Post-pandemic, the battle between Uber and Lyft is looking more one-sided
wsj.com
wsj.com
Linking to the site directly, likely with a bit of tracking information related to me, but allowing non-subscribers to access it without hitting the paywall. It also gives the actual experience.
For example - from https://news.ycombinator.com/item?id=32849962
Compare: https://archive.ph/OJYqz
and https://www.nytimes.com/interactive/2022/09/14/climate/san-f...
For the poor, I did a lot of runs taking older low income patients to dialysis clinics. Several rides were set up before hand where I took mentally disabled people to clinics (I was instructed not to drop them off in between home and the clinic if they requested.) Admittedly, Lyft is not a charity, so they're probably making good government money, but I like that Lyft made the effort to help the less fortunate and gave me the opportunity to feel like I was doing something that mattered.
I've never had an at all reasonable experience using any rideshare for an airport pickup, fwiw. End up on the phone with the driver trying to explain what terminal I'm at, how to identify the pickup zone, the entire concept of an airport really. When there's a taxi stand with a waiting professional driver right there it just does not make sense.
So, it seems, as usual, YMMV.
i don't know why i'm complaining though, it is still a fantastic public transportation system compared to many others.
For my most recent “Lyft accepted the ride twice and failed twice at 15 minutes each throw” experience on Friday, the T was already in bed for the evening (or about to be, meaning it couldn’t be counted on).
Getting to the airport? There’s too much variability from the T and I don’t like sitting at Logan for an extra 45 minutes when the T decides to operate smoothly nor stand and worry the extra 45 minutes when it decides to be crappy service. (That variability cost is on top of the 45-60 extra minutes the T takes over a car.)
Multiple bags or flying with the kids? Car service every time.
Most Lyft drivers are also Uber drivers. If Uber is on 2.5x surge from the airport, why would drivers accept Lyft rides? They should logically decline every Lyft ride offered until an hour after the last flight lands.
I think that’s what’s happening. Uber is quoting me $60-75 (normally $25-30) and Lyft is saying $28. Being frugal, I pick Lyft. Being sensible, Lyft drivers turn down the ride. Lyft tells me I have a ride coming, but eventually times out until I give up on them, conclude they are full of it, and refresh the Uber quote until I get one in the $35-45 range.
* - pun not originally intended, but left in place.
I'm just curious why you think that food delivery will do great during a recession, could you comment on that? I find Uber Eats to be utterly overpriced. I would assume that people will scale down on eating out during a recession or will look for ways to save on it (picking up by themselves, eating more at home, etc.)
They did both start declining at the same time about 9 months before the overall market did, in April 2021 instead of Jan 2022. But from IPO up until that decline started, Lyft was already down 20% whereas Uber was up 50%. Then this decline has been much worse for Lyft as well, down 80% from April 2021 whereas Uber is down 55%.
That's a pretty big difference between the two companies.
https://finance.yahoo.com/quote/LYFT/chart?p=LYFT#eyJpbnRlcn...
I'm scratching my head trying to figure out why Google Finance would graph stocks this way. The only thing I can think is they didn't consider the intersection of "comparing stocks" and "they might have IPOed in the time range".
[1] https://finance.yahoo.com/quote/MSFT/chart?p=MSFT#eyJpbnRlcn...
And while taxis didn't always like to pick up people in low-traffic areas, they always came for medical transports because they could bill insurance companies extra.
In the old days the “voucher” fares were on paper slips. Most the hospitals and clinics switched to the taxi company’s electronic systems by the late 2000’s, but we still saw a few of the old paper vouchers… one of my more memorable fares was a woman going home from the hospital with a paper voucher. She’d taken herself to the ER on account of her monthly misery. They gave her pain medicine, as if that would help her financial situation, or her PTSD from childhood abuse.
Nothing unique about Uber and Lyft having contracts.
Uber hasn't been doing scooters for a while. The rentals in the app are through Lime. Stuff like self driving and aviation also got offloaded to Aurora and Joby, respectively.
The third largest vertical for Uber is freight, not scooters. $1.8B in revenue there in Q2.
The rides business now has several arms, from B2B corporate accounts to numerous partnerships with players in adjacent and semi-adjacent industries.
The eats business is branching into general last mile delivery (e.g. cornershop acquisition).
The B2C strategy now is to bundle all the rides/rentals/food/deliveries services into the Uber One membership package, similar to the Amazon Prime/Costco volume-incentivizing model.
Look through the careers site and you see there's an ads arm spinning up.
I'm seeing a very clear change in focus from pie-in-the-sky ideas to more proven business strategies.
I'm still a bit surprised that we don't see more investor pressure for many of these companies to demonstrate that they actually can turn a profit.
