Lyft escalates price war with Uber in New York

Take that, Uber: Lyft riders in Manhattan get 50 percent off during the work week

Technology trends and news by Ronny Kerr
May 23, 2016
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For now, the passenger is winning.

Lyft today announced a weeklong promotion that will cut fares by 50 percent for all rides originating and completing in Manhattan. The promotion, which expires this Friday at 5 PM, includes not just regular Lyft rides, but Line and Plus modes as well.

(Akin to how retailers start celebrating Christmas before it’s even November, Lyft is dubbing its promotion “50% Summer Savings.” But the first day of summer isn’t until June 20.)

A 50 percent cut for every rider in Manhattan for five days is nothing to scoff at, and represents just another example of the ongoing price war between ridesharing startups like Lyft and Uber around the world.

My favorite example of this is Didi Chuxing (formerly Didi Kuaidi), which Uber founder and CEO Travis Kalanick has accused of spending $80 million weekly on “subsidies,” or discounts to its rides, in order to dominate the Chinese market. That comes out to $4 billion in yearly spending, just to be the cheaper offering in the market.

But while Uber must contend with these price wars in markets around the world—including China, India, and the U.S.—Lyft only operates in the latter. Of course, it helps that Uber is a lot bigger and better funded than it’s pink-mustached competitor.

Still, Lyft gives all appearances that it's holding its own in the fight against Uber. I’ve confirmed with the company that it has grown its ride count in New York City tenfold in the last year. Across the country, it's doing 11 million rides per month.

"We've had a fantastic year of growth and increasing market share," a Lyft spokesperson told the Verge. "The passenger promotion and driver incentive are also our way of saying thanks to the two sides of our community that have made this unprecedented growth possible."

Indeed, the promotion in New York isn’t just benefitting passengers. While the 50 percent cut is in effect, Lyft is not taking any percentage of fares as it normally does. Not only that, but drivers get to keep the entire fare amount before the 50 percent markdown.

In addition to the discount, Lyft also recently announced that it’s expanding to the Hamptons, Cape Cod, and the Jersey Shore. And it’s continuing partnerships with various summer parties, including SummerStage, Celebrate Brooklyn and the Northside Festival.

All in all, it’s nice to be a Lyft user in New York right now. But what about the rest of the country? Pew released data last week that a third of Americans have never even heard of ridesharing apps like Lyft and Uber. When you see them concentrating so much love on the big cities, you start to understand why that is.

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Description: Uber is a ridesharing service headquartered in San Francisco, United States, which operates in multiple international cities. The company...
Description: Lyft is a peer-to-peer transportation platform that connects passengers who need rides with drivers willing to provide rides using the...

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