Lyft vs. Uber | 2017 Comparison

Uber was founded in 2009 as UberCab. The original founders were Garret Camp (StumbleUpon founder) and Travis Kalanick. The mobile app was initially launched in 2011 in San Francisco. Uber’s original CEO was Ryan Graves, but he was ultimately replaced by Kalanick.

2011 was the breakout year for Uber. By the end of the year they had raised a total of $44.5 million in funding and officially changed their name from UberCab to Uber.

Over the next few years Uber attracted big name investors such as Google Ventures and Baidu, raising their valuation to above $50 billion by the end of 2015. Uber quickly expanded it’s driver and passenger base by using a number of referral incentives. They still use these incentives today.

Throughout their expansion, Uber has encountered various legal hurdles. The question of the legality of ridehsaring is still challenged to this day. Uber now operates in over 66 countries and 545 cities worldwide.

At the forefront of technology in the rideshare industry, Uber has expanded to multiple markets. They’ve invested in self driving technology, food delivery and artificial intelligence.

Lyft was founded in 2012 by John Zimmer and Logan Green. Originally, Lyft was launched as a service of Zimride (a rideshare company they had founded in 2007).

Zimride had focused on longer rides between cities. Lyft was created to connect passengers on shorter trips.

In 2013, Lyft completed a $60 million Series C round of funding. In the same year they sold the Zimride branch to Enterprise Holdings.

The expansion of Lyft has been fueled by venture funding, which has enabled large lyft sign up bonuses for new drivers as well as promotions for passengers. In 2014 Lyft completed a Series D financing round, raising $250 million. They raised another $1 billion in 2016, including a $500 million investment from partner General Motors.

Lyft has grown to operate in over 200 US cities, and has a total valuation of over $5.5 billion. They’ve encountered the same legal hurdles as Uber throughout this process.

Lyft has yet to expand outside of the United States, but has formed a strategic partnership with international player Didi Kuaidi. The partnership allows Lyft passengers to take rides in some overseas markets using the Lyft app to hail rides from Didi Kuaidi vehicles.

The tech side of Uber can be broken up into two parts, their general tech innovations and their app. As far as innovations go, Uber has really jumped into the lead. Uber has a ton of investor money to play with, and they’re doing some really cool things with it. They’ve invested in:

• Self driving cars (beta program is currently being tested in Pittsburgh. That’s right, Uber already has self driving vehicles on the road.)
• Artificial intelligence (Uber recently acquired Geometric Intelligence)

As far as their app is concerned, Uber has pulled top talent from Silicon Valley to spur innovations. They’ve added:

• UberEats, a food delivery service
• UberPool (a carpool service powered by an algorithm that connects passengers on similar routes)
• Fare estimator (calculate in app before ride)
• Insant pay
• End destination (choose end point of final trip)
• Varoius other features

Uber has stopped at nothing to become the most innovative rideshare company – and potentially the most innovative tech company. They’ve impressed us time and time again, and they’ll likely continue to do so.

Lyft has done quite a bit to innovate over the past few years. When it comes to rideshare innovation, Lyft and Uber are in an arms race. While Uber has more assets at it’s disposal, has also shown an incredible ability to develop new technologies.

When one rideshare giant innovates, the other is quick to rebuttal. Sometimes so quick that it’s difficult to tell who came up with the new technology first, Lyft or Uber.

Lyft has shown a strong desire to compete in the autonomous vehicle market, partnering with GM to produce the vehicles. Founder John Zimmer recently laid out a five year plan to put fully functional self driving vehicles on the road.

As far as app developments, Lyft has an impressive list:

• Lyft Line (carpooling service that saves passengers up to 60%)
• Instant pay (allows same day pay outs once you’ve earned $50 or more)
• End destination, lets drivers choose destination of final trip
• Various other features

It’s tough to say who’s innovated more on the app features front, both companies have some really cool features. We’re excited to see what new ways Lyft is able to innovate to streamline their app and make ridesharing more efficient.

