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I’ve always preferred driving for Lyft over Uber. Maybe it’s because I signed up for Lyft all the way back in 2014 and, at the time, they were all about the driver experience. Lyft was throwing parties for its drivers, setting new drivers up with a mentor ride and drivers could get tips in the app! It felt a lot less like work and a lot more like fun.
My first experience with Uber was with a recruiter who was trying to get me to sign up as quick as possible so we could both cash out on a $500 bonus for doing just one ride. Not the most welcoming experience, but the money was definitely nice!
Over the years though, Lyft has cut back on some of the programs and initiatives that made them stand out while Uber, especially with their 180 days of change campaign, is making huge strides to improve the driver experience. I never would have guessed that Uber would add a tipping option to their app, but they surprised me big time with that announcement and have continued to make significant positive changes ever since.
So what are the real differences between Uber and Lyft in 2017?
Drivers Like(d) Lyft More
Lyft has always been more liked by drivers and in our January 2017 survey, 75.8% of them reported that they were satisfied with their Lyft driving experience compared to just 49.4% on Uber. But even though many people prefer driving for Lyft over Uber, Uber has always been more reliable when it comes to getting rides and making money, and that’s really what matters most to drivers.
Lyft is competitive in certain cities but for the most part, you will get significantly more rides with Uber if you do both apps at the same time. And although there are drivers who do Lyft full-time, Uber is still the top dog when it comes to getting rides. So despite Uber’s flaws, many drivers begrudgingly put up with the experience. And now that Uber is also improving the driver experience, it wouldn’t surprise me to see satisfaction rates come up on Uber.
Uber is Changing its Perception
Uber’s 2017 got off to a rough start with a string of terrible stories that hit the newswire, and all of it was capped off by the CEOs firing. But one of the positives that came from all that turmoil was a clear directive to improve Uber’s relationship with drivers. Over the past few years, Uber has talked a lot about improving their relationship with drivers but never actually did much.
In all of 2016, the only two real features I can think of that they added to improve the driver experience were Instant Pay and Destination Filter. I love both features, but let’s not forget that Lyft had Express Pay first and Sidecar was using a destination filter over 4 years ago – not exactly the type of innovation you’d expect from a
$70, er, $45 billion company.
Suffice to say, Uber has a lot of catching up to do when it comes to improving the driver experience, since they’ve ignored it for so long. But the ‘180 days of change’ campaign has already seen two big releases that focused on driver earnings (tipping option and more) and customer support (24/7 phone line and more) and there are 4 more chapters to come.
These updates aren’t going to change Uber’s perception overnight, but they’re definitely a step in the right direction and most drivers have been appreciative of the efforts. Uber’s getting credit for a lot of the stuff they should have done years ago, but going forward, they’ll need to continually improve these products too. The 24/7 phone support line is a great idea in theory but drivers are reporting the same old problems with customer support unable to address some pretty basic stuff. The key takeaway here is that in order for this campaign to be successful, it needs to be an ongoing process of continuous improvement.
Lyft, You’re Up!
Although there were reports of Lyft seeing increased downloads and market share during all of Uber’s unrest, I haven’t seen much of an impact on the day to day lives of drivers. I think Lyft missed a big opportunity to take advantage of Uber while they were down and their CEO, John Zimmer, even admitted that’s just not their style.
Lyft has always been the nicer guys. Not that it’s a bad thing (I operate my business in a similar way), but being nice won’t help you overtake Uber. There’s lots of room in business to help people and be successful, but not if you want to be the best of the best. Costco is a great business and treats its employees well, but Walmart, whose reputation is at the other end of the spectrum, has a market cap that’s 3.5x higher!
On the driving side of things, we see a similar phenomenon. I often advise drivers that in order to maximize profits, you have to be a little cut throat. If you’re on a guarantee that requires you to stay within the city limits and you get a ride 1 hour south, you’re going to lose money if you do that ride. Most drivers will take it and be pissed the whole way but others will explain the situation to the rider (who will be upset), cancel the ride, take the rating hit and stay within the guarantee boundaries.
