Uber's Playbook for Sabotaging Lyft

As reported by The Verge: Uber is arming teams of independent contractors with burner phones and credit cards as part of its sophisticated effort to undermine Lyft and other competitors. Interviews with current and former contractors, along with internal documents obtained by The Verge, outline the company’s evolving methods. Using contractors it calls "brand ambassadors," Uber requests rides from Lyft and other competitors, recruits their drivers, and takes multiple precautions to avoid detection. The effort, which Uber appears to be rolling out nationally, has already resulted in thousands of canceled Lyft rides and made it more difficult for its rival to gain a foothold in new markets. Uber calls the program "SLOG," and it’s a previously unreported aspect of the company’s ruthless efforts to undermine its competitors.

Together, the interviews and documents show the lengths to which Uber will go to halt its rivals’ momentum. The San Francisco startup has raised $1.5 billion in venture capital, giving it an enormous war chest with which to battle Lyft and others. While the company’s cutthroat nature is well documented, emails from Uber managers offer new insight into the shifting tactics it uses to siphon drivers away from competitors without getting caught. It also demonstrates the strong interest Uber has taken in crushing Lyft, its biggest rival in ridesharing, which is in the midst of a national expansion.

After The Verge asked Uber for comment on its report, the company stalled for time until they could write this blog post introducing Operation SLOG to the world. "We never use marketing tactics that prevent a driver from making their living — and that includes never intentionally canceling rides," the company said.

‘A special ongoing project’

Earlier this month, CNN reported that Uber employees around the country ordered and then canceled 5,560 Lyft rides, according to an analysis by Lyft. (Lyft arrived at this figure by cross-referencing the phone numbers of users who tried to recruit Lyft drivers to Uber with users who had previously canceled rides.) Uber flatly denied trying to sabotage its competitor: "Lyft’s claims against Uber are baseless and simply untrue," the company said.

But one Uber contractor The Verge spoke with said Lyft’s complaint had merit. "What’s simply untrue is that not only does Uber know about this, they’re actively encouraging these actions day-to-day and, in doing so, are flat-out lying both to their customers, the media, and their investors," the contractor said. Until now, the canceled Lyft rides have been understood as a kind of prank call designed to keep competitors’ drivers off the road. But interviews and internal documents suggest another reason: Uber’s recruitment program has vastly increased in size and sophistication, and recruiters cancel rides in part to avoid detection by Lyft.

The ground troops in Uber’s sabotage campaign are the company’s ambassadors, some of whom it hires through TargetCW, a San Diego-based employment agency. For the most part, ambassadors work at events or on college campuses, promoting Uber as a cheap and easy way of getting around town. The primary goal is to recruit riders, not drivers, and Uber calls the activity "slanging." But since at least mid-summer, some brand ambassadors in New York have been turning their talents against Lyft. Using Uber-provided iPhones and credit cards, the contractors hail rides, strike up conversations with their drivers, and attempt to sign them up before they arrive at their destination. (In other cities recruiters travel with "driver kits" that include iPhones and everything else a driver needs to get started on Uber; ambassadors were told New York State does not allow this.) Compensation varies, but contractors can earn a $750 commission for successfully recruiting a single new driver to Uber, according to a contractor.

Organizing a street team

As Lyft has gotten better at sniffing out recruiters and banning them from the service, Uber has been forced to alter its tactics. In the run-up to Lyft’s high-profile launch last month in New York City, Uber organized a "street team" to analyze Lyft’s expansion strategy. On July 9th, a marketing manager emailed a subset of the company’s contractors in New York city with a new opportunity. "We have a special ongoing project that we’re going to be rolling out next week and I wanted to get about 8–10 of you to help out," he wrote. "This is going to be completely based on your own personal hustle, as it’s not a typical onsite event. We are going to have you working on your own time helping us sign up Uber drivers, and there is HUGE commission opportunity for everyone you signup."

Operation SLOG

The special ongoing project had a different codename: SLOG. Contractors in New York who responded to the "special ongoing project" message were invited to individual hour-long meetings with Uber marketing managers, who had traveled from Los Angeles and Washington, DC, to New York to oversee the team’s creation.

It was there that the company laid out its plan, according to a contractor. With Lyft’s arrival in New York imminent, Uber said it was creating a "street team" charged with gathering intelligence about Lyft’s launch plans and recruiting their drivers to Uber. Contractors were then handed two Uber-branded iPhones and a series of valid credit card numbers to be used for creating dummy Lyft accounts. Uber assumed every contractor would be caught by Lyft eventually; the second phone, according to a contractor interviewed by The Verge, was issued so "you would have a backup phone if and when that happened so you wouldn't have to go back."

Backup phones for days

A follow-up email outlined the process for recruiting Lyft drivers in detail. It emphasizes the importance of requesting rides from different physical locations so as not to arouse Lyft’s suspicions, suggests methods of recruiting, and outlines the process for signing up drivers on Uber’s platform.

The message linked to an online form, which was still active as this story went to press, where Uber could collect information about the Lyft drivers.

As their plans evolved, Uber realized the likelihood that Lyft drivers would be recruited multiple times by its team members and alert Lyft about the street team’s existence. The solution: a private group on the messaging app GroupMe where members of the street team could post Lyft driver profiles. That way, Uber contractors could make sure their Lyft driver had not already been pitched. "You guys will run into drivers you have already got in cars with," a Los Angeles-based marketing manager emailed the team. "Post the driver profiles in groupme when you request so people are aware."

In messages to the contractors, Uber’s marketing managers are full of good cheer. "Hello my lovely Sloggers!" begins one note, which gives instructions for filling out some paperwork. Once that’s out of the way, she writes, "then it’s all the little Lyfts your hearts desire." She ends her sentence with the hashtag #shavethestache, a reference to the big pink mustaches Lyft drivers affix to their vehicles’ grilles.

Uber appears to be replicating its program across the country. One email obtained by The Verge links to an online form for requesting burner phones, credit cards, and driver kits — everything an Uber driver needs to get started, which recruiters often carry with them. The form lists 10 cities, including LA, Seattle, Boston, Miami, and Washington, DC. "We are growing and growing so with that said this will put some organization to your madness," says the form, which was still live at the time of publication. "I need BA phones to make a lyft account," reads one line, referring to brand ambassadors; "Great how many do you need," reads the line below.

"This will put some organization to your madness!"

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.

Lyft declined to comment for this story. After Uber became aware that The Verge was asking questions, Target CW sent out multiple emails warning contractors that talking to the press violated a non-disclosure agreement they signed when they joined.