Uber (company)

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Uber, Inc.
Type Privately held company
Industry Transport
Founded March 2009
Founders Travis Kalanick, Garrett Camp
Headquarters San Francisco, California, United States
Area served Worldwide
Key people Travis Kalanick (CEO)
Services Taxi, Vehicles for hire
Website www.uber.com

Uber is an app-based transportation network and taxi company headquartered in San Francisco, California, which operates in cities in several countries. The company uses a smartphone application to receive ride requests, and then sends these trip requests to their drivers.[1][2] Customers use the app to request rides and track their reserved vehicle's location.[3] As of 16 December 2014 the service was available in 53 countries and more than 200 cities worldwide,[4] and was valued at more than US$40 billion.[5]

Upon its inception, Uber offered only full-size luxury cars for hire, and the "UberBlack" title was adopted for the company's main service (named after the "black cars" private transportation services in New York City).[3] In 2012, the company launched its "UberX" program, which expanded the service to any qualified driver with an acceptable vehicle. Due to a lack of regulation, Uber can offer lower fees, so the service has become extremely competitive with traditional taxi services, expanding Uber's appeal to a broader cross-section of the market.[6]

Uber is the subject of ongoing protests from taxi drivers, taxi companies and governments who believe that it is an illegal taxicab operation that engages in unfair business practices and compromises passenger safety. As of December 2014, protests had been staged in Germany, India, Thailand, Spain, France, and England, among other nations, while incidents involving passengers have been documented.[7][8] Uber was banned in Spain and two cities of India in December 2014, and continues to be involved in disputes with several governmental bodies, including those of the U.S. and Australia.

History[edit]

2009–2011: Establishment in the U.S., venture funding[edit]

Uber was founded as "UberCab" by Travis Kalanick and Garrett Camp in 2009. The service was officially launched in San Francisco in June 2010, with Ryan Graves appointed as CEO. Graves later stepped down from his role as CEO to become VP of Operations; he was replaced by Kalanick.[9] Uber's mobile app—for both iPhones and Android phones—was launched in San Francisco in 2010.[10]

The company received venture funding in late 2010 from First Round Capital and a group of super angel investors in Silicon Valley that included Chris Sacca.[11] In early 2011, Uber raised more than US$11.5 million in Series A funding led by Benchmark Capital.[12] In late 2011, Uber raised an additional $32 million in funding from several investors, including Goldman Sachs, Menlo Ventures, and Bezos Expeditions,[13] bringing their total funding amount to $49.5 million.

2012–present: international expansion, controversy, new investors[edit]

Paris was the first city outside of the U.S. where Uber's service began operating, in December 2011 prior to the international LeWeb Internet conference. Speaking about Uber, LeWeb founder Loïc Le Meur said to the TechCrunch news website: “This is going to end the monopoly of the taxis in Paris.”[14]

The company's operations in Canada began in March 2012 when an official launch was held in Toronto. At the launch, the company presented data that showed a ratio of 1.9 taxis per 1000 people and concluded that "one must drive to effectively get around the city."[15] The Vancouver testing phase commenced in May 2012, and served HootSuite founder and CEO Ryan Holmes soon after inception.[16]

In April 2012, Uber launched the Uber Garage initiative that was described by TechCrunch as "a workshop where the company will experiment with new ideas for urban transportation." The first project occurred in Chicago, Illinois, U.S., and provided Uber users with the option of both taxis and their own vehicles on the mobile app. Kalanick said that the Chicago project was an experiment with different car options to test the viability of working with existing taxis in U.S. cities. Chicago was chosen due to the high ratio of cabs in the city and the low price.[17]

In July 2012, the company launched its app in London, UK, with an initial group of about 90 drivers using Mercedes, BMW, and Jaguar vehicles.[18] During the same month, in honor of National Ice Cream Month, Uber launched an "Uber Ice Cream" program in the U.S., so that users in seven cities could summon an ice cream truck for on-demand delivery, while purchases were billed to users' accounts.[19]

Following a six-week testing period, Uber was officially launched in Australia, in November 2012. Sydney was Uber's first launch in the Asia Pacific region and the band Art vs. Science participated in an early promotion.[20][21]

The soft launch of Uber in Singapore began in January 2013, after Kalanick expressed an intention to expand into Asia in an early 2012 interview.[22] The official launch was attended by Graves and an article published by the Next Web website stated that Singapore was specifically chosen due to its reputation as an Asian technology hub.[23]

