Key Differences Between Uber and Lyft
Uber and Lyft may seem interchangeable, but there are not insignificant differences between the United States’ two biggest transportation network services. Here's how they compare:
Service Area and Hours
Uber serves hundreds of cities in dozens of countries, while Lyft operates only in the United States, serving 46 states and the District of Columbia. Uber’s considerably larger service area means it might be your only option for a taxi alternative. Uber and Lyft are both available 24/7, though you might have trouble getting a ride in the middle of the night in a small city if no drivers are operating. Both services are on-demand with a typical wait time of just a few minutes, and in some cities, you can book a ride well in advance.
For times when punctuality is especially important, like getting to the airport, a job interview or an important business meeting, reserving a ride is a great option. Otherwise, just open the app a few minutes early to see how far away the nearest driver is and what traffic is like, then time your ride request accordingly. (For related reading, see Uber and Lyft Expansions: Locations and Services.)
Uber drivers are a combination of professional drivers and non-professionals who have passed driving record checks and background checks. Uber offers several classes of service whose availability varies by city.
- uberX is the basic sedan service for everyday rides for up to 4 people.
- uberXL provides affordable SUV service for groups up to 6 people.
- uberSUV provides luxury SUV service for groups up to 6 people.
- uberPOOL allows customers with different starting and ending points who are traveling in the same direction to share rides in sedans and share the cost.
- uberBLACK provides rides with professional drivers in black town cars for up to 4 people.
- uberWAV provides rides in wheelchair- and scooter-accessible vehicles by drivers trained in assisting passengers.
- uberSELECT provides stylish, high-end cars with top-rated drivers for up to 4 people for special occasions.
- uberTAXI lets you hail a yellow cab from the Uber app. (Learn more in Uber Versus Yellow Cabs in New York City.)
Even if you choose uberX, the lowest-cost option, you won’t get picked up in a clunker. Uber has minimum vehicle requirements for drivers in each city. For example, in Los Angeles, you’ll be picked up in a vehicle that’s model year 2002 or newer, that is a 4-door car or minivan, that is in good condition with no cosmetic damage, that has working air conditioning, that is not commercially branded and that has passed a vehicle inspection.
Lyft, like Uber, has minimum vehicle requirements for even its basic level of service. Cars generally must be model year 2005 or newer and they must have four doors, no body damage and fully functional air conditioning, among other requirements. Lyft offers several service classes, too, which vary by city.
- Original Lyft provides rides in regular vehicles for up to 4 passengers.
- Lyft Plus provides rides in regular vehicles for up to 6 passengers.
- Lyft Premier provides rides in high-end vehicles for 4 passengers.
- Lyft Lux provides premium black car service in luxury vehicles.
- Lyft Lux SUV provides rides in premium black SUV service for up to 6 people.
- Lyft Line is a carpool service that matches passengers traveling along the same route who want to save money.
Lyft originally identified its vehicles with furry pink mustaches on the front (“carstashes”), but it now uses a more subtle system called the Amp on some vehicles in some cities (rollout began in December 2016). The Amp sits on the driver’s dashboard and lights up in a particular color. Waiting passengers see the color in the Lyft app on their phone so they know what to look for, which is especially helpful when getting a ride after dark, or when leaving a venue where everyone is using a rideshare app to get home. All Lyft vehicles have stickers displaying the Lyft logo in the front and rear windshields. Retiring its mustaches may have been a move toward adopting a more professional look to compete with Uber. (For more, see Make Money Fast from the New Sharing Economy.) Uber uses a beacon similar to Lyft’s Amp to help passengers identify the cars they’re waiting for. Drivers also display placards with the Uber logo in their front and back windshields. The apps themselves help drivers and riders identify each other as well, providing license plate numbers and descriptions of the cars.
Uber and Lyft have both gotten into the food delivery game as well. Uber launched UberEats in 2014 to compete with other services like GrubHub and Postmates. Uber gained a major partnership when McDonalds announced in December of 2016 that it would venture into delivery with UberEats. in December of 2017, the company announced the service was now profitable in 40 out of 165 cities in which it operates. Lyft also has a food delivery service, although it's a bit more colorful. Lyft has a major partner of their own in the form of Taco Bell. In July of 2017, the companies tested out a new feature called "Taco Mode" which allows a user currently on a trip in a Lyft car to press a button on their app and direct the driver to the nearest Taco Bell. Interestingly, the service is only available between 9p.m. and 2a.m. We can't imagine why. Taco Mode is expected to be rolled out to all devices in 2018.
