After I write about ridesharing series cutting their prices to the bone, Lyft decides to go even further
How kind. I just received a text message telling me I'm a Lyft "pioneer" (whatever that means) and offering me ten free rides.
It's a smart marketing move (although I don't actually live in Los Angeles, so not terribly useful) -- but the timing is ironic given all the reporting I just wrapped up for my piece on mobile price wars. Just this morning I called Lyft's “bizarro economic calculus,” of cutting prices to below the bone “unsustainable” and “Silicon Valley’s version of The Hunger Games.”
Mobile web companies are playing a dangerous game, using venture to artificially subsidize their prices, both to grow at a rapid pace and to steal consumers away from their competitors. But when the service is a commodity — a la Lyft and Uber — the passengers won’t be loyal to the company. They’ll be loyal to the price.
Uber has previously offered free rides when they enter new markets. But, by cutting prices to zero for existing customers in existing markets, Lyft is going all out in the ridesharing price wars. Slashing twenty percent off fees? I imagine John Zimmer sitting back going, “Hell no. Why don’t we just give it away for free?”
As one of those lucky Lyft pioneers, I’m not complaining. If only I could use my free rides in San Francisco where I actually live.