LYFT PUSHES FEEL-GOOD FACTOR AS UBER REELS
No. 2 ride-hailing firm sees chance to make up ground on rival
As Uber grapples with accusations of sexism, Lyft is making more moves to position itself as the feel-good ridehailing company to consumers who may not be familiar with the smaller rival.
Lyft announced Sunday it would soon be rolling out Round Up & Donate, an opt-in app feature that allows riders to automatically route rounded-up ride charges to charity.
“We’ll be launching with one charity, then on-boarding more with a focus on being unique in each of our communities,” Lyft vice president of marketing Melissa Waters told USA TODAY.
Lyft currently operates in 300 U.S. cities. Uber is in nearly 600 cities and more than 80 counties. Lyft’s value is pegged at $7 billion while Uber’s is 10 times that.
The new Lyft feature comes on the heels of an announcement last week that it had doled out more than $200 million in tips to its drivers. Uber does not allow tipping on its app, a feature many drivers have requested.
Waters dismissed the notion that Lyft was altering its marketing strategy to take advantage of Uber’s troubles, which include revelations about a discriminatory work environment and a dashcam video of CEO Travis Kalanick berating a driver.
“We won’t be swayed by whatever is happening,” she said. “We’re operating based on our own values.”
That doesn’t mean Lyft is the white knight in this escalating battle, says Ryan Price, executive director of the Independent Drivers Guild, which represents and advocates for 50,000 ride-hail drivers in New York City.
“Lyft recently cut driver pay in a race to the bottom with Uber and has refused to meet with the drivers guild,” he says. “So while their tipping policy is great, the picture is mixed for drivers.”
Nonetheless, from a branding perspective, the timing is right for Lyft to aggressively promote itself as the anti-Uber, says Stanley Hainsworth, CEO of branding consultancy Tether.
“What Uber is, is visible, but the ‘ who they are’ is impacting them,” says Hainsworth, a veteran of both Nike and Starbucks. “Lyft has much less awareness on both fronts, so it’s a great time to strike. Some people are looking for an alternative, so it’s best to put what you’re about out there.”
Round Up & Donate, which kicks off in a few weeks, was conjured up shortly after Lyft announced Jan. 29 it was donating $1 million over four years to the American Civil Liberties Union in the wake of President Trump’s first immigration ban.
At the time, Lyft CEO Logan Green tweeted that the ban targeting travelers from majorityMuslim nations “is antithetical to both Lyft’s and our nation’s core values.”
It remains to be seen if these initiatives will help Lyft gain ground on its better-funded rival despite Uber’s glaring issues.
For his part, Kalanick has vowed to root out any sexism at his company, find a COO to partner with him on change and recently visited with civil rights leader Jesse Jackson to talk about the importance of diversity.
In fact, some evidence suggests Uber’s business has yet to suffer from its internal issues. In a recent call with reporters, Uber’s North American operations chief Rachel Holt noted the first 10 weeks of 2017 had seen broad ridership gains over the year-ago period. Holt also admitted Uber had “underinvested in the driver experience” and would be addressing a range of issues soon, although the matter of tipping was not mentioned.
But credit card spending data compiled by TXN Solutions suggests Uber’s woes could be taking a toll. While Uber had 83.5% of the national market in the weeks leading up to the Jan. 30 #DeleteUber campaign, its grip has loosened in the tumultuous weeks that followed, TXN says.
Between Feb. 20 and March 3, Uber’s market share had slipped to 79%. Ex-employee Susan Fowler published her devastating blog post about the company Feb. 19.
Part of Lyft’s problem could be it’s too friendly. The company started as peer-to-peer play that had grown out of a college ride board; that contrasts with Uber’s start as a way to hail a town car when its drivers were idle.
The giant pink mustaches that adorned the grilles of Lyft cars have been replaced by more subtle dash-mounted digital hardware, but for some riders the perception exists that a Lyft ride requires social interaction where Uber trips are efficiently impersonal, down to the inability to tip.
Lyft’s Waters acknowledges as much. “It’s funny how that (origin story) legacy has stayed with us for five years, but I’d say for the most part people know they don’t have to behave differently” while in a Lyft, she says.