Lyft and Grab, a ride-hail app based in Southeast Asia, have a plan to make foreign travel easier. In the process, the two-sided battle for ride-hail dominance heats up.
Anthony Tan, the CEO of Grab, announced on June 1 that Grab users will soon be able to hail a Lyft with the Grab app while in the United States. The rider can then pay in the Grab app using their local currency, and the same goes for Lyft users traveling to Southeast Asia.
It’s not the first partnership between Lyft and foreign ride-hail apps, but it will be the first where both sides can do the same thing. Lyft has similar partnerships with Chinese ride-hail giant Didi Chuxing (the one Apple invested $1 billion into) and India’s ride-hail service Ola.
The move is another step that pits Uber against the rest of the ride-hail apps in the world.
Easier International Travel
One of the most groundbreaking pieces of this announcement is that riders can use their local currency rather than calculating out and switching.
The partnership makes the world a smaller, less complicated place for wandering travelers. Navigating public transportation in a foreign country is difficult. Allowing Lyft riders service to the 30 cities that Grab operates in in Singapore, Indonesia, Philippines, Malaysia, Thailand, and Vietnam makes travel a little less stressful. The same goes for Southeast Asia travelers visiting the 200 cities in the United States that Lyft operates in.
But that ease on the riders’ end translates to more work on each of the companies’ end. For each transaction, Grab and Lyft have to work out the currency exchange in the app. This creates a need for more staff, more app development, and more customer support.
Despite the extra positions, each company benefits just as much, if not more, as the riders. Lyft gets to expand its brand without fighting against foreign governments and customs that the company’s head executives might not be familiar with.
Uber, on the other hand, uses the same app worldwide. The app gets translated into the local language, slightly adjusted, and then released into the marketplace with the funding of a major company.
So far Uber’s method has allowed it to break into an impressive number of cities across China and Southeast Asia. But it faces stiff competition. Didi Chuxing (which has a similar partnership with Lyft as Grab does) has a huge base of Chinese users who are more likely to stick with the local app they know — and that knows them — than move over to Uber.
Solidifying the Two-Sided Ride-Hail Market
Lyft and Grab’s announcement is further evidence of how ride-hailing apps have split into two teams: Uber, and every other company around the world that is not Uber.
It’s not that there isn’t room for apps — especially as more people move to urban areas and the positive societal benefits like less fatal crashes and less DUIs that ride-hail companies bring to a city become more obvious. When two major players dominate so much of the playing field through proliferation (like Uber) and partnerships (like Lyft), though, users get used to relying on an app they know will work whenever, wherever.
Of course, in cities that have regulated the big two out, smaller companies pop up. But those smaller local companies can’t match up to a chain that is recognized everywhere by travelers.
People in different parts of the world will pick sides — team Uber, or team not Uber — as the to two sides of the app-based ride-hail market solidify. uber dominates the North American market and is rapidly growing in South America, while Lyft holds a fare share of North America and is growing in Asia through its partnerships.
The one clear winner? The riders.