Business is a war and sometimes winning requires you to take the battle to your enemies. Lyft, the cab hailing company that is Uber’s largest rival in the US, may be about to implement this tried and tested stratagem in its ongoing tussle by expanding globally.
Uber and Lyft both started out in the US. However, while Uber favored expanding to hundreds of cities in the world, Lyft chose to focus on its home turf. Some questioned the wisdom of the latter’s move though, as the gap between the companies grew ever larger with Uber attracting greater investments to fuel expansion and even managing to turn profitable in several countries.
Meanwhile, it has also continued to compete with Lyft in the US, the same as with Ola in India and Didi Kuaidi in China. On the other hand, in accordance with the old adage — enemy of enemy is a friend — the aggressive expansion led Didi and several other of Uber’s rivals team up, leading to collaborations and fundings for Lyft.
However, the company has never yet engaged Uber directly beyond the US, preferring to focus upon that country and countering the influence of its rival with marketing strategies that have included discounts for riders and perks for drivers. That is until now.
Speaking at the Fortune Brainstorm Tech conference in Aspen, Colorado, Johm Zimmer, the CEO of Lyft, said that his company’s overseas expansion was very likely. However, he refused to comment further on the topic, also refraining from mentioning the countries Lyft may be eyeing as probable candidates for future expansion.
Lyft has aligned itself with China’s Didi Chuxing, India’s Ola and Southeast Asia’s Grab, in its battle against Uber. So its somewhat unlikely that it will choose these places to expand. Particularly China. The competition between Didi and Uber has reached epic proportions there, with billions in funding raised by both the sides, hardly leaving room for a third competitor.
While Lyft doesnt really have a particular shortage of funds itself — what with General motors pledging $500 million in January — however, its far from matching Uber’s coffers. However, its too early to say anything at present. The company has plenty of options including the South American continent, Europe, South Asia….pretty much the whole world except the US. However, we can expect it to be careful, considering that a lot of these markets have their own, homegrown cab hailing startup.
Meanwhile, Lyft is facing the same troubles that are almost every startup’s lot. Reaching profitability or break even has been a particular issue for cab aggregators — even Uber — and Lyft is no exception. The company expects a flat growth rate with regards to the number of rides this year as well and all those incentives and discounts its been handing out mean that it is likely to keep on burning investors cash for some time to come —
With conditions as they are and no impending sign of achieving a very high growth rate in the US, Lyft must of needs turn to other markets. However, quite a lot of them already have Uber battling it out with domestic players — several of whom also happen to be Lyft’s allies. It will be interesting to see how it manages to squeeze itself into the equation. For now though, lets await an official word confirming the matter.