Lyft eyes upscale corporate travel as next leg of growth

CEO David Risher says the ride-hailing company is establishing a chauffeuring brand called Alcove to target high-end corporate travel

Lyft is betting on luxury rides for C-suite leaders and other VIPs as it looks to expand beyond its core business.

Lyft is betting on luxury rides for C-suite leaders and other VIPs as it looks to expand beyond its core business.

The ride-hailing company is establishing a new chauffeuring brand, dubbed Alcove, that caters to demand for full days of executive travel between client meetings, conferences and flights, Chief Executive David Risher said in an interview.

“There is an enormous opportunity in executive travel, corporate travel, events,” Risher. “Right now, it’s just not very well served.”

Alcove is designed to offer executives a higher level of service than Lyft’s existing premium ride offerings. If a rider spills coffee on their shirt on the way to a meeting for instance, an Alcove driver would replace it and call ahead to inform the rider’s colleagues why they’ll be late, Risher said.

The new service will fold in and expand TBR Global Chauffeuring, the Glasgow-headquartered luxury chauffeur provider Lyft acquired last year for $110 million. TBR, which recorded its strongest quarter to date in the period ending in June, brings a global presence and 24-hour service center. However, it isn’t well known in the U.S., which will be a key region for expansion.

Risher expects Alcove, which is set to launch early next year, to eventually become a multi-billion dollar business. Lyft brought in about $18.5 billion in gross bookings last year.

Alcove is entering a market that’s ripe for upheaval, Risher said. Executive assistants looking to book such high-end rides tend to work with a network of small chauffeuring businesses that have limited footprints.

“These services exist out there, but it’s kind of a fragmented market with older technology and typically no real scale advantage,” Risher said.

It’s also a big market, according to Risher, who said every Fortune 500 company has employees that need this kind of service. He also sees opportunity for Alcove to meet growing demand in live entertainment, helping executives as well as celebrities get everywhere from the Super Bowl or the U.S. Open to concerts.

Lyft’s rival Uber Technologies has also been focused on growing its corporate travel offerings lately. Earlier this year Uber agreed to acquire Blacklane, a chauffeur service that operates in more than 500 cities across over 60 countries, for an undisclosed amount. Lyft’s TBR offers its services in more than 3,000 cities across 120 countries.

The push into high-end corporate travel comes as Uber and Lyft contend with investor worries about whether the rise of autonomous vehicles will upend their businesses. Both have partnered with a range of players to provide robotaxi services on their platforms, and have expressed confidence that they can succeed in the long term with a hybrid network of both AVs and human drivers.

Alcove, though, may operate in a market that’s less primed for disruption. Risher expects its target audience to prefer human drivers to AVs, though he acknowledges that individual tastes can vary.

“I think this is a use case and a type of person where they’re going to appreciate someone getting out of the car and greeting them by name,” he said. “AVs are marvelous, but they’re not that.”

Write to Kelly Cloonan at kelly.cloonan@wsj.com