In Silicon Valley, how far you’re willing to go to win is often seen as a predictor of future success. Perhaps that’s why Uber’s investors have pumped almost $9 billion into the company.
Uber’s already storied history of shady practices and dirty tricks grew longer on Thursday after The Information reported that the ride-hailing giant had been using software to track Lyft drivers and then using that data to offer incentives to only drive for Uber.
That software, which Uber internally called “Hell,” helps provide a more complete look at the lengths to which Uber has gone to torpedo its main competitor. To fully understand this scene and just how Uber and Lyft became so competitive let’s go back to the heady days of 2013.
2013/early 2014 Driver incentives, billboards
Less than four years ago, Uber and Lyft were just two of many ride-hailing startups that were competing to become the next big thing in transportation. Back then, companies badly needed drivers. More drivers meant being able to give more people shorter wait times and better service.
To that end, Uber and Lyft started offering incentives to drivers free gas, bonuses, etc. The two companies had also been rolling out similar features and services.
Then there were the mobile billboards targeted at drivers. Uber went with “Shave the Stache,” a reference to the pink mustaches that Lyft used to have drivers put on the fronts of their cars. Lyft went with “Be more than a number.”
August 2014 Ordering then canceling rides
Uber v Lyft took a decidedly dark turn on August 11, 2014, when Lyft released data that it argued showed Uber employees had been ordering and canceling rides.
This was done to tie up drivers, making Lyft worse for those drivers as well as customers. Other times Uber recruiters would take short rides in an attempt to convince the drivers to switch to Uber, Lyft also claimed.
Uber didn’t exactly deny the allegations, first surfaced by CNN, though it implied that these could have been actions by a few people without direction from Uber executives.
That notion didn’t last long. About two weeks later, The Verge obtained internal documents from Uber that showed an internal program called “SLOG” used contracts to systematically book and cancel rides on Lyft. Uber denied the allegations.
November 2014 Trying to sabotage Lyft’s fundraising efforts
Going after Lyft’s business on the ground wasn’t enough. Just a few months after the revelation of Uber’s systematic attempts to take its rival’s drivers, CEO Travis Kalanick openly admitted that Uber had also been doing its best to hurt Lyft’s fundraising efforts.
“We knew that Lyft was going to raise a ton of money,” Kalanick told Vanity Fair in an interview. “And we are going [to their investors], ‘Just so you know, were going to be fund-raising after this, so before you decide whether you want to invest in them, just make sure you know that we are going to be fund-raising immediately after.'”
The two companies at the time were feverishly raising money to expand into new markets, subsidize ride costs, and market to new customers.
The interview helped solidify Kalanick’s already well-earned reputation for doing just about anything to beat Lyft. That December, Uber would announce that it had raised $1.2 billion. The month after, Lyft announced a $1 billion round of funding.
Late 2014/early 2015 Uber hires Lyft’s COO
Stealing drivers is one thing. Steal executives is another. Stealing trade secrets is… something else entirely.
Uber hired Travis VanderZanden in October 2014, shortly after he left the Chief Operating Office position at Lyft. The month after, Lyft sued VanderZanden, claiming he took confidential documents just before leaving the company.
“VanderZandens possession of Lyft confidential information post-employment breached his Confidentiality Agreement. That agreement bars him from possessing, post-employment, any Lyft confidential and proprietary information, and prohibits him from using or disclosing such information to anyone,” Lyft claimed at the time, according to TechCrunch.
Lyft settled the lawsuit in June 2016.
April 2017 “Hell”
The Uber v Lyft storyline cooled off for a while. But that hasn’t meant much rest for Uber’s weary communications department, as the company has been under fire for its internal culture after numerous allegations of gender discrimination and other sordid tales emerged.
On Tuesday, it kicked off again.
The Information reported that Uber had previously been using specialized software to track Lyft drivers and figure out how to best lure them away. The software, reportedly called “Hell” within Uber, used fake Lyft accounts to get a picture of what drivers were working, when they worked, and other information that helped them figure out which drivers they could poach.
The software is reportedly not being used any more, but the report detailed the extremes to which Uber had been willing to go to beat Lyft in cities where the two companies directly competed.
Could there be anything else? We wouldn’t bet against it.
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