I took Uber a half dozen times in the past couple days (on vacation). Since I'm very interested in the Uber vs. Lyft battle, I've been talking to all of the drivers.
All of them except for one drive for both Uber X and Lyft, and none of them really care one way or the other about who wins. Only one had a pink mustache, and it was a little stuffed one on the dashboard, probably six inches wide; he also had an uber sticker. One expressed worry about Uber taking over and not having a competitor to hold its feet to the fire.
The one who only drives for Uber is a new mother that just likes to get out and talk to people who aren't babies, and she gets paid to do so.
To them, at least, the article is right. The services themselves are awesome, yet mostly indistinguishable.
Interestingly enough, I'm 99% sure if I came here pre-Uber/Lyft I would just rent a car. I have a serious aversion to taxis, but Uber just takes the pain away. The drivers noted that tons of people have been saying that.
I've been using Uber for a while now, at home and on holiday. I still haven't tried Lyft. The main reason being it's not available outside the US, and I'm one of the few people out here in the world.
Last month I was in San Francisco and I STILL couldn't use Lyft, because you need a US phone number to sign up.
From day one Uber has been thinking on a different scale.
“I’ve noticed lots of Lyft drivers dropping the signature pink mustache from their cars. Many also don’t bother with the fist-bump introduction, another Lyft convention.”
This is very noticeable now. Lyft used to stand for a different customer experience to Uber, but now it's effectively the same. It's sad (although probably inevitable) that their growth has lead to such a dilution of their brand.
The fist bump was always awkward. This isn't Couchsurfing, you're not my buddy and we're not about to share some profound life experience together. I'm not going to get out of your car in 10 minutes with your contact and a promise to grab a beer.
This is strictly a quid pro quo transaction - nobody is going around riding Lyfts to meet interesting people, except maybe journalists hunting for a story. And nobody is out there driving Lyfts to meet interesting people... except maybe journalists hunting for a story. Let's not pretty it up with SV-style faux-populism.
Friendliness and mutual respect? Absolutely, the same respect and courtesy you'd show to any other human. But let's be real about the other stuff.
The fist bump got dropped because neither the drivers nor passengers cared about the fist bump.
I always specifically avoided Lyft because I thought they would all show up with a stupid pink mustache on the car and fist bump me like we were bros. And all I wanted was a smooth transport for my wife and I.
I thought the fist bump was awkward, but I would disagree with your statement that nobody drives around to meet interesting people. Most of the drivers I meet actually say that's a big part of the appeal.
I think its quite possible that lyft's schtick was a key aspect that kept it in the game. And the more social experience was a key differentiator. Sure its subsiding but i woukd not discount its importance.
> The fist bump got dropped because neither the drivers nor passengers cared about the fist bump.
I hate to tell you this, but not everyone is a button-down or a neckbeard. I liked the casual friendliness of it.
> nobody is going around riding Lyfts to meet interesting people
I wouldn't actively go grab a Lyft just for that purpose, but when some friends and I are a bit tipsy and heading out to the club? Absolutely we'd rather be in a fun environment with an interesting person.
Eh, casual friendliness is one thing, telling all of your employees/contractors to fist-bump customers is something else.
Don't get me wrong, I like things to be casual - in fact I find Uber's customer experience to be too far on the other end of the spectrum. "Yes sir", "of course sir", "would you care for some water, sir?" - blech!
I also enjoy chatting with my drivers, because hell, I might learn something.
But if my driver's having an off day and just wants to get me from A to B? That's fine. If my driver just isn't the super-chatty type? That's fine too. Expecting everyone performing a service for you to be bright, chipper, energetic, and ready to spill the beans on all manners of subjects, all the time strikes me as unreasonable - an attempt to create a social bond where none has been earned. Are we so devoid of meaningful social contact that we must try to artificially induce it by decree for paying customers?
Let's not forget that the fist bump - like the pink mustache - is not some organic thing that developed in the "community", it's an instruction from headquarters.
> "but when some friends and I are a bit tipsy and heading out to the club? Absolutely we'd rather be in a fun environment with an interesting person."
Does the interesting person want to be in the same environment as you? Does the interesting person find this environment at all fun? Has it occurred to you that people drive around drunks on Fri/Sat nights for a living, not for fun?
I mean shit, is this guy a driver or a court jester?
Their brand image was and is severely problematic and honestly should be viewed as a liability, in my humble opinion at least.
