27Aug

Uber Recruiting Drivers During Paid Rides Is Awesome

Uber Vs. LyftTwitter exploded today (at least my feed did) with discussion about the fact that Uber pays teams of people to book rides via their competitor, Lyft, and then proceeds to recruit the drivers during those rides to leave Lyft and drive for Uber.

I think this is a brilliant strategy.

Before going any deeper on this, I want to be sure to say that I am not talking about the issue of ordering rides and then cancelling them. If either company does this on purpose, or encourages it in the slightest, that is totally below the belt and I am not supportive of that in any way, shape or form. Having said that, I do think rides are being ordered and cancelled by both. However, I don’t think either company is asking employees to do it. My bet is that these employees are so passionate about their employer, and want to beat their competitor so deeply, that they are actually booking and cancelling rides on their own accord. That’s tough to control but I would also bet both companies are being much louder about telling employees to stop this behavior.

Anyhow…

Back to the discussion around this recruiting tactic. Two guys that I respect a lot, Jason Fried and David Heinemeier Hansson (DHH), Founders of Basecamp and authors of a book I love (actually it’s required reading in the classes I teach at WSU), REWORK, tweeted a bunch of reasons they think it is horrible that Uber pays people to take rides and recruit drivers. You can also read the tweet replies of Uber CEO, Travis Kalanick. It’s a great back and forth from smart people that disagree but still respect each other (at least Jason does, DHH seems like it’s gonna be a bigger issue for him).

I haven’t blogged in awhile, but I felt like I wanted to on this particular matter. I have zero problem with Uber paying people to book paid rides with competitors and then proceed to try to convince the driver to switch to Uber. I think it is creative, scrappy, unique, and I also bet that it works. Jason and DHH, if you clicked on their twitter links above (or already had been following or reading about this today), think it’s akin to someone barging into their offices, sitting down at their engineers desk, trying to recruit them, and then “putting $10 in the tip jar on the way out.” Even though I don’t think this is quite the right comparison, I’ll still go with it.

So yeah, someone barges into your office — although the employer owns/rents the office, the driver owns their car — so to be fair, it would be more like barging into individually owned offices by each engineer at a company, which of course, isn’t how companies are setup — but again, I’ll go ahead with their comparison. So, someone comes into your company and pitches your engineers, and they leave to go work for the company that did that.

Who’s fault is that?

The girl that barged in and recruited?

The engineers that left?

Nope. It’s you, the business owner. It’s your fault.

If you want to keep people, do what it takes to keep them. No amount of recruiting, ride ordering, office barging or the like will get them to leave. If Lyft is really concerned about this tactic working, they should pay their drivers more, or offer their drivers benefit packages, pay for their insurance, or get them special deals on cars. It is up to Lyft to figure out how to compel their drivers to stay. Same with Uber. They need to have a reason for Lyft drivers to want to leave. Sitting in the back of a paid ride isn’t enough.

That’s the beauty of it though; the drivers decide. They will do what is best for them. And they should. Employers often take it too personally when people leave. I know I have and did. I have tried to evolve on this though over the years. When someone good leaves, I have tried to focus inwardly on the matter. What could I have done better so that they would have stayed? What culture, opportunities, treatment, benefits or income should I have modified so that they stayed here? I have also come to learn that no matter what you do, some people are still going to leave. It’s a workforce norm nowadays (insert stat about average person changing jobs 7x in their career, etc.)

One final point. DHH pointed out that Uber is the leader, King of the space, and had Billions in funding and value — and because of this, they were unnecessarily stooping to a level that was beneath them. Additionally, my friend Zach Holmquist said something similar “scrappy, yes, but look at their last round of $1.2B” implying that hey, they have tons of cash, they don’t need to do stuff like this. My response to DHH and Zach is the same; the DNA and culture of Uber is super aggressive and very scrappy. Their CEO appears to be wired that way. I find it somewhat hypocritical of DHH to say this when he’s commented about how much of a shame it is that companies change once they receive funding or achieve success.

You can argue that Uber has crossed the line in other instances (I think they have). You can argue that they are too aggressive (not sure about that IMO), but if you realize that those same things are what got them to where they are, why in the world would they change it just because they are now successful and well funded? DHH and all of the other bloggers, authors and Silicon Valley folks that decry companies losing the core of what got them there — the Founders zeal — have to understand that it comes with benefits and challenges. What makes you successful can also make you hard to deal with. Either way, while you may not like the Travis K style of zeal, expecting them to change it now is both foolish and incorrect (IMO).

Bottom line, if you are Uber, keep recruiting in the back of paid rides. If you are Lyft, figure out how to make it much tougher for the Uber pitch to work. Or go book your own paid rides and recruit Uber drivers. Or many other things I am sure both companies are working feverishly on to grow their driver base.

Ultimately, the driver decides and I think that is just as it should be.

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About Alex Lawrence

Alex has been a successful entrepreneur for 20+ years. His current venture Lendio ranks #34 on the Inc. 500 list. Alex earned a BS degree at the University of Utah and his MBA at Weber State University, where he is Vice Provost and Director of the Entrepreneurship Program. If you want to talk with Alex about business and entrepreneurship (or other questions), email him (alex AT startupflavor DOT com), or you can find him on Twitter @_AlexLawrence.
  • elforesto

    I think what may be rubbing people the wrong way is that Uber’s actions give the appearance of trying to corner the market. Lyft can only survive if it has enough drivers to be useful to users. If Uber gets enough of them switched over to their service, users leave and the remaining drivers may follow. Any newcomers to the market could run into the same issues.

    Granted, we don’t know yet if Uber is going to dominate the landscape by being the best employer and service or by going all Standard Oil on us. I can see why someone would rather not find out that it’s the latter.

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