> Zimmer likes to compare the dynamic between Uber and Lyft to AT&T and Verizon. When both cell networks hit three bars of coverage, people start to see them as equivalent, and base their spending decisions on other factors, such as brand values and customer experience.
That's the key quote in the article. In San Francisco, Lyft and Uber have both long passed the "good enough" bar. They both get to you in ~5 minutes and take you where you want to go very reliably. They have parallel product lines, identical pricing, and similar surging tendencies.
This leaves room for brand preference. I know I am not the only one of my friends to choose Lyft whenever possible because I believe they are friendlier. Uber has a reputation for being profit-driven sharks. They're very professional, but don't get in the way of their money. Lyft has the feeling of taking a ride in a friend's car. I personally like the latter, and I think there are enough people who agree with that to keep two players in the market.
Horrible. For me the absolute #1 feature of these apps was not having to think about the stupid tipping economy. Officially charge a more expensive base fare, hell make it 2x, I don't care; but turn it into a social poker game where increasingly there are a set of unwritten rules about what you're "supposed" to pay, and I just want to find the first alternative out there.
As an European I find it horribly annoying to have to tip in the US. If I do not like the the food I still have to tip because otherwise the nice waiter gets nothing? Or is that old information? Or was it always a lie? I only want to tip when I really like something, not as a kind of guilt trip with an unwritten minimum. Wish they would change that.
American server here. Yeah, if I provide shitty service, you shouldn't have to tip me. Personally, as someone who has served and has gotten paid less than 'minimum wage' (service industry is different in some states), even if I'm the one getting shitty service, I leave 2-3 dollars on a $60 bill. I understand shitty days and putting up with hungry people. But it definitely is a culturally economic thing too. So if someone provides excellent service, or I see them as an extremely hard worker toward the guests around me, I leave them extra. Although I definitely agree that the tip should be included in the menu items and servers should be paid more than $15 (min wage is $9 where I live) in the more populated cities.
> If I do not like the the food I still have to tip because otherwise the nice waiter gets nothing?
I actually don't think your parent was asking about shitty service, I think they were asking about if the service was good but the food itself was bad, in which case yes, they should still tip, right? Which I guess could seem unfortunate but that doesn't seem worse than no-tipping systems for that case, so.
Bad food---> Ask to see a manager and complain, leave appropriate tip (20%).
Bad service---> leave little or no tip.
Long wait for food---->If server says nothing, leave little or no tip. If server apologizes and says they're having issues in the kitchen ask to talk to manager and leave an appropriate tip.
I appreciated that Uber eliminated tipping. But from reading driver forums, it seems like Uber drivers increasingly expect a cash tip, and retaliate against passengers who don't tip by assigning low ratings.
Despite the seemingly representative anecdote in your last link, I'm very hesitant to believe that most Uber drivers in San Francisco expect a cash tip. This hesitance is based primarily on the fact that I have never heard of tipping with cash, and I know very few (if any) people here that routinely carry cash, especially small bills. But perhaps the practice really is more common and expected in other demographics, like tourists.
Not sure how that is supposed to help them get tips in the future when the vast majority of passengers don't know their own rating number and probably aren't even aware that such a number even exists.
I would assume it's so future drivers see the bad rating and, while not knowing the underlying reason, will give preference to someone with higher rating(more likely to tip).
I disagree. The situation with Uber is this "well, should I tip in cash?" limbo. I've seen a bunch of articles recently about how some travelers are shocked to learn they have a less than 5 star rating from Uber drivers because they don't tip.
> The situation with Uber is this "well, should I tip in cash?" limbo.
No, just refuse to tip. It's not built in to the app because tipping is a stupid practice which needs to die.
Drivers, of course, like tips. Of course they're going to push a narrative that you need to tip. Everyone answers yes when you ask if they'd like to get paid more.
That doesn't mean you ever need to tip. Tipping is a stupid practice which needs to die, and Uber is helping to kill it. I've never tipped in Uber and I've also never had trouble getting a ride.
But now you're paying more than the competition just to have a better driver. Also the driver can rate the person who took the car lower if they don't tip. So the tip essentially becomes a way to extort one another.
