Lyft Increases its Presence in NYC

In the battle for New York City riders, Uber isn’t the only smartphone-driven car service gaining ground. Its smaller rival known for pink mustaches is also racing ahead.

Lyft, which like Uber is based in San Francisco, has significantly boosted its business since its July 2014 launch in New York City, a Wall Street Journal analysis of new city data show.

Lyft drivers took New York City riders on an average of about 10,000 trips each day in August, more than double the average of the year-earlier month, according to data provided by the city’s Taxi and Limousine Commission.

The data provide a glimpse into Lyft’s performance in the U.S.’s biggest taxi market in terms of revenue as the company revs up a push to attract riders and drivers in New York City to its ride-hailing app amid fierce competition by Uber and yellow cabs.

Lyft executives said the company’s gains in New York highlight its potential as a new transportation option and alternative to car ownership. The company said more than half of its New York City trips come via its carpooling option.

“This is inning one or two of a long game, and the market in a few years is worth way more than it’s worth today,” said John Zimmer,Lyft’s co-founder and president. “We want to aggressively grow into that.”

Fueled by cash injections from Uber’s Chinese rival Didi Kuaidi and activist investor Carl Icahn, Lyft has taken out subway and bus ads while offering generous discounts to riders and incentives for drivers.

The company’s 10,326 average daily trips in August add to a robust rise since April, the month it began regularly providing data to the city. But Lyft’s slice of the New York City market is dwarfed by that of Uber. Its deep-pocketed rival notched an average of 106,986 trips each day in August, more than 10 times the number of daily Lyft trips that month, the city’s data show.

The number of Uber’s trips in August marked a fourfold increase from a year earlier. The company’s rapid growth fueled a push earlier this year by New York City to impose a cap on for-hire vehicles city officials blamed for worsening congestion in Manhattan. Facing a backlash, the city backed off the proposed limit in July.

Despite Lyft’s push in New York, Uber executives said the company continues to see a stream of new drivers, riders using the app for the first time, and trips via its carpool feature.

Josh Mohrer, Uber’s general manager in New York City, said it wasn’t clear whether Lyft or any of the city’s hundreds of car services was taking the company’s market share in the five boroughs.

“There’s room for multiple players,” Mr. Mohrer said.

The city began regularly collecting trip records from the city’s livery and black-car services this year as part of an attempt by taxi regulators to understand changes afoot in the taxi and for-hire vehicle industry.

Uber, which launched in New York in 2011, and Lyft operate as city-licensed black-car companies. Lyft started operating in the city last year without regulators’ blessing, but backed down after a brief legal fight.

The city’s trip data, which the taxi commission provided in response to a public-records request from the Journal, didn’t include records from some other new ride-hailing companies trying to make inroads in New York, such as Via and Gett.

A taxi-commission spokesman said the agency hadn’t yet been able to process trip records from Via, a service focused on carpool trips in Manhattan. Gett doesn’t own any for-hire vehicle bases in the city and instead dispatches rides through other car services.

The city’s Uber and Lyft data offer insights into how the companies are faring in New York.

Evan Rawley, who teaches strategy at Columbia Business School and has studied the taxi industry, sees dim long-term prospects for Lyft in the city, saying Uber’s size and resources enable it to easily fend off competition. “Lyft is just so far behind,” Mr. Rawley said. “It’s going to be incredibly difficult for them to catch up.”

But Arun Sundararajan, a professor at New York University’s business school, said Lyft’s increase in trips this year showed “impressive growth,” a sign it could continue to increase its market share despite an uphill battle against Uber. “Don’t count Lyft out,” he said.

For drivers, the competition can mean new options.

Sukhjinder Singh, 31 years old, had been driving primarily for Uber but said he has increasingly been taking rides for Lyft as the company attracts more riders.

He appreciates that Lyft’s app, unlike Uber’s, lets passengers tip drivers, but Lyft alone doesn’t yet provide him enough for full-time work. “There is an increase of Lyft riders, but it’s not that dramatic, where I could fully depend on them,” Mr. Singh said.

Article Originally Published on The Wall Street Journal