Human Capital

"The training, experience, judgement, intelligence, relationships, and insight of the individuals workers at a firm."

Lyft has been able to secure access to an amazing workforce, simply by opening to door to so many backgrounds and expertise levels. I've used the company a number of times, and I never am not amazed by the unique stories I hear from drivers regarding their backgrounds.

For example in a major metropolitan city, here are the stats on how many drivers exist:

"The total number of transportation network company (TNC) drivers between Lyft, UberX and Sidecar in Seattle is approximately 3,000."

Even though the below chart is from their competitor Uber, it shows the scope of what's going on.

Technological Leadership

"Firms that make early investments in technology can be at a huge advantage against competitors moving forward."

One of the first patents applied for by Lyft was for the following:

"System and method for operating a service to arrange transport among parties through use of mobile devices,” while others refer to more specific features of the company’s operations, which are based on consumers using an app to summon nearby drivers."

The company has been on the forefront of this industry and field. They talk about it in all of their major interviews:

"Our vision is for every ride to be a Lyft ride, where we fill every seat in every car," says Wampler. "We've achieved that vision when the mom in the minivan is Lyft enabled, because technology has removed any friction for her to pass by my house when I need to get to the BART station and that's on the way to where she's going. But it's also the sense of humanity that [Lyft co-founders] John [Zimmer] and Logan [Green] came up with—sitting in the front seat, the fist bump, these rituals. For every ride to be a Lyft ride, we have to fill every seat, and you can't do that if you're only sitting in the back. And by the way, she's not going to pick you up if you only want to do that, she's already chauffeuring other people."

Barriers to Entry Into and Industry:

Government Regulation of Entry

According to an article in the Wall Street Journal: "Lyft is one of two popular ride-sharing services (Uber being the other) that have faced significant opposition from traditional competitors such as taxi companies. Governments around the country have attempted to enforce regulations on them"

It has gotten to be such an issue that Lyft has a host of people employed, simply to fight/advocate for their company in local state and principalities. The strict regulations on the taxi industry has cause much frustration. In a lot of ways, the app is a way around the traditional taxi medallion that is so hard to secure in some cities. I could literally become a driver after a sign up and quick background check. Its a pool of workers that has to be very frustrating to peers.

Again, the biggest hurdle for new competitors is the risk of government regulations on the entry of new people into the field

Economic Value

"The difference between the perceived benefits gained by a customer who purchases a firm's services and the full economic cost of the services."

One of the amazing things about Lyft is how many times I've heard individuals say that they would much rather use the service than a taxi. Regardless of actually value, there is a true perceived value at play with the company. Of course, it goes without saying that the temporary rental of a car is much better than walking, but a lot of times people will see more value in renting a temporary driver than actually driving their own car on that specific night. 

With the ease of use, Lyft has been able to create a distinct economic and competitive advantage over taxi services in most cities. The problem, as I'm sure we'll get to in later chapters are the competitors that have also created the same sort of economic value with customers. It really feels more intimate than a taxi and that helps people feel like home.