Or maybe I am the only one that prefers simple no-bs customer experiences over kitsch and hipster-bro nonsense. I would pay a $3 surcharge to avoid all pink furry things and fist bumps honestly.
Lyft could really benefit from a decisive and purposeful rebranding.
Disclaimer: I've never used Lyft and the following is purely hearsay:
In the area I live in (where we've got Uber(x), Hailo, and Lyft) there was word that cars that had the pink mustache were being targeted by taxi drivers for harassment, so I think they pulled them off for safety.
Uber has slipped in terms of standards too. They have been adding drivers like crazy in my area and apparently to save time they have stopped meeting new drivers in person all together. The driver I got didn't get the memo about having a clean car. It was his first day on the job and the interior had all his personal junk in it as well as a bunch of garbage from fast food visits past strewn about. It was truly disgusting.
The great thing about Uber versus Taxis - is that you were able to downvote him down, and presuming others do as well - he will no longer be driver for Uber for much longer.
Compare that to crazy taxi drivers with really terrible cars - they stay in the system for many, many years.
You can provide feedback to Taxis, but they normally have the system of needing to reference a license number or ID number, and you probably have to either ring their office, or put something in writing. That's too much hassle for most people, so bad drivers tend to stay on until they do something seriously bad or illegal.
Exactly. With Uber/Lyft you provide feedback on each and every driver. (And, of course, they do likewise with you).
That's one of the key innovations that Uber/Lyft have brought, (the other one of course being a Unified Geo-Dispatch system in any city that they serve)
For sure, and I certainly did give feedback in that regard. Made me wonder though how many riders reporting a bad experience it would take to get the guy off the road and to correct the situation.
I'd bet a bit part of this is law enforcement targeting these cars in certain cities. The mustache is an absurdly easy way to see which cars should be pulled over.
For one thing, how many drivers they have matters. More data might produce better estimated ETA (at least Uber use the data from the drivers to predict future traffic congestion, etc.).
Another thing is how well they control supply and demand. Say Uber has 10x drivers than Lyft, what if Uber has 100x consumers than Lyft? Uber likely has to surge at a very high rate, and the consumer can't afford a surge might go to Lyft instead. Since Uber can't control well how many total consumers they have at the moment without surging, one realistic alternative is to just reduce the number of Lyft drivers, so Lyft have to charge higher rates as well.
Here Uber doesn't just want more consumers coming in, because even less consumers is better than more consumers come in initially and can't afford a surge and then have to turn to Lyft.
So to sum up, in the end, Uber have to recruit more drivers (hey, they even just opened API for their product) or cut the number of drivers from Lyft (through alluring them). You can't blame Uber on that, it's the competitiveness of this market.
I don't use these services much, so I might be confused, but wasn't Uber initially a limousine/black car type service with professional (insured, taxed, maybe trained) drivers, and only later expanded into "ride sharing" with UberX, while Lyft has always been doing ride sharing?
Personally I prefer the old Uber over the "ride sharing" Uber and I don't really understand why they have diluted their brand to the point where some people don't even realize that Uber drivers are not necessarily random people driving their family car, but may be professional drivers.
I use both of these services extensively, but have only used Uber (the limousine service), a half dozen times or so.
UberX is at least a 20x, if not 30-40x larger business than Uber proper, which is why they transitioned away from simple black limousine service. A trip to San Francisco by Taxi from Redwood City is about $105. Via Uber it is about $150 (presuming no Surge Pricing) - Lyft/UberX charge me about $40-$55 (depending on wait time). And, unlike a Taxi, I get almost immediate service, by a courteous and professional driver eager for good feedback. As a 15 year+ user of taxis on the peninsula, and having taken Lyft/UberX around 100 times so far - I get a much more enjoyable experience in Lyft/UberX than I ever did in a taxi, some of who did know the area, but many of them just confused new-arrivals to the Bay area in dangerous vehicle that had me fearing for my life.
I didn't realize RWC-SF is only $50 on UberX, maybe I should try that some time! The only experience I have made with taxis around here is meeting them on the road as cyclist, and that's enough to never want to be inside one.
One thing that speaks for taxis is that they are insured for commercial transport of people so if I get hurt in one, it is likely that I get compensated. How does this work for UberX/Lyft where people use their personal cars?
UberX is easier and cheaper than a taxi when you normally take public transit but don't want to this time (or want to expedite an inconvenient first/last mile.)
Uber proper is priced for people who are used to driving their BMWs or hiring limousines but don't want to this time.
I assume they realized that the former is a larger (and currently underserved) customer base.