> In fact I don't even have to pay (the tip) if I don't want to. I still get a better driver, because they try to get me to tip.
You'll begin to get the reputation that you don't tip. Why would anyone pick you up then? You're essentially forced to tip if you want continued, good service.
> Well, that's easy to solve: don't allow drivers to rate passengers.
That's not a solution though; that's a hack to remove an undesirable affect from another feature (tipping). Just like drivers can be rated by passengers the inverse is also very important. These are still people's private cars after all; do you really want no way to rate the guy who trashes someone's car or is just an asshat?
Isn't Uber's entire business model (and its ridiculous valuation) based on the idea that they were going to become a monopoly? (and thus recoup the huge investment costs by raising fares?)
I can't see them accepting a competitor in the long term. A competitor will keep margins slim and the VCs invested in Uber won't be very happy with that. I wouldn't be surprised if Uber ups the ante and cuts fares to absurd levels in order to try to drive Lyft into the ground.
They lose millions of dollars a quarter still. I don't see how Uber can dominate the market in the long run, when they'll have to raise prices to a profitable level and thus make it easier for competition to undercut them. Drivers can work with multiple services at the same time, and the barrier for consumers to install another app or navigate to a web app is pretty small.
edit:
If the regulatory environment doesn't clear up, though, I could see that making it easier for Uber to dominate the market. They have the wherewithal to challenge regulators in courts of law and public opinion, and to comply with whatever red-tape is imposed on them. New entrants would have a much harder time.
I believe that in the markets they've been in the longest, they're profitable. It's expanding to more and more markets that makes them unprofitable on the whole.
But isn't Walmart's success just the classic example of economies of scale? While there are obviously some economies of scale in Uber's business, I would expect them to be far less significant than in Walmart's business.
They will kick the drivers to the kirb when auto driven cars are available. Currently they are just getting the people trained to use apps for calling taxis.
But do you think the strategy of cutting fares could actually work? I wouldn't think so. It appears that investors are willing to fund the second largest player now, and I see no reason that wouldn't continue for at least as long as Uber's investors are willing to throw money at them to subsidize fares.
Their continued spending spree to incentivize riders suggests otherwise. Uber seems to only give a first trip incentive, but I've gotten hundreds of dollars worth of free trips, 50% off trips, etc with Lyft. If riders aren't sticking around (and all the money they seem to be throwing around suggests that they aren't), then it doesn't seem to be defying any expectations.
I'd expect a free or half-priced alternative to do well, I just wouldn't expect it to be a good business. I think it's telling that they didn't have any traditional investors in their most recent round. VCs seem to want nothing to do with Lyft at this point. Only time will tell if GM is a better investor than every VC who passed. I suspect that they're not and that Lyft doesn't have much of a business (Line trips are likely never profitable, and they seem to have a problem keeping riders around that Uber doesn't seem to have).
Let's assume self-driving cars take off in <5 years. That means that this isn't "winner take all". It means its a commodity that's going to be driven down to razor thin margins. In that case, neither Lyft nor Uber have much of a business, and VCs are better off burning their money in a barrel.
Tesla's Autopilot can already do most of the driving on the highway, and the latest software release has the car driving in our out of your garage with no human intervention (it'll even open and close the garage door for you). Google's self driving tech has already mastered a majority of city driving. We're getting to a fully autonomous self driving future faster than most realize.
EDIT: Tesla charges $2500 for the autopilot feature, so far argument's sake, I'm going to say that cost won't be a problem. There's no way fully autonomous vehicles are going to require an expensive roof-mounted laser scanner; laser scanning gear? qualified maybe, as there are a few components manufacturers making solid scanner laser scanners (no moving parts). Also, some recent tech out of MIT is (supposedly) drastically better at 3D scanning with polarized camera filters than a laser.
Driverless cars are Google hoopla. I think it's more likely that cars slowly come equipped with increased automation, like adaptive cruise control and automatic braking. As they become cheaper, regulators will mandate some of these features. These are cheap fixes that make driving safer. Drivers and insurers will both like them. But complete computer control of the whole car is a much bigger hurdle and I don't see why we will simply skip to that point rather than implementing cheaper, effective automation first.
