Five months ago, Lyft launched, with much fanfare, a feature called HotSpots. Passengers could request rides at set pickup locations throughout the city for deeper discounts to its ride-hailing service. You know, like a bus. “Consider the game changed,” Lyft declared on the company blog on April 10 when it expanded the program to 100 locations. And then without much notice, it ended the program on Friday. Lyft felt it didn’t need HotSpots anymore to improve its routes. The demise of the offering comes just as Uber is testing a copycat service called “Smart Routes.” The goal of both companies’ products was to make multiple-passenger pick-up even faster for drivers by directing people to specific locations, making the process more predictable. By eliminating the need to drive out of the way for each carpool pick-up, drivers in theory would make more money per ride even as costs decreased for customers. This matters especially to Uber, whose CEO dreams of creating rides so cheap they replace people’s need to own personal cars. But what Lyft discovered — and Uber may find out soon — is that aggregating demand in certain areas didn’t improve productivity much more than picking up individuals at their original locations. “The density of Lyft Line users is so high, we’re seeing these efficient routes happening no matter what,” a Lyft spokesperson told Re/code. Instead of offering a separate product, Lyft said it will pass on the lower price of $6 for all Lyft Line rides in a big chunk of San Francisco without requiring passengers to go to fixed locations. There are no immediate plans to resurrect HotSpots, a Lyft spokesperson said. What will Uber learn from its new Smart Routes service? It is essentially the same service as HotSpots aside from where it has placed its pickup locations — on popular streets rather than intersections. We’ll let you know when it’s ready to talk about it. This article originally appeared on Recode.net.
As we reported yesterday, Uber is trialling a new service in San Francisco called SmartRoutes that lets passengers hop on a ride along specific routes for a cheaper fare, exactly as they would with a bus. However, Lyft already launched a service along these lines to much fanfare back in May, called HotSpots, although now it seems this service was quietly shut down on Friday. Apparently Lyft discovered that aggregating demand in certain areas did not improve productivity much more than picking up individuals at their original locations. Hence HotSpots was deemed simply not necessary, so it will be interesting to see if Uber has the same experience with SmartRoutes.