Lyft wants to enter the Indian market. What should be the strategy?

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Lyft wants to enter the Indian market. What should be the strategy?

Asked at Lyft over a year ago

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Malavika Lakireddy · Answer 1 · 2020-05-10T08:44:30+0000

Clarifying questions

Lyft provides on-demand ride sharing of cars, scooters, bicycles etc
Lyft also provides food delivery

Q) Is lyft looking to enter the market with only ride sharing or only food delivery or both?

Lets say only ride sharing

Q) Is lyft looking to provide ride sharing of cars only or cars, 2 wheelers etc

Lets say both

Q) In the view of COVID, the demand for ridesharing may have dropped significantly due to health & safety concerns. Do I have to take into consideration this special case?

Yes

Q) Will lyft employ professional drivers or part time drivers?

Lyft’s USP has been part time drivers - your friend driving you around. With this philosophy, Lyft will be primarily focused on non-professional drivers, who will be like a friend with a car.

Using porters 5 forces, lets analyze the market

Customer: Indian customers like the convenience of ride sharing, as lot of them dont like to drive. Indian ride sharing market is very huge considering the concentration of population in Metros, Tier 1, Tier 2 cities. In addition to ride sharing a car, 2 wheeler sharing is also very popular. Customers are price sensitive, however prices are also not very transparent. Getting customers to be aware of, download and use the app will be a significant challenge.
Competition: There are 2 main competitors for ride sharing - Uber and Ola, both of which primarily employ professional drivers. There are also carpool apps like Quickride, but these are limited by existing riders going to offices. There are also short term rentals such as zoomcar for cars and bounce for scooters. There has been a consolidation in the market, but there is also significant pent up demand as well as seen by customer satisfaction of the ride sharing apps.
Suppliers: The suppliers for Lyft would be non-professional drivers. In this case, recruitment for such drivers would be difficult as driving for others is considered a menial job in India, unless it is like a car pool. The cost of car and/ or scooter is also significant, so the drivers will need to put in significant hours to recoup the cost of driving. If Lyft can provide incentives and/ or charge higher for non-professional drivers aka “friends”, then the platform may attract drivers especially in metro and tier 1 cities. Supplier availability will significantly drive the success of the platform
Regulatory landscape: There are some regulatory constraints from entering into the Taxi/ ride-sharing business, but Lyft may circumvent this by being a pure marketplace
Company: Lyft has an overall robust infrastructure which can scale to new geographies.

Overall, there is sufficient demand and potential propensity to pay in India for differentiated services like Lyft in India. The key risk is driver aka supplier acquisition at scale to drive the availability and success of the platform.

Productize Me · Answer 2 · 2020-04-19T13:21:29+0000

My idea of how to answer this product launch question.

I think our business goal is to increase revenue. Is that fair to assume? The Indian market is huge being the second most populous country in the world. Is there a specific vertical of Lyft we should focus on (if not, I'll decide this in a bit).

I'm first going to analyze a few different components before formulating the launch strategy. After this, I will determine pre-launch, launch, and post-launch activities to achieve success.

Components:

Product
- Lyft is a rideshare business which connects riders to drivers. However, its ultimate goal is to allow for ease of transportation. In the US, there are multiple verticals of Lyft (Shared, normal, bikes, scooters). We should focus on one of these verticals to launch first to limit the scope and necessary infrastructure for our launch.
  - Rideshare requires an ample amount of drivers. Also, I believe India is known for its traffic. Bikes or scooters may be interesting, but we would probably have to ship a bunch of them and it may be logistically challenging without proper lock mechanisms or stations. I would suggest we capitalize on the high number of cars already existing in India and focus on rideshare. I would also suggest we focus on normal rideshare where a driver must complete a trip for one passenger, instead of shared rides as we likely need time to optimize map traffic routes. This also gives the customer a more tailored experience which is easier to control.
Market
- We should think about what part of India would make the most sense. I would consider rural, metropolitan, and suburban areas. I think that given we want to increase revenue, we should focus on metropolitan areas where there is more movement and more potential customers.
User
- We need to make sure people understand our app, so we will need to deal with localization. It's also important to consider that this market probably doesn't have the same brand understanding as we have achieved today. I will assume this is part of the product.
Competitors
- I believe there are several competitors in the Indian market today. Uber has also tried to expand into this market. Just because there are a large number of competitors, I don't think we should be deterred, but should come up with clear differentiation. Where Lyft succeeded when it was launched in competition with Uber was it's branding as a "friend picking you up." I believe we should lean heavy into this marketing. Local competition has the advantage of being local. I think we could partner with car leasing companies to create that local feeling.
- Also, I believe our pricing strategy could help us remain competitive. It may be worth taking smaller profits in the short-term to first establish a strong presence before focusing on long-term revenue.
Environment
- The Indian market is new to us. In the US, we have faced regulations, so we need to make sure we are compliant to avoid any barriers.

