We're going to get started as people roll in here. Welcome, everybody. My name is Ross Sandler. For those of you that I have not yet met, I head the U.S. Internet Research Team. We're super happy to have Erin Brewer from Lyft back again for another great year. And I think very timely given what's going on in this space broadly right now. So just to kick things off, why don't we just kind of address today's news head-on? I think the two big concerns we hear from the investment community are around robotaxi disruption and insurance. So on the first one, Cruise is now officially, I don't think this was a huge surprise to anyone, pulling out of the market. So I guess the question is, and you're starting to see these partnerships. You guys are involved with a few forming around the space.
I guess the question is, what does Lyft have to offer folks like Waymo and Tesla who, from our vantage point, appear to be the only two players that are going to be live in the next five years in the U.S.?
Yeah. Great question. I'd start out just by framing that at Lyft, we are excited about the advent of AVs. We absolutely see this as a market-expanding opportunity, and I'll sort of dive into a couple of the reasons why as I think about our capability and a little bit about what we're seeing on the ground, so if you think about Lyft, we think that our platform is going to be absolutely one of the best ways for these asset owners to maximize the utilization of their assets, which is going to be critical at the end of the day to making money, so how? It's really through three main areas. Clearly, the demand management, the scale of the business is built.
Our marketplace management, which, if you follow the company over the last six or so quarters, has just improved tremendously to the point today where our pickups are incredibly fast, competitive pricing, Prime Time reliability of pricing coming down significantly, so the marketplace management, I think, sometimes can be, on the surface, underappreciated for the complexity that's involved in that, and then the third area is really around fleet management expertise, so one area that we've been talking about a little bit more recently, and people have been curious about more recently, is our Flexdrive subsidiary. So today, and since 2020, through our Flexdrive subsidiary, we operate across about 27 of the major U.S. markets in the U.S. with physical locations where we acquire, lease, manage, clean, manage the repair flow offboard of more than 40,000 vehicles over the lifespan of this capability.
And that's been certainly a portion of our supply base over the years. But as you think about a world of AVs, it's an incredibly interesting and very relevant asset to have over time. Because not only do we have that capability, but over time, we've built sort of the software, the expertise behind the scenes all around driving that utilization management and getting to the point where we regularly have 90+ percent availability utilization of those vehicles. That's going to be really critical as you think about a world that will evolve in a hybrid way where you'll have human drivers, autonomous vehicles on the road, and that utilization and efficiency will be incredibly, incredibly important. So that is a little bit about the Lyft perspective overall. You mentioned a couple of competitors or a couple of companies that have capability.
Waymo, today, obviously, being the one that's out in a number of markets, we absolutely respect the progress that they've made. Certainly, you see them obviously around here in the streets of San Francisco. They've operated for a period of time overall, for example, in a market like Phoenix. Yet at the same time, those continue to be markets that grow for Lyft, markets where we continue to strengthen our overall position. And so that underpins some of our hypothesis that a lot of these rides are likely coming from incremental demand. So again, coming back to the fact that we see AVs as a great forward opportunity. You've seen us launch three initial partnerships. You can expect to see more from us as we go forward, but we're bullish here.
I should clarify that those two have scale from what it looks like, but there are many other players in the space, one of which is May Mobility. You guys are starting a trial within Atlanta. Uber's announced that they're partnering with Waymo in Atlanta. So could you just talk about what you're doing with May and then how what you're doing might differ or compete with the Uber-Waymo partnership?
Yeah. Yeah. So May Mobility's interesting. Before yesterday, obviously, they were one of three players who could legally operate in markets with sort of that driver-out model. As of Cruise's exit, they're now one of two. And they're interesting because they're really, really focused on the technology stack and innovative approaches to a lower-cost technology stack. They're backed by partners like Toyota, so they're using the Sienna platform for some of their initial deployments. So they've really picked their place that they want to be and are sort of focused on that technology stack. So we're excited. We announced a partnership with them. We intend to launch what is a pilot (think of it as a pilot-level deployment) in Atlanta in 2025, where we'll be learning alongside of them. And in that market, a Lyft rider can have the opportunity to opt into a May Mobility, an autonomous ride there.
So we're excited about it. It will be pilot at first, but excited about the opportunity with them.
And you mentioned the 27 markets where you have kind of the boots on the ground, the facilities. So fair to assume that Lyft is assessing partnership opportunities that could land in these 27 markets with some of the folks that we're talking about previously. Is there any reason to believe that this market just kind of goes non-exclusive and that you're going to be talking to Waymo about some of these opportunities as well?
Yeah. I think what we've seen to date as we think about Waymo is they're experimenting with a number of different models in a number of different markets. It's still relatively early as you think about not just Waymo, but certainly a number of other ways that other parties are playing in this market overall. And I think what I'd have to leave it at, Ross, is we're in all of the right conversations across the space with a number of different players, and you'll see more from us as we go forward.
