Uber and Lyft: How Ride-Sharing Mobile Apps Poach Business from Each Other
Uber and Lyft are two San Francisco-based transportation companies that offer the same kind of service -- peer-to-peer car ride-sharing services, using a mobile application to allow customers to reach the nearest available driver faster.
Their car-sharing service is reportedly about 30 percent lower in price for the same length of a taxicab ride.
According to The Wall Street Journal, the two companies are now engaged in one of the fiercest tech rivalries as they compete for business, each one accusing the other of unfair play using their respective mobile apps.
Their brand of service was lauded at first because in a matter of minutes a customer can summon a comfortable ride, which in a congested and busy area like San Francisco is almost impossible, especially during rush hours.
Each company has now branched out to other cities in the US and both want to get a bigger share of the marketplace. Not only are they rival taxicab companies, they also evidently want to kill each others' business.
Their war is not just about customers as they are poaching drivers and undercutting the others' prices as well.
In terms of operation, the battle is lopsided with Uber present in thrice the number of areas compared to Lyft. They also even encourage their passengers to use fist pumps as a greeting. Uber has five times more investors and about four times more employees than fledgling Lyft.
Lyft is alleging that, since October of last year, 177 employees of Uber had been ordering and canceling over 5,000 Lyft rides. The other issue involves recruitment: The Wall Street Journal reviewed an email sent by Uber to their drivers offering a staggered commission for recruiting new drivers. If they can refer a new driver they get $250. If they can refer a Lyft driver, the commission goes up to $500 and if they are able to sign up an experienced Lyft contractor that trains new drivers they will get a $1,000 commission.
Another issue is taking place almost at the same time on the new service: carpooling. That's where customers can share a ride and split the bill. Lyft introduced Lyft Line while Uber had its own Uber Pool. Lyft said they have been developing the car pool model for years while Uber has said they developed their system in several months. Uber came into the market in 2009. Lyft only came out in 2012. The design of Lyft's real time map app is similar to Uber's and its prime time pricing is even a variation of Uber's surge pricing.
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