Last updated on April 25th, 2018 at 07:25 am
Lyft ended 2016 stalled. Although the company narrowed its losses in 2016, it’s market share was stagnant at under 20%.
What a difference a year can make!
In 2017, Lyft successfully expanded to over a hundred new markets, more than doubled its ridership, and secured a huge investment and strategic partnership with Google.
On the other hand, Uber’s 2017 probably could not have gone worse.
Although Uber lost $3 Billion dollars in 2016, they still had over 80% of the U.S. rideshare market and a market value of $70 Billion.
Uber’s current market value is debatable, but it’s definitely lower than $70 Billion. Even worse, Uber’s market share has been shrinking all year.
Although Uber has trimmed losses, they’re still on track to lose around $2.5 Billion in 2017. Lyft will probably lose around $600 Million in 2017.
Here’s a quick rundown how 2017 went for both companies.
Lyft’s Banner 2017 Milestones
Lyft’s market share is on track for a 61% increase in 2017. This should give the company close to 30% of the U.S. market by the end of the year.
Lyft is currently giving over 1 million rides per day, more than double its 2016 per day average.
Lyft recently secured a $1 Billion investment from CapitalG, Google parent company Alphabet’s growth equity fund.
Overall, 2017 was a massive success for Lyft.
In some of the larger markets, they now have 40% of the market. However, in a number of smaller and midsize markets, Lyft is still hovering around 20% market share.
Given that Lyft loses substantially less money than Uber, and has much lower overhead costs, it ends 2017 well positioned to make further gains in 2018.
Uber’s Disastrous 2017
2017 was the year Uber’s repeated bad behavior and abhorrent corporate culture bit the company in the ass. Here’s a quick rundown of Uber’s no good, very bad year.
Taxi drivers at JFK airport went on strike to protest Trump’s Muslim ban. Uber decided to halt surge pricing at the airport during the strike, a move many viewed as support for the ban.
In response, people began deleting Uber from their phone and posting about it using the hashtag #deleteuber. It’s estimated more than 200,000 people deleted the app.
Former Uber Engineer Susan Fowler published a damning essay detailing the rampant sexism and sexual harassment that was commonplace at the company.
Alphabet (Google’s parent company) sues Uber for stealing self-driving car documents. A Google engineer, Anthony Levandowski, downloaded 14,000 documents before leaving the company. Levandowski then founded a self-driving truck startup, Otto, later acquired by Uber.
Top Uber executives Amit Singhal and Raffi Krikorian leave the company.
This video surfaces of Uber CEO Travis Kalanick berating a driver.
Uber President Jeff Jones, along with top execs Brian McClendon and Ed Baker, resign. At this point, Uber has no President and no COO.
Uber publishes its first diversity report. The numbers show a company that is anything but diverse. In fairness, the numbers aren’t any better or worse than the average tech company.
Uber hires Eric Holder, and the Perkins Cole law firm to investigate sexual harassment claims at the company.
That former Google engineer, Levandowski, pleads the fifth in the Alphabet lawsuit. He then steps away from his role as head of Uber’s autonomous vehicle program.
Uber is unsuccessful in its bid to send the Alphabet lawsuit to arbitration. I guess if you’re a multi-billion dollar company, you can get out of arbitration with Uber.
The Justice Department announces it’s investigating Uber for using a piece of software called “greyball” to avoid local and state regulators.
Another high ranking Uber exec, Gautam Gupta, leaves. Uber now has no President, COO, or CFO.
At the end of the month, Uber fires Levandowski.
Uber fires 20 employees as part of Perkins Cole’s ongoing investigation into sexual harassment at the company.
Uber fires Eric Alexander, its top exec in Asia. He had obtained the confidential medical records of a woman who was raped during an Uber ride in India. He then proceeded to show those records, to SVP Emil Michael, and Kalanick. Other executives at Uber also saw the confidential medical records.
Uber accepts all the recommendations of the Holder Report compiled by Perkins Cole. Uber releases the recommendations, but not the report itself. The report recommends firing Emil Michael.
SVP Emil Michael resigns.
CEO Travis Kalanick takes a leave of absence from the Uber.
David Bonderman, an Uber board member and all around idiot, resigns. Believe it or not, at a board meeting to discuss rampant sexism at the company, this schmuck made a sexist joke. Smdh.
The FTC launches an investigation of Uber’s privacy practices.
On June 20, Uber launches 180 days of change, a program to improve its standing with drivers.
Also on June 20, CEO Travis Kalanick resigns.
Benchmark Capital, a major Uber investor, sues Travis Kalanick in a bid to have him removed from the board.
As it turns out, Uber knowingly leased recalled vehicles to drivers in Singaport.
Uber hires a new CEO, Dara Khosrowshahi, who was the CEO at Expedia.
Uber announces that they will no longer track riders after their ride ends.
The Justice Department announces a preliminary probe into allegations that Uber may have violated the Foreign Corrupt Practices Act, by bribing people in some of their foreign markets.
The Regulator Transport for London (TfL) strips Uber of its operating license.
Uber pulls out of Quebec after the province passes tougher rideshare regulations.
Alphabet says it wants $2.6 Billion from Uber for stealing its stuff.
Reports surface of a pending deal in which Softbank will invest up to $10 Billion in Uber. The deal would value Uber at $50 Billion, or $20 Billion less than Uber was worth at the start of the year.
Uber’s board changes its governance rules, severely limiting former CEO Kalanick’s power.
Uber appeals the London decision that stripped it of its operating license.
Good Universe buys the rights to ex-Uber engineer Susan Fowler’s story.
Data shows Uber is losing ground among business travelers.
Softbank finalizes a deal to buy at least 14% of Uber.
Uber loses its appeal of a case in the UK that ruled it’s drivers were workers, not independent contractors. As such, they are entitled to overtime and benefits like vacation pay.
Final Take: What Uber & Lyft need to do in 2018
Uber & Lyft are both looking to IPO in the next couple of years. Here’s what both companies should do next year to prepare for their IPO.
Uber needs to stop hemorrhaging money. They lost $3 Billion last year, and will probably lose around $2.5 Billion this year.
To get closer to profitability and go public, Uber is probably going to have to lay off some employees in some markets. Unlike Lyft, Uber overhired as it was building up its operations. In 2016, they doubled their number of employees. As a result, they have a massive employee headcount.
They also have massive overhead because they opened offices in too many cities. To rectify this, Uber needs to close some offices and centralize operations regionally.
Besides cutting costs, Uber needs to continue to repair its brand, and its relationship with drivers. While the new CEO is off to a good start, he’s got his work cut out for him.
While Lyft had a great 2017, they still have a lot of work to do.
Lyft’s main goal for next year should include strengthening its operations in suburbs, and mid-size markets. Uber is still dominant in both of those areas. Lyft drivers main complaint in too many markets is that it’s just not as busy as Uber.
Lyft should also concentrate on improving the driver app. Uber’s driver app is still superior.
Moreover, many of the improvements Lyft made to the app in 2017 were simply reactions to improvements Uber made. To win 2018, Lyft must make proactive and independent improvements to the app. In other words, stop following what Uber does.
Additionally, Lyft should modify its bonus structure to attract more part time drivers. Currently, its Power Driver Bonus mainly appeals to full time drivers. Part-time drivers simply cannot meet the ride requirements for the bonus.
Finally, both companies should also raise driver pay, but that’s not likely to happen.
What changes do you think Lyft and Uber should make in 2018? Let us know in the comments.