Tailor Research at Penserra

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1 CONTENTS Key Takeaways 1 Survey Composition 2 Lyft Only 3-4 Uber Only 4-5 Uber/Lyft Customers 6-8 Uber/Lyft Drivers 9-12 Appendix Important Disclosures can be found on Pg. 13 Appendix Date November 8, 2018 COMPANIES Uber Lyft SECTOR On-Demand Transportation INDUSTRY Technology LOCATION United States TIMING OF RESPONSES October Tailor Research at Penserra Ride Sharing Survey Background: In a July 19, 2017 magazine article, Fortune s Michal Lev-Ram summed up sentiment in the relatively nascent on-demand ride-share industry. He implied that although Uber had a commanding head start, Lyft-the proverbial tortoise-was inching toward winning the race because of a more cautious and deliberate strategy. To be sure, investors are trying to understand the ramifications of an industry chock-full of controversy, including, crowdsourced labor disputes, autonomous car crashing, questionable spy programs, and alleged sexual harassment. Yet despite these issues, the ride-sharing industry is here to stay. As such, we looked at the two leading companies to see how their competing strategies were faring. Not in the eyes of the media, but rather in the eyes of consumers and the growing armies of drivers. Key takeaways RESPONDENTS (319 Total) Drivers (123) Consumers (196) GEOGRAPHIC BREAKDOWN The sample was skewed for both the driver respondents and consumer respondents toward the South and West, next was Northeast and the Midwest was underrepresented. CONTACT Penserra Securities LLC (800) research@penserra.com DOR: George Schmilinsky (925) As the on-demand ride-sharing market continues to evolve, customers are recognizing a positive change: Approximately 63% of respondents who use both Uber and Lyft stated that there has been a noticeable uptick in quality. Of that figure, 92% stated Uber, and 84% stated Lyft, had changed for the better. Of the Uber- and Lyft-only consumer respondents, a greater percentage of Lyft-Only consumers stated there was uptick than Uber-Only consumers. When we asked customers, who used only one platform why they preferred that platform, Uber and Lyft customers had vastly different profiles: Nearly all Lyft-only customers (52 out 58) had tried both Lyft and Uber but chose to use only Lyft. Conversely, a little over half of Uber-only customers (28 out of 55) had never even used Lyft. When we asked customers to compare ride sharing usage today from a year ago, 49% were using ride-sharing more, 36% the same, and only 15% are using it less. Regarding future usage, 41% anticipate using the service more, 52% the same, and 7% less. According to driver respondents who use both Uber and Lyft, Uber is the platform preferred for tips, incentives, and consistent business flow. Uber is the larger platform with broader reach. However, worth noting that on a stand-alone basis Lyft feedback skews positively.

2 Tailor Research: Ride Sharing Report 2 Survey Composition Respondents: We spoke to a sample of 196 transportation-on-demand consumers (Uber/Lyft) and 123 transportation-on-demand drivers (Uber/Lyft) across the United States (slight skew toward the South and West regions). Most respondents were in urban to sub-urban areas. Eighty-three (83) respondents were both Uber and Lyft customers, while 55 respondents were only Uber clients and 58 were only Lyft clients. Seventy-four (74) respondents were both Uber and Lyft drivers, while 41 respondents were only Uber drivers and eight were only Lyft drivers. Uber s platform was formed first, and this is reflected in the average time consumers have been on each platform (according to our respondents): Questions Asked: Both driver and consumer respondents who only used Uber or Lyft were asked a different set of questions than respondents who used both platforms. The main difference was regarding the reason for only choosing that platform for those consumers who used only one platform. Consumer Questions Other: Time on Platform Uber Lyft Less than 1 year years years years 11 8 Total Do you use ride sharing more, less, or the same from a year ago? Where do you see your demand going a year from now? Have you had a bad experience with either ride sharing program and if so with which company, did you file a complaint, did they reply quickly/easily, and ultimately was the issue resolved? Since you started using (platform), do you think the quality has changed over time (better, worse, same)? How often the service is used and average ride time? How often would you say you are given an offer for a discounted ride? The willingness to give a driver a bad rating from 1 to 10? Driver Questions Other: How long have you driven for Uber/Lyft? How likely are you to recommend Uber/Lyft from 1 to 10 and do you have a preference between platforms? What platform gives better tips? What platform gives better bonuses/incentives? What platform gives more consistent business? What platform has the better app? What are the better/easier things about each platform and how you would rank each platform? The percent of time on one app over the other and how might that change in a year?

