From an outsiders view, Lyft looks much more operationally focused. Instead of legally battling a bunch of different countries, it eyes only the biggest market, allowing it to slowly expand after it sees how Uber fares in each country. Instead of settling a lawsuit over allegedly stealing self-driving car technology, it is focusing on its core product. Instead of buying 19-month-old scooter company for $2B, it is spending money on its core value proposition.

At some point, investors might not hand over Uber any more cash. Meanwhile, Lyft could get to profitability more quickly while Uber deals with acquisition/project "hell" as Elon would say. As an outsider looking in, Lyft looks like it is playing the long game, drafting behind Uber until Uber catches another edge and slips.

Here is a press release from Zimride sent circa Thanksgiving 2008 (after they had been underway for about a year):

===

STUDENTS TO FIND RIDES HOME FOR THANKSGIVING ON FACEBOOK Useful Facebook application, Carpool, helps match students for rides home

Finding a ride home for Thanksgiving with friends and classmates has never been easier. Students can conveniently use a Facebook application to share rides home for some home-made turkey. The application built by Zimride is called "Carpool", and having launched in 2007, it has become the most popular online ridesharing service in North America.

Carpool on Facebook is especially popular among students on college campuses, where it has replaced traditional ride boards at student centers with a more convenient online interface. Over 25,000 rides have been posted on Carpool in the last four months. "The growth is unprecedented," comments Logan Green, a co-founder of Carpool. "It shows that not all popular Facebook applications have to involve ninjas and vampires. An application like Carpool helps students find safe rides in addition to cutting their gas expenses and reducing CO2 and it's clear students value that."

The Carpool application uses Google Maps technology to match students traveling in the same direction. After the trip, users are encouraged to leave feedback, to help inform future Carpool users. The application makes ridesharing a more social experience. "It really feels like I'm part of a community," says Corey Earle a student of Cornell University. "I could never trust an anonymous service like Craigslist because I wouldn't know anything about the other users. Using Carpool on Facebook, I can choose to ride with people in my school who I know I can trust.' Carpool on Facebook was built by a team of recent graduates who saw an opportunity to make carpooling more popular at universities across the country. John Zimmer, a co-founder of Carpool, says, 'We're thrilled that university students and administrators are reaching out to us to help make ridesharing become a part of mainstream culture on college campuses." Zimride has worked with over 20 universities since creating the service to build custom systems for their campuses.

If you have a car, offer your carpool today. If you don't have a car, find a ride and get home to the home cooked turkey, stuffing, gravy and cranberry sauce…don't forget to share!

To try out the Carpool on Facebook: http://apps.facebook.com/carpool

For more information on Zimride visit: www.zimride.com

===

Here was a sample use of a version of the product in a 2011 email:

===

Subject: [Reuse-sell] Ride from MIT to NYC or [city] NJ, Depart Oct. 21 1pm, Return Oct. 22 10am

I have rented a car for a trip to [city] NJ.

I am leaving from MIT at 1pm on Fri. Oct. 21.

I am returning from [city] NJ at 10am on Sat. Oct. 22

If you want to share the ride on either of the two directions let me know. I expect the total rental plus gas to cost me $120. I am looking for someone to pitch in $20 for each one-way journey.

I have posted on zimride too: http://zimride.mit.edu/ride/share?ride=[id]

Thanks, [name]

===

I think the deal is that the company pivoted mid-2012 to an Uber clone and sold the Zimride subsidiary to Enterprise in 2013.

I wonder how much of the Zimride engineering team went to Lyft during the pivot.

I wonder who has the longest tenure at Enterprise's Zimride subsidiary and how they feel about working there vs. working at Lyft.

Any rides I have taken where Lyft is available, I ride with Lyft. Else, Uber. (mostly NYC/NJ/Toronto areas Lyft has been consistently cheaper for me).

Cheapest rideshare wins. race to bottom. Only way Uber / Lyft can avoid death, is with business rides and lockin. There no one is price sensitive, and they can make money off of business rides (Lyft is doing this really well, in nudging users to have more business rides).

Lyft was the one to fight the battle of having 'ridesharing' become a thing. Uber didn't mind if the decision went one way or another as they already had a lockdown on the "professional driver market".

>> Instead of buying 19-month-old scooter company for $2B, it is spending money on its core value proposition.

Lyft aquired a scooter company Motivate, and announced the plans in June about their bike and scooter strat.

>>At some point, investors might not hand over Uber any more cash.

Lyft has raised 4.9B. It's the unicorns of Unicorns with a burn rate to match.

I agree with the OP, am pessemistic of an IPO, and would say it has the possibility of failure. I don't think that will happen, but an IPO flop of this scale would have major repercussion on the funding market in general. Again with the Hauwei arrest today, and the stock market in a major flux as tensions rise with China it has added risk.

But Lyft has a self-driving car group in Palo Alto, and it bought the bikesharing company, Motivate.

Actually, Lyft has a scooter program that is the result of an acquisition.

