Uber vs Lyft: Comparing the Rideshare titans
Uber vs Lyft: Comparing the Rideshare titans
In a short span of couple of years, these two companies have emerged as two of the strongest brands among ridesharing services. Crowdsourced transportation network companies (TNCs) – the formal description as per California Public Utilities Commission – are expanding rapidly and adding novel services to their business model to lure their customer base.
That however, is seldom an adequate strategy in a highly competitive TNC domain which has several other services like Zipcar, Zimride, Pace, and Sidecar clamoring for a share of the pie. Add to it, the constant legal threat from several metropolitan transportation networks, especially at the behest of shuttle services and yellow cabs, who find themselves increasingly sidelined.
Despite being the two leading service providers in the industry, it has meant a constant game of one-upmanship between Uber vs Lyft, trying to outdo each other with better offers, and even luring active or former work-force from each other with outrageously competitive promotions.
So we took it upon ourselves to make a pound-for-pound comparison between the ridesharing heavyweights and decide it for ourselves, who is the top draw at the moment?
Lyft versus Uber Establishment and Growth
When weighing in on the Uber vs Lyft match, it is important to take a look at the two companies and evaluate their roots and growth since their inception. Uber and Lyft were both founded in San Francisco, California. In spite of similar business model which uses a smartphone app or an online platform to connect riders to drivers, their similarity and growth curve ends there.
Founded as UberCab in 2009, it was already an established international brand by the time Lyft debuted in 2012.
Uber has search engine giants Google Ventures and Baidu (mainland China’s biggest search engine) among its array of investors, making it a first-choice search result for ride-sharing. It counts the Carnegie Mellon University as a technology partner.
Overall the investment funds raised make them the 48th most powerful brand in the United States. Their latest round of funding is estimated to be above USD $2 billion.
Lyft, by contrast has just about breached the USD $1 billion funding mark in mid-2015. Rakuten, Mayfield Fund, K9 Ventures, Carl Icahn and Alibaba are some of its prominent investors. Despite a three-year lag, they have emerged as one of the strongest competitors to Uber, albeit with less overall weight.
Raw Resources and Coverage
Uber steals a march here. They have a larger fleet and more pricing options. From the low-price UberX to the high-end UberLUX, with options of regular taxi, spacious SUV and classy sedans, Uber is impressive for the options it provides for every price-range and occasion.
The average service time is lower for Uber, and stringent background check ensures they have a higher count of professional drivers with better knowledge of local streets and routes (although, not before they were subject of lawsuits in multiple countries for insufficient background checks earlier).
Uber’s guideline for vehicles and their relative popularity adds up to relatively newer vehicles, some of them purchased exclusively for rideshare business and a greater portfolio of cars in general.
Both Uber and Lyft offer sign-up incentives for drivers who switch over from each other.
Lyft services are available in 60+ cities. However Uber is available in 200+ cities, in over 45 countries, clearly outshining its competitors. San Francisco, New York, Seattle, Los Angeles, Washington D.C. and Chicago are some of the hotly contested markets.
Among overseas cities, Uber first opened its operations in Paris, gradually expanding up to popular markets like Toronto, London, Sydney, Singapore, Johannesburg, New Delhi, Tijuana, Beijing, and a much-publicized debut in Lagos (Nigeria) where Prince Zamani was the “rider zero”.
While strategically, Lyft is trying to solidify its base in one city before moving on to the next, Uber’s availability across a wider geographical area contributes to its renown. Both however, are easier to avail and inexpensive than hailing a traditional taxi-cab service.
Uber vs Lyft Technology and Smartphone Apps
Both companies have similar smartphone apps which picks up addresses of the trip end-points via the customer-facing interface of the app, track the vehicle via GPS, provide shortest route navigation help, and accepts electronic payment and ratings.
While Uber took a couple of years to develop its smartphone app, Lyft developed its smartphone pretty soon after their launch, since it was already an industry standard at the time. Both companies ended up launching their respective apps around 2012-13.
Uber provides a real-time update of cost, helpful if traffic, wait-time or surge leads to higher trip costs. Lyft is slightly more secretive about the peak hour pricing.
However, Uber drivers incur a $10 weekly cost to use their pre-supplied iPhones, which disable downloading of any other app. Lyft app can be downloaded on your personal phone, and does the job.
