Uber and Lyft have been working on parallel tracks for a very long time. Drivers moonlight for each companies, clients toggle between the 2 apps, and regardless of Lyft’s efforts to place itself as a “woke” different to Uber, the 2 companies primarily function equivalent ride-sharing companies within the US.
Of course, there’s loads to differentiate the 2 from each other. Uber is international, whereas Lyft solely operates in North America. Uber dominates ride-sharing, taking in roughly 70 p.c of US riders spending and leaving Lyft with the remainder. But this week’s earnings studies revealed a a lot sharper divergence between the 2 companies than we’ve seen prior to now, particularly round aspect hustles.
Uber’s most important aspect hustle is supply. Food and different supply bookings within the fourth quarter grew 33 p.c yr over yr. The firm’s CEO, Dara Khosrowshahi, informed buyers that Uber’s supply enterprise reported its first quarterly revenue, together with supply within the US, and that “Uber Eats became the fastest-growing delivery player in America.”
Lyft, in the meantime, has a small business-to-business supply operation however has no plans on making an attempt to deal with the a lot larger and riskier world of shopper supply. “As we’ve said for many years, we’re a transportation-focused company,” Lyft president John Zimmer mentioned in his firm’s earnings name. “We want to have one main consumer that we’re building for. And again, we will not build a consumer-facing marketplace for groceries or food.”
What Lyft has that Uber doesn’t, although, is a thriving micromobility enterprise. Lyft claims to be the biggest electrical bike operator in North America thanks to its bike-share enterprise, together with the extraordinarily common Citi Bike in New York City. How common are we speaking? According to Zimmer, Citi Bike was the “25th most-ridden transit network in the United States.”
“To put this in context, last year, more people took rides on Citi Bikes than on BART, the Bay Area’s regional transit system,” he added.
In reality, bike-share is a faster-growing enterprise for Lyft than ride-share. “Consider that in each quarter of 2021, the number of riders using our bikes and scooters in addition to ride-share consistently grew faster than ride-share-only riders,” mentioned Zimmer.
Uber has largely deserted its two-wheeled operations, promoting its Jump bikes to Lime and ditching its electrical scooter enterprise as effectively. Uber stays an investor in Lime, and clients can lease Lime’s e-bikes and mopeds via Uber’s app. But for all intents and functions, Uber is out of the micromobility sport.
Another key distinction between the companies is their method to autonomous autos. Uber and Lyft had been each initially bullish about AVs, buying startups, hiring hundreds of engineers, and making huge guarantees about robotaxis on their platforms. But as prices ballooned and timelines stretched, each companies ultimately determined to minimize their losses. Uber offered its AV enterprise to Aurora in 2020, whereas Lyft divested its self-driving unit to Woven Planet, a subsidiary of Toyota, final yr.
But Lyft nonetheless sees a chance in remaining in shut proximity to the AV world. The firm made a take care of Ford-backed Argo.ai to put lots of of the corporate’s autonomous autos on its platform. Zimmer mentioned he expects the partnership to scale to 1,000 autos throughout a number of markets by 2026.
“The Lyft network is a continuously improving product, stemming from a decade of engineering investments in billions of real-world rides,” he added. “As a result, AV providers are increasingly working with us to help advance and commercialize their technology.”
There had been zero mentions of AVs in Uber’s earnings name — which shouldn’t come as a complete shock. One of the corporate’s self-driving check autos struck and killed a pedestrian in Tempe, Arizona, again in 2017 in what many name the primary AV fatality. Federal investigators mentioned security lapses at Uber had been partially to blame for the demise. The firm caught with its AV challenge for a number of years after the incident earlier than ultimately deciding to divest itself totally.
It’s not incorrect to see Uber and Lyft as two sides of the identical coin. Both companies nonetheless derive most of their income from automotive journeys. Both are extremely invested in subscription companies as a means to construct loyalty amongst clients and stop app-switching. And each are nonetheless embroiled in tense debates over gig work and driver classification.
But this most up-to-date quarter revealed that the way forward for each companies may very well be extra different than initially anticipated.