A fierce marketing competition between ridesharing services Uber and Lyft is taking place on the streets of the US. These provide a network of drivers who allow shared rides at short notice. It’s carpooling put through a digital business model.
Both services are currently locked in a highly competitive battle and are going head to head in almost every aspect – Uber made a heavy reduction on its prices in January 2014 to edge ahead of Lyft, but Lyft are now able to match these prices after receiving $250 million from investors. The two brands aren’t exactly distant rivals either; Uber and Lyft are situated only a few blocks away in the vibrant South of Market region in San Francisco. The battle to edge ahead is something we thought needed examining, so we loaded up SimilarWeb.
Uber vs Lyft
SimilarWeb PRO’s App Analysis feature allowed us to take a closer look at where Uber and Lyft both were in the US in the Google Play store; things are certainly very tight between the two. Uber and Lyft take the number 1 and 2 positions, respectively, in the ‘transportation’ app rankings. The overall app rating by consumers is 4.2 for Uber and 4.4 for Lyft, so this is the narrowest of margins and shows it’s difficult to differentiate who is on top. Uber records more installs than Lyft, but both brands share install levels which overlap, so the competition between the two is becoming very intense.
Marketing budgets in action
Lyft like to market their service with the quirky twist of a pink mustache attached to the car’s radiator grill. Not only does this get the car and brand noticed in public, it also acts as a badge of trust to let passengers know they’re getting into a Lyft car. Uber, meanwhile, take a more discreet approach which keeps in touch with their simplistic logo by displaying it on the roof of the car.
Every consumer loves a discount as it means they’re getting something free and can save their hard earned money for more luxurious pursuits. A quick search on Google reveals thousands of Uber discount codes offering ‘$30 off first ride’, ‘$10 credit after first ride’ and ‘Get $20 off first ride’ amongst other variations. Uber also offers exclusive discounts to certain demographics e.g. UK students can receive £20 off their first journey with Uber. Lyft have upped the stakes by offering a $50 discount code, so the competition to sway consumers is intensifying.
A consumer’s experience will always make or break a brand, so levels of customer service have to be cranked up to the max in a competitive marketplace. Lyft want their drivers to engage with their passengers in order to create a personal experience and their choice of drivers is helping to fuel this; Lyft even encourages drivers to greet their passengers with a fist bump! Uber, on the other hand, employs professional drivers who see their job as exactly that – getting from A to B and not engaging with their customer on the way.
At the end of every ride, there’s a small, but effective difference – the tip. Uber asks customers to select a set percentage before the journey starts, so the driver knows they are guaranteed a certain amount. Lyft, however, allow this tip to be customized at the end of the journey. Lyft, therefore, allows their customers more freedom in rewarding good customer service.
So far we’ve discussed fairly standard and fair marketing methods. However, it’s been revealed that Uber have been getting dirty in order to stall Lyft’s progress. There have been accusations that Uber book Lyft rides and then cancel them to destabilise the service. Another underhand method has allegedly involved Uber ‘ambassadors’ booking Lyft rides and trying to headhunt the driver mid-ride. This isn’t the first time that Uber have been accused of dirty tricks, but they’re remaining resolutely tight lipped over these fresh allegations. Regardless, it’s plain to see that things are hotting up between Uber and Lyft.
Moving away from the physical world, we decided to investigate Uber and Lyft’s online marketing strategies using SimilarWeb PRO’s App Analysis feature.
The most popular source for Uber is In-Store Search, where it is over double that of Lyft. Referrals and Charts provide very little traffic for either brand, but Featured sources provide the most popular source for Lyft and is double that of Uber.
To understand the competition for traffic between Uber and Lyft in more depth we switched our sights to their external traffic. This would highlight which areas the two brands were fighting over in order to win traffic and edge ahead.
The first thing to note is that Uber has, by far, the strongest brand as their direct traffic is around 4 times higher than Lyft’s. This is understandable given the three year head start that Uber has had to establish itself.
Uber dominates the Search sources and controls the major share of traffic for three of the biggest search engines: Google, Yahoo and Bing. However, Lyft manages to win traffic across a wide range of search options to enhance its web presence in areas where Uber is less strong, such as the majority of traffic in Image Search and a vigorous fight in Maps Search. Lyft is also dominating in second tier search engines like Ask and Bing Partners. These results show us how Lyft takes advantage of every spare opportunity and niche in order to compete with a more established player. While Lyft is still playing catch up, it makes a smart move by concentrating on affiliate partnerships which results in a high amount of referral traffic (80.18%). This is a clever strategy for a service such as ridesharing as it’s difficult to overestimate the value of recommendation.
Social content and traffic are becoming more and more influential in online marketing, so we took a look at how Uber and Lyft were competing in this arena. The majority of the traffic from this sector comes from Facebook and things are exceptionally close; Lyft just pips Uber to the highest traffic share with 51%. Google Plus and Twitter show that Uber are the dominant force with traffic shares of 90% and 81% respectively. Lyft receives the lion’s share of traffic for Reddit and also proves itself to be the professionals’ choice by receiving 73% of the traffic from LinkedIn.
How are Uber and Lyft attracting users to their app in-store? SimilarWeb PRO’s In-Store Keywords feature helps us uncover the most popular keywords.
The top two keywords are understandably ‘Uber’ and ‘Lyft’ which ties in with their efforts to create a strong brand; they’re the go-to options when people want a ridesharing app. It’s clear to see who the strongest brand is with 7 out of the top 10 keywords containing the phrase ‘Uber’, so the strength of their brand is again shown to be much higher than Lyft’s. Uber’s global reach also becomes apparent with 5 entries in the top 50 keywords compared to none for Lyft. It’s no surprise, then, that Uber comfortably leads the traffic share.
What’s interesting, though, is the competition for non-branded keywords. One of the most key terms for this industry is ‘driving’ and Uber and Lyft share this traffic exactly 50/50. Another important term is ‘taxi’ and this is split 68%/32% in favour of Uber and indicates another close battle between the two brands.
Uber are the market leader in the transportation industry, but Lyft is determined to eat into their share of the market. They aren’t doing a bad job either and their marketing strategies indicate they’re making ground on Uber. What are the long-term results of this fierce competition though? Customers can expect to see improved levels of customer service as the two brands move away from pricing wars and take a holistic approach to the customer experience. Marketers will also be watching this rivalry to glean insights about how to implement new strategies in such tightly fought industries. The levels of creativity being demonstrated will also lead to more innovative marketing techniques as each brand attempts to out-think the other. This rivalry is certainly one to keep an eye on whether you’re a driver, passenger or marketer.