In July 2013, Uber began offering "UberCHOPPER" rides, from New York City to the Hamptons, for US$3,000 in either a cab or helicopter.[24] On September 4, 2013, Uber announced its first sports deal. The company held a promotion with the NFL Players Association to promote safe rides for NFL players.[25]

Uber's service was launched in August 2013 in the South Korean capital city of Seoul.[26] In accordance with standard practice, Uber Seoul started as a test phase, and football player Koo Ja-cheol was the first Korean to use the service in the city.[27]

Although Uber was already banned in the Belgian capital of Brussels, the company advertised for a Brussels-based "General Manager" on the LinkedIn website in June 2014. The advertisement stated that the role was "by far the most demanding position Uber has to offer."[28] On June 6, 2014, Uber announced US$1.2 billion in funding during its latest round. The round valued Uber at around $17 billion pre-money.[29]

Following a soft launch of the Uber app in the Sanlitun shopping district in March 2014, an official launch was held in Beijing, China, in mid-July 2014, and the company's service operates in all of China’s four largest cities. At the time of the Beijing launch, Allen Penn appeared in the media as the head of Uber's Asia division.[30]

On August 4, 2014, the company announced the scheduled removal of a driver from the service pending a medical review, after the driver suffered an epileptic seizure while driving that resulted in an accident with a pedestrian in San Francisco. The 56-year-old driver was hospitalized after hitting three parked cars and then a man on the sidewalk; an Uber spokesperson said in the announcement that the driver "has an outstanding record of service and safety with no prior incidents."[31]

Drivers in the Polish capital city of Warsaw began using the Uber app on August 18, 2014. A taxi license or a taximeter are not requirements for drivers, and all payments are made through the mobile app. Swathy Prithivi, coordinator of Uber's entry into new markets, said to Polish media: “our premise is to be the cheapest. We will even be cheaper than the most popular Warsaw carriers."[32]

Although the Metropolitan Government of Seoul officially stated in mid-2014 that it would seek to ban Uber from operating in its jurisdiction, while also developing its own Uber-like app for registered taxis to be launched in December 2014,[33] Uber proceeded to introduce its UberX service in the city at the end of August 2014. According to the Wall Street Journal, UberX uses a "for-pay rideshare scheme" and "trips cost less than the same journey in an ordinary taxi." At the time of the launch, an Uber representative based in Seoul said that a charge will not apply to rides in Seoul until further notice.[26]

At the end of August 2014, the company had reportedly raised US$1.5 billion in venture capital.[34] Following a series of 2014 media articles, in which allegations were made of aggressive business practices by Uber, the news website Salon publication published an article on August 31, 2014 by staff writer Andrew Leonard, titled "Why Uber must be stopped." Leonard described Uber as "the closest thing we’ve got today to the living, breathing essence of unrestrained capitalism," and warned of the harms that will occur if the company achieves a "dominant market position in every major city on the globe."[35]

The service was launched in Montreal in October 2014. The city's mayor Denis Coderre publicly announced that if Uber "don't respect the rules" then the service would be banned there. At the time of the launch, 100 Montreal drivers had signed with Uber, while Coderre engaged in talks with Quebec's transportation minister, Robert Poëti.[36] On November 28, 2014, Thailand's Department of Land Transport declared Uber's continued operation within Thailand illegal.[37]

The Wall Street Journal reported on December 5, 2014, that Uber raised US$1.2 billion from a number of investors, including sovereign wealth fund Qatar Investment Authority, New Enterprise Associates, and hedge funds Valiant Capital Partners and Lone Pine Capital. The successful investors, the names of which Uber did not disclose, participated in a competitive bidding process that lasted several weeks, and their investments meant that Uber was worth US$41 billion. The article only referred to "people familiar with the matter" in regard to the sources of its information.[5]

On December 12, 2014, TechCrunch reported that the Chinese search engine Baidu, the mainland's largest, is expected to make a significant investment in Uber.[38] The deal, the details of which were not shared with the media, was confirmed on December 17, 2014, following a Beijing meeting involving Kalanick and Baidu chief executive and chairman, Robin Lee, who made a commitment to connect the search engine's map and mobile-search features with Uber’s app. At the time of the arrangement, Uber existed in eight Chinese mainland cities. Kalanick told the media afterward of an absence of "pressing regulatory issues" for Uber in China.[39]

