'Ambassador' tactic by Uber and Grab not poaching: Expert

Ride-hailing service Uber previously made headlines in the United States for allegedly having its staff order and cancel rides from rival company Lyft.
Ride-hailing service Uber previously made headlines in the United States for allegedly having its staff order and cancel rides from rival company Lyft.ST PHOTO: REUTERS

SINGAPORE (THE NEW PAPER) - Ride-hailing service Uber previously made headlines in the United States for allegedly having its staff order and cancel rides from rival company Lyft.

Lyft accused the San Francisco-based company of more than 5,000 ordered and cancelled rides from October 2013, said a CNNMoney report in 2014.

By ordering and cancelling rides, drivers lose time, petrol and income as they head to destinations where there are no passengers.

Uber’s driver recruitment programme, or operation Slog (supplying long-term operations growth), aimed to “cut through the noise to market to potential partners” and included several ways the company markets itself to prospective drivers, including using brand ambassadors and driver incentive programmes.

In a statement on Uber’s website, the company said: “We never use marketing tactics that prevent a driver from making their living - and that includes never intentionally cancelling rides.”

 

Some will describe the use of “ambassadors” here by Uber and Grab to woo rival drivers as poaching, but Associate

Professor in business law Dennis Ong says this is not so.

The professor at Nanyang Technological University’s Nanyang Business School said: “If he (the driver) is not an employee, then we are not dealing with employee poaching.”

He said that like any new business model, Uber and Grab need to recruit and attract drivers to use their cars.

Both companies confirmed with TNP that their drivers are freelancers, as opposed to employees.

National University of Singapore transport researcher Lee Der Horng is not surprised that the competition between the two ride-hailing services is so keen.

Dr Lee said that Uber “made a commitment to acquire assets by purchasing cars to enlarge its fleet, so if it doesn’t have sufficient drivers, its investment in the cars would be impacted”.