Uber Still King but is Sidecar the New Lyft?
So Uber has been dominating the rideshare space all year. They have money to burn so they used it to get more passengers and drivers with generous signup bonuses. They also weren’t going to let regulations stand in their way as UberX entered in some very tough cities, such as Las Vegas and Philadelphia and then had to stop service once the crackdown started.
More Drivers, Lower Fares, Less Income
The recent Uber price cuts and oversaturation of Uber drivers have reduced earnings of many drivers and more lucrative hours to drive on Uber have been harder to come by. There are still some times when Uber surges but they have been less frequent, despite the surge rates being much higher at times. Uber implemented some hourly guarantees to protect driver earnings after the last round of price cuts and some Lyft drivers have actually signed up to do them. They claim that the price cut is only temporary based on customer demand. If there is sufficient demand at the new pricing and driver earnings are close to before the price cut, then the price cut will be permanent. It is unknown at this time how long the guarantee will last. The emails claim that the guarantees will last as long as the price cuts are in place.
As Uber keep onboarding more drivers and cutting prices, this has gotten more drivers to look for alternatives. Of course, there have been the full gambit of outcomes on Lyft:
- Because many drivers are signing up to do the Uber guarantee, less drivers are on Lyft, causing more PT
- Because very few drivers are doing the guarantee, high Uber Surge so less passengers on Uber, more on Lyft
I haven’t heard yet that Lyft drivers are making more money now as Uber has cut prices. Its either business as usual or a reduction in demand, hence earnings.
Sidecar Makes a Big Push
Sidecar received an investment from Sir Richard Branson back in September and in November, they decided to put it to use. In November, they doubled their signup bonus to $100 [still active as of 1-22-2015] and Sidecar has seen a nice uptick in drivers signing up and also available drivers on the road. In December after releasing the shared rides feature on their passenger app, Sidecar gave out shared rides for two weeks and then heavily discounted them in the subsequent weeks. During peak times (weekday mornings and night, and weekend nights), they have ran various promotion, from a guaranteed shared ride pricing to a discounted shared ride pricing. Drivers earnings were protected with no commission, subsidies, 1.5x payments, hourly guarantees, or a combination of these promotions.
I hope you can see what they did:
- Get more drivers on the road
- Get more passengers to fill those cars
They essentially took the right approach to expanding business without cutting prices. It does take quite an investment from Sidecar to kick things off, but it seems to be working. In Boston, I have seen many more cars available during Friday night. Mornings are still sparse but better than it used to be. I have given a few Sidecar rides recently and was generally surprised that there is demand. Granted, I am usually the only car online within a few miles but I still get requests that are relatively close by.
From the limited driving I have done in the past few weeks on Sidecar, the earnings are decent. Keep in mind that Sidecar is still on the donation model so you may get a passenger enter in a $0 donation. Sidecar will reimburse you for those rides after 2 weeks so don’t worry about a non-payment. [Note that a low donation is a small but ongoing issue, as it was with Lyft before they switched to a fare model.]
Should You Switch from Uber/Lyft to Sidecar
I wouldn’t say that you can completely switch from Uber or Lyft to Sidecar and keep making the same amount of money you did before the price cut, but it is a viable alternative during key hours of the day. In some cities, Sidecar is quite big and many drivers do Sidecar full time. However, in many cities, it is tough to drive on Sidecar full time because of the lack of demand throughout the day. I believe demand has came a long way in the last two months but still needs to improve a bit more before it becomes a competitive alternative for drivers. However, if you find yourself sitting for long periods of time without a ride request, definitely give Sidecar a shot. There is nothing to lose with trying to get more request. Just getting one or two pings on Sidecar can definitely turn your day around.
Is Sidecar the new Lyft?
So lets go back to my original question: Is Sidecar the new Lyft? Last year, Lyft was the new kid on the block with their pink mustache, loyal driver community, official Facebook Lounges and their mentoring sessions. Lyft seemed as if they cared about their drivers. Then they started competing with Uber with price cuts. Then they pulled back their passenger referral programs which hurt a lot of drivers in the new markets. This caused a lot of anger with Lyft drivers and the Lyft driver community is much less loyal these days than earlier in the year. There are still some die-hard Lyft drivers but the same could be said about Uber. So to me, Lyft is just a pinker version of Uber. There are some big differences between the Uber and Lyft but in my city both pay about the same so I accept the first request that comes. From an income perspective, both are very similar.
Now Sidecar has been expanding demand like crazy in the last two months. They were giving out generous hourly guarantees that were quite competitive. As a company, they decided to reward their drivers who stuck it out during their NYE outage. Lyft and Uber didn’t do the same thing during their outage on Halloween. Sidecar has definitely shown their drivers that they care about their drivers. This goes a long way as many drivers don’t feel the same way about Lyft or Uber. Earlier this year, many drivers rather drive on Lyft than Uber. This wasn’t because we were paid more on Lyft than Uber (the complete opposite), but that we felt Lyft got our back, so we rewarded that loyalty with our time and effort. Then the price cuts and ending various other program severed that relationship with many drivers. Over time, the Facebook Regional Lounges turned from being positive to being rather negative. I believe this was the reason why Lyft switched from having a regional lounge back to having city specific lounges.
I have given a few Sidecar trips and none of them were huge money makers. I’ll admit that right now. However, Sidecar has various promotions and subsidies and I ended up making about $20 an hour. One hour I did clear $30 an hour with a subsidy and not the hourly guarantee. I think this was because my passenger tipped me well but it was still a good hour I had on Sidecar.
I definitely find myself wanting to drive on Sidecar more than Lyft or Uber if I have time for a trip or two before or after work. If I want to work a few hours, I’ll switch over to Lyft or Uber as I don’t get enough requests on Sidecar over the course of a few hours to have get meaningful income from Sidecar. For opportunistic drivers who don’t need to drive a ton of hours a week, you can set your own prices during peak times. Set it to something higher and then perform less rides for the same amount of money. I don’t expect to get rich off of this but its a good way to earn money without wearing out your car on short minimum fare rides.
If Sidecar continues with its passenger promotions and driver subsidies, they can definitely catch up to Lyft and become a good alternative for rideshare income.
So have you tried Sidecar yet? If you haven’t, use this link to signup and get a referral bonus after 10 trips!Rideshare Driver Training Course!