> Uber proper is priced for people who are used to driving their BMWs or hiring limousines but don't want to this time.
I've taken a few black cars not because I'm into limousines that much, but because of airport regulations, and the ride is typically within the range of the cab. Cab drivers in the US also expect to be tipped in 10-20% range, which leaves Uber black car service frequently a winner price-wise.
As someone who used the app a couple of times I am aware of that. I am talking about the public image Uber paints of itself for those not using the service yet. For example, many of my German friends only know about Uber through media coverage of "Uber vs taxi industry" where Uber is always described as ride sharing. To the uninitiated this sounds like Uber's goal is to replace professional insured certified tax-paying businesses with an app-ified version of the gypsy cab industry. More than once have visiting friends given me a strange look when I suggested using Uber to get around SF. I think Uber might be better served at winning new customers and fighting their political fights when they present themselves as a black car service with a ride sharing add-on.
I see what you are saying, but, in general, I think the aviation industry has taught us that people are pretty price sensitive when it comes to transportation. Uber is quite expensive, so the risk you run is making people think "Expensive" when they think of the Black Limousine service (which is incredibly awesome, BTW - totally appropriate for dates where you want to drink, or taking executives out to a meal).
I don't think twice about using UberX/Lyft right now - and certainly would never call a taxi in an area served by them.
If the services are pretty much equivalent, and the only thing left to compete on is price and/or some vague elements like experience, isn't this basically a textbook case of commodity?
The pricing depends on Surge and Wait times and is pretty volatile - both of them are experimenting. I see a 10-15% shift in the Bay Area - with the win going to one of Lyft or Uber randomly. I agree with Farhad - I use the two services indiscriminately. As far as "Better Experience" - Many drivers in the Bay area work for both services, and some previously worked for Lyft and Moved to Uber, and Vice Versa.
Long term - it really depends on how committed each service is to responding to User Feedback, and managing the drivers with consistently low scores out of their system.
Based on my own personal comparisons in San Francisco, I would mostly agree. Most of the differentiation relevant to me is the app itself. I still mostly use Sidecar, solely because it has the easiest workflow of choosing pickup and destination. I also agree with the article that this is a good thing for riders.
I'm glad to see Sidecar mentioned. I too live in SF and use all of these apps, and Sidecar has been my first goto for years. It's odd that Lyft and Uber seem to get all the press. When Lyft got really obnoxious with the mustaches and fist-bumps, my order of checking for rides was: Sidecar -> Flywheel -> UberX -> Lyft.
Recruiting drivers from each other: So if Google heavily recruits sw developers from Apple or Facebook does that mean Google and Apple are basically the same company?
Did someone tell Amazon yet that you don't want to be a commodity? I'm ok being the number 1 in a commodity market if the opportunity is to make 10 cents on every mile anyone ever travels on the road?
Not really sure what the point of the article is given this is transportation the actual "thing" (getting from point a to point b) creates commoditization. But there are sooo many ways to use technology and service to then differentiate and then win. And this is an industry in such a early/nascent state.
The sharing economy has a common core I.e uber,Lyft,airbnb. Social currency and brand equity will make one win over the other. What customers remember to say about the brand is what will make someone remember to either open their uber or Lyft app the next time they need a ride. If I were in charge of their marketing id invest heavily in product placement for at least a year.
The fact that these companies are working extremely hard to recruit each other's drivers means they are the same companies. Otherwise they would focus on some other core competency.
Google does not need to tell you they are better than another search engine. Use it once, and decide.
Assuming Uber goes public in the near future (and I believe it will), I wouldn't be surprised to see them buy Lyft. Who knows. Lyft could IPO before that happens, but I would bet on it happening. See also: Seamless & GrubHub, Zillow & Trulia
Whatever happens, it's very likely that only one of them will go public.
And given how indistinguishable both have become and how non-sticky their service is, it wouldn't surprise me if the very existence of two competitors that are so similar makes it impossible for either one of them to reach the kind of profitability that's a requirement for IPO's.
Kudos for disrupting the taxi industry, which was in dire need of a kick in the butt, but I think both companies are about to discover that profitability is a lot harder to achieve when you have competitors who can run a business that's 100% a clone of yours.
The simple fact that most drivers are working for both Uber and Lyft should be a red flag for any savvy investor.
> Whatever happens, it's very likely that only one of them will go public.
