There's one area where Lyft is ahead of Uber, the whole "we are nicer" thing discounted: investment from an auto company (Lyft took money from GM).
If you take a truly long-term view, the marketplace for on-demand drivers will become obsolete once autonomous driving becomes good enough to be adopted everywhere. At that point, Uber's biggest edge -financing and supply-side field logistics- will erode very quickly against companies that own vehicle production (auto giants) and AI (autonomous driving)
Uber knows this, and that's why they have been investing a lot of money on robotics and AI around their partnership with CMU. However, they still do not get the kind of data Google can get from their Maps and Waze (It's interesting to note that Lyft and Waze partnered) to enable their AI researchers.
Uber is still going to be a very successful company in the next few years: For technical and legal reasons, self-driving, on-demand vehicle services will be at least a decade out. But I'm not as sure about Uber's survival in, say, 20 years.
Keep in mind that AARP is excited about driverless cars because for millions of seniors, losing their ability to drive means losing their independence. Also, by age 50, everyone knows somebody killed by a human-driven car. AARP's members vote at very high rates even in non-presidential elections, so they are a very powerful lobby.
Not clear to me how a driverless car has any advantage for a senior vs. Uber or Lyft with a driver. In fact it seems less desirable, as the human driver could help the elderly passenger in and out of the vehicle, help with walkers or wheelchairs, etc.
The hope is that autonomous cars will be much cheaper once you take out the human element; when a taxi costs $30 for a routine trip, and Uber/Lyft still have to pay their drivers >minimum-wage, you cannot cater to the elder niche of doing groceries and making regular doctor trips, not to mention the useful aspect of 24/7 coverage.
There's also the psychological issues: elderly people don't want to be a 'burden' or rely on strangers, and autonomous cars neatly solve both issues.
It feels strange to see so many traditional backers for this tech. I've been hesitant to let myself get too excited for the possibility that driverless cars will reach the market when the technology is ready - instead of when it is deemed ready by regulators, lobbyists, and the gatekeepers who are backed up by legacy protectionist policies.
There seems to be so much positive traction among political and industry players that this might turn out to be one of those rare technologies who's progress doesn't get crippled by vested incumbents. But experience has taught me to be cautiously optimistic at best.
It does make sense though. The majority of people have driven a car and can relate to the hassles. Especially with drunk driving. Eliminating drunk driving is in everyone's best interest and hard to argue. Plus who would fight against self-driving cars? The only self-interest groups here would be the drivers themselves and even then I don't think it'll be a big enough lobby group.
Maybe a subscription model, now you can't pay once and maintain your car with your local mechanic for 20 years, it has to be done by the manufacturer and contains expensive software updates?
There's one area where Lyft is ahead of Uber, the whole "we are nicer" thing discounted
The way cultural currents are going, there's a lot of room for companies to make marketing headway through "we are nicer" and "we are not douchebags" public images. (Hopefully, fairly accurate public images.)
I mean, when it's been years since Apple has been parodied with a "We're mad with power" tagline, and when public shaming has become a way of life online, it's about time for nice.
>the marketplace for on-demand drivers will become obsolete once autonomous driving becomes good enough to be adopted everywhere
I'm not holding my breath, it'll be a looong time (decades, plural) before driver-less cars work everywhere, in poor weather conditions, in areas with lots of cyclists and pedestrians, in developing nations and parts of developed nations with bad roads, bad or unenforced traffic laws etc.. Human drivers will have a reduced role, but they won't be "obsolete" any time soon.
Driver-less cars likely means people taking more trips, causing more congestion and more pollution on the roads where they can actually operate. I wouldn't be surprised if some cities ban them.
I think by then, electric cars will be cheaper to purchase and operate than gas vehicles, so the pollution won't be much of an issue.
But you are 100% right that congestion will be the problem. Cars simply do not scale well, as the amount of sqft/passenger/minute is huge. We seem to be unwilling to devote the huge amounts of land to highways that we would need to in order to make congestion go away. And in cities, intersections can only let so many vehicles through per minute.
As another commenter said, traffic is a good problem, however it's only good until it stops trips. It's great for people to be moving about, but when traffic prevents that, it's bad.
Autonomous drivers give people back their time in the car to do with as they please, but they will definitely increase congestion.
Depends. In St. Louis, for example, a fully electric vehicle produces the same pollution (via the power plant) as a 36mpg car [0]. That's about in line with a highly-rated compact like the Golf or Mazda3 these days.
Electric vehicles give us the capability to reduce emissions by building cleaner electrical infrastructure, but that does not mean we will do so.