"It wasn’t until July, when Lyft acquired Motivate, the nation’s largest bike-share operator, that the company began to send signals that it was considering joining the frenzy."

https://www.theverge.com/2018/9/6/17824040/lyft-electric-sco...

This can be a reason why one would be more interested in Lyft. Uber seems like a distracted player who's losing money on many other markets and businesses, not to mention hundreds of millions of dollars on self-driving cars (and flying cars?!). Lyft is much cheaper (15B valuation), while Uber is much more expensive (120B?). If I invest 1B in Uber, my money would vanish in 1 quarter (yes they're losing 1B/quarter). Those 1B dollars would be split to invest in flying cars, uber eats freight bike/scooter, battles in India Middle East. On the other hand, if I invest 1B in Lyft, I'm sure those 1B would go towards gaining market shares in the US which is by far the most important market for the two players.

Second of all, personally I think if Lyft failed and the stock dropped by half. Some other dominant players would look to acquire Lyft. I'm thinking about Google's Waymo One plus Lyft's network. Apple seems to have a lot of cash to burn also, and they're also developing SDC. On the other hand, Uber's share price has to drop more than 10x in order for it to come close to a reasonable acquisition price.

1) The market can support multiple players running profitable (i.e it's a 2 player or 3 player market). Think of the drugstore industry (Walgreens & CVS). 2) Lyft focuses on profitable higher income markets like the US and Canada so they can have a higher margin and not get into pricing wars with massive foreign players (Didi, Oola, etc.). Uber is bleeding cash in their foreign markets. 3) Lyfts valuation is more reasonable relative to their numbers than Uber's. At the end of the day your investment thesis should not be just on the company but also the price you are buying at. 4) Lyft could manage their costs better and hence be closer to profitability to Uber (this is a pure guess but seems possible)

I have been pretty successful investing in 2nd players when they are priced correctly.

This, I think, is more important than many people realize.

When I was driving for Uber and Lyft (for about eight months, two years ago), Lyft had an entirely different clientele.

Uber was for the poors, the frat boys, and the average Joe Lunchbucket. Lyft was a decidedly better class of passenger, paid more per mile, the people tipped more and more often, and the passengers were 953% less likely to throw up in your car.

Drivers on their way to an Uber pickup would drop the fare if a Lyft opportunity came in.

Lyft doesn't capitalize on this perception that it is "better" than Uber, but my sense of the situation from talking to dozens of drivers and hundreds of passengers is that both the drivers and the passengers knew it.

Lyft could really differentiate itself in the market, if it decided to go this route (so to speak). The same way that Apple positions itself as a premium brand.

Is Lyft more expensive in your locale?

I’m in a new Lyft market, so their pricing makes them the cheapest with their discounts often.

Lyft's Android app just works, and is reasonably usable. I've been burned by Uber's app crashing after an update.

I keep using Lyft over Uber; most drivers I see in my area (NYC and Brooklyn) have both apps installed. But many seem to have the Lyft-specific sign under the windhshield, but rarely an explicit Uber sign.

As a corporation, Lyft seems to be much less showy, and does not seem to be losing gargantuan sums on pie-in-the-sky projects. They project a nicer, if understated, image; this is also somehow attractive, and likely says something about the way the company is run.

My guess is that people who could pay more for Lyft did. I gave a lot of homeless people rides through Uber, but never through Lyft.

( Sorry Lyft was never in my region )

Uber has all kinds of crazy promotions, like paying a flat $6 per ride for a whole month, or paying $25 up front for ten rides, no matter how long they are. Of course, there's also surge pricing that everyone knows about.

The worst is that Uber charges passengers more if they're traveling to or from "rich" ZIP Codes. In theory, Uber is doing this because we were supposedly carrying rich people around who could afford it. But more often than not, we were transporting low-wage maids and other service people from one job mucking out toilets to another. So Uber was actually hurting the people who could least afford to pay more.

I'm so glad to not be associated with Uber anymore.

Lyft frequently gives me offers like "10% of your next 10 rides" and "25% off this weekend!". I think it's because I'm only an occasional rider (1/month or so unless I'm traveling). Uber does not give me any promotions.

Uber doesn't have a massive moat. Drivers can have both apps, users can have both apps. You attract drivers by paying them more, you attract riders by charging them less. Uber for now can afford to beat everyone on both those fronts, but eventually they will have to start making a profit. When that happens Lyft is best placed to take advantage.

As someone who drove for both platforms, this is not true. Lyft pays drivers more than Uber in the market I was driving in.

Most drivers would abandon Uber in a heartbeat if Lyft just had more users. The problem was that for every Lyft request that came in, you'd get 10 to 20 Uber requests.

Lyft has an actual balance sheet Investors can understand.

Fun fact, I was an early and enthusiastic user of Zimride (for making a long distance relationship work between the Bay Area and SoCal). I liked the product and once upon a time drafted an e-mail applying for a position there. I assume I would have been employee like ... 5 or something. Never sent it and it hung out in my Gmail for many years. Decisions, decisions :-)

[1] - https://en.wikipedia.org/wiki/Uber

[2] - https://en.wikipedia.org/wiki/Lyft

To me, the key change deserving a new term was allowing completely independent, non-professional drivers, and I think Lyft beat Uber to that. (Heck, some purists would say "ride sharing" should be reserved for cases where the driver doesn't make an wages, just reimbursement for costs.)

