Management crises and upheaval at U.S. ride-hail giant Uber have allowed Lyft, a distant No. 2 in the market, to gain some ground.
Lyft recently announced reaching the one million riders per day mark, a milestone Uber accomplished back in 2014.
Uber carries 5.5 million rides per day but has been hampered by scandals for months, leading to the resignation of CEO Travis Kalanick and many of his top deputies. A coalition of labor unions, accessibility advocates and consumer rights groups recently sent an open letter to Uber, calling for a culture change in the company’s ethics and management practices.
The letter’s signatories include a number of groups that have been at loggerheads with Uber over the years, such as the Amalgamated Transit Union, Teamsters Local 117, the New York Taxi Workers Alliance and the Center for Disability Rights. It also features worker rights advocates like the National Employment Law Project.
The turmoil at Uber has contributed to Lyft’s 48 consecutive months of ride growth pointing to an annualized ride rate of 350 million.
“These important growth milestones are driven by a relentless and multi-year focus on our mission of improving people’s lives with the world’s best transportation,” said Lyft co-founder John Zimmer. “Every day, more drivers and passengers are choosing Lyft because we have focused from Day One on embedding hospitality and service in everything we do. As we’ve reached service level parity, the Lyft experience has become a key differentiator.”
The company has added service to 150 U.S. markets in 2017, making it available in more than 350 areas across the country.
Now, more than 80 percent of people in the U.S. can hail a ride, but traffic is still a plague in cities across the country.
Both companies started operations in San Francisco so Lyft’s Zimmer is used to the comparisons between the two firms. "They actually started with private cars. Limos, a couple years before us. So, they had a footprint. But before them, we launched a peer-to-peer transportation, which is kind of people using their own personal cars. And we're now the fastest growing ride-share service in the United States. And are taking market share from those other guys,” Zimmer told CBS News.
Zimmer says he is committed to the company’s core values. "There's always been doubt behind our set of values. Taking care of our drivers, taking care of our passengers was really important and many people said that would hold us back and we would not be able to compete with an aggressive competitor. We believe these are two different things. We're aggressively pursuing our values of taking care of people, and that is actually good for business. And I think finally people are starting to realize that."
Lyft now has 1,700 employees and more than 700,000 drivers. Zimmer believes ride sharing makes sense.
"We have 250 million cars in the United States that are parked 96 percent of the time. This is completely inefficient," Zimmer said.
Both Uber and Lyft see the role of autonomous vehicles in the ride-hail industry future. Lyft is developing technology in partnership with Google, General Motors and Jaguar Land Rover.
"We think that in a few years, you'll be subscribing to a miles plan on Lyft the way you would subscribe to a minutes plan on AT&T or Verizon or T-Mobile," Zimmer said.
Zimmer believes ride-hail will have a profound impact on the automobile industry.
"Well, we're really focused on the customer and what customers want. And providing that experience. If that means we can provide a better experience than the alternative, then we're gonna do that," Zimmer said.
Zimmer, the ultimate corporate example, uses ride-hail to commute.
"I currently don't own a car and I carpool to work with my co-founder in the mornings," Zimmer said.
Lyft’s surge in the market has been noted by the industry. “Lyft is currently gaining market share faster than they ever have,” said Ben Horowitz, a partner at Andreessen Horowitz who sits on Lyft’s board. The venture firm led a $60 million investment in the company in 2013, and despite selling some of its shares last year remains a major backer.
Jan Dawson with Jack Daw Research says Lyft’s prices are on par with Uber’s and the all-important wait times are competitive. “Lyft now in many places in the U.S. can be quite competitive in user experience,” said Dawson.