Uber doesn't have much of a moat or lock-in effect. I just switched one day from being a frequent Uber rider to 100% using Lyft, simply because I don't like Uber's behavior as a company. The prices are so close it doesn't make any practical difference to me.
Anecdotally, among my friends I also see Lyft becoming the default, and sometimes price-checking with Uber. If Waymo or whoever came out tomorrow with a cheaper/safer driverless car, I'd just as likely drop Lyft in a heartbeat.
I have found that the drivers for Lyft are much happier than the drivers for Uber. This holds true even when a driver drives for both services. I asked several drivers why this is and the universal response was that Lyft treats them better, so they are happier to pick up Lyft customers.
I switched over to only using Lyft, but like the OP states, if Waymo came out tomorrow I'd probably switch to that.
My experience as well; started asking drivers which they preferred, and they all said Lyft. That alone is a good reason to switch. I'd happily pay a 10-20% premium if I can feel confident that it's encouraging better working conditions.
This goes for other markets as well, it's just generally hard to get good information.
Ditto, except I’ve mostly stopped using Lyft in favor of ReachNow Ride which is driven by employees (i.e. not contractors) who show up in a BMW and generally drive like their income is decoupled from working long hours and the need to turn over lots of rides.
If you’re in a market where they operate, I can heartily recommend it.
I've had a slightly different experience. My Lyft drivers have definitely been happier and nicer, but most of them say that there is no real difference between the two services from a driver's point of view. I'm not sure how that could be the case.
Sexual harassment cases were on the HQ, not the drivers. Also, most drivers drive for multiple companies. All they need is 'one more app' on their phones, and they're off to go. Since Lyft/Uber/everyone is monitoring their competitors' s prices, they make sure they adapt pricing to make themselves antagonistic.
Thus the drivers won't care which app is running, since they will be making (more or less) the same $$$$$. All they need it to do is ensure they are driving people around/keeping busy, and if one company is bleeding customers, they will simple start 'the other app' and continue driving.
I may be oversimplifying the above, but it's the general idea/practice.
I wasn't really questioning how the drivers can easily work for multiple companies. That is pretty clear. My question is really around how I can generally have nicer Lyft drivers, with drivers having no preference on what service they drive for. Why wouldn't I have similar driver experiences on each app?
I feel like it would force prices down but it would also force Uber/Lyft to reduce their take, because presumably drivers don't care whether the ride was $10 or $11 if they get $7 either way.
While this is true, I feel like there are more 'average' folks looking to pick up extra income on the Lyft platform, as opposed to Uber. In US cities like SF, NYC, LA, Seattle, Chicago, it seems like most of the Uber drivers I encounter these days are former taxi or livery drivers -- Uber is clearly their profession. It's apparent in their approaches to discussing the destination (particular landmarks, hotel names, business names, cross streets), and in sometimes in their driving style. And they're usually driving a car that optimizes for rideshare/taxi service type driving: Accords, Corollas, Camrys, Prius, etc. The conversation tends to be all business with a few pleasantries.
On Lyft in the same cities, I always get a much more oddball mix of vehicles, with much more diverse conversation from the driver. I've had biotech founders looking to recruit and make beer money pick me up on Lyft rides going from the South Bay to the SF in the Bay Area, real estate agents and recruiters drive me in many cities, and many others that are clearly doing Lyft as a side gig rather than a profession. On the downside, this usually means that they're less aggressive drivers in terms of optimizing for speed and route efficiency, but it can make for a more interesting ride and better chitchat along the way.
As a result, I almost always default to Lyft unless there's a huge price spread in Uber's favor.
Agree that the lock-in is weak compared to other markets. Their strategy has been to incentivize drivers and riders to not split usage between other apps.
Uber drivers who do a certain number of hours or rides per day/week often get bonuses, so they'd have to forego these bonuses to split time with Lyft.
I have often compared Uber to the airlines and not in kind way. There is simply no loyalty. I am skeptical that the airline frequent flier model will work. I predominately use Delta for international travel because of Delta One, but will probably switch to United when the 767 and 777 retrofit to Polaris is complete. I prefer United because I live in SF and there are more good flights from here. I don't know what Uber or Lyft could offer me because the networks are largely the same, the product is identical and there is very little chance for differentiation. Maybe they will figure something out but I am skeptical. For me to believe there is margin anywhere in there I would need to see what their equivalent of business class would be.
I gave up on airline frequent flier plans (except Southwest and Alaska) decades ago. The big US-flagged airlines suck (cramped planes, consistently late flights, extra fees, treating customers like shit) and their FF plans suck too (expiring miles, too many restrictions on when you can fly).
Southwest and Alaska are a different story; they're still trying to compete. But the majors are so terrible I feel the opposite of loyalty toward them.
To attract users to these services, would Uber have to take a further hit to profitability? It seems they would in order to make customers lock themselves in.
