Uber Revs Its Engines Against a Ride-Sharing Rival
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The Fiscal Times
August 27, 2014

The ride-sharing company Uber has invested a lot of time and PR muscle in cultivating the image of an innovative underdog trying to fight its way past entrenched taxi companies to deliver a better, cheaper customer experience. But its strategy for responding to competition from Lyft, a slightly more down-market alternative, has some questioning whether Uber has crossed ethical lines in an effort to hamstring the company it sees as its biggest competitor. 

In an article published yesterday, Casey Newton of The Verge reported on an internal Uber program to recruit Lyft’s drivers using a small army of independent contractors. The contractors, known as “sloggers” after the program’s internal acronym (Supplying Long-term Operations Growth), were given a pair of iPhones and a list of valid credit card numbers they were to use to create Lyft accounts and call for rides. Once in the Lyft driver’s car, their job was to talk him or her into abandoning Lyft and coming to work for Uber. 

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While slightly underhanded, there is nothing outright unethical about that part of the plan. However, according to Newton, a side effect of the program was that thousands of Lyft drivers were sent to pick up riders who ultimately cancelled the transaction – costing the drivers time and money.

Because of the way Lyft is structured, riders don’t know who their drivers will be until they call for a ride. According to Newton’s reporting, Uber created an online database that its sloggers used to track which drivers had already been approached about joining Uber and which had not. Apparently, when a slogger found that a driver dispatched by the service was on the list, common practice was to cancel the ride. 

Earlier this month, Lyft – whose cars sport huge fluffy pink moustaches on their grilles – told CNN it had logged up to 5,000 cancelled rides that it claimed could be traced to Uber-related riders. 

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Some commentators have defended Uber’s tactic, pointing out it’s a good thing for Lyft drivers to be aware of their options, and noting that a few thousand cancelled rides is a relatively tiny portion of the company’s overall business. 

However, the timing of Uber’s rollout of Operation SLOG suggests there might be more to it than simple marketing. According to Newton, a team of sloggers were set loose on the streets of New York City last month in a push designed to coincide with Lyft’s launch in the Big Apple, which arguably made it more difficult for Uber’s new competitor to get traction. Similar programs have been implemented in at least 10 cities nationwide.

In a blog post, an Uber spokesperson identified as “Craig” wrote a defense of Operation Slog. Among other things, he wrote, “We can’t successfully recruit drivers without talking to them – and that means taking a ride. We’re all about more and better economic opportunity for drivers. We never use marketing tactics that prevent a driver from making [a] living – and that includes never intentionally canceling rides.” 

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The use of the word “intentionally,” of course, stops far short of a denial that Operation SLOG resulted in drivers losing business. It also doesn’t address the ethics of launching such an operation against a new competitor just as it launches in a major market. 

Its defense of Operation SLOG suggests that Uber is simply trying to build its own business, not interfere with Lyft’s. But in an email obtained by Newton, one Uber supervisor punctuates her message to the sloggers with the hashtag #shavethestache – clearly referring to Lyft’s trademark decoration. 

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A longtime reporter on the intersection of the federal government and the private sector, Rob Garver is National Correspondent, based in Washington, D.C. He has written for ProPublica, The New York Times and other publications.