Uber designs secret recruiting crusade

Stephen Shankland/CNET

Uber appears to have been caught red-handed conducting an extensive secret campaign designed to recruit its competitor's drivers.

Technology news site The Verge published a lengthy report on Tuesday detailing the car-sharing service's national marketing program to recruit Lyft drivers -- dubbed Operation SLOG. Uber responded with a blog post implying that it's been operating above board and said there's a lot of 'misinformation' about its recruiting tactics.

According to The Verge's report, Uber's Operation SLOG campaign involved hiring independent contractors and plying them with burner phones, credit cards for creating dummy accounts, and talking points in order to surreptitiously lure Lyft drivers to Uber's platform. These contractors reportedly booked Lyft rides and then tried to convince the driver to switch to Uber. The contractors were said to make up to $750 for each driver they recruited.

Getting more drivers is key for both Uber and Lyft because it means more people on the road picking up passengers and creating a bigger name for the service.

Uber's secretive recruiting tactics were first reported by CNNMoney earlier this month. At that time, Lyft alleged that 177 Uber employees had booked and then canceled 5,560 Lyft rides over the past nine months. Uber called the allegations 'patently false' and said Lyft also conducted similar recruiting campaigns.

Uber has remained adamant that its marketing tactics are transparent, including 'never intentionally canceling rides.' In a blog post published Tuesday, Uber maintained that its goal is to recruit more drivers and suggested there's nothing nefarious about its tactics. The company also confirmed it uses 'brand ambassadors' and will take rides with competitors to recruit drivers.

'There's been a lot of discussion -- and a lot of misinformation -- about Uber's driver recruitment and the ridesharing industry's at large,' Uber wrote. 'We'd like to set the record straight and demystify our recruiting efforts, which we call Operation SLOG (Supplying Long-term Operations Growth). With millions of riders and ever-increasing demand for more rides in even more cities, we are always working hard to recruit new drivers onto the platform.'

Uber and Lyft have been engaged in a public battle to win over more customers and drivers for years with price-cutting wars and one-upping campaigns, but the tactics didn't seem to get so dirty until now.

Uber has raised $1.5 billion in venture capital funding. It's unclear how its recruiting campaign will resonate with the company's backers. Menlo Ventures, which was one of several investors to raise $1.2 billion in Series D funding for Uber in June, told CNET that its investor agreement required it relay all inquiries to Uber. Other investors, Google Ventures and Kleiner Perkins Caufield & Byers, didn't return requests for comment.

When CNET contacted Uber for comment, a company spokesperson referred to the blog post published Tuesday. Lyft didn't return request for comment. The New York Taxi and Limousine Commission declined to comment and the San Francisco Municipal Transportation Agency didn't return request for comment.