Lyft vs Uber – Everyone wants to know: “What is the difference between Uber and Lyft?”, ”Who was there first, Lyft vs Uber?”, ”Who offers the better ridesharing experience, Lyft or Uber?”
In this post Lyft vs Uber (2016 Edition), we’re going to take a closer look at the two strongest competitors in the rapidly growing Transportation Network Company (TNC) market, which is part of the evolving Sharing Economy (also called Gig Economy). The discussion on the subject usually revolves around topics like:
- Which is better? Driving for Lyft vs Uber?
- How does the Uber app compare to the Lyft app?
- Lyft prices vs Uber prices – Are Lyft prices really higher than what we pay for an Uber ride?
In many ways, Lyft and Uber offer nearly identical services. They’re both very popular mobile ride sharing companies, but with slightly different philosophies. We’re putting both services under the microscope in this post, Lyft vs Uber – Clash of the Titans, and having them ruthlessly compete against each other – let’s see who wins!
- 1 Lyft vs Uber: What Is A Transportation Network Company (TNC)?
- 2 Lyft vs Uber 7 Point Breakdown: Our Review
- 3 #1 Lyft vs Uber – Market Share
- 4 #2 Lyft vs Uber – Company Culture & Style
- 5 #3 Lyft vs Uber – Innovation
- 6 #4 Lyft App vs Uber App
- 7 #5 Lyft vs Uber – Customer Service & Support
- 8 #6 Driving for Uber vs Lyft?
- 9 #7 Lyft vs Uber – Prices and Rates
- 10 Who is the winner: Uber or Lyft?
- 11 Lyft and Uber Promo Codes and New Driver Codes
- 12 Lyft vs Uber: Your Turn
Lyft vs Uber: What Is A Transportation Network Company (TNC)?
What kind of companies are Lyft and Uber, really?
How are they officially defined?
Let’s take a quick look: A TNC “connects paying passengers with drivers who provide the transportation on their own non-commercial vehicles”.
The parties, drivers and passengers, connect to Lyft’s services via a computing platform (a mobile phone or computer) that creates a live marketplace, in which ride-sharing services are matched with ride-sharing demands.
In other words, ridesharing is: ordinary people who drive their own cars, acting as paid drivers for individuals who need a ride somewhere (in lieu of traditional taxi cab or private car services). That’s probably the most simple definition of what Uber and Lyft actually do.
In 2011, Uber changed its name from UberCab to Uber.
It was only a few years ago, in 2012, when Uber introduced UberX (it’s wildly popular Taxi alternative) in New York and San Francisco. From there, Uber rapidly expanded into different areas in the United States, as well as across the globe.
Soon after, Uber dominated the car-on-demand market, essentially revolutionizing our way of getting around in Urban areas.
Lyft (Uber’s only major competitor) emerged out of Zimride, a ridesharing company that dates all the way back to 2007 and was founded by Logan Green (who, in his own words, recalls growing up in LA and being “traumatized by traffic”) and John Zimmer.
Zimride owed its name to the country Zimbabwe, where Green was inspired on a trip in 2005 when he saw locals sharing minivan taxis.
In summer 2012, Lyft was launched in San Francisco as a division of its parent company Zimride. What used to be Zimride changed its name officially to Lyft in 2013.
Lyft vs Uber 7 Point Breakdown: Our Review
Though Uber and Lyft are major competitors who started offering their most basic services (specifically, UberX and Lyft) around the same time, the two companies are nonetheless disproportionately sized — to a huge degree.
Uber is simply much bigger than Lyft, and operates worldwide — while Lyft’s operations are limited to the United States (at least so far).
Anecdotal reports suggest that Uber is the ‘fastest-response’ rideshare app available (due to its immense share of Uber drivers/riders). Basically – if you need a lift, quickly, Uber is most likely going to deliver a car to your doorstep a bit faster than Lyft (no pun intended).
For drivers, this has a very important trickle-down affect — volume. Uber’s size and popularity ensures near-constant fare opportunities (compared with other competitors).If you’re considering becoming a ridershare driver, and you want lots of potential fares, Uber’s size and scope gives it a major edge over Lyft.
Lyft vs Uber Market share: Basically, it all boils down to size — Fortune Magazine recently reported that Uber delivers roughly 15 times (!!!) more rides per month than its closest rival Lyft. So, it’s becoming increasingly clear: Uber holds a massive advantage in size and volume which directly affects its efficiency, speed and effectiveness as a ridesharing app.
Size and Coverage Score:
#2 Lyft vs Uber – Company Culture & Style
Uber is known for its sleek style and professional-oriented services. Lyft, on the other hand, cultivates a ‘Casual Fridays’ vibe which encourages informality in its drivers and users (hence the pink mustaches adorning many of its vehicles).
