 | |
Formerly
| Ubercab (2009–2011) |
|---|---|
| Public | |
| Traded as | NYSE: UBER |
| ISIN | US90353T1007  |
| Industry | Transportation |
| Founded | March 2009 |
| Founders | Garrett Camp Travis Kalanick |
| Headquarters | San Francisco, California, U.S. |
Area served
| 63 countries, 785 metropolitan areas |
Key people
| Ronald Sugar (Chairman) Dara Khosrowshahi (CEO) Nelson Chai (CFO) Thuan Pham (CTO) Tony West (CLO) |
| Products | Mobile app, website |
| Services | Vehicle for hire Delivery (commerce) |
| Revenue |  US$ 11.27 billion (2018) |
| US$−3.033 billion (2018) | |
| US$ 997 million (2018) | |
| Total assets | US$ 23.988 billion (2018) |
| Total equity | US$ 10.333 billion (2018) |
Number of employees
| 22,263 worldwide, including 11,488 outside the United States (2018) |
| Subsidiaries | Uber Eats Jump Bikes Careem |
| Website | www |
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An Uber driver in Bogotá, Colombia with the Uber app on a dashboard-mounted smartphone
Yellow Uber car in Moscow
Uber Technologies, Inc., commonly known as Uber, is an American multinational ride-hailing company offering services that include peer-to-peer ridesharing, ride service hailing, food delivery (Uber Eats), and a micromobility system with electric bikes and scooters. The company is based in San Francisco and has operations in over 785 metropolitan areas worldwide. Its platforms can be accessed via its websites and mobile apps.
As of 2019, Uber is estimated to have over 110 million worldwide users. In the United States, a 67% market share for ride-sharing in early 2019 and a 24% market share for food delivery in 2018. Uber has been so prominent in the sharing economy that the changes in industries as a result of it have been referred to as uberisation, and many startups have described their products as "Uber for X". The National Bureau of Economic Research estimated that, in 2015, Uber had accounted for $6.8 billion in consumer surplus.
As with other transportation network companies,
Uber has been criticized for unfair treatment of drivers, for
disrupting the taxicab business, and for increasing traffic congestion.
The company has also been criticized for its aggressive strategy in
dealing with regulators and for several unlawful practices.
Business model
Stakeholders
Passengers
Passengers use an app to order a ride, where they are quoted the fare. Uber uses a dynamic pricing model; prices for the same route vary according to supply and demand for rides at the time that the ride is requested. At the end of the ride, payment is made based on the rider's pre-selected preferences, such as a credit card on file, Google Pay, Apple Pay, PayPal, cash, or, in India, Airtel mobile wallet or Unified Payments Interface. After the ride is over, the rider is given the option to provide a gratuity to the driver, which is also billed to the rider's payment method.
In some locations, if the driver has to wait more than a few minutes
after arriving to the pickup location, riders are charged a wait time
fee.
Drivers
The status of drivers as independent contractors is an unresolved issue. Uber drivers use their own cars although drivers can rent or lease a car to drive with Uber. Uber offers car rental or leasing via Getaround, Hertz, and Fair and Uber and BYD Auto have a partnership to provide leasing of electric cars to Uber drivers in Chicago and New York City.
Drivers must meet requirements for age, health, car age and type, have a driver's license and a smartphone or tablet, and must pass a background check. In many cities, vehicles used by Uber drivers must pass annual safety inspections and/or must have an Uber emblem posted in the passenger window. Some cities also require Uber drivers to have a business license. A mechanism called "Real-Time ID Check" requires some drivers to occasionally take selfies when logging on to Uber.
Drivers use an app to receive and accept offers for transportations and further information. The Uber driver app includes accommodations for hearing-impaired drivers.
Service options
Offered
- UberX, the basic level of service, provides a private ride in a standard car with driver for up to four passengers. UberX and UberXL cars with child safety seats are available for an additional charge. Persons with a service animal may use any type of Uber service, as required by law. Rider service levels, many of which are only available in certain cities, include:
- ASSIST provides additional assistance to senior citizens and passengers with a physical disability, but cannot transport a non-folding wheelchair (see UberWAV for wheelchair-accessible vehicles).
- Bike is a dockless bicycle-sharing system that allows users to rent electric bicycles via Uber subsidiary Jump Bikes in nine metropolitan areas in the United States including San Francisco and Washington, D.C. Uber users are also able to rent Lime scooters in 46 cities via the Uber mobile app.
- BLACK provides a black luxury vehicle.
- Chapchap, available in Nairobi, Kenya is a low-cost service offering transport via a Suzuki Alto, a kei car. "Chapchap" means "faster" in the Swahili language.
- ESPAÑOL, available in California, is a version of UberX (see below) that provides a Spanish-speaking driver.