Given these considerations, I'll now formulate a launch plan with these in mind.

Pre-launch:

The biggest thing we will need to ensure is that we have an adequate number of drivers to meet expected demand. We can do this in a few ways:
- Offer monetary incentives to drivers: keep 100% of your profits in your first month
- Partner with car dealerships/leasers to loan people cars to use for Lyft
- Buy out a local rideshare service and leverage their driver base
- Refer other drivers
Marketing plan: Because we are a new brand, we should raise awareness of Lyft
- Physical billboards on roads
- Promotional videos in social media showing friendly Lyft experiences, "Meet your driver"
Training for drivers
- Give educational material for drivers

Launch

Promos for new riders
Press releases in local newspapers/online
Local blogs posts with influencers/celebrities

Post-launch

I would measure the following
- Acquisition
  - Number of app downloads
  - Number of drivers
  - Number of people who have taken at least one ride
- Customer experience
  - Average ratings--customer and driver
  - Number of cancelled rides
  - Average wait time
- Revenue
  - Average cost/ride
  - Average revenue/ride
- Retention
  - Average number of rides/user X weeks after joining platform
I would also like to follow up with drivers and riders within the first month for their feedback. This can also help us understand more about the experience if people are not retained or the customer experience as defined in the earlier metrics is poor.

To summarize, I would suggest we launch Lyft rideshare (basic rideshare) in India in a metropolitan market. This gives us the most opportunity to achieve our ultimate goal of increasing revenue by capitalizing on the massive Indian market. Because there are quite a few competitors in the space, we should take short-term revenue hits if possible to first establish our brand and infrastructure. We would need to ensure we have an ample amount of drivers before launch, which we can do through driver promos or referrals and a partnership program. We can also create buzz before launch through physical billboards and promotional videos on social media to solidify our market presence and raise awareness. We also need to set our drivers up for success. On launch day, we'll coordinate internal and external media to make a splash in the press as well as offer promos for new riders to increase acquisition. Post-launch we will closely monitor acquisition as well as the overall customer experience and retention to determine areas for optimization.

Kaushik · Answer 3 · 2021-02-28T15:03:38+0000

Clarifying Questions

What is the reason why Lyft wants to launch in the Indian Market right now? - We want to grow in emerging markets and given the size of the market, we want to enter this market
When we say Lyft is launching it in India, are we launching an existing product in India or a new one?
What are the timelines we are looking at launching in India - In the next 6-12 months

Strategic Goal - Grow by adding more drivers and riders in the Indian Market

High Level Structure of the Response

Given that we are talking about a service that is fairly established in the US, we want to try and replicate the success we are seeing in the other markets. I will break down the structure of my response into three parts

Pre-Launch - Before we plan for the launch, it is essential that we answer few questions about the launch itself - what are we launching, where, with whom, and how will the launch work etc.
1. Company - Lyft, the company's vision is to improve people's lives by providing the best means of transportation to them. So given the conditions in India when it comes to transportation, and the example of Lyft in the US, it makes sense to launch in India.
2. Where to Launch - The customers who are most likely to use a service in India as evidenced by existing competitors - Ola or Uber - are the folks living in Tier 1 and Tier 2 cities in India. We also need to decide which cities we should be launching the products in. Consider a few factors such as -
  1. size of the population,
  2. state of the public transportation in the city,
  3. contingent of cab using population in the city etc
  4. Standard of living of the population
  I'd go with choosing Bangalore, Delhi, and Hyderabad for their high tech population - who are considered early tech adopters
3. What to Launch - Given that we are not launching any new products in India, we want to carefully consider the existing options and see which ones fit best.
  1. Lyft - The best option currently since the paying capacity in India is lower for the users and this will give them an option to quickly try out a Lyft without too much cognitive load.
  2. Shared - Not allowed due to COVID
  3. Shared Saver - Not allowed due to COVID
  4. Lyft Luxury - The larger Indian customer segment is quite price-sensitive. Not the first choice
  5. Lyft XL - Could be an option provided at airports, railway stations.
  6. Lyft Scooters - Not allowed in India
  7. Lyft Bikes - Risks due to COVID
  8. ...
4. Customers
  1. Drivers - Drivers need to be onboarded onto the Lyft product, and be taught how to take the rides. So there is a long timeline on what to do here.
    1. Customer Development - Identify driver's challenges with the products currently
    2. Product Development + Iterations - Build necessary product features and gather feedback from a core user group working closely with the team
    3. Driver Onboarding - Provide an easy way for existing drivers of Ola and Uber to easily switch to Lyft by providing a similar experience. Reach out to more prospective riders via other channels. Create an incentive mechanism for drivers to sign onto Lyft - the signature mustaches on the cars or free insurance for the first years or co-lending program to bring more prospective drivers into the market
    4. Driver Training
  2. Riders - Riders need to be informed that Lyft's services will be launching in India and we need to ensure that they have an app installed
    1. Customer Development - Identify rider challenges with current level of transport
    2. Product Development + Iterations - Build necessary product features across the user journey to make the product usable by an Indian consumer - these could be things like new payment systems, local language translations etc.
    3. Product Marketing to drive downloads
5. How to Launch - The Launch plan itself needs to generate enough buzz. This means that Lyft needs to start advertising about the launch well in advance - a few avenues that can make this more effective
  1. Search Engine Optimization
  2. Social Media plans + paid marketing wherever necessary
  3. Print Advertisements - with newspapers, billboards
  4. Email + SMS media campaigns
6. Competitors - Ola and Uber are already in the market and they command a lion's share of all the riders today. It is important that Lyft position itself as a different ride-sharing service as compared to them. Some counter-positioning option would be:
  1. A more sustainable option
  2. A ride-sharing service that cares
7. Collaborators - It is important to think about the collaborators who can give significant traction on the initial days of launching the service
  1. Google Maps to provide links to book a Lyft in the maps app
  2. Airports in each of the cities to advertise with Lyft
  3. ...
8. Comprehensive Launch plan - Given the above things that need to be done, a full plan needs to be created for the launch.
During the Launch
1. Launching on Google Play
2. Advertisements to continue as a part of the plan
3. Customer Support
Post-Launch - We will look at the metrics to understand which activities worked well and which didn't
1. Drivers
  1. Awareness
    1. Number of Drivers reached
  2. Activation
    1. Number of drivers who installed the app
    2. Number of drivers who registered with Lyft finally
    3. Number of drivers who took their first trip
    4. Percentage of drivers who took their first trip
  3. Retention
    1. Number of drivers who took more than one trip
    2. Active users - D/W/M
    3. Repeat ride rate
  4. Referral
    1. Number of new drivers referred
  5. Revenue
2. Riders - Similar set of metrics for riders also...