Pricing and payments[edit]

Uber's pricing is similar to metered taxis, although all hiring and payment is handled exclusively through Uber and not with the driver personally. In some cities, if the Uber car is travelling at a speed greater than 11 mph (18 km/h), the price is calculated on a distance basis, otherwise, the price is calculated on a time basis.[40] At the end of a ride, the complete fare (which does not include a gratuity—Uber's exact wording is "No Need to Tip") is automatically billed to the customer's credit card.[3] Uber has said its high prices are the premium that the customers pay for a cab service that is not only reliable, but also punctual and comfortable.[41][42][43]

Surge pricing[edit]

Uber uses an automated algorithm to increase prices to "surge price" levels in order to attract more drivers during times of increased rider demand.[44][45] Customers receive notice when making a reservation that prices have increased.[44] The practice has often caused passengers to become upset and invited criticism when it has happened as a result of holidays, inclement weather, or natural disasters.[46] During New Year's Eve 2011, prices were as high as seven times normal rates, causing outrage in response.[47] Widely condemned for surge rates of four times the normal fare during the 2014 Sydney hostage crisis, after initially defending the practice Uber later apologized and refunded the surcharges.[48] Uber CEO Travis Kalanick responded to the criticism: "...because this is so new, it's going to take some time for folks to accept it. There's 70 years of conditioning around the fixed price of taxis."[47][49]

Promotions[edit]

DeLorean time machine provided by Uber

Uber's promotions include hiring ice cream trucks to deliver ice cream,[50] offering rides in DeLorean DMC-12s to Back to the Future fans,[51] offering helicopter service from New York City to the Hamptons during the July 4 weekend,[52] a National Cat Day promotion in which Uber drivers delivered kittens,[53] and a Christmas tree delivery service.[54]

Reception[edit]

In 2013, USA Today named Uber its tech company of the year.[55]

In 2011, Marc Andreessen said he would love to invest in Uber. He told CNET, "Uber is software eats taxis. [...] It's a killer experience. You watch the car on the map on your phone as it makes its way to you."[56] Also in 2011, The New York Times called Uber "clever but costly", noting the cars are "particularly nice by livery standards" and pickup times were slow compared with traditional New York City taxis and black cars.[41]

Uber faces competition from lower-cost real-time ridesharing startups such as Lyft, Sidecar, and Haxi. To compete at lower price levels, Uber has introduced UberTaxi (partnerships with local taxi commissions) and UberX (non-luxury cars such as Toyota Prius hybrids).[57] This move has led to dissatisfaction among existing Uber limo drivers who have seen their earnings decrease.[58]

In October 2014, Uber received an "F" rating from the Better Business Bureau (BBB), citing complaints over unexpectedly high charges.[59][60]

Regulatory opposition[edit]

Australia[edit]

New South Wales[edit]

On April 30, 2014, Transport for New South Wales, the government authority regarding transportation in New South Wales, Australia, responded to the introduction of ridesharing function of Uber and clarified that "if a NSW driver is taking paying members of the public as passengers, the driver and the vehicle must operate in accordance with the Passenger Transport Act" and "Under the act, such services must be provided in a licensed taxi or hire car, by an appropriately accredited driver, authorised by Roads and Maritime Services (RMS)."[61]

Queensland[edit]

Although Queensland premier Campbell Newman informed the media, "We are a deregulation-minded government" at the end of May 2014, in regard to the Queensland government's unwillingness to regulate Uber,[62] it sent a cease and desist letter to the company during the same month. Transport Minister Scott Emerson subsequently said that he "welcomed innovation in transport technologies", but Uber "must meet the relevant transport legislation". The Taxi Council Queensland (TCQ) supported the state government's stance, while Jordan Condo, Uber's head of public policy for the Asia Pacific region, described the state's regulations as "outdated".[63]

