An Uber-Lyft Duopoly Could Benefit Customers

As monopolies, especially local ones, loom in some other industries, Uber's predominance has been slipping. Will a duopoly between Uber and Lyft be enough to ensure quality ride-hailing?
December 23, 2017, 5am PST | Philip Rojc | @PhilipRojc
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Paul Sableman

Although Uber and Lyft have re-entered Austin's market "with a vengeance," where municipal laws previously kept them away, the prospect of a national Uber-only monopoly seems to be receding. As Joe Cortright writes, "During most of the past calendar year, rival ride-hailing firm Lyft has grown faster, and picked up market share. Nationally, estimates are that Uber's market share has fallen from more than 80 percent to less than 75 percent."

This follows "a series of widely publicized gaffes" from Uber, "ranging from sexual harassment claims against its executives, to a video of the company CEO disparaging one of its drivers, to the ultimate resignation of founder Travis Kalanick." One result has been an informal #deleteUber social media campaign.

Cortright shows that while Uber's still a lot bigger, Lyft rivals its market share in many municipalities. "In general, Lyft has made the biggest inroads in major West Coast markets; in Portland, Lyft has a 45 percent market share, making it a very close rival to Uber."

A duopoly between the two companies may benefit customers, who can switch between the services with little difficulty if they have a bad experience. But a wider field of competitors still seems unlikely in the short term.

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Published on Monday, November 20, 2017 in City Observatory
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