SAN FRANCISCO (Reuters) – Lyft Inc (NASDAQ:LYFT) continues to be challenging larger ride-hailing rival Uber Technologies Inc for years by cultivating images of caring more for its drivers, riders as well as environment. When the company debuts in the stock market on Friday, it hopes to convince investors the "nice guy" image can pay off.
"In the early days, people misunderstood, 'Oh everyone could be the nice guys. Everyone are likely to get crushed by way of a more competitive player," Lyft President and co-founder John Zimmer told Reuters.
"We said, 'No, we're very competitive but treating our employees well, treating our drivers well, treating the regional communities that people talk with respect, which is great for business."
Lyft exceeded market expectations with its initial public offering (IPO) on Thursday, raising $2.34 billion and fetching a valuation of $24 billion.
That continues to a part of the $120 billion valuation that investment bankers have told Uber it may possibly wind up within its IPO in April, because of its international presence and expansion into sectors for example food delivery and freight hauling.
Despite its bigger size, Uber has developed in lock-step with Lyft, adding new varieties of rides like car-pooling, changing fares purchasing autonomous vehicle development and adding scooters and bikes.
As a consequence, Lyft and Uber look quite a bit alike. Both companies were losing profits, subsidizing rides to increase business. But Lyft is making inroads against Uber in the us, boosting share of the market to 39 percent as of December from 35 percent during the early 2018.
Some of Lyft's gains are caused by Uber's woes. These continues to be recuperating from a series of scandals in 2019, including allegations of sexual harassment that is generated by female employees, the forced resignation of the company’s top dog along with the departure of other senior executives, and it is use of illicit software to deceive regulators.
A #DeleteUber campaign surged on web 2 . 0. The negative publicity helped Lyft attract new drivers and riders without having to spend much on marketing.
Lyft, which are operating in the United States while some Canadian cities, also moved to boost its business, adding more than 100 new cities since 2019. It targeted socially conscious millennials who definitely are focused on harming the planet by buying a car.
"We’ve got barely scratched the outer lining of helping shift the modern world from your car ownership model into a transportation-as-a-service model," Lyft's CEO Logan Green, who is another co-founder, told Reuters.
Lyft's branding as the warmer, more caring alternative to Uber dates back for their launch in 2012. It borrowed marketing strategies from Southwest Airlines (NYSE:LUV) Co and Starbucks Corp (NASDAQ:SBUX), hoping to portray itself as friendly and customer-centric, and likened itself into the championship Golden State Warriors pro basketball team, according to Lyft executives.
'Prices are MAIN FACTOR'
Anna-Marie Wascher, CEO and founding partner at Flat World Partners, an institutional advisory and asset management firm and early Lyft investor, said market share growth came as "consumers happen to be more discerning into their choices," and recognizing the gulf in company culture and values backward and forward firms.
While some Lyft riders have changed into loyalists as a consequence of its branding efforts and Uber's problems, many say they still select the app while using lowest price.
"(My choice) draws on price and estimated amount of arrival. However would say pricing is the magic formula," said John Nickele, web-sites a motorbike in San Francisco and spends about $30 per week on Lyft and Uber.
Both Lyft and Uber are actually criticized for causing congestion in cities and creating hazards to bicyclists and pedestrians. A survey by the S . fransisco County Transportation Authority found that half of new congestion in Bay area from 2010 to 2019 was from ride-hailing.
Lyft said today it is going to provide a minimum of $50 million per annum to cities to help with transportation infrastructure, fight climate change and provides free rides to individuals in need of help, which include victims of rental destruction.
The first project are typically in California, where it can offer rides to individuals who provide services towards the homeless.
Lyft's and Uber's relations making use of their drivers will not be without strain. Lyft drivers now held protests in S . f . and La over the things they call wages that happen to be way too low to thrive on. The provider also faces a slew of arbitration claims and lawsuits from drivers who claim they’re misclassified as independent contractors and owed back wages and reimbursement for expenses.
Zimmer told Reuters he believes the company's ongoing work supporting drivers might help it stand apart from Uber. He was quoted saying he still attends meetings with drivers to learn their grievances and exchanges texts along with them.