How Lyft Transformed The On-demand Ridesharing Segment To Raise $600Mn In Series I Funding?
Uber and Lyft have been fighting it hard against each other, in the ride-sharing segment, filling in gaps, and disrupting the whole industry. They have together given birth to the numerous taxi apps and car & bike pooling platforms, intended towards reducing the hassles of the commute. Amidst this competition, the question always remains “who is the leader”, and the answer was successfully revealed in the recent funding round.
Lyft received $600Mn in series I funding from Fidelity Management & Research Company. With this funding, the total amount invested by the investor reaches $800Mn. The total funds raised by the company has reached $2.9Bn, including the recently raised funds, and all the money will be invested towards scaling the platform.
Going Back To The Start
While Uber is still the rockstar, Lyft is slowly closing the gaps that exist between the two. They have each reached out different spaces, and conquered different areas, thus marking the top positions, eyed by the numerous others.
However, it is time to take that brief pause and reflect on the beginnings of Lyft. Where it all started, and how? Let’s go back in time.
Lyft was launched in 2012, as Zimride, which offers long-distance ridesharing services. The basic aim was to offer ridesharing services between two different cities while keeping in mind the need to know the driver. The app used to share the driver details, and ensure complete safety of the rider.
Zimride focused on college campuses, and the company needed an app that would concentrate on the local market as well, competing with Uber. They released yet another app that would help commuters with shorter trips, within the city.
They started defining their brand in a way that would reduce the user’s apprehension to take their services and augmented it in line with the user’s growing needs.
The company introduced pooling services with Lyft line in 2014. Soon, they introduced scheduling services, using which the riders could schedule their trip in advance.
They faced certain regulatory hurdles in NYC, owing to which they revamped their policies and allowed the drivers with TLC to ride the taxis.
The company not only adapted to the needs of the riders, but also managed to expand their operations to the nearby cities, thus becoming operational in over 300 U.S. cities.
The company, in 2017, announced a collaboration with the Boston-based NuTonomy, an autonomous self-driving car startup to offer on-demand autonomous car services to the passengers.
Uber came into existence 3 years before Lyft was launched, and has established its presence beyond the US. It is present across various countries globally, and Lyft is yet to scale to such dimensions.
How Lyft Is Differentiating?
Carpooling was not a new concept when both Uber and Lyft were launched in the markets. The main reason for their launch was to make the service more reliable and secure. After launching its services globally, Uber has become more business-like in its approach and mission.
Lyft – on the other hand, is relying majorly on personalization and improving the user experience. They believe in being close to the user and improving the features based on the end needs.
In the Lyft vs Uber debate, neither is a clear winner. In case of pricing, both charge almost the same price, however, it is the heavy demand time that Lyft comes across as a savior. When it comes to scheduling a ride or a pickup, there are certain differences between the two apps. Both of them have differentiated and created a USP.
Most often riders tend to choose their ride based on the availability, which makes the same driver drive for both the companies.
Lyft being the second in the league, has to constantly work on differentiating itself to create a name in the market, and scale the business. Here are some of the moves made by the company, which prove how incredibly the company is differentiating.
Going with Self-driving:
To balance the economies of the scale, a lot of ride sharing apps are moving towards self-driving. With a bulk purchase of the self-driving cars, fuel maintenance and insurance, the companies can offer direct services and gain economically. Lyft has entered this segment in order to scale itself and grow the business.
The brand is trying to cater to the non-emergency medical care by offering alternative transportation services. Lyft has tied up with Blue Cross and Blue Shield companies, and with a differentiated delivery model, has planned to improve ride sharing.
Augmented Driver Engagement:
Their main aim to improve driver engagement to increase driver satisfaction, which will in turn positively impact the customer engagement.
They have come up with guaranteed hourly payments and power driver bonuses, as incentives for the drivers. The Lyft estimator helps the drivers know the day’s earning.
You can decide your work hours and work timings. This means you are your own boss. If you wish to ride during the night and sleep through the day, it can be accomplished with this company.
Approximately 75.8% of the drivers claimed they were satisfied with Lyft, as against the 50% that claimed they were happy with Uber.
If you are a new rideshare driver, then the company gives you explicit training, making sure you understand every aspect, before you move out to the field. They have a short orientation program, and Lyft driver app tutorial videos to help them get started. They also have driver dashboard training videos, which helps get the basics clear.
Lyft has tied up with Delta Skymiles, to offer you free frequent flyer miles for every ride you take on the ground. This new cross-collaboration is an excellent strategy for winning more customers.
The Valuation of Lyft
With this funding, the company has reached a valuation of $15.1Bn. The company has doubled its valuation within 14 months. The startup has ably managed to increase its market share within US by 35% over the 22% it had in 2017.
The funds will be used towards scaling the business further, and they will improve their operations to increase the customer base.
Want To Create Your Own Ride Sharing Services?
If you want to create your own ridesharing app, here are a few things you might want to consider.
There are quite a few ride sharing apps in the market. What makes your app special? You will need to consider the point of difference before you begin with developing the app. This will help you define a winning strategy for your app.
A user-friendly design is a must for engaging users, and ensuring both riders and drivers are comfortable using the application. Make sure you design the prototype after studying the users and their app usage behavior.
When defining the features for your app, you should note all the requirements explicitly. Make sure you have aligned all the features with your needs and the purpose of the app.
Make sure you have defined the budget for the app development. It means you need to consider the app design, the features and the overall development cost before going ahead with the development.
Coruscate has established a defined process and delivered on-demand mobile app development services successfully to a number of businesses. We aim to help you reach the top 10 position in the app store. Connect with us to discuss the idea and further your business.
A story about ride sharing app