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Southwest Airlines for a long time just focused on point-to-point flights, avoiding money-losing flight patterns that routed passengers through a Chicago to New

Southwest Airlines for a long time just focused on point-to-point flights, avoiding money-losing flight patterns that routed passengers through a Chicago to New York type connection. Additionally, SWA only maintained 737's, and free checked baggage allowed for faster onboarding and deplaning, and therefore, faster turnaround times. Eventually, this little airline became the largest airline after the major airlines botched their oil hedging, customer service, etc. From an outsiders view, Lyft looks much more operationally focused. Instead of legally battling a bunch of different countries, it eyes only the biggest market, allowing it to slowly expand after it sees how Uber fares in each country. Instead of settling a lawsuit over allegedly stealing self-driving car technology, it is focusing on its core product. Instead of buying 19-month-old scooter company for $2B, it is spending money on its core value proposition. At some point, investors might not hand over Uber any more cash. Meanwhile, Lyft could get to profitability more quickly while Uber deals with acquisition/project "hell" as Elon would say. As an outsider looking in, Lyft looks like it is playing the long game, drafting behind Uber until Uber catches another edge and slips.

jazzkingrt 8y ago
What a great example! I'm realizing that perhaps the "second mover advantage" may be more pronounced in markets with low switching costs. Flyers can easily compare airline prices against one another, and drivers are incentivized to boot up 2nd, 3rd and 4th driving apps. Low-margin businesses can't afford to spend as much on R&D, make mistakes, etc. They have to win with small executional advantages.
- calvinbhai 8y ago
  IIRC, Lyft was the first mover, Uber shamelessly ripped off Lyft's model that anyone can be a driver and come out with Uber X. So, imo Lyft was the first mover, but was smart to let Uber face all the heat sacrificing short term growth for long term success. Uber has been in too many things for me to believe that they can sustain the business (I may be wrong)
  - degenerate 8y ago
    I don't think you are wrong. I have both apps, and my last 10 rides have been in Lyft, because it's consistently cheaper. If uber wants me back all they need to do is compete on price, but I think their operating costs are too high to do that, so they will eventually lose out from being too big and have to either scale back or implode.
    - brendanw 8y ago
      Lyft is consistently 30% or more more expensive for my apt-to-work route in SF. A few of my friends observe similar. Perhaps you have to look at things on a route-by-route basis.
    - calvinbhai 8y ago
      Same here. Any rides I have taken where Lyft is available, I ride with Lyft. Else, Uber. (mostly NYC/NJ/Toronto areas Lyft has been consistently cheaper for me). Cheapest rideshare wins. race to bottom. Only way Uber / Lyft can avoid death, is with business rides and lockin. There no one is price sensitive, and they can make money off of business rides (Lyft is doing this really well, in nudging users to have more business rides).
      - nradov 8y ago
        My employer has a business account with Lyft and I use it on all business trips. It's convenient because everything goes to our expense reporting system automatically. But businesses have no loyalty and would quickly shift to Uber for lower prices.
  - Lammy 8y ago
    Sidecar was the first mover :) https://en.m.wikipedia.org/wiki/Sidecar_(company) https://en.m.wikipedia.org/wiki/Sidecar_(company)
    - chimeracoder 8y ago
      Sidecar launched in 2011. Lyft nominally launched in 2012, but was really a continuation of the same product and company that the founders had been running since 2007, just under a different name.
katzgrau 8y ago
Completely agreed. There's always a second-mover advantage for burgeoning industries in that second-movers can avoid the mistakes that the first movers have become entrenched in.
- ghaff 8y ago
  Lyft has gone through quite a few iterations of its own. Predecessors started before Uber but, even more recently, it moved beyond the pink mustache and fist bumping into being essentially an Uber clone. I (and apparently others) found the whole "be buddies with your driver" thing to actually be a real turn-off.
  - davrosthedalek 8y ago
    I agree, for me too. On the other side, the "we want to get rid of drivers" and "squeeze driver" type of stories I hear from Uber made me go to Lyft by default. Most drivers I ask which drive for both prefer driving for Lyft.
    - ghaff 8y ago
      I use Lyft by default these days because of Uber sleaze factor. I'm not sure how big a difference there is and I don't use either much but small steps for whatever they're worth.
docker_up 8y ago
> Instead of settling a lawsuit over allegedly stealing self-driving car technology, it is focusing on its core product. Instead of buying 19-month-old scooter company for $2B, it is spending money on its core value proposition. But Lyft has a self-driving car group in Palo Alto, and it bought the bikesharing company, Motivate.
glitch003 8y ago
>Instead of buying 19-month-old scooter company for $2B Actually, Lyft has a scooter program that is the result of an acquisition. "It wasn’t until July, when Lyft acquired Motivate, the nation’s largest bike-share operator, that the company began to send signals that it was considering joining the frenzy." https://www.theverge.com/2018/9/6/17824040/lyft-electric-scooter-denver-dockless-public-transportation https://www.theverge.com/2018/9/6/17824040/lyft-electric-sco...
- pmart123 8y ago
  Interesting. 2.5x revenue though and has exclusive city contracts. I still view this differently than paying $680M pre-revenue for Otto. On the scooter side, at $300/scooter, Uber could buy 100k scooters and stick an UberScoot button on their app and probably can more ridership than any of the year old startups.
  - metildaa 8y ago
    This assumes those scooters aren't impounded, damaged or left with dead batteries. There are no human drivers constantly maintaining these scooters, at best a random person may come by and charge them (for a fee OFC), but no quality assurance or maintenance is happening in a timely manner. This is why scooter companies are seeing their average scooter break after 4 months, there is no maintenance plan and they aren't built to be on the street, unsheltered 24/7.
    - pmart123 8y ago
      If Uber wanted to operate a scooter division, I still think it makes way more sense to do it themselves at this point given Uber has no barriers to enter this market. Millions of people already have Uber on their phone and a number of drivers are probably willing to pick up scooters to charge them or transport them for maintenance if needed. I'm just saying it seems way cheaper to roll out a pilot program with 10,000 scooters than investing hundreds of millions to a couple billion dollars in another company that effectively is letting you white label its scooters (that are manufactured by another company). Is a scooter maintenance company worth $2B?
lorenzorhoades 8y ago
Most of the points made in this are untrue. Lyft was the one to fight the battle of having 'ridesharing' become a thing. Uber didn't mind if the decision went one way or another as they already had a lockdown on the "professional driver market". >> Instead of buying 19-month-old scooter company for $2B, it is spending money on its core value proposition. Lyft aquired a scooter company Motivate, and announced the plans in June about their bike and scooter strat. >>At some point, investors might not hand over Uber any more cash. Lyft has raised 4.9B. It's the unicorns of Unicorns with a burn rate to match. I agree with the OP, am pessemistic of an IPO, and would say it has the possibility of failure. I don't think that will happen, but an IPO flop of this scale would have major repercussion on the funding market in general. Again with the Hauwei arrest today, and the stock market in a major flux as tensions rise with China it has added risk.
- untog 8y ago
  A small point, but Lyft acquired Motivate for $250m, which is a lot less than $2bn. Plus, Motivate has profitable bikeshare programs in various cities across North America, and have done for many years. They're not a flashmob, fly by night scooter rental company.

