Uber is Thoroughly Beating Lyft, but Not Entirely
In June 2011, Uber rolled on the scene, and the way people get around has never been the same. While the app-based black car service cost more than one and a half the cost of a taxi, riders quickly embraced the luxury and accessibility Uber offered over other forms of local travel. And in short order, Uber took its place near the top of the mass transit hierarchy.
Then, a year later, in June 2012, pink-mustachioed rideshares began popping up, marking the arrival of Uber’s first real competitor–Lyft. And for the last six years, riders and investors have wondered which of these two titans of rideshare would come out on top. While that question won’t be answered today, we wanted to take a look and see where the competition stands right now.
To begin this study, we wanted to consider, perhaps, the most important factor in any service-based industry–the consumers. In this section, we explored Uber and Lyft’s riders, growth in riders, and repeat riders.
First, we looked at how the total number of riders each rideshare service had between April 2017 and March 2018 stacked up.
Takeaway: Uber had 1.8x as many riders as Lyft.
Unsurprisingly, the older of the two companies, Uber, owns a large portion of the potential customer base in the rideshare market. Though, considering that Lyft is only a year younger, it speaks volumes about Uber that it’s captured nearly twice as much of the potential market.
Next, we looked at how each rideshare service’s customer base grew.
Takeaway: Uber saw a 0.15% rise in new riders, while Lyft saw just a 0.06% rise.
While Uber and Lyft’s rider growth numbers are relatively small–just 0.15% and 0.06% respectively–the growth numbers are in-line with what’s expected. Neither company is going gangbusters in this department, but the larger, older company–again, unsurprisingly–is showing stronger growth.
Lastly, we looked at how many of Uber and Lyft’s customers used their services multiple times a month.
Takeaway: Uber had 1.5x as many repeat riders as Lyft.
This is another area where Uber’s got Lyft beat. Not only does Uber have a larger portion of the potential customer base, more of its customers are using its services more often, too. Uber riders are taking 1.5 rides for every 1 ride Lyft customers are taking.
In terms of riders, Uber’s got Lyft beat across all categories, but how do the two rideshare titans match up when it comes to rides.
The next most important aspect to consider was the service itself. How did the number of rides each company was providing match up? In this section, we looked at how many rides each company was providing and the overall growth of those numbers of rides.
First, we looked at how Uber and Lyft compared in terms of rides given.
Takeaway: Uber gave 2.7x as many rides as Lyft.
Considering Uber has nearly double the customers, it’s absolutely not a surprise that Uber is giving more rides than Lyft. Uber, on average, provided 2.7 rides for every 1 ride Lyft provided between April 2017 and March 2018.
Next, we took a look at how the number of rides each company provided grew over time.
Takeaway: Lyft saw a 76% rise in the number of riders, while Uber saw just a 58% rise.
When it comes to growth of the number of rides, though, Lyft has the edge. With a 76% increase between April 2017 and March 2018, Lyft handily beats out Uber, which grower its number of rides provided by just 58% during that same period.
So, while Uber gave more rides overall, Lyft saw larger overall growth in the number of rides it provided. In the final section of this study, though, we looked at the area of business that everyone talks about–money.
Money. It’s arguably the only factor that matters when determining the success of a company. In this final section, we looked at the average cost per ride for each company as well as how the cost per ride for each grew over eleven months.
Takeaway: Uber earns, on average, $0.54 more per ride than Lyft.
While the overall difference between Uber and Lyft’s average costs per transaction were only slightly more than half a dollar, Uber did, in fact, earn more on average per transaction than Lyft between April 2017 and March 2018. Uber’s average cost per transaction over eleven months was $0.54 more than Lyft’s.
The final area we looked at in this study was growth in cost per ride.
Takeaway: The rideshare market is competitive, with the price gap never exceeding $1.95.
Perhaps the most wildly fluctuating dataset we looked at, the average cost per transaction for each company fell an rose erratically over the course of eleven months. While it should be expected that Uber, with more users and having earned more per ride, would also see a higher rate of growth, Lyft was able to match Uber’s average cost per transaction in January 2018 and even exceed it September 2017, suggesting the market is competitive. The difference in cost per transaction between the two companies, in fact, never exceeded $1.95 in a given month.
At the end of the day, the larger, more seasoned Uber has a firm hold of the rideshare space, with more riders, repeat riders, and growth in riders. But, while Uber’s provides nearly triple the number of rides, Lyft’s share of rides provided shows nearly 20% more growth. And, even though Uber, on average, earns more profit, Lyft has been able to maintain competitive pricing.
So, yes — Uber is ahead in the rideshare space and is the stronger-performing company across most of the areas we looked at, but that doesn’t mean Lyft isn’t a still a modest threat. Which of the two titans of rideshare will come out on top remains to be seen.