A few weeks ago, we profiled new cab provider UberCab, which is quickly gaining a dedicated following in cities around America and Europe with its alternative, intuitive cab services. With an integrated mobile approach, geared toward removing the guesswork usually involved in catching a cab in a major city, UberCab has latched on to the need in this struggling economy for cheap rides and convenient pickups, especially for suburban commuters looking for an alternative to unreliable or cost-prohibitive public transportation.
However, Uber is just one small fish in a pond that seems to grow larger with each new interested user. One of the more exciting and innovative options jumping into the crowdsourcing ridesharing game (unwieldy term, I know) is Lyft, another startup focusing on getting people rides cheaply and easily, in urban areas specifically. However, Lyft has avoided the headaches and hangups that have been delaying Uber, specifically because Lyft has removed one major element from the Uber business model – the cabs and limousines themselves.
Instead, Lyft chooses to connect users who have cars or carseats to share, with other users who are looking for a cheaper, more convenient, and easy-to-access-through-mobile platform for finding their own rides to work. Lyft has expanded from an initial unveiling in San Francisco (we know, another exciting start-up from the San Francisco/Silicon Valley cradle of digital civilization, borrrrrring) to Seattle, Los Angeles, and more recently, my hometown of Chicago.
The model remains essentially the same as Uber, allowing users to summon cars to their current location and pay via their smartphone, but the main difference is the cars themselves. They are piloted by users operating their personal vehicles, and the cost per ride is determined by the rider and the driver (although Lyft will send a suggested donation recommendation determined by the distance of the ride).
Certainly, while the benefits of this type of business model allow Lyft to position itself as a very real and very enticing alternative to cab-reliant services like Uber, it’s time for us to examine Lyft using our patented SWOT analysis and find out what it is about Lyft that we can take back to our ventures and businesses:
Sure, the innovative approach Lyft has to identifying an existing demand in current markets and responding to it is perhaps the most essential component of Lyft’s future growth and success. However, for we entrepreneurs and innovators always looking for best practices and methods in entrepreneurship, Lyft provides several clear takeaways for us to apply to our own business.
We have written about this before here, and it may seem intuitive to many of us, but one of the most important strategies Lyft put into practice while attempting to break into an emerging market was to identify an existing competitor’s weakness, and exploit it fully. By removing the cab/limo element of the Uber business model, Lyft is able to circumvent from the outset the very problems that have dogged Uber’s expansion throughout the rival company’s young history.
While certainly a whole new slew of potential problems arises from this approach, notably the necessity for Lyft to experience its own problems and liability issues, Lyft also manages to present itself as a viable and innovative alternative to its largest competitor no matter where it launches.
Aside from this, another key takeaway for us from Lyft has been the effectiveness of intuitive social media marketing and contests as a means for rocket-launching our businesses to the forefront of the industries we are attempting to break into and dominate. Slick marketing, puns, eye-catching visual ads, clever slogans, slightly inappropriate branding; all of these are elements that have helped Lyft gain traction and notice in the four cities it currently resides. No matter how established a proven competitor, an effective and engaging viral media campaign can make up for millions of dollars in advertising by generating organic interest and a dedicated following, even before the launch of a product or service.
Go cash in on today,
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