By mid-November 2014, the TCQ announced an anti-Uber media campaign, in which it warns Uber passengers that they are putting their lives at risk. In regard to the campaign's slogan, "Don't risk your life—Rideshare apps are unlawful, unsafe and uninsured," TCQ chief executive Benjamin Wash said in a public statement: "Queensland taxi drivers undergo daily criminal checks, but rideshare drivers don't. You simply don't know who is behind the wheel." Uber responded with information about its insurance policy, including a $US5 million contingency liability insurance cover and "each partner driver's own full insurance policies". The TCQ also launched an online parliamentary petition to ensure that Uber remains illegal in Queensland, while Emerson said that, since August, the government had issued "more than [A]$170,000 in fines to 62 [Uber] drivers".[64]

Victoria[edit]

On May 6, 2014, the Taxi Service Commission in Victoria, Australia, issued a number of infringement notices to Uber drivers with a fine of A$1,723, after a public warning discouraging people to use ridesharing applications like UberX.[65] State officers said that they will review the state's Transport Act, while Uber said it will reimburse drivers.[62]

Belgium[edit]

Uber was banned in Brussels, whereby the company will be fined €10,000 (US$13,500) if it offers fares to drivers who are not in possession of a taxi license. Bruxelles-Mobilite, the city's federal region administration responsible for infrastructure and traffic, impounded 13 cars aligned with Uber after March 2014 and a spokesperson for the body described the service as "illegal" in June 2014. The spokesperson also said in a public statement that Bruxelles-Mobilite was generally addressing the issue of illegal taxi drivers in a sector that was difficult to regulate.[28]

Canada[edit]

A September 2012 article in Business in Vancouver reported a dispute with local regulators.[66] On November 22, 2012, Uber announced it was exiting the "Secret Uber" stage in Vancouver and raising its rates to C$75 per hour to comply with provincial regulations.[67] As of December, Uber had not applied for a license from the city.[68]

On December 5, 2012, officials at the City of Toronto charged Uber with "25 municipal licencing offences, including operation of an unlicensed taxi brokerage and unlicensed limo service".[69] City officials said they had advised the company to comply with local regulations. Rival taxi dispatch apps had obtained licenses.[70]

France[edit]

In December 2014, Uber avoided a ban in France after a French judge decided not to ban UberPOP, the low-cost service of the company. The ruling also stated that Uber could not advertise some of its services to the general public in France; if it did, it would face a $25,000 daily fine.[71]

Germany[edit]

In early 2014, Berlin authorities ruled against Uber—which operates in the German cities of Berlin, Munich, Frankfurt, Hamburg, and Düsseldorf—on two occasions following a case filed by the Berlin Taxi Association. The first ruling, delivered by a court of law in April 2014, deemed Uber's limousine service to be in breach of local legislation, while an August 13, 2014 decision banned the service from operating in Berlin due to safety concerns—the latter decision, which includes a €25,000 (Euro) (US$33,400) fine for non-compliance, cited issues pertaining to unregulated vehicles and unqualified drivers who are not properly insured. A Berlin Taxi Association representative said on August 14 that the legal proceedings were ongoing, and that Uber could lodge an appeal against the second decision.[72]

On August 28, 2014, a court in Frankfurt issued an immediate cease and desist order against Uber, following an appeal from the cooperative Taxi Deutschland.[73] The preliminary injunction applied to all of Germany[74] and included a fine of €250,000 (US$328,108) per ride for non-compliance.[75][76] If the injunction was breached, Uber's German-based employees could be jailed for up to six months, in addition to an imposition of fines upon the company.[8] Uber's premium Uber Black service was not affected by the ruling.[77]

On September 16, 2014, the district court of Frankfurt revoked the preliminary injunction, thereby re-allowing Uber to operate in Germany.[73] The presiding judge wrote that the Taxi Deutschland case "would have had prospects for success," but the case was merely lodged too late, as any case needs to be filed within two months of a service's launch—Uber started in Germany in April 2014, but the case was filed in August 2014.[77] According to Taxi Deutschland's legal representative after the announcement of the decision, the body had "already decided to appeal the decision, and we [Taxi Deutschland] will also seek that the temporary injunction be reinstated," meaning that the matter must be heard in a higher court.[78]

India[edit]

Hyderabad[edit]

The Hyderabad road transport authority banned Uber cabs a day after the Indian Ministry of Home Affairs advised all states to stop the operation of web-based taxi services. A spokesman for the authority said that Uber did not hold a license to operate in the city, and asked the public to cease using Uber cab services.[79]

Karnataka[edit]

