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Can Lyft Take Advantage of Uber's Misdeeds? Not As A 'Better Boyfriend'

Raz Godelnik headshotWords by Raz Godelnik
Investment & Markets
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Lyft doesn’t want to be a nice guy anymore. As Uber seems to be dealing with a new crisis every week, Lyft is striving to use this opportunity to build its brand as a clear alternative: a brand not shy of taking positions and action around political issues like President Donald Trump’s travel ban.

“We’re woke. Our community is woke, and the U.S. population is woke,” Lyft co-founder and President John Zimmer told Time magazine earlier this week. “There’s an awakening … Our vote matters; our choice matters; the seat we take matters." Curiously, he went on to add: "We’re not the nice guys. We’re a better boyfriend."

These statements coincide with a new Lyft initiative dubbed Round Up and Donate: The company will soon give users the option to “round up your fare to the nearest whole dollar and push the difference toward issues impacting everyone everywhere, from climate change to the pursuit of equality,” it announced in a blog post this week.

In the post, Lyft emphasized: “Treating people better along the way is just the way we do it,” subconsciously reminding you of that other company that doesn’t seem to treat people well, whether it's employees, drivers, city officials or other stakeholder groups.

Lyft seems intent on making this humanitarian sentiment a key message as it was also repeated by Gina Ma, who now heads up the company’s brand strategy, in an interview with the Guardian: “The one thing that really sets Lyft apart is how we think about treating people,” she told the paper.

So naturally, we need to ask ourselves: Is Lyft truly woke, does it treat people better and, how to put it, does the company act as a better boyfriend?

Let me start with the last part. I have to admit I am not really sure what a ‘better boyfriend’ actually means, so I can only guess. Maybe Zimmer was looking for a metaphor for a relationship you have with a really cool guy who you later learn isn't so cool at all, recognizing that the other guy, the nice one you didn’t really pay attention to, is actually much better for you because he is just a better person. My advice to Zimmer: Don’t use this metaphor. It doesn’t serve the narrative you have constructed, and some would say it actually goes against it.

Now, to the question about treating people well. I would say this narrative doesn't accurately reflect the reality. In fairness, I believe that Lyft and its founders’ mindset is different from Uber's. As Lyft’s Ma puts it: “John [Zimmer and co-founder Logan Green] have a very clear moral compass for the way they make designs, treat people and build teams. That’s a huge part of our secret sauce.”

I agree with that. (Full disclosure: I have worked with Lyft on class projects in a sharing economy course I teach.) However, I believe that the fact that Lyft drivers are independent contractors without almost any basic benefits makes this statement more of wishful thinking. You can’t claim to treat people well without treating the people that create value for you well, providing them with decent working conditions.

In that sense, Lyft is closer in its model to Uber than to Juno, a New York City ridesharing upstart that provides drivers with equity in the company and is looking to eventually hire drivers as full-time employees. With all its uniqueness, Lyft still subscribes to a model that doesn’t treat service providers well. Only when it significantly changes this element in its business model will Lyft be able to make a clear case that it indeed treats people better.

Let’s look at the “we’re woke” claim a bit closer, too. As Verge’s Andrew Hawkins explained this week: “Most people define 'woke' as being alert to social injustice, especially racism, and expressing a commitment to stopping it.”

Hawkins’ 'woke' analysis looked at issues including ties to the Trump administration (Peter Thiel, a supporter of the president and a Trump advisor, is also an investor in Lyft); social awareness (Lyft opposed the Trump travel ban and donated $1 million to ACLU); treatment of drivers (Lyft shares the same vision of a shift to autonomous cars only with a vague premise that “there would be a “huge role for humans being part of the autonomous transition”); and diversity and inclusion (unlike Uber, Lyft has yet to release diversity data, although it claims to stand for “inclusivity””). Bottom line? The jury is still out.

The main problem with Lyft’s new branding effort is that the company seems to be taking credit for values and practices that are only partially correct, i.e. the company is treating some people well (but many not that well) and is somewhat woke (support some causes but still mostly aligns with a Silicon Valley ‘business as usual’ agenda).

As I wrote here last month, the Trump era requires clarity and commitment. And it is certainly true for companies that want to position themselves as the right moral choice in this new political age. This era also requires consistency: You can’t be committed to treating only some people better – either you are fully committed to treat all of your key stakeholders with dignity and are willing to share with them the fruits of your (and their) labor, or you're not. Similarly, you can’t be somewhat woke – either you are making a serious effort to make a difference or you aren’t.

I believe it is time for Lyft founders Logan Green and John Zimmer to make a decision. Their heart seems to be in the right place. But Silicon Valley’s way of doing business seems to be more dominant in shaping the company’s culture and therefore the way it works and makes a difference overall.

Usually it is quite difficult for leaders to overcome the pressures of investors and the market, but here there’s actually an opportunity for Green and Zimmer to make their case that adopting a truly progressive mindset can be not just morally right, but also makes good business sense. This is an opportunity for Lyft to find a clear voice and what makes it different from Uber. If it misses it, there might not be a second one.

Image credit: Flickr/CB2017_

Raz Godelnik headshotRaz Godelnik

Raz Godelnik is an Assistant Professor and the Co-Director of the MS in Strategic Design & Management program at Parsons School of Design in New York. Currently, his research projects focus on the impact of the sharing economy on traditional business, the sharing economy and cities’ resilience, the future of design thinking, and the integration of sustainability into Millennials’ lifestyles. Raz is the co-founder of two green startups – Hemper Jeans and Eco-Libris and holds an MBA from Tel Aviv University.

Read more stories by Raz Godelnik