I’ve been a huge fan of Uber since they began disrupting the taxi industry.
Seventeen years ago the most valuable thing Delta owned was shares in Priceline — the company liquidating unsold airline inventory was worth more than the carrier that actually had that inventory. Priceline is worth a ton, but was supposed to be able to revolutionize other industries too. The Priceline liquidation model, taking excess capacity and finding consumers through an opaque bidding model that wouldn’t cannibalize existing sales, was supposed to extend to everything from gas for your car to home mortgages. The vision didn’t extend as far as it was supposed to.
I love Uber but I’m skeptical that they’ll revolutionize several industries. Investors much smarter than I am clearly disagree. I think the business model of taking underutlized resources (downtime of cars, cabs) and connecting up those with consumers looking to pay for them is a brilliant one. It makes the economy more efficient, delivers value without substantial additional capital. This idea can be extended, of course, to other industries. And embedded in Uber’s valuation is that they’ll be able to expand beyond connecting passengers to cars.
But Uber’s market position, while greater than Lyft’s, isn’t really protected by significant barriers to entry.. though in becoming in many cases pro-regulation they’ve tried to impose costs on other services that might start.
I like competition and so I’ve been using Lyft more. And it’s seemed as though there are more cars where I’ve been, in Austin and in Northern Virginia, which has translated to shorter waits (though this is only a difference of a couple of minutes).
How easy it is to transition underscores just how tenuous a place Uber is in in the market, even as they lose money on every ride and make it up on volume.
Lyft gives out $50 in new rider credits, which is more than Uber’s been doing ($15 – $20). They’re burning investor money doing that of course, but if they can get to scale there’s no fundamental reason they can’t catch Uber. (Do investors still think scaling is more important than making money..?)
The service is very similar to Uber albeit not in as many markets. Here are Lyft’s cities, they’re growing in the US while Uber is growing worldwide.
Lyft has clearly grown up. They’re not all pink mustaches on the hoods of cars and fist bumps with the driver when you get in anymore. It is now totally fine to sit in the back seat of the car.
Several months ago in DC I simply could not get the Uber app to open on my phone, so Lyft was a lifesaver. I want to keep Uber under competitive pressure, so think it’s worth giving Lyft a shot.
I thought their GPS and directions might not be as accurate as Uber’s, since I’ve had a few issues with drivers finding me recently, but I opened my Uber app yesterday for the first time in a couple of weeks and had the same thing.
This is my referral code for $50 in new rider credits. Feel free to leave your referral code in the comments.