- Comfort includes newer cars with additional legroom.
- FLASH, available in Hong Kong and Singapore, is a service that combines both private cars and taxis, operated by ComfortDelGro in Singapore.
- Green, available in Europe, provides an electric car or hybrid vehicle at the same price as UberX.
- Health, available for health professionals in the United States, is a HIPAA-compliant method to arrange rides for patients to-and-from their appointments. Patients without smartphones can receive pickup information via Text messaging or via the health professional's office.
- Hire, available in India, provides a vehicle for hire for local travel.
- Lux, provides upper-class vehicles.
- MOTO, available in India, Indonesia, Pakistan, and the Dominican Republic, provides transportation by motorcycle.
- POOL, available for up to two people per party, provides a ride that is possibly shared with other riders going in the same general direction. Unless the rider pays an additional fee for door-to-door service, the rider(s) are required to walk a short distance at both ends of the ride to save time for the driver and other riders. The pickup/drop-off locations are indicated via a map in the mobile app.
- Upper-class vehicles are marketed under the names Premier (India), Premium (New York City suburbs), Exec (London, Berlin?) and Select.
- SUV provides a sport utility vehicle.
- Taxi allows users to summon a taxi using the Uber software application. Users pay an additional booking fee and can leave a gratuity through the app. The service was implemented to appease taxi drivers who protested the increased competition from Uber.
- Van, available in Europe, provides a van for groups of up to 6 people.
- WAV aka ACCESS provides a wheelchair accessible vehicle.
- UberAuto, available in India, Sri Lanka and Pakistan, provides transportation by auto rickshaw.
- UberGO, available in India and Sri Lanka, provides for a ride in a hatchback.
- UberXL provides a ride in a large vehicle that can seat up to 6 passengers.
Services under development
- UberAIR / UberElevate will provide short flights using VTOL aircraft. Demonstration flights are projected to start in 2020 in Dallas and Los Angeles. Commercial operations are projected to begin in 2023. Although technically feasible, the program is expected to encounter safety and regulatory obstacles.
- In early October 2019, Uber announced a service called Uber Works that matches Temporary workers with potential jobs and employers. The new service is available only in Chicago.
Promotional limited services
DeLorean "time machine" provided by Uber
Uber has also operated promotional limited services, such as rides of
up to 15 minutes each on September 6–8, 2013 in San Francisco in the DeLorean that was featured in the Back to the Future film franchise.
Uber allowed users to hire speedboats in the summer to/from certain points on the coast of Croatia. Uber has also offered transport across Biscayne Bay during Miami Art Week and across the Bosporus strait in Istanbul in the summer.
Rating scores
After
each journey, drivers are required to rate passengers on a scale of 1
to 5 stars. Passengers are not required to rate the driver, although are
encouraged to do so using the same 1 to 5 scale. Riders and drivers who
have low ratings can be deactivated. In May 2019, Uber began actively banning riders with low ratings.
The company has not defined in detail what will be considered a “below
average rating”, but the update is intended to remove users who are
unable to improve their behavior.
Other products and services
- Uber Eats provides meal delivery from nearby participating restaurants.
- Uber and issuing bank Barclays offer a Visa Inc. credit card that offers customers a cashback reward program and other incentives.
- Uber Freight matches freight shippers with truckers in a similar fashion to the matching of taxi passengers with drivers.
History
Travis Kalanick, former CEO of Uber, in 2013
Uber was founded in 2009 as Ubercab by Garrett Camp, a computer programmer and the co-founder of StumbleUpon, and Travis Kalanick, who had sold his Red Swoosh startup for $19 million in 2007.
On New Year's Eve,
after Camp and his friends spent $800 hiring a private driver, Camp
wanted to find a way to reduce the cost of direct transportation. He
realized that sharing the cost with people could make it affordable, and
his idea morphed into Uber. Kalanick joined Camp and gives him "full
credit for the idea" of Uber.
The first prototype was built by Camp and his friends, Oscar Salazar
and Conrad Whelan, with Kalanick being brought on as a "mega advisor" to
the company.
Following a beta launch in May 2010, Uber's services and mobile app officially launched in San Francisco in 2011. Originally, the application only allowed users to hail a black luxury car and the price was 1.5 times that of a taxi.
In February 2010, Ryan Graves
became the first Uber employee, getting the job by responding to a
tweet from Kalanick announcing the job opening, and receiving 5–10% of
the company. Graves started out as general manager and shortly after the
launch was named as CEO. After ten months, in December 2010, Kalanick succeeded Graves as CEO. Graves became the company's chief operating officer (COO).
In 2011, the company changed its name from UberCab to Uber after complaints from San Francisco taxi operators.
