Lyft let Uber battle regulators for years before expanding into Canada, and the strategy paid off
Lyft Inc. sat on the sidelines for years while Uber Technologies Inc. battled it out with Canadian regulators before the ride-hailing company expanded into the country. That strategy may have paid off.
Lyft has signed up 10,000 active drivers in its first five months in Toronto, about a third of long-time rival Uber, which has been operating in the Canadian city for years.
“The response has been overwhelming,” Aaron Zifkin, Lyft’s managing director for Canada, said in an interview. “We think that response will carry across the country and so I’m really eager and excited to get rolled out.” Zifkin previously ran Airbnb Inc.’s Canadian business.
Canada was one of the countries Uber entered in its initial international expansion in 2012. Since then, the country has become one of its biggest markets, but has delivered its fair share of headaches, too. Toronto, with a population around the size of Chicago, legalized ride-hailing in 2016 after a drawn-out battle with Uber. In 2015, tax authorities raided Uber’s offices in Montreal and the company still can’t operate in British Columbia, despite years of lobbying.
Now, Lyft is stepping in to bring some competition north of the border. The San Francisco-based company won the drivers in Canada with generous bonuses and referral awards. It’s been giving out discount codes to potential passengers and working with major events like the Toronto Marathon and the city’s upcoming Pride Parade.
To be sure, many drivers use both services, and Uber still has a substantial head start in Canada. About 1.5 million Canadians use the service at least once a month and Uber is set up across the country, while Lyft is only active in a few cities in Ontario. Uber has 830,000 monthly riders in Toronto alone, a company spokesman said in an email. Zifkin declined to provide an updated rider number for Lyft but said 50,000 Torontonians had downloaded the app before the company launched in Canada.
As Uber works to recover from a year of scandals that led its co-founder and Chief Executive Officer Travis Kalanick to leave the company, Lyft has been expanding its share of the U.S. market.
Lyft had 19 per cent of market share for business travelers using ride-hailing apps in the first quarter of the year, according to recent data from Certify, a travel and expense software provider. That’s almost double from a year ago.
Zifkin said Lyft has a third of the U.S. market, and more than 50 per cent in some cities. Those are the kind of numbers he wants to see in Canada and, he said, he has the support from Lyft’s executives to invest to capture that growth.
“We had really high expectations coming into Canada,” Zifkin said. “It has been a lot of fun.”