How to Fix Ridesharing: Kill Lyft

Photo by James Klevin from the Vanishing SF Facebook page

A Modest Proposal

Last night, I had dinner with a friend and her sister, whom I’d never met before. The topic of Uber came up when I mentioned I drive for Lyft and Uber. My friend’s sister said she really likes taking Uber. She’s a performance artist and often needs to get around the city at night. Before Uber, she was regularly stranded by cabs, which would invariably pick up a street hail on the way to her location, leaving her in the lurch and forced to seek other options. With Uber, she’s never had this problem. She just requests a ride and the car shows up.

Awesome. The only problem is, well… Uber. And the way they’re treating drivers. As I mentioned to her the struggles drivers face when dealing with the lowered fares, the lack of tips and the general unpleasantness of Uber as a company, I began to feel like a dick. There I was, shitting on something that fulfilled a need in her life both personally and professionally. Without Uber, she, like a lot of people in the city, would once again be at a disadvantage. It seems the only thing everybody can agree on when it comes to this new trend in transportation is that cabs suck.

This got me thinking… If I owned a business that made a product people loved—one they loved so much they would be disappointed not to have anymore—why would I lower the price? I’m not business-minded in the least, but it just stands to reason that if somebody really wants your product, you could charge whatever price you wanted for it. So why is Uber continuously lowering fares?

Then it hit me. Fucking Lyft. Lyft is the problem. They keep picking fights with Uber. And Travis Kalanick, Uber’s founder and CEO, isn’t somebody you want to trifle with. But Lyft, the quirky kid with bad acne, thick glasses and a pepertual cowlick, does just that: day after day, they walk across the playground and challeng the biggest bully in school.

It’s not much a shock that Lyft is getting pummeled in the rideshare wars. It’s almost embarrassing how badly Lyft is losing this David and Goliath showdown. But you can’t feel too bad for Lyft. They asked for this. Unfortunately, the drivers on both platforms are suffering because of Lyft’s hubris.

The price wars have been going on for a while. It's hard to imagine a time when the minimum fare for an UberX ride was $10. But back in 2013, that what the going rate for a ride. Nowadays, in San Francisco, it's $5. In LA, it's $4. That's highway robbery at its very essence. Not to mention how drivers face serious risks with insurance gaps, troublesome passengers, potential health problems, damage to our vehicles, the financial hardships of constant repair and maintenance and we are denied tips. On top of all that, with the rating system, we don’t even have job security. Any passenger on a power trip could easily have us deactivated.

I started driving for Lyft in March of 2014. I made decent money. A few months later, to combat Uber's growing domination of the rideshare market with UberX, Lyft lowered their fares and stopped taking a commission. The price cut was supposed to be a test. Around the time they planned to return to the original rates, Uber lowered their rates, forcing Lyft to make their temporary price cut permanent and start collecting commission again, pissing off all but their most loyal drivers.

The Rideshare Wars

Uber is definitely winning the rideshare wars. In their calculated, underhanded assault on Lyft, Uber shows no restraint. They even announced UberPool, a carpooling feature that wasn’t active, the day before Lyft announced their own carpooling service, LyftLine, which was ready to launch, effectively stealing their thunder.

Even without public support, Uber is racking up victories. A month ago, when Uber’s Operation Slog was exposed, everybody felt bad for Lyft. But then Lyft lowered prices again and drivers started burning their mustaches.

Before this happened, Uber had started poaching Lyft drivers. I was one. I joined Uber during their $500 sign-up bonus. $500 to take one ride? Where do I sign?! The gimmick was that newly recruited drivers would see how much better Uber was compared to Lyft and switch sides. And it worked. As a regular Lyft driver, I was blown away by how much more business I got from driving for Uber. (Lyft tried to get Uber drivers to switch sides, or double down, by making a counteroffer of $500 plus a taco, but just came off looking silly, as usual.) 

These are the kinds of tactics that show who is really in charge when it comes to ridesharing: Uber.

