Lyft will stop renting out cars from its own fleet and has laid off around 60 employees, according to The Wall Street Journal. As TechCrunch notes, the layoffs have also been confirmed by the LinkedIn posts of affected workers. The people who lost their jobs, The Journal said, worked in operations and covered 2 percent of the company's workforce. Back in May, the company reportedly wrote in a staff memo that it's slowing down hiring due to the economic downturn, but that it didn't have any layoffs planned. Things have clearly changed since then.
In an internal memo from Lyft VP Cal Lankton seen by The Journal, the executive said that the company's road to in-house rentals is "long and challenging with significant uncertainty." Lankton also explained that Lyft started discussing the possibility of exiting the business last fall and that talks ramped up as the "economy made the business case unworkable."
The ride-hailing service debuted its car rental business in Los Angeles and the San Francisco Bay Area back in 2019 after a few months of testing, eventually expanding its first-party car rental offering to five locations. While it's sunsetting the option to rent vehicles from its fleet, the company isn't leaving the space completely. Lyft already runs more than 30 rental locations with Sixt SE and Hertz Global Holdings Inc., and it said it will continue working with big car-rental companies. "This decision," a spokesperson told the publication, "will ensure we continue to have national coverage and offer riders a more seamless booking experience."
Lyft is also in the midst of reorganizing its global operations and consolidating its offers from 13 to nine regions. That will lead to the closure of a location in Northern California and of its Detroit Hub, but it's unclear if the move will cause more layoffs. Either way, Lyft is merely the latest company in the tech industry to cut jobs due to the economy. Tesla reportedly laid off 500 employees from its Nevada Gigafactory without 60 days of advanced notice. Netflix cut 300 jobs in June after cutting 150 jobs in May. And more recently, TikTok started laying people off around the world. Even the biggest companies in the industry aren't immune: Meta reportedly told managers to keep an eye out for low-performing workers and to "move to exit" them if they're unable to get back on track.