Eric Hiller’s company blog takes a look at the strategy and growth probability of the Ride-hail market from the perspective of the Lyft CEO.
Summary for Lyft CEO
Ride-hail is not going away, but it must to get profitable. You can try to ‘grow to profitability’, but as we have learned in the past, that is a risky proposition.
Uber is expanding, but it is already bigger than Lyft. Is that strategy profitable, and if it is, is there enough room for two players in it. Simultaneously, the path to profitability is getting harder with cities pushing back on Lyft and Uber, and as Lyft and Uber attract new customers, they may be less profitable riders. Consider another option: an alternative targeted and differentiated strategy:
Lyft should double-down on a long-term strategy of letting Uber attempt to own the market… but in reality, building the interstate for Lyft to toll
Continue to build cultural allegiance driver, rider, and city — which will differentiate and win in a commodity market in the longer-term, as Lyft captures share in an increasingly regulated environment
Follow to profitable geographies
Long term invest in autonomous public transport, leveraging massive experience with app / software and routing vehicles to individuals.
Read the full article, Lyft vs Uber – What if You Are Driving Lyft as a Company?, on the Hiller Associates website.