Uber is a much larger company than Lyft and has received a lot of negative press for everything from a sexual harassment lawsuit to its cutthroat workplace culture to the low wages some workers earn. The company was also accused of trying to profit from a New York protest against Trump’s travel ban, which led to the #deleteuber social media campaign. Lyft has so far managed to avoid many of the controversies Uber has faced, perhaps in part because of its smaller size, though a New York labor group recently accused Lyft of wage theft. Most recently, it was reported that the FBI had opened a probe into Uber's use of software to track Lyft's drivers.
Cost and Payment
Uber’s fares consist of a base fare plus a time and distance rate, and fares vary by vehicle type and by city. Surge pricing during times of peak demand will increase the fare. The app allows customers to estimate their fares in advance. UberX is the least expensive option, while UberSUV is the most expensive. Each vehicle class has a minimum fare so that it’s worth a driver’s time to pick customers up even for very short rides.
The cost of a Lyft ride also varies by city and vehicle type and is based on total miles traveled, total minutes traveled, the base charge for each ride, the service fee that is added to each ride charge, and for rides during the busiest times, a prime time charge. The app gives riders an exact price for their ride in advance in certain cities and an estimated price in others.
With both services, changes to a ride once it is underway will affect the price. Customers pay through the company's smartphone app. Lyft riders can tip their drivers through the app or with cash, and drivers keep 100% of their tips. Lyft passengers can split the cost of a ride with fellow passengers through the app as long as they do so during the ride, not after. Uber does not solicit tips, nor does the app give passengers a way to add a tip to their fare, but it does allow drivers to accept cash tips. Uber lets riders split fares with friends through the app, too. (For related reading, see Pros and Cons of Uber and Other E-hail Apps.)
As of December 2017, both Uber and Lyft are privately held and analysts can only speculate about a possible initial public offering.
In Lyft’s most recent fundraising round in December, it received $500 million from Rakuten, KKR & Co., Baillie Gifford, Canada’s Public Sector Pension Investment Board, Fidelity, and other investors. The company was valued at $7.5 billion after receiving this additional investment. In January 2016, it raised $1 billion and was valued at $5.5 billion. The company has received a total of $4.61 billion since its seed funding round in 2008.
Uber has received numerous rounds of funding totaling $11.56 billion since its founding in 2009. One investor provided an undisclosed sum in April 2017; in 2017, seven investors, including Morgan Stanley, Saudi Arabia’s public investment fund and Letterone Holdings SA provided more than $3.5 billion in funding. Uber was valued at close to $70 billion early this year, though the recent scandals and lawsuits may have hurt its valuation considerably.
In 2015, Uber began to develop self-driving cars. The vehicles could be the future of the company and would dramatically lower its labor costs. However, Uber is currently engaged in a lawsuit with Alphabet, Google’s parent company, over allegations that it did not develop its driverless car technology independently and stole trade secrets from Google’s self-driving car spin-off, Waymo.
In February, after a failed attempt in San Francisco that ended in a regulatory clash, Uber began offering rides in driverless cars in Tempe, Arizona, with two Uber engineers in the front seat to handle any vehicle control problems that arose. In March, one of these vehicles was involved in a high-speed crash. No customers were on board and the police said that the crash was the driver of the other vehicle’s fault.
Uber also has ambitious plans for flying cars, opening an entire branch of the company (Uber Elevate) that focuses specifically on developing flying transit systems.
In May, Waymo joined forces with Lyft. Details of the deal are scant, but the obvious implication is that the partnership would allow Lyft to use driverless cars in its fleet and remain competitive with Uber. Plans are in the works for Lyft to test a fleet of autonomous Chevrolet Bolt cars, which are all electric, within the next few years. In December of 2017 the company started deploying self driving cars developed by Boston-based startup NuTonomy in the Boston Seaport District. These cars also have a driver ready to take the wheel should any surprises occur. Both companies hope and expect they'll have thousands of autonomous vehicles on the streets of major U.S. cities by 2020.
The Bottom Line
Uber and Lyft both offer innovative and often superior alternatives to taxis and long-established private transportation services, and both give passengers a convenient and innovative way to request and pay for rides through their smartphones. However, the companies have considerable differences in their service areas, offerings and culture. And because each company's drivers are independent contractors with varying vehicle types and personalities, even if you consistently use the same service in the same city, each trip will be different.