I seriously believe it'll be here in no more than 3 years, maybe 5 if there are regulatory hurdles. There's just too much value to capture for everyone to be half-assing it.
"We’re currently averaging 10,000-15,000 autonomous miles per week on public streets"
There are ~100K Model S vehicles. Somewhere around VIN 55K is when autopilot hardware was introduced (http://www.teslamotorsclub.com/showthread.php/44787-Autopilo...). Let's conservatively say that there are 40K Model S vehicles out there with self-driving hardware that are refining their data, and consequently, algorithms Tesla is updating. 40K vehicles * 12K miles/year/vehicle (average) = 40,000,000 miles/month (!!!) in "autonomous experience" Tesla is gaining. (Fun fact: The average human drives ~500K miles in their lifetime)
"According to Fred Lambert from Electrek, Musk referred to the first round of Model S owners with Autopilot as "expert trainers" that will collect and deliver tons of important data for Tesla's intelligence network. Musk said the system should improve each week as the driving algorithm constantly updates, adding Model S drivers could add around 1 million miles of new data every day."
I disagree that that driverless cars will get tied up in regulation. You know who is excited about driverless cars? AARP, the most powerful lobbying organization in America, whose members are the most consistent voters in local elections and who are afraid of being isolated when they lose their ability to drive.
National organizations have influence in local policy when it affects issues they care about. Normally, at least for very contentious issues, this doesn't happen (e.g. abortion, global warming, gay marriage) because those matters aren't handled locally.
An issue like this would absolutely be a priority for AARP and its members. Those members, as correctly noted, are likely voters.
Source: I work with local governments across the country.
I agree that the adoption rate will be slower than the 3-5 years rate stated by the commenter above.
I do think, though, that of the major cities, many people would agree that Chicago is among the most resistant to changes in labor due to customer preferences, due to its unique political system.
That said, though, imagine how absurd it would have been 6 years ago to imagine the market share that the Chicago yellow cab companies are losing, to newcomers that didn't even exist yet. I don't think many people, especially cab companies and Chicago legislators, could have predicted it.
The swell of opposition in legislators against cheaper technological answers to current labor solutions is heroic- the question that remains is, 'How long before consumer demand for the radically cheaper and/or more efficient option makes the opposition moot?'.
The answer usually seems to be: 'Sooner than everyone thinks.'
The first satellite was launched in 1957. The first man landed on the moon only 12 years later in 1969. But that didn't meant that a trip to Mars was in the cards even decades later.
Uber was a matter of applying well understood techniques and waiting for a critical mass of GPS enabled mobile devices with data support. Self driving cars still need to overcome fundamental challenges. It could happen in five years, or 50 years might pass without breaking through the final hurdles. Remember, the last 10% is 90% of the work.
Adoption could be slower than we think, but I don't think regulatory issues will be that big, the whole logistics industry will push it and many more. I also think that possible profits are the stronger incentive than preserving human labor
How do you define "cab"? How do you define "driverless"? Do you mean from arbitrary point A to arbitrary point B, or can there be only pre-defined connections between hubs? Must they travel above ground on ordinary streets, or specialized streets? How many people can they hold? And how do you define "driver"? Under certain interpretations of your bet, the MTA system already satisfies those requirements.
>I seriously believe it'll be here in no more than 3 years, maybe 5 if there are regulatory hurdles. There's just too much value to capture for everyone to be half-assing it.
We wont have full blown self-driving cars amounting to any more than 10% of the traffic even in 2025.
> Unlike other past dips in driving, this recent downward shift has had no clear, lasting connection to economic trends or gas prices. Evidence suggests that the decline is likely due to changing demographics, saturated highways, and a rising preference for compact, mixed-use neighborhoods, which reduce the need for driving. Some key factors that pushed VMT upward for decades – including a growing workforce and rising automobile ownership – have also slowed considerably. SSTI released a report last September outlining the many contributing factors, with references to supporting literature.
You mention 10%. 10% of total miles driven in 2025 is going to be drastically more than 10% of total vehicle miles driven today (Baby boomers aging out, who drive much less in retirement).
Never underestimate the volume of regulatory hurdles. I'd bet on decades of needless delay. Half of it caused by the first time people hear on the news about a self-driving car in an accident and ignore all the statistics showing they're actually far safer.
