By Sarah Whitty
Do you remember when Lyft, the innovative, highly disruptive ride-hailing company, first appeared in 2012, their cars sporting bright pink moustaches recognizable from blocks away? The moustache may have gone the way of a transparent window sticker, but the rest of the company’s defining features have remained.
In fact, Lyft was not first to market. Uber pioneered ride-sharing, having founded the company in 2009 with a focus on luxury vehicles. Over time, Uber recognized the potential of targeting a larger market by catering to people seeking lower priced, regular vehicles. But, Lyft had already foreseen that need leading to both companies jumping into the non-luxury industry in 2012 – Lyft anew, and Uber with new services.
Now five years later, Lyft launched its service in Toronto in December 2017 – the first time it has taken on its much larger rival Uber outside of the United States.
But of course, operating in Canada since 2014, Uber had once again made that leap before Lyft. Unfortunately, Uber’s entry into the Canadian market has been anything but smooth. The company has been riddled with controversy from government bans to taxi driver riots, claims of discrimination within the head office, and the 2016 data breach. And Lyft is taking full advantage of Uber’s failure to address current issues by positioning themselves as a friendlier version of Uber.
Consequently, Uber’s share of spend in the USA from January to the end of February of 2017 decreased significantly. Where Uber’s share dropped from 83% to 78%, Lyft’s rose from 16% to 21%. In June, most of the defectors came from the largest cities in the USA, which averaged 3% drops in Uber spend. Even heavy Uber users increased their spending on Lyft by 25%. And, in San Francisco, where both companies are headquartered, Lyft boasts an impressive 40% of the ride-sharing market.
As Lyft earns share in the USA and Uber suffers in Canada, this ought to be the perfect time for Lyft to strike in Canada. On launch day, the company’s Toronto general manager Tim Houghton told a news conference that “This is a monumental day for Lyft,” when Toronto Blue Jays pitcher Marcus Stroman hailed the company’s first Canadian ride to deliver toys to a local hospital. However, as you can see from the Google Trends chart, their entry into Canada has been quiet.
To turn up the pressure cooker and really be the friendlier service, Lyft jumped on the opportunity to reach out and help struggling Toronto commuters. They matched TTC (the public transit system in Toronto) fares during February while portions of the subway system were closed for scheduled maintenance. Customers paid a flat fare of only $3.25 per ride to or from any stop on the Line 1 subway station.
More than 50,000 people in Toronto, Canada’s largest city, downloaded the Lyft app in 2017. How this will shake out in terms of who people ultimately choose as their ride-hailing provider is yet to be decided. While the key to disruption is to be the disruptor, companies need to monitor their competitors closely, and ensure they know what consumers truly need.