One of the most interesting things from my summer in SF was seeing and experiencing “tech’s fiercest rivalry” go down between Uber and Lyft. I used both pretty equally over the course of the summer and spoke to most of the drivers about whether they drive on both or one and their experiences driving for both companies. Below are some interesting findings1 as well as some personal thoughts on Lyft line.2
The Competition for Drivers
- Most of the drivers I spoke to were current drivers on both Lyft and Uber.
- However, they had one which they preferred to use and only used the other in special/a change of circumstances
- Lyft is currently not charging any commissions on rides, which is why a lot of drivers I spoke to said they were using that right now.
- Uber on the other hand is charging a 20% commission.
- On some special times/days of special events, Uber has a guaranteed rate per hour for drivers to stay on the road (often in the $40-50 region), meaning that they would pay the driver the difference between the rate they guaranteed and the amount the driver made, if he made less than that amount in that hour.3 A few drivers I spoke to said that even though they primarily drove for Lyft, they drove for Uber during these times.
- Lyft recommends drivers to set a schedule a week in advance but they can basically just open the app and get into driver mode and unless there is a surplus of drivers at that point, the driver will start getting rides.
- I used Lyft Line 5 times, and really liked it. I was matched with other people only 3 times, one of which the other rider did not show up in. I received 50% off all times, and based on confirming with several drivers, in the case of no matches, lyft is still compensating the drivers the full amount i.e paying out of pocket.
- On speaking with my Lyft drivers, I found that they hadn’t had too many successful Lyft Line experiences, in terms of actually having multiple riders.
- If I were to guess, Lyft is probably subsidizing over a third of it’s Lyft lines right now.
- Overall though, Lyft line (and Uber pool) is a very brave move (and the correct one from an Innovator’s Dilemma perspective in my opinion) and great for consumers. With Lyft Line, it cost me only $4 to go from around the Caltrain to the mission, which is very close to the bart fare, and conservatively 10-15 minutes quicker factoring in walking time. As the demand for Lyft line increases and the matching algorithm improves (and indeed competition from Uber pool’s public launch), I can see the price of the service getting closer and closer and in some cases cheaper than public transportation while offering much more convenience, which is a very exciting prospect and could open Lyft and Uber up to an entirely new customer segment.
- These are purely anecdotal but probably true at time of writing though they may have changed since. ↩
- I didn’t get a chance to try out Uber Pool but I imagine it will be very similar in terms of pricing/experience. ↩
- In theory the driver could just drive around and not pick anyone up, though Uber requires that drivers maintain an overall 90% acceptance rate on requested rides.↩