Lyft does have a reputation of being “the friendly alternative” and, especially in its beginnings, it wasn’t unusual to see drivers fist-bump passengers as they entered a Lyft vehicle. Lyft even encouraged passengers to ride next to their drivers (i.e. in the front passenger seat) — a tactic meant to encourage driver-rider friendliness. Lyft brands itself as “your friend with a car“.
Users and drivers who have worked for both ride-sharing companies report that the ”vibe” at Lyft’s offices is significantly more casual and relaxed than its competitor’s offices.
Lyft vs Uber – New driver hiring and employee intake
Uber and Lyft’s company culture also affects how both companies operate internally — specifically, Lyft and Uber ap
Lyft, on the other hand, uses a mentorship program to acclimatize drivers to the rigors of being a rideshare driver, guiding driver-applicants through the entire process of becoming a Lyft driver via scheduled, mandatory mentor sessions. The program connects Lyft’s “top drivers in each city” with prospective drivers through personal sessions, which usually last about 45 minutes.
Lyft is adamant about creating a ”personal touch”, and implementing the core points of the company’s philosophy in each new driver. Lyft’s core idea is that your driver is not a “servant” but rather a friend with a car.
In the company’s early days, Lyft founders John and Logan met with each new driver in person (which naturally proved to not be a very scalable aspect of Lyft’s company philosophy).
The role of Lyft’s mustache was initially to identify the company as a true ”ride sharing” service (in the purest sense of the term) — especially since passengers weren’t used to seeing everyday cars pick them up — it was still a totally foreign experience, and the mustache helped passengers overcome the ‘strange-ness’ of being picked up in an ordinary Civic, Corolla, or Camry (as opposed to a yellow cab or a black town car).
Company Culture and Style Score:
#3 Lyft vs Uber – Innovation
What is Uber’s biggest innovation? The obvious and logical answer would probably be: the widely-used Uber taxi hailing app that connects users and drivers and creates a truly ”live” ride sharing market.
Other important innovations from Uber include:
- The core idea of an affordable black-car service (once thought to be economically impossible).
- The idea of offering a tiered portfolio of ‘semi-luxury’ and ‘luxury’ market of on-demand vehicles
- A star-rating system which incentivizes Uber drivers to drive responsibly, as well as keep their cars clean; provide amenities, like phone chargers, bottled water, etc.
- A ‘Surge Pricing’ system which incentivizes more drivers to come on the road when times are busy — dramatically raising prices (temporarily) during busy times like weekends, special events, weather, traffic, etc.
- The idea of a ‘no-tipping’ car-service (a major innovation in the car-hire world)
Uber’s Corporate Innovations:
Michael Mandel, chief economic strategist at the Progressive Policy Institute in Washington DC, proposes that Uber’s most important innovation is actually something much more subtle — specifically, its usual willingness to ”…work with governments around the world” during its rapid expansion, facilitating an ambitious market-takeover strategy and allowing it to consolidate its corporate dominance.
In this vein, Uber hired David Plouffe (best known as a top political strategist to Barack Obama) to help leverage Uber’s power vis-a-vis driving regulations, local governments, and unions.
Plouffe’s job was simple — to meet with policymakers all over the world, negotiating viable pathways for Uber to operate legally across a variety of global territories. Since Plouffe joined Uber’s advisory team, the backlash against Uber as a ridesharing giant has lessened significantly.
Lyft has also offered its share of innovations to the ridesharing market, which include:
- Most centrally, the notion of a large rideshare company functioning as an intimate, friendly, and less ‘corporate’ cab service (‘for the people by the people’)
- A system called ‘Prime Time’, which functions similarly to Uber’s Surge Pricing, but ensures that Lyft’s prices never reach the stratospheric heights than Uber’s system can sometimes facilitate.
- Notably, Lyft does not take a cut of revenues generated via Prime Time (‘surged’) prices.
- Uniquely, Lyft also offers a service which includes in-built discounts for when times are slow (the opposite of Uber’s surge pricing)
Lyft’s Corporate Innovations:
Lyft and other ride sharing companies have also successfully pushed for more rideshare-friendly regulatory environments in American cities.
Most notably, Lyft has teamed up with two Washington lobbying firms to fight the regulatory battle regarding America’s current ride sharing economy (specifically, TwinLogic Strategies and Jochum Shore & Trossevin).
Lyft has also developed a clever strategy via a program called “Lyft’s Champion of Innovation Awards” where the company awards state legislators and leaders who’ve championed the ridesharing industry, usually in the form of favorable legislation (supporting the basic tenets of the ride-sharing economy).
Both companies face major opponents, mostly in the form of taxi lobbies, limousine operators and municipal taxicab commissions. These are extremely powerful interest groups with strong ties to city and regional politics.
