If you are reading this, chances are you have taken an Uber before… but maybe you have never taken a Lyft. These two companies offer practically identical services, but are not viewed as equal in the public eye. This post will focus on the important distinctions between these companies, in particular How Lyft Will Surpass Uber.
UberEats, UberRush, UberEssentials, UberBoat, UberChopper and the list will continue to grow. Have you ever used any of these? Maybe UberEats when delivery was free, but any of the others? Didn’t think so. Uber is spreading itself too thin with this range of offerings, none of which are profitable. Of course some of these are gimmicky more than anything (Boat/Chopper), but it is important to realize that Uber is dedicating significant resources to these offshoots, which are unrelated to its profit center of ride-sharing. Uber is acting like Amazon and Alphabet, but unlike them it has not cemented itself as the leader in its core business.
LyftCarpool is the only alternative service offered by Lyft. Have you heard of this? Ok…probably not, but it is just being rolled out in San Francisco and its name is pretty self-explanatory. LyftCarpool allows users to coordinate carpooling in advance (a feature Uber users have demanded for sometime now).
Lyft will surpass Uber because of its focus on ride-sharing services, which is a cashflow positive business in established markets. This focus makes Lyft run more efficiently and allows its innovation to be related to its core business of ride-sharing.
2. MANIFEST DESTINY
Uber is all over the map in terms of product offerings as well as being physically all over the map.
The data shows that a majority of Ubers cities served are actually in international markets. While this is not negative, it shows that Uber has a lot more to worry about while its competitor can focus on the United States.
Lyft operates in 33 United States cities. Lyft has taken the more cost effective approach to the international market and partnered with Didi (China), Ola (India) and GrabTaxi (South East Asia). In this way Lyft and its partners are able to set the stage for expansion without diverting attention from home markets.
Uber has received $9 billion at a $62.5 billion valuation as of December 2015. Uber has received more funding, which is an advantage for the company because it has more capital to use for its operations. However, this premium valuation requires Uber to generate premium revenue and premium results. premium premium premium. Had to get that out of my system. This valuation is the reason that Uber is trying random variations of Uber like Chopper and Boat, so it can inflate revenue. This valuation is also the reason Uber is shooting for the moon and trying to capture all of the international markets.UberMoon coming soon…
Lyft has received $2 billion at a $5.5 billion valuation as of January 2016. This more reasonable valuation sets realistic expectations for a growing company.
When outlining this article I thought it was really important to include community because that is what Lyft preaches. They encourage their drivers to strike up conversation, passengers are given the chance to tip them and their logo is so fun! A pink mustache, how wacky and millennial! However, I think this is all BS and could care less about Lyft’s focus on community as a competitive advantage…
Wrapping It Up
Uber is not going away…but neither is Lyft. These companies represent the future of ride-sharing services and I believe that Lyft Will Surpass Uber. If you still don’t believe me Lyft has reached 40% market share in San Francisco, 45% in Austin , and it is continuing to grow.
- Uber is not focused on its money making product, which is ride-sharing in the United States.
- Uber achieving success in international markets is optimistic and in reality represents an attempt to justify an overpriced valuation.
- Uber received too much money and its high valuation is causing more harm then good.
- Uber doesn’t care about community and Lyft does…but that doesn’t really matter.
I can actually wrap that all up in one sentence for you to sound smart in front of your know-it-all-tech-friends, here it goes:
Uber’s inflated valuation has forced the company to abandon focus as represented by their random product offerings and geographic dispersion, which provides Lyft an opportunity to surpass them in profitable United States market share.