Partnership gives a free Lyft to pharmacy customers

Discussion
Photo: CVS Health
Mar 19, 2018
Matthew Stern

Two of the biggest names in pharmacy are partnering with an insurance company and a ride sharing startup, not to bring medicine to people who need it, but to bring people to their medicine.

CVS and Walgreens are each piloting programs that will allow people in some markets with participating Blue Cross/Blue Shield insurance coverage to get free Lyft rides to stores, according to Forbes. CVS will cover the cost of Lyft rides to their pharmacies for qualifying members who live in specific transportation deserts in Pittsburgh, and Walgreens will do the same for those in some similarly underserved parts of Chicago. CVS stated that the move is meant to improve health outcomes by giving people access to pharmacies. Walgreens likewise said the move will bring greater accessibility to populations in need.

Bringing people in may lead to more sales throughout the store, addressing a loss of potential impulse buys that retailers inevitably encounter when offering delivery (or even curbside pickup).

Big players in pharmacy, especially CVS, have made other high-profile service upgrades in the past few years. On one level, new offerings like free next-day prescription delivery seem targeted at closing gaps in the healthcare system and promoting customer health. But they also serve to prepare for an eventual encroachment of Amazon.com into the prescription drug arena.

CVS has also taken stances on health-related social issues. The chain stopped selling tobacco in 2014 and, more recently, it delisted low-SPF sunscreens and foods containing trans-fats and moved its candy aisle. The chain also announced a store redesign with an expanded selection of healthy products. 

DISCUSSION QUESTIONS: As more retailers move into healthcare, does it make sense for them to leverage companies like Lyft to provide these types of services? Does this pilot provide more opportunities for retailers than delivery?

Please practice The RetailWire Golden Rule when submitting your comments.
Braintrust
"If [CVS is] offering free rides in transportation deserts, it makes you wonder if the people they’re serving aren’t also living in food deserts."
"Makes perfect sense for CVS who has not been shy about investing in their customers’ health."
"I seriously doubt “extra purchases” made by ill people in pharmacies is going to make up the cost of the Lyft rides."

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15 Comments on "Partnership gives a free Lyft to pharmacy customers"


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Mark Ryski
BrainTrust

Leveraging services like Lyft to enable customers to pick-up perscriptions makes good sense. Not only does it build an even deeper relationship with the customer, but it also brings more traffic to the store.

Joel Goldstein
BrainTrust

Not just a good PR move, this will allow the pharmacies to broaden their retail footprint into transportation deserts serving as a true part of the community. Outside-of-the-box thinking like this will be the key to building customer loyalty where price-shopping isn’t going to be the deciding factor.

Nikki Baird
BrainTrust

I’m not sure that this so much about Lyft as it is about services in general. Yes, you could get Rxs delivered to your home, but especially in underserved areas or “transportation deserts” (a new one I hadn’t heard before), the pharmacy may be the first level of health care help. I think (so long as the pharmacies are delivering on the expectation) that making it possible for customers to come in and talk to a pharmacist in person is a good thing, beyond the cynical expectation that they may spend money in the rest of the store while they’re there.

I have to give credit to CVS especially, for walking the walk when it comes to their commitment to customer health. If they’re offering free rides in transportation deserts, it makes you wonder if the people they’re serving aren’t also living in food deserts. A trip to a store offering healthy food to go with that Rx may benefit CVS — but it could honestly benefit its customers too. That’s how it should work.

Max Goldberg
Guest

As competition heats up, retailers look for innovative ways to get consumers into their stores. Paid ride-sharing services are one such way. Once consumers are in the store, they can be motivated to buy additional items that they would probably not have purchased through curb-side or mail delivery.

Ken Lonyai
BrainTrust

For the underserved that get access to needed healthcare items/services, the partnership should be a good thing. Beyond that though, I don’t buy the corporate spin. If they can get away with it, more power to them, but this is really nothing more than CVS and Walgreens getting subsidized transportation for their consumer base — probably driven by Amazon encroachment fears.

I do have concern for Lyft drivers being the underpaid (?) pawns effectively being used (literally) to enhance pharmacy profits.

Brandon Rael
BrainTrust

For Walgreens and CVS, the main objectives of offering a free Lyft ride are to not only offer prescription services, but also having you customers physically in your stores, where there are clear upsell and impulse shopping advantages to be achieved. For the pharmacy, this is a mitigating last mile strategy, and well worth the investments. While it may lead to incremental business opportunities for Lyft and Uber, this is a clear value added service, which could sway consumer loyalties to either CVS or Walgreens.

