Lyft Inc. LYFT is expanding its advertising services.
The San Francisco-based car service company launched Lyft Media and is currently testing the service in Los Angeles, according to the Wall Street Journal. Lyft expects it to reach 25% of all rides by year-end in three other cities.
Recall two years ago when Lyft purchased Halo Cars Inc., which allowed drivers to run digital ads and engaging videos displaying vehicles' targeted location and time. This acquisition also provided Lyft riders access to in-car tablets, which show the route, allow one-touch tipping, and provide media content.
In-app sponsorships will also be an offering. For instance, The Vita CoCo Company Inc COCO ran a campaign after the 2021 NFL Super Bowl to promote its coconut water-based products with branded icons.
In January, T-Mobile US Inc. TMUS acquired Octopus Interactive, which reaches more than 5 million riders per month and enhances the riders’ experience by delivering interactive games, prizes, premium video, and infotainment curated specifically for Uber and Lyft audiences.
Lyft, like its rival, Uber Technologies Inc. UBER, has struggled with profitability. The ad revenue space could open a whole new stream of income for drivers and eventually will allow for more affordable fares for riders. However, Lyft has not revealed how much it expects the new initiative to increase the company's overall revenue.
Uber, meanwhile, expects to reach $1 billion in ad revenue by 2024.
Kenan Saleh, general manager of Lyft Media, said that they will not be collecting personal data from riders but rather measuring the performance, adding that only 1% of riders turn the tablets off.
Price Action: Earlier Monday, Lyft stock price was at $20.67 per share, up 1.92%.
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