These are two opposite terms to classify, essentially, the goals of enlightenment.
Hinayana = smaller vehicle,(Theravada tradition)
Mahayana = greater vehicle
The common misconception, usually derived from ego and pride, is that hinayana is an insulting term to belittle Theravadan tradition. In actuality, looking at the facts and what both traditions of hina and maha encompass, the terms are really just essentially as is. It's no different than saying a mansion is a big house, and a shack is a small house. No one wants to be a part of a smaller association, that is, one with pride and ego. You don't want someone with a big house calling your house small. right? But if these people dropped their egos and pride for a moment, they'd realize it's not an insult, just a classification. Of course, who is to say what is big or small? You can also view it that way too. If you don't care to be a part of a "bigger" "house", then you don't have to. If small is fine with you. Great. Does it really matter, as long as you're content? So don't take it so seriously!
This is why the two traditions are classified between small an big:
Hinayana: smaller vehicle: The Theravadan tradition's ultimate goal in enlightenment is to attain the highest level of Arhatship. In this tradition, it is common belief that one cannot attain buddhahood like Shakyamuni Buddha (Goutama). In another perspective, Theravadans believe enlightenment is merely the cessation of life/birth/death/rebirth/suffering/ and all attachments/false thinking. They believe this is Buddha, and that's all.
However, in the Mahayana tradition, that is only the level of Arhat. There is more to it than merely becoming an Arhat. One must become a Buddha. Though one has escaped all the aforementioned, one has not essentially become a Buddha yet. One is still on the way. Essentially, one can say the ultimate difference is that the Theravadan goal is to be enlightened, while Mahayanan goal is to be fully enlightened.
And now I will explain why the Mahayana is logically a greater vehicle, and by extension, the ultimate goal. This tradition strives to become Buddha; to reach the ultimate final accomplishment. In all of buddhism, in its very core, the buddha does not isolate himself as an unreachable attainment or entity. To do so, is more of a Christianity thing, i.e. "GOD". The buddha entered the life of a human and became enlightened, and attained buddhahood. This story alone should tell you that we all can become Buddhas. It was the Buddha's primary reasoning that we all could become just like him. We all have a buddha nature inside and the ability to realize buddhahood, thus becoming a buddha.
Naturally, in that as a first case, Arhatship is not full buddhahood. To the Theravadan, one is satisfied as long as they have ended attachments and suffering/life/death/rebirth. That's all that matters. That's the most core fundamental goal in enlightenment. The main purpose to follow buddhist lifestyle, is to end suffering, cease the cycle of birth/death. By definition, an Arhat is an enlightened being that has escaped birth/death/suffering.
HOWEVER...
In Mahayana, after Arhatship, one continues to cultivate, and enter the practice of Bodhisattvas. Theravadans do not believe in this practice nor its existence.
The practice of Bodhisattvas is a core practice in Buddhas because it is the essential part of the Buddha's compassionate heart and teaching. If the buddha had no such heart, then bodhisattvas don't exist. But Bodhisattvas exist for this reason: to practice the art of teaching and understanding ultimate compassion, like the Buddha. How can an Arhat be a Buddha, if their practice has not cultivated that function of a buddha?
Look at it this way, the buddha is a buddha because of these factors; his composition is thus: ultimate compassion, full sight and understanding, free from the cycle of birth and death and suffering, ultimate spiritual penetration, fully enlightened, supreme wisdom, universal teacher.
Arhats only accomplish less than half of these traits. They are extremely wise and enlightened, but not fully and not to that of the Buddha's level. They were compassionate in life, but the bodhisattva practice of the buddha's compassion is a compassion that is beyond that range.
This is why one must practice the bodhisattva path to become a true Buddha. The Buddha's perspective encompasses and transcends all directions and periods of time. There is no past, present, future, end, beginning, boundaries, etc. The perception is boundless. The Buddha is truly free and unbound by description, boundaries, etc. Thus, he is naturally ONE with everything. He is everywhere.
Because the Buddha is free from all attachment and discriminations, he is able to encompass everything as one. There are no boundaries. Thus, his compassion extends infinitely. It is inconceivable in that respect. In order to attain a perspective like this, one must cultivate it, obviously. A certified path for this, is the bodhisattva path. Why? How does practicing compassion and crossing over living beings make you a buddha?
By practicing to be compassionate to ALL living beings, one opens his heart to everyone and everything, rather than being selective and limited. By having great compassion that is unbounded, one understands and is able to see what the buddha sees. You won't know till you try it, right? That's why Bodhisattvas practice compassion on this level. And how do you practice it? By teaching others to become buddhas. To sacrifice and commit. To teach and crossover any living being without discrimination. If you practice hate, then you selectively like or consider people. But if you practice love for everyone, then you can accept everyone. By accepting everyone, you can contemplate and perceive ALL things. That... is an end to discrimination and leads to no attachments whatsoever.
