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Lyft defies predictions by continuing to grow as a rival to Uber
- sharemywin 11y agoMost of the winner take all platforms are free. Once you have to pay standard economics takes over.
- kasey_junk 11y agoOne thing I've never understood is why these platforms are considered winner take all. They don't seem particularly sticky nor does it seem like economies of scale matter. Seems like only a matter of time for meta sites to pop up finding the best riding deal across multiple platforms.
- pbreit 11y agoThe advantages of scale are massive. More drivers = faster rides. More riders = more trips. It's a pretty classic natural monopoly. Like Ebay.
- kasey_junk 11y agoBut nothing prevents drivers from working multiple networks nor riders switching. It's literally a web gui ready to be written.
- joshfraser 11y agoIt has been: http://www.whatsthefare.com/ http://www.whatsthefare.com/
- Spivak 11y agoSure, but let's say you as a consumer don't actually care about the brand of the ride platform and just want to get to your destination for some weight of speed and cost. Then it doesn't matter if there's only Uber or if there are 50 private taxi services in your area. Once someone fills gap with a meta-privte-ride service that just locates the closest and cheapest provider it's trivial for someone like Uber to be undercut by a local competitor.
- zanny 11y agoHow are you going to make a meta-ridesharing service? The only way to tell what Uber or Lyft drivers are available is through their apps, and it seems like it would be against their interests to do anything than make their communications as proprietary as possible. If you prevent users from weighing options you are better able to capture users exclusively.
- pbreit 11y agoYou're throwing around the word "trivial" pretty carelessly. "the closest and cheapest" is Uber. "let's say you as a consumer don't actually care about the brand" is a big, mostly wrong assumption.
- lsc 11y ago>Once someone fills gap with a meta-privte-ride service that just locates the closest and cheapest provider Yup. If you want to find me legal cover, I've got a guy who's good at reverse engineering shit. Let's do this thing.
- prostoalex 11y agoMost drivers work for multiple networks though. If Uber or Lyft want to keep them in independent contractor status, it will remain that way.
- jbpetersen 11y agoWhoever's market leader gets to use monopoly pricing for their network effects until they hit the price point where there's competition from someone without the same economy of scale. This holds only for largely homogeneous markets.
- nostromo 11y agoUber isn't pricing like a monopoly though. They keep lowering their prices. http://www.bloomberg.com/news/articles/2016-01-09/uber-drops-prices-in-80-cities-in-the-u-s-and-canada http://www.bloomberg.com/news/articles/2016-01-09/uber-drops...
- viscanti 11y agoTheir continued spending spree to incentivize riders suggests otherwise. Uber seems to only give a first trip incentive, but I've gotten hundreds of dollars worth of free trips, 50% off trips, etc with Lyft. If riders aren't sticking around (and all the money they seem to be throwing around suggests that they aren't), then it doesn't seem to be defying any expectations. I'd expect a free or half-priced alternative to do well, I just wouldn't expect it to be a good business. I think it's telling that they didn't have any traditional investors in their most recent round. VCs seem to want nothing to do with Lyft at this point. Only time will tell if GM is a better investor than every VC who passed. I suspect that they're not and that Lyft doesn't have much of a business (Line trips are likely never profitable, and they seem to have a problem keeping riders around that Uber doesn't seem to have).
- toomuchtodo 11y agoLet's assume self-driving cars take off in <5 years. That means that this isn't "winner take all". It means its a commodity that's going to be driven down to razor thin margins. In that case, neither Lyft nor Uber have much of a business, and VCs are better off burning their money in a barrel. Tesla's Autopilot can already do most of the driving on the highway, and the latest software release has the car driving in our out of your garage with no human intervention (it'll even open and close the garage door for you). Google's self driving tech has already mastered a majority of city driving. We're getting to a fully autonomous self driving future faster than most realize. EDIT: Tesla charges $2500 for the autopilot feature, so far argument's sake, I'm going to say that cost won't be a problem. There's no way fully autonomous vehicles are going to require an expensive roof-mounted laser scanner; laser scanning gear? qualified maybe, as there are a few components manufacturers making solid scanner laser scanners (no moving parts). Also, some recent tech out of MIT is (supposedly) drastically better at 3D scanning with polarized camera filters than a laser.
- pbreit 11y agoI have a feeling truly driverless operation will be slower than we think.
- pbreit 11y agoUber apologists Sacca and Efrati were dissing this article on Twitter as being supposedly poorly sourced. It seems like Lyft is holding its own in SF but with the driver discounts and one-rider pools its unit economics must be under pressure.
