It’s Not Just Rides Anymore: Digital Advertising with Lyft and Uber
Two years ago, Lyft (LYFT) acquired Halo Cars Inc., which manufactures monitors that run digital ads on top of cars. Now, the ride-hailing company is launching a new unit called Lyft Media. The aim is to both consolidate and expand its digital advertising capabilities, which is a growing sector in and around car services.
Lyft executives say the goal is to generate advertising revenue and become more competitive with Uber Technologies (UBER). The rival ride-hailing company has been selling digital ads through its Uber Eats app since 2019.
Uber and T-Mobile
Lyft’s plan is to sell both rooftop ads and ad placements within the in-car tablets that customers can access during rides. The tablets track the route, let users rate and tip drivers, and control the music in the car. Right now, those tablets are being tested in Los Angeles with plans for year-end expansion.
At present, Lyft has some catching up to do in the digital advertising space. Earlier this year at the company’s investor day, Uber predicted its ad revenue could hit $1 billion by 2024. Elsewhere, startup companies servicing ads in Uber cars and taxis have been proliferating. Telco giant T-Mobile (TMUS) acquired Octopus Interactive this year, which runs interactive video screens in ride-hailing vehicles.
Lyft says, while it will work with third-party firms to help measure the effectiveness of digital ads, user data won’t be collected. The tablets being tested in LA may be turned off at any time if the rider chooses, although less than 1% of consumers opt to do so.
Ads will be targeted based on an algorithm that takes the time and location of the trip into account. This includes advertising via rooftop and in-car tablets, as well as ads sold on Lyft’s app. A portion of the revenue goes directly to drivers. Lyft says it aims to connect advertisers with its network which means customers can expect to see a lot more companies hawking their products while hitching a ride.
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