This Is How Lyft Works, The New Threat To The Taxi (And Uber)

This is how Lyft works, the new threat to the taxi (and Uber)

A car with a giant pink mustache on the front. It may seem like a joke, but nothing is further from the truth: it is the badge with which Lyft identifies its cars. The idea is that customers know what their vehicle is going to be and, incidentally, attract attention. After all, you don’t see a badge like this every day.

Lyft is a transportation service for travelers in which private users use their cars to earn extra money. The customer installs an app and when they want to be picked up, they press a button. A nearby driver will receive the notification and soon a car with one of these mustaches will appear in front of him. Like Uber? Yes, more or less… although there are several significant differences between these two services.

The “less stretched” version of Uber

At they say that if Uber is the luxurious Ritz hotel, then Lyft is a friend’s couch. Uber is a service where many customers wait for the driver to open the rear door of the vehicle for them. At Lyft, the driver will greet you with a “fist bump” and invite you to sit in the front seat. This is precisely one of the claims that the service uses: “Your friend with a car”, they say.

If you get into a Lyft vehicle, the driver will most likely make conversation with you. They look for drivers who are customer friendly. In short: “buenrollismo” prevails over the one-on-one treatment, something in which they beat Uber by a landslide. This is not necessarily good in all cases. Ultimately, a customer is looking to get from A to B. There will be those who prefer to go quietly all the way or mind their own business, but Lyft has been taking this approach since 2012, and, so far, it seems to be working pretty well for them. good.

The less stretched version of Uber

Tips and taxes

The style of the drivers is not the only difference. The procedures are carried out, as is the case with Uber, from the application itself: from requesting a vehicle to the payment itself. However, Lyft plays with two clear advantages for drivers. For one thing, Lyft allows tipping. It is the passenger himself who decides the amount. In Uber, this is not possible. On the other hand, at the moment, there is no commission for the operation. UberX, Uber’s low-cost service, takes 20% of the total for each trip.

Uber and Lyft, are confronted by the prices and by the commissions that are taken by the operation.

Since the beginning of the year, it can be said that Uber and Lyft are leading a price war. First, it was Uber that announced, in January, that its commission would drop from 20% to 5% in some markets. Lyft followed soon after but with a riskier move: they would not only lower the commission but, for an indeterminate period, they would remove it entirely. Since then, Uber has already returned to the initial 20%.

Which service is cheaper then? Both set the prices for their drivers, but it depends on the city. In San Francisco, Lyft charges $1.35 per mile with $0.27 per minute (minimum per ride is $5). In the same city, but with Uber X, the fare is $1.50 per mile and $0.30 per minute, with a minimum of $6. This is not only important for customers, but also for drivers, who see how they can earn more by going with the competition. This is how this “price war” we are talking about is explained.

And what about dynamic prices? Uber’s surge -principle was one of its great innovations: in the face of greater demand than usual (for an event or whatever), the price multiplies to get more drivers out on the streets with their cars. Lyft also has its system, called Prime Time, although prices can only be increased by a maximum of 25% (Uber has no limit). It is also accompanied by Happy Hours: when there is low demand, customers get a 10% discount.

Also the target of controversy

With an operation similar to Uber, it was to be expected that Lyft would also be received with suspicion by the Taxi sector where it operates. And so it has been. Its drivers are individuals, without a license to transport passengers. Initially, Lyft did not have fixed rates but rather worked on donations: the user decided how much to pay the driver. To please the authorities, most cities (including major ones ) currently use a pre-established price.

This same month, Lyft encountered problems on its arrival in New York, coming to see how the city threatened to requisition its vehicles and took them before the Supreme Court the same day of its launch. In the end, Lyft has had to resign itself and has launched its service in a “decaffeinated” way: only people with a license will be able to drive for them. Its founder explained that, sooner or later, they wanted to bring their entire service there, with private drivers, but that was not possible for now.

Last week they again encountered a small difficulty on the road: after reaching an agreement with the authorities, Lyft will stop its service in Buffalo and Rochester on August 1.

Competition for collaborative transport

With a pink mustache or without a pink mustache, with good vibes or with a premium service, we cannot lose sight of the fact that we are dealing with two companies that do almost the same thing: take a client from point A to point B. Uber has the advantage: it has more drivers and is present in 42 countries. Lyft only operates in 60 cities within the United States, but it is expanding little by little and has the blessing of investors, with which it hopes to leap to other countries as well. For now, it is unknown which ones but, given the current situation, possibly Spain is not one of the first.

PS: About the pink mustache, a brief comment: it is not mandatory to wear it and they only give it to experienced drivers, but it has also had its controversy. Some experts have already said that it can clog your front air vents and cause damage from overheating. With how innocent she seemed, right?