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Jan212016

02:09:00 am

Why Uber's Sundance helicopter service is about wiping Lyft off the map

The announcement of another Uber helicopter service, this time for the Sundance film festival, signals the beginning of a new, more aggressive campaign to compete with their ride-hailing competitor Lyft.

Uber executives have been rattled by the recent $1bn investment in Lyft, a round announced in January and led by General Motors.

The Lyft investment caught the attention of more traditional transportation companies like Airbus which, seeing that GM is investing in startups, initiated the partnership with Uber, it is understood.

The helicopters will fly between Salt Lake Citys airport and Park City, a 15-minute journey, for $200 a person during the day and $300 at night. Uber first experimented with helicopters in 2013 in New York.

The viability of the service is certainly another nod to Silicon Valleys embrace of inequality, but it also says something about Uber and Airbus.

Lyfts new valuation came as a shock to Uber, an executive there recently told the Guardian. Theyd all assumed the fight was basically over. And Airbus executives, who dont typically get covered by tech reporters, seems to be wanting a little startup veneer, which many car companies got recently with announcements at CES.

Its a pilot project. Well see where it goes but its pretty exciting, Airbus CEO Tom Enders said about the partnership at a tech conference in Munich yesterday.

Already, the San Francisco-based ride-hailing behemoth has had to cut prices; Lyft quickly followed suit. In Silicon Valleys funding game, an environment that values market share over profit, all that matters is that user numbers keep going up.

This means more press, more Uber for kitten-like moments (a gimmick in which the company sends on-demand kittens, often to media offices), more helicopters.

When Uber and Lyft looked more evenly matched last year, Uber began Operation SLOG, exposed in a document leak to the Verge. Covert Uber contractors would pose as civilian Lyft riders only to recruit the drivers. The company gave the operatives burner phones and credit cards to create fake accounts. To further disrupt their competition, Uber operatives also reportedly called and canceled more than 5,000 Lyft rides.

It seemed to work. Uber raised $8.61bn to reach its current astronomical $70bn. Silicon Valley insiders had largely written off Lyft. And then Lyft raised $1bn in a round led by General Motors. At a valuation between $3.9bn and $4.5bn, its still small in comparison, but in the startup world brand loyalty is weak, and consumers could quite easily switch apps.

The contrast between the two companies Uber with its smooth black aspirational aesthetic and Lyft with its pink mustaches and drivers who insist on fist-bumping riders is stark. Even as Uber tries to soften its image with humanizing profiles of its bellicose founder and Lyft moves to a more slender understated pink mustache, they represent two very different approaches to a ride-hailing future.


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