I get it, when Uber was just in SF, the argument was "don't worry about profit, just grow until you eat the entire industry... then you turn on the profit switch". But here we are, Uber has IPO'd, is in every city in the US and many countries around the world, and has only one major competitor which the WSJ claims is "eating their dust".
When do you flip that profit switch if not now?
The most obvious reason I can think for not flipping the switch is there is none. Still very curious when, if ever, the market will care.
All of that to say I don't think there is a profit switch. Uber doesn't really give any benefits over a taxi in large metros anymore which I assume is where most of their profit comes from.
I'm not sure their brand recognition can possibly get any better. It's been top-notch for years. All that's left is to make the unit economics work out. So, where are they on that?
Suppose that the unit economics for Uber do not work out, especially in a recession with high borrowing costs. It would not take long for that "value" to become zero.
I think that a large component of a brand’s value is the low-pass filtered value of the underlying company.
This is exactly correct. If they could have, it would be profitable by now.
A lot of these large tech companies simply act as wealth transfer vehicles, enriching a few key players. When private, the insane valuations drive ever larger VC funding rounds with early investors cashing out with money from later rounds. Leadership teams take home millions in compensation and equity. All of them have a huge incentive to keep the fiction going.
By the time the company goes public, the last rats leave the sinking ship with public money and the company is now a zombie. Everyone left is just scavenging the scraps leftover until a few unlucky souls are left holding the bag.
The thing is I can't convince myself that this is meaningfully different than a classic ponzi scheme. I guess because they have a "product" and and a revenue stream. But their business is basically selling $1.00 for $0.90 -- no surprise that their volume is insane.
I agree. And this is one of the reasons that their path to profitability is impossible. Since they often cite their large customer and driver acquisition campaigns as the thing they can cut to start taking profits when they have scaled enough.
The truth is that they can't stop that spending, they need a constant stream of new drivers (suckers) to keep things going. If they stop the spend, the drivers go away.
My last driver on vacation said he was on his 3rd vehicle over 7 years of driving with Uber. I imagine if he's still going, he's doing more than "breaking even".
I see lots of people argue that drivers don't understand depreciation, but you talk to these drivers who have been doing it for years across multiple vehicles, and they're still doing it. It seems like people want them to be exploited, so they feel justified in saying the big tech companies are bad, and it's really easy to just ignore the reality that there are many of these multi year multi vehicle drivers out there who are still doing it and say they like it and are making money. If drivers were actually losing money, you wouldn't expect to find nearly as many multi year drivers as you do.
That might be an oversimplification too. That suggests at least some drivers are finding it worth sticking with, absolutely. There could be systemic reasons there are others who give it up in 6mo or whatever. The ration may be interesting also.
It would be particularly interesting in how many people are maintaining a one income household with it, without other sources of income.
I bring up the surprising number of multi year drivers because if you believe what you read online, you'd imagine that Uber is stealing from people who don't understand what depreciation is and that no one could still be doing it on their second or third vehicle. That appears not to be the case and there are numerous counter examples that disprove it. That doesn't seem to stop people from still arguing that Uber is somehow exploiting everyone.
My point was that the existence of said counterexamples doesn't prove anything very strong, only that clearly Uber isn't only stealing from people who don't understand depreciation, etc.
In order to actually understand what is going on, you'd need to have a broad survey (and yes, that should include people like your hypothetical). It would look something like a uniform sampling over drives (not trips) as a starting place.
Average length doesn't prove anything, but it should be clear that I wasn't suggesting it did.
https://www.gobankingrates.com/money/jobs/uber-and-lyft-driv...
- Toyota Camry Hybrid LE (about $30k to get entry-level, new)
- Driving 35 hrs / week at an average speed of 35 mph, 48 weeks of the year
- A couple thousand personal miles
- Deprecation at that rate over 3 years is about $11k
- Average Uber driver income of $0.83 / mile
Ends up with:
- Running costs of $0.16 / mile (insurance, fuel, maintenance)
- Depreciation costs of $0.06 / mile
- Total per-mile cost of $0.22 / mile
- Net per-mile income of $0.83 - $0.22 = $0.61 / mile
That's about $35,868 / year "take home."
But, it's also a best-case scenario (no major accidents, no periods where you can't work, no injuries, about the best car you can get for this kind of gig, you have the cash or credit to buy it new and you can easily sell it after 3 years). I suspect that depreciation amount to be a little low, since the calculators don't factor in Uber-driver levels of usage.
And of course, that's 1099 income. No benefits, no health insurance. If your auto insurer finds out you're a professional driver, your rates will likely go up. If you have an accident and they find out, they may void your policy.
It isn't a great gig but I have to admit that it is net-positive.
Sources:
- https://drivingpress.com/how-much-can-you-make-driving-for-u... - https://afdc.energy.gov/calc/
Ideal situation is using a vehicle you have anyway so you're only incurring the additional usage-costs and not modifying your vehicle age-costs.
