Lyft Seizes Opportunity as Uber Tries to Outrun Troubles

Lyft seizes opportunity as Uber tries to outrun troubles [CNBC News]

Sum and Substance: Lyft makes a big expansion move, announcing it is adding statewide coverage to 32 states, bringing its total to 40. The company seizes the opportunity to recruit disillusioned drivers. Lyft’s share of the U.S. ride-hailing market in the past two years grew at double the rate of Uber. It has upgraded its smartphone app, stepped up marketing efforts to attract more riders and expanded its U.S.-only service into 160 more cities for a total of about 350.

When management upheaval, allegations of corporate espionage and revelations of sexual harassment sent Uber into a public relations sinkhole, its long overshadowed rival Lyft shifted into overdrive. The company seized the opportunity to recruit disillusioned drivers so it could be more responsive to passengers searching for a ride-hailing alternative to Uber. It upgraded its smartphone app, stepped up marketing efforts to attract more riders and expanded its U.S.-only service into 160 more cities for a total of about 350.

The aggressive tactics cast the much smaller Lyft in a new light. After five years of being content in its role as the fun-loving, pink-mustached underdog of ride hailing, Lyft is proving to be a wily opportunist and a more imposing threat to Uber.

But a huge chasm still separates the foes in terms of financial resources, ridership and breadth of operations. While Lyft’s rides are in the millions per year and only in the U.S., Uber makes 10 million trips per day worldwide and has carried more than 5 billion passengers in over 80 countries since 2009. Uber has raised nearly $14 billion in capital since its inception, compared with Lyft’s $2.6 billion. For its part, Uber is doing all it can to keep its lead. … Yet the ground that Lyft has been gaining can’t be ignored. By the time Uber’s board ousted abrasive CEO Travis Kalanick in June, Lyft had more than doubled its ridership from the first six months of last year. At the end of June, it had passed 2016’s full-year ride total of 162.5 million.

To be sure, Lyft already was growing fast before Uber went into self-destruct mode. Lyft’s share of the U.S. ride-hailing market in the past two years grew at double the rate of Uber, rising from 12 percent to just over 30 percent, according to Lyft’s internal metrics.

… Nick Raef, 23, who works at Northwestern University near Chicago, considers price and brand image each time he chooses between Uber and Lyft. Service in Chicago, he says, is close to even between the two. But if Uber happens to be misbehaving on a particular day, he’ll go with Lyft even if it’s more expensive. “I’ve told myself this controversy is worth a dollar or $2 depending on how bad the story was that day,” he said.

My Take:  This is the story line we’ve all been anticipating for some time now – Lyft capitalizes on Uber’s mistakes to seize market share. But if my personal experience of a driver is any indication, I’m still not buying the narrative.  When I turn on both apps, invariably Lyft involves longer pickups – which mean there is less demand and fewer drivers on the Lyft platform.

While Lyft passengers may be a tad nicer, that’s hardly a decisive factor for me. The Quest offers I receive from Uber are considerably more attractive than the incentives Lyft offers. Uber offers a $120 bonus for completing 25 rides in a weekend with a 75% acceptance rate while Lyft offers a $140 guarantee of net earnings (actually just over $100 after Lyft commission.)  Uber’s offer is in addition to my total earnings, while Lyft’s offer is the total compensation.  So from this driver’s perspective, Uber still pretty much has a lock on this market – more passengers and more drivers making more money. What’s it like in your market?

U.S. House unanimously approves sweeping self-driving car measure [Reuters]

Sum and Substance: The U.S. House on Wednesday unanimously approved a sweeping proposal to speed the deployment of self-driving cars without human controls by putting federal regulators in the driver’s seat and barring states from blocking autonomous vehicles. The House measure, the first significant federal legislation aimed at speeding self-driving cars to market, would allow automakers to obtain exemptions to deploy up to 25,000 vehicles without meeting existing auto safety standards in the first year. The cap would rise over three years to 100,000 vehicles annually.

Representative Doris Matsui said the bill “puts us on a path towards innovation which, up until recently, seemed unimaginable.” Automakers, business groups, and advocates for the blind praised the House measure. But one consumer group said the House bill did not do enough to ensure self-driving cars would be safe. Under the bill, manufacturers seeking exemptions must demonstrate self-driving cars are at least as safe as existing vehicles. States could still set rules on registration, licensing, liability, insurance and safety inspections, but not performance standards.  Automakers would have to submit safety assessment reports to regulators, but the bill would not require pre-market approval of advanced vehicle technologies. The measure now goes to the Senate, where a bipartisan group of lawmakers has been working on similar legislation. Automakers and technology companies, including General Motors Co and Alphabet Inc’s self-driving unit Waymo, hope to begin deploying vehicles around 2020. They have been pushing for new federal rules making it easier to deploy self-driving technology, but some consumer groups have sought additional safeguards.

Current federal rules bar self-driving cars without human controls on U.S. roads. States have issued a variety of different rules in the absence of clear federal guidance, and automakers have complained that California’s rules are too restrictive. U.S. senators might circulate their draft legislation this week. One sticking point is how to handle commercial self-driving trucks, which are not included in the House measure. The Senate version may also soften the provisions preempting state rules. Volkswagen AG (VOWG_p.DE) and other automakers have been lobbying Congress to act, often bringing test vehicles to Capitol Hill so lawmakers can test out driverless cars. Advocates hope self-driving cars can help reduce U.S. road deaths, which rose 7.7 percent in 2015, the highest annual jump since 1966. The U.S. National Highway Traffic Safety Administration said in a 2014 study that U.S. traffic crashes cost society $836 billion a year in economic loss, with human error behind 94 percent of crashes.

Consumer advocates want to give the National Highway Traffic Safety Administration quicker access to crash data and more funding to oversee self-driving cars. “The autonomous vehicle bill just passed by the House leaves a wild west without adequate safety protections for consumers. It pre-empts any state safety standards, but there are none at the national level,” the Consumer Watchdog group said in a statement. The policy group Transportation for America said cities are worried the House “legislation will preempt local authorities from managing their own streets and fail to give local leaders the confidence that manufacturers and operators will be aware of and follow local laws and regulations.”

My Take: While there clearly is a benefit from having the federal government set uniform standards that apply in all 50 states, I’m not a big fan of this bill, especially when there is no pre-market approval required of advance technologies. What’s to prevent unsafe or unproven technologies from being used in situations that could cause bodily harm or death? Like so much legislation in Congress and state houses, the legislators rely on language suggested by the potential beneficiaries of the legislation. That, after all, is why lobbyists outnumber legislators by what … 1000-1 in DC?