Understood. Okay. And then to that second issue that I think folks in the investment community are hung up on, insurance. So we've seen deleverage from that line in your cost structure and your competitors' cost structure. When might that level out? And then what macro factors would play the role in having that go from deleverage to leverage? And talk to us about the strategy of splitting the renewal from once a year to now, more than once a year.
Yeah. Clearly, we've made a lot of progress here. We're really, really proud of that. And just to level set, what we talked about on our most recent earnings conference call was that we expect the sequential change in our cost of revenue from Q3 to Q4 to increase roughly $50 million, primarily driven by those third-party renewals, which happened on 10/01. And by comparison, that same sequential increase in 2023 was $100 million. So really, really proud of the progress. You mentioned the splitting. So same thing. In 2023, we talked pretty extensively about a different structure for the timing of the renewal of these agreements, a portion of which we took at that time and put on a six-month renewal cycle. So this will now be our second year operating under that structure.
And it really just affords us some optionality, obviously, but it also allows us, frankly, to better handle what have continued to be increases within our operating and financial plans overall. I'm just going to highlight a number of things that we emphasized within our investor day framework where we went into this area because we know it's of interest to investors in some detail, where we continue to make a lot of progress. So in addition to, I think, what is a better approach as we think about the timing overall, we think about macro inflation trends, which have continued to decline from the prior year, obviously.
But don't forget, we have an exceptional team across Lyft that thinks day in and day out from product, technology, partnership approach, all around this area with a really keen focus on that reduction in the core drivers of accident frequency and severity. And we showed some information at our investor day about we've been at this for a while. This is not new. Our ability to reduce that trend and really bend that curve overall, that's been important. It will continue to be important. And as we continue to demonstrate a lot of this strong progress, whether it be in our mapping or our routing or different signals that drivers really engage with about driving behavior and how they can continue to provide a better service overall, that makes a difference in working with our third-party partners overall in that experience.
So it's across a number of different areas, really, but we're incredibly proud of that progress. And I think we're in a much better position today, certainly, than we were a few years ago.
At the end of the day, you just touched on this, but you guys did a good job of laying out kind of the growth algorithm for Lyft over the next few years. And you talked about we're at 800 million-plus rides this year out of, I think, 160 billion TAM. So how should we think about rider growth, frequency growth, and new products coming on as the algorithm by which you're going to achieve those CAGRs that you laid out?
Yeah. Absolutely. I think the first thing I would highlight, in addition to that algorithm, which I'll go into, is just this is a growing market. We continue to see increases across use cases. We've highlighted a number of those throughout this year, but strong growth in commute. We see people getting out and about. Our party time hours have been another strong growth use case. So the market is growing, and that's a great place to be in. And then as we think about the algorithm for Lyft and how we contribute to that and how we expand upon that, it's really coming across three core areas. One is the foundation of operational excellence. So don't forget, this is a very physical market where you need to run it with exceptional execution over time, fast ETAs, a reliable experience, reliable pricing.
That really begets riders, too. When you do that well and you do that consistently, that really expands the aperture for how riders are willing to continue to incorporate service in their transportation journey. So that's really, really foundational. Then on top of that, what I'd point to are things like product innovation. As we've continued to improve the core service, you've seen us really lean into product innovation, listening very carefully, not only to drivers, but also to riders. You've seen us launch things like Women+ Connect, which is over its lifetime produced 36 million Women+ Connect rides. We're really, really proud of that. Price Lock, which is a recent launch, which really gets at that commute and frequency case. These are just examples of the way we have innovated, the way you'll continue to see us innovate. And then last, but certainly not least, is around partnerships.
We talked about this a lot at our investor day. We have a number of marquee partnerships that we've had for a period of time, but these are vast programs that companies like Delta and Hilton and Chase that we continue to have opportunities to penetrate, and then we're obviously really excited about a month ago with our new partnership with DoorDash, so another great example of partnering with really best-in-class companies and creating value on both sides and certainly opening the aperture for riders to be introduced to Lyft.
On the product front, so you mentioned Price Lock. I think one of the other things people are always kind of concerned about in the back of their mind is just overall pricing in this industry and how you and your competitor are trying to bring down the cost per ride. So you talked about on the last call, I think Prime Time is down 40%. You've got some new products like Price Lock. So how much runway is there ahead of you to bring down price? And how much of a role does rolling out new products play in that?
