Uber, Lyft take swings at carpooling with a cost

Uber and Lyft made parallel announcements last week: The two companies, widely (and not quite accurately) synonymous with “ridesharing,” are testing big new services that look, well, a little more like actual ridesharing.

Uber unveiled UberPool, in San Francisco. Lyft introduced Lyft Line, described as a take on “personal transit” and launching there as well. Both services are throwbacks to the traditional carpool as Silicon Valley would re-imagine it.

Thus far, the two companies have wielded data to pair passengers and driversfor-hire in real time. Now they’re aiming to link passengers with drivers with other passengers, leveraging within their growing networks efficiencies where two or more riders heading in the same direction might travel there together.

The idea is both the logical next layer to everything both companies have built thus far and a sign of their ambitions to supplant much more than Friday night cab rides.

Trips through the new services would function a lot like they currently do through both apps. You call a car through the shared service. A nearby driver (a nonprofessional in his personal car) accepts the ride and picks you up. But then, on your way to your destination, the app continues to search for other potential passengers headed the same way.

Lyft claims that 90 percent of its rides replicate similar trips that someone else is taking within five minutes. While that claim is vague, it’s plausible in a big, dense city: Researchers at MIT who’ve looked at taxi data in New York have concluded that 80 percent of all trips there could be shared with minimal inconvenience to each rider. Those MIT researchers envisioned a cab network centrally optimized through real-time data that looks strikingly like what Uber and Lyft are proposing.

With UberPool and Lyft Line, the rides will not be free (this is where the concept diverges again from the traditional carpool). But both companies are promising still bigger discounts off their cheapest services to date. Uber says a shared ride will cost 40 percent less than a solo UberX ride; Lyft is promising “up to 60 percent” off the original, with the price depending on the odds that another rider is traveling your way, too.

With the even lower rates, both companies are angling for the parts of the transportation market that are seldom served by taxis: daily commutes to and from work, errand runs for which you wouldn’t pay $10 a pop — but for which you might pay $5.

They’re aiming, in effect, at the kinds of trips a person would be more likely take in his own car — which also means the companies are aiming at the car itself. “At these price points,” Uber declares in its blog post announcing the beta, “Uber really is costcompetitive with owning a car, which is a game-changer for consumers.”

Here’s how Lyft co-founder Logan Green put it to Farhad Manjoo at The New York Times: “We don’t want to be the option that people use only when they’re heading out for a nice evening. We want to be something that people use twice a day, every day.”

By invoking the idea of “personal transit,” Lyft even seems to be aiming at rides people might otherwise take on the bus or train. A particularly intriguing passage from the company’s announcement: “We’ve spent our entire lives moving around transit. Paying to rent near it. Sprinting to catch it. Timing our days to its timetables. But from today on, transit comes to us.”

Piling more people into fewer cars makes economic sense for both companies.

As they sprint to the bottom of the market, trying to collect $3 and $4 rides — opposite, for Uber, from the high-end towncar trips that launched the company — the strategy could come at a cost to their other customers: drivers. It wouldn’t make sense for a driver to ferry someone across San Francisco for $7. But it might make sense if he has three passengers in the back each paying $7.

For Lyft, the idea of returning closer to ridesharing’s roots — more people, using fewer cars efficiently — is at the core of its business. For Uber, the strategy is one piece of a bigger picture that involves providing transportation for every context and every kind of customer, from the businessman on a corporate account to the guy who normally takes the bus.