Shep Hyken
BrainTrust

Anything that makes the experience more convenient for a customer is worth considering. Partnering with Lyft (and similar companies) has already been done for delivery. It’s been done for doctor and hospital visits. The question I have is about the cost involved in paying for a round-trip visit to the pharmacy. Do the numbers work? I’m sure that’s been thought out. Smaller margins with more customer loyalty doesn’t bother me. And, the good will that will be gained may offset the cost and be a win/win for both the retailer and the customer.

Steve Montgomery
BrainTrust

One of the issues retailers have is getting customers into their stores. CVS and Walgreens are addressing this by providing transportation to customers who need it to get to their locations. It helps build traffic for not only their prescription services, but the ever-increasing variety of items they sell.

As the article stated, it also helps them blunt Amazon’s efforts to enter and then dominate the prescription market. Helps Lyft gain potential new customers for their other transportation needs. Definitely a win/win/win scenario.

Warren Thayer
BrainTrust
The big pharmacies depend on a financial model whereby this practice will cut into their margins, and I seriously doubt “extra purchases” made by ill people in pharmacies is going to make up the cost of the Lyft rides. Changing a long-standing financial model that is widespread in the channel is like asking supermarkets to give up their addictive funny money from vendors. Very painful. Lyft runs in the range of $3 for just getting into the car, and then 90 cents a mile and 9 cents a minute. Let’s say the person lives 15 miles from a CVS or Walgreens. (They’re in a pharmacy “desert,” right?) That’s $27 for mileage, round trip. And let’s say our Lyft driver is a speed demon and averages 60 mph both ways, so 30 minutes in the round trip is $2.70. That’s about $30. Add in the $3 for getting into the car in each direction, and you’re up to $36. And let’s say Lyft cuts an incredible sweetheart deal and charges the pharmacy half price for the… Read more »
Ken Lonyai
BrainTrust

I suggest reading the referenced Forbes article. It’s reported that “Blue Cross plans will soon begin to provide “no cost” transportation via Lyft to customers of Walgreens Boots Alliance and CVS Health in certain markets.” So it seems (?) per my comment, the pharmacies are getting a free ride too and have no reason not to take the windfall.

Lyft just received another $200M in equity and “plans to use the funds towards manufacturing self-driving vehicles.” So the pharmacies do seem to be the clear winners, with everyone else in a gray zone.

Celeste C. Giampetro
Guest

Makes perfect sense for CVS who has not been shy about investing in their customers’ health. First step was the Minute Clinic, which others have noted may be the only health provider some folks see, and now offering rides to those communities. Good on CVS.

Michael La Kier
BrainTrust

This is a great idea. Mobility is an important factor to consider. The “last mile” is not always getting from retailer to shopper….

Craig Sundstrom
Guest

A nice idea, I suppose, but I really wonder how big the universe of people is who can’t afford Lyft but can somehow afford Blue Cross. I think economics will ultimately have the last say here as it usually does, and if the primary intention is to connect people with their meds — as opposed to creating shoppers — I think delivery (presumably through pooling buyers) will prove cheaper.

Ricardo Belmar
BrainTrust

This is certainly a creative way for both CVS and Walgreens to get customers into the physical store. Will there truly be an uplift in sales from this? I’m not so sure. Maybe it depends on the prescription — if you’re feeling physically ill, I expect the last place you want to be is in a store to shop for something.

That said, there may well be a sizeable enough universe of people in these “transportation deserts” to make it interesting.

I suspect these are more like pharmacy deserts than they are transportation deserts — doesn’t the name imply you can’t get to “something” to be a desert? If I can’t get to a pharmacy without using transportation that isn’t available to me it seems that makes it a desert for the “something” I’m trying to get to rather than the transportation!

Kai Clarke
BrainTrust

This is a great way to bring customers into the store, but there should be a choice of ride-sharing options, as well as have cab companies bid on this. BS/BS should be viewing this as an option for all of their customers.

wpDiscuz
Braintrust
"If [CVS is] offering free rides in transportation deserts, it makes you wonder if the people they’re serving aren’t also living in food deserts."
"Makes perfect sense for CVS who has not been shy about investing in their customers’ health."
"I seriously doubt “extra purchases” made by ill people in pharmacies is going to make up the cost of the Lyft rides."

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