The state government of Karnataka was reported to have banned Uber on the morning of December 11, 2014. The decision occurred after Home Minister Rajnath Singh announced in Parliament on December 9, 2014, that he had advised all states and Union territories to ban unregistered and unlicensed cab services. The state's transport department was expected to issue the notification imposing the ban during the afternoon of December 11.[80][81]

New Delhi[edit]

In December 2014, following allegations of rape against an Uber driver in New Delhi, India,[82] Uber was banned from New Delhi for not following the city's compulsory police verification procedure.[83] The driver had been charged, then acquitted, of a prior sexual assault in 2011.[82] Within two days of the rape incident, almost 7,000 people signed a petition calling on Uber to conduct mandatory seven-year background checks on drivers, in line with its U.S. operations.[84] Delhi's transport department banned Uber from all activities related to the provision of any type of transport service in the city.[85] Uber issued a statement stating that it would work with the Indian government "to establish clear background checks currently absent in their commercial transportation licensing programs."[86]

In banning Uber, Delhi's transport department cited a number of rules that Uber had broken. According to India's Radio Taxi Scheme, 2006, all taxi licensees must be either a company under the Companies Act, 1956, or a society under the Societies Registration Act, 1860. Furthermore, taxi services must provide adequate parking space for all taxis, as well as sufficiently sized office space to accommodate the control room, the maintenance of a minimum fleet size per license (500 vehicles), and all vehicles must be fitted with GPS/GPRS tracking systems (to be in constant communication with the control room while on duty). The rules also stipulate that the taxi licensee is responsible for ensuring the quality of drivers, including police verifications, supervision, and employee behaviour.[86]

The Netherlands[edit]

On December 8, 2014, Dutch judges banned the UberPop ridesharing service that was launched as a pilot project in Amsterdam between July and September 2014, followed by an expansion into The Hague and Rotterdam. The Hague-based Trade and Industry Appeals Tribunal ruled: "Drivers who transport people for payment without a licence are breaking the law". Uber's official response indicated that the company would continue to offer the service, despite the €100,00 fine and the €40,000 fine for drivers who are apprehended.[87]

Philippines[edit]

On October 23, 2014, despite the recommendation of the Metropolitan Manila Development Authority,[88] the Philippine Land Transportation Franchising and Regulatory Board (LTFRB) imposed a ₱120,000 (US$2,676) to ₱200,000 (US$4,460) fine for using Uber on public utility vehicles and sedans, respectively.[89] A spokesperson for the board said that Uber did not have an approved franchise to operate in the country, and not because of the service itself.[89] The LTFRB also remarked that Uber can still operate in Metro Manila if the Philippine House of Representatives can give them a proper legislative franchise, saying "We want this scheme work in the Philippines because the application is good, but it has to work inside the context of Philippine laws."[90] On October 30, 2014, after an intervention from the Department of Transportation and Communications, the LTFRB temporarily suspended apprehending Uber vehicles and will review its operations.[91]

Poland[edit]

Following the commencement of Uber services in Warsaw, Jaroslaw Iglikowski, chief of the Union of Warsaw Taxi Drivers, said: "We will put pressure on politicians, and demand that they change the regulations [for firms offering taxi services]."[32]

South Korea[edit]

The Seoul city government released an official statement in July 2014 expressing its intention to seek a ban on Uber's smartphone app. The government stated that South Korean law prohibits fee-paying transport services that use unregistered private or rented vehicles, and a Seoul driver received a one-million won (US$974) fine in April 2014 after using Uber to solicit customers in a rented car. The city government also initiated a police investigation of Uber in June 2014, but the request was suspended due to a lack of evidence; however, the July statement indicated that the investigation would be recommenced. A response from Uber warned the government that it risked being "trapped in the past."[33]

Spain[edit]

On December 9, 2014, a judge ordered Uber to cease all activities in Spain. Since its arrival in Spain, the company had been the target of a series of protests by the Madrid Taxi Association, which considers the app to be unfair competition. In a statement after the ruling, the Spanish court stated that drivers "lack the administrative authorisation to carry out the job, and the activity they carry out constitutes unfair competition."[87]

Taiwan[edit]

Uber Taiwan received over US$30,000 in fines for operating illegally, including a cease and desist of the app, on December 5, 2014. Issues included failure to insure vehicles, operating like a business without a business license, metered fares unknown to passengers, metered fares not inspected by the Ministry of Transportation, and failure to report income and pay taxes. Many drivers had their licenses suspended for violations.[92]