Another reason why the bodhisattva path is true, is because A BUDDHA has also crossed over countless beings. He is a supreme teacher and universal teacher. You can add this to the description of a buddha. A buddha is illogically a buddha if he hasn't taught anyone. And to have taught less than anyone else, makes him not very... supremely accomplished. He'd be a complete no-name nobody. We use the word 'buddha" to describe someone so supremely accomplished and more. A buddha is a teacher; a mentor. And on the level of one that is supremely accomplished, a buddha has taught countless, countless immeasurable beings. You don't see a doctor having never worked on a patient before, have you? You can't be called a doctor or get your license until you've gotten your residency and minimum hospital/clinical years of experience beforehand. Same with Buddhahood. You're not a buddha until you've done what a buddha does!
So how does an Arhat's perspective encompass what a Buddha encompasses if he hasn't even started to think along those lines? How can Arhats be called buddhas if they haven't even completed all the attainments of a buddha? This is why the Theravada tradition is a smaller vehicle. It stops to a point, whereas Mahayanans want to reach the ultimate attainment, BUDDHA, just as Buddha taught, "to be like me".
Here's a fundamental explanation on why Mahayana is the greater vehicle:
Theravadans and Arhats believe that materials and false thoughts are binding. They bind you up, and thus you are attached and have desires. If you are unbound by these things, by severing your attachments, they no longer bind you. You are free. If you are no longer attached to desires and the perception of humans, you become enlightened and can become an Arhat (escape life/death/rebirth/suffering).
HOWEVER... according to the wisdom of the bodhisattvas, the Arhat's perception of attachment is what is essential to escape life/death/rebirth/suffering, but still limited. The Arhat's perspective is the perspective that all cultivators study and practice in order to attain enlightenment. But once you reach arthatship, you must now continue to understand this great fundamental that is key to growing and becoming a Buddha:
"There is nothing binding."
You see, the Arhat believes these materials and desires are binding. They bind you up and keep you tied to this existence on Samsara (Saha world). That perspective is true. But it is even more true and correct to understand that NOTHING is binding. To acknowledge that something is binding, acknowledges its existence and form. You are thus BOUND by a notion. You attach to SOMETHING; that SOMETHING is there. That is like saying there is the shape of a bird or turle in the clouds. Where there is emptiness and nothing, you acknowledge there is something. In the end, what was once correct, is now incorrect.
This is the very, very logic and core fundamental difference that divides Mahayana and Hinayana (Theravada), or more clearly, Buddha and Arhat, respectively.
The buddha sees no bounds and is FULLY free from all that is binding. There is no boundary to his perception. There is no end. He is one with everything. There is only ONEness. ONE. So how can an Arhat be a buddha if he believes there IS SOMETHING that binds? Opposing perspectives!
This is why people follow Mahayana and practice the bodhisattva path. They do not wish to stop at Arhatship, so they bypass the arhat's perspective, and focus on encompassing everything as one so that nothing is there to bind you in the first place. If nothing binds you, then there is nothing to be attached to. Isn't that ultimate freedom?
They practice crossing over ALL living beings. They practice and cultivate compassion that encompasses everything. Do you see how I'm tying it all together now? The mahayanans practice this ultimate compassion and teaching, like that of buddhas, in order to cultivate a mind that can encompass EVERYTHING, thus seeing no boundaries, and essentially, seeing that nothing binds and there is nothing to be attached to.
Though things are binding, nothing binds. Everything is empty, but not. Sound familiar?
By this extension, we can conclude logically and fundamentally that Mahayana is the greater vehicle because it essentially aspires towards Buddhahood, while Hinayana (Theravada) is a smaller vehicle, as it aspires to only attain the minimum and core practices, thus not focusing on alllllll the practices of a buddha.
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Supplemental:
My post may make it sound like Arhats don't do anything but enlighten themselves. In the Theravadan tradition, yes, the goal is to enlighten the self and that's all that is to worry about. Mahayanan practitioners enlighten the self AND everybody else.
Now, does this mean Arhats don't enlighten anyone? No. We all walk the same path and progress through the same stages. The difference is that Theravadans stop at Arhatship. Their beliefs and perceptions limit their enlightenment to that of an Arhat, whereas the Mahayanan practice goes all the way.
So if a Mahayanan becomes enlightened and stops the birth/death cycle, one has become an Arhat. That's the essential meaning of Arhat. But because they believe in the perspective of no bounds and nothing is binding, they continue their bodhisattva path and practices. Though they are arhats, they still practice ultimate compassion and crossing over living beings. Eventually, they will become Bodhisattvas, and then Buddhas. Arthats that are accomplished as Theravadans, are Arhats. But they don't wish to go anywhere or progress any further. They're done. They've escaped birth/death and suffering! No more work! And here, it is all choice to either remain, or keep going.

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