Lyft to shutter its car-rental business and lay off about 60 workers
Lyft shares picked up 8% in the Wednesday session, but the ride-share company's stock has fallen more than 70% in the past year
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Lyft Inc. is cutting jobs and consolidating some operations, while shutting its rental business.
The company is reportedly cutting 60 workers and reducing its global operations team by trimming regions from 13 to 9, according to an employee memo reviewed by the Wall Street Journal.
The cuts involve less than 2% of staff and mainly affected employees who worked in operations.
Lyft shares rose around 8% Wednesday to close at $14.70.
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Passengers wait for rides from Lyft Inc. at the LAX-it centralized pickup area at Los Angeles International Airport. (Patrick T. Fallon/Bloomberg via Getty Images / Getty Images)
The company is folding the part of its business that allowed customers to rent its fleet of cars on the app.
The company said it is going to continue working with big car-rental companies, with car-rental partnerships with Sixt SE and Hertz Global Holdings Inc. in more than 30 locations, a spokeswoman said.
Car for hire with a Lyft sticker in the window. (iStock / iStock)
Lyft’s car-rental business had five locations.
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"Our road to scaling first party rentals is long and challenging with significant uncertainty," according to the memo, sent by Cal Lankton, vice president of fleet and global operations at Lyft. Lankton wrote that conversations about exiting the business started last fall and "then accelerated as the economy made the business case unworkable."
In this photo illustration the Lyft logo is seen displayed on a smartphone. (Rafael Henrique/SOPA Images/LightRocket via Getty Images / Getty Images)
In the reorganizing of global operations team, the company is closing a location in Northern California and its Detroit hub, according to the memo.
Lyft’s stock has fallen more than 70% in the past 12 months.
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In May, rival Uber Technologies Inc. said it would slow hiring. Its stock has halved over the same period.