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.
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.
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.
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.
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.
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.
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.
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.
[+] [-] austenallred|11 years ago|reply
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.
[+] [-] BronSteeDiam|11 years ago|reply
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.
[+] [-] hol|11 years ago|reply
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.
[+] [-] potatolicious|11 years ago|reply
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.
[+] [-] CPLX|11 years ago|reply
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.
[+] [-] devonnulled|11 years ago|reply
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.
[+] [-] pmorici|11 years ago|reply
[+] [-] yesimahuman|11 years ago|reply
[+] [-] jw2013|11 years ago|reply
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.
[+] [-] jonemo|11 years ago|reply
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.
[+] [-] ghshephard|11 years ago|reply
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.
[+] [-] superuser2|11 years ago|reply
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.
[+] [-] hueving|11 years ago|reply
[+] [-] maxk42|11 years ago|reply
[+] [-] TeMPOraL|11 years ago|reply
[+] [-] ghshephard|11 years ago|reply
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.
[+] [-] colmvp|11 years ago|reply
Last time I used it over a course of several days, Uber regularly had surge pricing whereas Lyft never charged me extra.
On top of that, Lyft drivers were way friendlier.
[+] [-] baddox|11 years ago|reply
[+] [-] toleavetheman|11 years ago|reply
[+] [-] jusben1369|11 years ago|reply
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.
[+] [-] jeffmanu|11 years ago|reply
[+] [-] rokhayakebe|11 years ago|reply
Google does not need to tell you they are better than another search engine. Use it once, and decide.
[+] [-] encoderer|11 years ago|reply
[+] [-] zak_mc_kracken|11 years ago|reply
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.
[+] [-] viscanti|11 years ago|reply
[+] [-] revelation|11 years ago|reply
It's all about the customer and raw, capitalist competition as they keep telling us.
[+] [-] prostoalex|11 years ago|reply
Such app has been built, promoted, denied access and subsequently shut down http://techcrunch.com/2013/06/02/corral-lyft/
[+] [-] beaner|11 years ago|reply
[+] [-] adamio|11 years ago|reply
Uber and Lyft are basically dispatch and payment processors. Similar perhaps to a credit card processor.
[+] [-] sitkack|11 years ago|reply
[+] [-] georgeecollins|11 years ago|reply
[+] [-] afafsd|11 years ago|reply
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.