12 ms·

Lyft Raises $530M in Fight with Uber

222 points by sethbannon 12y ago

physcab 12y ago
This makes me happy. After having been an Uber customer, then an Uber driver, and now a Lyft customer, I'm more than happy to transition my business to Lyft. Where Uber made me feel douchey, Lyft has made me feel part of a community. Even though functionally the two services are indistinguishable, I've always had better experiences with Lyft. Lyft feels more grounded. You have the opportunity, if you wish, to sit next to your driver and not treat them as a lower class citizen. I don't hear about Lyft employees being ruthless or money-grabbing. And generally all Lyft drivers I've met have been happy Uber driver converts. I totally buy the Southwest Airlines angle they are trying to achieve.
- jsonne 12y ago
  Same. The way I describe the difference is that I started using ride sharing services to avoid taxis. Then all the taxi drivers started driving uberx so I switched to Lyft. It's as much about the experience as it is the convenience.
- ChrisAntaki 12y ago
  > And generally all Lyft drivers I've met have been happy Uber driver converts. I totally buy the Southwest Airlines angle they are trying to achieve. I've noticed this too - the Lyft driver's are happier on average. And when you do get a rude Lyft driver, chances are they are driving for Uber too. At least this has been my experience.
  - outericky 12y ago
    I've heard this from drivers too. Lyft passengers are generally happier and more social, while Uber don't want to be bothered.
- JoshTriplett 12y ago
  > I totally buy the Southwest Airlines angle they are trying to achieve. I wouldn't compare any service I actually like to Southwest Airlines. Southwest seems to be one of the least appealing airlines in terms of comfort and quality.
  - aetherson 12y ago
    My guess is that you're 30 or under? Southwest during its rise to prominence in the 90's and maybe early 2000's had this friendly, relaxed reputation. It was definitely an economical option, but they tried to be friendly and jokey and get out of your way. I agree that nowadays that has all gone away and they're just kind of cattle-cars.
    - karmajunkie 12y ago
      Agreed. There was a time i wouldn't fly anything BUT southwest if i could help it. I don't fly enough these days to care that much, but back when I did fly a lot, I really preferred their approach.
  - worklogin 12y ago
    As a mid-20s middle class guy, it's the only airline I fly. No-nonsense, good price, friendly people. No, it's not luxury seating, but I really like flying with them. They also haven't screwed up connections or held up my baggage, which US Airways and United have.
- meowface 12y ago
  Did you perhaps mean JetBlue? Southwest isn't well-liked.
  - ProAm 12y ago
    > Southwest isn't well-liked What are you referring to? Southwest is loved by customers and employees.
    - saryant 12y ago
      Southwest is still living on the goodwill they generated from their huge fuel hedge last decade. They don't allow their fares to be shown in the aggregators but they've convinced a large segment of the population to start their search at southwest.com rather than Orbitz/Kayak/Expedia because they believe WN will have the lowest price, but that's hardly ever true anymore. Brilliant but hardly consumer-friendly.
      - dkrich 12y ago
        I disagree. Myself as well as many people I know like the experience on Southwest. To me the best thing about them is their no-fee cancellation/change policy, right up to 15 minutes before take-off. To change a non-refundable flight on most other airlines carries a default $250+ fee. Being able to check bags at no additional charge is pretty awesome too.
- wcummings 12y ago
  >You have the opportunity, if you wish, to sit next to your driver and not treat them as a lower class citizen This might say more about you than Uber or Lyft. Why is sitting in the back treating them like a "lower class citizen"?
  - bdcravens 12y ago
    I consider it keeping things professional to sit in the back. They are being paid to performing a service for me; it's not like it's slavery. I don't find myself feeling guilty about not standing when a waiter comes to my table.
  - mbrubeck 12y ago
    In the early days, Uber's slogan was “everyone’s private driver” while Lyft was “your friend with a car.” Uber's marketing was aimed at recreating the experience of a private chauffeur (which in certain older times would have been a member of the servant class), while Lyft's marketing was aimed at recreating the experience of carpooling with a friend. Obviously neither marketing story was really true, but they did influence the way the customer experience was and is presented.
alaskamiller 12y ago
My car's in the shop getting fixed so I've been using Uber and Lyft in the suburban south bay--a market of long roads, horrible traffic conditions, and high rate of personal car ownership. Since the past week I've learned a few things: - all the drivers have both apps running and have no loyalty - drivers prefer uber customers, however - drivers don't like lyft's demo of college kids and local rides, it earns them no money - lyft drivers think uber is evil, uber drivers thinks lyft drivers are hippies - all the international travelers coming into silicon valley have uber and used to uber service - uber dispatches to lyft dispatches are a 5 to 1 ratio - drivers always complain lyft keeps them afloat but doesn't get them ahead - uber, whether intentionally or not, actually has viable career plan. an uber black driver i rode with on the lyft service explained how after selling his real estate company and investing in three lincoln escalades was able to make his money back on one of the cars after 7 months. - all the drivers concur uber is pretty evil, don't like the 1099 relationship, hate how uber corporate doesn't support the drivers over customers or incidents, yet sadly resign and accept the situation. it's oddly depressing talking to a uber driver. Over half a billion dollars at the E round is quite a lot to drop into a "community" instead of Uber's business. Hopefully the money is put into innovating locally instead of international expansion because they're definitely losing the game. And when the automated cars are here it would have been the tech game's worst investment cycle.
- dnautics 12y ago