Thailand[edit]

Following concerns raised by taxi drivers in Thailand over the lower rates charged by Uber drivers, the head of the country's Department of Land Transport, Teerapong Rodpraser, declared Uber illegal on November 28, 2014, alleging that Uber vehicles are not properly registered in Thailand, the charging methods of Uber drivers are not valid, Thai Uber drivers are not properly licensed, and the service discriminates against people who do not possess credit cards.[37]

The Department also raised security concerns over Uber's credit card-only policy in Thailand, and Teerapong said that Uber was also illegal under Thailand's Motor Vehicle Act B.E. 2522. As of the November 2014 announcement, the Uber Black and UberX services are available in the Thai cities of Bangkok and Phuket.[37]

Following the announcement, Uber drivers faced a maximum 4,000-baht fine is caught by police. Meanwhile, a meeting of different government agencies was held to decide how Uber services would be managed in the future—the outcome was not publicized in the media at the time of the announcement.[37]

United Kingdom[edit]

On June 11, 2014, London-based Hackney carriage (black cab) drivers, members of the Licensed Taxi Drivers Association, disrupted traffic as a protest against Transport for London's refusal to stop Uber's calculation of fares based on distance and time taken, as they claimed it infringes upon their right to be the sole users of taximeters in London.[93] The following week, London mayor Boris Johnson stated it would be "difficult" for him to ban Uber "without the risk of a judicial review"; however, he expressed compassion for the view of the black-cab drivers:

I think it's a very difficult [question] ... We've gone to the high court to get a ruling on this, and the issue is basically: is the driver's mobile in the cab equivalent to a taxi meter? I can see why m'learned friends might think that it is, because it's receiving data about, or it's calculating, the distance and time and the fare. And there are other lawyers who say that it isn't, and that was the advice of the counsel to TfL. And so we've got a legal problem.[94]

In a blog post black-cab driver Rooney Johan wrote: "if they (had) included us and the limousine companies instead of the private cars we would have acted differently", which was followed by another black-cab owner George Ryan saying: "if Uber want to operate outside US they have to modify their business model". Following the black-cab protest, driver Richard Cudlip wrote in his blog, "as a trade we failed to get our message across". Cudlip also said he was concerned about safety in minicabs, slow issuing (and reissuing) of black-cab licences, a failure to prevent minicabs from illegally touting for business, and a lack of space outside key London tourist destinations.[94]

United States[edit]

In May 2011, Uber received a cease-and-desist letter from the San Francisco Municipal Transportation Agency, claiming it was operating an unlicensed taxi service, and another legal demand from the California Public Utilities Commission that it was operating an unlicensed limousine dispatch. Both claimed criminal violations and demanded that the company cease operations. In response, the company, among other things, changed its name from UberCab to Uber.[95] In the fall of 2012, the California Public Utilities Commission issued a cease-and-desist letter to Uber (along with rideshare companies Lyft and SideCar) and fined each $20,000. However, an interim agreement was reached in 2013 reversing those actions.[96]

In September 2013, the CPUC unanimously voted to make the agreement permanent, creating a new category of service called transportation network companies to cover Lyft, UberX, SideCar, and Summon, thereby making California the first jurisdiction to recognize such services.[97]

In January 2012, an Uber driver's cab was impounded as part of a sting by the Washington, D.C. taxicab commission. The commissioner said the company was operating an unlicensed taxicab service in the city.[98] Following a social media campaign by Uber's users, the D.C. city council voted in July to formally legalize this type of service with no minimum fare, which led to taxicab drivers protesting.[99]

On August 1, 2012, the Massachusetts Division of Standards issued a cease-and-desist letter to Uber, on the grounds that the GPS-based smartphone app was not a certified measurement device, but on August 15, the agency reversed its ruling after prodding by Governor Deval Patrick, saying that technique was satisfactory because it was under study by the National Institute of Standards and Technology.[100]

On October 5, 2012, Uber was sued by the taxi and livery companies in Chicago. According to the release, Uber is accused of violating Chicago city laws and Illinois state laws designed to protect public safety, consumer protection, and fair practices.[101]

The New York City Taxi and Limousine Commission has discouraged drivers from participating in Uber, resulting in suspension of Uber-operated taxi service in the city in October 2012. Uber's premium sedan service was not affected.[102] When Hurricane Sandy hit New York later that month, Uber drew criticism for doubling prices as part of its "surge pricing" system.[103] (Uber ultimately waived its fees and passed on all of the fares to its drivers, and defended its pricing by noting that it tripled the number of vehicles available.)

