How Lyft Gained Traction in an Uber-Dominated Market

When we think of transportation technology today, two startups usually come to mind: Uber and Lyft. However, just a little over a year ago, this was not the case. Uber was dominating the entire ride-share market and Lyft was viewed as an Uber “wannabe.” So, how has Lyft gained enough traction in this market that it is now viewed as a legitimate substitute for Uber instead of an underdog? Here are some of the strategies, particularly having to do with marketing, that Lyft used to gain so much attention and success.

Taking Advantage of What Makes Them Different

One of Lyft’s principal strategies to hold its own with Uber is emphasizing how it is different from Uber- not necessarily better. Overall, Lyft seems to be going after a different demographic than Uber- one that is more interested in fun and affordability that luxury. This divide is seen in the homepages of their respective websites:

Uber’s website is less colorful, has a less youthful subject, and has a more assertive message: “Your day belongs to you.” Meanwhile, Lyft’s passengers look younger and more playful, and the website has a less formal feeling with a different font and brighter colors. Lyft also emphasizes the driver-passenger relationship more so than Uber and this can be seen in the use of the driver in the Lyft website’s homepage photo while Uber’s homepage photo is only of a passenger. It is clear that Lyft wants to convey a more fun and friendly experience, and this generally attracts a younger and less professional audience than Uber. Lyft CEO Logan Green has called his rideshare service one that is “not for highrollers,” while Uber is evidently for a more professional and often more affluent crowd.

Making a Ride Experience Completely Different from Uber’s

One of Lyft’s well-known taglines is “Your Friend with a Car.” This is the kind of experience that Lyft tries to recreate with every ride. Drivers are encouraged to interact with passengers as soon as they enter the car, and they never aim to keep it quiet and “professional” like many Uber drivers. Part of this stems from the fact that Lyft does not offer a black car service like UberBlack, so all Lyft drivers overall are less formal in their approach. Driver-passenger interaction is essential to Lyft’s culture, and passengers are encouraged to DJ during the ride and sit in the front. This differs greatly from many Uber rides, where the driver often opens the door for the rider to sit in the backseat. Lyft’s signature pink mustache embodies this jovial experience, and it represents “a smile,” Lyft founders have said.

It is clear that both of these rideshare services have very different marketing strategies that make them appealing for different demographics. Lyft saw an opening in the market that Uber was assumed to already have dominated, and this has led to an explosion of success for Lyft. While Uber, the veteran company, still has a greater global market share and higher revenue than Lyft, Lyft has been growing at an impressive rate; At the beginning of 2015, Lyft was logging about 2.5 million rides per month- at the end of 2016, it is expected to have about 17 million rides per month. Uber has more overall rides due to the fact that that it is available in more cities than Lyft; however, in cities where both companies are very prevalent, like San Francisco, the rides are divided almost exactly equally between the two. The data on Lyft’s growth serves to show that this company is on its way to becoming a rideshare giant, mainly thanks to unique marketing strategies.

Written by Stanford Marketing's Emily Quinn