Go niche, rather than trying to compete on price. They've been doing it longer so are likely better at it, and therefore could drop their prices even lower if they wanted to.
Ed Dale's [30 Day] Challenge just started a few days ago. This is a free online marketing course aimed at beginners but it has some decent material for everyone. The goal is to identify a profitable niche in 30 days - big enough to have traffic, small enough that you can own the niche.
Find a niche and find how you can optimise any existing services for that niche. You can always expand beyond that later on.