Currently they seem to be the "we aren't those jerks" sort of alternative to a competitor with a bad reputation. Just like how Uber gained over Taxis - and ironically Lyft to do the same to them over assorted shadiness and scandals.

Of course to sustain that effect they not to gain a bad reputation.

And I’m honestly not sure what the answer is other than not carrying with it quite the same amount of negative baggage that Uber does. They were differentiated but it turns out most people don’t want to fist bump their taxi driver.

As far as winning the market goes, actual product differentiation doesn't matter that much. In their particular market it almost all boils down to how much the rides cost. I usually just open both apps and pick the cheaper one.

When Lyft first started, there was no set price for rides... you would pay what you wanted. It was very strange, I didn't like it.

I only started using Lyft when they transformed themselves into a clone of Uber. (Not that I use either all that much.) I found the whole fist-bump, pink mustache, weird pricing, etc. completely off-putting.

Lyft was “Uber but in a normal persons car and much cheaper” until Uber created their cheap option

All the mainstream ride sharing platforms seem to have more or less gravitated towards the same basic offering(s)--which is, perhaps not entirely surprisingly, essentially an app-enabled taxi.