I think regulatory hurdles will be introduced by politicians not due to safety concerns, but based on jobs. The conversation will switch from "immigrants are stealing our jobs!" to "robots are stealing our jobs!"
Technology companies have been remarkably bad at playing the propaganda game. We, as an industry, have done such a bad job of security that trusting the computer to drive you is going to be a powerful problem to overcome. "You've replaced your credit card because of a computer security failure, now think about that when getting into your computer controlled car. Can your family risk having a hacker at the wheel?"
Except for people who have no choice (the elderly, whom have no one else to transport them and can no longer drive themselves, or people who have gotten DUIs ironically enough).
Well, we do elderly transport in our neck of the woods (not sure about the urban folks). People currently sometimes have no options, but those groups probably won't overcome the regulatory wall that will show up. Plus, the truck driver is one of the most common jobs in almost every state, and it is a job that cannot be outsourced. Its going to be a rather large hit to the economy. I would imagine which side a politician would come down on.
I will think it might become an issue when I see a Google Car in North Dakota in the winter. Until then, I'm not sure the technology for a national roll-out is really there.
One probalem is that driverless cars don't have to be better than humans. They have to be better than human drivers with computer assist. Or at least cheap enough to jsutify the extra carnage.
We'll have to see who can bribe, whoops I mean donate, the most money. Self driving cars is being backed by Google, Apple, Tesla, GM, Uber, Lyft...that's a lot of weight to be thrown around.
I actually think most of the push will come from transportation/logistics companies, where labor expenses tend to be quite high. Imagine if trucking companies could replace their drivers with self-driving trucks, for example. They would massively increase their profitability.
Never underestimate the regulatory influence of insurance companies. They are the ones who will call the shots when it comes to driverless car adoption, and I suspect they'll be all for it. Every year, we lose about 30,000 people on the roadways in the US alone. There are massive incentives in almost all corners of society to eliminate human drivers as rapidly as possible.
I'm what you'd call an "enthusiast" driver, but I'm not going to stand in the way of autonomous cars even though it will mean the end of an activity I enjoy. The upside is just too great to reject for the sake of what amounts to a hobby. We're about to find out if Ferry Porsche was right when he said, "The last car on Earth will be a sports car."
Insurance companies make money based on the float of premiums they take in vs what they pay out in claims. If the risks reduce substantially, so will the float.
Insurance companies thrive on quantifiably, risky propositions of which driving is a perfect example.
It is going to take longer than expected to have a perfect driverless car but when it is here the takeover is going to be extraordinarily quick.
I believe the regulatory hurdles will actually go the other way -- suddenly it is going to be very hard to be a human driver on a public road. It is the regulations which will force human drivers from the road, not self-driving technology. Someone can provide a better analogy than I can, but it would be the equivalent of trying to hand deliver a packet rather than send it across the internet.
I agree. Anyone who thinks it is coming soon is deluding themselves.
The technology maybe reasonably close but the policies and logistics aren't. The responsibility for car crashes and insurance isn't defined and needs alignment with government policy around the world. And there are still concerns about the behaviour of the self driving cars i.e. it drives to the rules which no one does and how does it handle random scenarios e.g. mattress flies off truck in front.
It's taken years for car avoidance and emergency braking technologies to come to market and even those aren't widely available still.
And it isn't even close. Just the other day Google released a bit of PR that indicates their current cars will pull over and stop if it starts to rain. That basically means their cars aren't usable in all but the driest locales. And handling the rain is exponentially harder than handling good weather driving.
So all of the truck drivers will move to the rainy coasts and Canada/Alaska, and all of the driving-labour-sensitive industries will move to the sunnier parts of the continent? :P
I still predict that the first major adoption of driverless tech will come for long-haul trucking, not the every-day commute.
Think remote flat desert highways. Trucking companies have strong economic incentives to make it happen, having a person in the driver's seat that has to take frequent legally mandated breaks is slower and more expensive than a machine.
Yours? Or the one you use with a ridesharing service?
If its yours, your own garage. If you're in an urban area, I'd assume ridesharing services would use lights out parking garages when they're overcapacity.
