Lessons in Allegiance: Little Brand Loyalty Among Ridesharing Users
Ridesharing passengers around the world seek a consistent experience, irrespective of the service or brand. Consumers may be lured by, and develop loyalty for, a particular brand at first, but once the novelty and experiential elements of the brand engagement wear off, in many cases, so does the allegiance. This consumer behavior trend is inherently strong in the multiplayer ridesharing market, where competing services offer nearly identical features.
In 7Park Data’s latest Insight Series report “The Trillion Dollar View: Ridesharing” we discuss consumer preferences and offer comprehensive analysis and insight on competition in the US and major global ridesharing markets. In this post we briefly discuss consumer trends in the United States and how Uber and Lyft compete in the country.
Even though Uber dominates the US market, Lyft has been gaining market share on Uber year over year since 2014 in 19 of 20 major cities. Lyft’s gains in US market share are meaningfully impacted by crossover riders. In their search for a better deal, Uber riders have been experimenting with Lyft at an increasing rate.
In general, switching costs, which help to deter fickle users from crossing over to a local competitor, play a critical role in scaling ridesharing businesses. Still, considering how easy it is for users to access different local ridesharing apps and services, there is little that can be done to prevent riders – or drivers – from turning to an alternative operator.
Regarding US consumer spending, Uber users spend an average of nearly $13 more per month than Lyft users ($64 vs. $51). Moreover, both Uber and Lyft users have been spending an average of over $57 per month since 2014, and we estimate that roughly 13 to 15 million US adults will use a ridesharing service by the end of 2016.
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If you rather not do the math on the economic potential of the ridesharing industry, then purchase 7Park Data’s “The Trillion Dollar View: Ridesharing” report and get caught up on the industry’s growth trajectory in major global markets, including Brazil and India, and gain insights on marketplace trends and the future of ridesharing as it continues to disrupt the worldwide transport markets.
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