  some of your statements seem contradictory. I'm in the bay area - I'll offer my perspective. - all the drivers have both apps running and have no loyalty Lyft offers a very strong driver incentive, and that has kept me off of the uber platform since I moved to oakland (and drive in SF) in december. - drivers prefer uber customers, however In San Diego (a different market) I really hated the uber customers and preferred the college demo. In SF, I never liked the uber customers, either, and I really liked the lyft demo, so I dropped uber. - drivers don't like lyft's demo of college kids and local rides, it earns them no money I think that's a south bay thing. One afternoon after a meeting in Palo Alto, I attempted to escape back to the city and wound up getting vortexed into Stanford, so I just got out of there. - lyft drivers think uber is evil, uber drivers thinks lyft drivers are hippies - all the international travelers coming into silicon valley have uber and used to uber service Shrug - uber dispatches to lyft dispatches are a 5 to 1 ratio This is a function not only of demand but also supply. In particular, in San Diego, I found that the dispatches were in a 2:1 ratio, BUT if I favored lyft rides over uber rides by strategically turning the app off, I was making significantly more per week, because lyft's "loyalty program" is strong. - uber, whether intentionally or not, actually has viable career plan. an uber black driver i rode with on the lyft service explained how after selling his real estate company and investing in three lincoln escalades was able to make his money back on one of the cars after 7 months. Well if this guy had some initial capital beforehand a 'real estate company' this doesn't mean much. It might be more difficult to bootstrap this from scratch, which is what you are suggesting when you say 'viable career plan'. This is also contradicted by your projection of automated cars. By contrast, during my down time from lyft, I'm running a nonprofit research organization and also coding a backend for a startup. - all the drivers concur uber is pretty evil, don't like the 1099 relationship, hate how uber corporate doesn't support the drivers over customers or incidents, yet sadly resign and accept the situation. it's oddly depressing talking to a uber driver. Lyft has this 1099 relationship too, and it makes it for very tough running sometimes. But you just have to roll with the punches and keep hustling.
StartupLSatoshi 12y ago
I'm shocked. </sarcasm> So, to ask the question that Thiel has asked, is this a market that supports a monopoly, or is it going to be a consumer-favoring highly competitive scene? > Thiel is also an investor in Airbnb– yet another darling of the sharing economy, valued at a “mere” $10 billion compared to Uber’s $18 billion. Unlike Uber and Lyft, Thiel argued, there is no obvious competitor to Airbnb. That in and of itself makes it a more valuable company because of the distraction and profit erosion that he describes throughout his book. Thiel seems to think that it doesn't support a monopoly, and I'd tend to agree. So, assuming that it's a competitive market, and Uber and Lyft repeatedly copy the features of one-another, I'm very curious to see what kind of profit margins and therefore valuations are supported. For a competitive market, it seems like the gap between Lyft's $2.5bn and Uber's $41 is bound to be reduced, one way or the other.
habosa 12y ago
This is great. More competition is great for me, the consumer. Recently Lyft and Uber have bother offered flat rate rides for $5-7 anywhere in SF. When people ask me how it can be so cheap, I always joke it's because it's a $15 ride but you're splitting it with a venture capitalist. I wonder if either company has any serious long-term plan to make sure they are not competing in a commoditized space. Currently the services are basically indistinguishable. Sure most people have a preference one way or the other, but it's not a preference they'd stick to if the other service was a few bucks cheaper. They seem to be in lock step, doing the same things and alternating who makes the first move. If they're not careful they will become like the airline industry. 40 years ago airlines were a glamorous new way to travel. Now they are reduced to who can offer the cheapest point-to-point ticket with 17" of leg room, customer service is an unexpected bonus.
- conanbatt 12y ago
  I wouldn't compare cabs to airlines. 10% price difference between one airline to the other can be 100 to 200 dollars in a single buy , where in cabs it could be spread out in an entire year. I agree that airline competition has been so price focused that value to consumer has been eroded, but cabs are fundamentally a simple, less pricey , decision. I hope they become commodities regulated for safe driving and rather modern cars (no older than x years). The rest really IS icing on the cake.
  - bsbechtel 12y ago
    I would argue airline competition focus on pricing is due to the marketing/purchasing methods presented to consumers when they go to buy a ticket. Expedia, Orbitz, Priceline, etc all show a big graph listing the prices of all flights taking place on the dates you want to travel. If you list a comparison of any product to consumers with little information about the varying products other than price, most consumers are going to make their purchasing decision based on price alone. Having said that, I'm not at all arguing that price isn't important in the airline industry. $200 is a big chunk of change for an airline ticket. However, consumers might be a little more flexible about price if they had a better idea of what other value they are getting on the trip.
elliotec 12y ago
Here in Salt Lake City, Lyft already won by a long shot. Its crazy, they got here like a week or two before Uber, but their arrival seemed to just not leave any room for a competitor. Uber can rarely be found here, and if it can its always longer and more expensive than Lyft. Long live Lyft. Also, thank god they got rid of the mustache thing and just put the pink sticker in their back window.
FlyingLawnmower 12y ago
Hopefully Lyft puts some of that money towards supporting more platforms that could make it competitive with Uber. I would love to have alternative options, but unfortunately, it seems like Uber is the only service that offers a Windows Phone application and a Mobile site to order off of. While there aren't too many non iOS/Android mobile phone users, all of us are collectively tied to Uber.
- techstrategist 12y ago
  I think this tells us something very interesting about the startup economy: your choice of car service is dictated by the brand of mobile phone that you own.
- JohnLen 12y ago
  Totally agree.
starmole 12y ago
I might be missing something here because nobody else brought it up: Is this not just a necessary move to salvage investments in Lyft? Assuming Uber won already, Lyft investors need to keep it dangerous enough to force a buy out or write it off completely. Keep Lyft alive until Uber is forced to buy it pre/post IPO? At some point the Lyft competition is going to cost Uber more than the price of just buying them out. Please note that I am not a biz guy so if I am wrong I would be very happy for an explanation on how/why.
- lexap 12y ago
  The industry is big enough for multiple players.
  - starmole 12y ago