As of August 2013, Uber was being sued by American drivers who claimed that the company was stealing their tip money.[104]

On March 17, 2014, the Seattle City Council voted to limit the number of drivers that ridesharing services like Uber, Lyft, SideCar, and others could operate to 150 per service.[105] City Council Member Kshama Sawant argued in favor of the caps as a means to protect traditional taxi drivers.[106] However, on April 17, 2014, the council's ordinance was suspended by a coalition that obtained 36,000 signatures to put the question to voters in a referendum. As a result, Mayor Ed Murray announced a 45-day negotiation process to find an alternative approach.[107] As of July 14, 2014, Uber has donated over $500,000 to "Seattle Citizens to Repeal Ordinance 124441," a political group seeking to overturn the ordinance limiting the number of rideshare vehicles in Seattle.[108]

On June 5, 2014, the Virginia Department of Motor Vehicles issued a cease-and-desist letter to both Uber and its competitor Lyft, demanding they halt operations within Virginia.[109]

On September 17, 2014, California's Governor approved the "Assembly Bill No. 2293" bill that will become effective on July 1, 2015. The bill will amend "the Passenger Charter-party Carriers’ Act to enact specified requirements for liability insurance coverage for transportation network companies, as defined, and their participating drivers." The driver under the new law is defined as "any person who uses a vehicle in connection with a transportation network company’s online-enabled application or platform to connect with passengers." The stated minimum insurance requirement ranges from US$50,000 to $100,000 for death and injuries per individual or incident, and stipulates US$30,000 for property damage. As a breach of the bill would be classified as a criminal act, a corresponding "state-mandated local program" will be implemented.[110]

On December 8, 2014, Portland sued Uber, claiming that Uber violates the city's Private for Hire Transportation Regulations and Administrative Rules. The court was asked to stop Uber from operating in Portland.[111]

On December 9, 2014, the cities of Los Angeles, California and Uber's headquarter city of San Francisco sued the company, claiming that it had "refused to comply with straightforward California laws that protect consumers from fraud and harm", and that it made misleading statements about the background checks it performs on drivers and falsely charging a "Safe Rides Fee". San Francisco's city attorneys had previously settled out of court with the rideshare company Lyft over similar allegations.[112]

Controversy[edit]

Lawsuits[edit]

In December 2013, a person who worked as an Uber driver ran over and killed a six-year-old girl, severely injuring her mother and brother. The driver was not carrying a passenger, but the girl's family filed a wrongful death claim against Uber, claiming the driver was using Uber's mobile application at the time.[113][114][115]

Protests[edit]

On January 13, 2014, cab drivers in Paris attacked an Uber driver's car near Charles de Gaulle Airport, protesting competition from the transportation startup.[116] On June 11, 2014, in a concerted action, taxis blocked roads in major European cities in protest against what they perceive as a threat to their livelihoods by companies such as Uber. The cabbies contended that Uber and similar smartphone app-based services have an unfair advantage because they are not subject to the same kinds of fees and regulations placed on taxis.[117][118]

Sabotage against competitors[edit]

The company issued an official apology on January 24, 2014 after documents leaked to the Valleywag and TechCrunch publications said that, earlier in the month, Uber employees in New York City deliberately ordered rides from Gett, a newly established 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 offered drivers incentives—including cash—to join Uber.[119] Uber apologized in a statement on its website.[120]

The Lyft ridesharing service then reported to the CNN Money media outlet in August 2014 that 177 Uber employees had ordered and cancelled approximately 5,560 rides since October 2013—Lyft said it found links to Uber recruiters by cross-referencing the phone numbers involved. The CNN Money report identified one Lyft passenger who canceled 300 rides from May 26 to June 10, 2014, and was identified as an Uber recruiter by seven different Lyft drivers. On this occasion, Uber did not issue an apology, but suggested in a statement on its website that the recruitment attempts were possibly independent parties trying to make money.[121][122] A Lyft spokesperson stated to CNN Money: "It's unfortunate for affected community members that they have used these tactics, as it wastes a driver's time and impacts the next passenger waiting for that driver."[121]

