Lyft now does 7 million rides a month. Wasn’t a huge spike in alleged attacks supposed to inevitably come with growth?
It was a mixed week for Lyft. And that’s pretty much life as Lyft, isn’t it?
The only surviving number two ride sharing company in the US, but a David that mostly refuses to pick up the rock and put it in his slingshot and score a point against Goliath. Lyft: A company of which we constantly wonder: Do they actually want to win?
On Tuesday, Reuters reported that Lyft was on track to hit $1 billion in gross revenues this year, boasting more than 40% market share in its home market of San Francisco.
Then, the next day, Bloomberg obtained some leaked Lyft documents and spun a different story: One of missed revenue targets and escalating marketing costs, presumably, to gain all that market share.
From that piece:
In the first half of the year, Lyft generated less revenue, lost more money, and added fewer customers than projected in February. The numbers suggest Lyft has had to burn through cash as it chases growth in a competitive industry. The willingness to spend big on growth is a costly strategy that’s becoming increasingly common in Silicon Valley. Public market investors have expressed concern about the high valuations of private technology companies recently. Fidelity Investments, BlackRock, and others wrote down their stakes in some startups this year.
Reuters painted a story of an ascendent company with the “vast majority” of its venture cash still in the bank. Bloomberg painted one of a company burning through tens of millions a month with unpredictable revenues in a market where late stage capital is rapidly constricting. Both are probably true.
Also this week, Lyft had another – far less remarkable or newsy – distinction on Pando. It was included for the first time in our monthly “ridesharing companies behaving badly” series.
We started this a few months ago, because the reports of assaults happening in cars have continued unabated. And yet, it’s no longer a new or shocking story so reporters have stopped covering them. We don’t want to run a story on this topic every day either – especially given other topics like the ride sharing story in China and other global markets. On the other hand, not covering these stories at all leads to a false perception that they’re no longer happening.
Every month we’ve done it, there have been no reports we could find anywhere that included Lyft. Until this month. From the piece:
Courthouse News Service reported on October 30 that a woman has sued both her driver and Lyft itself. The woman vomited in the driver’s vehicle; he then followed her into her home and demanded sex in exchange for waiving a clean-up fee. The woman said she was able to push the driver off of her and convince him to leave her home...
And then, earlier this week, a second Lyft driver -- this time in Dallas -- was arrested for allegedly raping a female passenger:
She told police she ordered a ride from an app-based service, according to court records. A man in a black Chevrolet Tahoe rolled up and picked her up. She sat in the front passenger seat.
After a short distance, Laila allegedly began to inappropriately touch the woman. She resisted, and he pulled onto a “dark side street,” where he raped her in the back of the Tahoe, police said in court records.
This is not to say that Lyft drivers have never had these sorts of allegations before. We detailed a cluster of them back in June.
But, comparatively, they’ve always been fewer and far between, even as both Uber and Lyft grow. Why?
There’ve been a lot of explanations, and with time at least one of them has been solidly debunked: That these assaults are just the cost of scale. Since its early days, Uber claimed there were more reports of attacks in Ubers because Uber was bigger. With more rides, more of this just becomes inevitable, it shrugged. Lyft will see.
A look at actual numbers refutes that.
When the scandals first started coming out about Uber, it was doing some 800,000 rides a week. Lyft is still not experiencing as many of these scandals as Uber was then and it’s doing – according to numbers reported this week – some 1.7 million rides a week.
The idea that with more people on these sites the law of averages demands there will be more bad eggs slipping through the cracks simply hasn’t proven true.
Another explanation is that Uber is the market leader and as such gets way more scrutiny, so the Lyft attacks are happening but comparatively under reported. I find that one hard to believe too. Uber has a pretty aggressive smear machine, and sees Lyft as enough of a threat it’s tried to sabotage its fundraising and steal its drivers. If these reports were widespread they’d be leaked to receptive publications like Business Insider and TechCrunch daily.
Let’s not forget this gem, when Lyft was -- hilariously-- accused of hacking Uber recently. There was no evidence of the claim at all, despite multiple press reports from “anonymous sources.” If there was more mud to throw at Lyft, Uber insiders would find a way. We get a lot of these tips sent from the taxi industry – and they hate both Uber and Lyft.
One explanation might be subtle differences in how the two do background checks. For instance, Lyft requires in-person meetings before someone is vetted as a driver. Given the pressures to sign up drivers, Lyft likely errs on the side of approving them. But still.
Another meaningful difference – especially going forward – will be Uber’s global ambitions compared to Lyft’s US focus. Background checks are a lot more challenging in many parts of the emerging world, and Uber’s lean operating model of putting just a handful of people on the ground leaves future assaults all but assured.
The world has seen, tragically, exactly how effective Uber’s background checks in India are. And Pando previously reported that hundreds of Chinese Uber driver accounts are for sale on Taobao at any given time. Some sellers have completed thousands of these transactions. Even if Uber was carefully vetting Chinese drivers, there’s no control over who keeps the account.
The last factor that can’t be ignored is culture. Uber has become known as a company that turns a blind eye towards misogyny at the highest levels of its corporate structure, and a place that will victim-shame riders who claim they’ve been assaulted. In the past, Uber CEO Travis Kalanick has just claimed these incidents didn’t occur, or Uber reps have told Pando and other outlets that victims – usually women – were provocatively dressed or drunk when they were attacked. The latter is particularly disgusting, given the social props Uber tries to get as an alternative to drunk driving.
We’ll continue to keep a grisly score in the monthly column we most wish we never had to write again.