I wrote this article in 2016 but it still rings true. You must take advantage of opportunities, especially when your competitor is losing public confidence. You must take advantage of opportunities quickly, and focus on attacking your competitor’s strengths. It will be interesting to see how Lyft fares in the future of ride sharing.

Uber Troubles

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Uber has been the powerhouse in the ride share market, valued at approximately $70 billion versus Lyft’s valuation of approximately $5 billion. Uber operates in 300 cities in 60 countries versus Lyft in 60 U.S. cities with no international coverage. A strong backlash against Uber has been growing. Uber’s previous CEO Travis Kalanick was part of President Trump’s economic advisory team, infuriating anti-Trump rideshare users and many executives and employees in Silicon Valley. Then, as Trump signed the immigration ban soon after his inauguration, Uber made two missteps (it’s often better to be A-political in business).

As the New York Taxi Association called off pickups at JFK airport in New York City, protesting the immigration ban, Uber tweeted about turning off their surge pricing, effectively crossing the strike. In addition, Kalanick tweeted that “people are free to disagree”. This created a firestorm of anti-Uber protests, resulting in #DeleteUber as one of the top trending topics on Twitter. Lyft quickly donated $1 million to the ACLU to “defend our constitution”, aligning with many of its customers values and supporting the protests. In the midst of Uber’s missteps, Lyft had an excellent opportunity to gain some ground on Uber. But how?

Lyft and The Art of War

Referencing The Art of War, Sun Tzu provides some simple guidelines for Lyft to attack and gain market share. Four areas that Sun Tzu emphasized that Lyft should have adopted were deception, strengths & weaknesses, use of spies, and maneuvering. These four areas could have allowed Lyft to develop strong differentiation and competitive advantages, as they leveraged Uber’s missteps.

Deception could have kept Uber off-balance while supporting the protests against the controversial Trump issues; while ensuring a centralist position is perceived by the public (never go against the President, just the issues). For example, overtly work on challenging drive share regulations, while covertly working with local regulators to build relationships and get regulations changed in Lyft’s favor (i.e., negotiate behind Uber’s back). Both firms need to survive with ongoing state regulatory issues, but if Lyft can work with local regulators and gain local support, Lyft could have built clear separation between Uber and local politicians. In addition, reaching out to local Muslim and refugee communities can gain public support and new customers.

Lyft could also have used Uber’s size and arrogance to work against them. Lyft should have supported protesters covertly with discounted pricing, food, and other methods to gain mind share while avoiding overt links to the protests. In addition, management should have allowed drivers the opportunity to provide promotions as needed to support the company values. Lyft could have also planted “seeds” in the minds of Uber drivers that Lyft is a responsible organization looking to improve society and lower Uber driver morale. Finally, Lyft should have positioned Uber as evil among local communities. The company needed to create an evil versus good, big business versus local values public persona.

Strengths and Weaknesses

Lyft should have focused on strengths and weaknesses - both theirs and Uber’s. Uber was perceived as arrogant and trying to profit off the refugee ban by crossing the taxi strike. In addition, Uber’s CEO alignment with Trump was in direct opposition to many employees in Silicon Valley who are immigrants. Lyft should have quickly leveraged this negativity. Uber’s weakness was a great opportunity for Lyft to gain public trust and new customers.

Positioning Uber as evil, Lyft could have become the "good" company in the minds of drivers. Lyft could have convinced Uber drivers they are working for an evil company; destroying their morale, and getting them to drive for Lyft. In addition, Lyft should have worked with non-U.S. media to drive international boycotts against Uber (this should have been done VERY carefully or could have created a more powerful backlash against Lyft). As Uber was forced to fight multiple battle fronts (e.g., driver relations, foreign governments) Lyft should have focused on smaller markets, gain public support, and demoralize Uber employees.