In a few decades St Louis won't have such crappy energy sources, and if they do, their electricity prices will be sky high because they made poor decisions.
Additionally, pollution concentrations matter for cities, specifically dumping the exhaust out right next to people vs. dumping it at remote locations where it has more area to dilute before encountering people.
The long tail pipe hypothesis seems to be a bunch of people trying to desperately prove that electric cars are no better, but they have to resort to extreme cases to try to justify their positions. 36mpg which pollutants? Certainly not all them. CO2 from pure coal is something like a 50 mpg car. And as we get rid of these inferior and more expensive sources of electricity, electric cars will only increase their lead over gas vehicles.
A lot of congestion comes from cars looking for parking and cars not being shared with other people. The self driving cars are not going to be looking for parking, and can automatically scale what is on the road based on demand. They will also be more efficient with sharing a vehicle with multiple people, or have more specialized mini cars to scale trips properly.
Smaller vehicles will be far more practical in an automated taxi model as well.
No one wants to own a single person car, because even a single person wants to be able to carry passengers if they need to. But lots of people will be making single person journeys all the time, so it makes sense for a taxi company to own them.
> For technical and legal reasons, self-driving, on-demand vehicle services will be at least a decade out.
At least the legal reasons are now moot at least in Germany, as all the laws required for self-driving cars have already been passed.
All the harbors and airports have been using fully automated vehicles for transport on their area for quite a while now, and the recent showcase where autonomous trucks from all european car manufacturers drove to the netherlands has shown reliability on streets as well.
At least in the transport market autonomous cars are less than half a decade out.
So manufacturers already know under what conditions/standard they can put an unassisted self-driving car on the public roads, and it's the same as (or analogous to) the rule for automated port tools? What is that standard?
I don’t know myself, I’d have to look in the laws, but the rules were written because Mercedes and VW have now a decade of unassisted self-driving experience and plan to release the first fully self-driving vehicles for transport (trucks, etc) within of the next year.
"However, they still do not get the kind of data Google can get from their Maps and Waze (It's interesting to note that Lyft and Waze partnered) to enable their AI researchers."
Google is invested in uber, why would they not supply them the data they needed?
Because Google routinely undermines their partners through internal productizing (see e.g. Flintstone/OnHub), and Google has a large self-driving car program. There's a clear path from there to a Google(/Alphabet)-owned ride provider regardless of investment in Uber.
This just isn't true in any way. Uber once upon a time was a bidder on Here Maps, which provided most of Bing's mapping data, but they lost to a consortium of German car makers (BMW, Daimler, Audi): http://www.wsj.com/articles/bmw-daimler-audi-agree-to-buy-no...
No. I can't name a source though. Basically Microsoft was hemmoraghing money on this unit and Uber took a chunk of staff, the tech, AND the operating expenses.
$1 doesn't make any sense. Perhaps you're leaving out some form of equity swap. Bankrupt companies get purchased all the time for millions of dollars and I can't imagine Microsoft's business team would allow such a shitty deal.
Google has the map data. Google are working on autonomous vehicles. When they get the latter, what is the need for Uber? The $250M would be an irrelevant sunk cost at that point.
I have no doubt about uber being around in 20 years, they're just too well established and understand where the industry is heading to become irrelevant.
Though what I do think will happen is an erosion of their lead where they go from the sole 800lb gorrilla in the west to being one of many with automakers coming into their own offering self driven taxi style service on what will probably be a subscription model (like how we have monthly payments for cars today).
>>Though what I do think will happen is an erosion of their lead where they go from the sole 800lb gorrilla in the west to being one of many with automakers coming into their own offering self driven taxi style service on what will probably be a subscription model (like how we have monthly payments for cars today).
Either this, or I could easily seeing aggregator apps, similar to the many that have popped up to manage multiple social media accounts, appearing to help drivers and riders manage both Uber and Lyft accounts.
They already kinda are. Look at, say, Drive Now (https://uk.drive-now.com/) - they're owned by Sixt, and they operate Drive Now jointly with BMW (BMW cars being the only type you can have with DN). I imagine automakers have relationships with other "car-sharing" firms (e.g. Zip Car) as well.
You might already know that, but for everyone who doesn't live in a city where they're available... :)
Per your point that Google knows far more data than Uber via Maps/Waze, I'd like to point out that Google Ventures plowed 200mm+ into Uber at one point. So a partnership between the two is not unlikely in a future like the one your describe.
Whats the big deal? They arent decades behind their competiton. At most you can argue they are a few years behind. With their resources they can catch up quick.
I've used Lyft a few times recently. I'm a little suspicious Uber is using surge fair tactics on users that have agreed to the pricing in the past when there is in fact no surge occurring.
