In early August, Uber and Lyft tripped over each other to be the first to announce they were debuting a carpooling option. Hours before Lyft was set to announce Lyft Line, Uber jumped in front and shouted they were beginning UberPool, both of which offer riders the chance to pay lower fares and pair with other riders.
The announcements struck a one-two punch on fledgling carpooling startup Hitch, whose launch I covered in June. Its cofounders, Snir Kodesh and Noam Szpiro, had built Hitch around a dream of shared rides with strangers -- but suddenly, the backseat was a lot more crowded.
"There was a feeling of, 'Oh boy, we have a lot of scary competition if we want to continue on this track,'" said Kodesh. "We knew it was going to be a real uphill battle to go face to face."
But no battles will be waged. Instead, Lyft will buy Hitch, the companies said Monday.
Hitch was the first startup to embrace true carpooling, but it faced rough waters from the beginning. Their business model was built to work well at scale -- riders paying less while drivers pocketed more -- but getting big enough to reach that sweet spot was hard enough -- and that was before Lyft and Uber moved in.
During commute hours, Hitch saw enough volume and shared rides for the model to make sense, the founders said. But they never got to the point where every ride was recouping losses, Kodesh said.
Expensive and complicated insurance was also a huge cost for the startup. And while Uber and Lyft are already in dozens of U.S. cities, Hitch would have had to hard to bring awareness to every new region outside of its home San Francisco.
"Ultimately, our passions are about bringing our vision and the Lyft Line vision everywhere in the country and in the world," Kodesh said. "We got to a point where it made a lot more sense to ... team up with the powers out there."
Before the acquisition, Hitch had been especially worried by Lyft because they saw it as having a strong enough community to support ridesharing with strangers.
Hitch, which had raised $600,000 from investors including Winklevoss Capital, is Lyft's third acquisition. The companies did not disclose the terms of the deal. In April, Lyft bought Rover, a transit startup that tried to enable Lyft carpoling by tapping into an undocumented Lyft API, and in March 2013, it bought on-demand carwash startup Cherry.
Hitch's platform will shut down on Monday, and its drivers will become Lyft drivers. Kodesh and Szpiro will join Lyft to work on Lyft Line.
