In Trump backlash, Lyft ends up on top
Ride-hailing startup Lyft tends to drive in the shadows of much-larger rival Uber, but this week Lyft got a taste of what it’s like to be on top — and some experts say that’s where Lyft may one day stay.
In a first in the history of the two companies’ contentious fight for market share, Lyft surpassed Uber in daily downloads from the Apple App Store this week. The boost for Lyft came as Uber was swept up in a backlash against President Donald Trump’s controversial Friday immigration order, prompting the #DeleteUber hashtag to take off on Twitter. The jump in downloads follows a year of explosive growth largely devoid of the massive publicity blunders that have plagued Uber.
“This adds much needed fuel to the momentum that Lyft has been building,” Mobile Action, a San Francisco-based app data intelligence company, wrote in a blog post.
Downloads of the Lyft app peaked on Monday, hitting 191,400, compared to Uber’s 85,400 according to Mobile Action. Negative reviews of the Uber app also spiked on Sunday.
On Tuesday afternoon, Lyft was still ahead. The Lyft app was ranked number eight among the most popular free iOS apps, while Uber trailed at number 17.
While it’s unlikely Lyft, worth $5.5 billion, could surpass $68 billion behemoth Uber anytime soon, experts say the smaller startup is looking more and more attractive in the long run.
“Lyft has been growing at an astronomical level within the U.S.,” said Evan Danckwerth, an analyst with PrivCo, which compiles data on private companies. “And they’re growing at a much faster rate than Uber is.”
This week’s App Store flip came as Uber faces criticism from some quarters for CEO Travis Kalanick’s ties to Trump — the executive sits on the president’s business advisory council, along with other tech executives including Tesla’s Elon Musk. Activists blockaded Uber’s San Francisco headquarters during Trump’s inauguration, protesting Kalanick’s ties to the administration.
For some Uber users, the ride-hailing company’s actions during a protest Saturday night were the final straw. While taxi drivers at New York’s JFK International Airport called a strike in protest of Trump’s Friday order temporarily barring refugees from entering the country, Uber deactivated its surge pricing in the area, allowing passengers traveling to and from the airport to get a ride at a lower cost. Uber — which has faced backlash in the past for using surge pricing during natural disasters and other crises — says it disabled surge pricing after the airport protest ended.
But some critics felt Uber was attempting to undermine the protest, and soon a #DeleteUber hashtag was trending on Twitter. While angry Uber drivers and customers often threaten to boycott the ride-hailing service to little effect — a promised strike during last year’s Super Bowl at Levi’s Stadium caused few headaches — it seems this time, Uber may be feeling the heat.
Bob Barrett, a 26-year-old software engineer from San Jose, was one of the users who deleted his Uber account this week. Barrett, who thinks Trump’s executive order on immigration was an overreach of his power, said he’s uncomfortable with tech executives becoming involved in the administration.
“I think their cooperation is a sort of tacit endorsement of what the administration does,” he said.
Uber didn’t say how many users have canceled their accounts since the weekend, or comment directly on the #DeleteUber hashtag. But on Sunday both Lyft and Uber released statements condemning Trump’s refugee ban. Lyft pledged $1 million to the ACLU, and Uber set aside $3 million to help U.S. Uber drivers who left the country and are unable to return under the ban.
Last week Lyft announced it’s planning to increase its coverage area by 50 percent this year, and the company also reportedly is planning to expand internationally. The company’s losses are shrinking and it plans to be profitable by 2018.
That means Lyft could make a profit before Uber, and some experts say it’s likely the smaller company will go public first.
Uber has some self-driving vehicle policy headaches to work out before it can go public, said Danckwerth, especially after its failed attempt to launch its autonomous cars in San Francisco. And whichever startup makes it to the public market first will have the advantage of being the first ride-hailing company open to investors.
“I don’t think you’re going to see Lyft take over Uber in the next three to five years,” Danckwert said. “But maybe the next decade.”