When traveling for work I often use Uber and recently there was consistent surge pricing. The first day it made sense since it was raining. But then the next few times I used it there was surge pricing - not much, like 1.1x or 1.3x. I agreed because it wasn't too much more and I needed to get to my meetings and it can be expensed. I mentioned to my Uber driver there was a surge and he said it didn't come up as a surge for him. The next trip later that day the surge was 2.2x
But then when I got back home I noticed every time I've brought the Uber app up there is a "surge". Even during fine weather and non-traditional surge times. I look outside and there are taxis available (NYC) and I opened Lyft and there were plenty of options without any surge.
It was probably bad luck (I don't really think they'd get that greedy that quickly) but it made me try Lyft and I had the exact same experience as Uber.
I strongly suspect that Uber has (or will, depending on a particular market's maturity) smooth the curve on surge pricing.
I think most customers are initially averse to ever paying more than 1x, but once you've gotten used to paying 1.1x or 1.2x, you realize it's still typically much cheaper than a taxi. It's ultimately in everyone's interests for prices to adjust quickly and smoothly to demand.
I have no idea why they'd assume that people will tip taxies 20% and not tip the Uber drivers (who presumably make less?) -- it certainly seems like an odd way to compare prices ("a is cheaper than b when you choose to give b more money!"). Does Uber have some kind of policy on tipping? And how would that even work, assuming you pay cash?
I do wonder how much of that lower price on Uber is due to tax evasion and dodging licenses and registrations etc.
Surge pricing isn't just about getting a larger cut for Uber, it's about increasing the pool of drivers on the road to serve rides and eliminate shortages.
I'm guessing the smoothing you describe comes from the fact that the pool of uber drivers has grown dramatically of late.
It's highly dependent on the market. I rarely see surge where I live (Seattle), but I was in a different city a few weeks ago and only saw surge pricing the whole time I was there.
Right. Uber understands you don't have alternatives in that city, you don't know the city, don't have your car, and you need transit. You're in tourist-mode, so you're going to get tourist pricing. Otherwise Uber is leaving money on the table.
In a small city (Cincinnati), Uber only really surges on Friday and Saturday nights, mostly around the downtown neighborhoods, and then for major events with a few thousand+ people in one place.
Probably because NYC has strict limits to the number of licenced taxi's on the road creating a supper/demand imbalance, largely due to the medallion system, which is not found in most other medium sized cities resulting in a much greater supply.
In Boston at least I've had a far better experience with Lyft than Uber. I know the driver pool is very similar so it's probably the result of a small sample size on my part, but Lyft drivers have just been better, happier, and more conversational.
I've heard Lyft pays them slightly better, so perhaps that's part of it.
In New York, I started seeing a marked deterioration in Uber's driver quality, for UberX as well as black cars. Two minute ETAs would turn into ten as turn after turn to where I was got blown past. This more and more frequently culminates in the driver calling me and asking me to meet them a block and a half away.
This is made worse by drivers accepting rides when they're headed away from you on a 1-way road (which are everywhere in NYC). I've spent more time waiting for them to turn around and finally pick me up then it took to get to the actual destination. The app should disallow acceptance if the driver is pointed away from the requesting passenger.
Ugh, I live next to a freeway in Seattle and see drivers accept while driving 60 miles an hour past me. It is infuriating - the "nearest driver" algorithm absolutely needs to be based on a real-time routing system and not something so inaccurate as distance.
I've been on one side of Lake Union and had drivers on the other side try to pick me up. Sorry, no, that's just not gonna happen in a reasonable amount of time.
I just wish that both firms would fix their mapping data. Both insist on picking me up and dropping me off around the corner from my front door. This is not a crazy street or anything. Two way next to two way.
The data is so mind boggling bad that I seriously doubt the self driving car will ever come to be. The mapping data is accurate, but the systems insist on sending drivers to the wrong spot. How are you going to tell the self driving car where to actually go?
I've been using Lyft quite a bit this year, and I've asked every driver if they drive for both (yes) and which they prefer (Lyft, because it pays better). Anecdata, I know.
I have driven for both in the past. Lyft has major advantages in my mind:
1. Tipping is allowed so you make more money that way. I don't think the fares are significantly different (maybe they are, I haven't compared).
2. You can cash out early. I was driving because I had just gotten a divorce and moved out and had extra expenses with getting into a new place, and frequently, being able to put $50-100 into my bank account after a night's work was the difference between solvency and insolvency.
