Lyft is an American transportation network company. It connects users to registered drivers who can pick them up in just a few minutes. It uses a mobile phone application that facilitates peer-to-peer ridesharing by connecting passengers to drivers. This new business model has started many controversial debates on its legality and treatment of its drivers. However it has become a very popular form of transportation because of its easy, convenient, and affordable pricing compared to traditional taxi cabs. There are many ridesharing companies out there but there are only two that stand out. Lyft and Uber are the largest ridesharing companies in U.S. Although both companies are fairly large, Uber is more widely known and has a very strong and dominant competitive position over Lyft. There are many ways in which Lyft can incorporate the six principles of persuasion in order to improve their competitive position.
Reciprocation
The first principle is Reciprocation. This principle states that people feel indebted to those who do something for them or give a gift. Lyft is already applying this principle by giving new customers a $50 credit on their first ride, but they can further implement this principle. Lyft can give existing customers an incentive to continue using their services. There can be a program created that is similar to the ones airliners use reward customers based on loyalty and miles traveled. Customers can earn points by miles that they accumulate using a Lyft and earn a free set dollar amount credit towards their account after reaching a set amount of miles accumulated.
Social Proof
The second principle is Social Proof, which is when people are uncertain about a course of action. They tend to look around them to guide their decisions and actions. Lyft currently has a rate system in which customers rate their experience they had with a driver. Although this sounds great, the drivers rating and reviews are only viewable when someone is already using the app to request a driver. There must be a way for people that have not yet used Lyft to see how other peoples experiences have been with Lyft. This can be accomplished by creating a new section to their website and adding profiles for both the drivers and customers where ratings and reviews of both can be seen publicly. The profiles would be kept simple and to the point, just like how the reviews are seen on airbnb.
Consistency
Consistency is the third principle. People tend to like consistency and find ways to stress the consistent values connecting old actions or purchases with values underlying any new actions or purchases. Lyft has a very consistent service domestically throughout 65 cities in the U.S. However, their rival, Uber is global. Uber reaches over 200 cities in 45 countries delivering a consistent service in all of them. In order for Lyft to increase its position, they must expand to other countries where customers can continue to use their services and not have to switch other to Uber. Lyft also has an ingenious way in which they brand their cars so people know it’s a Lyft car. They hand out small illuminated pink mustaches that can be mounted on the dash inside the car. This mustache is a very unique and it makes Lyft stand out over Uber. They also utilize a sticker on the front windshield identifying them as a Lyft driver, where as Uber does not use any of these tactics. Lyft would have to be consistent with the use of the pink mustaches and identifying stickers abroad in other countries in which they would expand to.
Liking
The fourth principle is Liking. The principle states that people prefer to say “yes” to those they know and like. Lyft is already implementing this principle by using ordinary people in some of their marketing as well as celebrities. Just recently, Lyft teamed up with Justin Bieber in early November of this year. Justin Bieber rode shotgun with a Lyft driver to pick up unsuspecting passengers. Go-Pros were installed in the car to show customers reaction and a video was made. That video showed the reactions of the passengers and has over a million views already in just the couple of weeks that it has been out, immediately creating more awareness for Lyft.
Authority
Authority is the fifth principle. People respect authority. Giving an appearance of authority increases the likelihood that others will be more willing to accept what is told to them. Lyft can encourage its drivers to become an expert in the city in which they serve and become very knowledgeable about the roads. This can be accomplished by creating another criteria where customers rate the driver on knowledge of the roads and helpfulness. If drivers receive close to a perfect score they get a monetary incentive. This incentive would ultimately improve customer service and make people want to use Lyft over Uber.
Scarcity
The last principle is Scarcity. The less of something, the more valuable it is. Lyft currently has three different rideshare services customers can choose from. The regular “Lyft” which is just the affordable ordinary car, “Lyft Plus” that can transport 6 people, and “Lyft Line” which people share a ride going the same direction but not necessarily the same destination. Lyft has to expand on this part of their business as well. Uber has 5 different rideshare services. “UberX” is a affordable ordinary car, “UberSUV” is a 6 person car, “Uber Black” which is a high-end sedan, “Uber Taxi” which is a basically a taxi driving under Uber, and “Uber Lux” which is a higher-end car. “Uber Black” and “Uber Lux” are similar but differentiate not in brand but in car model. Uber Black uses a BMW 5 Series, where as Uber Lux uses a BMW 7 Series. What Lyft must do is create the same rideshare services as Uber as well as add a new rideshare that Uber does not currently have. Lyft Exotic can be such a product that Uber does not have yet. It would consist of rare and exotic cars. This new rideshare service will give Lyft a sense of exclusivity and attract more customers. With all these principles applied, the gap between both rideshare companies could become slim to none. Lyft could potentially propel beyond Uber and be in a stronger competitive position over Uber.