Both companies are in the business of revolutionizing transportation and eventually replacing the need for personal cars in the future.
The greatest innovation of all? The Self-Driving Car.
Lyft Teams Up with General Motors To Create Self-Driving Cars
General Motors announced plans to team up with Lyft to create a network of self driving cars. Reportedly, GM is planning to invest $500 million into Lyft to develop an on-demand network of autonomous vehicles. GM president Dan Ammann states: “We see the future of personal mobility as connected, seamless and autonomous”.
The vision behind Lyft and GM’s collaboration is simple but revolutionary — to completely transform the basic model of traditional car ownership in the United States and beyond.
Uber and Self Driving Cars
Uber announced it intends to replace ‘human drivers’ with self driving autonomous cars in 2014. Travis Kalanick, Uber’s co-founder and CEO spoke about the goal of having autonomous, self-driving cars to reduce the cost of ‘Ubering’ anywhere — eventually making that option cheaper than owning a car.
Self driving cars also have the potential to drastically improve safety on roads and make transportation more affordable.
Uber has been much less specific about their exact strategy to develop self-driving cars than Lyft. The company has recruited numerous of autonomous-vehicle researchers from Carnegie Mellon University’s robotics program and hired Google’s ex vice president of engineering, Brian McGlendon, as head of Uber’s Advanced Technologies Center.
Both ride-sharing companies face the strongest competition in the ‘autonomous self-driving cars’ realm from Google, who currently leads in that industry.
One strategy — shared by Google, Uber and Lyft — is to initially develop self- driving cars for the purposes of (exclusively) offering ride-for-hire services (allowing people to become gradually accustomed to the technology). The data collected in the process would allow Google, Uber and Lyft to advance their technological capabilities rapidly.
In any event — self driving cars are likely a ways off (experts suggest 5-15 years). Only the future will show when we’re truly ready for self-driving cars!
#4 Lyft App vs Uber App
Lyft vs Uber – The Lyft App
The Lyft smartphone app — in its function and visual appearance — is very similar to Uber’s smartphone app.
Lyft’s latest redesign includes a feature that lets you instantly compare all three different Lyft services (Line, Lyft and Plus) in one glance, including ETA and fare estimates, which is extremely practical. The upgraded design has a more sleek and user-friendly appearance.
Lyft made a deal with Verizon in 2015, allowing customers an in-built discount if they drive for Lyft. The partnership also includes a deal which makes the Lyft app preinstalled on certain Android devices. Lyft also announced that there will be more deals of this nature in the future, which will include added incentives for passengers.
Lyft recently announced a partnership with Waze, the increasingly-popular crowdsourced navigation and traffic app that was developed in Israel (and acquired by Google in 2013). Real-time route updating — with the help of Waze — will allow Lyft to improve Lyft Line pickup matches and reduce overall travel and wait-times for passengers.
The collaboration with Waze is strategically a very smart move by Lyft.
Lyft vs Uber – The Uber App
Uber is constantly tweaking and updating their Android and iPhone smartphone App.
The user experience for both ride sharing apps is relatively similar. Where you see the three different Lyft services on the app including their ETAs, passenger capacity and service offered, you can slide between the different Uber services on the competitor’s app.
Among other things, this difference is probably due to the fact that Uber offers a much bigger variety of services than Lyft. Listing ETAs for all services would clutter the smartphone screen unnecessarily.
Also – a new collaboration with Spotify lets riders stream music via the Uber app (without using data), making it possible to “DJ your ride from the backseat”.
Uber has been working on improving its own navigation algorithm and system. It will be challenging for Uber to compete with an established community-driven navigation system.
Lyft App vs Uber App Score:
#5 Lyft vs Uber – Customer Service & Support
Uber’s Customer Satisfaction
Uber and Lyft both receive consistently high customer-service results (despite the occasional controversy).
Overall, customers report high satisfaction with both Uber and Lyft — an impression likely buttressed by the fact that both companies fill a much-needed void in the wider transportation industry, and create new, hyper-dynamic marketplaces for ridesharing.
Uber Customer Service
As a company, Uber is always attempting to optimize their customer’s experience. It does this — most centrally — by making customers a fundamental part of the company’s corporate model, asking Uber passengers to provide direct-feedback via the Uber App (in the form of a 1-5 star rating).
Technically speaking, there is no basic ‘call center’ to contact Uber, which focuses the Corporate-Rider communication dynamic most centrally on data analytics, which are generated through email feedback and app-dervied ratings information.
This approach lets Uber update and tweak their service based on large-scale information collection – which arguably leads to better service.
Lyft Customer Service & Satisfaction
Lyft receives similar levels of customer satisfaction as Uber, according to YouGov.com.
