Seven things you need to know as Lyft makes move into Canada

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Toronto is the first international destination for the only ride-sharing company to give Uber a run for its money in the United States.

Lyft Inc.'s Canadian office has been operating under the radar for six months with a small staff of about 10 people, but it has plans to expand quickly and expects to be offering rides in Toronto by December. Lyft executives speaking to Toronto media have been reluctant to even say the name "Uber" but the two companies share a tortured history and are inextricably linked in the minds of many consumers.

How does it work?

The Uber and Lyft apps are very similar, once users sign up (according to Lyft, 50,000 Torontonians have already downloaded its app this year): You just tell it where you want to go and are offered an estimated time of arrival for when the car will pick you up and when you'll get to your destination, fare calculated ahead of time. Sites like Ride.Guru lets users compare prices across services, and Lyft is typically very competitive with Uber on price for a single ride, and its car-pooling service Lyft-Line is often the cheapest option. Both are almost always several dollars cheaper than a traditional taxi cab. Both services have so-called surge pricing; Lyft's version is called Prime Time and it expresses itself as a percentage increase in the regular fare, while Uber's is given as a multiple of the expected fare (3X, 10X etc.).

Which is more popular?

Uber, by a long way, but that may finally be changing. Neither Uber nor Lyft report much in the way of ridership statistics, but TXN Solutions makes use of credit-card transaction data to glean insight into consumer trends, and it found that, while Uber still dominates market share in the United States, Lyft has been the primary beneficiary of a raft of scandals that created momentum for #deleteuber campaigns. From January to the end of February of 2017, TXN reported Uber dropped from 83 per cent of ride-sharing spending to 78 per cent, while Lyft had risen from 16 per cent to 21 per cent. In June, TXN reported most of the defectors were coming from the largest U.S. cities, which averaged 3 per cent drops in Uber spending, and even heavy Uber users had increased their spending on rival Lyft by 25 per cent. Lyft also has 40 per cent of the ride-sharing market in San Francisco, where both companies are headquartered.

How much money are these companies burning?

Lyft has raised $3.6-billion (U.S.) in venture and private equity financing in 12 rounds; it raised $1-billion in October from the CapitalG venture fund of Google's parent, Alphabet Inc.; and in April it raised $600-million from a group of investors including KKR and Canada's Public Sector Pension Investment Board (which manages the pensions for the federal public service, the RCMP and Canadian Forces). Lyft's valuation stands at about $11-billion. Uber has raised $11.5-billion in 18 rounds and its valuation is is estimated at $70-billion).

According to anonymous sources talking to Bloomberg News, Lyft lost as much as $600-million in 2016, and while its losses grew about 46 per cent, its revenues grew 250 per cent, which might just make the company profitable before Uber. For its part, in 2016 former Uber CEO Travis Kalanick said Uber's U.S. operation was profitable, but the company has said it lost more than $2.8-billion that year thanks to its aggressive international expansion.

Lyft may be smaller than Uber, but it has been around longer:

The Lyft app launched in 2012 (Uber, originally called UberCab, in 2009), but Lyft started life as a side project for Zimrides, a carpooling service founded in 2007 that leveraged Facebook and students for long-distance ride-sharing back when Uber was just a limousine-shaped gleam in the eye of Canadian co-founder Garrett Camp. It was Lyft's team that provided the first regulatory window in San Francisco to test ride-sharing, a practice that most suspected would be illegal for drivers without a taxi licence (according to journalist Brad Stone's excellent book on Uber's founding, The Upstarts). Lyft has had tipping as a core part of its service and to date has distributed more than $350-million in tips to drivers. Uber only introduced tipping in the summer of 2017 (in its first two months drivers earned $50-million). Lyft Line (a car-pooling offering) was introduced in 2014, just as Uber launched the competing Uber Pool option. Lyft is in close to 400 cities, in all 50 states, and says it is reachable by 95 per cent of the U.S. population. Uber is in more than 450 cities around the world.

Legal battles

Like Uber, Lyft lobbies against local governments that try to regulate it as a taxi company, and has engaged in contentious tussles in California, Washington, Texas, Missouri, Illinois, New York and more. In 2016, it shut down its service in Austin, Tex., but somehow avoids the hard-ball reputation Uber has garnered. In March, it finalized a $27-million class-action suit settlement with its California drivers that ended a four-year-old court fight but avoided resolution on the question of whether drivers are contractors or employees (for now, Lyft, like Uber, treats all drivers like independent contractors and not employees).

What about that pink mustache on its cars?

That's no longer the easy way to identify a Lyft car. An Uber driver slaps a semi-transparent sticker on the car window so riders can identify them in a crush (they can be hard to spot, but handy if you're trying to avoid the attention of angry protesting taxi drivers). In 2016, Lyft replaced the gigantic day-glow pink plush mustaches that used to adorn the front of its cars with a bulky, glowing dashboard device called Amp that is not only hard to ignore, but will change colour to match with an icon in the app to help a user identify which Lyft ride is here for you.

For real though, do they have a policy against using the word "Uber" in interviews?

"Honestly there isn't, but I think it reflects the fact that we're really just focused on what we do best," says Tim Houghton, the general manager for the Toronto office, who typically just says "the competition" in reference to Uber in several interviews. He argues that culture is what sets Lyft apart, focusing on keeping drivers happy with such inducements as monthly events, and access to its local "hubs" that are a combination of service centre and hangout.