    It might be, but then it's a commodity! I think the valuation of Uber and Lyft is based very much on a winner takes all model.
    - CamperBob2 12y ago
      To some extent those valuations are based on expectations for the future, where the companies don't even need to employ human drivers. Whoever owns the "Johnnycab" concept twenty or thirty years from now is going to be very profitable.
      - maxerickson 12y ago
        Is a strong brand much of a moat? It seems the only way there can be much pricing power is onerous regulation preventing others from stepping into the market. (For example: Why wouldn't an airport charge local cab owners a small fee to be listed in their registry? Why wouldn't passengers access that registry to save $10?)
        CamperBob2 12y ago
        It seems the only way there can be much pricing power is onerous regulation preventing others from stepping into the market. That could be another aspect of first-mover advantage: no latecomer will have the same opportunities for regulatory capture that Uber and/or Lyft will have. It's not a question of if the taxicab incumbents will lose their grip on the regulatory process, but when. Whoever takes their place will be able to shut their competitors out, or at least make life hard for them.
martinald 12y ago
I think this industry is going to end up exactly like the airline industry. IE: no margins to speak of really. I just can't see how one company can ever have a long term competitive advantage. I think any current perceived advantage is down to the amount of VC cash flowing in and also how abysmal the old school taxi competition is.
conanbatt 12y ago
Im glad investors are backing Lyft even if today its the underdog compared to Uber. Its no secret that Uber's practices provoke disgust or discomfort, and that many would wish Lyft to do better just because at least in appearences they havent been behaving as douchey as Uber. But I'm happy because no matter how you appreciate Uber as a company in spite of their practices, there should be no monopolies, and competition is often the most healthy result to great results to consumers and to CREATE VALUE. I hope that ALL YC companies remember that the final destination to a profit driven economy is creating value to people. A large number of companies have made their cake and made their founders and investors very rich: stop looking at the bottom line and focus on creating value. Not things you can charge and make money of. Value.
ChrisAntaki 12y ago
I'm a little worried. More Lyft drivers on the road might mean it's harder for me, a simple pizza delivery man, to deliver value across the city of Chicago. At the same time, I welcome Lyft to challenge Uber's dominant position - and hope they can gain market share while maintaining a stronger moral stance than the incumbent.
- pgodzin 12y ago
  How does that affect your delivery business? Do you think more people take Lyft to get a pizza instead of waiting for delivery?
  - ChrisAntaki 12y ago
    I just worry about the congestion. Then again, I'd rather be driving alongside a Lyft driver than a taxi driver, if you know what I mean.
    - shazeline 12y ago
      I would argue that an increase in ride-sharing usage reduces traffic congestion.
      - ChrisAntaki 12y ago
        I hope you're right. It definitely helps with parking.
        benatkin 12y ago
        I need more evidence to have an opinion on whether Lyft and Uber are good for the environment. It's really hard to tell because there are people choosing them over public transit, and people choosing it over car ownership.
- logicallee 12y ago
  why do you mention being a simple pizza delivery man in all your comments? One of your recent comments: >Well, that's possible with compile-to-JavaScript languages. Also you have the option of plugins like Unity, if you're going for something graphically adventurous. >That being said, JavaScript is a powerful tool, if wielded correctly. It's so flexible. In a lot of ways, it's like a pizza. One man orders a pizza with anchovies, another with green peppers. And on and on. Eventually it's like they've got two completely different dinners. if you know about compile-to-JavaScript languages, and consider JavaScript a powerful tool and so flexible, why are you a pizza delivery man? (An unskilled job requiring no training.) Why don't you get skilled work as a programmer, even entry-level? And why would you make an inappopriate pizza analogy in a thread about javascript, or mention >When I knock on someone's door, and then hand them a hot box of pizza, they smile and often hand me money: $5's, $10's, sometimes a $100. I'm just doing my job, just like this Harlan "Father Time" Stenn. I suppose we take for granted, that which we can't see. in a way that is completely unrelated to the story you posted it under? Are you using this as a 'novelty account'?
downandout 12y ago
Lyft, with a valuation of around 5% that of Uber, is clearly losing this battle. However, its mere existence is causing something that is rarely seen: the transfer of billions of dollars out of the bank accounts of absurdly wealthy investors, almost directly into the hands of people at the lower end of the economy. After all, the vast majority of this money is going into incentivizing drivers to sign up/stay, and subsidizing rides. As long as this battle goes on and investors are willing to fund it, I'll be a fan of both companies. Sadly, it won't last forever.
- rhizome 12y ago
  One thing Lyft has going for them is that the entrenched interests see them as the same as Uber. Signaling and all that. Case in point: http://imgur.com/jbfcLpV.jpg http://imgur.com/jbfcLpV.jpg
- cubano 12y ago
  > the transfer of billions of dollars out of the bank accounts of absurdly wealthy investors, almost directly into the hands of people at the lower end of the economy. Aren't those AKA paychecks?
  - downandout 12y ago
    Yes, but no tech startup has ever employed this many non-Stanford/MIT grads at relatively high wages. Most Lyft/Uber drivers would be laughed at if they tried to apply for a job at Google or Facebook. Yet some drivers are earning more than entry-level engineers at these companies. Normal, everyday people with or without degrees are the recipients of most of this VC money at the moment. The fight for both drivers and riders is so fierce that drivers are being overcompensated and riders are being undercharged at the expense of investors hoping that these businesses will one day be profitable.
    - mbesto 12y ago
