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Uber is dominating the ridesharing space by a factor of four, according to 7Park
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If you just look at the two companies’ marketing language, you’d almost think Uber and Lyft were neck and neck in a fight for your ridesharing dollars. Here in the U.S.—the only country where Lyft operates—it’s almost impossible to tell who’s winning until you look at the most obvious sign: funding.
Uber has raised over $15 billion at a valuation of $68 billion. Lyft has only raised a “measly” $2 billion. Though venture capital isn’t always the end-all-be-all barometer, plenty of other data suggests that Uber is definitely dominating the ridesharing market.
The numbers are fuzzy, but Uber has told its investors that it has secured between 84 percent and 87 percent of the U.S. market. That figure may be slightly inflated, as new data from data intelligence company 7Park says that Lyft has a little over 21 percent of the market.
No matter how you slice it, however, Uber is beating Lyft by a factor of about four.
There are some local markets where the contest looks a bit even. In Denver, Portland, and San Francisco, Lyft has 38 percent, 36 percent, and 29 percent of the markets.
But those are the best places for Lyft. On the other side of the spectrum are places where Uber has had what 7Park calls a “multi-year, first-mover advantage.” In Houston, Atlanta, and Washington, DC, for example, Uber has 97 percent, 87 percent, and 84 percent of the markets. And in New York City, one of the biggest prizes in the ridesharing market, 7Park’s data shows Uber easily winning with 84 percent of the market.
As such, the report’s authors believe that Lyft will end up on the auction block:
We believe Lyft will ultimately be sold, which is not to suggest a company under duress – Lyft has $1.4 billion in cash on hand – but one in which motivations behind an acquisition are more strategic than existential. [...] While Lyft has not found a buyer, combinations with auto companies or diversified tech companies interested in the evolution of ridesharing could increase the company’s effectiveness in the marketplace.
The report references an August 2016 report in The New York Times that said Lyft has already made moves to sell itself to a wide range of companies, including its big-name automotive investor (General Motors), large tech companies (Apple, Google, Amazon), and even other ridesharing companies (Uber, Didi Chuxing).
Overall, 7Park notes in its report that growth in the ridesharing market has started to slow down. Out of an estimated 207 million smartphone users in the U.S., approximately 13 to 15 million adults will use a ridesharing service by the end of this year. That’s only about 6.7 percent of the total smartphone population. The report specifically says Uber is “close to saturating” its biggest markets in the U.S.
One other data point worth mentioning is the fact that users (irrespective of platform) tend to use ridesharing more over time and spend more too. Both Uber and Lyft users, according to 7Park, spend an average of $57 per month on the apps.
Ed. note: Our 6th Annual Vator Splash LA conference is coming up on October 13 at the Loews Hotel in Santa Monica. Speakers include Mark Cuban (one of the hosts of Shark Tank and owner of the Dallas Mavericks); Brian Lee (Founder & CEO, Honest Company); Leura Fine (Founder & CEO, Laurel & Wolf ); Nick Green (Co-Founder and Co-CEO, Thrive Market); Tri Tran (CEO & Co-founder, Munchery); Adam Goldenberg (Founder & CEO, JustFab); Andre Haddad (CEO, Turo); Mike Jones (Founder, Science) and many more. Join us! REGISTER HERE.
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Uber is a ridesharing service headquartered in San Francisco, United States, which operates in multiple international cities. The company uses a smartphone application to arrange rides between riders and drivers.