Uber Accused of Booking Thousands of Fake Rides to Mess with Rival Lyft
Uber may be one of the hottest startup companies, but its aggressive tactics aren't worth five stars.
Uber may be one of the hottest startup companies in the country, but its aggressive tactics aren't worth five stars. The car-hailing service has once again been accused of interfering in the business of competitors by booking rides through their apps and then canceling them at the last minute. The company's employees — 177 of them — have allegedly ordered and cancelled 5,560 rides with rival ridesharing service Lyft since October last year.
Lyft released the data to CNN Money, which had been reporting a story on the competition between the two companies. In it, the company says it cross-referenced phone numbers associated with known Uber recruiters with the ones listed for accounts that canceled rides.
These so-called "phantom requests" have snowballed since October, with one Lyft passenger canceling 300 rides between May 26 and June 10. The passenger, who Lyft claims has been identified as an Uber recruiter, used a phone number that linked to 21 other accounts, boosting the total to 1,524 canceled rides.
It's not just creating multiple accounts and then ordering and canceling rides. Lyft also points to evidence of Uber recruiters obviously attempting to conceal their identity. One employee, the company said, used a different name on his account.
En masse, the phantom calls create a domino effect in slashing Lyft's income: For one thing, it limits drivers' availability to get fares by sending them on a wild goose chase for a customer when they could have been picking up real riders, while the lower availability of drivers also creates surge pricing for other Lyft users. Not only that, but Lyft loses money on gas, and drivers become dissatisfied with the fewer rides and low income. All of this — availability, wasted money, dissatisfaction — ends up pushing customers and drivers toward using and working for Uber instead.
Uber has released a statement on the issue, claiming the company was unaware of such tactics:
We recruit hundreds of thousands of entrepreneurs to build their own small businesses on the Uber platform, where the economic opportunity for drivers is unmatched in the industry.
We even recently ran a program where thousands of riders recruited drivers from many platforms, earning hundreds of dollars in Uber credits for each driver who tries Uber.
Taking the ride and meeting the driver is essential to successful recruitment.
It's possible the employees made phantom calls without Uber managment's knowledge. But to Lyft, the explanation doesn't matter as much as the effect. "It's unfortunate for affected community members that they have used these tactics, as it wastes a driver's time and impacts the next passenger waiting for that driver," Lyft spokeswoman Erin Simpson said in a statement. "We remain focused on growing the business faster than any competitor through better customer experience and innovation."
Still, Uber has never made its competition with Lyft a secret. The company has released recruitment ads in the past declaring drivers should "Shave the Stache," referencing the bright pink mustaches Lyft drivers place on their cars when in service:
@Uber is declaring war. Time to shave the stache. cc @lyft pic.twitter.com/yz2G7in0aD— Edith Yeung (@edithyeung) May 24, 2013
And Lyft's not the only rival to have pointed its finger at Uber for its aggression. In January, Gett, a ridesharing service based in New York City, said Uber drivers had made more than 100 phantom calls. Back then, Uber quickly confessed to the sabotage, releasing the following statement to Techcrunch:
It was likely too aggressive a sales tactic and we regret the team’s approach to outreach of these drivers. But to be clear there was no time spent by the providers as the requests were canceled immediately and Uber did pay cancellation fees for these requests. We have messaged city teams to curtail activities that seek lead generation by requesting transportation services.
Either way, it's a nasty fight between Uber and its competitors, and Uber is more than willing to head into battle — especially because it sees its ridesharing service as the underdog going up against the established city cab fleets. As the company's CEO Travis Kalanick told CNN Money earlier this year, "The taxi industry [is] trying to protect a monopoly that has been granted them by local officials, so they're trying to slow down competition."