The company's early hires included a nuclear physicist, a computational neuroscientist, and a machinery expert who worked on predicting demand for private hire car drivers and where demand is highest.
In April 2012, in Chicago, Uber launched a service where users were
able to request a regular taxi or an Uber driver via its mobile app.
In July 2012, the company introduced UberX, a cheaper option that
lets people drive for Uber using non-luxury vehicles, subject to a
background check, registration requirement, and car standards. At first, rates were similar to those of taxis and were 35% cheaper than UberBLACK. By early 2013, the service was operating in 35 cities. Uber allowed drivers to use their personal vehicles as part of UberX starting in April 2013.
Rates were quickly lowered, which caused some dissatisfaction among
UberBLACK and taxi drivers, whose earnings decreased as a result of the
increased competition at lower rates.
In August 2014, Uber launched UberPOOL, a carpooling service, in the San Francisco Bay Area. The service was then launched in other cities worldwide: Paris in November 2014, New York City in December 2014, China in August 2015, Washington, D.C. in October 2015, London in December 2015, the suburbs of Boston in January 2016, Hyderabad, Kolkata Mumbai, and Singapore in June 2016, Delaware in September 2016, Toronto (Brampton and Scarborough) in April 2017, Nashville in December 2017, Sydney in April 2018, and Melbourne in June 2018.
In August 2014, Uber launched Uber Eats, a food delivery service.
In August 2016, after facing tough competition in China, Uber sold its operations in China to DiDi, in exchange for an 18% stake in Didi. Didi also agreed to invest $1 billion into Uber Global. Uber had started operations in China in 2014, under the name 优步 (yōubù).
In August 2017, Dara Khosrowshahi, the CEO of Expedia which had led an $11M investment in Wingz, became the CEO of Uber.
In fall 2017, Uber became a gold member of the Linux Foundation and received a five star privacy rating from the Electronic Frontier Foundation.
In February 2018, Uber combined its operations in Russia, Armenia, Azerbaijan, Belarus, Georgia and Kazakhstan with those of Yandex.Taxi and invested $225 million in the venture.
In March 2018, Uber merged its services in Southeast Asia with those of Grab in exchange for a 27.5% ownership stake in Grab.
As of March 2018, men accounted for 62.0% of overall company
employment, 51.4% of support staff, and 82.1% of technology-related
employment. White people made up 48.6% of the overall employment base and Asian people
account for 32.3%. However, for technology-related jobs, White people
were 46.3% of employees, while Asian people accounted for 44.7% of
employment.
Rent, powered by Getaround, was a peer-to-peer carsharing service available to some users in San Francisco between May 2018 and November 2018.
In March 2019, Uber proposed the idea of acquiring Careem,
a transportation network company based in Dubai, with operations in
over 100 cities in 14 countries in the Middle East, Africa, and South
Asia for $3.1 Billion. As part of the deal, Careem maintains an
independent brand and operates separately.
On May 10, 2019, the company became a public company via an initial public offering underwritten by 30 banks including Morgan Stanley. Following the initial public offering, Uber's shares dropped 11%, resulting in the biggest first-day dollar loss in IPO history for the US.
It then posted losses of $1 billion on its first quarter of 2019 in its
first earnings report as a public company. A month after going public,
both COO Barney Harford and CMO Rebecca Messina stepped down.
Uber posted a drastic US$5.2 billion loss of for the second quarter of
2019. The loss included US$3.9 billion of "stock-based compensation
expenses" related to employee equity delivered as a result of the IPO,
and an operating loss of US$1.3 billion.
In June 2019, Uber cleared its first regulatory hurdle in process
of acquiring Careem by getting its application approved from UAE's
Ministry of Economy. Sultan bin Saeed Al Mansouri, Minister of Economy
issued a ministerial decision approving the status of Economic
Concentration in the UAE market for the acquisition of Careem by Uber.
Facing continued losses, the marketing department headcount was reduced by a third on July 29, 2019 with the lay-off of 400 people. Engineer hires were frozen as well.
In early September 2019, Uber laid off an additional 435
employees with 265 coming from the engineering team and another 170
coming from the product team.
In October 2019, Uber launched Uber Works to connect workers who want temporary jobs with businesses. The app is available in Chicago only as a start.
In October 2019, Uber announced airport helicopter taxi service available to all users from JFK airport.
In January 2020. Uber completed the acquisition of Careem for
$3.1 billion after getting the regulatory approval from Egyptian
Competition Authority (ECA) with compliances for Uber to abide with. The
regulatory approval from some other countries where Careem is
operational including Qatar, Morocco and Pakistan was still awaited.
Self-driving car research
Uber autonomous vehicle Volvo XC90 in San Francisco
Advanced Technologies Group (Uber ATG) is a subsidiary of the company that is developing self-driving cars. Uber ATG is minority-owned by Softbank Vision Fund, Toyota, and Denso.
