For Uber users, the ability to listen to their own Spotify playlists while riding in a stranger's car is a nice little perk. For Uber, it may be much more than that. 

Locked into an existential war with Lyft and other peer-to-peer ridesharing services, the San Francisco startup is desperate to be able to compete on something other than the price of a ride. Its ability to raise otherworldly amounts of venture capital--and to sabotage competitors' efforts to do the same--is one way it's been able to differentiate itself. Partnerships like the one with Spotify that it unveiled Monday morning may be another.

Beginning Friday, Uber customers who are also subscribers to the music streaming service will be able to choose what music they'd like to hear during their rides. "We're always trying to create what we call a highly evolved experience," Uber CEO Travis Kalanick said during a call with reporters. "It's the first time we've personalized the experience inside the car."

Only subscribers to Spotify's paid service will have full access to the new feature, although there will be regular promotions for users of its free tier who want to try it out, Spotify founder Daniel Ek said on the call.

"Soundtracking," as Uber calls the feature, won't be available on rides summoned via Uber Pool, the carpooling service, or Uber Taxi. Drivers participating in the other services--UberBLACK, UberX and UberXL--will be free to decide whether they want to turn control of their stereos over to their passengers. But considering how anxious drivers are to earn five-star ratings, it's hard to imagine many of them risking riders' displeasure by opting out.

Just about every product innovation Uber has launched to date has been quickly copied by Lyft, and vice versa, including carpooling, SUVs and a business-to-business program

Partnerships with other market-leading services may be one area where Uber can acquire and maintain a lasting edge. In addition to its new deal with Spotify, Uber is also the only ridesharing app to have deep integration with Google Maps

Skeptics of Uber's valuation, now rumored to be somewhere north of $20 billion, argue that taxi rides are a commodity and never-ending competition will drag prices down and erode the company's margins. If Uber can build a service that's not just bigger than the alternatives but demonstrably better, the euphoria may just prove justified. 

 

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Published on: Nov 17, 2014