      I don't disagree with your premise, but it's a slight exaggeration and isn't factually correct. > Yes, but no tech startup has ever employed this many non-Stanford/MIT grads at relatively high wages. They are contractors.[0] There is a big difference here, as a Stanford/MIT grad contracting would easily make 2x that of an Uber driver. > Yet some drivers are earning more than entry-level engineers at these companies. Proof? My understanding is that the rough maximum you can make driving is $25/hr. Most junior web developers contracting make $40+/hr in SV. [0] - http://www.reuters.com/article/2015/03/12/us-lyft-drivers-idUSKBN0M72JM20150312 http://www.reuters.com/article/2015/03/12/us-lyft-drivers-id...
cndl-mkr-lvl-9 12y ago
I'm curious where these companies and driverless cars intersect. I guess Uber transitions to driverless cars and cuts costs. It's crazy to think about. It's more or less cheap driverless taxis.
gkanapathy 12y ago
I support alternatives to Uber, not because they're bad or anything, but because I don't want to see a monopoly develop. Competition is the best way to ensure that we don't wind up with the next Comcast. I found this analysis to be the most compelling thing supporting alternatives to Uber that I've ever read: http://www.interfluidity.com/v2/5822.html http://www.interfluidity.com/v2/5822.html
chrischen 12y ago
I think it's extremely premature that people are saying Uber has won. These companies operate in a bunch of silo'd markets so for Uber to "win," they'd have to one by one take all the markets. It's more appropriate to look at individual markets where both are competing and see how they perform relative to each other. I think Uber's higher valuation is probably due to the fact that they've aggressively expanded and are in more markets than Lyft, Sidecar, and others.
godgod 12y ago
I'm personally a fan of Lyft. Uber execs are too sleezy for me. That means something to some of us.
xacaxulu 12y ago
I still prefer Uber because it's nicer than Lyft. Not uberx of course, but even then uberx is basically on par with all Lyft drivers. If I'm paying for a car service, I don't derive much value from a fist bump. I want a bottle of water in the back seat, tinted windows and the door opened for me - and the few extra dollars is more than worth it. Yes competition is good, but which supporting demographic do you think will keep a company afloat? I'm betting on the people that fly business class. There are good reasons Uber attracts the big money investors.
- closetnerd 12y ago
  I'm inclined to believe you simply based on evidence. Uber is till, by far, the choice for most. Moreover Travis Kalanick seems to have the passion for efficient transportation as Steve Jobs did for Apple products. And I suspect there is some biased on Hacker News in favor of Lyft. Thiel is now even a partner of Y Combinator. And if I was Lyft, I'd rely on the passion of techies and engineers to push Lyft's "benevolent underdog" fight against the "evils of the goliath" Uber.
jerguismi 12y ago
When does Lyft expand internationally? The value of this kind of ride-sharing apps to me is primarily when I'm traveling. Getting reliable rides in a foreign country is such a gigantic hassle. Uber seems to be only international ride-sharing app nowadays.
jerguismi 12y ago
When does Lyft expand internationally? The value of this kind of ride-sharing apps to me is primarily when I'm traveling. Getting reliable rides in a foreign country is such a gigantic hassle. Uber seems to be only international ride-sharing app nowadays.
nicholasdrake 12y ago
if self-driving cars become ubiquitous how does that change lyft and uber's business model? not unreasonable in a 10-20 year time frame right?
salimmadjd 12y ago
For once I get to disagree with A16Z, "Scott Weiss, general partner at Lyft investor Andreessen Horowitz, sees the company beating Uber by emphasizing better customer service...he compares Lyft’s opportunity to Southwest Airlines and Virgin America" I don't believe the comparison is correct. Catching an Uber is a quick decision process. I don't believe the change will be big enough to convert Uber users to install Lyft's app. They would have spend all that money raised and give it a way to get Lyft customer to refer friends with a free-ride coupon codes.
dkrich 12y ago
I think Lyft is making a major tactical mistake by using surge-pricing, and in my experience, in many cases at rates that are higher than those of Uber. While this may ensure that their drivers make a comparable amount to Uber drivers, its at precisely the times that Uber is surge-pricing at 1.7x+ that people are most-likely to look at alternate options. Indeed I've witnessed many instances of friends doing just that- checking Lyft and realizing that the cost is actually higher than Uber's and just using Uber or (gasp) an honest-to-God cab. If Lyft truly wants to land-grab from Uber, that is the most opportune time to do so. A secondary problem is that Lyft has far too few drivers (at least in DC) to realistically compete, which probably further compounds the aforementioned problem of constant surge-pricing. IMO to compete with Uber they should use this money to get more drivers on the road in major markets and do away with surge-pricing for some time until they have reached a higher market saturation.
- dopamean 12y ago
  I've never experienced significant (higher than 1.5x) surge pricing on Lyft but have frequently with Uber. The last time I was in New York the surge was 6x on Uber. This lasted for hours. The entire weekend I was there it never dropped below 2.1x. This was not during a holiday or bad weather. It was just the weekend.
  - untog 12y ago
    In my experience both Lyft and Uber use surge pricing in NYC. I've seen Lyft as high as 2x, Uber much higher. But I usually launch both apps to see what level they are at.
- aetherson 12y ago
  Yeah, you could see something working with the passengers where you say, "Okay, we'll be 1.3x the price of UberX all the time, and so we'll grab customers from Uber when they're surging (which is, after all, when most people want cars)" and some percentage of those people will become loyal customers who won't care about a small surcharge during non-surge times. But, realize, you're also competing for drivers. And at least a substantial fraction of your drivers are entirely willing to turn you on during the non-busy times and take advantage of your higher rates, and then switch to Uber during surge to take advantage of the temporarily higher rates there. Which can be a problem for you. There's probably a finesseable option here where you offer drivers some kind of volume-based bonus that keeps them hungry for your rides during surge times, but doesn't mean you bleed money. But it's definitely hard to hit that mark. Source: I used to work for Flywheel, which does "hail a taxi with your smartphone" and we spent a lot of time working through these kinds of scenarios.
itschaffey 12y ago
More competition is surely better for the consumer. As I'm based in London, I'm very much an Uber customer but I hope to see the pink moustaches driving around Buckingham Palace soon! Will be interesting to see how they plan to expand to the UK...

