USA TODAY International Edition
Is this Lyft’s moment to leap ahead of Uber?
Maybe, but ride- hailing company still has a long way to go to top its rival
SAN FRANCISCO Is this Lyft’s moment to really lift off?
Uber, the company’s larger ride- hailing rival, has been hit with a string of bad press lately related to a misbehaving CEO, claims of sexist supervisors, reports of law- skirting conduct and a lawsuit over allegedly stolen intellectual property.
And that’s all after a # Delete Uber campaign related to Uber’s initial response to President Trump’s immigration travel ban saw 200,000 riders dump the service.
“Lyft is seeing some openings, and they’re making the most of them,” says Karl Brauer, executive publisher of Autotrader and Kelley Blue Book.
Despite being the underdog in this fight, Lyft President John Zimmer told USA TODAY months ago that his mission was to own the U. S. market and cede global dominance to Uber. This would seem an opportune time for Zimmer and his team to make big strides.
The service recently announced that it had opened 96 new markets this year, bringing its total to 300 cities. And the company is raising $ 500 million in capital to turbocharge its efforts, according to a person familiar with the effort who was not authorized to speak publicly.
Evidence suggests Lyft already has received a discernible bump from Uber’s ongoing issues.
The week before the # Delete Uber campaign, Uber had 83.5% of the ride- hailing market and Lyft had 16.5%, according to TXN Solutions, which tracks debit and credit card spending.
But Uber’s troubles resulted in market share gains for Lyft, which had 20.9% of the market following # DeleteUber and got another bump to 21.3% after exemployee Susan Fowler’s incendiary blog post alleging blatant sexism at the company.
The decline in Uber’s market share was consistent in all four of its top markets: New York City, Washington, D. C., Los Angeles and the San Francisco Bay Area, TXN found.
At the same time, spending nationwide on Uber in the fourweek periods before and after Jan. 30 declined 2% while Lyft spending jumped 30%.
In a breakdown of nearly 40 U. S. markets, dramatic spending shifts appeared in cities such as Minneapolis- St. Paul, where Uber declined 7% and Lyft surged 24%; Portland, Ore., where Uber fell 18% and Lyft rose 16%; and in the companies’ Bay Area hometown, where Uber was down 8% and Lyft was up 24%.
Asked for specifics on Lyft’s plans given Uber’s dilemma, Lyft spokesperson Alexandra LaManna said, “We have always been guided by the same set of business strategies and values ... none of that has changed.”
Momentum at least appears to be on Lyft’s side. The company says it tripled its ride count last year to 162 million from 53 million in 2015. Lyft has 700,000 active drivers, or double that of a year ago. And it has dispensed $ 150 million in tips to drivers, an in- app option not available to Uber drivers that is, admittedly, a plus for many riders.
In fact, in a survey of drivers compiled by TheRideShareGuy.com, a blog for drivers, said 76% of them were satisfied with their Lyft driving experience, compared with just less than 50% on Uber.
Also in Lyft’s favor is that the company is not spending inordinate resources on self- driving car technology, something Uber has done since establishing its Uber Advanced Technologies center in Pittsburgh. Uber currently is facing a lawsuit from Alphabet-owned Waymo, which contends that Uber- owned Otto has selfdriving truck sensor technology that was stolen from Google.
But if Uber is the heavyweight boxing champion on the ropes, Lyft is the gutsy featherweight that’s punching far above its class.
Uber, which declined to comment for this story, may have mounting brand image issues, but at a $ 70 billion valuation it is roughly 10 times the size of Lyft. Uber is in nearly 600 cities in 81 countries.
While recent bad PR might seem to be a drag on the company, that doesn’t seem to be sticking. Downloads of the Uber app in the past few weeks have been higher than average, according to analysis firm Mobile Action.
And whether due to the ubiquity or efficiency of its service, Uber’s name is on a fast track to becoming the Xerox of ride- hailing terms.
Given Uber’s massive head start, it would take an “ongoing series of this kind of mistake for it to really fall from its global leadership position,” says Brauer.
Gartner analyst Michael Ramsey says that Uber’s woes are likely to provide an opening for Lyft and other ride- railing companies, which include Juno in New York City, mytaxi ( formerly Hailo) in Europe and Didi Chuxing in China and Brazil.