A look at the Lyft/Uber Battle and US Federal Changes

(Brandon Bhangoo) #1

Lyft is constantly trying to catch up and even overtake Uber in the US market. While Uber is a global company with more than one service being provided, Lyft seizes a stake in the US market through Ubers mismanagement of its drivers.

While, Kalanik and Uber have been acting in unusual ways, as usual, with sexual harassment issues and investor unrest in the background. Lyft has been slowly capitalizing on Ubers mistakes.

Ubers biggest and most strategic resource is its drivers, and many Uber drivers are disillusioned and upset by the over-selling of possible earnings against real earnings and how Uber relates to and treats its drivers.

Lyft has recently expanded its reach to 40 states; this is a leap of 32 states in total, I giant step but a clever and measured one. While Uber went on a global rampage, blitzing its way across borders, Lyft has been watching and learning from the giant and slowly building a market presence in every state it entered.

There is still a big difference between the two companies, even in every state. Uber is constantly in the news and social media. Its corporate antics are still under constant debate, and the ever-colorful ex-CEO Kalanik is still being watched. Uber has branded its name, Lyft has yet to reach a brand level recognition. Lyft has a few million rides per year; Uber makes 10 million rides a day! Uber raised around $17billion and lost $b3 billion every year, while Lyft only raised $2.6 billion.

Without the financial resources, Lyft has to utilize its finances correctly, so wasting money on over-reaching and extending global branding was not an option. Instead, Lyft concentrated on improving its app, its driver's experience and in doing so raised its market share in the US to 30%.

There is just one difference that might make Lyft finally overtake Uber when Uber runs out of money. Uber is overspending on driver bonuses, paying drivers out of the investors' money and not through a clever profit margin participation. This means that Uber drivers are being fed a disillusioned picture of reality. This is great for Uber drivers living in the now and present, as well as being able to work for more than one company since Uber views drivers as independent contractors and not employees. However, for Lyft, the day will come when its slow progress, step by step logical approach, watching how the big dog chases its tail, will reach an equal market share and eventually overtake it. The only way Uber can combat this is by changing the way it grows, franchising the Uber global stake and expanding into other markets (Uber Eats).

One final word, Lyft should consider markets that Uber has not yet taken on, such as the parcel delivery market.BY competing against national delivery services, Uber can utilize its human driver resource to cut into FedEx and other delivery services, the foundations have been set, in fact, the foundations are even better since Lyft doesn't need to worry about vehicles. It's just a matter of creating Lyft Boxes or Lyft Packages, and away they go.

Are self-driving cars the future menace to ride-share drivers?

The US House passed a unanimous decision approving a federal regulation that over-rides state legislature. This sweeping reform is to introduce 25,000 driverless cars into every US state without having to provide the safety requirements for the cars, and this cap would rise to 100,000 in three years.

The concept behind a driverless car is to lower accidents by pacing cars in a digital grid, where the software would manage traffic. Each car within the grid would move at a rate and direction that is pre-defined by the software, and as such, no more human error would enter the algorithm. On the flip side, by removing auto safety standards, the passengers in the car are unprotected for any incident that might arise outside the autonomous cars grid. For instance, until the entire grid is driverless, human interaction in traffic will cause enormous problems to the autonomous system, since it must rely heavily on machine thinking and high-quality data input from multiple sources to manage the drive safely. Since autonomous cars are being developed with a non-grid system in place, these intelligent machines should, therefore, provide maximum protection for its passengers, something which the government signed off against.

The bill has been met with criticism from outside the house, while inside the house legislators are looking at ways to strengthen the US car making industry and giving it an edge in the next global commercial battleground. The autonomous car will only change the way cars are driven, it will not change the fact that people will still need a car to be driven. Therefore, the cars will combine both auto-pilot mode as well as self-drive mode. The big automakers are all pushing towards this new technology and will most probably add more and more technologies to improve the overall performance of the machines. This leading edge is necessary to maintain the strong US holding the future of global automaking. So, when the government forces States to comply, it's saying that this is a national endeavor, car war effort to win and maintain a lead in a major source of employment and income.

The other side of the coin is the necessity to reduce human risk factors and thereby reduce collisions. The market is rife with accidents, human suffering, and insurance claim haggling. With the new autonomous car, three sectors will be hit, insurance, medical and traffic policing. The ride-share industry will also need to adjust itself, while cars will still need an owner, would they need a driver, and how will ride-share then pay for rides?

Driver Unions in Seattle

It seems that Seattle's Uber and Lyft drivers are spearheading a unification process whereby the drivers will create a ride-share union. The drivers banded up and went to court, only to be stopped by Seattle court. The Union representatives demanded a list of drivers names and addresses from Uber and Lyft and would get it until the 9th Circuit Court of Appeals passed an injunction stopping the demand. Not all Uber and Lyft drivers want to be part of a teamster union. First of all Uber drivers are not employees, they are independent contractors. The second point that they make is that they don't want a union to interfere with their contracts with Uber and Lyft, in fact, their independence demands a non-unified approach. Not all drivers work full time, some just join Uber for a ride a month, the necessity to force these drivers into a union goes against their first amendment rights. Both Uber and Lyft will side with this stance too since the last thing they need is to deal with a union that is more interested in power struggles, shady deals and upsetting smooth workflow.

Teamsters Local 117 which has sole rights to represent the unionized drivers disagrees with the above statements, and claims that it is the right of every driver to be unionized and get good representation against companies that are constantly underpaying them.

Final word, it's obvious that there are drivers for and against being unionized. The final decision will be made in court. Also, one area of the law that is causing concern is the Teamsters demand that only drivers that have worked for less than 90 days and have made less than 52 rides for Uber or Lyft don't have a vote.While Uber and Lyft demand that every driver, once signed up, can vote. The difference being that the Teamsters want to restrict the vote to 30% of Lyfts drivers and just under 50% of Ubers, proving that their aim is not truly a representation of the driver but more a way to step into a new sector for power.

Lyft co-founder John Zimmer didn't take a salary for three years