October 15, 2019
Are you loyal to Starbucks or Dunkin Donuts? Rite Aid or CVS? Target or Walmart? Uber or Lyft?
The act of decision making often comes down to the ability to decide between two or more alternatives.
What’s Our Choice?
It comes down to the value we believe we are getting for the price we pay. Does Starbucks really have better coffee than Dunkin? That’s a matter of personal opinion, but if we were to look at the beans getting roasted to make your Venti Latte, I would be willing to bet that they are probably not too different.
Psychologist William James said it best,
“Thoughts become perception, perception becomes reality. Alter your thoughts, alter your reality.”
The reality of the decision-making process is that Dunkin and Starbucks, or any of the other compared companies listed, may not be very different at all.
Yet, their marketing makes us perceive that they have vastly unique offerings, quality, or price ranges.
You wake up and subconsciously drive to your favorite coffee shop because you believe that the decision you made is the better of alternatives. After work, you decide to go out to your favorite bar with some colleagues to order your typical dirty martini and find yourself riding back home in the backseat of an Uber.
But Why Uber?
Just as facial tissues became Kleenex, bandages became Band-Aids, searching something online became Googling, using a ride-sharing service is now considered “Ubering.”
As of August 2017, Uber controlled nearly 74.3% of the rideshare market, while Lyft controlled only 1/3 that amount — or 23.4%.
There’s no question that Uber is dominating the market right now… but for how long will this continue?
Uber has been facing some serious heat over the past few months after multiple allegations of workplace harassment and fraud stemming from now-former CEO, Travis Kalanick.
Despite serious accusations like this, how many consumers will truly switch from Uber to Lyft if they weren’t directly affected by the fraud or harassment?
I doubt too many.
The switch will come as soon as the consumer feels they aren’t receiving the same value from Uber that they once did, OR if Lyft is able to deliver its value proposition better.
Why choose Uber?
Uber dominates the current rideshare market because of two reasons:
First, they were the pioneers of the ridesharing model and the first to market, allowing them to achieve higher customer awareness and acquisition rates.
Consumers jumped on the app simply because it was a better alternative to their other option — hailing a taxi on the side of the street. At that point, they didn’t give much thought to the aesthetics of the app or to the special promotions they had with outside brands. If the app worked and provided you with a driver at a reasonable price and within a reasonable time frame — they jumped on board.
Secondly, due to the fact that they were the first to create such a revolutionary new platform, Uber found itself pulling in money from some of the largest and best-known investors in Silicon Valley. To be exact, Uber has raised over $11 billion dollars to date. By comparison, Lyft has onlyraised $3 billion.
Keep in mind, though, having all the money in the world does not necessarily set you up for success.
After having raised nearly $1 billion in venture funding, and receiving publicity from the likes of President Barack Obama, the once-praised solar technology startup closed its doors in 2011.
In the world of Uber vs. Lyft, what are customers actually looking for from these giants?
How are Uber and Lyft actuallybranding themselves to compete with one another?
At the end of the day, both apps will get you from point A to point B. Both have fairly transparent and up-front pricing. Both also have a very similarly functioning app.
Today, for most consumers the decision to choose between Uber and Lyft can usually come down to two factors: Brand Awareness & Brand Loyalty
Just as you go to Rite Aid over CVS to grab a pack of batteries, despite being the same cost and the exact same product, you chose Uber over Lyft because it’s what you are most accustomed to or it’s because sometimes it feels like Uber is talked about EVERYWHERE.
With the limited flexibility to lower prices without putting themselves out of business, Uber, Lyft, or any other variation of these services, will be forced to further compete on the value they are giving consumers.
What is their value?
In the world of personalization, everyone is expecting the products and services they use to be tailored and customized towards them. How are brands like Uber and Lyft able to personalize what some would simply just consider a taxi ride?
I’ll tell you it’s not easy!
Lately, brand partnerships have become a sort of flagship in Lyfts strategy to set themselves apart as more than just a ride-hailing app.
For example, take their relationship with JetBlue Airlines. Connecting your Jetblue and Lyft accounts will yield you 30 TrueBlue points for every airport ride you take using Lyft, along with $15 off just for signing up and taking your first trip.
So now, your next vacation may look a little bit more like this…
Lyft provides you with transportation to the airport that you booked through their connection on Google Maps. Once there, you’ll board the plane that was booked using discounted prices through Lyft’s partnership with the airline. Once landed, your autonomous driving Lyft-branded Ford will pick you up to bring you to your hotel. Later that evening you find yourself in a Lyft, once again, and this time on your way to the nearest TacoBell.
This will be the strategic goal of businesses both large and small in the years ahead. Just as Apple has begun to transform its iconic retail locations into what they now call a “town square” to bring consumers an entire experience, Uber and Lyft must transform the way consumers perceive their services.
They aren’t ridesharing platforms, they are a full-service transportation provider.
“GrowthLab has provided invaluable tools and advice to Tizra’s management team, helping us scale smoothly and confidently.“
Abe Dane, CEO at Tizra
“GrowthLab earns my highest praise for professionalism and affordability. I have hired them to improve our financial reporting... they were hands-on, patient, and able to move our organization... to an up-to-date and easy-to-use system.”
Christine Earley, Ph.D. Board Member & Treasurer at NAMI
“…well-versed in all areas of finance, providing strategic guidance for early- stage start-up businesses… possesses a great work ethic, deep insights into financial analysis and modeling, and a collaborative approach to his work. An asset to any team.”
Andy Levitt, Founder & CEO at Purple Carrot
“GrowthLab is a tremendous partner for FluidSense. Allowing our core team to focus on engagement and development, while GrowthLab focuses on the financial and bookkeeping aspects.”
Jeff Poole , COO at Fluid Sense
“GrowthLab has provided invaluable tools and advice to Tizra’s management team, helping us scale smoothly and confidently.“Abe Dane, CEO at Tizra
“GrowthLab earns my highest praise for professionalism and affordability. I have hired them to improve our financial reporting... they were hands-on, patient, and able to move our organization... to an up-to-date and easy-to-use system.”Christine Earley, Ph.D. Board Member & Treasurer at NAMI
“…well-versed in all areas of finance, providing strategic guidance for early- stage start-up businesses… possesses a great work ethic, deep insights into financial analysis and modeling, and a collaborative approach to his work. An asset to any team.”Andy Levitt, Founder & CEO at Purple Carrot
“GrowthLab is a tremendous partner for FluidSense. Allowing our core team to focus on engagement and development, while GrowthLab focuses on the financial and bookkeeping aspects.”Jeff Poole , COO at Fluid Sense
FROM THE BLOG