2. Executive Summary
1. Overview 2.Diagnosis 3.Proposal
• Factors that
determine supplies
(Drivers)
• Factors that
determines
demand
(Passengers)
• Factors that
determined better
matching and
paring (Current
strategy)
• Appropriately locate
the brand
• Accurately target
costumers according
to platform’s
characteristics and
advantage
• Feature innovation
helps winning the
market
• Building customer
community
• Ride-sharing
market, along with
traditional taxi
market, now
becomes a huge
industry
• But it seems to be a
winner-take-all
market
• UBER has already
occupied a lion
share of market
3. Market Overview
4%
Annual market growth
11billion
Net revenue of U.S market in
2014
241million
Annual taxi passengers
Ride-Sharing
Industry
2014
[PERCENTAGE]
15%
Market Share
UBER Lyft
Ride-Sharing market,
with Taxi market,
generated huge
integrated industry
However, this
industry seems
to be a winner-
take-all market
4. Growth History &
Current Valuation
2.5 billion
valuation
90k
weekly revenue
55 Countries,
200 Cities
40 billion
valuation
900 k
Weekly revenue
U.S.
65 Cities
0.3 1.5 7.5 22.5 82.5
332.5
862.5 862.5
0.2 1.5 12.5 49.5
307.5
1507.5
4307.5 4507.9
0
1000
2000
3000
4000
5000
SEED 1 SEED 2 SERIES
A
SERIES
B
SERIES
C
SERIES
D
SERIES
E
SERIES F
FUND GROWTH
Lyft UBER In million $
• Lyft received 862.5 million fund, while UBER
collected 4.5 billion.
• Also, UBER is valued 16 times larger as Lyft.
• Market Valuation reflects investors expectation of these two
companies.
• The subsequent parts would exam possible factors resulting
the valuation gap, and consequently give our solutions.
7. Higher Requirement for Lyft Drivers
Lyft Uber Who is More Strict
Drivers’ Age 21+ 21+ Tie
Driver’s Experience 1 year + Not required Lyft
Cars’ Condition 2003 or newer 2005 or newer UBER
Background
Check
Yes Yes Tie
Driver Ride Exam Yes No Lyft
Need own phone Yes No Lyft
• Compared to UBER, Lyft has significantly fewer drivers to provide services*.
• We now look into drivers’ concerns when considering which company they prefer to drive for.
• 1. Lyft Got Higher Driver Requirement, Which may hinder drivers from offering the service.
8. Drivers Compensation
60
8490
126120
170
0
20
40
60
80
100
120
140
160
180
Uber Lyft
Drivers’ Income
--- Measured as Number of Rides to Earn 50k,75k, and 100k annually
50K 75K 100K
*data from US news 2014.Dec
11.48
15.97
0 5 10 15 20
Lyft
Uber
Avg. Hourly Pay
hr rate
• After deducting gas, insurance and maintenance
cost, Lyft drivers’ income is less than UBER drivers’.
• However, Lyft Drivers usually get 10-15% tips, while
UBER drivers seldom receive customers’ tips.
12.5
0
0 5 10 15
Lyft
Uber
Avg. Tip Rate
tip rate
10. Cultural and Community
Lyft Uber
Culture Customer Friendly Professional
Drivers Blog Sharing personal
experience outside
working
Working-related
discussion
Community Forum Company news, drive’s
instruction, program
overview, ect.
Discussion about people,
stories and advices
Community Event Frequently held,
diversified events
Less or rare
• Both platform out effort in community building
• Lyft is more success in building community cohesion
11. Price Comparison
• Price is always customers’ first concern. Let’s take a look at prices in LA.
Uber X Lyft UberXL Lyft +
Santa Monica --
LAX
$12 $17 $25 $25
Westwood -- LAX $15 $19 $32 $28
Westwood --
Downtown
$19 $24 $40 $36
Beverly Hills --
Disneyland
(In-city Long
range)
$45 $54 $93 $80
LA -- San Diego
(Inter-City)
$119 - $160
Ave: $140
$160 $245 - $327
Ave: $286
$239
• UBER X’s Price is lower
than Lyft’s Price
• However, for larger
cars request, Lyft+
provides lower fare
• Consider that
customers use regular
services(Uber X and
Lyft) more often, Lyft is
losing its ground here.
12. App Evaluation:
App download
Register
Service Option
Pare Estimation
Payment
Evaluation
VS
• Disadvantage: listed behind Uber on Apple store
• Tie: similar complexity and time taking
• Disadvantage: Uber has more car type choices
•
• Disadvantage: Lyft only estimate pare for Line
but not other service
• Tie: Similar payment method
• Disadvantage: Both can evaluate drivers, only
Uber can evaluate customers
14. Matching and Pairing
Lyft Strategy Uber
Strategy
• Prime Time
25%-200% price
increase
• Hotspots
redistribution
• Surge Price 200%
-700% of fare
• Matching and Pairing strategies of Lyft and Uber are controversial
• “Price gauging” is more severe problem for Uber
16. Takeaway
Less
customers
Less Drivers
Less geographic
coverage and
Saturation
Less brand
Awareness
• By comparing Lyft with Uber, the
discrepancy between attractions
offered by two platforms that
drivers and customers will concern
did existed but are NOT very
significant
• Instead of only “doing well at
what Uber does ”, Lyft strategy
should focus on “doing well at
what Uber does NOT do”
Lyft
Current
Vicious
Cycle
17. Our Solutions
• Establishing a unique brand image should be the breakthrough point of Lyft’s
future growth.