A car sits idle 95% of the time. That's why GM invested in Lyft. They see a future where there's a need for drastically fewer vehicles to service mobility needs. Yes, yes, rush hour handwaving. You use economic incentives to solve that.
Self-driving cars don't need to park at a destination. They just find the next rider. Privately owned self-driving cars can drive themselves to a carpark that's arbitrarily inconvenient to get to (which will greatly increase congestion, so let's hope that self-driving cars turn out to mainly be used as taxis).
General Motors just invested $500 million in Lyft, and will partner to provide vehicles today and autonomous vehicle technology as it develops in the future.
GM has already committed to autonomous cars in the past, but it got more real when they threw half a billions dollars in the ring and partnered with Lyft.
Driver-less cars will take off at sunny locations like California, Nevada, etc.
But it will take longer for other weather conditions you will find in winter at other locations - a combination of snow/rain and evening sun rays are a showstopper for current LIDAR and camera based systems.
> Let's assume self-driving cars take off in <5 years. That means that this isn't "winner take all". It means its a commodity that's going to be driven down to razor thin margins. In that case, neither Lyft nor Uber have much of a business, and VCs are better off burning their money in a barrel.
Possibly. But Uber raised 1B at the same time. So that suggests that the VC world still believes in the Uber model (or that they think Uber comes out as one of the winners in self driving cars). The fact that Lyft failed to get any traditional investors suggests that those investors believe there is a significant difference.
>>Possibly. But Uber raised 1B at the same time. So that suggests that the VC world still believes in the Uber model
No, it simply suggests that VCs behave as a herd, and one well-known VC firm investing in a company suddenly makes the others want to invest in it too due to FOMO (fear of missing out).
That answers why a second VC might join a round. It doesn't explain how rounds work in general though. I'm not convinced we can hand-wave over the first VC joining. They still have criteria they're using, and they seem willing to take on a lot of long-shots. The fact that none of them picked up Lyft's latest round still says something.
Lyft and uber are competing in 2 completely different spaces. Uber is most similar to a company like the nasdaq and lyft is pretty similar to a cable company that existed in a liquid market.
Uber is an information arbitrageur. They make markets and have high velocity. By this I mean they are well capitalized and all of their money is spent on people and developing software. Google collects and organizes the worlds information, uber it's movements.
Lyft, like fed x, runs ligistics and information analytics but largely inside of its own narrow domain here being last mile transportation. Lyft focuses on comfort and style and is modeled on something like virgin airlines. It will continue to make money (i have reversed my thinking here) but not a lot as the industry becomes commoditized.
Uber will pivot into something like a CDN in a few years doing end to end delivery or will become software vendors of autopilot technology.
Obviously, I dont know what each company will do, but they are super different
This is wrong. The analogies you make are tenuous. They're doing business in the exact same space. One is much bigger than the other.
Their differences are due to their relative positioning in the market, i.e. due to the opportunities they have as a consequence of their relative scale.
Maybe in the markets they've already established themselves in. Here in Poland, they're basically throwing money at people. Every other week I hear that there's ~$7 worth promo code to be found somewhere. Or that they'll deliver you ice creams. Or donuts to work. Or something.
If it's like the U.S., only the first promo code you use on your account gets honored for most of them. And the Uber Ice Cream, etc. they charge a decent amount for -- It was $20 for 5 ice cream bars in Ohio last time they ran it.
I got some deal with take five rides and get 50 dollar credit (5 dollars per ride). I'm in DC. I took them up on it.
It's pretty much the same experience as uber.
I don't see the same sort of network effects that keep something like Facebook as a monopoly. I think we'll have several companies in this market in 20 years.
I'm not sure I agree that VC's not investing in Lyft is a bad sign for Lyft's long-term success. Those who have invested in Lyft recently make good sense as investors. Carl Icahn isn't exactly dumb money, and can probably add a unique perspective. GM makes sense because it is a very good long-term partner: Autonomous vehicles will be a big part of the future, and when that time comes, Lyft will have a highly-qualified partner to bring a fleet to market.