222 points by sethbannon 12y ago

This makes me happy. After having been an Uber customer, then an Uber driver, and now a Lyft customer, I'm more than happy to transition my business to Lyft. Where Uber made me feel douchey, Lyft has made me feel part of a community. Even though functionally the two services are indistinguishable, I've always had better experiences with Lyft. Lyft feels more grounded. You have the opportunity, if you wish, to sit next to your driver and not treat them as a lower class citizen. I don't hear about Lyft employees being ruthless or money-grabbing. And generally all Lyft drivers I've met have been happy Uber driver converts. I totally buy the Southwest Airlines angle they are trying to achieve.

jsonne 12y ago
Same. The way I describe the difference is that I started using ride sharing services to avoid taxis. Then all the taxi drivers started driving uberx so I switched to Lyft. It's as much about the experience as it is the convenience.
ChrisAntaki 12y ago
> And generally all Lyft drivers I've met have been happy Uber driver converts. I totally buy the Southwest Airlines angle they are trying to achieve. I've noticed this too - the Lyft driver's are happier on average. And when you do get a rude Lyft driver, chances are they are driving for Uber too. At least this has been my experience.
- outericky 12y ago
  I've heard this from drivers too. Lyft passengers are generally happier and more social, while Uber don't want to be bothered.
JoshTriplett 12y ago
> I totally buy the Southwest Airlines angle they are trying to achieve. I wouldn't compare any service I actually like to Southwest Airlines. Southwest seems to be one of the least appealing airlines in terms of comfort and quality.
- aetherson 12y ago
  My guess is that you're 30 or under? Southwest during its rise to prominence in the 90's and maybe early 2000's had this friendly, relaxed reputation. It was definitely an economical option, but they tried to be friendly and jokey and get out of your way. I agree that nowadays that has all gone away and they're just kind of cattle-cars.
  - karmajunkie 12y ago
    Agreed. There was a time i wouldn't fly anything BUT southwest if i could help it. I don't fly enough these days to care that much, but back when I did fly a lot, I really preferred their approach.
- worklogin 12y ago
  As a mid-20s middle class guy, it's the only airline I fly. No-nonsense, good price, friendly people. No, it's not luxury seating, but I really like flying with them. They also haven't screwed up connections or held up my baggage, which US Airways and United have.
meowface 12y ago
Did you perhaps mean JetBlue? Southwest isn't well-liked.
- ProAm 12y ago
  > Southwest isn't well-liked What are you referring to? Southwest is loved by customers and employees.
  - saryant 12y ago
    Southwest is still living on the goodwill they generated from their huge fuel hedge last decade. They don't allow their fares to be shown in the aggregators but they've convinced a large segment of the population to start their search at southwest.com rather than Orbitz/Kayak/Expedia because they believe WN will have the lowest price, but that's hardly ever true anymore. Brilliant but hardly consumer-friendly.
    - dkrich 12y ago
      I disagree. Myself as well as many people I know like the experience on Southwest. To me the best thing about them is their no-fee cancellation/change policy, right up to 15 minutes before take-off. To change a non-refundable flight on most other airlines carries a default $250+ fee. Being able to check bags at no additional charge is pretty awesome too.
wcummings 12y ago
>You have the opportunity, if you wish, to sit next to your driver and not treat them as a lower class citizen This might say more about you than Uber or Lyft. Why is sitting in the back treating them like a "lower class citizen"?
- bdcravens 12y ago
  I consider it keeping things professional to sit in the back. They are being paid to performing a service for me; it's not like it's slavery. I don't find myself feeling guilty about not standing when a waiter comes to my table.
- mbrubeck 12y ago
  In the early days, Uber's slogan was “everyone’s private driver” while Lyft was “your friend with a car.” Uber's marketing was aimed at recreating the experience of a private chauffeur (which in certain older times would have been a member of the servant class), while Lyft's marketing was aimed at recreating the experience of carpooling with a friend. Obviously neither marketing story was really true, but they did influence the way the customer experience was and is presented.

alaskamiller 12y ago

My car's in the shop getting fixed so I've been using Uber and Lyft in the suburban south bay--a market of long roads, horrible traffic conditions, and high rate of personal car ownership. Since the past week I've learned a few things: - all the drivers have both apps running and have no loyalty - drivers prefer uber customers, however - drivers don't like lyft's demo of college kids and local rides, it earns them no money - lyft drivers think uber is evil, uber drivers thinks lyft drivers are hippies - all the international travelers coming into silicon valley have uber and used to uber service - uber dispatches to lyft dispatches are a 5 to 1 ratio - drivers always complain lyft keeps them afloat but doesn't get them ahead - uber, whether intentionally or not, actually has viable career plan. an uber black driver i rode with on the lyft service explained how after selling his real estate company and investing in three lincoln escalades was able to make his money back on one of the cars after 7 months. - all the drivers concur uber is pretty evil, don't like the 1099 relationship, hate how uber corporate doesn't support the drivers over customers or incidents, yet sadly resign and accept the situation. it's oddly depressing talking to a uber driver. Over half a billion dollars at the E round is quite a lot to drop into a "community" instead of Uber's business. Hopefully the money is put into innovating locally instead of international expansion because they're definitely losing the game. And when the automated cars are here it would have been the tech game's worst investment cycle.

