Introduction
Lyft is a ride-sharing company facing several challenges in recent years. These challenges include declining revenue, high operating costs, and increasing regulatory pressures. As a result, Lyft has hired me as a consultant to help the company overcome these challenges and present a plan to the Board of Directors that will keep the company in business.
Corporate Client
Lyft, a prominent corporate client, has carved a niche as a leading ride-sharing company, operating across multiple cities in the United States (A ride whenever you need one, n.d). Founded in 2012, the company has rapidly gained popularity among customers, owing to its commitment to providing affordable and convenient transportation solutions. Lyft’s vision has always been to reduce traffic congestion and pollution while ensuring people can quickly move around cities. Over the years, the company has invested heavily in cutting-edge technology and innovative strategies to enhance the safety and comfort of riders, further cementing its reputation as a top player in the ride-sharing industry. Today, Lyft’s influence extends beyond the United States. The organization is now recognized as one of the largest ride-sharing companies globally, a testament to its impressive growth trajectory and unwavering commitment to customer satisfaction.
Client’s Issue
Lyft’s primary issue is declining revenue due to intense competition, high operating costs, and increasing regulatory pressures. According to Bowning (2023), Lyft lost $588 million in its recent quarter. The ride-sharing industry is highly competitive, with Lyft competing against rivals like Uber, Didi, and Grab. These competitors offer similar services, and customers often choose the company that offers the lowest prices or the best service. Intense competition has pressured Lyft’s revenue, which has declined in recent years. In addition to the competition, Lyft also faces high operating costs. The company must pay for the salaries of its employees, the maintenance of its vehicles, and the fuel cost. Streeter (2022) explains that Lyft has been offering steep incentives to lure drivers back, which means that at some point, its drivers quit due to the company’s challenges. The costs can be significant, especially when combined with the need to provide quality service to customers.
Moreover, Lyft is facing increasing regulatory pressures. Governments are beginning to regulate ride-sharing companies, which can result in additional costs and requirements for Lyft. For example, some cities require ride-sharing companies to have a certain number of accessible vehicles, which can be expensive to acquire and maintain.
The diagram above depicts the drastic decline in the share price of Lyft
Solution using the six steps on the Project Scope Checklist
Project Objective
The primary objective of this project is to develop a strategic plan to help Lyft overcome its challenges and remain competitive in the ride-sharing industry. Lyft must be designed to address Lyft’s declining revenue, high operating costs, and increasing regulatory pressures. The plan should be practical and achievable within a reasonable timeframe.
Deliverables
The key deliverables of this project include a comprehensive report outlining the proposed plan, including detailed recommendations for improving Lyft’s operations, reducing costs, and increasing revenue. The report includes a risk assessment, a cost-benefit analysis, and a plan implementation timeline.
Milestones
The following milestones are critical in the implementation of the proposed plan:
Identifying Key Areas for Improvement: The first step in the proposed plan is to identify the key areas where Lyft can improve. These may include reducing operating costs, improving service quality, or increasing revenue through new products or services. Once these areas are identified, Lyft can develop specific strategies to address them.
Developing a Cost-Benefit Analysis. Lyft needs to conduct a cost-benefit analysis before making any changes to assess each strategy’s potential benefits and costs. Conducting the analysis will enable Lyft to prioritize the strategies to implement first based on their benefits and costs. Thus, a cost-benefit analysis will help Lyft decide where to focus its resources.
Developing a Timeline for Implementation. Once Lyft has identified the critical areas for improvement and has conducted a cost-benefit analysis, it should develop a timeline for implementing the proposed plan. Developing a timeline for implementing the proposed plan is crucial after identifying the critical areas for improvement and conducting a cost-benefit analysis. The timeline should be realistic and achievable within a reasonable timeframe to ensure the plan’s successful implementation.
Presenting the Proposed Plan to the Board of Directors. It will be presented to the Board of Directors to seek approval for the proposed plan. A clear and concise presentation is necessary to effectively communicate the benefits and risks associated with the proposed plan. The presentation should provide the Board with the necessary information to make an informed decision regarding approval.
Implementing the Plan. Implementing the approved plan will require allocating resources, including personnel and financial resources. Once resources have been allocated, Lyft can put the plan into action. Successful implementation will depend on the efficient use of resources and the effective execution of the plan.