The point isn't that they've never had VCs or 'smart money' (we could debate Carl Icahn's smartness for tech), it's that their latest round of $750M didn't have any. They have GM and a Saudi prince making up the entire round. Neither of those likely meet even a liberal definition of 'smart money'.
> I think it's telling that they didn't have any traditional investors in their most recent round.
No, it's not telling at all. If you're trying to raise $500M, you don't have many choices. You're looking at 1) IPO, 2) private equity, 3) strategic investors. IPO has obvious problems. The fact that Lyft chose strategic investors doesn't say much. I'm sure there were tons of Asian private equity funds clamoring to invest.
> If you're trying to raise $500M, you don't have many choices.
Every other unicorn in the world suggests otherwise. This is the first large round by either GM or the Saudi prince. The Saudi prince isn't even a strategic investor, he's just a guy with a deep bank account. VCs and Private Equity Firms have been incredibly active in later stage rounds for Unicorns.
Late state rounds almost never have a single investor. That's true for Lyft this round. It's telling that they couldn't find any of the more traditional investors to invest (even for a part of the $250M they weren't able to sell).
No, all the unicorns get their funding from the same options I just outlined. The Saudi prince invests through his private equity sovereign wealth fund.
Also wrong on the single investor. Firstly, we don't know that GM was the only investor in the round. It is common not to name all the investors. For example, in Uber's recent private equity round, Baidu was the investor, and other investors, if any, were not announced.
It's no surprise to anyone who has read "The 22 Immutable Laws of Marketing". Once you establish yourself as the solid #2, your market share tends to grow as you distance yourself from the also-rans and also establish yourself as the alternative to the market leader, in this case Uber. (The law of Duality).
Lyft caps its surge at 200% or 2x, while Uber intentionally goes to 8-10x on busy nights. The outrage at uber over insane fares has a history far beyond this past New Year's Eve. People want Lyft to succeed, but Lyft still needs to get its act together on a few things. Lyft's servers have crashed on busy holiday nights, or rides requests don't match despite cars showing on the map. I'm hoping the recent investments and growing popularity of Lyft keep it in the race.
And the Lyft app occasionally spams ads at you, at least on Android. I ditched Lyft when they spammed me a notification about Justin Beiber at midnight on a weeknight.
I'm waiting for someone to make Uber, Lyft and others into a utility where you request a car with an app and the closest one, regardless of type, gets the call and comes to you. The current APIs seem to make this exact scenario a bit difficult but it wouldn't surprise me to see something like this come about at some point in the future. There is just not a huge difference between the two to really care about, in my opinion anyway.
Edit: Any reason for the down-votes? I'm genuinely curious if it's because people disagree with me and why or if it was something else.
Lyft is only alive due to massive injections of VC money. This is a typical dotcom style business that will crumble this year when the stock market tanks and VC funding disappears.
The funny thing is that the entire taxi cab industry in the US was $11B in revenues. So to value Lyft at $5B with Uber having a massive amount of market share is defying simple math. There will be a lot of tears from Lyft.
And the drivers don't care because they largely will be on both networks. It will be largely a marketing problem but without their massive amounts of driver and customer incentives people will simply stop using Lyft.
> The funny thing is that the entire taxi cab industry in the US was $11B in revenues. So to value Lyft at $5B with Uber having a massive amount of market share is defying simple math.
Not disputing valuations specifically, but
1) Company's valuation would be a multiple of expected revenues. If you expect Uber or Lyft to survive for more than one year, then $11B is just the basis for multiple, not the maximum number.
2) There seems to be strong support for "market expansion" argument. People who take a significant number of Uber/Lyft rides have not in the past taken significant number of taxi rides.
3) Uber has expanded internationally (Lyft chose not to), so a global taxi revenue would be a fairer number to start off.
I am more likely to take cabs now than I was before. With Uber and Lyft I often have almost a 50% over cabs 5 years ago. Additionally, it's a hell of a lot simpler, especially when half the cabs I used to take refused credit cards.
I'd agree when I'm in NYC or somewhere cabs are readily available at the curb. But it's a rare occasion that I'd actually call a cab.