dnautics 12y ago
some of your statements seem contradictory. I'm in the bay area - I'll offer my perspective. - all the drivers have both apps running and have no loyalty Lyft offers a very strong driver incentive, and that has kept me off of the uber platform since I moved to oakland (and drive in SF) in december. - drivers prefer uber customers, however In San Diego (a different market) I really hated the uber customers and preferred the college demo. In SF, I never liked the uber customers, either, and I really liked the lyft demo, so I dropped uber. - drivers don't like lyft's demo of college kids and local rides, it earns them no money I think that's a south bay thing. One afternoon after a meeting in Palo Alto, I attempted to escape back to the city and wound up getting vortexed into Stanford, so I just got out of there. - lyft drivers think uber is evil, uber drivers thinks lyft drivers are hippies - all the international travelers coming into silicon valley have uber and used to uber service Shrug - uber dispatches to lyft dispatches are a 5 to 1 ratio This is a function not only of demand but also supply. In particular, in San Diego, I found that the dispatches were in a 2:1 ratio, BUT if I favored lyft rides over uber rides by strategically turning the app off, I was making significantly more per week, because lyft's "loyalty program" is strong. - uber, whether intentionally or not, actually has viable career plan. an uber black driver i rode with on the lyft service explained how after selling his real estate company and investing in three lincoln escalades was able to make his money back on one of the cars after 7 months. Well if this guy had some initial capital beforehand a 'real estate company' this doesn't mean much. It might be more difficult to bootstrap this from scratch, which is what you are suggesting when you say 'viable career plan'. This is also contradicted by your projection of automated cars. By contrast, during my down time from lyft, I'm running a nonprofit research organization and also coding a backend for a startup. - all the drivers concur uber is pretty evil, don't like the 1099 relationship, hate how uber corporate doesn't support the drivers over customers or incidents, yet sadly resign and accept the situation. it's oddly depressing talking to a uber driver. Lyft has this 1099 relationship too, and it makes it for very tough running sometimes. But you just have to roll with the punches and keep hustling.

StartupLSatoshi 12y ago

I'm shocked. </sarcasm> So, to ask the question that Thiel has asked, is this a market that supports a monopoly, or is it going to be a consumer-favoring highly competitive scene? > Thiel is also an investor in Airbnb– yet another darling of the sharing economy, valued at a “mere” $10 billion compared to Uber’s $18 billion. Unlike Uber and Lyft, Thiel argued, there is no obvious competitor to Airbnb. That in and of itself makes it a more valuable company because of the distraction and profit erosion that he describes throughout his book. Thiel seems to think that it doesn't support a monopoly, and I'd tend to agree. So, assuming that it's a competitive market, and Uber and Lyft repeatedly copy the features of one-another, I'm very curious to see what kind of profit margins and therefore valuations are supported. For a competitive market, it seems like the gap between Lyft's $2.5bn and Uber's $41 is bound to be reduced, one way or the other.

habosa 12y ago

This is great. More competition is great for me, the consumer. Recently Lyft and Uber have bother offered flat rate rides for $5-7 anywhere in SF. When people ask me how it can be so cheap, I always joke it's because it's a $15 ride but you're splitting it with a venture capitalist. I wonder if either company has any serious long-term plan to make sure they are not competing in a commoditized space. Currently the services are basically indistinguishable. Sure most people have a preference one way or the other, but it's not a preference they'd stick to if the other service was a few bucks cheaper. They seem to be in lock step, doing the same things and alternating who makes the first move. If they're not careful they will become like the airline industry. 40 years ago airlines were a glamorous new way to travel. Now they are reduced to who can offer the cheapest point-to-point ticket with 17" of leg room, customer service is an unexpected bonus.

conanbatt 12y ago
I wouldn't compare cabs to airlines. 10% price difference between one airline to the other can be 100 to 200 dollars in a single buy , where in cabs it could be spread out in an entire year. I agree that airline competition has been so price focused that value to consumer has been eroded, but cabs are fundamentally a simple, less pricey , decision. I hope they become commodities regulated for safe driving and rather modern cars (no older than x years). The rest really IS icing on the cake.
- bsbechtel 12y ago
  I would argue airline competition focus on pricing is due to the marketing/purchasing methods presented to consumers when they go to buy a ticket. Expedia, Orbitz, Priceline, etc all show a big graph listing the prices of all flights taking place on the dates you want to travel. If you list a comparison of any product to consumers with little information about the varying products other than price, most consumers are going to make their purchasing decision based on price alone. Having said that, I'm not at all arguing that price isn't important in the airline industry. $200 is a big chunk of change for an airline ticket. However, consumers might be a little more flexible about price if they had a better idea of what other value they are getting on the trip.

elliotec 12y ago

Here in Salt Lake City, Lyft already won by a long shot. Its crazy, they got here like a week or two before Uber, but their arrival seemed to just not leave any room for a competitor. Uber can rarely be found here, and if it can its always longer and more expensive than Lyft. Long live Lyft. Also, thank god they got rid of the mustache thing and just put the pink sticker in their back window.

FlyingLawnmower 12y ago

Hopefully Lyft puts some of that money towards supporting more platforms that could make it competitive with Uber. I would love to have alternative options, but unfortunately, it seems like Uber is the only service that offers a Windows Phone application and a Mobile site to order off of. While there aren't too many non iOS/Android mobile phone users, all of us are collectively tied to Uber.

techstrategist 12y ago
I think this tells us something very interesting about the startup economy: your choice of car service is dictated by the brand of mobile phone that you own.
JohnLen 12y ago
Totally agree.

starmole 12y ago

I might be missing something here because nobody else brought it up: Is this not just a necessary move to salvage investments in Lyft? Assuming Uber won already, Lyft investors need to keep it dangerous enough to force a buy out or write it off completely. Keep Lyft alive until Uber is forced to buy it pre/post IPO? At some point the Lyft competition is going to cost Uber more than the price of just buying them out. Please note that I am not a biz guy so if I am wrong I would be very happy for an explanation on how/why.

