Could Uber and Lyft be too good to be true? The ride-hailing apps are generally simple, reliable and economical. They’ve also been great at destroying the taxi industry. Both companies are closing in on their initial public offerings and are looking at valuation of $72 billion in August for Uber and $15 billion in June for Lyft, according to an article published in the Wall Street Journal. However, their lack of profit and multi-billion dollar losses do not prove either company ready to pursue IPOs and seek public investors.
This could mean an increase in prices for consumers of the companies’ services. While Uber may succeed in relying on its global use as a means of profit, Lyft focuses on North America.
While the companies have the same premises, their strategies remain distinctive. Uber’s self-driving cars, food and retail delivery, e-bike and scooter rentals and trucking and freight management services indicate that its potential is its greatest feature. This has still created issues, such as when a pedestrian was killed by a self-driving car in Arizona. Meanwhile, Lyft may have less unique services but still works to be a reliable, consistent service. Between October 2017 and September 2018, Lyft expanded into 20 new markets, illustrating that it has a commodity consumers want that Uber does not seem to deliver.
Lyft also has another advantage – it has not needed to regain the public’s trust. Uber’s former CEO Travis Kalanick resigned in 2017 after major investors demand he leave due to sexual harassment claims within the company. Uber’s new CEO, Dara Khosrowshahi, has had to work to change company culture and regain public trust.
While Uber develops technology, Lyft focuses on its core service and expands quickly. At this point, Lyft seems the better bet. It is focused, reliable and growing. Uber has proven a wild card – while it has tremendous public recognition, its public relations fiascos emphasize its inherent risk. It is probably not a coincidence Uber and Lyft both filed for an IPO with the Securities and Exchange Commission on Dec. 6, 2018. Lyft is catching up to Uber in maturation, even though it has a smaller geographical base. This duopoly is in close competition, and though Lyft may appear to be an underdog due to its relative youth, it’s on the upswing.