In early 2015, the company hired approximately 50 people from the robotics department of Carnegie Mellon University.
On September 14, 2016, Uber launched its first self-driving car
services to select customers in Pittsburgh, including Pittsburgh Mayor Bill Peduto, using a fleet of Ford Fusion cars each equipped with 20 cameras, seven lasers, Global Positioning System, lidar, and radar
equipment that enabled the car to create a three-dimensional map
utilizing landmarks and other contextual information to keep track of
its position.
On December 14, 2016, Uber began using self-driving Volvo XC90 SUVs in its hometown of San Francisco. On December 21, 2016, the California Department of Motor Vehicles
revoked the registration of the 16 vehicles Uber was using for the test
and forced the program to cease operations in California. Uber then moved the program to Arizona, where the cars were able to pick up passengers, albeit with two Uber engineers in the front seats as a safety precaution. In March 2017, an Uber self-driving car was flipped on its side by a vehicle that failed to yield. In October 2017, Uber started using only 1 test driver despite some employees' safety concerns.
In November 2017, Uber announced a non-binding plan to buy up to
24,000 Volvo XC90 SUV vehicles designed to accept autonomous technology
(including a different type of steering and braking mechanism and sensors) between 2019 and 2021.
In March 2018, the death of Elaine Herzberg by an Uber self-driving vehicle in Tempe, Arizona resulted in temporary pause to Uber's self driving vehicle testing.
According to police, the woman was struck by the Uber vehicle while
attempting to cross the street, while the person in the vehicle was
watching videos on her phone. Uber pulled its self-driving cars off all public roads and quickly reached a settlement with the victim's family. There was disagreement among local authorities as to whether or not the car or the victim was at fault.
In December 2018, after receiving local approval, Uber restarted
testing of its self driving cars, only during daylight hours and at
slower speeds, in Pittsburgh and Toronto. In March 2019, Uber was found not criminally liable
by Yavapai County Attorney's Office for the death of Ms. Herzberg. The
company changed its approach to self-driving vehicles after Herzberg's
death, inviting both Waymo and General Motors’ Cruise self-driving vehicle unit to operate vehicles on Uber’s ride-hailing network.
In February 2020, Uber regained the permit to test self-driving
vehicles on public roads of California with backup drivers. The company
is going to resume testing in San Francisco, where its main office is
based.
Prior to its IPO, Uber projected the potential operation of
75,000 autonomous vehicles, in 13 cities, by 2022. These projections,
developed through an internal effort codenamed Project Rubicon, targeted
the possibility of profitable autonomous vehicles by 2018 in an initial
January 2016 report, with a May 2016 report claiming that 13,000
autonomous Uber vehicles could be operating by 2019. The 75,000-vehicle
figure was proposed in September 2016. To reach these goals, Uber spent a
reported $20 million a month on research and development, according to TechCrunch.
Other sources have estimated Uber’s spending on self-driving vehicle
research to have reached as high as $200 million per quarter.
In April 2019, Uber scientist Raquel Urtasun offered a more
cautious estimate of the company’s eventual self-driving capabilities,
saying "self-driving cars are going to be in our lives. The question of
when is not clear yet. To have it at scale is going to take a long
time."
Cancellation of research on autonomous trucks
After spending over $925 million to develop autonomous trucks, Uber cancelled its self-driving truck program in July 2018. Uber acquired Otto for $625 million in 2016. According to a February 2017 lawsuit filed by Waymo, owned by an affiliate of Google, ex-Google employee Anthony Levandowski
allegedly "downloaded 9.7 GB of Waymo's highly confidential files and
trade secrets, including blueprints, design files and testing
documentation" before resigning to found Otto, which was purchased by Uber. A ruling in May 2017 required Uber to return documents to Waymo. The trial began February 5, 2018.
A settlement was announced on February 8, 2018 in which Uber gave Waymo
$244 million in Uber equity and agreed not to infringe on Waymo's
intellectual property.
Criticism
Criticism by the taxi industry
The
taxi industry has claimed that ridesharing companies skirt regulations
that apply to passenger transport and ridesharing companies are
therefore illegal taxicab operations.
This has resulted in additional regulations imposed on ridesharing
companies and, in some jurisdictions, certain ridesharing companies are
banned from operating.
In New York City, use of ridesharing companies has reduced the value of taxi medallions, transferable permits or licenses authorizing the holder to pick up passengers for hire. After soaring in value after the Great Recession
due to their perceived safety, New York City taxi medallions were again
trading for around $170,000 each in 2018. Annual rental rates were
$30,000. A couple of credit unions that lent money secured by medallions suffered from bank failure.
