The Benefits of Being No. 2 in Business

Back in the early 1960s, also-ran Avis — a smaller, less successful business than Hertz — decided to run a new advertising campaign, one that embraced its market position rather than trying to change it. “When you’re only No. 2, you try harder. Or else,” the company’s advertisements read. Avis’s initial business insight was to locate its cars at airports, not in downtowns, but its most ingenious one was to play up its inferior position. It focused on its newer fleet and better customer service, promising, “We’re always emptying ashtrays,” and “Since we’re not the big fish, you won’t feel like a sardine when you come to our counter.” The strategy worked: The company moved from the red to the black and expanded its market share — even, within a few years, coming close to beating Hertz.

It makes sense: Differentiate in order to compete. Upscale or downscale. Don’t go head to head. And so Lyft is driving away from it again — or, rather, doubling down on what made it different in the first place. “We’ve gotten to or are getting to scale in all our cities,” Zimmer told me. “What’s the next experiential push that helps us realize the broader vision?”

—What’s next for ridesharing’s biggest underdog? Annie Lowrey takes a look in “Can Lyft Pull an Avis?” in New York magazine.

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