Uber has also garnered criticism for taking advantage of this freedom from Lyft, by urging its driving mentors and recruiters deliberately use the Lyft app to schedule and cancel rides to offset their business.
Uber versus Lyft Driver Benefits & Promotions
This is where the one-upmanship game is at its fiercest. The job for drivers is the same for both, but both companies offer huge incentives for drivers who have previously worked for each other.
Both companies have a $500 signup bonus. Uber offers it via two-way referrals which gets credited after 25 rides are completed within 30 days of activation. The norm was 20 rides last year, until a fierce promotional war in November briefly brought it down to just one ride! Uber also has a $600 incentive for anyone who has been a driver for Lyft or Sidecar previously, in select markets like San Francisco.
Lyft updated its sign up bonus to $500, but its $750 for Silicon Valley area. Lyft typically starts with a much higher sign up bonus before gradually reducing it over time. For example, it had a $1000 sign up bonus for Boston for a week, followed by $750 for the next week, before bringing it down to $500.
There’s a caveat though (it had to be so, isn’t it?). The number of rides required within the 30 day period since activation is 50, that’s significantly more than Uber’s 30.
Uber however scores in one area. Even if your referral link didn’t work, you can email Uber and get your sign up bonus added on later. Plus their sign up amounts are still relatively steady at $500. Lyft, by contrast, has brought down the sign up bonus amounts to $300-$400 in several markets since October.
The standard driver requirements are same for both:
- At least 21 years of age at the time of application
- Valid driver license for at least a year prior to application.
- Vehicles must be 2005 or newer. Some states allow 2000 or 2003 standards, but it’s a good idea to keep the 2005 benchmark in mind. Valid registration papers at the time of application are needed too. It’s a good idea to check for any impending renewals before applying.
- Must pass background checks, including federal, county, and multi-state criminal background checks by third party agencies
To maintain an active account, the drivers must accept at least one trip in a month. The driver app for Uber does cost $10 per week, so it gives Lyft an edge.
Lyft markets itself as up to $40/hour job. Uber keeps it to $35/hour job. Both are a bit unrealistic for new drivers, and especially those who’re going for it part-time.
A comparison of how much the drivers from both services make (source: Sherpashare.com) makes for an interesting read. While Lyft makes marginally better in quite a few major centers like Washington D.C., Austin, Los Angeles, Orange County and Nashville – Uber drivers make a lot more (up to $2 to $3 more per hour) on other centers like Salt Lake City, Phoenix, Baltimore, Miami and Seattle. The overall stat tilts slightly in favor of Uber.
Insurance coverage is up to $1 million liability coverage per incident for the duration of the ride, including contingent and collision damage coverage. In case of personal insurance, the Uber insurance covers the entire cost of the damaged vehicle up to $1,000 deductible. There’s also contingent coverage between the trips for Uber drivers, if the auto insurance coverage refuses to pay.
Lyft’s insurance is also $1 million liability, but the additional benefit is a 24×7 customer service/ insurance agent to speak to via critical response line. Lyft is also additionally vigilant with any past history of felony, sexual offense, shoplifting, arson etc. on record for older than seven years (despite several states waiving this requirement). Their contingent comprehensive coverage is also
$2,500 deductible, as opposed to $1,000 for Uber. New York State has different policy coverage terms for Lyft.
Customer Service and Support
Lyft scores slightly better on this count, even if just because they haven’t run into as many issues and legal hoops as Uber has, in different cities and countries.
Uber has had lawsuits (both personal, and class action) filed against them for malicious use of information, deliberately using media, and insufficient customer safety checks in the past. However, as of 2014-15, they have upped their standard. Beyond the standard opposition to peer-to-peer model Lyft hasn’t run into major controversies on that count.
Drivers are re-imbursed for tickets handed out unfairly at airports, or any damage/ loss of business caused by passengers, by both Uber and Lyft.
Lyft has an emergency hot line 855-865-9553 available 24×7, in addition to online customer support email email@example.com – response times are generally within 48 hours. Uber just has the form for customer support and response time can vary between 2 to 5 working days.
Lyft scores yet again by sending out invitations for its driver lounge Facebook group. From answering questions, to sharing positive experiences, or publicizing community events this is one great feature.
Uber vs Lyft Prices and Cost
On the single biggest factor affecting user engagement, Uber edges out Lyft. Average trip costs for both Uber and Lyft are roughly similar. The average cost of a rideshare ride is $2/mile, trips starting at $1, costing roughly $1/mile and $0.25 per minute.
