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Uber

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Uber Technologies, Inc.
FormerlyUbercab (2009–2011)
TypePublic
NYSEUBER
Russell 1000 Index component
IndustryTransportation
Mobility as a service
FoundedMarch 2009; 12 years ago (2009-03)
FoundersGarrett Camp
Travis Kalanick
HeadquartersSan Francisco, California, U.S.
Area served
69 countries, over 900 metropolitan areas
Key people
ProductsMobile app, website
Services
RevenueDecrease US$11.139 billion (2020)
Increase −US$4.863 billion (2020)
Increase −US$6.768 billion (2020)
Total assetsIncrease US$33.252 billion (2020)
Total equityDecrease US$12.967 billion (2020)
Number of employees
26,900 (2019)
Subsidiaries
Websitewww.uber.com
Footnotes / references
[1][2][3][4][5]
Yellow Uber car in Moscow
An Uber driver in Bogotá, Colombia with the Uber app on a dashboard-mounted smartphone

Uber Technologies, Inc., commonly known as Uber, is an American mobility as a service provider based in San Francisco, with operations in over 900 metropolitan areas worldwide.[3] Its services include ride-hailing, food delivery (Uber Eats and Postmates), package delivery, couriers, freight transportation,[6][7] electric bicycle and motorized scooter rental via a partnership with Lime,[8][9][10][11] and ferry transport in partnership with local operators.[12][13][14][15] Uber does not own any vehicles; instead, it receives a 25% commission from each booking.[16][17] Fares are quoted to the customer in advance but vary using a dynamic pricing model based on the local supply and demand at the time of the booking.[18][19]

In the second quarter of 2021, Uber had 101 million monthly active users worldwide.[20] In the United States, Uber has a 68% market share for ride-sharing[21] and a 26% market share for food delivery.[22] Uber has been so prominent in the sharing economy that changes in various industries as a result of Uber have been referred to as uberisation,[23][24][25] and many startups have described their offerings as "Uber for X".[26][27][28]

Like similar companies, Uber has been criticized for the treatment of its drivers as gig workers and independent contractors, disruption of taxicab businesses, and an increase in traffic congestion. The company has been criticized for various unethical practices and for ignoring local regulations.

History[edit]

Travis Kalanick, former CEO of Uber, in 2013

In 2009, Uber was founded as Ubercab by Garrett Camp, a computer programmer and the co-founder of StumbleUpon, and Travis Kalanick, who sold his Red Swoosh startup for $19 million in 2007.[29]

After Camp and his friends spent $800 hiring a private driver, he 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.[30] The prototype was built by Camp and his friends, Oscar Salazar and Conrad Whelan, with Kalanick as the "mega advisor" to the company.[30]

In February 2010, Ryan Graves became the first Uber employee, receiving the job by responding to a post on Twitter. Graves started out as general manager and was named CEO shortly after the launch.[30] In December 2010, Kalanick succeeded Graves as CEO.[30][31][32] [33] Graves became chief operating officer (COO).[34] By 2019, Graves owned 31.9 million shares.[35]

Following a beta launch in May 2010, Uber's services and mobile app launched publicly in San Francisco in 2011.[31][36] Originally, the application only allowed users to hail a black luxury car and the price was 1.5 times that of a taxi.[37][38] In 2011, the company changed its name from UberCab to Uber after complaints from San Francisco taxicab operators.[39][40]

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.[29][41] In April 2012, Uber launched a service in Chicago, whereby users were able to request a regular taxi or an Uber driver via its mobile app.[42][43]

In July 2012, the company introduced UberX, a cheaper option that allowed drivers to use non-luxury vehicles, including their personal vehicles, subject to a background check, insurance, registration, and vehicle standards.[44][40] By early 2013, the service was operating in 35 cities.[45][46][47]

In December 2013, USA Today named Uber its tech company of the year.[48]

In August 2014, Uber launched a shared transport service in the San Francisco Bay Area.[49][50] The service soon launched in other cities worldwide.

