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Can nice guys win? That’s the question we’re seeing explored in a real-life battle between ride-sharing giants Uber and Lyft.
Of course, Uber is the far larger company by nearly any measure: valuation, funding, drivers, riders, and revenue. But it’s also got a massive lead in terms of scandal, executive bad behaivor, and all around questionable corporate character. It remains to be seen whether the latter will eventually overshadow the former.
Lyft, on the other hand, comes off as the friendly company with the pink mustaches, where riders exchange fist bumps while sitting in the front seat. Early investors in Lyft reportedly questioned whether the company’s founders, John Zimmer and Logan Green, were too nice to compete in the cutthroat – and heavily regulated – transportation category.
Zimmer joined us this evening for a PandoMontly fireside chat to discuss, in part, the company’s culture, growth plans, and whether can possibly outcompete Uber at this point. In many ways, the verdict is still out on all these questions. But ignoring for a second any comparison to Uber’s obviously impressive metrics, Lyft is by nearly any measure a massive and rapidly growing business.
Only two years after pivoting its model from a SaaS carpooling platform for the enterprise to the consumer-facing, ride-sharing service we know today – and changing its name from Zimride in the process – Lyft has raised more than $ 330 million, has grown its employee count more than tenfold, and is now operating in 50 markets, more than double the number in which it started this year. And in spite of the competition from Uber and traditional taxi and limiosine services, Lyft continues to set new records for revenue and rides month after month, according to Zimmer.
By any of those measuring sticks, it seems like being nice is working out just fine for Lyft. The question is why Uber and Lyft’s corporate personas are so very different.
While not speaking for Uber’s motivations, Zimmer points to Lyft’s mission-driven nature. The company was founded, long before Uber existed, based on Green’s LA-inspired hatred of traffic and Zimmer’s passion for developing next-generation green cities. The two first linked up in 2007 around ZimRides and made the hard decision to pivot toward the Lyft model – and abandon a profitable SaaS business in the process – based on a conviction that it represented a better path to achieving their stated mission.
When faced with the question of whether Lyft could be built based around “niceness” and a community driven culture, Zimmer says he drew inspiration from AirBnB and its CEO Brian Chesky. While facing many similar regulatory hurdles and consumer safety scandals as have confronted the ride-sharing startups, AirBnB and Chesky proved the ability to prioritize hosts and guest above the company’s bottom line and thrive as a result. AirBnB’s obvious success with this long-view approach gave Zimmer and Green the conviction to stick to their own guns around the values with which they founded Lyft.
We’ve discussed at length the “asshole culture” that is plaguing this generation of Silicon Valley startups. It’s a troubling issue in any product category, given the amount of sensitive data being shared today. But perhaps this even more the case for companies dealing with the physical movements of people, and asking consumers to trust their location and safety to total strangers. In that sense, it seems like Lyft’s softer, friendlier side should be a bonus.
Michael Carney is a West Coast Editor at PandoDaily, covering venture capital, financial technologies, ecommerce, on-demand services, and the future of television, among other subjects. He has spent his career exploring the world of early stage technology as an entrepreneur and early-stage investor, working in multiple countries within North and South America and Asia. He is an enthusiast of all things shiny and electronic and is inspired by those who build businesses and regularly tackle difficult problems. You can follow Michael on Twitter @mcarney.