This is what war to the death for market share looks like from inside my car when dropping off at LAX. Free=$195/week lease rate. Fair=Anyone with a license is eligible to drive for Uber. In California, legal status is irrelevant. If you complete 125 rides/Eats deliveries in a week, the lease is paid by Uber. That’s one way to take a $5 billion write-down in a single quarter and bleed veteran drivers at the same time.
Make no mistake, the rideshare model is ubiquitous and profitable in the major cities. No one is going back to buses and cabs. The ancillary businesses: delivery, freight, scooters and bikes, overseas markets are fiscal sinkholes. So are endless recruitment incentives.
If Uber can agree with Lyft how to divide the market, each could raise fares one dollar per ride, use it to retain the current driver fleet and pad their bottom line.
But that’s not what they’re doing. Los Angeles is shaping up as the Gettysburg of the gig economy. We are in the bloodletting stage before Pickett’s Charge. There will be one dominant market player at the end of the horsemeat.
In another century we had Will to Power. Now we have the Will to Bezos.
Thursday night in Studio City, I get a ride request from a 7-11. A man gets in and asks a familiar question.
“How long have you been driving for Uber?”
“Really? Me, too. I’m a driver, also.”
“That makes us veterans. A rare breed.”
“You ever think about driving for Lyft? Cause I can sign you up right now, in ten minutes.” Wait, what?
We pulled into a parking lot of a bar, and a woman, his supervisor, hopped into the back seat. She opened a briefcase. They had a Lyft recruitment packet ready to go.
They were brand ambassadors. They seemed to already know who I was. Like how I had partially completed a Lyft application in 2016, that I never followed up on. They were friendly, eager to have me. Flirtatious, even.
“We can do the vehicle inspection right here in the parking lot, while you download the driver app.”
Suddenly it was happening. I was being jumped. By the rival gang…
They photographed me standing in front of the bar, submitted my background check, gave me my pink trade dress. I was on my way to being a bi-sexual driver, as so many of us are, now.
It explained a few things. Like the generous spike in Uber driver bonuses of late. And the fresh TV ad campaign for Lyft featuring Jeff Bridges and Tilda Swinton. Los Angeles is the biggest ride share market in the country, and Lyft has steadily been gaining ground.
LA is the misty plain upon which each company is intent on luring the other into a Pickett’s charge. If there is going to be a defining slaughter, it’s going to happen here.
Much is made of Uber as a tech company, but the technology behind rideshare is easily duplicable. The company owns nothing, not even the infrastructure. The phones and the cars are the infrastructure. What Uber owns, and Lyft desires, is the transaction itself, the connective tissue between rider and driver. This too, if you think about it, could be re-positioned onto a publicly-owned forum that could match drivers and riders, Craigslist-style, or more accurately Waze-style, in real time.
Rider demand is unslakable and growing. Cheap fares get people off the bus. Fewer working people on the bus means the derelict/normal person ratio becomes less palatable, leading yet more people to get off the bus. More cars on the road mean fewer people want to drive, and more car owners booking ride share.
So the drivers are the whole ball game. This may sound counter-intuitive. On paper, we’re 1099 peons from Palookaville. We have no collective bargaining rights, no benefits, no employment status. While nearly anyone without a DUI or criminal record can become a driver, in practice very few people do so. Most who sign up wash out after a few months. There is an initial gold rush when Uber enters a new market, after which subsequent driver recruitment efforts yield diminishing returns. In a few years the market is established and pretty much anyone who is going to be a driver is already doing so, or tried it.
Los Angeles has entered the Yojimbo/Fistful of Dollars phase of rideshare. We’re all smoking cheroots now, trading our services back and forth to rival bands offering no quarter to the other. The money has never been better. I’m ready to be a ho samurai. I got my ho shoes samurai sword/six shooter out tonight. I got my pink dress. I’m bisexual, for like, whatever.