In this edition of the CB Elevator Pitch, editor James Cowan looks at the long-standing rivalry of Lyft and Uber, the two major services competing to eclipse the traditional taxi industry with distributed fleets managed by smartphone apps. Although still far smaller than Uber, Lyft is running a successful charm offensive to brand itself the kinder, gentler version of Uber, whose hyper-competitive tactics have crossed the line several times, as our business ethics blogger Chris MacDonald wrote recently:
I’m no Uber hater. In fact, I’ll admit from the start to being an Uber fan. I use the service frequently here in Toronto, and I love the model. But that makes it all the more disappointing that a company with a great idea is using scummy tactics to gain and hold market share. […] Capitalism embraces competition, but the kind of competition it embraces is not unrestricted. It is competition based on innovation, and on a dedication to producing a better product at a better price than the other guy does. As others have pointed out, failure to compete (say, when such failure takes the form of collusion) is itself unethical and illegal. But that fact certainly doesn’t licence every imaginable competitive strategy. Hockey, too, is a rough game. And players are obligated not to generously share the puck with members of the other team. But the best hockey—and the best business—happens when competitors fight hard within the rules of the game, winning because of their superior talent, not because they busted the other guy’s knees.