Uber vs. Lyft... Who's in it for the long run?
Are you a Starbucks or Dunkin Donuts fan? Rite Aid or CVS? Target or Walmart? Uber or Lyft? The act of decision making often comes down to the ability to decide between two or more alternatives.
Psychologist William James said it best,
The reality of the decision-making process is that Dunkin and Starbucks, or any of the other comparisons listed, may not be very different at all. Yet, we are taught that they have vastly unique offerings at times.
You wake up and subconsciously drive to your favorite coffee shop because you believe that the decision you made is the better of alternatives. After work, you decide to go out to the bar with some colleagues and find yourself on your back home in the backseat of an Uber.
As of last month, Uber controlled 74.3% of the rideshare market, while Lyft controlled only 1/3 that amount - or 23.4%.
There's no question that Uber is dominating the market right now, but for how long will this continue?
Uber has been facing some serious heat over the past few months after multiple allegations of workplace harassment and fraud from now-former CEO, Travis Kalanick.
How many consumers will truly switch from Uber to Lyft if they weren't affected by these accusations? I doubt very many.
The switch will come as soon as the consumer feels they aren't receiving the same value from Uber that they once did, or if Lyft is able to display its value proposition better.
First, they were the pioneers of the ridesharing model and first-to-market, allowing them to achieve higher customer awareness and acquisition rates.
Secondly, due to the fact that they were the first to create such a revolutionary new platform, Uber found itself pulling in money from some of the largest and best-known investors in Silicon Valley. To be exact, Uber has raised over $11 Billion dollars to date. By comparison, Lyft has only raised $3 Billion.
Having all the money in the world does not necessarily set you up for success. Take Solyndra. After having raised nearly $1 Billion in venture funding and receiving publicity from President Barack Obama, the solar tech startup closed its doors in 2011.
In the world of Uber vs. Lyft, what are customers actually looking for from these giants?
How are Uber and Lyft actually branding themselves to compete with one another?
At the end of the day, both apps will get you from point A to B. Both have fairly transparent and up-front pricing. Both also have a very similar functioning app.
At the end of the day, it comes down to two factors.
With the limited flexibility to lower prices without putting themselves out of business, Uber, Lyft, or any other variation of them, are forced to compete using partnerships with other large and small brands.
In the world of personalization, everyone is expecting the products and services they use to be tailored towards them. How are brands like Uber and Lyft able to personalize what some would simply just call a taxi ride?
I'll tell you it's not easy!
Brand partnerships have become a flagship in Lyfts strategy to set themselves apart as more than just an app. Take their relationship with JetBlue. Connecting your Jetblue and Lyft accounts will yield you 30 TrueBlue points for every airport ride you take, along with $15 off just for signing up and taking your first trip.
Your next vacation may look a little bit more like this...
Lyft provides you with transportation to the airport that you booked through Google Maps. Once there, you'll board the plane that was booked using discounted prices through Lyft's partnership with the airline. Once landed, your autonomous driving Ford Lyft will pick you up to bring you back.
This will be the strategic goal of business both large and small in the years ahead. Just as Apple has begun to transform its iconic retail locations into what they now call a "town square" to bring consumers an entire experience, Uber and Lyft must transform the way consumers perceive their services.
They aren't ridesharing platforms, they are a full-service transportation provider.
The partnerships each brand makes within the next few years will be fundamental to whether the next generation will be using "Ubering" or "Lyfting."
What's Our Choice?
It comes down to the value we believe we are getting for the price we pay. Does Starbucks really have better coffee than Dunkin? That's a matter of opinion, but if we were to look at the beans getting roasted, I would be willing to say that they probably are not very different.Psychologist William James said it best,
"Thoughts become perception, perception becomes reality. Alter your thoughts, alter your reality."
The reality of the decision-making process is that Dunkin and Starbucks, or any of the other comparisons listed, may not be very different at all. Yet, we are taught that they have vastly unique offerings at times.
You wake up and subconsciously drive to your favorite coffee shop because you believe that the decision you made is the better of alternatives. After work, you decide to go out to the bar with some colleagues and find yourself on your back home in the backseat of an Uber.
Why Uber?
Just as facial tissues became Kleenex, bandages became Band-Aids, searching something online became Googling, using a ride-sharing service is now Ubering.As of last month, Uber controlled 74.3% of the rideshare market, while Lyft controlled only 1/3 that amount - or 23.4%.
/cdn.vox-cdn.com/uploads/chorus_asset/file/9155231/uber_lyft_market_share_01.png) |
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There's no question that Uber is dominating the market right now, but for how long will this continue?
Uber has been facing some serious heat over the past few months after multiple allegations of workplace harassment and fraud from now-former CEO, Travis Kalanick.
How many consumers will truly switch from Uber to Lyft if they weren't affected by these accusations? I doubt very many.
The switch will come as soon as the consumer feels they aren't receiving the same value from Uber that they once did, or if Lyft is able to display its value proposition better.
Where do people see value in Uber or Lyft?
Uber dominates the current market because of two reasons.First, they were the pioneers of the ridesharing model and first-to-market, allowing them to achieve higher customer awareness and acquisition rates.
Secondly, due to the fact that they were the first to create such a revolutionary new platform, Uber found itself pulling in money from some of the largest and best-known investors in Silicon Valley. To be exact, Uber has raised over $11 Billion dollars to date. By comparison, Lyft has only raised $3 Billion.
Having all the money in the world does not necessarily set you up for success. Take Solyndra. After having raised nearly $1 Billion in venture funding and receiving publicity from President Barack Obama, the solar tech startup closed its doors in 2011.
How are Uber and Lyft actually branding themselves to compete with one another?
At the end of the day, both apps will get you from point A to B. Both have fairly transparent and up-front pricing. Both also have a very similar functioning app.
At the end of the day, it comes down to two factors.
Price & Brand Awareness
Just as you go to Rite Aid over CVS to grab a pack of batteries despite being the same cost, you chose Uber over Lyft because it's what you are most accustomed to.With the limited flexibility to lower prices without putting themselves out of business, Uber, Lyft, or any other variation of them, are forced to compete using partnerships with other large and small brands.
In the world of personalization, everyone is expecting the products and services they use to be tailored towards them. How are brands like Uber and Lyft able to personalize what some would simply just call a taxi ride?
I'll tell you it's not easy!
Brand partnerships have become a flagship in Lyfts strategy to set themselves apart as more than just an app. Take their relationship with JetBlue. Connecting your Jetblue and Lyft accounts will yield you 30 TrueBlue points for every airport ride you take, along with $15 off just for signing up and taking your first trip.
Your next vacation may look a little bit more like this...
Lyft provides you with transportation to the airport that you booked through Google Maps. Once there, you'll board the plane that was booked using discounted prices through Lyft's partnership with the airline. Once landed, your autonomous driving Ford Lyft will pick you up to bring you back.
This will be the strategic goal of business both large and small in the years ahead. Just as Apple has begun to transform its iconic retail locations into what they now call a "town square" to bring consumers an entire experience, Uber and Lyft must transform the way consumers perceive their services.
They aren't ridesharing platforms, they are a full-service transportation provider.
The partnerships each brand makes within the next few years will be fundamental to whether the next generation will be using "Ubering" or "Lyfting."
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