jazzkingrt 8y ago

What a great example! I'm realizing that perhaps the "second mover advantage" may be more pronounced in markets with low switching costs. Flyers can easily compare airline prices against one another, and drivers are incentivized to boot up 2nd, 3rd and 4th driving apps. Low-margin businesses can't afford to spend as much on R&D, make mistakes, etc. They have to win with small executional advantages.

calvinbhai 8y ago
IIRC, Lyft was the first mover, Uber shamelessly ripped off Lyft's model that anyone can be a driver and come out with Uber X. So, imo Lyft was the first mover, but was smart to let Uber face all the heat sacrificing short term growth for long term success. Uber has been in too many things for me to believe that they can sustain the business (I may be wrong)
- degenerate 8y ago
  I don't think you are wrong. I have both apps, and my last 10 rides have been in Lyft, because it's consistently cheaper. If uber wants me back all they need to do is compete on price, but I think their operating costs are too high to do that, so they will eventually lose out from being too big and have to either scale back or implode.
  - brendanw 8y ago
    Lyft is consistently 30% or more more expensive for my apt-to-work route in SF. A few of my friends observe similar. Perhaps you have to look at things on a route-by-route basis.
  - calvinbhai 8y ago
    Same here. Any rides I have taken where Lyft is available, I ride with Lyft. Else, Uber. (mostly NYC/NJ/Toronto areas Lyft has been consistently cheaper for me). Cheapest rideshare wins. race to bottom. Only way Uber / Lyft can avoid death, is with business rides and lockin. There no one is price sensitive, and they can make money off of business rides (Lyft is doing this really well, in nudging users to have more business rides).
    - nradov 8y ago
      My employer has a business account with Lyft and I use it on all business trips. It's convenient because everything goes to our expense reporting system automatically. But businesses have no loyalty and would quickly shift to Uber for lower prices.
- Lammy 8y ago
  Sidecar was the first mover :) https://en.m.wikipedia.org/wiki/Sidecar_(company) https://en.m.wikipedia.org/wiki/Sidecar_(company)
  - chimeracoder 8y ago
    Sidecar launched in 2011. Lyft nominally launched in 2012, but was really a continuation of the same product and company that the founders had been running since 2007, just under a different name.