Operation SLOG[edit]

In August, 2014 The Verge online publication reported on a secret Uber project called "Operation SLOG"—which recruits members with the assistance of TargetCW, a San Diego, U.S.-based employment agency—that appears to be an extension of the company's activities in relation to Lyft. As reported, on July 9, 2014 following Lyft's expansion into New York City, Uber sent an email offering what it called a "huge commission opportunity" to several contractors based on the "personal hustle" of the participants.[34] Those who responded met with Uber marketing managers who attempted, according to one of the contractors, to create a "street team" to gather intelligence about Lyft’s launch plans 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.[34] After being contacted for comment, Target CW warned its contractors against talking to the media, stating that it represented a violation of a non-disclosure agreement they signed.[34]

National Federation of the Blind[edit]

A lawsuit was filed in the U.S. state of California on September 9, 2014 by the state chapter of the National Federation of the Blind, in response to the reported denial of services to "more than 30" blind customers—the lawsuit claimed that the conduct was in violation of the Americans with Disabilities Act of 1990 and California state law. The Washington Post published a direct quote from the complaint, in which the Federation claims that its constituency "face the degrading experience of being denied a basic service that is available to all other paying customers." Two cases were described in the Post article: First, a California UberX driver allegedly stored a service dog in the trunk of his vehicle and refused to acknowledge the blind passenger's concern upon the latter's realization of what had occurred; second, a driver allegedly cursed at a blind passenger during a verbal exchange, in which the latter was explaining the nature of the guide dog—according to the complaint, the driver suddenly accelerated, and nearly injured the dog, while also striking the passenger’s blind friend with an open car door.[123]

Uber responded to a number of blind passengers who reported their experiences, stating that since Uber drivers were independent contractors, the company was unable to oversee their conduct. The Federation replied in a public statement that Uber closely monitored its drivers' work practices through the Uber app, that Uber advised blind passengers to notify drivers about their guide animals in advance, and that the Federation was proceeding with the filing of the lawsuit after Uber refused to enter into a negotiation with them to resolve the issue.[123]

Threatening journalists[edit]

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 into the personal lives and backgrounds of media figures who reported negatively about Uber. Specifically, he targeted Sarah Lacy, editor of the technology website PandoDaily, who has accused Uber of sexism and misogyny.[124] The controversy made national news and stirred criticism against Uber. "The comments, reportedly made by senior vice president for business Emil Michael at a New York dinner attended by BuzzFeed editor-in-chief Ben Smith," wrote a Washington Post columnist, "ignited a powder keg of criticism about a company already perceived as cut-throat — landing Uber on the front pages of The Washington Post, USA Today and the New York Times."[125]

Michael issued a public apology.[126] Later, he sent an email to Lacy: "I was at an event and was venting, but what I said was never intended to describe actions that would ever be undertaken by me or my company toward you or anyone else. I was definitively wrong and I feel terrible about any distress I have caused you."[127]

Speaking with the Australian media publication The Conversation on November 20, 2014, European PR agency FINN partner Raf Weverbergh said that Uber does not realize exactly how upset journalists are in the wake of the Michael incident. On the same date, the publication reported that more journalists deleted their Uber apps. Uber's Brisbane spokesperson stated that journalists will not be investigated by the company in the Australian state of Queensland, in light of the legislative difficulties that were occurring at the time.[128]

User privacy[edit]

Kalanick received a letter, dated November 19, 2014, from Senator Al Franken, Chairman of the United States Senate Judiciary Subcommittee on Privacy, Technology and the Law, over user privacy. In addition to a list of 10 questions, Franken stated that the company had a "troubling disregard for customer privacy" and that he was "especially troubled because there appears to be evidence of practices inconsistent with the policy [Uber spokesperson] Ms. Hourajian articulated" and that "it appears that on prior occasions your company [Uber] has condoned use of customers’ data for questionable purposes". Franken concluded his letter by asking for a response by December 15, 2014.[129]

Concerns have been 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 Mode". In addition to the aforementioned use of the service to track journalists and politicians, a venture capitalist disclosed in 2011 that Uber staff were using the function recreationally and viewed being tracked by Uber as a positive reflection on the subject's character.[130] An individual who had interviewed for a job at Uber 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.[131]

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External links[edit]