Lyft Lux and Lux SUV are designed to get under Uber's skin.

Lyft’s New High-End Service Is a Luxurious Nose-Thumbing at Uber

Lyft’s New High-End Service Is a Luxurious Nose-Thumbing at Uber

Moneybox
A blog about business and economics.
May 25 2017 4:51 PM

Lyft’s New High-End Service Is a Luxurious Nose-Thumbing at Uber

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Lyft is cruising toward Uber's profits.

Mike Coppola/Getty Images for Lyft

Everybody seems to have a legitimate grievance with Uber these days: Google, female engineers fed up with its workplace misogyny, the U.S. Department of Justice. But the latest nose-thumbing comes from the company’s biggest domestic ride-hailing rival, Lyft, which announced a new high-end black-car service on its website Thursday.

Stylized as Lyft Lux, the service apes Uber Black, the luxury service Uber pioneered with its 2009 beta launch. Lyft Lux will begin picking up customers with a limited rollout in Chicago, Los Angeles, New York City, San Francisco, and San Jose through mid-June, according to TechCrunch, followed by 15 additional markets. A second service from the Bay Area company, Lyft Lux SUV, will offer parties of six or more in need of a higher-occupancy vehicle the same posh experience.

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Lyft’s expansion follows a series of high-profile PR slip-ups by Uber, which include an exodus of engineering and management talent, revelations in the New York Times that it failed to adequately compensate some of its drivers, as well as budding rivalries with other ride-sharing services and growing discontent among its own employees in international markets like Brazil and South Africa.

Lyft is still an industry lightweight compared with Uber, which tips the scales at a $69 billion valuation. But its competitors are catching up. Hot on its heels is the Beijing-based Didi Chuxing, whose current $50 billion valuation makes it one of China’s most valuable companies. And as Recode reported Thursday, Lyft landed a $7.5 billion valuation with a total of $2.6 billion raised, putting it on pace with Didi.

Lyft’s growth also means a change for the company’s legions of drivers. Those jumping at the chance to ferry customers willing to shell out a prettier penny are required to own a black-painted vehicle—a lengthy rundown of options includes specific models of Audi, BMW, Buick, Cadillac, Jaguar, Lexus, Mercedez Benz, Toyota, and Tesla—no older than 2011 to qualify. Drivers for Lyft Lux and Lux SUV will also need to maintain at least a 4.7 out of five rating from the mobile app’s users in order to make the cut.

But as TechCrunch noted Thursday, diversification is the name of the game as the ride-hailing economy continues to evolve. And as the Verge observed, Uber still outclasses Lyft in terms of niche offerings, including readily available wheelchair-accessible vehicles and cheaper UberXL cars that can fit more people. Lyft’s Premier service, launched last July, was an early attempt to rival Uber’s specialty cocktail of both inexpensive and fancier fare aimed at the business community, Consumerist’s Mary Beth Quirk wrote Thursday. Now, sensing blood in the water, Lyft Lux and Lux SUV may be poised to take a bigger bite out of those competitive advantages.