The sharing economy is big these days, with new companies popping up -- and fading away -- almost daily. And there’s big money to be made, both for the companies providing the platform and for the people using them -- think of Uber and Getaround for transportation, AirBNB for accommodations and LendingClub for loans. Lyft is in this same group and, although significantly smaller than Uber, is still a unicorn (a private company worth over a billion dollars).
So how does a (relatively) small company like Lyft compete with a giant like Uber when their products are essentially the same? They compete with community and culture.
Lyft was founded on community
Let’s paint a quick picture:
You’re running late and need to get to work. A car with a fuzzy pink mustache attached to the grill pulls up outside your house. You grab your bag, rush out, open the passenger door, hop in and bump fists with the driver. Then you’re on your way to work as you chat with the driver about the inspirational quotes she taped to the dashboard.
Does this sound like a business transaction or friendship? When Lyft first started, they wanted every ride to look like that -- friendly, fun and connected.
Rather than creating a sense of traditional hierarchy -- driver in the front, passenger in the back, no conversation, money exchanged -- Lyft started by creating a different experience. An experience that emphasized friendship, quirkiness and authenticity. While Uber intentionally emphasizes luxury and service, Lyft has done the exact opposite by highlighting normal people and community. Which makes sense, considering that Lyft grew out of carpooling company Zimride -- carpooling is about meeting people and making friends.
Lyft is also different because they see drivers as one of their biggest assets. And because of that, their culture isn’t only about passenger experience -- they emphasized driver community. Lyft encourages drivers to put their own touches on customer experience to make passengers happier -- by decorating their cars, taping jokes to the dashboard or anything else they can think of. They also encouraged drivers to talk to each other, exchange ideas and create their own community culture -- they even created a mentoring program where experienced drivers ride with new drivers. As a reward, drivers that went above and beyond promoting Lyft’s culture could earn special, gold rimmed mustaches for their cars, elevating their social status within the driver community.
It’s that emphasis on community and fun that made Lyft different from any of its competitors and was critical for their success. In many ways, Uber and Lyft are the same, and their products and strategies are so streamlined, they can’t do much to differentiate themselves. But Uber can’t recreate Lyft’s culture, or vice versa. Lyft created a unique ecosystem that often attracts different drivers and riders -- and that’s their secret sauce.
So far it’s worked. Although Lyft is worth significantly less than Uber right now, it’s kept up better than anyone expected, and it’s only continuing to grow and expand.
Like all startups, Lyft has changed a lot since it began. In Silicon Valley, a few years may as well be a few lifetimes -- change happens rapidly, and most companies fail. To survive, you need to be able to keep up with the extreme pace and adapt, which is what Lyft has been doing.
And Lyft looks different today than it did in 2012.
The first difference is the most obvious -- those big, fluffy pink mustaches are gone. As Lyft expanded to include more people, they found that their defining, iconic image -- representing whimsy and fun -- turned some people off. So they needed to adapt. Now, instead of seeing a windblown mustache on the front of your driver’s car, most drivers have a small, glowing pink mustache on the dashboard.
Another big difference is how passengers interact with drivers, and vice versa. Instead of sitting in the front seat, most passengers opt for the back. Sometimes people talk, but it’s not expected. And that fist bump? Now it’s a thing of the past for most Lyft experiences.
Why is this? It’s hard to say, but it could be because Uber and traditional taxi culture has leaked into Lyft’s vision -- many drivers drive for both Uber and Lyft, and most passengers ride with both companies. Since Uber and Lyft are about convenience, it makes sense that drivers and passengers use whichever platform is most convenient for them at any given time.
Whatever the reason, Lyft needed to adapt to fit its users -- although its community started one way, it evolved another way. It’s a great example of a shift that happens in many growing communities -- you may start a community with certain intentions only to find out that your members feel differently. Rather than forcing a tradition on its customers, Lyft recognized that some aspects of their community weren’t working, and adapted.
So today, with the edge being blurred, Uber and Lyft look more similar than different. Most drivers have both an Uber and a Lyft sticker in their window indicating they work for both companies. Both platforms have more economical carpooling options. They’re both competing for the same cities and for similar market share.
Did Lyft forget about it’s community? Or is community going to save them?
Community is still strong
No, Lyft didn’t forget about community. Although they look different today than they did a few years ago, community is still their leading edge.
Lyft just needs to remind drivers and passengers alike that community still reigns -- especially in a time when people feel lonelier than ever. And technology is often blamed for this trend.
In 2015, Lyft launched their “Driving You Happy” campaign that focused on community. Rather than letting technology distance people from each other, Lyft emphasizes the power of technology to bring people together and “reconnect communities.” And their drivers still play a big part in that community -- they’re the bridges between technology and people, actually connecting the dots by driving passengers to their destinations.
Lyft also works on connecting their Lyft community with local communities. Lyftie Awards, which began in 2015, highlight the most popular destinations in Lyft’s major cities. It’s a great strategy because it creates a story behind the numbers. Where do people go to find community? In San Francisco, their home city, Lyft highlighted the most popular restaurant and bar but also the most popular transit stop and neighborhood. It helps you imagine who is using Lyft, what they’re doing and who they’re going to see, which is important. Remember -- Lyft is about more than just getting from A to B. It’s about connecting with drivers, having fun and connecting with those around you.
Keep community in mind
Lyft has a good thing going for it right now -- it’s culture. And to keep up with Uber and continue differentiating themselves, they need to highlight their culture and the community that relies on their product.
How should they do this? They need to actively cultivate their community, now, more than ever. They have an excellent advertising campaign that highlights community, but they need to walk the walk.
Here are more community ideas for Lyft:
- Continue to highlight how important your drivers are, and make sure they know it. Host meetups for them and encourage drivers to connect with each other. Even though the fluffy pink mustaches are gone, continue to find ways to highlight and reward drivers who cultivate the community and spread Lyft culture.
- Remember where you are. Not every city is the same. A program like the Lyftie Awards highlights cities and shows how important Lyft is in those cities. Take that concept further. Continue connecting people with the town around them. The other week, in San Francisco, the weather was incredible and Lyft sent out an email: 15% off ride to or from your nearest park. This was genius because it was well-timed, hyper-local and connected riders with their city and their friends.
Lyft started with community. They should stick with community, and continue to build off of the awesome one they created.