Coming up on the one-year anniversary of its ridesharing service, Lyft is celebrating with a new round of funding worth $60 million.
Known for the bright pink mustaches on the grill of its drivers' cars, Lyft is a service that lets smartphone users call drivers to their locations for rides. Using their own cars, the drivers take users wherever they need to go, much like a taxi service. At the end of the ride, the Lyft app suggests how much money users should donate to their driver. The transaction happens electronically through the app.
The service launched last June in San Francisco, but has been growing and expanding to more cities. In January, it launched in Los Angeles, and most recently, it launched in Chicago earlier this month. Lyft also operates in Seattle.
But now with the funding, led by venture capital firm Andreessen Horowitz, Lyft may be able to expand to more cities and add more drivers faster than before. The company's chief executive, Logan Green, who attributes his obsession with transportation to growing up in Los Angeles, said the funding is "the ultimate kind of validation" for Lyft.
"It's a big vote of confidence from the top VC firm in the world," Green said. "They understand and are incredibly excited about the peer-to-peer-sharing economy, so I think they 'got' this business."
Andressen Horowitz has invested in hundreds of companies, but it is perhaps best known for investing along with others to purchase Skype from Ebay and then reaping the rewards years later when Skype was sold to Microsoft for $8.5 billion.
Scott Weiss, the general partner at the firm who led the Lyft investment, said the big issue with peer-sharing services is getting people comfortable and able to trust others. While many other services exist in the ridesharing market, Weiss said Lyft has been able to stand out and gain its users' trust by building a community.
“These guys have focused on getting normal people to drive," Weiss said, explaining that forcing all Lyft riders and drivers to sign in through their Facebook accounts make users feel more at ease with the service. “They're getting everybody comfortable with getting people to share seats in their cars.”
Green said Lyft is giving users 30,000 rides every week -- the first time the company revealed ride statistics about its service. He said the latest round of funding will allow Lyft to keep building its team of staffers and continue to improve the app.
“That means shorter pick-up times, more Lyfts on the road and a better experience all around," Green said. "And a lot more pink mustaches."