There's no such thing as "taken" like that. That is to say, just because somebody else is working on an idea, that doesn't mean you can't (or shouldn't) work on the same idea, or a closely related idea. If anything, if you're working on an idea and nobody else is, you should be asking some really hard questions of yourself, like "why is nobody else working on this if it's such a good idea. Am I really that much smarter than EVERYBODY ELSE IN THE WHOLE WORLD??" and so on. If somebody else is working on the idea, then that's at least small amount of validation that it might be a good idea. If they have paying customers, so much the better.

There's a quote I read once, and I wish I could find the original source so I could provide a proper citation, that I think was from Bob Parsons that goes "Never be afraid to enter a crowded market. Just be better than everybody else." That might be a little bit hyperbolic, but I think the general attitude is sound. Don't be afraid to get in there and mix it up and compete.

As the old saying goes "Startups don't die by murder, they die by suicide." Most likely, the other startup you're think about is going to die by suicide anyway. They're going to fail to execute, choose a bad market segment, screw up their marketing, screw up sales, choose SVB as their bank, or any of 1000 other things that are going to send them to the Great Accelerator In The Sky. Just don't make those mistakes, outlast them, and the market is yours!

Steve Blank[1][2] also has a lot of salient advice on these topics.

[1]: https://steveblank.com/

[2]: https://books.google.com/books?id=CUZsmgEACAAJ