3 Tailor Research: Ride Sharing Report 3 Lyft Only Users and Drivers Consumers who only use Lyft: We asked 58 consumers who only use Lyft why they chose to only use that ride-sharing platform. The results were interesting when comparing Uber s only consumers with Lyft s. Almost all of Lyft-only consumers (52 out of 58) had tried both Lyft and Uber but chose to only use Lyft. While a little over half of Uber-only consumers (28 out of 55) had only used Uber. Forty-five percent of Lyft-only consumers stated that they chose to use only Lyft because it was less expensive (26 out of 58). A lower percentage (33%) stated they chose to use Lyft because it was a better application. Only 22% stated that it was because it was quicker (13 out of 58). However, one-third of Lyft-only consumers (20 out of 58) chose Lyft because of better service. When Lyft-only consumers were asked whether they use ride sharing more, less, or the same as a year ago, 27 out of 58 respondents (47%) indicated that they used ride-sharing more. Only 13 out of 58 stated they used it less and 10 stated they used the same. When these same respondents were asked whether they believed this would change a year from now, nearly half stated they did not (27 out of 58) while 21 stated that they would use it more, ten stated they would use it less. Only 11 (19%) Lyft-only consumers stated they had a bad ride sharing program experience and one of those stated it was with Uber, another with both Uber and Lyft. A little over half of these consumer (6) filed a complaint but almost all stated the process was resolved quickly and easily. Lyft-only consumers were asked whether they thought the quality of services had changed over time. Over half (55%) stated they did not see a quality change. Of the ones that did, a high majority (23 out 26) stated that it was for the better for Lyft, three stated it was for the worse for Lyft. One who had tried Uber stated that it was for the better for Uber. Lyft-only consumers were asked how many times a week they use the service. The following chart summarizes the results (out of 58).

4 Tailor Research: Ride Sharing Report 4 Drivers who only use Lyft: We asked drivers who only used Lyft (eight drivers) why they did so; out of the four categories the respondents could chose from, only two were chosen: (1) three of the eight chose better economics as the reason; (2) while five out of the eight chose better hours. No other questions were asked of these respondents. Uber Only Users and Drivers Consumers who only use Uber: We asked 55 consumers who only use Uber why they chose to only use that transportation-on-demand platform. A little over half of Uber-only consumers (28 out of 55) had only used Uber, which was the main reason for only using one platform. The biggest reason why Uberonly consumers, who had used Lyft, chose Uber was quicker pickup (14 out of 55). Other reasons cited were less expensive (8 out of 55), better app (9 out of 55), and better service (9 out of 55). When Uber-only consumers were asked whether they use ride sharing more, less, or the same as a year ago, 24 out of 55 consumers indicated that they used ride-sharing more, while 21 indicated that they used it about the same. Ten Uber-only consumers indicated that used Uber less than a year ago. When these same consumers were asked whether they expect this to change in the next year, most stated they did not, while 31% expected to use ride share more. Only one out of 55 Uber-only consumers stated they had a bad ride sharing program experience. That respondent stated it was a bad experience with a driver, but they did not file a complaint. Uber-only consumers were asked whether they thought the quality of services had changed over time. Twenty-two out of 55 (40%) Uber-only consumers stated that they saw a quality change over the period of time of using the platform but most of that change was positive. Twenty-one of the 22 respondents

5 Tailor Research: Ride Sharing Report 5 who stated that there was a change in quality noted a positive change. Uber-only consumers were asked how many times a week they use the service. The following chart summarizes the results (out of 55). Drivers who only use Uber: We asked drivers who only used Uber (41 drivers) why they chose only Uber, their reasons were mixed. See the following chart for a summary. Analysis of Uber and Lyft Consumers

6 Tailor Research: Ride Sharing Report 6 We surveyed 83 consumers who use both Uber and Lyft to gain perspective on the strengths and weaknesses of each platform. In general, Uber s qualitative feedback from hybrid users was more bullish than Lyft s. However, it is worth noting that on a stand-alone basis each platform scored favorably (see results above). First, we wanted to know how likely they would be to recommend each respective platform to a friend (10 = very likely, 1 = not likely)? While both platforms represented themselves well Uber (52% of respondents scored 10) outpaced Lyft (34% of respondents scored 10). Of the 83 consumers that use both platforms, we wanted to gauge what percentage were pre-disposed to use one platform over the other. As the table below indicates, Uber was the preferred choice:

7 Tailor Research: Ride Sharing Report 7 Feedback positive for both Uber and Lyft: Although results were favorable for Uber, it is worth noting that both Lyft and Uber had very favorable feedback overall. To illustrate, out of 83 respondents, only 16% noted a bad experience on either platform: As the on-demand transportation market continues to evolve, consumers are recognizing a positive change; Approximately 63% of respondents stated that there has been an uptick in quality and of that figure, 92% stated Uber and 84% stated Lyft had changed for the better.