lexap 12y ago
The industry is big enough for multiple players.
- starmole 12y ago
  It might be, but then it's a commodity! I think the valuation of Uber and Lyft is based very much on a winner takes all model.
  - CamperBob2 12y ago
    To some extent those valuations are based on expectations for the future, where the companies don't even need to employ human drivers. Whoever owns the "Johnnycab" concept twenty or thirty years from now is going to be very profitable.
    - maxerickson 12y ago
      Is a strong brand much of a moat? It seems the only way there can be much pricing power is onerous regulation preventing others from stepping into the market. (For example: Why wouldn't an airport charge local cab owners a small fee to be listed in their registry? Why wouldn't passengers access that registry to save $10?)
      - CamperBob2 12y ago
        It seems the only way there can be much pricing power is onerous regulation preventing others from stepping into the market. That could be another aspect of first-mover advantage: no latecomer will have the same opportunities for regulatory capture that Uber and/or Lyft will have. It's not a question of if the taxicab incumbents will lose their grip on the regulatory process, but when. Whoever takes their place will be able to shut their competitors out, or at least make life hard for them.

martinald 12y ago

I think this industry is going to end up exactly like the airline industry. IE: no margins to speak of really. I just can't see how one company can ever have a long term competitive advantage. I think any current perceived advantage is down to the amount of VC cash flowing in and also how abysmal the old school taxi competition is.

conanbatt 12y ago

Im glad investors are backing Lyft even if today its the underdog compared to Uber. Its no secret that Uber's practices provoke disgust or discomfort, and that many would wish Lyft to do better just because at least in appearences they havent been behaving as douchey as Uber. But I'm happy because no matter how you appreciate Uber as a company in spite of their practices, there should be no monopolies, and competition is often the most healthy result to great results to consumers and to CREATE VALUE. I hope that ALL YC companies remember that the final destination to a profit driven economy is creating value to people. A large number of companies have made their cake and made their founders and investors very rich: stop looking at the bottom line and focus on creating value. Not things you can charge and make money of. Value.

ChrisAntaki 12y ago

I'm a little worried. More Lyft drivers on the road might mean it's harder for me, a simple pizza delivery man, to deliver value across the city of Chicago. At the same time, I welcome Lyft to challenge Uber's dominant position - and hope they can gain market share while maintaining a stronger moral stance than the incumbent.

pgodzin 12y ago
How does that affect your delivery business? Do you think more people take Lyft to get a pizza instead of waiting for delivery?
- ChrisAntaki 12y ago
  I just worry about the congestion. Then again, I'd rather be driving alongside a Lyft driver than a taxi driver, if you know what I mean.
  - shazeline 12y ago
    I would argue that an increase in ride-sharing usage reduces traffic congestion.
    - ChrisAntaki 12y ago
      I hope you're right. It definitely helps with parking.
      - benatkin 12y ago
        I need more evidence to have an opinion on whether Lyft and Uber are good for the environment. It's really hard to tell because there are people choosing them over public transit, and people choosing it over car ownership.
logicallee 12y ago
why do you mention being a simple pizza delivery man in all your comments? One of your recent comments: >Well, that's possible with compile-to-JavaScript languages. Also you have the option of plugins like Unity, if you're going for something graphically adventurous. >That being said, JavaScript is a powerful tool, if wielded correctly. It's so flexible. In a lot of ways, it's like a pizza. One man orders a pizza with anchovies, another with green peppers. And on and on. Eventually it's like they've got two completely different dinners. if you know about compile-to-JavaScript languages, and consider JavaScript a powerful tool and so flexible, why are you a pizza delivery man? (An unskilled job requiring no training.) Why don't you get skilled work as a programmer, even entry-level? And why would you make an inappopriate pizza analogy in a thread about javascript, or mention >When I knock on someone's door, and then hand them a hot box of pizza, they smile and often hand me money: $5's, $10's, sometimes a $100. I'm just doing my job, just like this Harlan "Father Time" Stenn. I suppose we take for granted, that which we can't see. in a way that is completely unrelated to the story you posted it under? Are you using this as a 'novelty account'?

downandout 12y ago

Lyft, with a valuation of around 5% that of Uber, is clearly losing this battle. However, its mere existence is causing something that is rarely seen: the transfer of billions of dollars out of the bank accounts of absurdly wealthy investors, almost directly into the hands of people at the lower end of the economy. After all, the vast majority of this money is going into incentivizing drivers to sign up/stay, and subsidizing rides. As long as this battle goes on and investors are willing to fund it, I'll be a fan of both companies. Sadly, it won't last forever.

rhizome 12y ago
One thing Lyft has going for them is that the entrenched interests see them as the same as Uber. Signaling and all that. Case in point: http://imgur.com/jbfcLpV.jpg http://imgur.com/jbfcLpV.jpg
cubano 12y ago
> the transfer of billions of dollars out of the bank accounts of absurdly wealthy investors, almost directly into the hands of people at the lower end of the economy. Aren't those AKA paychecks?
- downandout 12y ago
  Yes, but no tech startup has ever employed this many non-Stanford/MIT grads at relatively high wages. Most Lyft/Uber drivers would be laughed at if they tried to apply for a job at Google or Facebook. Yet some drivers are earning more than entry-level engineers at these companies. Normal, everyday people with or without degrees are the recipients of most of this VC money at the moment. The fight for both drivers and riders is so fierce that drivers are being overcompensated and riders are being undercharged at the expense of investors hoping that these businesses will one day be profitable.
  - mbesto 12y ago
    I don't disagree with your premise, but it's a slight exaggeration and isn't factually correct. > Yes, but no tech startup has ever employed this many non-Stanford/MIT grads at relatively high wages. They are contractors.[0] There is a big difference here, as a Stanford/MIT grad contracting would easily make 2x that of an Uber driver. > Yet some drivers are earning more than entry-level engineers at these companies. Proof? My understanding is that the rough maximum you can make driving is $25/hr. Most junior web developers contracting make $40+/hr in SV. [0] - http://www.reuters.com/article/2015/03/12/us-lyft-drivers-idUSKBN0M72JM20150312 http://www.reuters.com/article/2015/03/12/us-lyft-drivers-id...