No CC in 2016 is insanely frustrating. I paid for a ~$10 cab ride once with a $100 bill (the only cash I ever carry) after the driver claimed he couldn't accept a CC. Then he gave me ~$30 in change and semi-apologized with "sorry I don't have any more cash yet tonight". I called bullshit and he managed to find another $10 or so. If I hadn't had quite a few drinks, I would have felt more comfortable calling the cops on him at the time, but really it just takes that happening once for me to refuse cash-only cabs. I really had no idea how to respond especially since he told me that at the end of the ride at my apartment, which isn't near an ATM.
The stock market isn't why there's so much VC money, it's because VC has better returns than elsewhere, and the stock market tanking only furthers that, doesn't it?
One thing I've never understood is why these platforms are considered winner take all.
They don't seem particularly sticky nor does it seem like economies of scale matter. Seems like only a matter of time for meta sites to pop up finding the best riding deal across multiple platforms.
Sure, but let's say you as a consumer don't actually care about the brand of the ride platform and just want to get to your destination for some weight of speed and cost. Then it doesn't matter if there's only Uber or if there are 50 private taxi services in your area. Once someone fills gap with a meta-privte-ride service that just locates the closest and cheapest provider it's trivial for someone like Uber to be undercut by a local competitor.
How are you going to make a meta-ridesharing service? The only way to tell what Uber or Lyft drivers are available is through their apps, and it seems like it would be against their interests to do anything than make their communications as proprietary as possible. If you prevent users from weighing options you are better able to capture users exclusively.
Whoever's market leader gets to use monopoly pricing for their network effects until they hit the price point where there's competition from someone without the same economy of scale. This holds only for largely homogeneous markets.
Uber apologists Sacca and Efrati were dissing this article on Twitter as being supposedly poorly sourced. It seems like Lyft is holding its own in SF but with the driver discounts and one-rider pools its unit economics must be under pressure.
I've also seen hundreds of Lyft billboards around SF along with their promotions with the Giants. So they've got the poor performance of their primary product (they claim that Line accounts for the majority of their trips) along with what must be incredibly high rider acquisition costs (spray-and-pray ads, multi-trip promotions, subsidized trips).
With their aggressive spending to acquire users, it's amazing they aren't making up more ground. But I suppose that's why they always refer to the couple cities where they're aggressively spending. They seem quick to mention SF and Austin, and never mention anything else.
Well they moved their whole CS team to Nashville Tennessee which some like a form of punishment. However, apparently Uber has over 15,000 (!) customer service reps...I can't imagine that is a workforce with a pleasant work environment.
What's interesting about these rideshare companies - they have to maintain separate workforces - look up Lyft's jobs page. It talks about exempt/non-exempt "team members". Non-exempt team members get "unlimited vacation" - exempt 15 days (which is still great IMO). It must be interesting for HR to manage the dynamics as the companies get bigger.
I feel like if Lyft could grow in a manner that makes driving for them actually worthwhile and they can somehow structure the "surge" pricing in a manner that is not ridiculous and exorbitant, they may even have a chance to unseat Uber in many markets. I personally don't think Uber offers sufficiently much and there really isn't anything exclusive about it anymore, so I don't see the advantage of feeding that horrible company.
I've been using Uber for a long time, but since a few months I'm always getting "uber surge" and paying quite a lot more then getting a regular cab.
I've installed Lyft as an alternative, but it didn't work on my Samsung S5, Android 4.4.2, in London.
End installing Hailo but haven't tried yet.
And not necessarily bad news for Uber, because having a viable competitor will help keep them sharp.
The only one how loses are Uber shareholders who bought shares above valuation $X billion. I'm not sure what X is, but X is what Uber is worth under a duopoly. Its current market cap I assert is well above $X.
That's the key quote in the article. In San Francisco, Lyft and Uber have both long passed the "good enough" bar. They both get to you in ~5 minutes and take you where you want to go very reliably. They have parallel product lines, identical pricing, and similar surging tendencies.
This leaves room for brand preference. I know I am not the only one of my friends to choose Lyft whenever possible because I believe they are friendlier. Uber has a reputation for being profit-driven sharks. They're very professional, but don't get in the way of their money. Lyft has the feeling of taking a ride in a friend's car. I personally like the latter, and I think there are enough people who agree with that to keep two players in the market.