In August 2014, Uber launched Uber Eats, a food delivery service.[51][52]

Uber logo used from February 2016 until September 2018

In August 2016, facing tough competition, Uber sold its operations in China to DiDi in exchange for an 18% stake in DiDi.[53] DiDi agreed to invest $1 billion in Uber.[54] Uber had started operations in China in 2014, under the name 优步 (Yōubù).[55]

In August 2017, Dara Khosrowshahi, the former CEO of Expedia Group, replaced Kalanick as CEO.[56][57] In July 2017, Uber received a five-star privacy rating from the Electronic Frontier Foundation,[58] but was harshly criticised by the group in September 2017 for a controversial policy of tracking customers' locations even after a ride ended, forcing the company to reverse its policy.[59]

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.[60] In March 2018, Uber merged its services in Southeast Asia with those of Grab in exchange for a 27.5% ownership stake in Grab.[61][62][63]

In November 2018, Uber became a gold member of the Linux Foundation.[64][65]

On May 10, 2019, Uber became a public company via an initial public offering.[66]

In June 2019, both COO Barney Harford and CMO Rebecca Messina stepped down.[67][68] In July 2019, the marketing department was reduced by a third, with the layoff of 400 people amidst continued losses.[69][70] Engineer hires were frozen.[71] In early September 2019, Uber laid off an additional 435 employees with 265 coming from the engineering team and another 170 from the product team.[72][73]

In January 2020, Uber acquired Careem for $3.1 billion.[74][75][76]

In the same month, Uber sold its Indian Uber Eats operations to Zomato, in exchange for 9.99% of Zomato.[77]

Also in January 2020, Uber tested a feature that enabled drivers at the Santa Barbara, Sacramento, and Palm Springs airports to set fares based on a multiple of Uber's rates for UberX and UberXL trips.[78]

On May 5, 2020, during the COVID-19 pandemic, Uber announced plans to layoff 3,700 employees, around 14% of its workforce.[79]

On May 18, 2020, 3,000 more job cuts and 45 office closures were announced.[80]

In June 2020, Uber announced that it would manage the on-demand high-occupancy vehicle fleet for Marin Transit, a public bus agency in Marin County, California. This partnership is Uber's first SaaS partnership.[81]

In July 2020, Uber in partnership with its majority-owned Cornershop, launched Uber grocery delivery service in Latin America, Canada, Miami, and Dallas.[82][83]

On December 1, 2020, Uber acquired Postmates for $2.65 billion.[84][85][86]

In early February 2021, Uber announced the purchase of Boston-based alcohol delivery service Drizly for $1.1 billion in cash and stock.[87]

Also in February 2021, Uber announced it would partner with Walgreens pharmacies to offer free rides to stores and clinics offering COVID-19 vaccines for those who live in underserved communities.[88]

Former operations[edit]

Self-driving cars[edit]

Uber ATG/Advanced Technologies Group, minority-owned by SoftBank Vision Fund, Toyota, and Denso, was developing self-driving cars.[89] In early 2015, the company hired approximately 50 people from the robotics department of Carnegie Mellon University.[90] On September 14, 2016, it launched self-driving cars in Pittsburgh using a fleet of Ford Fusion cars[91][92] and on December 14, 2016, it began testing self-driving Volvo XC90 SUVs in San Francisco.[93] After the California Department of Motor Vehicles forced the program to cease operations a week later,[94] the program was moved to Arizona.[95] In March 2018, it paused testing after the death of Elaine Herzberg in Tempe, Arizona.[96] Uber restarted testing in December 2018 after receiving local approval in Pittsburgh[97][98] and Toronto.[99] In January 2021, with Uber ATG described as a "cash-burn machine", the division was sold to Aurora Innovation for $4 billion and Uber invested $400 million into Aurora, taking a 26% ownership stake.[100][101]

Autonomous trucks[edit]

In 2016, Uber acquired Ottomotto, a self-driving truck company, for $625 million.[102][103] Ottomotto was founded by Anthony Levandowski, previously of Waymo, who allegedly founded Ottomotto using trade secrets he downloaded while at Waymo.[104][105][106][107] In February 2018, to settle a lawsuit regarding the stolen trade secrets, Uber gave Waymo $244 million in stock and agreed not to infringe on Waymo's intellectual property.[108] Uber cancelled its self-driving truck program in July 2018.[6][109][110]

Air services[edit]

In October 2019, in partnership with HeliFlight, Uber offered 8-minute helicopter flights between Manhattan and John F. Kennedy International Airport for $200-$225 per passenger.[111][112]

In December 2020, Uber sold its Elevate division, which was developing short flights using VTOL aircraft, to Joby Aviation.[113][114]

Uber Rent[edit]

Uber Rent, powered by Getaround, was a peer-to-peer carsharing service available to some users in San Francisco between May 2018 and November 2018.[115]

Uber Works[edit]

In October 2019, Uber launched Uber Works to connect workers who wanted temporary jobs with businesses. The app was initially available only in Chicago and expanded to Miami in December 2019.[116][117] The service was shut down in May 2020.[80]