Yeah. You mentioned a couple of things there, which I'll repeat and then go into. So first of all, our objective is to operate in a healthy and competitive way, pricing competitively. That's a given. And then you also mentioned pricing reliability, which is extremely, extremely important. And our ability through a number of efforts we've been focused on for a period of time, which have really improved the health of the supply side of our marketplace, we've been able to drive Prime Time down, as you mentioned, substantially this year. And that is really foundational to this whole pricing reliability strategy. But bear in mind that Prime Time is still, while we've made tremendous progress, it's still at levels that are slightly above where we were in pre-COVID times. So there's always opportunities and room to perfect that over time.
I would say the other piece that you need to think about for Lyft is that we really want riders to come and shop within the app, and if you look at our mode selection, it's addressing a number of different use cases, whether you have a need to get there ASAP, you're on your way somewhere important, priority pickup is a great option, a weekend trip to the grocery store where it kind of doesn't matter and you're willing to trade off that price for time, too, if you happen to live in one of our operated markets in the U.S. for bikes and scooters, and a bike ride is a great way to go. There's a variety of options across a number of different price points to choose from.
Continuing to perfect that reliability across that pricing and to have that overall selection to trade off for what the use case is is something that you'll continue to see us focus on and emphasize.
On Price Lock, you mentioned that I think you're now above pre-COVID levels on the commute corridor and that use case, and it's a testament to Price Lock. And I guess when you guys look at measuring factors that drive growth, how much of that is macro return to office, these types of things, versus you put out a new product and you see compensatory share gain? Can you talk a little bit about that?
Yeah. Certainly, the macro return to office and even as we saw in that period of time, which there tends to be changes in transportation patterns at the end of the summer, continued growth in that category into 2024. That's an important backdrop, but certainly a product like Price Lock, which really gets at that very robust use case, which offers, again, that reliability. You pick a window of time with which you want to lock in that particular ride. You lock in that price. You don't have to think about it. That's a very, very strong foundation, and then I think in addition to that, Ross, what's important and what we would have anticipated and what we are seeing is that once you get in that, you're having a great experience on the product. We're seeing those Price Lock riders take more non-Price Lock rides on Lyft than they were before.
It's that habituation, that incrementality that's really critical. Our national launch wasn't too long ago, so we have had great response to that, and we're excited about what's possible there going forward.
Another thing that's helping drive some growth is international. So you guys are expanding into a couple of new markets in Canada. But I think if we go back to when you started talking about this maybe a year ago, a little bit more than that, there seemed to be a hint that there was more than just Canada going on here. So I guess it didn't feature widely at the investor day. How should we think long-term about other markets besides Canada?
We're really obviously excited about the progress we've made in Canada. We emphasized it on our most recent earnings call, just reaching an all-time high in rides in that market. To your point, that's been a very deliberate growth path across 2024 in terms of expanding markets and launching in new areas within Canada, and we'll continue to focus on that in 2025. What I would say is where we sit today, operating in the U.S. and Canada, there are great market characteristics around those markets. We're really focused on that, and I wouldn't add a lot more there.
Okay. No breaking news today. Going back to partnerships, so the DoorDash one is obviously the big recent news. Any initial learnings from that? There's elements where you're funding some of it, DoorDash is funding some. Could you talk about that? And are you seeing at least a path towards possibly gaining share in some of those markets that they have high overlap versus maybe the Uber rides business like the suburbs?
Yeah. So DoorDash, we talked about this. Again, incredibly excited to partner with this really best-in-class company who we think at a values level, as we talk about customer obsession, embodies a lot of those same values. Obviously, a lot of planning and collaboration goes into planning for the launch of these types of partnerships, really thinking very deeply about customers on both sides, the value that we can create, the compelling case that we can create overall. So a lot of thought obviously went into that pre-launch. We were both companies, I think, excited, certainly, about the opportunities. Again, we're just a month in, but what I would say is we were optimistic about that going in. And the response from customers has been great, as we would have expected, when you have this kind of partnership and the compelling value on both sides, to your point, co-funded.
So, on the Lyft side, offering some specific ride discounts. On the DoorDash side, offering trials into DashPass. And our experience with these types of marquee partnerships, this is not our first one, is that they do build over time. So, you'll hear us talk about it more, obviously, as we go into the future, but we're off to a really good start, as we would have expected going in, and excited to see where we're going to take this going forward.
And beyond DoorDash, so you have some partnerships that are several years old, some that are kind of in between. I guess just how meaningful of a growth driver is just your overall partnership model? How many new segments out there are you looking at that could provide additional growth? And just any update on Chase, Delta, some of the bigger ones that are existing?
Yeah, absolutely. We highlighted at investor day that roughly 20% of our rides came through partnerships, and certainly those partnerships that existed at that time. And we also further highlighted that riders that come through those partnerships tend to overall take a mix of higher value or higher margin rides overall in their mix and their transportation journey. So it's clearly really, really important. But maybe sort of going back a little bit to what I was mentioning on DoorDash, how these partnerships build over time. You mentioned things like Chase and Delta and Hilton that have very, very expansive customer bases within those products. And we talked about, in particular, one example there at investor day where even at that time, we were 10% penetrated into that user base.
