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After Uber's stumble, is it Lyft and Sidecar's time to shine?

Both Lyft and Sidecar see significant bumps in business after Uber's publicity blunders, but it appears it'll take more than a boycott to oust the top dog.

Dara Kerr Former senior reporter
Dara Kerr was a senior reporter for CNET covering the on-demand economy and tech culture. She grew up in Colorado, went to school in New York City and can never remember how to pronounce gif.
Dara Kerr
4 min read

Lyft distinguishes its cars with a fuzzy pink mustache. Lyft

After a pile-on of bad publicity for ride-sharing service Uber last week, a certain hashtag started to gain prominence on Twitter: #deleteUber.

Scores of people took to the social network to say they were deleting their Uber accounts because they were done with the company's off-color comments and hardball competitive tactics. Some people posted screenshots of their smartphone showing the deleted app, others said they were switching to ride-sharing rivals like Lyft and Sidecar.

To help grease the wheels, Lyft and Sidecar have been quietly promoting their services as ride-sharing alternatives that respect drivers and cater to riders.

Uber and its competitors have a history of waging war -- but it's been more of a David and Goliath battle than a meeting of equals. Uber has been cast as the buttoned-up luxury car service that could soon be valued at as much as $40 billion. Lyft, its biggest competitor, has been perceived as the more friendly and much smaller alternative. Sidecar, smaller still, is seen as the minor leagues. But even with Uber's recent stumbles it's not clear the tables will turn.

"In the end, most consumers don't care about negative publicity," said Altimeter Group principal analyst Brian Solis, who added that Uber and Lyft also appear to be attracting different types of customers. To move Uber users off the service, and to a competitor, it takes more. "They do care about privacy and customer experience and if negative publicity gathers momentum on those fronts, Uber will have a major problem."

Uber came under fire last week after BuzzFeed reported one of its executives, Emil Michael, said he would like to spend $1 million to "dig up dirt on its critics in the media." At the same time, another BuzzFeed journalist reported Uber's New York general manager tracked her without her knowledge, which prompted Sen. Al Franken (D-Minn.) to send a letter to Uber CEO Travis Kalanick about privacy concerns.

In the aftermath, Uber has done little in terms of damage control. The biggest statement the company made was when Kalanick posted a stream of tweets to Twitter saying Michael showed a "lack of leadership," his remarks were a "departure from our values and ideals," and "folks who make mistakes can learn from them."

Meanwhile, Lyft and Sidecar have been discreetly touting their services. Lyft announced its new "Driver Destination" service on Tuesday that lets drivers give carpool rides during their own commutes or while running errands. It also sent out an email pamphlet to riders saying they can just say "hello" to drivers rather than give the customary fist-bump. Sidecar pointed out a couple of studies: one said its drivers earn 20 percent more per mile than other ride-sharing services and the other said Sidecar is cheaper than all other ride-sharing and taxi services in San Francisco.

Both Lyft and Sidecar said they've experienced an increase in business over the last week. Lyft spokeswoman Katie Dally did not share specific numbers but did say the ride-sharing service had a boost in new signups and "last week was Lyft's biggest week ever in terms of ride volume." Sidecar spokeswoman Margaret Ryan said it also tallied a record week with 40 percent more app downloads, double the amount of driver applications, and a 20 percent bump in rides nationwide, with a 50 percent increase in Los Angeles.

Still, Uber has far more resources than both Lyft and Sidecar combined. Uber has raised $1.5 billion in funding and is rumored to be landing another $1 billion that would put its value between $35 billion and $40 billion. That would make it the highest valued venture-backed company in the world. Lyft has currently raised $332.5 million and Sidecar has raised $35 million.

"Uber will remain the larger player simply because it is fighting to do so in states and countries around the world," Solis said. Lyft "is in a different league and as such not directly benefiting from Uber's negative publicity."

Uber declined to comment.

Parks Associates analyst Tejas Mehta agrees the bad press won't change much unless Lyft and Sidecar add more investors and find a new way to stand out.

"Lyft has been competing with Uber on pricing, which is not sustainable in the long run," Mehta said. "Uber's recent troubles may not dramatically tilt the balance, but if Lyft can gain some market share as a result, it may just be the opening that levels the playing field a little."

Update: Taxi-hailing app Flywheel also reported a jump in users since last week, with a 300 percent growth in app downloads. The company did not release specific numbers.

Updated at 6:40 p.m. PT with data on Flywheel.