Summary - Overall, we started with the high-level goal of growth by launching in the Indian market. We broke down the entire launch process into three parts - pre-launch, launch and post-launch. We discussed the various dimensions of the launch in the pre-launch stage to decide which direction to move in, what to keep in mind while launching in the Indian market. Then we discussed what should happen during the launch phase and what metrics we should measure after the launch has happened.

Illia B · Answer 4 · 2021-02-26T10:31:01+0000

Lyft wants to enter the Indian market. What should be the strategy?

Clarify the scope of the project

Lyft provides commuters a wide spectrum of services that help commuters to get from point A to point B: carsharing, car-hailing, renting e-scooter, car rental, and connecting different types of transportation with public transport. It also offers a monthly subscription (Lyft Pink), that provides discounts and free rides. Currently, it operates in the US and Canada.

Can I assume that we are launching the car-hailing part of the business? Yes

For car-hailing Lyft has 2 major users for launching operation:

Drivers
Riders

I assume that there is an existing market of car-hailing operators like Uber and some local providers (this needs to be researched) that provide similar services.

2. Choose a goal

My suggestion here would be to the market research before entering the market and answer the following questions:(interviewer may provide additional information here):

Current competition (anyone else, except the Uber)
Alternative transportation and services (tuk-tuk, e-bikes)
Public transportation
Driving culture
Rates of the competitors
Government regulations (driver’s license, etc.)
The traffic situation in the entering city

For Lyft, the short-term goal would be determining the viability of a business model, because the new India market may have particular quantities. However, for the strategic goal, I would choose the Grabbing market share (20) in the new market. Lyft has a well-established product in North America, and the business interest would be to get the scale.

On the other hand as a milestone on the new market would be the viability of the business model. This will help to make adjustments in the model during entering the market.

3. Describe your strategy to achieve your goals

Pick a particular segment

For Lyft, I think we can focus on the cities with the highest population and the largest business penetration (Mumbai, New Dehli, or Bangalore). Let’s pick Bangalore, because it is also known as “Silicon city” in India, and I assume there will well fit for both demand and supply. On the demand side:

Working professionals, who commute every day to work and back. They will have a higher willingness to pay and better adoption of the new product. Obviously, they will have various frequencies of usage, from frequent to rare users. Before choosing this user group I would take a look into demographics to understand the scale of this user group.
Business travelers or travelers (from the US), who are aware of Lyft. They are more likely to use familiar services with known standards.

On the supply side:

In a city with a high population and business environment, there will be potential drivers who want to use Lyft as well as the main source of income, as well as someone how wants to get extra cash.