So these tend to be multifaceted and multi-time period opportunities to continue to engage, to continue to penetrate our ability to make those connections and have those linkages with those customer base. So we've got a lot of opportunity just in the partnerships that we have today and obviously bringing DoorDash on board. That's not to say that this won't continue to be a key part of our strategy, but I just want to emphasize that we still have plenty of opportunity within the universe that is in front of us today.
Shifting gears a little bit to another hot topic around driver supply and incentives. So incentives have been coming down. I think you're ahead of your efficiency goal there. One thing more recently that we've heard from the investment community is just kind of concerns around you've got this changing of the administration. Is the driver pool broadly going to change related to that? And what does that mean for propensity to invest more in incentives? So could you just talk about where we're at with supply and then where we're at with your goals around efficiency with incentives?
Yeah, sure. So we think about incentives just to level set. We deploy incentives in two ways, on the driver side and then primarily on the rider side. And the framework that we outlined at our investor day was when you combine that incentive spend and understand that on a per-ride basis, our goal is to drive 10% efficiencies per year on that combined incentive spend. As you mentioned, we're obviously ahead of that target as we noted in Q3, so making very strong progress. And we've made very, very strong progress on the supply side also, as you've noted over the last 18 months, to be in a very healthy position today.
And that's through a lot of innovation and effort in and of itself with drivers, whether it's Driver Earnings Commitment or in 2024, the 33 different features that we've released on the driver side, really being customer-obsessed, listening to what's going to make a difference in their experience day in and day out. So we're super proud of that. And that certainly leads to a position where we're able to be much more efficient. Again, still not quite as efficient on the driver side as pre-COVID overall, but increasingly quarter by quarter, much more efficient. And we've been increasing our incentives that are generally deployed to riders. You've seen us do that pretty methodically throughout 2024.
We do that very purposefully with an eye to what are the returns as we think about the various investments that we deploy in the market or incentives, I'm sorry, that we deploy in the market on the rider side. And we've continued to like what we see there. Those have been very efficient ways, very positive returns that we've invested in those incentives. And so you've continued to see us in some cases increase that over time because we like that return overall. To be clear, it's not something that foundationally we kind of have to do to compete. We do it, and we have been doing and increasing it because the returns have been positive. Again, overall, on a combined basis within that framework of continuing to drive efficiency on a per-ride basis, we've made a ton of progress there.
Last topic I want to hit on is the advertising business, Lyft Media, so featured very well at the investor day. I think it surprised us in terms of how big you guys expect that to be over the next few years. I think we're in the stage of kind of onboarding advertisers, adding measurement partners, kind of proving out the ROAS. What are the constraints that you're seeing in terms of that onboarding process, and as we look ahead towards that, I think it was just under two points of penetration of your gross bookings. What are the constraints around impressions versus other things that might kind of hold that back?
Yeah. So this is a very deliberate buildup of this capability. It's incredibly important to do that in a deliberate way because delivering that value and demonstrating the value that you're delivering through really relevant measurement is incredibly important to our brand partners. So you've seen us talk pretty much every quarter and highlight a number of the different measurement partners that we've brought onto our platform. This was always clearly contemplated as our first phase, if you will, of foundation and building this business. And just to go into maybe a minute of detail here to bring to life about why that's important is advertisers clearly want to reach customers in new ways, but they absolutely want to know that that investment is a solid one and they're getting a return.
Continuing to build on that capability in increasingly sophisticated ways and collaboration with some of our brand partners has been deliberate, methodical, and really, really important. The best testament and way that I can bring that to life for you is we've highlighted now a couple of times about brands coming back, right? Our retention of brand partners, that they come back and continue to advertise on the platform quarter after quarter. Then as we increasingly improve this measurement capability, not only do we see them repeating, but we see them coming back with higher budgets. These are large advertisers overall. Those are really, really important foundations and proof points as we build this capability out overall.
Because to take this then to some of the next levels or the next phases of opportunity, which we touched on a little bit at investor day, and that's how do you combine this capability with our really unique not only experience in terms of a rider in a car sort of checking their phone, maybe engaged with a really interesting video advertisement, but we can increasingly over time make that really relevant and personalized to you. And that is a big opportunity we think in front of us. But without that foundation and that credibility, that build certainly becomes harder. So it's an essential first step. We are right on track with where we thought we would be at the end of 2024, how we articulated that at our investor day and optimistic about continuing to build that value in that business going forward.
Great. So we're at time. So Erin, just want to say thank you.
Thanks for having me again, Ross. Appreciate it.
Good job.
Yeah, thank you.