I thought Uber (at least) had supplemental auto insurance coverage for when you're driving a passenger, but that's probably market-specific too (and then you're on your own personal insurance for everything else).
Lyft surge prices are much higher IME. At a particularly bad time, a surge Uber trip downtown where I live might be $25, Lyft will charge me $60 for the same ride. I wonder how much of that the driver sees.
I was grateful to take a Lyft home for $28.00.
Luckily I remembered Lyft existed or I would have been stranded that night. Installed and set up in less time than I had already wasted trying to get Uber to verify.
...anyway, fraud detection is largely anecdotal.
Uber insists on sending me an SMS verification code. But the code never arrives.
I have no problem with any other app, just Uber. But I can't get anyone at Uber to look at the problem because I'm an human being (read: "edge case") and I don't scale.
Like, what a hostile UX design. I walked out of the airport, got to the ride-share pick-up area, and was then told by Uber I needed a mask. So I had to walk all the way back to the baggage claim to buy a mask at a store.
And, I seem to remember seeing a chart of ... maybe it was average time to infection on a matrix of different kinds of masks for the carrier and the exposed. The short of it was that masks on both people help lengthen the time.
I have no problem with following local law (or even just whatever Uber wants to enforce). I was annoyed that Uber's app did not make me aware of the mask requirement until after I was ready to book my ride.
Airports often have special pickup areas dedicated to rideshares. I always walk to the pickup area before booking when at an unfamiliar airport, because I don't know how long it'll take me to get there, and I don't want to keep my driver waiting.
In this case the pickup area was outside of the airport terminal and a fairly long walk. When I reached the pickup area I tapped 'book', and Uber then told me I needed a mask. I then had to walk back to the terminal to buy a mask.
So, I deleted Uber and installed Lyft. The first thing Lyft showed me was that a mask is required to ride in the area.
> Has it not been obvious that you need a mask when in enclosed spaces with strangers
If it's required by law, or if the driver asks me to, then I'm happy to comply. If I'm given the choice, I choose not to wear a mask.
I was traveling and was unaware that the locality that I had traveled to legally required a mask while in rideshares. I chose to respect law and my driver by walking back to the terminal to purchase a mask, rather than ignoring the message.
"But Lyft’s total revenue is forecast by analysts to remain less than a third of Uber’s global ride-hailing business alone this year"
"Not surprisingly, Uber is racing to broaden its horizons, adding taxi and other travel bookings as well as alcohol and grocery delivery. For now, Lyft is still chugging along the same beaten path."
Lyft is a purely rideshare company in only the US market. Uber is doing all kinds of different shit, globally. Yet the article makes it seem strange that Lyft is "eating Uber's dust", when they are barely comparable.
But I've switched to Lyft though mainly because a lot of friends work there.
It's also the classic bundled vs individual components debate. Uber is bundled and Lyft is a component. Usually there's room in the market for both.
I have no idea if it's a profitable venture for them - supposedly they're the "operating partner" which I guess means the actual owners pay them a fee to handle all the logistics while the owners themselves are responsible for the profit and loss of the system overall. Can anyone provide more detail here?
So their market is a race to the bottom. Which is a indicator of an effective market. Only non-effective markets have large profit margins.
Consider that each country needs their own specialized team of engineers to deal with its own unique problems. Then you need reliability engineers, you need engineers building administrative tooling, payments, security, so much shit. You really do need thousands of engineers.
[1] https://onde.app
Years of mismanagement that were exposed by past peaks of COVID-19 levels? Sure. But that's here to stay even if every COVID virus particle evaporated tomorrow. Current COVID-19 levels are not a causative agent for the healthcare system and other things that make society run being on the brink of collapse.
We have a perpetual crisis mentality engineered by a chicken little media.
Besides, we know the long term effects of influenza, we don’t for covid.
My anecdotal experience recently is that Uber is much better at communicating a lot of hand wavy reasons why it's not them that are impacting their net pay $random_government_entity taking all your money. Or I've just gotten some especially out there drivers recently.
Traditional shift work low skill labor jobs like fast food are honestly a better option. These days some fast food places are providing benefits, not to mention a path to management and therefore a higher wage. It's not like uber or lyft will ever promote you from driver.
There’s so some type of scam where Lyft drivers accept a ride then don’t move. They try to get you to cancel and pay a $3 fee. If you wait long enough you can cancel for free. My last Lyft ride took multiple drivers and 30 minutes to arrive in downtown Seattle. So frustrating.
I’m sure other people have had similar and worse experiences with Uber. I’m sure I’ll rage quit them again before long.
> And while Uber has enjoyed the Covid-precipitated boom in food delivery over the past few years, Lyft remains largely a rideshare company.
Some day it'll be like that.
Many people were on those waiting lists and experienced the collapse of the USSR before they even got the chance.