World News: 14:12 GMT Wednesday 15th May 2019. [Landor via Globe Newswire via SPi World News]
NEW YORK, May 15, 2019 (GLOBE NEWSWIRE) -- IPOs for both Uber and Lyft underperformed, with Uber’s stock falling nearly 8 percent in Friday’s market debut, erasing $6 billion in market value, while Lyft’s shares are down almost 30 percent since its March offering. While many factors impact the success or failure of IPOs, brand strength is an important consideration, especially with two highly competitive players in the same space.
Both companies have been courting investors, customers and drivers, but which one is winning? According to the latest Landor Pulse—an analysis conducted by Landor, the global brand consultancy—Lyft has a brand strength percentile ranking of just 27 (out of 100), down from 31 in 2017. Uber’s brand strength is more than twice that at 67, but it is significantly down from last year’s 82 ranking. Brand strength is defined as a combination of brand relevance and differentiation and is a proven metric to measure the future growth potential of brands. A percentile rank score of 67 means Uber outperforms 67 percent of all 3,000 brands tracked in the BrandAsset® Valuator study. As the original ride-sharing app, Uber has clearly done the better job of differentiation with a percentile ranking of 90, compared to Lyft’s 51.
However, Lyft bests Uber on being trustworthy with a score for that specific attribute of 45, up from 21 in 2017. Uber rates just 20 on trustworthiness, slightly down from 22 in 2017, most likely the outcome of numerous issues the company has faced, ranging from adverse behavior of its drivers to alleged sexual harassment and gender discrimination by its executives. Both organizations score very high on being visionary, with rankings of 96 for Uber and 90 for Lyft, but extremely low on high quality, a meager 4 and 5, respectively.
Landor Pulse is based on data from the full-year 2018 and 2017 scores from the U.S. BrandAsset® Valuator (BAV). Data was specifically evaluated based on responses from adults aged 18 years and older. BAV is the world’s largest database of consumer brand perception data, comparing statistics for more than 3,000 brands in the United States.
“While Uber has a higher brand strength metric, it seems their issues with employees and challenges with customer experiences are obviously having an impact,” noted Thomas Ellingson, executive director at Landor. “And Lyft will need to continue focusing on their differentiation of their offering, as they have never been able to overcome Uber’s first-mover advantage. Considering both companies are unprofitable, they will need to better define their brand vision, which must include how they plan to strengthen affinity with both the drivers and riders. Lyft laid out a strong vision during their first earnings call, but they need to follow through and ensure it resonates with all their audiences. The same is true for Uber.”
Maarten Lagae, director of insights & analytics at Landor, continued: “Marketing and brand have tremendous roles in helping to create a higher valuation. In fact, brands account for more than 30 percent of the stock market value of the companies in the S&P 500 Index. Companies often don’t understand the inherent value of their brand and what an important asset it is. When a company offers an IPO, a compelling brand helps increase interest and eliminate uncertainty.”
According to an EY global study, institutional investors attribute an average of 40 percent of their IPO investment decisions to nonfinancial measures, one of which is brand strength, ranked fourth in importance. To help companies think through the branding implications when considering an IPO, Landor shares four important lessons:
To date, BAV tracks brands in more than 50 countries with data from more than 1 million consumers. It covers 55,000+ brands across dozens of brand metrics and attitudinal questions. BAV is part of Young & Rubicam Group, a partnership of companies that includes Landor.
We believe that brand is the most vital tool to help companies meet the most pressing challenges in today’s rapidly changing world: cultural transformation, differentiated customer experience and tech-enabled innovation.
We have been using insights and imagination to help our clients grow for 76 years, across 26 offices in 19 countries, working with a broad range of world-famous brands across many industries. Clients include Barclays, Bayer, BP, Diageo, FedEx, Google, Huawei, J.P. Morgan, Kellogg’s, Kraft Heinz, P&G, Squarespace and Tata.
Landor is part of WPP, a creative transformation company. For more information, please visit and follow Landor on , , and .
Globe Newswire: 14:12 GMT Wednesday 15th May 2019
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