Chief Strategy Officer

In 2018, both Uber and Lyft heavily subsidized rides to gain market share. If Uber lowered prices by 10%, Lyft immediately matched it. Both companies optimized their apps for speed and reliability (operational improvements), yet neither could achieve sustained profitability. According to Michael Porter’s logic cited in Chapter 1, what strategic trap describes this scenario?

• AThe Red Queen Effect (Running hard to stand still).
• BCompetitive Parity due to lack of differentiation.
• CGrandiose Ambition.
• DThe Innovator’s Dilemma.