8 Tailor Research: Ride Sharing Report 8 Consumer Usage: Uber/Lyft hybrid consumers were asked how many times a week (to and from) they use the service. These hybrid users used each platform in similar ways versus the other. The following chart summarizes the results (out of 55). Consumers willingness to give a bad rating: Consumer Uber/Lyft hybrid users were asked their willingness to give a positive or negative rating. Overall, consumers were willing to provide bad ratings.

9 Tailor Research: Ride Sharing Report 9 Analysis of Uber and Lyft Drivers We also surveyed 74 drivers who drive for both Uber and Lyft. As previously discussed in the consumer analysis, both platforms generally received positive reviews. However, Uber ratings from hybrid drivers were better than those for Lyft. We asked drivers of both platforms how likely they would be to recommend the respective platforms (10 = very likely; 1 = not likely at all). Many drivers are inclined to recommend both platforms (83% rating Uber 8-10 vs 84% for Lyft). Worth noting 43% of respondents scored Uber a 10 rating while 35% of respondents rated Lyft a 10 a negligible difference given the sample size. The chart below illustrates the results. We also asked the 74 drivers that use both platforms a handful of questions to gauge their respective preference across various metrics.

10 Tailor Research: Ride Sharing Report 10 First, when directly asked for preference between platforms 49% of respondents chose Uber, 42% saw little/no difference, and only 9% prefer Lyft. When asked which platform yields better tips 50% cited Uber, 28% same, and 22% Lyft. We saw similar results when drivers were asked who provides bigger bonuses/incentives with 50% saying Uber, 27% Lyft, and 23% same. When asked which platform gave more consistent business, Uber led the results; 55% of drivers gave Uber a positive rating for consistent business compared with only 15% for Lyft. When hybrid drivers were asked which platform was the easier to work with, 50% of hybrid drivers noted Uber compared with 18% for Lyft. Thirty-two percent stated that both platforms were easy to work with.

11 Tailor Research: Ride Sharing Report 11 Tips, bonuses and incentives: Drivers who used both Lyft and Uber were asked about their preference between platforms regarding tips, bonuses, incentives, consistency of business and the overall ease of which to use either platform. Overall, Uber fared well in all metrics. Roughly fifty-percent of drivers stated that Uber was the superior platform for tips, incentives and ease of Use. A higher percentage preferred Uber for the consistency of business. Lastly, we surveyed all the drivers with questions to gauge overall level of satisfaction with both platforms. Overall, both platforms were ranked similarly. We also asked respondents the percentage of time they spent on each platform. The results partially reflect the time each platform has been in existence.

12 Tailor Research: Ride Sharing Report 12 Interesting Quotes Some reasons cited for why Uber is the better platform: Uber's app is easier to use the info is easier to get too. You don't have to be sent to different webpages to see stuff or change driver preference. - Driver, Lansing IL Uber has Customer service phone number if you need to get ahold of them. Lyft does not they only deal with . - Driver, Vernon WI Provide more employment opportunities and increase income significantly - Driver, Philadelphia, PA Some reasons cited for why Lyft is the better platform: Lyft uses GPS location of the phone - Driver, Fayetteville, NC Lyft has much better support. No contest. - Driver, Newark, DE

