It appears that Lyft, the hail-by-smartphone car service that last year earned $1 billion in revenue, wants to be the Netflix of ride-sharing.
Last month, the San Francisco-based company announced it would continue testing its All-Access plan, a monthly subscription service for rides. The service, first made available to a select group of customers in March, charges an upfront monthly price of $200 to secure $15 off 30 rides. The price represents a savings of $250, assuming a customer takes a set of 30 $15 rides per month.
Price discounting in pursuit of market share is nothing new, but it’s a curious move for Lyft, a company that positions itself as a feel-good, socially minded brand. The deep discount not only conflicts with the warm, fuzzy image that Lyft has cultivated, it also endangers its relationship with customers.
I’m a huge fan of Uber and use its services all the time. Still, I can’t deny it’s been a tough couple of weeks for Uber. A blog post by a woman employee who credibly seems to be claiming sexual harassment and retaliation for making those claims was widely covered in the media. Days later, a video that showed the CEO arguing vehemently with an Uber driver about rates went viral. Plus, revelations about “grey-balling” — preventing certain people from accessing the Uber system — put the company in an unfavorable light with a number of different stakeholders.
We hope you enjoy the latest installment of the MIT Sloan Experts Podcast series!
The third in our series of MIT Sloan Experts podcasts features Chris Knittel, professor of applied economics at MIT Sloan, talking about his latest research on racial bias in the ride-sharing industry.
Knittel’s research focuses on how Uber and Lyft are failing black passengers and what to do about it. Listen to this brief podcast and find out how Knittel came to his conclusions, what his findings say about drivers who cancel on customers with names that generally indicate they are a person of color, and what takeaways Uber and Lyft can garner from these findings to improve.
MIT Sloan’s Christopher Knittel, Professor of Applied Economics, and associate editor of The American Economic Journal—Economic Policy, The Journal of Industrial Economics, and the Journal of Energy Markets, spoke with reporter and author Josh Levs during an #MITSloanExperts Twitter chat. During this chat, the men spoke about Professor Knittel’s research on racial discrimination in the ride sharing industry and discussed how ridesharing apps like Uber and Lyft can better contend with this issue.
Professor Knittel will continue this discussion on February 15th during a LiveStream event hosted by MIT Sloan. Read More »
From hailing taxis that won’t stop for them to being forced to ride at the back of buses, African-Americans have long endured discrimination within the transportation industry.
Many have hoped the emergence of a technology-driven “new economy,” providing greater information and transparency and buoyed by an avowed idealism, would help us break from our history of systemic discrimination against minorities.
Unfortunately, our research shows that the new economy has brought along some old baggage, suggesting that it takes more than just new technologies to transform attitudes and behavior.
Our new paper, “Racial and Gender Discrimination in Transportation Network Companies,” found patterns of discrimination in how some drivers using ride-hailing platforms, such as Uber and Lyft, treat African-American passengers and women. Our results are based on extensive field studies in Seattle and Boston, both considered liberal-minded cities, and provide stark evidence of discrimination.