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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 t

by 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.

by dkrich 12y ago

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.