Lyft Vs Uber: Is Lyft Being `Woke` Enough to Beat Uber? |
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Though the enterprise side of the business grew gradually – providing a steady stream of revenue – Green and Zimmer decided to go bigger and open up the customer side of the business. In 2012, they introduced a new service at Zimride called ‘Lyft’ that helped users connect with each other for ridesharing on much shorter trips, through a mobile app. The new service was given a separate name – Lyft – to differentiate it from the existing Zimride service. . |
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| From the time Uber launched its own peer-to-peer ride sharing services, it had taken a lead over Lyft. Though exact user numbers were not released by either company, Uber, according to market research firm FutureAdvisor Research, had about five times more credit-card transactions than Lyft in May 2014, which pointed to a larger number of riders using Uber than Lyft... |
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| Considering the complexities of the industry, Lyft decided to capture market share in the ride sharing space by differentiating itself from Uber through other measures. For Lyft, the key way to differentiate itself from Uber was to show that it had better morals and values than its rival. Since 2014, Uber had been embroiled in one controversy after another. Moreover, Uber had resorted to several questionable business practices in a bid to undermine Lyft, and this provided Lyft the opportunity to portray itself as a better company. . |
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| Industry observers believed that though Uber was paying the price for having low ethical standards, it would be simplistic to believe that Lyft could beat Uber just by being a nicer company. They felt that while Lyft was striving for a better image, Uber offered a faster service, apart from ensuring a balance between supply and demand. They felt that Lyft should try to beat Uber by striving to have more drivers, shorter rider wait-times, and lower fares, thereby providing a better customer experience. . |
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| Analysts believed that the only feasible way in which Lyft could differentiate itself from Uber was to take measures that would make more drivers prefer to work for it rather than for Uber. Industry observers felt that the key factor that determined the revenue in the ride sharing industry was the number of drivers available or ‘Share of Drivers’. It was observed that most drivers used both the Lyft and Uber apps and provided their service as per demand. . |
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| Being the industry behemoth, Uber had attracted heavy funding of US$ 14 billion (equity and debt) from over 70 venture capital firms, private equity funds, and high-net-worth individuals over the years. However, the end of 2017 saw a massive 30% decline in its market valuation to US$ 48 billion from a high of US$ 69 billion, due in part to the scandal ridden year the company had gone through. . |
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Exhibit IA: Key Similarities between Lyft and Uber, as of 2017
Exhibit IB: Unique Features of Lyft and Uber, as of 2017
Exhibit II: Friendly Options Given to Drivers of Lyft and Uber
Exhibit III: Partnerships of Lyft and Uber in the Autonomous Vehicles Space
Exhibit IV: Information about Ride Sharing Companies, as of 2017
Exhibit V: Comparison of the Financials of Lyft and Uber (in Millions of US$)
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