Now don’t get me wrong, I think Uber, with Kalanick at the helm, is an evil, unscrupulous company along the lines of Wal-Mart. Kalanick comes across as an antisocial, libertarian scumbag who’d stab his own mother in the back to get ahead. He probably has a cum-stained paperback of The Fountainhead under his pillow that he strokes gently as he falls asleep at night. But he’s not stupid. He knows how to run a business, even if it is at the expense of workers. Lyft, on the other hand, has yet to display any business acumen. Their entire platform lends itself to mockery.

Look at their signature branding: the pink mustache. While it’s proven to be an effective symbol to get attention, it’s so ugly and goofy and alienating and … shit, the list goes on and on. Most people don’t like the stupid thing and very few drivers have them on their cars anymore. Lyft, realizing this, developed what they call a “cuddlestache,” a smaller version that goes on the dash instead of the grill. But from a distance, it just looks like a pink turd. Another Lyft fail! [UPDATE: Lyft is ditching the 'stache.]

Where Lyft supposedly excels is through creating a sense of community. I prefer the social aspect of driving for Lyft. It makes for better stories. Driving is more fun when you are free to chat with the passengers. The time goes by so much faster. And Lyft encourages tipping, which is awesome. Uber tells their users the tip is included in the fare. (It’s not.) But the whole “Cult of Lyft” mindset is a niche market at best. In order to fall for it, you have to drink the Kool-Aid. Lyft fanatics are a brutal lot of mustache-waving zealots who will try to stifle any dissent in order to protect the brand. Still, there’s no way they can corner the entire rideshare market based on jingoism alone. In fact, I’m willing to venture that the community aspect hurts Lyft more that it helps. Some people just want to get from point A to point B without making a friend along the way.

There are folks to whom Lyft’s transportation model is appealing and Lyft needs to cultivate those users. Not the market as a whole. They will never be able to compete with Uber, financially or logistically.

As cutthroat as they are, it’s not surprising Uber is resisting Lyft’s attempts to corner the market. Lyft is fighting with a ruthless bully. Their only move at this point is to beg for mercy. Even their cries of “that’s not fair” have fallen on deaf ears. If this were a schoolyard fight, we’d all be standing there with out arms folded going, “Dude, you asked for it.”

The question of who started the price wars doesn't even matter anymore. Even if Lyft were out of the picture, it's not likely the prices go back to what they were at the beginning of the year. It doesn't even matter that, except for surge pricing, passengers weren’t complaining about the prices before the price war started. What's done is done. At this point, Uber could charge as much as cabs and still be profitable and control the market. 

The Writing on the Wall

Oh sure, there are plenty of problems with ridesharing. Killing Lyft might not fix them all, but the only way to end the price wars is for Lyft to be better than Uber. Or die.

I’m not the only rideshare blogger who’s come to the conclusion that Lyft isn’t going to win. They are perpetuating the price wars in a futile attempt to compete with Uber and yet they’ve lost each battle.

Somebody needs to put a stop to the price wars. Despite what the their computers tell them, raising prices would benefit the company and improve the rideshare experience for passengers. Of course, if Uber and Lyft did raise the prices, the users who take advantage of the five-dollar rides would drop off. And while those short rides are fine for a computer to just add to the ultimate tally, earning those five-dollar rides as a driver is no easy task. The five-dollar rides need to end anyway. The minimum fare for an on-demand ride should be ten dollars. If you can’t afford ten bucks to get from one neighborhood to another, you really shouldn’t be using an on-demand car service. Why waste an Uber driver’s time by having them spend several minutes driving to you just to take you a few blocks? That’s plain lazy and a waste of everybody’s time.

It’s time for passengers who want quality transportation options provided by drivers paid a fair wage to expect more than a race to the bottom. 

As a driver, the end of Lyft cannot come soon enough. There are very few drivers who are even loyal to Lyft anymore. Lyft is the losing team. All roads lead to Uber. Whether we like it or not, they are going to win the rideshare wars. Anybody who can’t see that is obviously drinking too much Lyft Kool-Aid.

---- 

FOLLOW UP POST: Should We Really Kill Lyft?