In Silicon Valley, Transportation Innovation Is a Flat Circle

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Ride-sharing app Lyft has a new service available in Chicago and San Francisco that they’re calling a “shuttle.” According to Lifehacker, it works like this:

Lyfts can add up fast and Lyft Line, while less expensive, can take you out of your way and make your travel time much longer.

Lyft Shuttle addresses both those issues by having you walk to a nearby pick up spot, get in a shared car that follows a pre-designated route, and drops you (and everyone else) off at the same stop. So, basically, you share a ride with other people (most of the time) so your ride price is lower, but you know exactly how long the ride will take because you’re on a pre-designated route.

Sounds… familiar. Wait a second.

The Benefits of Being No. 2 in Business

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Nick Leiber

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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July 6, 2015

Categories: Nonfiction, Quotes

Tags: Annie Lowrey, Avis, Hertz, Lyft, marketing, New York magazine, ridesharing, transportation, uber

Why the Uber and Lyft Battle Turned So Ugly

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Mark Armstrong

Uber’s aggressive tactics reflect the fact that ridesharing is largely a zero-sum game: a driver picking up an Uber customer can’t simultaneously pick up a Lyft customer. (Drivers are allowed to drive for both services, though the companies discourage the practice.) Having more active drivers on the road creates a virtuous circle that improves geographical coverage, increases demand, and allows services to lower prices by taking a smaller cut from a growing number of rides. Uber and Lyft are competing to become the first app you think of when you need a taxi, and the service with the most drivers likely stands the best chance of winning.

That helps to explain why competition between the two has become so vicious, with Uber and Lyft both offering hefty bonuses and other perks to drivers who switch services. For a time, Uber lost money on every ride to help spur demand. And Lyft has itself aggressively recruited Uber drivers, offering cash bonuses for joining, and hosting free taco lunches at its driver center. The Spy-vs.-Spy nature of their competition was revealed again earlier this month, when Uber caught wind of Lyft’s multi-passenger ridesharing offering and preemptively announced a nearly identical offering the night before Lyft made its announcement.

–Casey Newton, in The Verge, exposes internal Uber documents showing how it planned to sabotage its ridesharing app competitor Lyft and steal its drivers.

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Photo: bootleggersson, Flickr