Lyft challenges Uber by introducing in-app ad functionality

Rideshare app Lyft is enabling the display of advertisements in its mobile application for the first time. 

Brands will now be able to directly reach consumers at various points along their Lyft journey, from when they open up the app in search of a driver to the moment they’re dropped off at their destination. The capability supports static display ads, but will expand to include video ads later this year.

Brands that have already signed up for in-app ads on Lyft include Audible, Universal Pictures and Bilt Rewards. The service is powered by Rokt, an e-commerce technology company that also works with Uber. Lyft has also partnered with analytics firm Kantar to help brands understand how their ads are performing.

The new capability is the latest from Lyft’s young advertising business, Lyft Media, which has become a focus for the company as it looks to drive revenue in ways other than its core rideshare service. Launched last August, Lyft Media functions much like a retail media network, providing brands first-party consumer data in order to court their advertising on its platform. 

The network offers placements on in-car tablets, digital rooftop screens and regional bike-share stations, in addition to the new in-app capability.

The No. 2 rideshare app, Lyft is looking for ways to stay competitive with Uber, the No. 1 rideshare. Uber has its own advertising network, and began offering ad placements on its core app last year; Uber Eats has offered the same capability since 2019. In June, Uber announced that video ads would be enabled on its core app, Uber Eats and alcohol delivery platform Drizly, which it acquired in 2021. Uber also has an ongoing partnership with Rokt. 

Lyft has had a substantially tougher go-round than Uber since pandemic restrictions let up. The app’s market share has dipped to 26% of the overall rideshare market, down from 38% in 2020, according to YipitData metrics cited by CNN. Uber now commands a 74% market share, up from 62% in 2020, and has made strides in developing other areas of its business, namely, delivery services.

As a result of headwinds, Lyft laid off 1,072 employees in April, or about 26% of its overall workforce. The app is also reportedly exploring a sale of Citi Bike, a short-term bike rental service that operates in New York City.