Lyft should have also driven messaging that Lyft was the rideshare that supported all Americans and freedom, this needed to be done carefully to avoid alienating a large portion of the population; however, Lyft could have developed a sustained and coordinated effort of social responsibility with strong media exposure (stay in the ear of the consumer, don’t let them forget what Uber did and what Lyft is doing). Emphasizing that Uber is the big, evil villain only focused on profits and going against local markets could have gained ongoing Lyft support. For example, Lyft could have profiled immigrant drivers and shared stories how Lyft helped local people, including immigrants, and small towns.

Another indirect attack for Lyft was to focus on weak Uber markets and build strength in those least-served markets. Attacking markets where Uber does not focus would have been similar to how Wal-Mart avoided large markets as they slowly gained strength and size in small towns. Using guerrilla tactics of hit-and-run, Lyft could have conducted sustained regional promotions to keep Uber guessing where and when the next “attack” will occur, and ensure local needs were met while avoiding large, “well defended” markets that Uber controls.

Use of Spies

Sun Tzu noted the importance of utilizing spies. This is a tricky area in terms of crossing ethical and legal guidelines. However, a firm can be creative. For example, Lyft could have used mystery shoppers to find holes in Uber’s business model. Leveraging local Lyft managers, local teams could have quickly made changes to disrupt Uber and gain advantages. Continuous improvements in pricing, customer service, etc., as well as finding areas of poor Uber coverage from front-line information could have helped regional teams to understand local Uber activities.

Maneuver

Maneuvering is another area of great value Lyft leaders could have adopted from Sun Tzu. Lyft needed to ensure the ongoing acquisition and sharing of real-time data from regional operations. This data would have allowed regional teams to quickly and efficiently adapt to Uber movements and proactively out-maneuver Uber local promotions, events, etc. Providing local managers with authority to quickly adapt to market needs and counterattack Uber marketing activities would have ensured ongoing strategic agility.

Working with local taxi unions, Lyft could also have developed an environment where both taxis and ride shares can benefit; excluding Uber from negotiations. Lyft could have also used the combined force of taxi unions and Lyft to work against Uber, for the benefits of both. Lyft could have also maneuvered into new, underserved markets such as car-pooling (Uberpool versus Lyft Line) and high-end limousine type services.

Creative thinking and problem solving are critical for long-term growth. Conducting experiments in smaller markets, Lyft will learn and adapt to new segments, gain critical knowledge and strength for future attacks, and continually gain loyal, repeat customers. Expanding the customer base while Uber focuses on multiple fronts (e.g., driver relations, international issues, development of self-driving vehicles) will maintain a clear focus for Lyft leaders. Ongoing experiments and adjustments will enable smaller Lyft to use its size to out-maneuver Uber and develop a clear perception of “us versus them”; aligning with American values and the youth consumer base.

Conclusion

Will Uber changes over the past few years turn the tide? We will have to wait and see. However, the public forgets quickly in this age of instantaneous, endless information. Lyft needs to stay on the gas and focus on continuous improvements to outmaneuver Uber.

Most importantly, Lyft must leverage the combined force of all internal departments to share knowledge and work together to provide a strong, unified force against the much larger Uber. Winning will be based on a thorough analysis of the market and both companies to identify areas of opportunity and develop actionable tactics to drive growth and weaken Uber.

As noted by Michael Hiltzik in his op-ed piece, Uber’s ongoing arrogance and potential lack of innovation are potential weaknesses, as Uber’s relationships with local regulators are weak and resources are being spread. Also, Uber’s move from software to hardware (self-driving cars) may be too much of a leap from its core competency and weaken the firm, thinning out much needed resources (recent reports that the company is losing large amounts of money).

Time will only tell how this battle develops, especially how Lyft leverages current opportunities without antagonizing the 500-pound gorilla (Uber). However, focusing on indirect attacks against Uber’s weaknesses, avoiding direct attacks against Uber’s strengths, and using ongoing creativity to keep the gorilla off-balance will allow Lyft to leverage agility based on market needs and conditions.