katzgrau 8y ago

Completely agreed. There's always a second-mover advantage for burgeoning industries in that second-movers can avoid the mistakes that the first movers have become entrenched in.

ghaff 8y ago
Lyft has gone through quite a few iterations of its own. Predecessors started before Uber but, even more recently, it moved beyond the pink mustache and fist bumping into being essentially an Uber clone. I (and apparently others) found the whole "be buddies with your driver" thing to actually be a real turn-off.
- davrosthedalek 8y ago
  I agree, for me too. On the other side, the "we want to get rid of drivers" and "squeeze driver" type of stories I hear from Uber made me go to Lyft by default. Most drivers I ask which drive for both prefer driving for Lyft.
  - ghaff 8y ago
    I use Lyft by default these days because of Uber sleaze factor. I'm not sure how big a difference there is and I don't use either much but small steps for whatever they're worth.

docker_up 8y ago

> Instead of settling a lawsuit over allegedly stealing self-driving car technology, it is focusing on its core product. Instead of buying 19-month-old scooter company for $2B, it is spending money on its core value proposition. But Lyft has a self-driving car group in Palo Alto, and it bought the bikesharing company, Motivate.

glitch003 8y ago

>Instead of buying 19-month-old scooter company for $2B Actually, Lyft has a scooter program that is the result of an acquisition. "It wasn’t until July, when Lyft acquired Motivate, the nation’s largest bike-share operator, that the company began to send signals that it was considering joining the frenzy." https://www.theverge.com/2018/9/6/17824040/lyft-electric-scooter-denver-dockless-public-transportation https://www.theverge.com/2018/9/6/17824040/lyft-electric-sco...

pmart123 8y ago
Interesting. 2.5x revenue though and has exclusive city contracts. I still view this differently than paying $680M pre-revenue for Otto. On the scooter side, at $300/scooter, Uber could buy 100k scooters and stick an UberScoot button on their app and probably can more ridership than any of the year old startups.
- metildaa 8y ago
  This assumes those scooters aren't impounded, damaged or left with dead batteries. There are no human drivers constantly maintaining these scooters, at best a random person may come by and charge them (for a fee OFC), but no quality assurance or maintenance is happening in a timely manner. This is why scooter companies are seeing their average scooter break after 4 months, there is no maintenance plan and they aren't built to be on the street, unsheltered 24/7.
  - pmart123 8y ago
    If Uber wanted to operate a scooter division, I still think it makes way more sense to do it themselves at this point given Uber has no barriers to enter this market. Millions of people already have Uber on their phone and a number of drivers are probably willing to pick up scooters to charge them or transport them for maintenance if needed. I'm just saying it seems way cheaper to roll out a pilot program with 10,000 scooters than investing hundreds of millions to a couple billion dollars in another company that effectively is letting you white label its scooters (that are manufactured by another company). Is a scooter maintenance company worth $2B?

lorenzorhoades 8y ago

Most of the points made in this are untrue. Lyft was the one to fight the battle of having 'ridesharing' become a thing. Uber didn't mind if the decision went one way or another as they already had a lockdown on the "professional driver market". >> Instead of buying 19-month-old scooter company for $2B, it is spending money on its core value proposition. Lyft aquired a scooter company Motivate, and announced the plans in June about their bike and scooter strat. >>At some point, investors might not hand over Uber any more cash. Lyft has raised 4.9B. It's the unicorns of Unicorns with a burn rate to match. I agree with the OP, am pessemistic of an IPO, and would say it has the possibility of failure. I don't think that will happen, but an IPO flop of this scale would have major repercussion on the funding market in general. Again with the Hauwei arrest today, and the stock market in a major flux as tensions rise with China it has added risk.

untog 8y ago
A small point, but Lyft acquired Motivate for $250m, which is a lot less than $2bn. Plus, Motivate has profitable bikeshare programs in various cities across North America, and have done for many years. They're not a flashmob, fly by night scooter rental company.