A quick follow up to my previous post on Lyft vs Uber, based on conversations with drivers in NYC.
- Every single Lyft driver I’ve spoken to is also an Uber driver. They often have two phones and use both simultaneously and then turn the other off from driver mode when they get a passenger.
- Lyft has been running some interesting promotions to get users, both on the supply side and the demand side. On the passengers side, there is the lyft pioneer program which gives new users a number of free rides for two weeks. On the driver side, lyft normally charges drivers a 20% commission, lower than Uber (which varies based in the kind of Uber but is in the 26-28%). However, if drivers do more than 40 rides per week, then Lyft doesn’t charge any commission – basically trying to encourage drivers to drive almost full-time on Lyft/switch over to Lyft from Uber.
- Further, they also have a promotion where they pay new drivers a $500 bonus after they’ve done 20 rides.
- Most drivers felt that the services were more or less equivalent and didn’t really care which of the two “won”/have a preference between them other than which had greater demand, similar to what the recent NYT piece pointed out, but some of them felt that passengers would switch to Uber when the free rides on Lyft ran out.
- Some preferred Uber because they felt that Uber had more passengers taking long distance trips. They felt that Uber was much better for getting passengers that wanted to go from NYC to Jersey or Connecticut which resulted in very high fares. These mostly tended to be working professionals in midtown who would take late night rides to Jersey/Connecticut.
- Further, Lyft doesn’t have the capability in place to take the toll charges from passengers, where as Uber does, which again made it easier for long distance fares. (For Lyft, the driver would have to send some receipts to Lyft which would then charge the passenger later). This again made them prefer Uber for long distance trips.
Overall, it seems that the services are close to equivalent in NYC though Uber is winning slightly because it’s better for drivers for long distance trips which result in high fares. To compete, Lyft will have to improve its app to make tolls easier, but more difficultly attract the corporate clientele, which might be difficult given perception that Uber is the professional brand and Lyft is the fun “pink-mustache” one.