Don’t worry, this blog has a strict no politics policy! But on the heels of the recent Uber controversy, I thought it would be a good time to analyze my rideshare usage. I currently have both Lyft and Uber loaded on my phone. The main reason has been if one was on surge pricing, I could toggle to the other for a better rate. Since Uberx and Lyft launched in Phoenix several years ago, we’ve seen a dramatic drop in pricing for rides on both apps. If one lowers their fares, the other usually follows within a few days. It’s a well documented price war that doesn’t seem to have an end in sight. Unfortunately, the independent drivers are paying the price. Lyft however, offers a unique driver benefit that has me asking: Should I #DeleteUber?
Uber: A Brief History
When Uber originally launched, it was a Black Car service that focused exclusively on the luxury market. They were a great option for wealthy individuals, date nights and business travel. Not long after, Uber realized they could scale much faster by allowing regular people to drive passengers in typical cars and SUV’s. They called the service Uberx and it spread like wildfire.
The original value proposition of Uber (Black Cars) was that you never needed cash, a ride could be ordered on demand, and your tip was included. Anyone that frequently used traditional taxis knew the convenience of having all of this wrapped into an app. It was a game changer. What many didn’t know is that the driver doesn’t get a tip at all. Uber drivers get 75-80% of the fare, that’s it. At the time, Black Car drivers were more than happy to grab a few extra rides in between their scheduled ones, tip or not.
Here’s where things got tricky. Uber had now delivered the expectation that tipping would always be included in your fare. It was part of the experience. Well when they launched the low cost Uberx brand, they had to stick to their guns.
Tipping Is Good Karma
Enter Lyft, the scrappy startup that was determined to go toe-to-toe with Uber. A basic Lyft car was the same as an Uberx. A normal person driving their late model car or SUV to get you where you need to go. As competition heated up, fares plummeted. Caught in the middle were the drivers who often represented both companies. At the moment, Lyft and Uberx are charging $0.90/mile in Phoenix, which is less than half the traditional taxi rate.
If you start to analyze the cost of gas, insurance, wear and tear, you’ll quickly see that margins are very tight for the drivers. Lyft found a way to help their drivers out by allowing the passenger to tip at the end of each ride. Nothing is mandatory, but they give you a few options, or a space to leave a custom tip.
Given how inexpensive these fares have become, it’s more compelling than ever for me to skip Uberx and go with Lyft on economy rides. On a 20 mile trip, I’m more than happy to leave a couple bucks for the driver. It’s what we always did with taxis, why not now?
Should I #DeleteUber?
Well, let’s not take this too far. For right now, I’m going to keep both apps on my phone. While I’ll always go with Lyft for the low cost option, there’s several good reasons to keep Uber as a backup.
- The abundance of other offerings Uber provides can be enticing. In addition to Uberx, they currently market UberXL, SUV, Black, and Select in my market. Lyft only competes with Select and XL.
- You never know what’s going to be available. Some markets are just saturated with Uber’s and Lyft just doesn’t have a presence. Why resort to trying to track down a taxi if you don’t have to? Unless you’re in Vegas anyway…
- I alluded to surge price toggling above. If one service is running double the normal cost, you should always jump on the competition to see if you can score a regular priced rate.
How about you? Do you find yourself in the backseat of an Uber or Lyft?