All eyes will be on Lyft as it turns on its Toronto service this morning, marking the ride-hailing company’s first-ever foray outside of the United States. Lyft will be competing for both riders and drivers against Uber, which has been operating in Toronto since 2014.
Tim Houghton, the general manager for Lyft’s Toronto office, told me in an interview that the sprawling, amalgamated metropolis of 6.4 million is a “world-class city, so when we thought about international expansion, Toronto was a no-brainer for us.”
Lyft, which took in $2.1 billion
in funding and private equity in 2017 alone, and has a current valuation of $11.5 billion, wrote in a blog post
that its service is now available to 95 percent of the US population and that it recently celebrated its 500 millionth ride. Lyft said it gave more rides in 2017 than the previous four years combined, and that it’s delivering more than a million rides per day.
Even so, Lyft’s popularity has historically paled in comparison to Uber’s. Uber announced in June
that it had given five billion rides worldwide to date, and it’s currently operating in 616 cities across 77 countries. Lyft is currently operating in around 300 cities, in just two countries (the US and Canada). There are signs, though, that the David in this scenario (Lyft) could be revving up to nail Uber’s Goliath right between the eyes.
Uber took a $1.5 billion loss
in its last quarter, while Lyft reportedly tripled its revenue
so far in 2017.
Lyft will be using Canada’s biggest city as a jumping-off point for future expansion, although Houghton wouldn’t give details on launching in other Canadian cities or abroad.
In the greater Toronto area (GTA), the service will operate from Hamilton to Oshawa and up to Newmarket, according to Houghton, who recently relocated from his position with the company in Southern California to head up the company’s only Canadian office.
He said local drivers so far have been enthusiastic about Lyft’s arrival. The company has been holding driver recruitment events in the GTA since officially announcing its expansion on November 13. As independent contractors, drivers can choose to work for both Lyft and Uber simultaneously.
As for passengers, Houghton said more than 50,000 people in Toronto downloaded the app in 2017 alone, before the service even became available there. He added that the company intends to be at parity with the competition on price and wait times, so ultimately what it comes down to is the experience.
“We know that by treating people better—drivers, passengers, and regulators—we make the whole Lyft experience better for everyone involved,” he said.
Although he wouldn’t mention Uber directly, he was likely alluding that company’s abysmal track record on treatment of drivers
, and employees
. For instance, Houghton noted that Lyft has enabled tipping from the very beginning. Uber only implemented tipping earlier this year following driver demands.
He also said Lyft is a natural fit in Canada because the company’s values align nicely with Canada’s: “Lyft has always valued inclusivity, diversity, and treating people better.”
Uber’s most recent meltdown, stemming from allegations of sexual harassment and discrimination, culminated in June with the departure of founding CEO Travis Kalanick. The company is still struggling to regain its footing while Lyft is enjoying breakneck growth.
Uber, however, is maintaining a stiff upper lip on Lyft’s expansion. In a statement emailed to Motherboard, the company said it’s “proud to have paved the way for ridesharing in Canada and we welcome competition that encourages the use of more transportation alternatives.” The email went on to say more shared-mobility options reduce congestion and pollution.
Lyft will benefit from the groundwork Uber laid when it aggressively—and illegally
—launched in Canada three years ago. Constituents’ demands for access to the app-based service has forced regulators in Canada, and around the world, to adopt laws permitting ride-hailing.
Lyft has a kinder, gentler image that it can capitalize on as Uber works to shake off multiple controversies and growing negative sentiment. The timing is right for Lyft’s expansion, however slow it may be—for now.
“We’ve obviously matured as a company, a lot. We’ve grown tremendously over the last five years. We have a much better product and much better processes that we feel we can bring to Canada,” said Houghton. “We really wanted to wait until we were at the right stage of the company to launch internationally.”