Your analysis of the IPO situation could use another look. I personally think it's very likely both companies will go public -- or Uber will snap up Lyft before it has the chance. While it's pretty reasonable to think there would be a "profitability requirement", a look at tech IPOs dispells that myth. Look at the recent ones, the ones from a few years ago, the 20 year old ones from the 90s, doesn't matter which period you look, you'll find scores of unprofitable companies.
Recently Go Pro and Twitter went public. Neither, I don't think, are profitable. Of the 4 companies I mentioned in my comment, I don't think any are profitable consistently though perhaps Zillow has been recently. Amazon went public 20 years ago and is still not profitable.
Neither of these companies need to turn a consistent profit in order to IPO. I imagine they both already have sales high enough to pass the chickenshit threshold. That's all that counts.
Fair points, we'll see how things unfold. I still stand by my claim that at most one of them will go public. After that, either that one will buy the other one or one of them will fade (probably the one that didn't go public).
Lyft was allegedly rebuffed by investors over the summer (they apparently tried to raise another round once Uber raised their 1B round). It sounds like Lyft's investors are really pushing Uber for an acquisition (http://www.businessinsider.com/uber-lyft-wants-us-to-acquire...). I'd be surprised to see them ever make it to an IPO. Their recent spree of attack articles against Uber seem to line up with the alleged threats to "go nuclear" if they aren't acquired. It seems like a desperate company on the way out.
Hold up. Lyft raised 1/4 billion dollars 5 months ago. I really question your sources here, but IF there was any issue with Lyft raising more money it's certainly a question of valuation. Not whether they can raise but whether they can raise on their own terms. And of course lyft's investors want an Uber buyout. Anyway, I certainly cannot predict the future, but on the trajectory Lyft is on as it looks to me living in SF, an IPO is on the horizon.
Interesting to see the on-the-ropes impression by several of you. Where do you live?
Might as well treat them as that, then. I envision an app called RideMETA that orders you a cab from each and cancels on whichever doesn't arrive first.
It's all about the customer and raw, capitalist competition as they keep telling us.
There's no theory of competition that expects incumbents to allow their own infrastructure to be used against them.
But you're right, if the article is correct, we should expect Uber and Lyft to fight tooth and nail to provide the better product for consumers, which is the beauty of competition. They do all the work and take all the risk, we get almost all the benefit. Both companies seem uniquely placed to have exactly zero chance of capturing regulatory favours.
It's not necessarily a competition thing though, is it. Intermediaries sit on top of them, rather than competing. And they rise in many industries because they can provide value that suppliers can't. In the travel industry, consumers want (for example) the cheapest rates on elements of holidays, hotels etc. So price comparison sites happened. Suppliers can't do anything about this in terms of competition, because the intermediary has a value proposition that the suppliers can't offer which the market wants, and the suppliers want the sales anyway.
With ride sharing, consumers presumably want the cheapest, quickest, cleanest fleet. I doubt fist-bumps really factor in to the experience. Suppliers can improve their fleet, improve their drivers and so on, using their own perspective as a guide. Aggregators can offer the cheapest, quickest, cleanest fleets to the market without having the limited perspective. They get a better view of the market through this too, potentially adding value to the whole supply chain.
Incumbents don't have to allow their own infrastructure to be "used against them", but they will, because this is what the market wants.
Uber is a good business, but valuing it at $18 billion seems absurd to me. You can't price businesses as though they will have incredible growth without some discount for the risk involved. One of the risks is competition.
> You can't price businesses as though they will have incredible growth without some discount for the risk involved. One of the risks is competition.
I'm just gonna go ahead and assume that the investors understand this basic principle perfectly well, you're not being cleverer than them by disagreeing on the valuation, you're just using different assumptions about how incredible the growth could be and how large the risks are.
If Whatsapp can sell for $18 billion I don't see why Uber can't. Uber, after all, has an actual business model and income stream.
All of them except for one drive for both Uber X and Lyft, and none of them really care one way or the other about who wins. Only one had a pink mustache, and it was a little stuffed one on the dashboard, probably six inches wide; he also had an uber sticker. One expressed worry about Uber taking over and not having a competitor to hold its feet to the fire.
The one who only drives for Uber is a new mother that just likes to get out and talk to people who aren't babies, and she gets paid to do so.
To them, at least, the article is right. The services themselves are awesome, yet mostly indistinguishable.
Interestingly enough, I'm 99% sure if I came here pre-Uber/Lyft I would just rent a car. I have a serious aversion to taxis, but Uber just takes the pain away. The drivers noted that tons of people have been saying that.