Andy Swan is the co-founder of LikeFolio, a company that provides social data for investors.
LikeFolio helps investors understand what’s happening on Main Street, before it becomes news on Wall Street. By combining Twitter’s (TWTR) powerful data feed with our proprietary database of the brands and products owned by companies, we are able to see shifts and trends in consumer behavior in real-time.
Uber vs. Lyft
While a majority of our data tracking revolves around publicly traded companies, we also track a number of “unicorn” private companies that are believed to be on the IPO-track.
So what’s happening now?
In our prior report, we maintained that one of the key components of Lyft’s market share gains was the happiness of its client base. Unfortunately for Lyft, things aren’t going as well as they were last fall…
Note that the method for calculating consumer happiness has changed since the prior referenced post. The chart above utilizes the new, improved formula for the entire data-set.
The bottom line? Lyft customers are still happier than Uber’s, but both it and Uber are seeing significant, steady declines in customer satisfaction over the past 5 years. Basically, Lyft is barely hanging on as the least frustrating of the two services.
We believe this decline is attributable to the commoditization and proliferation of ride-sharing — it’s simply not cool and unique to use an app to catch a ride anymore. In addition, it’s likely that both companies have had to recruit and accept less desirable drivers in order to facilitate growing demand across less densely populated cities.
As a result, customer expectations are rising and dissatisfaction growing. In fact, Uber and Lyft’s consumer happiness levels are beginning to fall in line with the rest of the transportation industry — not great.
Is Lyft still gaining ground on Uber?
To answer, we take a look into LikeFolio’s purchase intent mentions on Uber and compare them to the same metric for Lyft. Instead of just looking at how much these companies were being talked about or retweeted, we want to focus purely on those tweets that strongly indicate the user is actually taking a ride from the service at that moment.
We then graph the ratio between the purchase intent mentions of the two companies. You can think of the chart below as a visual representation of how much bigger Uber is than Lyft over the past couple of years:
As you can see, Uber was providing 9 times as many rides as Lyft in late 2015, and is now barely 5 times bigger. That’s a significant decline in market share for Uber, which is clearly starting to lose its first-mover advantage in a lot of markets as Lyft successfully expands into new markets with a happier customer base.
While the underlying trends, and Uber’s self-inflicted wounds, may be working to Lyft’s advantage, they’d be wise to heed the warning bell of declining consumer happiness.
Uber may be down for the moment, but we wouldn’t count them out.