In terms of customer service, the company takes a similar approach to Uber. Pulling data from customer-feedback information (which the company collects via Lyft’s app), Lyft constantly updates and optimizes their customer-service approach in various way.
Most notably, Lyft customers report a friendly, laid-back attitude when dealing with Lyft customer service online — the company offers an online help service (it’s also possible to get in contact with the company by phone), and the email response rate is reported to be reasonably fast.
Uber and Lyft Customer Service and Satisfaction Score:
#6 Driving for Uber vs Lyft?
Lyft and Uber offer their drivers some of the same things — the ability to work on their own hours; work for a non-traditional employer; and the option to work as hard (or as little) as they want.
On the other hand, the companies sometimes offer very different driver experiences – which are worth considering if you’re currently contemplating (or have already decided to) sign up as a driver for either company.
Driving for Uber
Uber drivers often report high satisfaction when working for the company (according to an internal survey commissioned by Uber itself, driver satisfaction was as high as 81% in 2015).
Uber drivers have some complaints, however — chief amongst these is the general impression that Uber riders are more demanding than regular rideshare clients (especially compared to a service like Lyft). High-volume ridership inevitably increases the frequency of ‘bad experiences’, for riders and drivers alike.
Uber drivers often express basic frustrations over common disagreements with riders — for instance, passengers’ report a frequent request from riders to ”ditch the app” and make a ‘deal’ with passengers for a lower price — something which drivers are (obviously) not allowed to do.
Another downside of being an Uber driver is the mandated lack of tips — Uber has a strict policy against receiving gratuity, and most riders do not offer their drivers tips (Uber calls the policy of one of the company’s ‘core philosophies’).
Driving for Lyft
Lyft drivers also report high levels of overall satisfaction.
Unlike Uber, Lyft ratings don’t hold quite as much weight — meaning that passengers don’t hold outsized influence over your destiny as a Lyft driver (and thereby your livelihood and career).
Also, unlike Uber, Lyft’s policies allow tipping — meaning that Lyft drivers can receive a substantial income boost every day (some anecdotal reports suggest that moderately-active Lyft drivers receive a $50 – $100 per-week boost, just from tipping).
Lyft vs Uber Driver pay
Whose drivers make more – Uber or Lyft?
At the end of the day, Uber and Lyft have very similar base fares — a fundamental factor which determines overall driver revenue. Some evidence indicates that Uber drivers (nationwide) make an average of $16 per hour, while Lyft drivers make $14 (without factoring in tips).
Lyft Driver vs Uber Driver Score:
#7 Lyft vs Uber – Prices and Rates
Uber vs Lyft Pricing
Uber and Lyft prices are very similar in terms of cost-per-ride. For their basic services (i.e. Lyft and Uber), a ride will generally come out within a few dollars of each other (Uber fares are — generally speaking — lower nationwide).
Both Lyft and Uber rates vary greatly in different cities, but — for basic rides — the core pricing system is as follows:
- $1-2 to start an UberX or Lyft ride.
- $1.50 -$2.50 per mile
- $0.25 to 0.50 per minute
This formula is fairly standard (obviously, it excludes premium and luxury services, which are offered by Uber in a variety of cities), but it produces a price-result which is (usually) 20 – 45% cheaper than a regular taxi service.
Also notable — with Uber, no tipping is required (unlike Lyft), which leads to a slight price discrepancy between the two services — if you decide to tip your Lyft driver, it will (obviously) raise your overall price by 10 – 15% percent.
All told — for riders, Uber and Lyft rates are very similar in terms of cost and function — both services offer a much better deal when compared to taxi cabs; black town cars; and other private car services.
Lyft vs Uber Pricing Score:
Who is the winner: Uber or Lyft?
Both Lyft and Uber are — without any doubt — the primary players in today’s rapidly-expanding rideshare business.
As both companies continue to disrupt the wider transportation market, they are transforming the way we travel — and slowly (but surely) replacing the traditional need for personal car ownership.
While Uber dominates today’s market, the battle for true ”ride share supremacy” is still far from over — and will likely require very clever strategic moves from both Uber and Lyft to stay relevant in an increasingly competitive market.
But — for the moment — Uber undoubtedly holds a massive advantages over all competitors (including Lyft) in the ridesharing industry.
Uber’s staggering size, scope, and car portfolio dominates the industry — a market-place behemoth which might be difficult (or impossible) for its many competitors (including Lyft) to ultimately catch up with.
Lyft vs Uber – Final Scores
Lyft and Uber Promo Codes and New Driver Codes
Lyft Promo Code:
First time riders can get $50 off by using promo code: IDWU
Sign up here to drive for Lyft and earn up to $750 cash bonus!
Uber Promo Code:
First time passengers can get $20 off their first ride by using promo code: mcc25
Sign up here to become an Uber driver and earn up to $500 cash bonus!