Also, I've observed anecdotally that the Lyft passengers are nicer. I've talked with various people about why that is and there are various theories, but generally the idea is that it starts at the top. Uber has a history of dick moves and I think that reflects in the different clientele.
They may be set up for both but if you probe an inch deeper I suspect you'll find they prefer and drive for one service much more. Which is why it's misleading to suggest that "they all drive for both".
I was in Chicago all last week and I asked this question of my drivers as well. Every driver prefers to drive Lyft because they make more money per ride, but they end up driving Uber most of the time because there's virtually no downtime. They can pick up the next person within close proximity and almost as soon as they've dropped off the last person.
It's weird because in a way they should be the same company because they share the driver pool. But the experience is different I think it's a positive feedback loop because drivers expect a happier and more engaging customer with Lyft. And Lyft offers in app tips.
Customer responsiveness by the parent company is a big factor too, IMO. I was a user of both Uber and Lyft with a mild preference for the former. One day, for some reason, their credit card system was declining my specified card and there was no way available to contact them to get this fixed. I fired up the Lyft app and was on my way shortly. I have used Lyft's Twitter channel when I have had issues and their response was swift, courteous, and effective.
Plus in the Central Texas area, all of the drivers that I have used who work for both TNCs indicate that Lyft treats them better than Uber.
When was your experience? At least nowadays there's https://help.uber.com, support@uber.com and @Uber_Support. I've used the first regarding a promo that didn't work for my ride, and they refunded it fairly quickly.
It was last summer. In-app, there appeared no obvious way to contact them to get status on the payment problem. Changing cards did not work either, which lead me to the conclusion that the payment processing was at fault especially since the same card was working fine for Lyft.
I uninstalled the app shortly after and exclusively use Lyft now.
Didn't know that; thank you for pointing it out. If you have to have tips, that’s a good way to handle it.
Nonetheless I prefer doing away with tips for other reasons:
* It’s just one more thing I have to decide, and I’m tired of doing it. I don’t even do a good job. I often tip people based on completely irrelevant things.
* Tips don’t lead to better/friendlier service. Taxi drivers regularly get well over 20% tips but I’ve had very few good experiences in a taxi. Rather, they just expect a tip and get quite made if you leave a small one.
* Tipping is gamed by service workers who learn what to do to get bigger tips and then focus on those things. Other aspects of service are often neglected.
* In Japan service is far superior to America in all the ways I care about, but tipping is virtually nonexistent. Having spent time there, I just can’t get behind tipping.
I think Gett (a Black Cab app I use in London) improves upon tipping somewhat as well - your choices are 0%, 5%, 10%, or 12%. That's it. No giving a 20% tip (or a 100% tip because you were drunk-typing or whatever).
I've always just set it to the maximum tip amount, because I figured (a) It's not that much, and (b) it would result in me getting better ratings, though after what GP said, maybe they have no idea how much I tipped :-/
It's totally a positive feedback loop. It's like Southwest airlines. They've got the same planes as everyone else and I am sure their staff has experience working for the airlines we hate. But because as a customer I think of them as nicer I treat them nicer and everyone is happier.
I know my Lyft drivers likely drive for Uber too but in an Uber I don't expect a friendly driver so I never give them a chance. In a Lyft I try to strike up a conversaion and often enjoy it.
I do not agree, there is still lot of controversy with regard to paying toll in Boston especially around Airport.. Try getting Lyft near Airport, you will know that there are issues regarding how Lyft treats its drivers..
I often ask drivers whether they prefer Uber or Lyft. I've never heard anyone say they prefer Uber, and I've heard lots of stories about how driving for Uber is a ripoff. Neither one is a very good deal for the driver, but I'll continue to prefer Lyft as long as I keep hearing the same opinions. I still think drivers barely break even once you account for vehicle purchase and maintenance costs.
> I still think drivers barely break even once you account for vehicle purchase and maintenance costs.
This is the case in most cities for brokered taxis with or without Uber/Lyft. It takes working long hours and good luck that your car doesn't break down to make a decent wage.
Uber has been a lifesaver, but main gripe with UberX as of recently is that they don't seem to screen cars very well, at least in the Bay Area. Dirty seats, older cars, noxious air fresheners, etc. all seem to be the norm. Yes, I do try to leave feedback but wishing the baseline was a notch higher.
Lyft requires drivers to go to a mentorship process but with Uber all you do is sending pictures of your driver license and car to become a driver.
Lyft also sends training videos and material to drivers. Because of the possibility of the tip drivers are trying their best.
It's a good idea to tip to drivers that do a good job. They are low income people and deserve that extra $1 more than your bartender that usually earns a good chunk of money each night.
