Amid Discount Wars, Uber and Lyft Jockey for Market Share

Uber share rebounds in March with up to 37% of rides discounted

Key Takeaways

• Lyft took 36% of rideshare revenue between the two companies during the week of February 11

• Uber has since returned to 66% market share

• During the week of March 11, 37% of Uber rides in the US received a discount

• During the week of March 4, 36% of Uber rides were discounted, compared to 12% in the same week in 2018

• 94% more rides were taken with Uber than with Lyft last week

As March comes to a close, another red-hot IPO hits the market. Lyft, often known for following in Uber’s footsteps into new markets and ventures, is this time the one leading the charge. However, Uber’s IPO is expected to be close behind, and in expectation of such, the two companies have entered into a discount war. In November 2018, after months of both rideshare companies hovering around 10% of rides discounted, both Uber and Lyft began offering discounts to riders heading to the polls. The discounts didn’t stop after election day, however, but instead have continued to rise and fall, with Uber’s discount rate spiking to 37% of rides in March.

In our previous story on rideshares, we found that Lyft was gaining on Uber. However, with each company’s final efforts in trying to woo investors, what impact, if any, have these maneuvers had on each company’s market share? Edison Trends analyzed more than 8M rideshare transactions from this last year to find out.

How has market share changed since the rideshare discount war began?

Figure 1. Chart shows the percent of revenue earned between Uber and Lyft during the period of January 1, 2018 - March 24, 2018, according to Edison Trends.


Since the start of 2018, Lyft's market share has been growing steadily, but Uber’s hold on the market is difficult to shake. In late January 2018, 30% of the rideshare revenue earned between Uber and Lyft went to Lyft, and by the week of March 18, Lyft’s share was up 4 percentage points. Their market share peak came in mid-February 2019, when they took 36% of rideshare revenue between the two companies. Despite these changes however, Uber’s hold remains strong — even at their lowest share, they maintained control of over 60% of the US market.

How does the timing of increased discount rates match up with changes in market share?

Figure 2. Chart shows the percentage of rides that had a discount for each brand during the period of January 1, 2018 - March 24, 2019, according to Edison Trends.


Around the end of October 2018, perhaps tied to the upcoming midterm elections, both Lyft and Uber began offering more and more discounts. This increase was more pronounced for Lyft, for which a maximum of 29% of all rides were discounted. Lyft then continued to offer discounts for nearly a third of their rides until the week of December 24. The percentage of discounted rides they offered dropped to 7.6% during the week of January 14th, but their market share didn't begin to decline until over a month later.

Uber's most recent market share increase, seen in Figure 1, coincides with a noticeable rise in discounting from the week of February 18 onward. The share of discounted rides for Uber increased from 11% to 37% between the weeks of February 11 and March 11. Seeing their efforts pay off, during this time, Uber saw its market share rise by 2 percentage points within one month.

How have the discounts affected the price per mile of rideshare trips?

Figure 3. Chart shows average price per mile paid by customers for Uber and Lyft during the period of January 1, 2018 - March 24, 2019, according to Edison Trends.


While there have been many peaks and valleys in price per mile, Uber’s price is consistently higher than Lyft’s. Uber’s sharp increase in discounts during the week of February 18 resulted in their average price per mile dropping 4% versus the previous twelve weeks, to $4.06, which was still more expensive than Lyft’s price during the same time period.

How did the discounts affect the number of rides customers took?

Figure 4. Chart shows number of rides taken with Uber and Lyft during the period of January 1, 2018 - March 24, 2019, according to Edison Trends. Note: "1x" means "1x the number of rides taken with Lyft during the week of January 1, 2018." For instance, if 100 rides were taken with Lyft that week, 223 would have been taken with Uber.


Looking at number of rides per week, the trends are very similar between Uber and Lyft, with the exception of the past two months. As with market share seen in Figure 1, Lyft hit their peak first during the week of February 11, while Uber followed with a peak of their own in the week of March 11. As of last week, about twice as many (94% more) rides were being taken with Uber rather than with Lyft.

As the market evolves, we will continue to stay on top of the latest trends. To learn more about how Edison Trends can help your business, contact us at bizdev@edison.tech. For more up-to-date insights in the e-commerce space, be sure to subscribe to our newsletter, and follow us on Twitter at @EdisonTrends.

*The data in this article is based on an estimate of Uber and Lyft sales, examined via more than 8 million rideshare transactions per year, according to the Edison Trends dataset.