• Locate new groups of customers, and create new growth of demand.
• Innovate functions to keep customer stickiness
• Finally, integrate drivers and customers to build up a vivid community!
Brand
Positioning
Customer
targeting
Feature
Innovation
Community-on-
Wheel
18. Create a Differentiated Brand Image
Brand Positioning Customer targeting Feature Innovation Community-on-Wheel
Pink & Blue Color Theme Black & White
Creative Car Interior Design Monotonous &
Standard
Interactive Driver-Rider Relation Distant
Casual Target Travel Type Business
An interesting ride, get
to know people, and
HAVE FUN
What riders get Just a ride
19. Capture a Niche Market with the Brand Image
Business Travel Market: Red Ocean!
l Uber has significant market
share.
l Lyft has very low market share.
Extremely difficult to compete
with Uber in this market
l Avoid too much investment in
this market
source: Brad Stone, Bloomberg
Brand Positioning Customer targeting Feature Innovation Community-on-Wheel
20. Capture a Niche Market with the Brand Image
Social Activity Market for young
people:
Blue Ocean
l Uber has not yet have any specific
strategy to capture this niche market
l The brand image of Lyft – young and
creative – caters to this niche
market.
l Focus on this market to breakthrough
the whole industry
l Concentrate power to
enter and capture this
niche market
l Lead a fashion trend
– encourage drivers to
creatively decorate
their cars.
l Pinpoint target customers
–fashionable young
people.
Brand Positioning Customer targeting Feature Innovation Community-on-Wheel
21. Pinpoints Young Riders
Partnerships
Lyft Events
l Where young people
go, where our
partnerships go
ü Fraternity & Sorority
ü Clubs & Bars
ü Coachella & etc.
After having fun in these
places,
go home with a FUN Lyft
ride!”
Brand Positioning Customer targeting Feature Innovation Community-on-Wheel
22. Pinpoints Young Riders
Partnership
Lyft Events
l Lyft initiates and sponsors
promotion activities:
ü “Pink Mustache Day”
ü “Lyft Car Design
Competition”
ü “Lyft Adventurous Rides”
l Lyft’s App recommends
other events to
customers
Don’t passively wait for riders.
Rather, actively introduce
rides to customers.”
Brand Positioning Customer targeting Feature Innovation Community-on-Wheel
23. Ride like a Boss
Loyalty Programs (VIP status)
➠ Increase customer stickiness
➠ Both monetary / non-monetary
rewards
🔻 Lyft event discounts
🔻 Free upgraded vehicle
➠ Substantial switching costs
Brand Positioning Customer targeting Feature Innovation Community-on-Wheel
24. Lyft-You-Up At the Right Time
Scheduled pick-up service
➠ Effectively reduce down-time for
drivers
➠ Instant ride for customer
🔻 Operationally efficient
➠ Event-driven
🔻 Sync with iOS calendar / TripIt
🔻 Drivers can offer ride prior to
request
Brand Positioning Customer targeting Feature Innovation Community-on-Wheel
25. Leverage Big Data to Create New Experiences
Place Recommendation Event Recommendations
Lyft Recommendations
➠ Direct partnership
➠ Massive opportunity to
direct eager crowds to
places they want to go
➠ In an instant of a ride
➠ “Looking for something to do
tonight?”
➠ List of events along with
discounts
🔻Activity Discount
🔻Pair the ride with free drinks
“We bring the place and events
together plus we offer the ride!”
Brand Positioning Customer targeting Feature Innovation Community-on-Wheel
27. Communities-On-Wheel
Rider / Driver Acquaintance
• Follow each other and make friends on Lyft profile page
• Break traditional identities of guest and owner
Pre-selection
• Gender, age (Approximate range), Interest
• Customized choice of driver or rider
Post-rating system
• Feedback with Yelp’s Star rating and Linkedin’s recommendation
• Two way between driver to rider
Brand Positioning Customer targeting Feature Innovation Community-on-Wheel
28. Communities-On-Wheel
Party Yoga Picnic
Ride for Fitness Ride for fun
Ride for the thrill
We Cater for All
“You Will always Find Your Group with Lyft Communities-on-Wheel”
Brand Positioning Customer targeting Feature Innovation Community-on-Wheel
30. Revenue Projection
u Revenue Projection:
u Our projection is based on 3
points
u Revenue induced by exploring
youth market;
u Efficiency improvement by
community integration;
u Brand reposition and popularity
increase by providing all-inclusive
catering
0
500
1000
1500
2000
2500
3000
3500
4000
4500
2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023
REVENUE
Lyft In million $
As a comparison, UBER project 2015 revenue
to be 10 B.
31. Risk Factors
u Possible failure of brand reposition because of imprecise market trend
recognition.
u Youth customers’ popularity does not necessarily convert into revenue
because temporarily lack of buying power.
u Feature innovation could be cost effective due to technology restrains
and competition pressure.
u Integrating community may cause privacy impeachment, which could
further lead to the collapse of brand reputation.