cndl-mkr-lvl-9 12y ago

I'm curious where these companies and driverless cars intersect. I guess Uber transitions to driverless cars and cuts costs. It's crazy to think about. It's more or less cheap driverless taxis.

gkanapathy 12y ago

I support alternatives to Uber, not because they're bad or anything, but because I don't want to see a monopoly develop. Competition is the best way to ensure that we don't wind up with the next Comcast. I found this analysis to be the most compelling thing supporting alternatives to Uber that I've ever read: http://www.interfluidity.com/v2/5822.html http://www.interfluidity.com/v2/5822.html

chrischen 12y ago

I think it's extremely premature that people are saying Uber has won. These companies operate in a bunch of silo'd markets so for Uber to "win," they'd have to one by one take all the markets. It's more appropriate to look at individual markets where both are competing and see how they perform relative to each other. I think Uber's higher valuation is probably due to the fact that they've aggressively expanded and are in more markets than Lyft, Sidecar, and others.

godgod 12y ago

I'm personally a fan of Lyft. Uber execs are too sleezy for me. That means something to some of us.

xacaxulu 12y ago

I still prefer Uber because it's nicer than Lyft. Not uberx of course, but even then uberx is basically on par with all Lyft drivers. If I'm paying for a car service, I don't derive much value from a fist bump. I want a bottle of water in the back seat, tinted windows and the door opened for me - and the few extra dollars is more than worth it. Yes competition is good, but which supporting demographic do you think will keep a company afloat? I'm betting on the people that fly business class. There are good reasons Uber attracts the big money investors.

closetnerd 12y ago
I'm inclined to believe you simply based on evidence. Uber is till, by far, the choice for most. Moreover Travis Kalanick seems to have the passion for efficient transportation as Steve Jobs did for Apple products. And I suspect there is some biased on Hacker News in favor of Lyft. Thiel is now even a partner of Y Combinator. And if I was Lyft, I'd rely on the passion of techies and engineers to push Lyft's "benevolent underdog" fight against the "evils of the goliath" Uber.

jerguismi 12y ago

When does Lyft expand internationally? The value of this kind of ride-sharing apps to me is primarily when I'm traveling. Getting reliable rides in a foreign country is such a gigantic hassle. Uber seems to be only international ride-sharing app nowadays.

jerguismi 12y ago

nicholasdrake 12y ago

if self-driving cars become ubiquitous how does that change lyft and uber's business model? not unreasonable in a 10-20 year time frame right?

salimmadjd 12y ago

For once I get to disagree with A16Z, "Scott Weiss, general partner at Lyft investor Andreessen Horowitz, sees the company beating Uber by emphasizing better customer service...he compares Lyft’s opportunity to Southwest Airlines and Virgin America" I don't believe the comparison is correct. Catching an Uber is a quick decision process. I don't believe the change will be big enough to convert Uber users to install Lyft's app. They would have spend all that money raised and give it a way to get Lyft customer to refer friends with a free-ride coupon codes.

dkrich 12y ago

I think Lyft is making a major tactical mistake by using surge-pricing, and in my experience, in many cases at rates that are higher than those of Uber. While this may ensure that their drivers make a comparable amount to Uber drivers, its at precisely the times that Uber is surge-pricing at 1.7x+ that people are most-likely to look at alternate options. Indeed I've witnessed many instances of friends doing just that- checking Lyft and realizing that the cost is actually higher than Uber's and just using Uber or (gasp) an honest-to-God cab. If Lyft truly wants to land-grab from Uber, that is the most opportune time to do so. A secondary problem is that Lyft has far too few drivers (at least in DC) to realistically compete, which probably further compounds the aforementioned problem of constant surge-pricing. IMO to compete with Uber they should use this money to get more drivers on the road in major markets and do away with surge-pricing for some time until they have reached a higher market saturation.

dopamean 12y ago
I've never experienced significant (higher than 1.5x) surge pricing on Lyft but have frequently with Uber. The last time I was in New York the surge was 6x on Uber. This lasted for hours. The entire weekend I was there it never dropped below 2.1x. This was not during a holiday or bad weather. It was just the weekend.
- untog 12y ago
  In my experience both Lyft and Uber use surge pricing in NYC. I've seen Lyft as high as 2x, Uber much higher. But I usually launch both apps to see what level they are at.
aetherson 12y ago
Yeah, you could see something working with the passengers where you say, "Okay, we'll be 1.3x the price of UberX all the time, and so we'll grab customers from Uber when they're surging (which is, after all, when most people want cars)" and some percentage of those people will become loyal customers who won't care about a small surcharge during non-surge times. But, realize, you're also competing for drivers. And at least a substantial fraction of your drivers are entirely willing to turn you on during the non-busy times and take advantage of your higher rates, and then switch to Uber during surge to take advantage of the temporarily higher rates there. Which can be a problem for you. There's probably a finesseable option here where you offer drivers some kind of volume-based bonus that keeps them hungry for your rides during surge times, but doesn't mean you bleed money. But it's definitely hard to hit that mark. Source: I used to work for Flywheel, which does "hail a taxi with your smartphone" and we spent a lot of time working through these kinds of scenarios.

itschaffey 12y ago

More competition is surely better for the consumer. As I'm based in London, I'm very much an Uber customer but I hope to see the pink moustaches driving around Buckingham Palace soon! Will be interesting to see how they plan to expand to the UK...