Are Uber and Lyft Becoming More Similar?
At their core, the Uber and Lyft apps are really just glorified taxi apps. There’s a lot that goes on behind the scenes, but the product we see basically just connects riders and drivers. As time has gone on, it’s becoming more of a commodity product than ever. We’ve seen that a majority of passengers care first and foremost about price – they want the cheapest ride at the cheapest price.
So how are Uber and Lyft becoming more similar?
We haven’t seen major price cuts in 2017, but from 2014-2016, Uber cut rates across the board and Lyft shortly followed suit each time. I can’t blame Lyft for copying Uber here since passengers care so much about price but it also disproves Lyft theory that passengers will pay for a better, more ethical experience. Unfortunately, they won’t.
While we haven’t seen rate cuts in 2017, we have seen an increase in the booking fee (twice actually), which is a fancy way of Uber giving only themselves a raise. Since the booking fee is charged directly to passengers and drivers don’t receive any portion of it, any increase in booking fee is realized 100% by Uber.
Like with rate cuts, Lyft has also been forced to follow suit here, which tells me that the economics of both companies are pretty similar. They charge about the same amount, take about the same amount and lose about the same amount (relative to their ride volume). Both companies need to figure out a way to stem losses, so it wouldn’t surprise me to see more of this.
Uber has always taken the more callous approach to self-driving cars and I think the general feeling among drivers is that once Uber gets self-driving cars, ‘you’re out!’ I don’t think it will happen that quickly, but there’s no doubt that self-driving cars will be a huge part of both companies’ futures.
Uber has always taken the ‘do it yourself’ approach with self-driving cars and has invested heavily in the technology. Now Lyft is taking a similar approach.
Saying drivers dislike UberPOOL and Lyft Line is probably the understatement of the year. Close to 75% of drivers surveyed in Los Angeles (a big UberPOOL market) were dissatisfied with their UberPOOL experience.
Lyft Line has similar problems but shared rides are one of the key opportunity areas for Uber and Lyft since it’s a great way to reduce the cost of the ride without paying the driver significantly less. Initially, Uber and Lyft both were paying drivers less per mile for shared rides but Lyft recently raised the rates on all Lyft Line rides to equal regular Lyft rides. This is a big change and Lyft drivers have definitely noticed.
Uber has also noticed and is testing increased POOL payouts in a few cities.
Uber switched to ‘earnings guarantees’ in favor of sign-up bonuses in most markets at the beginning of 2017 and drivers hate it. Most of the guarantees we’ve seen are hardly guarantees and it still seems like this program is not being communicated very clearly to new drivers. I get e-mails all the time from drivers who were expecting a bonus, only to get a guarantee and tell me ‘this feels like a bait and switch, I’m only going to do Lyft from now on’.
And when it comes to Lyft, this is one area where they’ve actually improved sign-up bonuses since they recently switched to a per trip model. So new Lyft drivers can receive a bonus on every single trip instead of having to do 50 or 100 trips and then getting a lump sum at the end.
Lyft is Still Number Two
If there’s one good reason to still favor Lyft, it’s because they’re the underdog. Competition is a good thing for drivers and there’s a reason why Uber is always pestering drivers to submit their Lyft pay statements. Uber cares deeply about what the competition is or isn’t offering.
At the end of the day, I think drivers should do what’s best for themselves, but don’t swear off competitors completely. A world without Lyft is a world where rideshare drivers will have less choice and less opportunity. I think apps like Mystro are great because they make the playing field more equitable, allowing drivers to more easily drive for Uber and Lyft at the same time.
However, with all of the positive changes Uber is rolling out to the driver experience, Lyft needs to step up their game if they want to keep drivers. In the past, you could always point to Lyft as the more driver-friendly app because they had in app tipping, Power Driver Bonus and other features. But now, Uber is adding all of that and more, so the tides may be turning.
Drivers, what do you think in the debate between Uber and Lyft? Is Lyft still the more “driver-friendly” company or have you noticed Uber improving its driver experience? Let us know in the comments!
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-Harry @ RSG
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