After having read the news article ‘Alphabet is leading a $1billion round in Lyft – despite being an investor in Uber’ (Balakrishnan, 2017), I believe it is time to blog about the two ‘kind of the same’ companies.
Both companies offer the same service: A ride when you need one. Uber, being worth $70billion, is still the largest of the two, since Lyft is ‘only’ worth $11billion. Alphabet, the mother company of Google, noticed the potential of Uber and its business model already in 2013. They invested $250mln in Uber at the time, and this got them a seat on the board.
However, yesterday the newspapers were full with the news that Alphabet now leads a $1billion investment round in Lyft.
So, what happened and what is the situation now?
In 2014, Alphabet gave its seat on the board of Uber, since they intended to compete in the ridesharing space with Uber in the future. This, of course, was inconvenient for Uber. After this, Uber has had to deal with several other incidents. Incidents about repeating sexual assault by drivers, but also with the incident of board member David Bonderman, who made sexist comments during a meeting (Maessen, 2017; Rawstorne, 2017). More recently, Uber had to deal with its CEO who resigned, hoping that the company would recover from the lost reputation under the lead of someone else (The Guardian, 2017).
Meanwhile, Lyft is getting the $1billion investment and the company benefits from a good reputation (Nu.nl, 2017). Nevertheless, the company is still only available in the USA, but is becoming a serious competitor of Uber. Especially after the investment lead by Alphabet and the announcement that Alphabet want to partner with Lyft on a self-driving car project (Isaac, 2017).
All this makes me wonder whether we will soon be ordering Lyfts instead of Ubers in Europe as well. I always looked at Uber as a company that was never going to give up the spot it created in the taxi market, but after reading all this, I might have been wrong…
Balakrishman, A. (2017). ‘Alphabet is leading a $1billion round in Lyft – despite being an investor in Uber.’ CNBC.com. Accessed: 23 October 2017 at https://www.cnbc.com/2017/10/19/lyft-funding-alphabets-capitalg-leading-1-billion-dollar-round.html
Isaac, M. (2017). ‘Lyft and Wymo reach deal to collaborate on self-driving cars.’ The New York Times. Accessed: 23 October 2017 at https://www.nytimes.com/2017/05/14/technology/lyft-waymo-self-driving-cars.html
Maessen, L. (2017). ‘Andere topman Uber stapt op na seksistische grap.’ NRC.nl. Accessed: 23 October 2017 at https://www.nrc.nl/nieuws/2017/06/14/andere-topman-uber-stapt-op-na-seksistische-grap-a1562925
Rawstorne, T. (2017). ‘How safe is Uber? Growing concern as police figures suffest company’s drivers are linked to one sex attack in London per week.’ Daily Mail. Accessed: 23 October 2017 at http://www.dailymail.co.uk/news/article-4741030/Figures-Uber-drivers-linked-one-sex-attack-week.html
Comment op ‘Lyft vs Uber’
Thank you for your great blog post about Lyft and Uber, Justin. Before I read your article I didn’t even know Lyft existed. So I did some research to find out what the difference is between Uber and Lyft. In particular I was curious about the costs. It seems that Uber’s fares consist of a fixed fee and a fee based on time and distance. Prices vary between cities and car type. In very busy times, the price will rise. A Lyft ride fare also varies between cities and car types. They are also charged with a fixed fee and a higher price during busy times, and the fare is also based on total miles and minutes travelled and the service added. But when it comes to giving tips, only Lyft provides customers with the option to give a tip, Uber doesn’t. Also, Lyft provides customers with the option to split the cost of the ride with other passengers, Uber doesn’t.
You are wondering if we will soon be ordering Lyfts instead of Ubers. If Lyft provides me with the option to split the cost with my friends, I most certainly will!
Check out this article about the differences between Uber and Lyft: http://www.investopedia.com/articles/personal-finance/010715/key-differences-between-uber-and-lyft.asp
Hi Justin,
Interesting post!
I also wonder how Lyft might do in Europe. I am under the impression that Lyft is much like BlaBlaCar.
But also, Lyft is a lot like UberPop. Uberpop was very popular but due to some legal issues UberPop is not available anymore in the Netherlands. I think that the same will happen for Lyft. As Lyft is a ridesharing platform, BlaBlaCar can be a direct competitor. And right now BlaBlaCar could expand their platform from long distance to shorter distance travel.
For Lyft to penetrate the Europe market they would need to check the legal environment first and set a strategy that is within the legal parameters. Not like Uber, that without thinking launched the app and has a lot of legal issues at the moment. And take into account the factor of BlaBlaCar that keeps expanding in Europe.