Classification of drivers as independent contractors
Unless otherwise required by law, rideshare drivers are generally independent contractors and not employees. This designation may affect taxation, work hours, and overtime
benefits and lawsuits have been filed by drivers alleging that they are
entitled to the rights and remedies of being considered "employees"
under employment law. In response, ridesharing companies say they provide "flexible and independent jobs" for drivers.
In O'Connor v. Uber Technologies, a lawsuit filed in the United States District Court for the Northern District of California on August 16, 2013, Uber drivers pleaded that according to the California Labor Code
they should be classified as employees and receive reimbursement of
business expenses such as gas and vehicle maintenance costs. In March
2019, Uber agreed to pay $20 million to settle the case.
On October 28, 2016, in the case of Aslam v Uber BV, the Central London Employment tribunal ruled that Uber drivers are "workers", rather than self-employed individuals, and are entitled to the minimum wage under the National Minimum Wage Act 1998, paid holiday, and other normal worker entitlements. Two Uber drivers had brought the test case to the employment tribunal with the assistance of the GMB Union, on behalf of a group of drivers in London. Uber appealed the decision. In December 2018, Uber lost an appeal of the case at the Court of Appeal, but was granted permission to appeal to the Supreme Court of the United Kingdom.
In March 2018, the Federal Department of Economic Affairs, Education and Research of Switzerland, gave the legal opinion that under the conditions that bind drivers to Uber that they should be classified as employees.
In April 2018, the California Supreme Court ruled in Dynamex Operations v. Superior Court that document delivery company Dynamex has misclassified its delivery drivers as independent contractors rather than employees. This ultimately led to California passing Assembly Bill 5
on September 11, 2019, which would require many jobs, to be classified
as employees, with the according minimum wage protections and
unemployment benefits, beginning in 2020.
Uber and Lyft both pledged to keep drivers classified as contractors,
saying they could meet the requirements of the new test, and both
pledged $30 million on a 2020 ballot initiative against AB 5.
Driver criticism of compensation
Drivers
have complained that in some cases, after expenses, they earn less than
minimum wage. As a result, in some jurisdictions, such as New York
City, drivers are guaranteed a minimum wage. The New York City minimum
wage was set at $26.51 before expenses or $17.22 after expenses in 2019,
and an analysis by the NYC Taxi and Limousine Commission revealed that
85% of drivers made less than the minimum wage prior to the law.
In May 2018, a unanimous panel of the United States Court of Appeals for the Ninth Circuit found that the City of Seattle's attempt to engage in collective bargaining on behalf of ridesharing company workers was not entitled to state action immunity from the Sherman Antitrust Act.
High Prices During Emergencies
Ridesharing companies use dynamic pricing models; prices for the same route vary based on the supply and demand for rides at the time the ride is requested.
When rides are in high demand in a certain area and there are not
enough drivers in such area, fares increase to get more drivers to that
area. The rate quoted to the rider reflects such dynamic pricing.
Ridesharing companies were criticized for extreme surcharges during emergencies such as Hurricane Sandy, the 2014 Sydney hostage crisis, and the June 2017 London Bridge attack, especially when taxis offered to transport riders for free.
Increased traffic congestion
Ridesharing companies have been criticized for increasing traffic congestion in New York City and San Francisco.
A report published by Schaller Consulting in July 2018 showed that, as a
result of ridesharing companies, traffic congestion increased in both
cities, which already had comprehensive public transport systems in place.
A main reason was that a large number of people, who would otherwise
have used public transport, shifted to services offered by
transportation network companies. Compared with data in the report,
taxis out-perform ridesharing companies in high-demand locations in
terms of rider waiting time and vehicle empty driving time, and thus
contribute less to congestion and pollution in downtown area.
Reduced usage of public transportation
Studies have shown that ridesharing companies have led to a reduction in use of public transportation.
Lack of wheelchair accessible vans
In some areas, ridesharing companies are required by law to have a certain amount of wheelchair accessible vans
(WAVs) on the road at any given time. This can be a difficult
requirement for ridesharing companies to meet because the companies
don't provide vehicles and most drivers do not own a WAV, causing a
shortage.
Drivers using their phones while driving
When a customer makes a pick-up request, a driver is notified via mobile app and is provided the customer's location. The driver has approximately 15 seconds to tap the phone to accept the request. In many jurisdictions, tapping a phone while driving is against the law as it could result in distracted driving.
Driver status and earnings
While Uber is viewing drivers as contractors, courts in the United Kingdom and Switzerland consider their drivers to be employees of the company. The Guardian quoted a driver in March 2019 who said he was earning $3.75 per hour after expenses. A report published by the Economic Policy Institute in 2018 found the average wage for drivers to be $9.21.