I'm not sure. We would need to add up the costs of free shipping, unlimited photo storage, licensing of 3rd party video content, creating 1st party video content, licensing music content, free 6-month Washington Post subscription, Whole Foods discounts, free eBooks, free games and more. [1]
They also don't have a direct competitor/s like Uber. I think the better comparison would be the loyalty programs from United or American.
Converse to this, I get a lot of bad behavior when I try to book Uber, especially late at night or in odd areas. Drivers who cancel, intentionally drive in the wrong direction to force you to cancel, who don’t wait or drive to the wrong place to pick you up, who don’t know where to go, who are rude, who refuse to turn off music...
I started using Uber because it was worth paying more to not deal with taxis. Now Uber is the cheap, bad option. I really wish there was a “middle of market” ridesharing service. Cheaper than a black car from whatever service, but still with good quality control. Uber used to be that but isn’t anymore. Lyft is kind of that but isn’t quite there.
Anyway, it feels like Uber is trading goodwill for volume. I only use it for free rides with Amex platinum or when I need a car ASAP and no taxis are available. Otherwise I use Lyft (and sometimes Lyft is cheaper anyway). It feels like Uber is shorting quality control and trading long-term profitablility for short-term volume with more, cheaper drivers.
Since my impression is a large population of drivers drive for both I don't think you would find different behavior in Uber or Lyft. A dickhead is doing to be a dickhead whether driving for Uber or Lyft right?
I have experienced the drive in the wrong direction for >10 minutes uber driver and it is very frustrating. They must get dinged massively for cancelations?
It doesn't matter if the end result is a duopoly. The two need only stop competing and raise prices. It will be hard for a third entrant to come in because of the large cost to enter markets. The only viable entrant is, as mentioned Waymo, because driverless cars alters the economics and because they have the tech.
I thought this for a while but I'm pretty sure I was wrong. When thinking about all these services that exist I didn't understand how divers would stay busy: Uber, Lyft, Uber eats, Amazon restaurants, doordash, GrubHub, etc. Then I realized they actually reinforce each other because all divers can work for all the services. So they don't have to wait around for an Amazon restaurants order to come in, they'll just do Ubers until then, or whatever else comes in first. This actually makes it easier for new entrants the more services are already out there demanding divers and maintaining a large pool of contract drivers.
To this day I don't even really understand the value that Uber et al are supposedly adding that justifies the size and evaluation of their companies.
At the end of the day they're a layer on top of a taxi business. Sure this is useful in some way but like Airbnb or weworks or all these other companies that just throw one layer of service over the actual business I don't understand why they are treated like high tech companies.
The most extreme example was possibly moviepass which was basically just a subsidy from investors to movie goers.
I believe it was originally a big bet on the eventual profit margins from having the market share when deploying driverless cars instead of human drivers
That always seemed insane to me. The potential moat I saw was in controlling a two sided market (like eBay for collectibles). Drivers drive for you because you control the riders. Riders ride with you because you have all the drivers. This would be a competitive advantage because you’re getting your drivers to deploy capital (cars) for you.
But driverless cars change that dynamic. Now you need to own a fleet. Well, guess what: there are already businesses like this! They are called car rental companies. Last time I checked, they were shitty, low margin businesses.
That is the story they spin since their growth exploded and they realised that they will never be profitable with the original model. That future is so far away though.
They have different company culture for now but at the end of the day, the business practice dictates direction and I don't think there's anything fundamentally different with Lyft.
Their rides are both VC subsidized and unsustainable. They both punish customer loyalty. My wife and I rotate hiring rideshares. If one of us books too many, one person's fare becomes much costlier than the other. They're both godsends when initially disrupting markets (our Egyptian Uber driver definitely took a lot of personal risks engaging in shouting matches against street touts who were throwing themselves at the car and ready to drag us out so we spend our money at their shops) but once they reach semi-duopoly status in mature markets like the Bay Area, more and more crappy things happen. Things like drivers canceling you after 10 minutes or people using GPS spoofers to pick up rides while not even in the same county. And you clearly see both companies, over the years, trying to hide ways to get problems resolved behind more and more layers of circular forms labyrinths.
I've been taking more traditional taxies to keep the balance of power competitive (and because it's sometimes less frustrating).
With their new loyalty program and Uber Visa card, I definitely think they are trying hard to build that lock-in effect. Once that happens, I do think they'll reap the rewards of their platform. It's just hard at first. I hope they can pull it off tho. But then again, I do know a lot of Uber drivers who only use Lyft personally for rides.
Why? I mean, most taxi cab companies have rideshare apps. They were a first mover and showed us the way, but they burned a ton of cash and did some really shitty things. Heck, they've killed more than a few people.
The extent of their lock-in is that of any C2C company: the marketplace. Can one side be confident there are enough on the other side? And then it becomes about brand recognition and marketing. (And in this particular case, the Uber brand has some issues....)