Criticism[edit]

Treatment of drivers[edit]

Classification as independent contractors[edit]

Unless otherwise required by law, drivers are generally independent contractors and not employees. This designation affects taxation, work hours, and overtime benefits. Lawsuits have been filed by drivers alleging that they are entitled to the rights and remedies of being considered "employees" under employment law.[118] However, drivers do receive certain flexibilities that are not common among employees.[119]

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.[120]

On October 28, 2016, in the case of Aslam v Uber BV, the Central London Employment tribunal ruled that Uber drivers are "workers", not self-employed, and are entitled to the minimum wage under the National Minimum Wage Act 1998, paid holiday, and other entitlements.[121] 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.[122] Uber appealed to the Supreme Court of the United Kingdom; in February 2021, the court ruled that drivers should be classified as workers and not self-employed.[123] Uber drivers won the right to minimum wage, holiday pay, and protection from discrimination in the ruling. After losing three previous court cases, the company had appealed to the Supreme Court, arguing that its drivers were independent contractors.[124]

In March 2018, the Federal Department of Economic Affairs, Education and Research of Switzerland ruled that drivers should be classified as employees.[125]

In April 2018, the Supreme Court of California ruled in Dynamex Operations West, Inc. v. Superior Court that Dynamex, a delivery company, misclassified its delivery drivers as independent contractors rather than employees.[126] This ultimately led to California passing Assembly Bill 5 (AB5) on September 11, 2019, with a test to determine if a tasker must be classified as an employee and receive minimum wage protections and unemployment benefits. In December 2019, Uber and Postmates sued California, claiming AB5 is unconstitutional.[127] In 2020, they spent tens of millions of dollars[128][129] campaigning in support of California's Proposition 22, which passed, granting them a special exception to Assembly Bill 5 by classifying their drivers as "independent contractors", exempting employers from providing benefits to certain drivers.[130]

In November 2019, the New Jersey Department of Labor and Workforce Development determined that drivers should be classified as employees and fined Uber $650 million for overdue unemployment and disability insurance taxes.[131]

In March 2021, the UK Supreme Court ruled that Uber has to classify all of its drivers not as independent contractors but as workers, complete with the standard benefits. This includes minimum wage and holiday pay with other potential benefits depending on the contracts.[132]

Compliance with minimum wage laws[edit]

In some jurisdictions, drivers are guaranteed a minimum wage, such as in New York City, where drivers must earn $26.51/hour before expenses or $17.22/hour after expenses. Analyses have shown that absent such laws, many drivers earn less than the stated minimum wage.[133] A May 2018 report by the Economic Policy Institute found the average hourly wage for drivers to be $9.21.[134] Reports of poor wages have been published in Profil,[135] Trend,[136] and The Guardian.[137] A 2017 report claimed that only 4% of all Uber drivers were still working as such one year after starting, primarily due to low pay.[138]

However, a 2019 study found that "drivers earn more than twice the surplus they would in less-flexible arrangements."[139]

Safety concerns[edit]

Crimes have been committed by rideshare drivers[140] as well as by individuals posing as rideshare drivers who lure unsuspecting passengers to their vehicles by placing an emblem on their car or by claiming to be a passenger's expected driver.[141] The latter led to the murder of Samantha Josephson and the introduction of Sami’s Law. Lawsuits claim that rideshare companies did not take necessary measures to prevent sexual assault.[142][143] Rideshare companies have been fined by government agencies for violations in their background check processes.[144][145][146]The 2016 Kalamazoo shootings in February 2016, which left six people dead in Kalamazoo, Michigan, were committed by an Uber driver. Although Uber was criticized for its background check process, the driver did not have a criminal record, and the background check did not cause alarm.[147]

In November 2017, after discovering that 57 drivers in the state had violations in their background checks, including a conviction felon that received permission to drive for Uber by using an alias, the Colorado Public Utilities Commission fined Uber $8.9 million, or $2,500 per day that an unqualified driver worked.[148]

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, and other issues regarding insurance and safety, including evidence that Uber driver accounts had been used by unauthorized drivers.[149][150][151][152][153][154][155][156][157] After appealing the ruling, Uber was granted a license under certain conditions.[158]

It is unclear if rideshare vehicles are less or more safe than taxicabs. Major cities in the United States don't have much data on taxi-related incidents. However, in London, in 2018, there were 21 taxi and private hire journey-related sexual offences where a driver was charged, involving 17 individual drivers. More than half of the drivers involved, 11, were Uber drivers, one was a licensed taxi driver, one an unlicensed driver and the rest related to drivers affiliated with other private hire vehicle operators.[159]