Austrian weekly papers Profil and Trend found the hourly wage of
drivers to be at €4 and claimed a high incidence of tax evasion, social
fraud and circumvention of labour laws by the companies employing
drivers on Ubers behalf. A 2017 report claimed that only 4 percent of all drivers were still working as such one year after entering the company.
In November 2019, the New Jersey labor department gave Uber a $650 million bill for overdue unemployment and disability insurance taxes from the previous four years.
Misleading drivers of potential earnings
In January 2017, Uber agreed to pay $20 million to the US government to resolve accusations by the Federal Trade Commission of having misled drivers about potential earnings.
Alleged short-changing of drivers
In 2017, lawyers for drivers filed a class action lawsuit that alleged that Uber did not provide drivers with the 80% of collections they were entitled to.
In May 2017, after the New York Taxi Workers Alliance (NYTWA)
filed a class action lawsuit in federal court in New York, Uber admitted
to underpaying New York City drivers tens of millions of dollars over
2.5 years by calculating driver commissions on a net amount. Uber agreed
to pay the amounts owed plus interest.
Driver refusal to transport a service animal
In March 2018, a lawsuit filed against Uber in the United States accused the company's drivers of not serving a woman with cerebral palsy due to her service dog, in violation of the Americans with Disabilities Act and the Texas Human Resources Code.
Criticism for collecting fares during a taxi strike
In late January 2017, Uber was targeted by GrabYourWallet for collecting fares during a taxi strike in New York City in protest of Trump travel ban Executive Order 13769. The Order had triggered a taxi strike in New York City, to which Uber responded by removing surge pricing from JFK airport, where Muslim refugees had been detained upon entry. Uber was also targeted because then-CEO Travis Kalanick joined an Economic Advisory Council with Donald Trump. A social media campaign known as #deleteuber was formed in protest, resulting in approximately 200,000 users deleting the app. Uber added user account deletion to meet the resulting surge in requests.
Statements were e-mailed to former users who had deleted their
accounts, asserting that the company would assist refugees, and that CEO
Kalanick joining the Council was not an endorsement of President Trump. On February 2, 2017, Kalanick resigned from the business advisory council.
Aggressive strategy for dealing with regulators
When
Uber was led by Travis Kalanick, the company took an aggressive
strategy in dealing with obstacles, including regulators. In 2014,
Kalanick said "You have to have what I call principled confrontation."
Uber's strategy was generally to commence operations in a city, then, if
it faced regulatory opposition, Uber mobilized public support for its
service and mounted a political campaign, supported by lobbyists, to
change regulations.
In 2014, while in the midst of a regulatory battle, Portland,
Oregon's transportation commissioner called Uber management "a bunch of
thugs".
In June 2014, Uber distributed to its riders the personal contact
information of a commissioner in Virginia who opposed the company, and
told riders to flood his inbox with complaints.
In November 2017, CEO Dara Khosrowshahi dropped the "win at all
costs" strategy and implemented new values for the company, including
"we do the right thing".
In December 2019, Uber and Postmates
sued California over labour law, alleging that legislation set to take
effect in the US state, meant to improve worker conditions, unfairly
targeted them, and should be considered unconstitutional.
Alleged cancellation of ride requests to disrupt competitors
Uber issued an apology on January 24, 2014, after documents were leaked to Valleywag and TechCrunch saying that, earlier in the month, Uber employees in New York City deliberately ordered rides from Gett,
a competitor, only to cancel them later. The purpose of the fake orders
was two-fold: wasting drivers' time to obstruct legitimate customers
from securing a car, and offering drivers incentives—including cash—to
join Uber.
Operation SLOG plan to disrupt Lyft
Following Lyft's expansion into New York City in July 2014, Uber, with the assistance of TargetCW, a San Diego,
California-based employment agency, sent emails offering a "huge
commission opportunity" to several contractors based on the "personal
hustle" of the participants. Those who responded to the solicitation
were offered a meeting with Uber marketing managers who attempted to
create a "street team" to gather intelligence about Lyft's launch plans
in New York City and recruit their drivers to Uber. Recruits were given
two Uber-branded iPhones
(one a backup in case the person was identified by Lyft) and a series
of valid credit card numbers to create dummy Lyft accounts. Participants
were also required to sign non-disclosure agreements.
In August 2014, Lyft
reported that 177 Uber employees had ordered and canceled approximately
5,560 Lyft rides since October 2013, and that it had found links to
Uber recruiters by cross-referencing the phone numbers involved. The
report identified one Lyft passenger who canceled 300 rides from May 26
to June 10, 2014, and who was identified as an Uber recruiter by seven
different Lyft drivers. Uber did not apologize, but suggested that the
recruitment attempts were possibly independent parties trying to make
money.