Determine metrics

On the high level

For drivers:

Number of signups
Successful drivers check
Number of “going online” drivers
Number of completed rides
Number of canceled rides by the driver

For riders:

Number of downloads
Number of the app launch
Number of requested rides
Number of completed rides d/w/m
Satisfaction rate

Risks:

For a successful launch, Lyft has to provide riders good amount of available drivers that can cover the supply
Pricing strategy should be attractive to users to switch from competitors

4. Develop a three-phase implementation plan.

Prelaunch

Partnerships: For a good supply of cars, Lyf can think about partnerships with rental companies (economy and mid-class cars), existing taxi or transportation providers that have drivers and cars. This will help to provide the supply of drivers in the start before the necessary amount of drivers join Lyft. Also, we can think about the partnership with public transport providers.

Marketing: Because we are focusing on working professionals in a particular city I think it’s really important to focus on both user groups.

For riders: pr articles in the local online media (local, business, tech) and offline advertising in business areas, and airports.

For drivers: ads on jobs sites, online pr activities, referral program

KPIs:

For drivers:

Number of signups

For riders:

Number of downloads
Number of the app launch

During launch

Marketing: Promo codes sharing on social media, the launch of the referral program for riders, influencers social media activities.

Partnerships: partnering with banks for providing cashback for Lyft rides

Distribution: for riders, it would apps store advertising targeting the specific city. For drivers - we may use car stickers to promote Lyft with referral codes.

Pricing: 50% discounted price, promo codes, referral programs.

Post-launch

Measure Performance:

For drivers:

Number of signups
Number of “going online” drivers
Number of completed rides d/w/m
Number of canceled rides by the driver
Number of completed drives per driver
Avg time to pickup
Length of drive

For riders:

Number of downloads
Number of the app launch
Number of requested rides
Number of completed rides d/w/m
Satisfaction rate

Summary:

For entering the India Market I suggest focusing on the car-sharing part of Lyft business and enter the market with one city Bangalore. The main goal would be to grab the market share of 20% of carsharing business in Bangalore. For this launch we need to do a lot of activities both for drivers and riders, I suggest to start with working professionals and measure the Number of completed drives D/W/M and measure it against our goal

If the launch went well Lyft can think about launching e-bikes, connecting to public transport, and also expand to other big cities.

Overall my suggestion is to think and research about this market before.

Bhavnish Walia · Answer 5 · 2021-02-12T17:44:22+0000

Define the product

Lyft is a ride hailing app that is currently only in the US. To summon a car, a consumer goes on the Lyft app, selects the car they want- economy, large or luxury, and feeds the information on pick up and destination.

Goal

Lyft wants to enter the Indian Market. The goal would be to create awareness and adoption by users.

Strategy:

Competitors-

Currently in India there are some local players like OLA and some international players such as UBER in major cities.

Users-

Usually these cab hailing services are used by people who commute to work, need to be dropped off or picked up at major transport hubs like railway stations and airports. It is also used by tourists and people who don’t wish to drive.

Geography- With that in mind I would like to introduce this in a major city in India where there is a huge demand for such services such as Delhi or Mumbai. Once successful I would like to introduce it to other cities and enhance options to scooters and bikes.

App- The Lyft app would be developed on similar lines as the app in the US but would be customized for India.

Implementation phase

Pre-Launch

Marketing- Run social media, print and media campaigns on lines of safety of Lyft. Affordability of the rides along with great vehicles and customer experience should also be emphasized. Create a line for women with women drivers. These activities could start 2-3 months before launch

Partnerships with major transportation hubs like the airport and railway stations and strike a deal to provide dedicated parking spots and kiosks so that users can hail the cab directly from there.

Partner with MNCs to hire Lyft exclusively to ferry employees. Partner with App stores to make the App available in India.

Purchase Cars and Hire Drivers for their fleet.

KPIs-

I would set up my metrics at this stage to know whether it is viable for Lyft to be in India, I’ll look at metrics

Number of rides hailed per week and D/W/M/Q growth
Number of companies partnering with Lyft to ferry employees
Number of pickups and drops at major transportation hubs to understand if there could be an improvement.
Number of repeat customers per week and their growth
Number of cancellation as a proportion of bookings
All the above metrics to be tracked separately for the women line.
Average wait times during different times of the day and different zones within the city.

During launch-

Marketing campaigns in pre-launch phase to continue.

Partner with Visa and MasterCard with cash back to customers.

Pricing- no surge pricing at transportation hubs. Kiosks and Lyft at major transport hubs to be set up

Announce companies that have partnered with Lyft

Post launch -

Use KPIs that have been set up to measure the awareness and adoption of Lyft. Post mortem to understand if the cancellation are large and understand reasons why. To assess the demand and supply, look at the average wait times.

Conclusion

In summary, I will propose a launch in Delhi due to high demand for such a service. I will partner with Airports and other transportation hubs. I’d also partner with MNCs to provide their employees a reliable good quality transportation service. I would divide my marketing between pre-launch and during launch phase and ensure I collect data for KPIs to allow me to gauge the success or failure of the launch.