Driving for Uber is a lot like driving for a professional cab service. They brand themselves as the premium rideshare service, and expect drivers to fall in line. There are a few major notes to keep in mind when considering driving for Uber:

• 25% commission taken out of driver wages (booking fees not included)
• Professionalism expected
• Higher demand for rides (Uber owns a larger market share in most markets)
• UberPool forces drivers to pick up more passengers on same route
• End destination feature (allows drivers to target destination of final ride)
• Uber app does not allow tips (Uber claims they are already built in to ride fee)
• Uber power driver bonus (tested in San Francisco – no word on national rollout)

Driving for Uber gives you access to the largest market of potential passengers. At the end of the day, that’s all that really matters. A driver’s bottom line is most affected by the number of rides that they give in any given hour, given that rates and commission percentages are roughly the same. Uber’s apparent message to drivers is something like this, “Hey, we’re the bigger, better company. You’ll want to drive for us because we own a larger market share. There’s no reason for us to pamper drivers, because we’re the best option.” That is not an official quote from Uber.

Lyft has a reputation for being the driver friendly, encouraging and positive rideshare company. They offer a number of incentives to keep drivers happy, and have phenomenal support service. They do however make some exceptions, including rate cuts, in order to stay competitive with Uber. Here are a couple major points that effect Lyft drivers:

• 20% commission from drivers that signed up before 2016, 25% commission from all new drivers since 2016
• Friendly environment (generally more talkative passengers)
• Solid demand for rides (although less that Uber in most markets)
• LyftPool feature similar to UberPool (LyftPools tend to be less common)
• End destination feature (allows Lyft drivers to set destination for final ride)
• Lyft app allows for tips
• Lyft power driver bonus allows drivers to take home more of their paycheck (nearly 100% if enough rides are given)

Overall, Lyft has a few features such as tips and the power driver bonus that make it really advantageous to drive for them. They create a very positive environment, from driver support to friendlier passengers. They have a smaller market share than Uber in most locations. A number of incentives still make driving for Lyft very appealing.

Uber customer service is available to passengers and drivers. That said, uber is definitely lacking in the customer service department.

In our experience, many of the responses received would lead us to believe that all customer service for Uber has been outsourced. This would fall in line with Uber’s cost cutting tendencies.

Generally speaking, we’ve received responses in anywhere from 1 to 5 days after reaching out to Uber support.

Lyft is known for fantastic customer service and driver support. They have real people working around the clock to answer an questions. For drivers, this includes:

• 24×7 emergency hotline available at 855-865-9553
• A support email at support@lyft.com

Passengers can also use the support email to reach out with any questions. In our experience, response times vary between 1 and 2 days. Answers are generally very helpful and well thought out. Needless to say, we’ve been very impressed by the customer service.

Uber has a number of promotions to incentivize drivers and passengers to sign up. Initially, Uber was lighter on promotions than Lyft. Once this tactic became effective for Lyft, Uber raised their promotions in order to compete.

Uber has the bankroll to consistently offer higher promotions than Lyft. Their referral bonuses currently beat out Lyft, but this environment is constantly changing.

It is clear that Uber is using a lot of data to set promotional rates. They vary by city, and are non existent in some cities where demand is insufficient.

Uber has offered the following promotions:

• Driver referrals – up to $1,000 to sign up
• Passenger referrals – up to $20 off first ride

Lyft has offered a number of promotions over the years to attract new drivers and passengers. They’ve experimented quite a bit with different variations. They’ve even had some bad PR in the past for questionable promotions.

Lyft was the first to offer a $1,000 sign up bonus for new drivers. They also didn’t realize just how attractive the signing bonus would be. A huge influx of new drivers caused Lyft to hesitate on payouts. This didn’t make drivers to happy, so Lyft ultimately made good on their word.

Since then Lyft has been very straightforward with signing bonuses. They’ve offered:

• Up to $5,000 for new drivers (minimum rides for the $5,000 payout are generally very difficult to meet)
• Up to $50 for new passengers