Evasion of law enforcement operations
Greyball
Uber developed an internal software tool called Greyball,
which uses data collected from the Uber mobile app and other means, to
avoid giving rides to certain individuals. The tool was used starting in
2014. By showing "ghost cars" driven by fake drivers to the targeted
individuals in the Uber mobile app, and by giving real drivers a means
to cancel rides requested by those individuals, Uber was able to avoid
giving rides to known law enforcement officers in areas where its
service is illegal. Investigative journalism by The New York Times
and the resulting report, published on March 3, 2017, made public
Uber's use of Greyball since 2014, describing it as a way to evade city
code enforcement officials in Portland, Oregon, Australia, South Korea, and China. At first, in response to the report, Uber stated that Greyball was designed to deny rides to users who violate Uber's terms of service, including those involved in sting operations.
According to Uber, Greyball can "hide the standard city app view for
individual riders, enabling Uber to show that same rider a different
version". Uber reportedly used Greyball to identify government officials
through factors such as whether a user frequently opens the app near
government offices, a review of social media profiles by Uber employees
to identify law enforcement personnel, and the credit cards associated
with the Uber account.
On March 6, 2017, the City of Portland, Oregon
announced an investigation into whether Uber had used its Greyball
software tool to obstruct the enforcement of city regulations.
The investigation by the Portland Bureau of Transportation (PBOT) found
that: "Uber used Greyball software to intentionally evade PBOT’s
officers from December 5 to December 19, 2014 and deny 29 separate ride
requests by PBOT enforcement officers."
Following the release of the audit, Portland's commissioner of police
suggested that the city subpoena Uber to force the company to turn over
information on how Uber used software to evade regulatory officials.
On March 8, 2017, Uber admitted that it had used Greyball to
thwart government regulators and pledged to stop using the service for
that purpose.
In May 2017, the United States Department of Justice opened a criminal investigation into Uber's use of Greyball to avoid local law enforcement operations.
Ripley
After a police raid in Uber's Brussels office, a January 2018 report by Bloomberg News stated that "Uber routinely used Ripley to thwart police raids in foreign countries."
Developed as a type of secret "panic button" system, initially called
"unexpected visitor protocol", then nicknamed "Ripley", to disrupt
government raids on Uber's offices by locking, shutting off, and
changing passwords on staff computers upon a raid; Uber likely used this
button at least 24 times, from spring 2015 until late 2016.
User privacy and data breaches
God view
On November 19, 2014, then U.S. Senator Al Franken, Chairman of the United States Senate Judiciary Subcommittee on Privacy, Technology and the Law, sent a letter to Kalanick regarding privacy.
Concerns were raised about internal misuse of the company's data, in
particular the ability of Uber staff to track the movements of its
customers, known as "God View". In 2011, a venture capitalist disclosed
that Uber staff members were using the function to track journalists and
politicians as well as using the feature recreationally. Staff members
viewed being tracked by Uber as a positive reflection on the subject's
character.
An Uber job interviewee said that he was given unrestricted access to
Uber's customer tracking function as part of the interview process, and
that he retained that access for several hours after the interview
ended.
Data breaches
On February 27, 2015, Uber admitted that it had suffered a data breach
more than nine months earlier. Names and license plate information of
approximately 50,000 drivers were inadvertently disclosed. Uber discovered this leak in September 2014 but waited more than 5 months to notify the affected people.
An announcement in November 2017 revealed that in 2016, a
separate data breach disclosed personal information on 600,000 drivers
and 57 million customers—including names, email addresses, phone
numbers, and driving license information. Using employees' usernames and
passwords that had been compromised in previous breaches (a "credential stuffing" method), attackers gained access to a private GitHub repository used by Uber developers. The hackers subsequently located credentials for the company's Amazon Web Services
datastore in the repository files, and were therefore able to obtain
access to the account records of users and drivers, as well as other
data contained in over 100 Amazon S3 buckets. Uber paid a $100,000 ransom to the hackers on the promise they would delete the stolen data. The company was subsequently criticized for concealing the loss of data. CEO Dara Khosrowshahi apologized. Uber's British divisions were fined £385,000 (reduced to £308,000) by the Information Commissioner's Office.
In September 2018, Uber settled with the Federal Trade Commission
for $148 million and admitted that its claim that internal access to
consumers' personal information was closely monitored on an ongoing
basis was false. Uber also stated that it had failed to live up to its
promise to provide reasonable security for consumer data. It was the largest multi-state settlement related to a data breach.
Safety concerns
It is unclear if Uber is less or more safe than taxicabs, as major cities don't have much data on taxi-related incidents.