- viscanti 11y agoI've also seen hundreds of Lyft billboards around SF along with their promotions with the Giants. So they've got the poor performance of their primary product (they claim that Line accounts for the majority of their trips) along with what must be incredibly high rider acquisition costs (spray-and-pray ads, multi-trip promotions, subsidized trips). With their aggressive spending to acquire users, it's amazing they aren't making up more ground. But I suppose that's why they always refer to the couple cities where they're aggressively spending. They seem quick to mention SF and Austin, and never mention anything else.
- pbreit 11y agoThe driver discounts cost them way more than new rider promos.
- sputknick 11y agoIt's no surprise to anyone who has read "The 22 Immutable Laws of Marketing". Once you establish yourself as the solid #2, your market share tends to grow as you distance yourself from the also-rans and also establish yourself as the alternative to the market leader, in this case Uber. (The law of Duality).
- brianbarker 11y agoLyft caps its surge at 200% or 2x, while Uber intentionally goes to 8-10x on busy nights. The outrage at uber over insane fares has a history far beyond this past New Year's Eve. People want Lyft to succeed, but Lyft still needs to get its act together on a few things. Lyft's servers have crashed on busy holiday nights, or rides requests don't match despite cars showing on the map. I'm hoping the recent investments and growing popularity of Lyft keep it in the race.
- PhrosTT 11y agoJust a couple anecdotes: 1.) I had to get an ride into Manhattan on NYE. Uber was a $150 estimate. Lyft was $68 after a $10 credit. 2.) I used to just blindly use Uber, but now I check estimates on both. 3.) Multiple drivers have told me they'd prefer if I'd ordered them through Lyft since they get a bigger cut.
- mrfusion 11y agoWhy was this downvoted?
- JohnTHaller 11y agoAnd the Lyft app occasionally spams ads at you, at least on Android. I ditched Lyft when they spammed me a notification about Justin Beiber at midnight on a weeknight.
- wahsd 11y agoI feel like if Lyft could grow in a manner that makes driving for them actually worthwhile and they can somehow structure the "surge" pricing in a manner that is not ridiculous and exorbitant, they may even have a chance to unseat Uber in many markets. I personally don't think Uber offers sufficiently much and there really isn't anything exclusive about it anymore, so I don't see the advantage of feeding that horrible company.
- mrfusion 11y agoI just signed up and got five free rides. That's pretty cool. I was reading in Reddit that lyft treats their employees better?
- win_ini 11y agoWell they moved their whole CS team to Nashville Tennessee which some like a form of punishment. However, apparently Uber has over 15,000 (!) customer service reps...I can't imagine that is a workforce with a pleasant work environment. What's interesting about these rideshare companies - they have to maintain separate workforces - look up Lyft's jobs page. It talks about exempt/non-exempt "team members". Non-exempt team members get "unlimited vacation" - exempt 15 days (which is still great IMO). It must be interesting for HR to manage the dynamics as the companies get bigger.
- gnopgnip 11y ago15 days is great?
- david-given 11y agoDisturbingly, it actually seems to be. http://www.bls.gov/news.release/ebs.t05.htm http://www.bls.gov/news.release/ebs.t05.htm Average number of paid holidays for employees nationwide: 7. Meanwhile here I am, living in Switzerland, with a statutory minimum of 20 paid days of holiday a year...
- deleted 11y ago[deleted]
- habosa 11y ago> Zimmer likes to compare the dynamic between Uber and Lyft to AT&T and Verizon. When both cell networks hit three bars of coverage, people start to see them as equivalent, and base their spending decisions on other factors, such as brand values and customer experience. That's the key quote in the article. In San Francisco, Lyft and Uber have both long passed the "good enough" bar. They both get to you in ~5 minutes and take you where you want to go very reliably. They have parallel product lines, identical pricing, and similar surging tendencies. This leaves room for brand preference. I know I am not the only one of my friends to choose Lyft whenever possible because I believe they are friendlier. Uber has a reputation for being profit-driven sharks. They're very professional, but don't get in the way of their money. Lyft has the feeling of taking a ride in a friend's car. I personally like the latter, and I think there are enough people who agree with that to keep two players in the market.
- enjo 11y agoI always ask drivers which one they prefer to drive for. The answer is always Lyft.
- cyan_atrus 11y agoIn my experience (SF) it's the opposite -- drivers like that Uber gives them more dispatches
- win_ini 11y agoMy findings are the same. Lyft made a switch to giving them the money for rides immediately too....Uber makes them wait.