With Uber I had to get a vehicle inspection and medical certificate which required a visit to the driver center. I believe the medical certificate is legal requirement in my state.
Lyft's mentorship process wasn't much of a process in my experience. I met a guy at his house, we talked for about 45 minutes, it was kind of helpful but I felt like Uber's onboarding was more organized.
Uber also has a number of training videos and I think they do a better job than Lyft at providing information to drivers.
I agree that the tipping thing is huge. When I drive, I get out of the car and open the door for the passengers, that kind of thing. I also make a point of keeping the car clean; at least vacuuming before I work a shift. I keep Armor All wipes in the car too so I can give a quick shine to the dashboard and the door frame (it gets scuffed up from people getting in and out and shows dirt quickly).
“From everything I’m looking at, we’re gaining share in all top 20 markets, which is where 80 percent to 90 percent of rides happen,” 80% of your ridership, not uber's.
I'm looking forward to hailing a self-driving Tesla directly with no middle man. All the money Uber, Lyft etc are throwing at building a network will be for nothing.
1) That's at least 3-4 years from now before it will be practical in most situations, which is a lot of revenue for Uber and Lyft.
2) Uber is already investing heavily in its own self-driving cars and has stated plans to buy as many self-driving cars as it can if someone else beats them to the punch. So really the choice will be between owning your own car (very high upfront cost and maintenance costs) and using a self-driving car service. I think many people will opt for the latter.
The network is important because we're not going to go from manual driving to self-driving overnight. It's a transition that will take years. For most Uber users, the change will be transparent; the only practical difference would be that there isn't someone in the front seat of the car that comes to pick you up. Growing the userbase and making the investments in becoming the primary method of ride acquisition is useful because that will carry over into the self-driving era.
The point is with a demand-supply network where you need both sides to participate in order to have a working system, you have to spend a lot of money to build that initial network in the face of competitors. In the case where you can add more supply without throwing incentives at drivers, anybody can start a local competitor fairly cheaply, and all those billions Uber and Lyft have spent building their networks will no longer matter.
What's the point of a self driving Tesla? A huge portion of the Tesla appeal is the high performance. Self driving cars are going to be the opposite of that: gentle acceleration and strictly following traffic laws and speed limits.
Struggling to keep up doesn't imply you were ever head to head does it? You could struggle to keep up with someone for an entire race and always be behind them.
> “From everything I’m looking at, we’re gaining share in all top 20 markets, which is where 80 percent to 90 percent of rides happen,” said Lyft President John Zimmer.
I don't think it's quite that simple, though I don't see mentioned the rate of Lyft's growth in key markets.
Why assume that? Houston wasn’t one of the first 20 domestic or foreign markets for Uber: http://cl.ly/3g1Z081h1Q2G (link is an image originally from uber showing timeline of new markets opened)
Houston is a much more driver-"friendly" city. Everything has parking. They're always building more roads. The city itself is very spread out. Nearly every household owns one or more cars. That's not the kind of environment in which services like this would thrive.
This part of the article is particularly interesting:
"Meanwhile, Uber has been working to fulfill a promise to shareholders and employees that it would achieve profitability in North America by the second quarter of 2016, a milestone it says it has now reached in the U.S. and Canada."
The effects of this are being felt in engineering, there is a freeze on any new hardware purchases at the moment. You need a new server? Too bad, make do with what you've got. They've also reduced perks for new hires, and new hires are being stiffed in terms of compensation compared to what employees were getting just a few months ago, both in terms of stock and base salary and Uber credits.
Although the author may not have provided a citation for the claim, this has pretty much nothing to do with "life experience"? Roughly speaking, if you have a certain likelihood of knowing someone that dies in a car accident in a given year and every year of your life is somehow independent, it is not inconceivable that (most) people by the age of 50 know someone killed by a human-driven. car.
Also, deaths in car accidents are decreasing, so older people are likely to have known more people that died in car accidents in their youth than younger people today.
If you take a truly long-term view, the marketplace for on-demand drivers will become obsolete once autonomous driving becomes good enough to be adopted everywhere. At that point, Uber's biggest edge -financing and supply-side field logistics- will erode very quickly against companies that own vehicle production (auto giants) and AI (autonomous driving)
Uber knows this, and that's why they have been investing a lot of money on robotics and AI around their partnership with CMU. However, they still do not get the kind of data Google can get from their Maps and Waze (It's interesting to note that Lyft and Waze partnered) to enable their AI researchers.
Uber is still going to be a very successful company in the next few years: For technical and legal reasons, self-driving, on-demand vehicle services will be at least a decade out. But I'm not as sure about Uber's survival in, say, 20 years.