Uber has been enduring horrendous press for almost a year, the latest bad news being tied to a lawsuit from investors against former CEO Travis Kalanick. Meanwhile, smaller rival Lyft has been quietly reaping the gains of Uber’s journey from controversial-but-envied company to veritable Silicon Valley pariah. How could it not? Lyft head of product Taggart Matthiesen told Recode that Lyft “saw a 60 percent increase in passenger activations” in response to the first #DeleteUber protest.
Despite its demure reputation, Lyft is aggressively capitalizing on the opportunity to grow at Uber’s expense — and spending less doing it. A source who worked on Lyft’s promotional efforts told Inc. that Lyft has been progressively reducing its marketing since fall 2016 as Uber’s troubles have increased. The source, who requested anonymity due to an NDA, said that Lyft has been scaling back its partnerships with external promoters as well as reducing the financial incentives for new users to sign up. Uber’s troubles and Lyft’s growing public profile are apparently providing more than enough incentive for consumers to switch.
Inc.‘s source estimated that Lyft was devoting $50 in incentives per new user in October 2016, $20 in the spring of this year, and then $5 “almost nationwide” by early summer. Lyft is likely spending $10 to acquire a new user, down from the previous benchmark of $70. Meanwhile, third-party promoters’ potential commissions were limited to $2,000 each in fall 2016, then halved in early 2017. Lyft declined to comment on these numbers or the timeline. The company would not confirm that it has actually cut marketing spend rather than simply reallocating it.
originally posted by –https://www.inc.com/sonya-mann/lyft-uber-marketing-spend.html