Uber and Lyft Have Become Indistinguishable Commodities
bits.blogs.nytimes.com
bits.blogs.nytimes.com
All of them except for one drive for both Uber X and Lyft, and none of them really care one way or the other about who wins. Only one had a pink mustache, and it was a little stuffed one on the dashboard, probably six inches wide; he also had an uber sticker. One expressed worry about Uber taking over and not having a competitor to hold its feet to the fire.
The one who only drives for Uber is a new mother that just likes to get out and talk to people who aren't babies, and she gets paid to do so.
To them, at least, the article is right. The services themselves are awesome, yet mostly indistinguishable.
Interestingly enough, I'm 99% sure if I came here pre-Uber/Lyft I would just rent a car. I have a serious aversion to taxis, but Uber just takes the pain away. The drivers noted that tons of people have been saying that.
Last month I was in San Francisco and I STILL couldn't use Lyft, because you need a US phone number to sign up.
From day one Uber has been thinking on a different scale.
This is very noticeable now. Lyft used to stand for a different customer experience to Uber, but now it's effectively the same. It's sad (although probably inevitable) that their growth has lead to such a dilution of their brand.
This is strictly a quid pro quo transaction - nobody is going around riding Lyfts to meet interesting people, except maybe journalists hunting for a story. And nobody is out there driving Lyfts to meet interesting people... except maybe journalists hunting for a story. Let's not pretty it up with SV-style faux-populism.
Friendliness and mutual respect? Absolutely, the same respect and courtesy you'd show to any other human. But let's be real about the other stuff.
The fist bump got dropped because neither the drivers nor passengers cared about the fist bump.
I hate to tell you this, but not everyone is a button-down or a neckbeard. I liked the casual friendliness of it.
> nobody is going around riding Lyfts to meet interesting people
I wouldn't actively go grab a Lyft just for that purpose, but when some friends and I are a bit tipsy and heading out to the club? Absolutely we'd rather be in a fun environment with an interesting person.
Don't get me wrong, I like things to be casual - in fact I find Uber's customer experience to be too far on the other end of the spectrum. "Yes sir", "of course sir", "would you care for some water, sir?" - blech!
I also enjoy chatting with my drivers, because hell, I might learn something.
But if my driver's having an off day and just wants to get me from A to B? That's fine. If my driver just isn't the super-chatty type? That's fine too. Expecting everyone performing a service for you to be bright, chipper, energetic, and ready to spill the beans on all manners of subjects, all the time strikes me as unreasonable - an attempt to create a social bond where none has been earned. Are we so devoid of meaningful social contact that we must try to artificially induce it by decree for paying customers?
Let's not forget that the fist bump - like the pink mustache - is not some organic thing that developed in the "community", it's an instruction from headquarters.
> "but when some friends and I are a bit tipsy and heading out to the club? Absolutely we'd rather be in a fun environment with an interesting person."
Does the interesting person want to be in the same environment as you? Does the interesting person find this environment at all fun? Has it occurred to you that people drive around drunks on Fri/Sat nights for a living, not for fun?
I mean shit, is this guy a driver or a court jester?
Totally. You're not wearing the minimum pieces of flair again, right? That whole concept of forced friendliness makes me ill.
Or maybe I am the only one that prefers simple no-bs customer experiences over kitsch and hipster-bro nonsense. I would pay a $3 surcharge to avoid all pink furry things and fist bumps honestly.
Lyft could really benefit from a decisive and purposeful rebranding.
That never even occurred to me.
Wow.
In the area I live in (where we've got Uber(x), Hailo, and Lyft) there was word that cars that had the pink mustache were being targeted by taxi drivers for harassment, so I think they pulled them off for safety.
Compare that to crazy taxi drivers with really terrible cars - they stay in the system for many, many years.
That's one of the key innovations that Uber/Lyft have brought, (the other one of course being a Unified Geo-Dispatch system in any city that they serve)
Their flow for reporting bad experiences is categorized, so I'd imagine "unsafe driving" is weighed more than "car smell".
Another thing is how well they control supply and demand. Say Uber has 10x drivers than Lyft, what if Uber has 100x consumers than Lyft? Uber likely has to surge at a very high rate, and the consumer can't afford a surge might go to Lyft instead. Since Uber can't control well how many total consumers they have at the moment without surging, one realistic alternative is to just reduce the number of Lyft drivers, so Lyft have to charge higher rates as well.
Here Uber doesn't just want more consumers coming in, because even less consumers is better than more consumers come in initially and can't afford a surge and then have to turn to Lyft.
So to sum up, in the end, Uber have to recruit more drivers (hey, they even just opened API for their product) or cut the number of drivers from Lyft (through alluring them). You can't blame Uber on that, it's the competitiveness of this market.
