Uber Shows True Business Colors; Lyft Charges It Canceled Thousands of Rivals Rides
|   Wednesday, August 20, 2014
Even as it was touting its successful move into the Hong Kong market with news releases and interviews that made it seem as if Uber were the most important development in the limousine and cab market in the last 50 years, a key US competitor, Lyft, told CNN that Uber employees had placed and then canceled nearly 6,000 ride requests recently, a huge cost the Lyft.

Uber's rival told CNN that when a ride request is received, the driver and his vehicle are locked down for the ride as they are also cleaned and gassed in anticipation of a good fare.
Waiting until the last minute, 117 Uber employees canceled the 6,000 ride requests and Lyft lost a lot of business.

This may seem like a minor business skirmish because smartphone apps are easily installed by anyone with a smartphone and access to the store where it is sold. Once installed, it is easy for a user to set up for a service. That app can be used by any service that it sees. It is little wonder then that Uber wants to be the only game in town.

You can tell that is the case when it announces to the world that its financial success has resulted in a hugely lopsided $18 billion valuation. Analysts from firms up and down Wall Street were quick to point out that this valuation is very loose and not likely based on anything but someone's imagination.

You can see the strategy, though. If smaller app-based firms were to see the "it's all over, but the shouting valuation story on a market blog or a financial services blog" then they are likely to pull up their stakes and move to another town – or at least that is Uber's hope.

Uber also wants the world to believe it is the next generation taxi/limo/ride service. It may even believe its own publicity as it operates as if it were outside the law and not subject to it. For example, New York City is actively trying to control Uber's illegal operations in the downtown area where its vehicles steal fares from legitimate taxi vendors. They get away with it, even if they are continually cited by the Taxi Commissions of many of the cities where they do business. They simply ignore the law when it doesn't suit them.

When it needs to tilt the playing field further in its own direction, CNN notes, that it will issue press releases and phone calls to drivers who work for not only Uber but also key competitors like Lyft, saying that it is against taxi regulations in the city involved for them to be driving for the rival and they have to cease it immediately. This happened recently, CNN noted yesterday, in New York City.

However, it is just not the case and though Uber has tried to use a fictitious regulation to its advantage that use merely ended up bringing more scrutiny from NYC's Taxi Commission who were quick to tell the public that there is no such limitation at all in their regulation. Perhaps, though no one has said so, Uber actually believes its own press or is trying to pressure cities to act in its interests rather than against them, apparently.

The latest planned act of unbusiness-like conduct – the cancellation calls – weren't defeated but the next time it happens it is likely that the competition will be ready for them.

Headquarted in San Francisco, Uber has offices all over the country. It believes it is something of a financial catch as it claims a valuation of $18 billion. Analysts, CNN notes, looked at the foundations of the claim and noted that it was disconnected from reality as its valuation is nowhere near as high it believes.
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