No different than, say, consumer rental companies like Airbnb.
> As a rider, there's no "cost" to having both apps, so I'll just check both
Sure, if you never left your country. I certainly didn’t want to register to Italy’s official taxi app - don’t wanna trust them my CC nor my life to horrible service I’ve received (same price as Uber, horrible car)
Sure. If a competitor has managed to get good consumer market share, then switching is easy. The marketplaces are not exclusive.
If, for example, HomeAway got a similar number of rentals to Airbnb (though in this particular case, it hasn't), then both markets could easily co-exist.
Creating C2C marketplaces, however, is not an easy task.
Depends, where I am there's Uber or Traditional Cabs. My experience phoning for a cab is pretty pleasent though (quicker than using uber). Although their app is unusable.
(When it comes to dodgey companies CabCharge is pretty terrible)
No moat? Of course it has a moat! So far Lyft has raised $1.5 BILLION dollars in order to compete [1]. Capital requirements are absolutely a barrier to entry and protect their position.
Why do these ride companies need so much capital? They don't buy cars; the drivers aren't employees. They're a mobile app with a big backend. So why do they need more capital than, say, a game company?
Try Gett. They have less drivers, but their quality is much better – they actually know the city, have excellent manners, and I've hardly ever heard any horror stories.
while it is true that you can easily switch from uber to Lyft or vice versa, there are only two of them. so they do have moats. its not easy for a new competitor to emerge unless they are doing something different like perhaps driverless cars.
In Singapore Uber did an equity swap with Grab (they both own parts of each other and are invested in by Softbank too) to cease business. Now I just use a normal taxi booking again (as well as Grab when it's cheaper).
The reason I'm reluctant to use Lyft is that they do not say beforehand how much my ride is going to be.
Edit: I stand corrected. Their UI mislead me because for airport rides the price is only shown after you hit a Confirm button, but that does not order the car as I thought, only takes you to the next screen.
I stand corrected. Their UI mislead me because the price is only shown after you hit a Confirm button, but that does not order the car as I thought, only takes you to the next screen.
I've been misled in the exact same way when using Lyft at airports. This has caused me to use Uber instead of Lyft at least once, until I figured it out.
I use Lyft frequently on iOS all over the US, it gives an estimate that tends to be conservative (i.e. high). Do you not see the same thing in your app?
In the parent comment's defense, I remember trying to price-check with Lyft and being scared about pressing 'Confirm.'
They should really think about switching it to 'Confirm route' or 'location'.. something that ensures me I'm not ordering it yet. Maybe an arrow where I can swipe and see the next step? Or some visual cue that there are more steps ahead?
Yeah, it’s not exactly clear. I figured it must not be the “send me a car” button since it doesn’t have all the info it needs yet, but I can totally see why you’d get stuck at that point.
Interestingly, it only uses the “Confirm” label for airports. Other destinations say “Set Destination” which is about eight thousand times more clear.
This is one of those no-shit responses, parroted over and over again.
At the end of the day, Pepsi and Coca-Cola sells you sugar water. McDonald's and Burger King get the same meat form the same vendor trucks. You charge a credit card whether Visa or MasterCard.
The point isn't who brings you the convenience, it's that you have convenience at all.
Uber/Lyft has commoditized driving to a product sold at ~$2/mile. That's why this week they both launched loyalty programs, back to back.
And from there they'll just keep trying to add more value bit by bit. Not surprised at all if in 10 yrs Uber doesn't have cab hailing anymore, but you ended up on an Uber flight to Shanghai.
"BPI was a major supplier to McDonald's and Burger King, as well as restaurants and grocery stores, and its products were reportedly used in 75% of the United States' hamburger patties in 2008. The School Lunch Program, another large buyer of Beef Product's goods, used about 5.5 million pounds in 2009."
I think the problem really is profit. Pepsi and Coca-Cola both sell sugar water, a commodity, at a profit. Lyft and Uber have made rides a commodity but at this point it looks like commoditization of rides is not able to be sold at a profit. I think they both are touting that scale and technology will lead them to profitable rides but its not obvious that this is going to ever come true in a way that justifies their value. To me the scary part for them is that they already have commoditized their product.
In my opinion the outstanding question today is: are they both too early? It's currently a race to the bottom of driver oriented rides. As soon as driverless becomes viable the current rider fee suddenly shifts to being a more positive profit margin and also shifts opex back in favor of both. But can either last long enough to get there?
Alexa can't even turn on my living room lights more than 50% percent of the time. I'm not holding my breath for driverless cars coming any time soon (if ever).
Anecdotally, among my friends I also see Lyft becoming the default, and sometimes price-checking with Uber. If Waymo or whoever came out tomorrow with a cheaper/safer driverless car, I'd just as likely drop Lyft in a heartbeat.