Lyft is reportedly firing 60 workers and ending its car-rental services.
According to an employee memo reviewed by the Wall Street Journal, Cal Lankton, Vice President of Fleet and Global Operations at Lyft, explained to employees that “Our road to scaling first party rentals is long and challenging with significant uncertainty … the economy made the business case unworkable.”
Lyft had previously allowed drivers to rent cars from Lyft. The company is now pivoting solely to third-party rental partnerships with Hertz and Sixt.
Spokesperson Jodi Seth said in a statement, “We have decided to discontinue Lyft‘s first party Rentals business to focus on our best-in-class third party Rentals with Sixt and Hertz,” according to Bloomberg.
Lyft has continued cuts throughout the company. The global operations team has been consolidated from 13 to nine regions, and a Detroit hub has been closed.
Prior to this move, Lyft had indicated that a hiring slowdown was on the table. In a May memo, Lyft President John Zimmer told employees, “Given the slower than expected recovery … we’ve made the difficult but important decision to significantly slow hiring in the U.S.,” according to the Wall Street Journal.
At the time, Mr. Zimmer also stressed that “our near-term action plan will be focused on accelerating profits — whether we like it or not, that’s the ticket of entry in today’s market,” according to the May memo cited by the Wall Street Journal.
Lyft‘s stock has fallen more than 70% in the past year.