Lyft pushes feel-good factor as Uber reels
Lyft pushes feel-good factor as Uber reels
Marco della Cava, USA TODAY 5:06 a.m. ET March 26, 2017
SAN FRANCISCO — As Uber grapples with accusations of sexism, Lyft is making more moves to position itself as the feel-good ride hailing company to consumers who may not be familiar with the smaller rival.
Lyft announced Sunday that it would soon be rolling out Round Up & Donate, an opt-in app feature that allows riders to automatically route rounded-up ride charges to charity.
“We’ll be launching with one charity, then on-boarding more with a focus on being unique in each of our communities,” Lyft vice president of marketing Melissa Waters told USA TODAY. She declined to name the debut charity.
Lyft currently operates in 300 U.S. cities. Uber is in nearly 600 cities and more than 80 counties. Lyft's value is pegged at $7 billion while Uber’s is ten times that.
The new Lyft feature comes on the heels of an announcement last week that it had doled out more than $200 million in tips to its drivers. Uber does not allow tipping on its app, a feature that many drivers have requested.
Waters dismissed the notion that Lyft was altering its marketing strategy to take advantage of Uber’s troubles, which include revelations about a discriminatory work environment and a dash-cam video of CEO Travis Kalanick berating a driver.
“We won’t be swayed by whatever is happening,” she said. “We’re operating based on our own values.”
That doesn't mean Lyft is the white knight in this escalating battle, says Ryan Price, executive director of the Independent Drivers Guild, which represents and advocates for 50,000 ride-hail drivers in New York City.
"Lyft recently cut driver pay in a race to the bottom with Uber and has refused to meet with the drivers guild," he says. "So while their tipping policy is great, the picture is mixed for drivers."
Nonetheless, from a branding perspective the timing is right for Lyft to aggressively promote itself as the anti-Uber, says Stanley Hainsworth, CEO of branding consultancy Tether.
“With any great brand, there are two sides, who you are, your mission and values, and what you do” says Hainsworth, a veteran of both Nike and Starbucks.
“What Uber is, is visible, but the who-they-are is impacting them,” he says. “Lyft has much less awareness on both fronts, so it’s a great time for them to strike. Some people are looking for an alternative, so it’s best to put what you’re about out there.”
Round up & Donate, which kicks off in a few weeks, was conjured up shortly after Lyft announced on Jan. 29 that it was donating $1 million over four years to the American Civil Liberties Union in the wake of President Trump’s first immigration ban.
At the time, Lyft CEO Logan Green tweeted that the ban targeting travelers from majority-Muslim nations “is antithetical to both Lyft’s and our nation’s core values.”
The new feature was produced “in an exciting few weeks after that ACLU announcement,” says Henrique Saboia, Lyft's marketing lead on the donation concept. “The idea was to build an experience into our app that would allow our community to do more and give back.”
It remains to be seen if these initiatives will help second-place Lyft gain ground on its better funded rival despite Uber's glaring issues.
For his part, Kalanick has vowed to root out any sexism at his company, find a COO to partner with him on change, and recently visited with civil rights leader Jesse Jackson to talk about the importance of employee diversity.
In fact, some evidence suggests that Uber’s business has yet to suffer from its internal issues. In a recent call with reporters, Uber’s North American operations chief Rachel Holt noted that the first 10 weeks of 2017 had seen broad ridership gains over the year-ago period.
Holt also admitted that Uber had “underinvested in the driver experience” and would be addressing a range of issues soon, although the matter of tipping was not mentioned.
But credit card spending data compiled by TXN Solutions suggests Uber’s woes, which include a #DeleteUber campaign, could be taking a toll.
While Uber had 83.5% of the national market in the weeks leading up the Jan. 30 #DeleteUber campaign, its grip has loosened in the tumultuous weeks that followed, according to TXN.
Between Feb. 20 and March 3, Uber’s market share had slipped to 79%. Ex-employee Susan Fowler published her devastating blog post about the company on Feb. 19.
SimilarWeb, which tracks consumer use across desktop and mobile devices, shows Uber experienced a 22% decline to 85 million site/app visits between Jan. 17 and Feb. 17, which could have more to do with cyclical seasonal downturns. That said, Lyft's traffic decline over the same period was only 11% to 14 million visits.
Ironically, part of Lyft’s problem could be that it’s too friendly. The company started as peer-to-peer play that had grown out of a college ride board; that contrasts with Uber’s start as a way to hail a town car when its drivers were idle.
The giant pink mustaches that adorned the grilles of Lyft cars have been replaced by more subtle dash-mounted digital hardware, but for some riders the perception exists that a Lyft ride requires social interaction where Uber trips are efficiently impersonal, down to the inability to tip.
Lyft’s Waters acknowledges as much. “It’s funny how that (origin story) legacy has stayed with us for five years, but I’d say for the most part people know they don’t have to behave differently” while in a Lyft, she says.
But, she adds, the feedback shows that riding in a Lyft remains anchored to positive social interaction, something the company may well continue to exploit as its battle with Uber over U.S. riders intensifies.
“People show up for our ride,” she says, meaning they are eager to interact. “Our drivers and passengers treat each other well, and they’re happier.”
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