13 Tailor Research: Ride Sharing Report 13 Appendix Our Approach to Research Tailor Research at Penserra uses a bottom-up approach to gathering market intelligence (e.g. shifts in volume, price, market share, etc.). Penserra gains this knowledge through compliance-friendly industry channel-checks using a mosaic approach. Many respondents are contacted, each with very little information and usually through tertiary distribution channels rather than the target company itself; it is only through forming a mosaic of their answers does the data become informative. To facilitate this, Penserra uses an innovative technology platform that has surveyors located throughout the world. There is a technology barrier between the respondent and Penserra (a registered and regulated broker-dealer of its own). When Penserra receives the data, the data goes through a compliance protocol to ensure the individual data (responses from respondents) is not material, then the data tested (statistically) for anomalies to ensure the integrity of the data is good. Some data is randomly spot-checked with a second surveyor, especially when anomalies are discovered. All research is then sent to research supervisor as a further precaution to ensure compliance and data integrity. Then, the client received the research after three layers of compliance and no one-on-one interaction with the respondents. Penserra ensures we are consistently improving on our mission to be the best source of market intelligence at an affordable price available by also back testing our results. Custom Reporting Penserra Research offers two research solutions: Semi-Custom and Customized research reports. Semicustom research reports are reports shared with a handful of clients in exchange for lower fees. Our Custom and Semi-custom research solution utilize a technology research platform allowing investment managers to get out of the channel check business and instead focus on their core competencies. It is an efficient, cost-effective and scalable solution providing analysts access to industry s participants. Clients tell us the questions to ask, or we develop them with them (or even independently), clients work with us on how many respondents to survey and their budget constraints. Penserra does the rest. Clients use the platform when they want to, with no minimum service required. Regulatory Disclosures All materials are provided for informational purposes only and should not be used or construed as an offer to sell, a solicitation of an offer to buy, or a recommendation for any security. Penserra Securities LLC is not responsible for gains/losses that may result in the trading of these securities. All information is believed to be obtained from reliable sources, but there is no guarantee that the information supplied is accurate, complete, or timely. There is no guarantee or warranty with regard to the results obtained from the use of Penserra s research. There is no guarantee of suitability or potential value of any particular investment or information source. You acknowledge that your requests for this information are unsolicited and shall neither constitute nor be considered investment advice. Penserra has not received or is not entitled to

14 Tailor Research: Ride Sharing Report 14 receive compensation from any covered company in any of our reports over the last 12 months. Past performance is not an indication of future performance. The interpretations and opinions expressed herein are solely those of the author and not of Penserra Securities LLC as an organization. Penserra Securities LLC Member: SIPC, MSRB, FINRA. Analyst Certification The views expressed in this research accurately reflect the personal views of the analyst(s) about the subject securities or issuers and no part of the compensation of the analyst(s) was, is, or will be directly or indirectly related to the inclusion of specific recommendations or views in this research. The analyst principally responsible for the preparation of this research receives compensation based on overall revenues of Penserra Securities LLC and has taken reasonable care to achieve and maintain independence and objectivity in creating this report. Penserra Since 2007, Penserra has served some of the largest and most sophisticated asset management firms, corporations, banking institutions, foundations, and retirement systems from around the world. We are a specialized institutional financial services firm with offices in Chicago, New York, and San Francisco/Bay Area. As a broker-dealer, Penserra offers a variety of equity and fixed income trading services, investment banking, equity research, and ETF specialized trading services. As an investment advisor, Penserra offers transition management, passive index strategies, and ETF sub-advising. By combining the strength of our people and leveraging our proprietary technology, we offer institutions specialized products and services that deliver precision and innovation. Penserra Securities LLC (800) SAN FRANCISCO/BAY AREA 4 Orinda Way, Suite 100-A Orinda, CA CHICAGO 440 South LaSalle Street, Suite 710 Chicago, IL NEW YORK 75 Broad Street, Suite 201 New York, NY 10004

15 TRUST PRECISION INNOVATION We are available to answer your questions, discuss your current research coverage, or help you evaluate your investment research needs at any time. Contact Us (925) All materials are provided for informational purposes only and should not be used or construed as an offer to sell, a solicitation of an offer to buy, or a recommendation for any security. Penserra Securities LLC is not responsible for gains/losses that may result in the trading of these securities. All information is believed to be obtained from reliable sources, but there is no guarantee that the information supplied is accurate, complete, or timely. There is no guarantee or warranty with regard to the results obtained from the use of Penserra s research. There is no guarantee of suitability or potential value of any particular investment or information source. You acknowledge that your requests for this information are unsolicited and shall neither constitute nor be considered investment advice. Penserra has not received or is not entitled to receive compensation from any covered company in any of our reports over the last 12 months. Past performance is not an indication of future performance. Investors are encouraged to consult a registered broker or investment adviser before making any investment decisions. The interpretations and opinions expressed herein are solely those of the author and not of Penserra Securities LLC as an organization. Penserra Securities LLC Member: SIPC, MSRB, FINRA Penserra