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Carey, Lyft Talking Possible Merger, Email Reveals

Carey International CEO Gary Kessler (LCT file photo)
Carey International CEO Gary Kessler (LCT file photo)
WASHINGTON, D.C. — Carey International is pursuing a partnership with Lyft that, if sealed, would become the first and largest such deal between a major chauffeured vehicle service and a transportation network company (TNC), sources confirmed to LCT Magazine.

[UPDATE 7/7, 6:25 p.m. ET/3:25 p.m. PT: Lyft Confirms Talks With Carey]

The disclosure, relayed to LCT by a source who received an email from Carey CEO Gary Kessler, amounts to a stunning revelation for the limousine industry, which has been fighting Lyft and Uber in the regulatory arena over passenger safety, insurance and duty-of-care issues. Carey, considered to be among the largest and oldest elite chauffeured transportation services in the world, also had been working with leading companies Dav El / BostonCoach and Empire CLS to create a uniform technology platform for the limousine industry that would allow pooling of fleet vehicles with adherence to duty-of-care policies, as reported in the July issue of LCT.

The July 1 email from Kessler to Lyft's director of enterprise partnerships Amit Patel makes several references to the logistics of a pending partnership or merger between the two companies. Kessler sent the email to a member of the limousine industry or may have included that individual on the email address list, resulting in an apparent misfire and the disclosure. The individual who received the email shared it only on condition of anonymity.

In the text of the email, Kessler references a “Lyft/Carey Partnership summary” that addresses “how to handle the integration between the Carey and Lyft sales teams,” “messaging,” “referrals and lead-sharing,” “co-selling initiatives,” a section of the summary related to “discussing your current proposed merger-specific solutions,” and a plan of attack for selling to travel managers.

The email goes on to refer to “obvious places to start our exploration of ways for the Carey and Embark reservations [to] flow into Lyft.” The text also refers to a meeting to be held at 9 a.m. PT on July 6, devoted in part to “API and joint reporting solutions.”

“We will most likely have the strongest chance of meeting our deadlines if we can work through the other points as soon as possible,” the email states.

When contacted by LCT July 5, Kessler said the email reflected “exploratory conversations,” and said there is “nothing to discuss,” and nothing pending. He called any reference to a Lyft-Carey deal “a bit premature.” When asked further about the tone of certainty and level of detail conveyed in the email, Kessler declined further comment. The email did not include any legal advisories or disclaimers.

Leaders of two organizations representing ground transportation sectors hurt by the regulatory disparities between them and TNCs are still trying to fully assess the expected fallout if a Carey-Lyft partnership is announced.

NLA President Gary Buffo said he would make statements to the industry and the NLA membership on July 6.

Dwight Kines, President of the Taxi Limousine & Paratransit Association, said, “Carey is a legitimate, renowned carrier with a great reputation in the limousine business. The TLPA hopes that if this is true, it’s more a matter of Lyft coming into compliance with regulation, safety inspections, fingerprint background checks, and driver screening — things Lyft has all resisted. I hope it signals the start of compliance in those areas.”

The TLPA will continue to call on all TNCs to obey local regulations no matter what they are, Kines said. “Our thrust is that our members are all playing by the same rules as TNCs. In most states, we’ve ended up with a dual set of regulations, one for them and the other for the brick and mortar operator that has followed the same rules for years. We feel very strongly they are not a technology company and will continue to take that stand."

LCT left messages with the franchisees or managers of Carey operations in four big cities who have not yet returned requests for comment.

Lyft, which has been a distant No. 2 in revenue and activity to Uber, has attracted more venture capital in recent years as it courts the corporate and business travel sector with pre-reservation and managed travel options, while entering a $500 million self-driving vehicle venture with General Motors.

Lyft investors listed here

With 1,531 vehicles, Carey International ranks as the second largest chauffeured transportation company on LCT's just published 2016 50 Largest Fleets List. Carey Holdings Inc., the parent company of Carey International, is majority owned by Highland Capital Management LP, according to a 2012 bankruptcy filing by Carey's Southern California division. 

Bloomberg overview of Carey here

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