Personally I prefer the old Uber over the "ride sharing" Uber and I don't really understand why they have diluted their brand to the point where some people don't even realize that Uber drivers are not necessarily random people driving their family car, but may be professional drivers.
UberX is at least a 20x, if not 30-40x larger business than Uber proper, which is why they transitioned away from simple black limousine service. A trip to San Francisco by Taxi from Redwood City is about $105. Via Uber it is about $150 (presuming no Surge Pricing) - Lyft/UberX charge me about $40-$55 (depending on wait time). And, unlike a Taxi, I get almost immediate service, by a courteous and professional driver eager for good feedback. As a 15 year+ user of taxis on the peninsula, and having taken Lyft/UberX around 100 times so far - I get a much more enjoyable experience in Lyft/UberX than I ever did in a taxi, some of who did know the area, but many of them just confused new-arrivals to the Bay area in dangerous vehicle that had me fearing for my life.
One thing that speaks for taxis is that they are insured for commercial transport of people so if I get hurt in one, it is likely that I get compensated. How does this work for UberX/Lyft where people use their personal cars?
Uber proper is priced for people who are used to driving their BMWs or hiring limousines but don't want to this time.
I assume they realized that the former is a larger (and currently underserved) customer base.
I've taken a few black cars not because I'm into limousines that much, but because of airport regulations, and the ride is typically within the range of the cab. Cab drivers in the US also expect to be tipped in 10-20% range, which leaves Uber black car service frequently a winner price-wise.
I don't think twice about using UberX/Lyft right now - and certainly would never call a taxi in an area served by them.
Long term - it really depends on how committed each service is to responding to User Feedback, and managing the drivers with consistently low scores out of their system.
Last time I used it over a course of several days, Uber regularly had surge pricing whereas Lyft never charged me extra.
On top of that, Lyft drivers were way friendlier.
Not really sure what the point of the article is given this is transportation the actual "thing" (getting from point a to point b) creates commoditization. But there are sooo many ways to use technology and service to then differentiate and then win. And this is an industry in such a early/nascent state.
Google does not need to tell you they are better than another search engine. Use it once, and decide.
And given how indistinguishable both have become and how non-sticky their service is, it wouldn't surprise me if the very existence of two competitors that are so similar makes it impossible for either one of them to reach the kind of profitability that's a requirement for IPO's.
Kudos for disrupting the taxi industry, which was in dire need of a kick in the butt, but I think both companies are about to discover that profitability is a lot harder to achieve when you have competitors who can run a business that's 100% a clone of yours.
The simple fact that most drivers are working for both Uber and Lyft should be a red flag for any savvy investor.
Your analysis of the IPO situation could use another look. I personally think it's very likely both companies will go public -- or Uber will snap up Lyft before it has the chance. While it's pretty reasonable to think there would be a "profitability requirement", a look at tech IPOs dispells that myth. Look at the recent ones, the ones from a few years ago, the 20 year old ones from the 90s, doesn't matter which period you look, you'll find scores of unprofitable companies.
Recently Go Pro and Twitter went public. Neither, I don't think, are profitable. Of the 4 companies I mentioned in my comment, I don't think any are profitable consistently though perhaps Zillow has been recently. Amazon went public 20 years ago and is still not profitable.
Neither of these companies need to turn a consistent profit in order to IPO. I imagine they both already have sales high enough to pass the chickenshit threshold. That's all that counts.
Interesting to see the on-the-ropes impression by several of you. Where do you live?
It's all about the customer and raw, capitalist competition as they keep telling us.
Such app has been built, promoted, denied access and subsequently shut down http://techcrunch.com/2013/06/02/corral-lyft/
But in true capitalist fashion, Travis would be proud, we of course can't allow them.
But you're right, if the article is correct, we should expect Uber and Lyft to fight tooth and nail to provide the better product for consumers, which is the beauty of competition. They do all the work and take all the risk, we get almost all the benefit. Both companies seem uniquely placed to have exactly zero chance of capturing regulatory favours.
With ride sharing, consumers presumably want the cheapest, quickest, cleanest fleet. I doubt fist-bumps really factor in to the experience. Suppliers can improve their fleet, improve their drivers and so on, using their own perspective as a guide. Aggregators can offer the cheapest, quickest, cleanest fleets to the market without having the limited perspective. They get a better view of the market through this too, potentially adding value to the whole supply chain.
Incumbents don't have to allow their own infrastructure to be "used against them", but they will, because this is what the market wants.
Uber and Lyft are basically dispatch and payment processors. Similar perhaps to a credit card processor.
I'm just gonna go ahead and assume that the investors understand this basic principle perfectly well, you're not being cleverer than them by disagreeing on the valuation, you're just using different assumptions about how incredible the growth could be and how large the risks are.
If Whatsapp can sell for $18 billion I don't see why Uber can't. Uber, after all, has an actual business model and income stream.