As Uber negotiated its purchase of the downtown Sears Building in Oakland, Lyft was planning an exodus of its own.
The ride-hailing company is keeping its current San Francisco headquarters but planning additional expansion out of state, shifting 20 people on its customer support team from the Bay Area to Nashville. It’s also establishing an engineering hub in Seattle instead of buying more property in the SF Bay Area at this moment.
Lyft’s move is part of a larger trend of growing outside the city. As real estate and talent become ever-more expensive, fast-growing companies in San Francisco are looking for new fertile territory.
Smaller startups like Product Hunt and Meerkat have hired part of their engineering teams abroad. Some, like Uber and Pandora, are grabbing spots in Oakland. Lyft decided the best course of action was to move some growth out of state for now, although it will continue hiring in San Francisco.
COO Rex Tibbens was eager to paint Lyft’s moving narrative as one of growth instead of cost-cutting. “It’s not that we don’t want to grow in San Francisco, but we’re growing in triple digits and we’re out of space,” Tibbens said. “We’re bursting at the seams.” The company currently has 500 employees.
Although Tibbens didn’t want to dwell on this fact, the cost of living — and salaries — are cheaper in Nashville. The Lyft customer service team that heads to Tennessee will be receiving a pay cut after a year, to bring their salaries more in line with Nashville rates. Those who don’t want to move will be offered severance.
Defending the decision, Tibbens said: “Our customers are all over the U.S. It made sense to open another center for customer experience so we have both East Coast and West Coast.” Most of Lyft’s future U.S.-based customer service reps will be hired in Nashville.
If Nashville’s draw is cheap rent and a different time zone, Seattle’s perk is the plethora of engineers. There are not quite as many companies fighting for the Seattle talent as there are competing for developers in the Bay Area. Amazon and Microsoft have their pick, but they may soon face challengers. Lyft aims to hire 20 engineers in Seattle in the next few months and hit 60 in 2016.
“It was a no-brainer for us in terms of where our next our tech hub should be,” Tibbens said. “It’s becoming a really great place for technical talent.”