Why the Uber and Lyft Battle Turned So Ugly

Uber’s aggressive tactics reflect the fact that ridesharing is largely a zero-sum game: a driver picking up an Uber customer can’t simultaneously pick up a Lyft customer. (Drivers are allowed to drive for both services, though the companies discourage the practice.) Having more active drivers on the road creates a virtuous circle that improves geographical coverage, increases demand, and allows services to lower prices by taking a smaller cut from a growing number of rides. Uber and Lyft are competing to become the first app you think of when you need a taxi, and the service with the most drivers likely stands the best chance of winning.

That helps to explain why competition between the two has become so vicious, with Uber and Lyft both offering hefty bonuses and other perks to drivers who switch services. For a time, Uber lost money on every ride to help spur demand. And Lyft has itself aggressively recruited Uber drivers, offering cash bonuses for joining, and hosting free taco lunches at its driver center. The Spy-vs.-Spy nature of their competition was revealed again earlier this month, when Uber caught wind of Lyft’s multi-passenger ridesharing offering and preemptively announced a nearly identical offering the night before Lyft made its announcement.

Casey Newton, in The Verge, exposes internal Uber documents showing how it planned to sabotage its ridesharing app competitor Lyft and steal its drivers.

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Photo: bootleggersson, Flickr