Why Lyft Scores Another Massive Genius Win as Wounded Uber Stumbles

The secret is an important generation-spanning combination of characteristics.

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BY Erik Sherman - 01 Aug 2017

PHOTO CREDIT: Getty Images

Rideshare company Lyft has been on a tear. And late yesterday came news it had doubled its business, handling as many rides through June as it did all of 2016.

In the meantime, Uber continues to thrash about with no CEO, divisions on the board, and co-founder and former CEO Travis Kalanick looking for a path back to control the company. Which is how it got where it is in the first place: management problems, sexual harassment issues, continuing general drama -- and business going to Lyft.

One of these is not like the other, and there is a good reason why. Lyft is managing to combine a millennial service aesthetic -- convenience as close as your phone -- with leadership that has focused on such old-fashioned basics as a focus on customers, positive press, and keeping their drivers happy.

Uber's attitude, swagger, and a disruptive culture of "stepping on toes" may sound hip and dangerous. But early success has turned into more bad news than a tabloid can generate in New York City on the eve of a full moon.

A company that targets a millennial audience, as Lyft does (look at the partnership with Taco Bell), still needs to focus on fundamentals. Get the right vibe, but do things right as well. And Lyft has been. Here are a few examples of doing something smart and getting great press from it:

• Rather than having a well-documented problem with sexual harassment, the company added a second woman to its board in July.

• Lyft has bypassed the idea of world domination and instead focused on the U.S. market, conserving resources and taking an opportunity to focus and build a stronger operation.

• Where Uber's Kalanick sparked another PR nightmare by berating one of his own drivers, Lyft sent baseball great David Ortiz and singer Demi Lovato undercover as Uber drivers to surprise customers and get great material for viral videos.

Drivers seem happier with Lyft, in significant part because they make more money.

Of course, paying drivers more while remaining competitive on price means less money for the company and a greater chances of running in the red. But Lyft seems to be narrowing its losses even as it expands into more areas, with a $600 million loss last year on $700 million in revenue, while Uber's losses might have hit $3 billion last year while trying to expand all over the world.

So long as Lyft remembers that millennium service ethic of phone-driven convenience while keeping the focus on basics, it should continue to move ahead, even as Uber tries to find itself -- and a CEO and a way to lower its expenses.

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