Here Are Five Things Uber Did To Beat Lyft Before It Even Had A Chance To Compete

Uber means serious business.

It’s notoriously been a step, if not several, ahead of the competition.

In just a few years, Uber has turned into a tech powerhouse that generates $US20 million per week.

Meanwhile, Lyft is about to launch in Brooklyn and Queens, even though both the Taxi and Limousine Commission and the State Department of Financial Services have called its services illegal and threatened to take action.

Unlike Lyft, rival Uber doesn’t face those same problems in New York. It also probably doesn’t hurt that Ashwini Chhabra, the former deputy commissioner for policy and planning at the TLC joined Uber back in March.

Here’s how Uber did it.

1. It raised a ton of money — $US1.5 billion to be exact — from high-profile investors.

Uber has some aggressive fundraising tactics. Its investors include people like Amazon CEO Jeff Bezos, serial entrepreneur Jason Calacanis, Google Ventures, and Menlo Ventures.

About a month after Lyft announced a massive $US250 million round, Uber raised $US1.2 billion in new funding. That was not a coincidence, according to a venture capitalist Business Insider previously met with. That round valued the company at $US18.2 billion.

In fact, Uber has come right out and said that it’s raising more money to snuff out Lyft and the taxi industry.

2. Uber has poached former TLC and government workers to help with regulatory issues.

Back in May, Uber hired top taxi official Ashwini Chhabra, the former deputy commissioner of policy and planning at the TLC.

Officials within the TLC questioned the move when it happened. In fact, some people even called for an investigation.

“There should be an investigation, whether he had a conflict of interest while working for the TLC and whether that conflict was exploited,” Ethan Gerber, the executive director of the Greater New York Taxi Association, told Betabeat in May. “It would seem that he had the interests of Uber at heart while working for the TLC. One doesn’t get a job like that overnight. Mr. Chhabra was working for the TLC and negotiating with Uber.”

Meanwhile, Uber has hired Bradley Tusk, the person responsible for managing former Mayor Bloomberg’s 2009 campaign, and Stu Loeser, the former press secretary in city hall.

3. Uber CEO Travis Kalanick seems to strategically try to one-up Lyft when it has a big launch or promotion.

This also does not seem like a coincidence.

Ahead of Lyft’s upcoming launch in New York, Uber cut the cost of its lower-end service, UberX. It’s also guaranteeing that its drivers will make a minimum of $US1,000 a week for the next two weeks.

Meanwhile, the same day Lyft announced that it would be giving out unli
mited free rides for two weeks in 24 cities, Uber offered the same thing did the same in Connecticut.

4. Uber pays Lyft riders to convert drivers to Uber.

Back in June, Uber had a promotion that offered $US250 in Uber credit to people who could convince a Lyft driver to sign up for UberX.

Uber also offers drivers $US500 to switch from Lyft and other ridesharing competitors to Uber.

“For drivers currently on another ridesharing platform, we’re offering new partners $US500 after they do just one trip on uberX,” Uber wrote on its blog in May. “For drivers already partnering with Uber, you can earn $US500 just for referring someone new from another ridesharing platform.”

5. Uber found a loophole to get legal in New York.

Unlike its ridesharing competitors, Uber’s operations in New York, a key taxi market, are totally legal and in adherence with the TLC. The company did this by abandoning the traditional ridesharing model where everyday people can work as part-time drivers and by establishing relationships with licensed taxi base stations.

“Due to TLC regulations Uber does not currently have a ridesharing platform in New York,” Uber spokesperson Lane Kasselman told Business Insider via email. “If regulators embrace ridesharing with a relaxed approach to licensing and enforcement with other companies, Uber will be excited to launch our ridesharing platform soon in the state of New York.”

This means, apart from the company’s hailing app, Uber essentially operates as a traditional black car business in New York. The same is true for the company’s low-cost UberX service.

It’s “quite clever, really,” TLC spokesperson Allan Fromberg told Business Insider, adding “from a PR standpoint.”

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