Lyft is accusing rival taxi app company Uber of scheduling thousands of rides and then canceling them at the last minute in an effort to reduce their drivers’ apparent availability and get people looking for a quick ride to use Uber instead, reports Erica Fink for CNN Money.
Lyft says one Uber employee made 21 accounts and over a thousand fake reservations
According to Lyft, 177 Uber employees have made reservations for 5,560 rides since last October, including one person whose phone number was tied to 21 separate Lyft accounts responsible for 1,524 canceled rides. In other cases, Lyft says that Uber employees booked short trips for the sole purpose of trying to recruit drivers away from the rival network. Since the allegations are coming from Lyft they should be taken with a grain of salt, but taxi app Gett made similar allegations earlier this year and Uber never really denied that it had made the bogus reservations.
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Uber may already be feeling the competitive pressure
The first thing that jumps out at you is that Lyft’s app must be a little bit shoddy to allow this sort of thing in the first place. There’s no reason to let someone create multiple accounts with the same phone number, let alone 21 of them, and if the app doesn’t at least flag duplicates it’s a little embarrassing. It’s also strange that a client could make hundreds of phantom requests without getting a permanent ban and makes you wonder what other obvious measures the company hasn’t taken to protect itself.
But if the allegations are true they should also worry Uber enthusiasts who think that this startup is the next big thing in transportation. If Uber was confidently dominating the taxi app market, however big that is, it wouldn’t feel the need to resort to such cheap tricks. But as plenty of skeptics have pointed out, writing an app that matches drivers with riders and facilitates payments just isn’t that hard to replicate. Uber’s only business moat is its early brand recognition and network effects from having a lot of people currently using it, but that doesn’t seem like it’s enough to defend margins in the long-term.
After Lyft introduced a ridesharing feature called Lyft Line that lets people on the same route share costs, Uber announced that it’s coming out with UberPool that does the same thing. Sharing rides isn’t good for Uber’s bottom line, so the only explanation is that the competition for market share is already heating up.