Uber launched UberX in June 2012. Lyft launched in June 2012.

Give Sidecar credit where it's due.

Then Waymo dozes over both of them while destroying a large chunk of the "gig economy".

The network effect favours the larger player: less dead-heading between rides and better “pool” load-factors.

It can focus on profitable markets, and leave it up to Uber to fight City Hall and spend the money habituating new regions to the idea of ride sharing.

From a user point of view, the product is indistinguishable from Uber. If I had to own shares in one company, it would probably be Lyft.

Uber's last private valuation was, what, $60 billion? How much ROI do you think the LPs in the last round want to see from that investment after a few years? That sets the lower boundary for Uber's IPO price so unless Uber does a down round (which wont bode well for investor confidence), they're going to have to deliver a hell of a lot more value for their share price than Lyft, which means their is a lot more risk attached to them than lyft.

Buy low, sell high.

The story is simple. The second largest ride sharing company. Underdog against evil Uber. Could become number 1 or could grow the market.

There can be more than one successful company in a segment.

Also, well, you can't invest in Uber.

Haven't worked there in 2 years though.

Fingers crossed.

An IPO isn't a bet, like at a racetrack, the money raised is actually used to further the business. It's quite possible this will give them the fuel for that expansion you mention.

Is it, or is it just used to pay back the early investors who want to exit?

For example, it's impossible to invest in just AWS without AMZN's other business. However, AWS is far less susceptible to the current macro geopolitical instability than AMZN's retail business.

Uber has a brand people hate, and is losing market share to Lyft. They have room to shrink.

Meanwhile, Lyft has a brand people love, is taking market share from Uber, and is starting to expand internationally (Canada). They have room to grow.

The most obvious reason to invest in the Lyft IPO instead of the Uber IPO is that there is no Uber IPO.

If you're asking whether Lyft and Uber can achieve simultaneous financial success, the answer is yes.

Basically if you believe that ride hailing apps will succeed as a sector and that there is room for two companies in the long-term, then Lyft gives you a much better "value" investment in terms of the ratio of the company's valuation to the number of customers or dollars of revenue.

In a word... price. Lyft's IPO will give public markets access to a rapidly growing industry at a lower valuation than Uber.

Post IPO I would guess being publicly traded would be an advantage for Lyft because they will have a broader base of stakeholders who benefit from their success.

well, marketshare (a percent value) is by definition a zero-sum metric. however, what you mean to say, that every new customer of lyft is a customer less for uber, is false. there is no network effect, like social networks or marketplaces. new customers for uber may also be customers of lyft, and in a true rising tide, and one company may prime the market for the other.

Anyway, as the smaller player, given the lack of rider network effect and the clearly established lack of driver loyalty, they could quite easily see much faster growth. (going from 1->2 is much more significant that 100->110, eg). And growth rate, not absolute market value, is what investors really care about.

Taking Lyft to be a single-purpose undiversified company, isn't the opposite true? I'm no economist nor MBA, but aside from cashflow wouldn't a smaller company be more resilient to conditions due to lower resource demands?

every point of marketshare they get is a zero-sum game against Uber

Is this...true? First, because there's more than two players in the industry, and second because there can be more demand than cars among all of them.

As for your second point, you might be right. It's not EVERY point of market share, but it must still be a significant number that is wrested from Uber with great difficulty.

Does Uber operate in any markets that wouldn't be catastrophically affected by a crash of the US economy?

Competitors exist, and they sometimes do things better.

If you invest in a gold company, do you want them hedging the price of gold?

Some corporations function as diversified quasi-portfolios. But it's often far easier to analyze and model pure plays. Plenty of pure-play securities on public markets.

Vancouver is so backwards :(

I'd prefer driver compensation to be worked out on Uber's end of things rather than being passed to the consumer. I know that's what tipping is - but I'm against payment structures that require tipping. I still tip because I don't want to put it on the driver/waiter/whatever, but I'd prefer for the price point to be higher and to not tip.

Why? If you're not concerned about the driver's pay, you shouldn't be concerned that they might feel stiffed.

Also, who says Uber drivers are getting stiffed? One of my really good friend does Uber full time in Toronto right now and takes home around $4.5k/month (before tax). He drives around 6 hours a day, 5 days a week.

Pretty optimistic of you to assume that "no option to tip" means "drivers are paid better up front."

It's not zero-sum, given every car on the road can potentially be replaced by freelance drivers moving people and goods.

Is there no price at which Lyft stock would be a good investment relative to Uber?

Also revenue. They has it.

I can more easily see how a public market shareholder would make money in a lyft holding, than in an uner holding. This isnt about getting married to a stock and putting the share certificate in a frame, this is about growth and potential addressable market, which is easier to see.