In the US, ride-hailing company Lyft Inc. operates in close to 400 cities, in all 50 states, and is reachable by 95% of the population. Now, Lyft has made its home in Toronto with its December launch, much to the dismay of its ride-sharing rival, Uber.
Choosing Toronto to be its first international expansion was a “no-brainer” according to Tim Houghton, general manager for Lyft in Toronto. 50,000 Toronto users have already downloaded the app, before the service was even available in the city. It’s not just Toronto; Lyft will operate its services between Hamilton and Oshawa, and as far as Newmarket. Lyft Line, much like UberPool, allows passengers heading to the same location to share a ride for a discount. As well, thousands of drivers showed interest through the company’s US website before the recruiting process began.
Both apps are incredibly similar. Once the user signs up, they input their pick-up and drop-off locations. The app then offers an estimated time of arrival when the car will pick the individual up and for when it will drop them off at the destination. The fare is calculated ahead of time. Prices between the two companies are often competitive, however Lyft’s car-pooling service (Lyft Line) is often cheaper than Uber’s version (UberPool). Lyft also shares Uber’s surge pricing element. During peak hours, Uber expresses it’s pricing as a multiple of the expected fare (3X, 10X, etc.), while Lyft’s “Prime Time” shows itself as a percentage increase in the regular fare.
Houghton said that the company plans on “winning customers with a more people-centred experience …Where we really set ourselves apart is how we treat people.”
Uber is top dog when it comes to ride hailing services, but its long trail of scandals and controversies, including a history of sexual harassment within the company and allegations of poor treatment of drivers, has left a bad taste in peoples’ mouths. Neither company shares ridership statistics, but analytics firm TXN Solutions have insight into consumer trends using credit-card transaction data. According to TXN, Uber still dominates market share in the US. However, Lyft has benefited from the plethora of allegations against Uber that fuelled the #deleteUber campaigns. From January to the end of February 2017, TXN reported that Uber dropped from 83% of ride-sharing spending to 78%, while Lyft went from 16% to 21%. Later, they reported that even frequent Uber users increased their spending on Lyft by 25%.
Although Uber may be the dominant of the two services, Lyft has been around for longer. The Lyft app launched in 2012 while Uber started three years earlier in 2009. However, Lyft was originally a side project for Zimrides, a carpooling service founded in 2007. Lyft was the first to test ride-sharing in San Francisco and has had tipping as an integral part of its service, distributing more than $350 million in tips to drivers, when Uber only started tipping in 2017. And Lyft Line was introduced in 2014, right before Uber launched UberPool.
Uber isn’t the only competition, however. Facedrive, yet another ride-hailing service, launched at the end of October 2017, servicing Toronto and the downtown core. The question is whether the already-congested streets of Toronto need the addition of a few thousand more cars. Kristine Hubbar, operations manager of Beck Taxi, said in an interview that the King Street vehicle shutdown was an effort by the city to encourage people who normally drive, to take public transit.
“My biggest problem is how absurd it is that we’re taking big steps like the King Street shutdown, basically in order to encourage people onto mass transit, while we’re doing something that infers otherwise,” she said according to HuffingtonPost.ca. However, she doesn’t see taxi drivers protesting Lyft like they did Uber.
Nevertheless, Mayor John Tory welcomed the entrance of Lyft to the Toronto market, saying, “I hope (Lyft) compete fairly and that people understand they have a greater choice as to how to get around the city which is, I think, nowadays a very good thing.”
Helen Jacob | Staff Writer