Inadequate background checks and vetting of drivers
Concerns regarding Uber's background checks were raised after reports of sexual abuse of passengers by Uber drivers. Sexual assaults in relation to Uber are most often committed by either Uber drivers themselves
or by individuals posing as Uber drivers. In the latter case, imposters
have lured unsuspecting passengers to their vehicles by placing an Uber
sticker on their dashboard or by claiming to be a passenger's expected
driver.
In September 2017, Uber's application for a new license in London was rejected by Transport for London
(TfL) because of the company's approach and past conduct showed a lack
of corporate responsibility related to driver background checks,
obtaining medical certificates and reporting serious criminal offences.
In November 2017, The Colorado Public Utilities Commission
fined Uber $8.9 million after discovering that 57 drivers in the state
had violations in their background checks. The fine amount equaled
$2,500 per day that an unqualified driver worked.
In November 2019, Transport for London (TfL) announced it would not renew Uber's license to operate in London
for the second time in just over two years, following a two-month
probationary extension granted in September 2019, on the grounds that
Uber had failed to adequately address issues with checks on drivers,
insurance and safety.
Part of TfL's rationale for removing Uber's licence was evidence that
Uber driver accounts had been used by unauthorized drivers.
Crimes committed by drivers
In February 2016, Uber was criticized following the 2016 Kalamazoo shootings, a shooting spree in Kalamazoo, Michigan
that left six people dead and two wounded. It was committed by Jason
Dalton, who was driving for Uber while conducting the shooting. During
the ensuing seven-hour manhunt, authorities believe that Dalton
continued to drive and accept fares. Uber was aware of issues with
Dalton's driving skills, having received multiple complaints, though
critics agree that Dalton would not have raised any red flags since he
did not have a criminal record.
Sexual harassment allegations and management shakeup (2017)
On February 20, 2017, former Uber engineer Susan Fowler stated that she was subjected to sexual harassment by a manager and subsequently threatened with termination of employment by another manager if she continued to report the incident. Kalanick was reportedly aware of the harassment issues.
CTO Thuan Pham was alleged to have had knowledge of and to ignore Susan Fowler's sexual harassment allegations; however, investigations by TheInformation and Buzzfeed showed this to not be the case, allowing Pham to keep his job.
Uber hired former attorney general Eric Holder to investigate the claims. Arianna Huffington, a member of Uber's board of directors, also oversaw the investigation. Fowler likened Uber's culture to A Game of Thrones, in which rivals vie for the throne the same way Uber employees were encouraged to vie for power and aggression and betrayal was common. On February 20, 2017, Kalanick led a meeting with employees that was described by the participants as honest and raw.
On February 27, 2017, Amit Singhal,
Uber's Senior Vice President of Engineering, was forced to resign after
it came to light that he failed to disclose a sexual harassment claim
against him that occurred while he was the Vice President of Google Search.
On June 6, 2017, Uber announced that it fired over 20 employees as a result of the investigation. On June 13, 2017, Kalanick took an indefinite leave of absence from Uber. On June 20, 2017, after multiple shareholders reportedly demanded his resignation, Kalanick resigned as CEO.
Scandals and departure of Emil Michael
At a private dinner in November 2014, Emil Michael,
senior vice president of Uber, suggested that Uber hire a team of
opposition researchers and journalists, with a million-dollar budget, to
"dig up dirt" on the personal lives and backgrounds of media figures
who reported negatively about Uber. Specifically, he targeted Sarah Lacy, editor of PandoDaily, who, in an article published in October 2014, accused Uber of sexism and misogyny in its advertising. Michael issued a public apology and apologized to Lacy in a personal email, claiming that Uber would never actually undertake the plan. Several journalists deleted their Uber apps.
After several additional scandals involving Emil Michael, including an
escort-karaoke bar scandal in Seoul and the questioning of the medical
records of a rape victim in India, he left the company in June 2017 when
Kalanick, who reportedly was protecting Michael, resigned.
Settlement with victims
In
August 2018, Uber agreed to pay a total of $7 million to 480 workers to
settle claims of gender discrimination, harassment and hostile work
environment.
Use of offshore companies to minimize tax liability
In November 2017, the Paradise Papers, a set of confidential electronic documents relating to offshore investment, revealed that Uber is one of many corporations that used an offshore company to minimize taxes.
CEO's comments on the killing of Jamal Khashoggi
On November 11, 2019, Uber was seen trending on Twitter on #BoycottUber, after the company's CEO Dara Khosrowshahi characterized Saudi Arabia's murder of Jamal Khashoggi as a "mistake" in comments. In his interview with Axios on HBO, he compared the assassination of Khashoggi
to Uber’s decision of including self-driving cars, which resulted in a
death of a woman in 2018. He called them both "mistakes" that can "be
forgiven".
Awards
In 2013, USA Today named Uber its tech company of the year.
