Rideshare: With IPOs looming, Uber leads market share, but Lyft has gained ground

While Uber dominates U.S. rideshare, its primary competitor, Lyft, is growing faster. In January, Uber accounted for 68.5 percent of U.S. rideshare spending, and Lyft captured 28.9 percent of the market, up 3 percentage points from a year ago. Both companies are expected to go public soon and, reportedly, have had IPO proposals reviewed by the SEC.

Second Measure on Rideshare: As market grows, Uber controls two-thirds of U.S. sales

Starting in August 2017, Uber’s share of the market excludes Uber Eats transactions. Other rideshare competitors include Via and Juno, which claim just a fraction of the market.

Rideshare rivals

In September 2018, Uber celebrated one year of new management under CEO Dara Khosrowshahi after controversial CEO Travis Kalanick stepped down in June 2017. In the time since Kalanick’s departure, Uber has lost market share, but its U.S. monthly sales have still climbed as the overall rideshare market expands.

In 2018, the industry started out with strong growth that has slowed since last spring. In that time, Lyft has grown faster than Uber, and it now accounts for just under a third of the U.S. rideshare market. Lyft is strongest on the West Coast, where it’s closing in on Uber in several cities. In Seattle, WA, Lyft currently brings in 43 percent of monthly rideshare spending, making it Lyft’s strongest city by market share among the top fifteen cities for rideshare spending.

Second Measure on Rideshare: Uber's U.S. share of sales are weakest on the West Coast.

As both companies race to prepare IPOs, Americans are increasingly likely to hail a Lyft. But, Uber still wins out on rider engagement. In 2018, riders have called an Uber an average of 5.8 times per a month, compared against an average of 4.9 rides per a month for Lyft.

What lies down the road

Though slowing growth may be concerning, rideshare companies have maintained investor appeal. From food delivery to driverless technology, Uber and Lyft are at the forefront of changing how we get around.

Uber’s successful foray into food delivery has surprised its own CEO, and Uber Eats now rivals industry leader GrubHub in multiple U.S. cities. As the market for app-driven food delivery continues to expand, Uber’s logistical data and network of drivers provide an advantage in new markets.

Uber and Lyft have also segued into scooters and bikeshare. Both rideshare companies aspire to become a one-stop shop for all things transit, making last-mile solutions an integral component of that vision. Uber invested in Lime, acquired Jump Bikes in April 2018, and has been reportedly looking into purchasing a scooter company. Lyft followed suit, acquiring Motivate—the company behind Citi Bike and Ford GoBike—in July 2018. Due to its presence in northern cities and popularity with tourists, Motivate’s sales are impacted by seasonality, with an expected peak of sales during summer.

Second Measure on Rideshare: Bird and Lime have grown rapidly in 2018

Bird and Lime saw rapid growth in early 2018, but have also suffered a seasonal sales dip as winter approaches. The race for leadership in last-mile transit is still wide open, as new partnerships and regulations shift the landscape. Both Uber and Lyft were issued a blow in August 2018 when San Francisco denied their applications to rent scooters in the city, instead granting permits to Scoot and Skip. Undeterred, Lyft moved into Denver with its inaugural scooter fleet in September.

While scooter startups are scoring multi-billion-dollar valuations, the real golden goose is miles down the road. Uber and Lyft are both heavily invested in bringing driverless cars to market. Despite major setbacks—including a fatal accident—Uber continues to press forward with help from an August 2018 investment from Toyota. Lyft has also been working toward a driverless future and announced a new partnership with Magna in March 2018. While autonomous vehicles would be a game-changer for the profitability of rideshare, that reality may be further from reach than previously believed.

Rough roads traversed

Uber’s reign over the rideshare market has not been short on struggle—or controversy. The company has long faced public scrutiny over how fares are determined and how drivers are treated. Then, in January 2017, the #DeleteUber campaign kicked off what would become a rocky year. The hashtag went viral when Uber was accused of crossing the picket lines during a politically-motivated taxi strike, and Uber’s market share dropped 5 percentage points in a single week.

Second Measure on Rideshare: Uber's share of sales fell dramatically as a result of #DeleteUber

The #DeleteUber ordeal was followed by legal struggles, starting with accusations of stealing trade secrets from self-driving technology competitor Waymo, which were eventually settled in February 2018. Uber also found itself in hot water when its Greyball program made headlines. A tool used to cloak Uber’s activity in areas where it was not authorized to operate, Greyball exemplified the rule-bending culture that would breed further troubles for Uber.

Uber’s internal struggles peaked when a tell-all blog post led to a company-wide investigation into discrimination and harassment. The revelations of its toxic culture were far-reaching, and the continual bad press culminated in Kalanick’s resignation. After his departure, Kalanick reportedly meddled with the hunt for his replacement and, in August 2017, Benchmark Capital—a top Uber investor—sued Kalanick over his interference. Khosrowshahi was hired later that month.

A new CEO and 2018 brand overhaul have helped Uber clean up its image, but the core challenges of its business remain. Squeezing money from rideshare is expected to get harder, as major cities—like New York—have moved forward with proposals to add surcharges to fares and cap the services’ allotment of active vehicles.

Check back monthly for the latest on Uber and Lyft, or get in touch about accessing this data on-demand.

Oh, and we’re hiring.