Monday, December 29, 2014

The Uber recruitment scandal isn't scandalous

Justin Sullivan

In recent months, the ride-sharing service Uber has been engaging in a campaign to recruit its competitors' workers. This is something almost every company in a competitive market does; indeed, agreeing not to poach your competitors' workers is against the law.

Yet a brilliant Lyft PR campaign has portrayed Uber's garden variety recruitment campaign as a sketchy, underhanded sabotage campaign. And too many credulous people in the media have bought into the spin.

To see how un-scandalous Uber's campaign is, it's helpful to put yourself in Uber's shoes. If you ran a McDonalds and wanted to recruit Burger King's workers, you'd just walk over to the local Burger King and make your pitch. But Lyft doesn't have stores where you can go to meet their drivers. The only people who have a list of Lyft drivers is Lyft itself, and obviously Lyft is not going to help Uber poach their own drivers.

So Uber did the obvious thing: they hailed Lyft cars and used the rides as an excuse to make their recruitment pitch, paying the Lyft drivers for their time like any other customer. This is not only completely legal, it's also good for drivers, who benefit from having employers fight over them.

Lyft's case that Uber is engaged in "sabotage" hinges on one additional element of Uber's campaign: between October October 2013 and August 2014, Uber booked and cancelled 5500 rides. Lyft has portrayed this as a concerted campaign of sabotage, and sympathetic media stories have quoted Lyft drivers frustrated by these tactics.

What this ignores is that 5500 is a really, really tiny number of cancelations. To put it in context, Lyft says it has 60,000 drivers. So the 5500 figure means that fewer than one in ten Lyft drivers has ever suffered from an Uber ride cancellation.

A few Uber reps, like one who allegedly cancelled 300 rides over a 2-week period, do seem to have been abusing Lyft's system. But if Uber intended these cancellations as an act of deliberate sabotage, the campaign was way too small to be a major threat, or even a significant nuisance.

The internal Uber document released by the Verge offers a more likely explanation for these cancellations: Uber reps were trying not to waste drivers' time.

Cancellation

Many drivers will be happy to hear the "switch to Uber" pitch from recruiters once. But they'd probably be annoyed to get it over and over again. So as soon as an Uber recruiter found out that he'd hailed a ride from someone he'd already talked to, he may have just cancelled the trip to save everyone the hassle. Notice that Uber's instructions tell reps to wait at least 5 minutes between trips to minimize the number of times they have to cancel.

Now, maybe it would have been more polite to keep the appointment and take a short trip so that the Lyft driver gets paid. I don't know if the average Lyft driver would rather get a quick cancellation or a short fare. But getting one cancelled ride from an Uber recruiter over 9 months — and remember, Lyft's own figure suggests that 90 percent of Lyft drivers got zero cancelled fares from Uber reps — is hardly a serious imposition.

Meanwhile, Uber's recruitment campaign was good for Lyft drivers, both those who talked to an Uber rep and those who didn't. Knowing that every driver had the option to switch to Uber gives Lyft drivers more leverage in pay negotiations. If I were a Lyft driver, I'd think that a 10 percent chance of getting one cancelled ride was a small price to pay for a better chance of getting a raise.

Update: I added a screenshot from Uber's recruitment document.

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