[jasongill]

Yes they do, and they have for 15+ years. Their website even says:

Trademarks as keywords Google won't investigate or restrict the selection of trademarks as keywords, even if we receive a trademark complaint.

Search for "Uber" on Google and you should see a Lyft ad right near the top of the paid section.

[tyingq]

Worth noting they will police the use of the trademarked term in the ad itself. But only after the trademark owner complains about it, and not in all situations. You can still bid on the term, of course, just somewhat restricted in what the resulting ad can say.