However, Uber has a clear notification for ‘surge pricing’, and you can roughly estimate the trip cost ahead of time using the surge calculator, even though the surge prices may go up to seven to eight times the regular price.
Lyft has smaller prime-time zones, and the prices typically never go beyond 200% of the original price. But their app isn’t very clear about the information, and trip prices can’t be calculated ahead of time, often leaving the users nonplussed.
Surge pricing can make these trips significantly more expensive, but the average price is at least 20% cheaper than a regular taxi-cab. Also, high demand zones like San Francisco, Washington D.C., Chicago etc. tend to have a slightly higher base price than smaller centers. A smart tactic is to either move slightly outside the surge zone, or wait for a bit for the surge to be over, before ordering the ride.
By the way, if you want to estimate Uber fares before you ride, take a look at our most recent addition to our site, our Uber Fare Estimator tool. This simple but effective tool gives users the ability to calculate Uber ride fares straight from their desktop, and within any page that the estimator is present.
Estimating a fare is simple, and only requires two inputs on the user’s part: the beginning and ending destinations. From there, our tool does the heavy lifting, and spits out data including price, car types available, and route information that is stored reference if you ever need to share the trip information with somebody else.
Check it out:
Uber and Lyft Rides for Business
Uber and Lyft both provide rides for business purposes to supplement unscheduled travel, late-night transit, daily commutes, and special work-related events.
Uber for Business hosts all details of their program and policies. They’re slightly ahead of Lyft in terms of professional appearance, better driver professionalism, and available portfolio of vehicles for business appearance.
For example, a black luxury sedan would most likely be available and make a better impression when you ride with Uber to a sales meeting with top company officials, rather than a personal vehicle with a magenta moustache! Drivers are likelier to open the door for you, instead of throwing you a fist-bump.
Regardless, Lyft for Work makes a decent fist of things too, but the general company culture is a bit casual to match up to Uber.
Lyft versus Uber Company Culture
Uber’s brand value is built on professional, slightly detached customer service. Not to say that there aren’t plenty of cheerful, personable Uber drivers, but they are generally there to “get the job done”. They will open the door for you, make sure you reach on time, and let you be. The company website reflects the same values, mostly adorned in steel gray, classy blue and plenty of black.
Lyft thrives on a warm, engaging customer service. Drivers usually greet you with a fist-bump (it was a “requirement” during the early days!), keep you engaged with a good conversation or music and encourage you to take the front-seat.
There are interesting themes like Cookie Lyft, Harro Potter Lyft, Karaoke Lyft etc. The pink moustache (recently replaced by the magenta ones) are the signature symbols of a fun environment. The company website, with bright, warm colors – embraces the same.
Lyft is also marginally more rigorous about background checks, which definitely addresses the customer safety concerns better. As for driver ratio, Lyft boasts of a far better percentage of female drivers, another aspect which may offset the “professional chauffeur” perception but points at a truer equal opportunity work environment. Uber has recently started inviting veterans and servicemen to redress that image somewhat, but Lyft takes the biscuit on this one.
Given its better budget and more ambitious expansion plans, Uber has already ventured into cool ancillary services like: UberEATS (food delivery service), UberBLACK (for limousine rides), and UberPLUS(where multiple passengers can share a luxury ride if they’re headed the same way).
Lyft also has a Lyft Line which does pretty much the same thing as UberPLUS, albeit with regular cars, aimed at splitting costs rather than the rider experience. But it’s fair to say Uber is perhaps marginally ahead for the options it offers.
On the whole there are pros and cons to both services and it’s unlikely to decide a clear winner. Passenger and rider preferences vary by location, income-group, and perceptions are guided by local media coverage as well. Uber and Lyft are heating up the battle to capture more ground as the ride-sharing service of choice, and it’s a rivalry which is likely to spawn better service for the end users.
Enjoy amazing promotional offers on your Uber, Lyft or Sidecar ride today, to decide your favorite.
As you can see, when comparing Uber vs Lyft, there are quite a few different factors that come into play. When looking at the two companies from an unbiased perspective, it brings their past, current, and future achievements into perspective, and you realize that both companies are doing some really, really cool stuff.
We had a hard time picking one over the other and had to give them equal ratings. Who would you pick? Vote in the poll above!