Uber Vs Lyft, the Last episode?
Everyone Agrees that Uber is The “Gorilla” in their field and I think it’s already late to compete against it.Startups can try, but not by doing the same thing, they have to find another way to take the gorilla down. In my opinion, everyone who is investing in main competitors is betting on the wrong market.
Within all the competitors, we find some interesting ones, including Lyft, the serious competitor to Uber in The US. One month ago, they were able to raise 530 Million in the Series E round, and lately a 100 Million (with the same valuation from the previous round). Apparently they are taking market shares from Uber in The US (if we believe techCrunch). This is a good thing but unfortunately not enough, especially worldwide.
Let assume that Lyft can achieve a good market share in the US, they would have to cut their prices in order to do that. They can afford executing this strategy but not for the long run. For example, let’s say that in the next 3 years, Uber and Lyft share 70% of the US Market. At this point, Uber would have already controlled 70% of the global market and accumulate more cash in the Bank ; at this stage they can execute the Amazon strategy, cutting prices down in the US and force Lyft to do the same.
I think that the Lyft board is already aware of this problem that is why they are trying to find a way to differentiate from Uber. When I first heard that Lyft wanted to raise another round (5 month ago), I asked myself, what reason will push investors to give them money; and now, I’m starting to see clearer. They actually not investing to compete directly with Uber but they are making a risky bet to compete by doing something different, and this is the only chance they have to survive against the “Gorilla”.
Let’s make some research on what is happening in the market (lyft side):
1. 12 March 2015, forbes announcing the 530 M round for lyft.
· Some social feature between drivers and users (which in my point of view,is a nice feature, I shall explain why later)
· Announcing a new feature to make rides cheaper.
**I predict more and more articles in the next months announcing new features from Lyft.
Maybe a good way to compete with uber is not to try to replace the Taxi, but to try to replace the public transport.
Another way; is to give your users (drivers and users) more value when using your service. Let me explain myself; I already mentioned that the social feature is an interesting one, I think that because of my friend who is a good looking guy and works like an uber driver (Uber pop, he is an engineer also), has every night two to three girls sending him texts after he gave them a ride at 4 am :D (and yes I saw the texts ,it’s happening a lot).
This feature can be used as a leverage from Lyft to make young drivers opt for them (because it’s more fun), consider it a Tinder & uber mix. It’s would be interesting to see this feature or startup in reality. The main point is to try to customize the ride and give more value when using the service.
In conclusion, competing with Uber will be very hard, not only because of what in mentioned before but also because of Uber investments in the self-driving cars, delivery services and others.