Allegations of sexual harassment, mishandling medical records, multiple lawsuits including one over theft of trade secrets, a string of executive departures, resignation of the CEO, and virtually a new team of executives at the senior management level have affected Uber’s image and its market shares.
While Uber battles these challenges, its primary competitor in the U.S., Lyft manages to make its profit off the situation. San Francisco based cab hailing service Lyft completed a fundraising round in April, raising $600 million. Since then, it has expanded to 150 cities and captured a huge share of the market, thanks to the #DeleteUber campaign. Lyft closed last year with revenues of $708 million, which is 1/9th of Uber’s revenue.
A spokesperson for Lyft said the data underestimates the company’s growth and its gross revenue from rides was $1.1 billion. Lyft has been particularly successful in its hometown where it has captured 40% of the market.
Lyft has managed to capitalize on the opportunity and expand its market share across the country, while Uber’s market shares fell in recent months to 77% from 84%. According to customer surveys by consultancy CG42, 25% of customers have a negative perception about the company and 4% of surveyors have stopped using the app.
According to Stephen Beck, a managing partner at CG42, the biggest challenge for ride-hailing companies is that it is very easy for customers to switch to a different service provider. With so many challenges, it is definitely going to be a long road back for Uber.
Megha Shah for TechFunnel.com