My daughter, Lauren Christianson, does experiential marketing out of an agency (Cunning) in NYC, producing events for clients such as ride-share company Lyft, Uber’s main competitor. Experiential marketing immerses customers in the brand’s promise, such as Lyft’s fun and irreverent brand personality.
This past Halloween, for example, Lauren used special effects make-up artists to transform actors in San Francisco and New York City into zombies. People could request Lyft Zombie Mode and have a zombie delivered to their gathering.
Other recent work includes Lyft Ghost Mode, a promotion for the new Ghostbusters movie, where users could take a ride in an Ecto-1 vehicle. (See picture.) There was also Lyft Jazz Mode at the New Orleans Jazz and Heritage Festival, where riders could order a vehicle with live jazz musicians playing.
Both companies are networks (also called two-sided markets) — digital platforms enabling individual matches between two distinct user groups to the benefit of each side. Riders get easier-to-book rides, effortless payment from a stored credit card, and less expensive fares than taxis. Drivers (many of whom are part time) get a flexible job that’s easy to attain.
Two-sided markets, however, only work when there are enough people on both sides. As the smaller of the two well-known ride-share companies, Lyft must work to have enough riders and drivers. If Uber has more riders signed up, drivers will select Uber to maximize utilization of their cars. If Uber has more drivers, riders will find faster rides with Uber than with Lyft. In other words, scale offers competitive advantage. Creating demand on both sides of a two-sided market is therefore key for up-and-comers.
Lauren is having fun working with Lyft. But is “fun” enough for Lyft to gain share on Uber, the market leader? I have an idea for another rider benefit Lyft could add to its feel-good platform. First, some background.
Lyft and Uber have created a major disruption in transportation markets by both creating new demand and replacing old demand. They brought “new trips” into the market by attracting riders and trips. (Why for example would a group now take the subway if a Lyft Line is cheaper?) But there has also been a lot of substitution; the ride-share companies have drained ridership from old forms of transport. Hire a cab or town-car today and the driver will almost always tell you his or her business has been negatively affected.
I am an example. It costs me $46 out-of-pocket for a towncar ride to my airport whereas Lyft is half the cost. The $20 plus difference offers an opportunity for Lyft to leverage its cleverly named brand to “lift up” drivers, communities, and my experience as a rider, successfully differentiating itself from Uber. The shift could happen quickly as many drivers drive for both Lyft and Uber, based on my anecdotal experience.
How can Lyft accomplish my suggestion? By leveraging some of my financial gain. I would gladly leave a “tip to the community” in which I use Lyft, money contributed to an important community cause such as homelessness or children living in poverty. (The drivers could even select the cause.) I would be helping Lyft-up communities. (Lyft could even save my annual donation history and issue a letter at tax time.)
Research shows people favor brands that have a positive reputation for social responsibility. Uber’s brand as revealed through the actions of its CEO is techy, brash and bullying. Lyft can offer a refreshing alternative – fun, positive, and generous by creating a smart response to making the gig economy fairer for all.
Drivers I have interviewed prefer Lyft because riders can leave a tip on each ride and Lyft lets drivers keep more of their fare. Now it’s time for Lyft to bring more riders on board by making the gig economy not just more fun, but even better for communities.