- nostromo 11y agoAnd Lyft lets you tip your driver.
- BinaryIdiot 11y agoArguably that's a bad thing for the customer though.
- mrfusion 11y agoITT people downvoting anyone saying positive things about lyft.
- pfarnsworth 11y agoLyft is only alive due to massive injections of VC money. This is a typical dotcom style business that will crumble this year when the stock market tanks and VC funding disappears. The funny thing is that the entire taxi cab industry in the US was $11B in revenues. So to value Lyft at $5B with Uber having a massive amount of market share is defying simple math. There will be a lot of tears from Lyft. And the drivers don't care because they largely will be on both networks. It will be largely a marketing problem but without their massive amounts of driver and customer incentives people will simply stop using Lyft.
- prostoalex 11y ago> The funny thing is that the entire taxi cab industry in the US was $11B in revenues. So to value Lyft at $5B with Uber having a massive amount of market share is defying simple math. Not disputing valuations specifically, but 1) Company's valuation would be a multiple of expected revenues. If you expect Uber or Lyft to survive for more than one year, then $11B is just the basis for multiple, not the maximum number. 2) There seems to be strong support for "market expansion" argument. People who take a significant number of Uber/Lyft rides have not in the past taken significant number of taxi rides. 3) Uber has expanded internationally (Lyft chose not to), so a global taxi revenue would be a fairer number to start off.
- dikdik 11y agoI am more likely to take cabs now than I was before. With Uber and Lyft I often have almost a 50% over cabs 5 years ago. Additionally, it's a hell of a lot simpler, especially when half the cabs I used to take refused credit cards.
- tedmiston 11y agoI'd agree when I'm in NYC or somewhere cabs are readily available at the curb. But it's a rare occasion that I'd actually call a cab. No CC in 2016 is insanely frustrating. I paid for a ~$10 cab ride once with a $100 bill (the only cash I ever carry) after the driver claimed he couldn't accept a CC. Then he gave me ~$30 in change and semi-apologized with "sorry I don't have any more cash yet tonight". I called bullshit and he managed to find another $10 or so. If I hadn't had quite a few drinks, I would have felt more comfortable calling the cops on him at the time, but really it just takes that happening once for me to refuse cash-only cabs. I really had no idea how to respond especially since he told me that at the end of the ride at my apartment, which isn't near an ATM.
- adomanico 11y agoMost of the time I prefer Lyft drivers. They are usually more chill and down to earth. Uber is also a good service but their drivers are less personable and more professional. Both services are great.
- ghaff 11y ago>Uber is also a good service but their drivers are less personable and more professional. That sounds preferable. The whole original fist-bumping thing is one of the reasons I don't favor Lyft.
- BinaryIdiot 11y agoI'm waiting for someone to make Uber, Lyft and others into a utility where you request a car with an app and the closest one, regardless of type, gets the call and comes to you. The current APIs seem to make this exact scenario a bit difficult but it wouldn't surprise me to see something like this come about at some point in the future. There is just not a huge difference between the two to really care about, in my opinion anyway. Edit: Any reason for the down-votes? I'm genuinely curious if it's because people disagree with me and why or if it was something else.
- rankam 11y agoApparently Karhoo is attempting to do just that. Anecdotally, I've heard they've raised upwards of $200M, but I can't confirm that is true. http://karhoo.com/ http://karhoo.com/
- BinaryIdiot 11y agoInteresting though that seems to be more for taxis as far as I can tell. Interesting though.
- prostoalex 11y agoI have not tried it, but PriceRide aggregates transportation providers based on price http://www.nbcnews.com/tech/mobile/uber-ubers-app-compares-ride-hailing-prices-n300221 http://www.nbcnews.com/tech/mobile/uber-ubers-app-compares-r...
- jgalt212 11y agoIn short, good news for drivers and riders. And not necessarily bad news for Uber, because having a viable competitor will help keep them sharp. The only one how loses are Uber shareholders who bought shares above valuation $X billion. I'm not sure what X is, but X is what Uber is worth under a duopoly. Its current market cap I assert is well above $X.
- heldrida 11y agoI've been using Uber for a long time, but since a few months I'm always getting "uber surge" and paying quite a lot more then getting a regular cab. I've installed Lyft as an alternative, but it didn't work on my Samsung S5, Android 4.4.2, in London. End installing Hailo but haven't tried yet.