Monitoring Progress and Making Adjustments as Necessary. Monitoring progress and making adjustments as necessary is the process of regularly reviewing the implementation of a plan to ensure that it is progressing as intended (How to monitor progress | indeed.com – indeed career guide, n.d). Monitoring involves setting up specific metrics and indicators to measure progress and then tracking those metrics over time. Monitoring progress makes it possible to identify potential issues or areas where the plan is not working as intended. Once issues or areas of improvement have been identified, the company can make adjustments to improve the plan’s performance. Adjustments may include modifying specific tactics or strategies, reallocating resources, or revising the overall plan. The ultimate goal of monitoring progress and making adjustments is to ensure the plan succeeds and achieves its desired outcomes. The process is an essential part of any effective planning and implementation process. It enables organizations to remain agile and responsive to changes in the external environment and adapt their approach as necessary to achieve their objectives.
Technical Requirements
Before Lyft can implement its proposed plan, it must fulfill several technical requirements. The first requirement is to improve its technology infrastructure to accommodate the anticipated surge in demand for its services; this could involve upgrading its servers, developing new software, or adopting more advanced technologies. Technology can offer many benefits to an organization, such as low overhead costs (Bawa, 2018). Additionally, Lyft may need to hire skilled personnel to execute the plan successfully. Hiring skilled personnel could include hiring data analysts, software developers, and marketing professionals with expertise in the relevant fields. These individuals would ensure the proposed plan is executed effectively and efficiently. Lyft can increase its chances of successfully implementing its proposed plan and achieving its objectives if it meets the technical requirements.
Developing New Products or Services. Lyft could explore various options to bolster its revenue, such as collaborating with other businesses, innovating new technologies, or venturing into untapped markets. These strategies can help the ride-hailing company stay competitive and broaden its customer base. Lyft can enhance its value proposition and drive growth in the long run if it diversifies its offerings.
Limits and Exclusions
There are several limits and exclusions to the proposed plan. The limits and exclusions may include the following:
Financial Constraints. Lyft should create the proposed plan with the company’s monetary restrictions in mind to ensure financial stability. This technique necessitates the cost of executing the plan to be reasonable and justifiable. As a result, financial feasibility should be a top consideration in developing any plan.
Regulatory Constraints. Adhering to applicable regulations and laws is mandatory and critical for any proposed plan. Abiding by the laws and regulations may involve fulfilling requirements regarding accessibility, safety, and insurance. Therefore, thoroughly examining regulations and laws is crucial during plan development.
Reviews with Customer
Customer reviews are critical to the success of the proposed plan. Lyft must ensure its customers are satisfied with the proposed changes and willing to continue using its services. Lyft may need to conduct surveys or focus groups on determining customer satisfaction levels.
Risks Involved if the Plan Fails
If the proposed plan of Lyft fails, several potential risks could arise. The first and perhaps most significant risk is a continued decline in revenue. Lyft’s revenue may continue to decrease, leading to the company quitting. Additionally, if Lyft fails to keep up with its competitors, it may lose market share to its rivals, making it challenging for the company to recover in the future. Moreover, the government could impose regulatory sanctions on Lyft if it fails to comply with regulations, which could result in fines and increased operating costs. These sanctions could make it more challenging for the company to remain competitive. Therefore, Lyft must execute its proposed plan successfully to avoid these potential risks and ensure its continued success.
Conclusion
Lyft faces several challenges that are putting the company at risk of failure. As a consultant, my primary objective is to develop a strategic plan to help Lyft overcome these challenges and remain competitive in the ride-sharing industry. The proposed plan includes a comprehensive report outlining the critical areas for improvement, a cost-benefit analysis, and a timeline for implementation. The proposed plan must also meet several technical requirements and comply with all relevant regulations and laws. Customer reviews will be critical in the success of the proposed plan, and the risks involved if the plan fails to include a continued decline in revenue, loss of market share, and regulatory sanctions. Lyft can overcome its challenges and remain a leading player in the ride-sharing industry if it implements the proposed plan successfully.
References
A ride whenever you need one. Lyft. (n.d.). Retrieved March 5, 2023, from https://www.lyft.com/
Browning, K. (2023, February 15). Financial woes Thrust Lyft, long in uber’s shadow, into the spotlight. The New York Times. Retrieved March 5, 2023, from https://www.nytimes.com/2023/02/15/technology/lyft-financial-woes.html
Bawa, N. (2018, October 9). Council post: Three reasons all companies should invest in Tech. Forbes. Retrieved March 5, 2023, from https://www.forbes.com/sites/forbestechcouncil/2018/10/09/three-reasons-all-companies-should-invest-in-tech/?sh=2ffe9fbf6710
How to monitor progress | indeed.com – indeed career guide? (n.d.). Retrieved March 5, 2023, from https://www.indeed.com/career-advice/career-development/monitor-progress
Streeter, S. (2022, May 4). Lyft and uber – the challenge for the ride Hailing Giants. CEO Insight. Retrieved March 5, 2023, from https://ceo-insight.com/finance/lyft-and-uber-the-challenge-for-the-ride-hailing-giants/
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