Uber and Lyft Both Debut Cost-Splitting With Strangers
Arch-rival ride-sharing services Lyft and Uber today are both debuting plans that would have their members opt into carpooling with people who are taking similar routes in return for a significant discount. They are called Lyft Line and UberPool.
This is a particularly important strategic announcement for Lyft, which is built around the idea of a sharing community and explicitly wants to provide an alternative to public transportation. Lyft is launching Line as an option for all San Francisco users today, with the promise that riders who choose that option will spend 10 percent to 60 percent less on a given route.
“Now, everybody will have a transit line to their door,” said Lyft CEO Logan Green. “This is becoming a product you can use every day, twice a day,” added president John Zimmer.
But Uber, which knew about Lyft’s plans, moved up its launch of UberPool to last night, getting some of the glory before a Lyft press embargo this morning. Uber described UberPool as an experiment in car-ownership alternatives, and said it would be in beta testing for Google employees and others who opt in.
Uber may be significantly bigger than Lyft, but this is a project for which Lyft is uniquely suited, given that its company norms are set around passengers sitting in the front seat and talking to their drivers. (It’s actually standard driver practice to greet passengers with a fist bump.)
Uber acknowledged as much on its blog today. “This is also a bold social experiment. There’s the interaction between riders in an UberPool — should they talk to each other? When is that cool and when is it, well, annoying?”
Uber said it expected UberPool to offer a 40 percent discount on existing UberX rates.
To encourage people to try Line, Lyft is giving away a first ride free of up to $25. The company said that 90 percent of its rides share their routes with another trip within five minutes.
Once Line is selected, Lyft’s algorithm spits out a price for the ride so people know what they pay up front. The actual discount amount is calculated by an algorithm that estimates the chances that the ride will overlap with another request at that same time, but on average it’s supposed to be 30 percent to 40 percent. New short detours may be added later in the route, but participating passengers are expected to be curbside to minimize wait time for other people in the car.
Along with the announcement, Lyft disclosed that it has 60,000 total drivers in 65 cities, 25 million users and has arranged more than 10 million rides. It acquired a small company called Rover earlier this year whose team led Lyft Line product development.