Did you get the $50 email?
Lyft is promising individuals in its 20 markets -- the biggest cities in the United States -- free rides. Fifty dollars in free rides. Well, $5 off each of your first 10 rides.
I received the email early this month. And last week, Bloomberg Businessweek ran a story explaining (among other things) the huge promotion, which is also spread across billboards and bus-stop advertisements around the country. Lyft is spending big to try to gain market share on its big-dog counterpart in the new American ride-hailing duopoly.
You know the big dog as Uber.
Lyft raised $1 billion early this year, and, according to Bloomberg Businessweek, "Lyft has promised investors to cap its losses at no more than $50 million a month, according to a person familiar with the matter who asked not to be identified because the plans are private," you know, to keep from bleeding too much money.
The strategy, of course, is to just gain on Uber in the United States, as a lot of Uber's expansion vision is turned to the east. (It is spending about $1 billion a year to grow in China -- a strategy its founder, Travis Kalanick says is working, but that its prime competitor there, Didi Kuwaidi, contests. And, by the way, Didi launched a partnership with Lyft last year, the results of which have yet to be seen, but which could make China-as-a-long-term-strategy even more of a nail-biter for Uber.)
What's interesting to come out of the report is actual numbers of market share in the United States. The fleet of pink mustaches completed 11 million rides in March. Uber's fleet completed 50 million. (To put that in context, New York City's yellow taxi fleet, as of 2014, completed 175 million rides a year -- that would have averaged out to about 14.6 million each month. And China's Didi says it completed 200 million rides in December of 2015 alone, in its vastly larger market.)
Meanwhile, both companies are swatting at regulatory flies in multiple locations. One big recent one: San Francisco is now requiring Uber and Lyft drivers to pay a $91 fee annually to register their own businesses (if they earn less than $100,000 a year). The city's treasurer began sending letters requiring the fee be paid in 30 days to 37,000 drivers in the city, according to the San Francisco Chronicle.
While Lyft works to grow, and is burning money at home to do so, Uber recently had some sunny news for its shareholders: It met its goal of reaching profitability by the second-quarter of this year. Yes, it has reached profitability -- by some measures, at least -- in the United States.
By some measures? Well, the report isn't completely clear, and taken from documents obtained exclusively by Businessweek. Uber, which takes 25 percent of each ride fare to cover the costs of maintaining or growing the company, apparently earned in February an average of 19 cents on every ride. But, what that 19 cents might not include is "interest, taxes, or equity-based compensation for employees," which, according to Businessweek, were not accounted for outside of that figure. So, Uber could still be earning far less than that (or spending more than that, still).
In any event, the cusp of profitability is a great place for Uber to be in the United States. It'll take a while for Lyft to get there at this rate -- although its recent push for new riders could help.
While it's easy to consider the Uber-Lyft battle as probably the greatest new duopoly of the decade, it's worth considering that the companies have very different missions at this point. As Uber focuses on all-around-the-globe growth, diversification of product, and ubiquity of its service, Lyft is allocating a lot of energy (the energy that isn't spent on domestic growth, at least) to making real in-roads into self-driving cars, and creating an infrastructure that could support them. It is banking on the idea that our urban transit needs will look a lot different in 15 years -- and it is making investments in that fact now.
It's crazy to think, but we probably won't know who's won the battle for market share until we're all being driven by robotic autos. It's going to be a long haul.