Ridesharing services have grown in popularity in recent years. As the two top dogs, Lyft and Uber, battle it out for a lion’s share of the current market, you may be wondering what’s behind the Uber vs. Lyft craze and what’s making the ridesharing phenomenon so popular.
Keep reading to find out the secrets to success for these companies and ridesharing in general.
Meeting Customer Needs
Coming into 2018, Lyft’s fourth quarter 2017 earnings had grown 2.75 times faster than Uber’s, but Uber still has a wider grip on the market, bringing in higher revenue overall.[i]
Theoretically, this should mean a customer service bonanza as the two companies battle it out, which leads to the main reason consumers patronize these two companies: quality service in a convenient package.
Ridesharing services allow people to quickly and easily hail a ride from a smartphone mobile app. After placing a request, local drivers in the area respond, providing pricing and an estimated time of arrival. The user can select the driver they like best, using reviews from others to guide their decision, then communicate particulars all through the app.
Compared to ordering a taxi and standing and waiting at the curb, ridesharing offers prompt service and reliable rides at a cost that is often cheaper than taking a cab. Each driver is in competition for market share and repeat customers, so quality customer service is also a hallmark of ridesharing.
Convenient Income for Drivers
Consumers aren’t the only ones who benefit from ridesharing services. Drivers for Uber and Lyft are finding it a positive way to make income and interact with people.
As baby boomers retire and leave the suburbs, taking on ridesharing gigs is a way to make extra money while being connected to the community. Ride-sharing “renters” are largely clustered in the 19 to 40-year age group, but nearly a quarter of Uber drivers are over the age of 50.[ii]
When it comes to picking the best company to work for, it seems to be a draw. Lyft comes out on top for being the most driver-friendly, but Uber drivers make more per trip. To get the best of both worlds, many drivers have opted to work for both companies.
Another factor that contributes to revenue growth for ridesharing services is price surging. This term refers to raising ride prices when demand is highest, such as late nights when bars and clubs are closing. During times of high traffic, Uber and Lyft can take advantage of the sheer number of people who want rides to make extra money. It’s Economics 101, supply and demand.
While this may be frustrating for some customers, it keeps the companies afloat and provides needed revenue for continued growth.
Despite price surging, pricing still remains fair when it comes to convenience and luxury for riders.
Word of Mouth
A lot of the success Uber and Lyft have experienced can be attributed to word of mouth. After Silicon Valley took notice of these startups early on, word started to spread about ridesharing and how it was revolutionizing the taxi industry. As the news got out, Uber and Lyft enjoyed a lot of free advertising.
Soon enough, blogs and social media sites started to report on the trend and the companies went viral. As people started to learn that there was a better alternative to the traditional taxi cab, more people jumped on the ridesharing bandwagon. Thanks to positive experiences, they then recommended the service to others.
Disrupting a Stale Industry
Both Uber and Lyft have focused on disrupting the taxi industry and even transportation as a whole. These companies have transformed the way people think about getting from place to place and even car ownership. By taking an already-existing industry and making it more convenient, customer-friendly and cost effective, Uber and Lyft have seen tremendous success.
Uber and Lyft have now infiltrated almost every city in America and have reshaped the way we travel. As these companies continue to grow, they will permeate our society even more.
One thing to consider if you’re thinking about becoming an Uber or Lyft driver: your traditional car insurance might not cover you while you’re operating your ridesharing business. Make sure you’re getting the right coverage at a fair price by comparing car insurance quotes with Bolt Insurance.
[i] Dara Kerr. “Lyft’s Revenue Growth Is Nearly Triple Uber’s.” C|Net, Mar. 12, 2018. Web.
[ii] “Demographic Shifts: Shaping the Future of Car Ownership.” Wharton University of Pennsylvania. Knowledge @ Wharton, Feb. 21, 2017. Web.