Jackie Wightman hops in her Lyft ride and starts to chat.
“My husband and I sold one of our cars because we now just use Lyft in the city,” says Wightman, in town from Denver where she works in sales for consumer insights company InfoScout. “And we deleted the Uber app after we saw how they were treating women at that company.”
Her Lyft driver can’t help but smile. He happens to be company president John Zimmer, out for one of his occasional shifts behind the wheel to sound out riders and test driver app features.
“She’s not a plant, I swear,” Zimmer says with a laugh during an exclusive ride-along conversation with USA TODAY. “But it has been an exciting year.”
Wightman’s flattering summary does neatly touch on a few big landmarks in what has been an explosive twelve months in the ride hailing business.
Awareness of the taxi alternative has increased thanks in part to Lyft barreling into more than 100 new cities in 2017. Lyft claims that its service is now available to 95% of the population, up from 54% at the beginning of the year. The company says it recently hit 500 million total rides — the last 100 million coming in just three months, or about 1 million a day — and its valuation has doubled in the past year to around $11 billion.
But market leader Uber also played a role in commanding consumer attention, grabbing headlines for ignoring complaints about sexual harassment at its headquarters as well as for a variety of corporate practices that now has regulators investigating.
Despite those issues, Uber reported a 10% jump in second-quarter bookings over the previous quarter, according to Bloomberg, and last summer hit 5 billion rides spread out across more than 70 countries. Uber’s resilience suggests that for a majority of consumers, disgust over corporate misconduct doesn’t always translate to ditching a reliable service.
As private companies, neither Lyft nor Uber report operational details or revenue growth. But a variety of companies that track credit card data suggest that over the past few years, Lyft has gained steadily on Uber. In data prepared for USA TODAY by TXN Solutions earlier this year, Uber’s market share had slipped to 75% from 90% since 2015.
Uber’s valuation also has slipped according to some industry watchers, from a high of nearly $70 billion to perhaps closer to $50 billion based on ongoing reports about SoftBank looking to take a huge stake in the ride hailing giant based on that lower valuation.
Zimmer won’t comment on such figures. But, he adds, “We feel that eventually we can be the biggest service in the U.S.”
For his part, Zimmer’s calm demeanor — he is unfazed when a truck driver lays heavy on the horn after Zimmer quickly changes lanes in a construction zone — extends to how he has chosen, along with co-founder and CEO Logan Green, to steer Lyft during a tumultuous year.
“Lyft was born into a world where the competitor already existed and wanted to kill us from day one,” says Zimmer. “We never took that lightly. But we also felt like we couldn’t affect what was going on (at Uber), we could only focus on ourselves. Whatever (new Uber CEO) Dara (Khosrowshahi) does, we’re just going to keep doing our thing.”
In 2017, that included locking down another $1.6 billion in funding to help expand into new U.S. cities, opening its first foreign operation in Toronto and creating a new team focused expressly on self-driving car technology.
There have also been tweaks to the service, including adding a luxury car option in some cities (echoing Uber’s debut as a black town car service) as well as a partnership with Taco Bell (allowing a stop at the fast food eatery hints of the UberEats delivery service).
But some ride-hailing industry watchers suggest Zimmer has been too nice when it comes to taking advantage of a rival’s stumble.
“Lyft certainly made gains this year, but I didn’t get the sense they had a killer instinct,” says Harry Campbell, a Lyft and Uber driver and founder of TheRideShareGuy blog. “It seems like a missed opportunity for Lyft.”
Mark Muro, senior fellow at the Brookings metropolitan policy program, says both Lyft and Uber need to be concerned about a lack of differentiation. While Lyft currently presents itself as the feel-good ride company, that lasts only as long as Uber remains in the cultural penalty box.
“This (ride hailing) will soon be a commodity service, a standard product offering with no defensible technology,” says Muro, adding that both companies have had to use cash to grow their driver base with incentives. “The margin pressure in this business will be constant.”
Zimmer shrugs off suggestions that the road ahead will be bumpy. He points out that ride-hailing companies currently cover just 5% of miles traveled in the U.S., “the vision we’re talking about is a full alternative to car ownership, so it’s early days.”
Zimmer pulls over to drop off his passenger, who thanks him with a promise to spread the Lyft gospel. Zimmer can’t suppress another grin.
As Zimmer drives back to Lyft headquarters, he ponders a question: How can he guarantee that Uber’s 2017 egregious miscues won’t happen at Lyft?
“Well, for one, Logan and I know what we are each doing, and we’re in control of making sure what happened at Uber doesn’t happen here,” he says, adding that Lyft recently hired its first chief people officer from Google, Emily Nishi. “We want to double down on ethics.”
Ultimately, Zimmer says, consumers will determine whether a company thrives or fails based on the way it behaves as a corporate citizen. He cites the spotlight recently put on social networking sites such as Twitter and Facebook, which have not been vigilant about hate speech and foreign propaganda on their platforms.
“I like winning as much as the next business person,” Zimmer says. “Technology companies can affect billions of people, so there’s an additional responsibility you need to think about. I feel like we have taken that seriously. From the beginning.”