Lyft and Uber are currently in a heated battled for car-on-demand services.
So much so that Lyft recently accused Uber of ordering and cancelling 5000+ rides as a way to disrupt Lyft’s services. They even claims that 177 Uber employees around the country were involved.
The reason for the heated competition is that there’s big money on the line for car-on-demand services. Uber’s latest round of $1.2 billion in funding values them at $17 billion to $18.2 billion. That means there’s a lot at stake for Uber to dominate the market.
This competition spills over to PPC ads, something we’re quite familiar with here at iSpionage. Doing a quick iSpionage search we found the following data about Uber and Lyft’s PPC spending from last month.
As you can see, Uber spent between $82,000 and $121,000 while Lyft spent $19,812 to $29,879. This might make it seem like Uber spends four times per month than Lyft, but the monthly averages tell a slightly different story.
Uber estimated ad budget for the last 12 months
Lyft estimated ad budget for the last 12 months
The monthly estimates show us that Uber spent twice as much over the past year with approximately $1,660,000 spent on PPC ads, but Lyft comes in with a healthy $863,000 spent (enough spending to apparently keep Uber looking over their shoulder).
One data point that stands out is that both companies had big advertising months with Uber spending approximately $359,000 in February and Lyft following suit with a $478,000 month in March. Spending for each went down after those big months, but it looks like the two services may have gotten into a spending war for at least a short period of time.
From the summary tabs we can see that Uber is using 1,492 ads for 19,174 keywords. As a comparison, Lyft is using 814 ads for 15,198 keywords, as seen below.
By looking at the top keywords, we see that interestingly the advertising strategies appear to be different. Uber’s top keywords are focused on cab services with seven of their top 10 ads being for cab services of some sort.
The top 10 keywords for Lyft, on the other hand, are all focused on recruiting new drivers with keywords based on delivery and driving jobs. This doesn’t mean that Lyft isn’t bidding on terms like “cab fares in Chicago,” which they are, but Lyft’s top keywords seem to point to more emphasis on recruiting new drivers for the service than getting more riders.
What does this tell us about the two services?
It seems to reinforce what we already know that Uber is the leader in the space and that Lyft is fighting to compete. The fact that Uber can devote a greater percentage of their budget to get new riders indicates that Lyft is still playing catch up by focusing on recruiting new drivers for their service and can’t afford to spend as much to get new rides.
This trend continues as we look at the top ads for each service as measured by iSpionage’s proprietary Ads Effectiveness Index (AEI). Uber’s top five ads target people looking for a taxi-type of service, but Lyft’s once again are dedicated to finding new drivers with headlines like “Make $500 Per Weekend” and “Start Driving for Lift.” You can see the ads yourself in the images below along with the corresponding AEI score.
Next, we’d like to take a look at some landing pages for each company to see where they’re directing traffic. The best practice is to send people to a page with information about what searchers are looking for, so we’ll double check to see if either company simply drops people onto their homepage or if they’re following PPC best practices.
Uber sends all of their top five ads to the exact same page—a mobile-optimized form to sign up for the service. It’s very sleek and focuses all of the visitors attention on signing up for the app without any kind of distracting links or extra information. Here’s what it looks like (you can also click here to see the live version):
Lyft’s landing page is somewhat similar. It’s a simple page with a nice, beautiful background image and an excellent headline that says, “Make $35 Per Hour Driving Your Own Car.” Here’s what it looks like (with the live version viewable here):
If we happened to be a competitor of either Uber or Lyft, we would also set up competitive alerts and keyword alerts in iSpionage to let us know when one or the other makes a change. Competitive alerts are a great way to keep up with your competition and to know when they make significant changes to their PPC campaigns that can affect your business. You simply set up an alert based on a competitor’s URL or an important keyword and receive a notification email whenever anything changes, something that’s especially beneficial when you have as much on the line as Uber and Lyft do in fighting to come out on top in the car-on-demand space.
It’s too soon at this point to know whether or not Lyft’s complaint about Uber’s underhanded practices actually took place or not, but one thing we do know for sure is that the battle for car-on-demand service is just as heated online when it comes to PPC advertising as it is offline when it comes to finding more drivers and riders.
Article note: The budget numbers in this post are estimates based on publicly available data and will not match the actual advertising spend 100%.
Joe Putnam is the blog editor at iSpionage. You can get in touch with him on Twitter at @josephputnam.