Because it increases the number of people riding in automobiles instead of safer forms of transportation, a study from the Becker Friedman Institute at the University of Chicago tied ridesharing to an increase in traffic fatalities, including pedestrian deaths.[160][161]

Ridesharing has also been criticized for encouraging or requiring phone use while driving. To accept a fare, some apps require drivers to tap their phone screen, usually within 15 seconds after receiving a notification, which is illegal in some jurisdictions since it could result in distracted driving.[162]

Ridesharing vehicles in many cities routinely obstruct bicycle lanes while picking up or dropping off passengers, a practice that endangers cyclists.[163][164][165]

Dynamic pricing and price fixing allegations[edit]

Due to dynamic pricing models, prices for the same route may vary based on the supply and demand for rides at the time the ride is requested.[166] 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.[167][168] In some cases, this resulted in extreme surcharges during emergencies such as Hurricane Sandy,[169] the 2014 Sydney hostage crisis,[170] and the 2017 London Bridge attack.[171]

In the United States, drivers do not have any control over the fares they charge; lawsuits allege that this is an illegal restraint on trade in violation of the Sherman Antitrust Act of 1890.[172][173]

Accessibility failures[edit]

Ridesharing has been criticized for providing inadequate accessibility measures for disabled people compared to the public transit it displaces.

In some areas, vehicle for hire companies are required by law to have a certain amount of wheelchair accessible vans (WAVs) in use. However, most drivers do not own a WAV, making it hard to comply with the laws.[174]

While companies have strict requirements to transport service animals, drivers have been criticized for refusal to transport service animals, which, in the United States, is in violation of the Americans with Disabilities Act. In one case, this resulted in a lawsuit, which was referred to arbitration.[175][176] The case was eventually ruled in favor of the visually impaired passenger, Lisa Irving, with Uber ordered to pay her out $1.1 million.[177]

Bias against minority passengers[edit]

Complaints that passengers in certain demographic groups were discriminated against by drivers have prompted services like Uber and Lyft to remove identity information from advertised rides. However, once a ride is accepted, the driver gets the name and photo of the passenger, along with other information. A 2018 study in Washington, DC, found that compared to other passengers, drivers more frequently cancelled rides for African American passengers and LGBTQ and ally passengers (indicated by a rainbow flag), but cancelled at the same rate for women and men. The higher cancellation rate for African American passengers (only) was somewhat attenuated at peak times, when financial incentives were higher.[178]

Antitrust and unfair competition allegations[edit]

Uber has been the subject of several antitrust investigations and lawsuits.

Uber faced significant antitrust and unfair competition lawsuits from taxi companies across the United States, with federal courts hearing cases in cities such as Boston,[179] Houston,[180] and Philadelphia.[181] Taxi companies also sued cities for allowing Uber to operate a taxicab business without complying with the local taxi regulations.[182] Courts sided with Uber in almost every case: “The only case to proceed to trial resulted in a verdict for Uber on plaintiffs’ unfair competition claims and claims under the state consumer protection statute.”[183] That case did find, however, that Uber violated applicable local taxi regulations, although “Out of some 29 million Uber trips taken during the conduct period, 497 citations issued to Uber drivers represented a relatively insignificant violation of the Taxi Rules.”[184] One legal scholar summarized this taxi litigation as, that “In almost every case, on almost every claim, courts found that there is no legal claim for relief that medallion holders could have brought to vindicate the injury to their medallions.”[185]

Uber has also faced allegations that it facilitates an illegal price-fixing scheme. Antitrust law generally holds that price-setting activities are permissible within business firms, but bars them beyond firm boundaries. Uber has argued that it does not provide services to consumers directly.[186] Instead, the company argued that it only connects riders and drivers, sets service terms, and collects fares. When a consumer brought a class action alleging that "the Uber application allows third-party drivers to illegally fix prices,"[187] Uber was able to force that lawsuit into arbitration.[188]

Congestion[edit]

Several studies, including a study funded by Uber, have found that Uber rides and rides with similar services result in vehicles spending a large amount of time driving without a passenger, and those vehicles have a low average passenger occupancy rate which increases congestion.[189][190][191] One study found that in Los Angeles and Seattle the passenger occupancy for Uber services is higher than that of taxi services, and concluded that Uber rides reduce congestion on the premise that they replace taxi rides.[192] Later studies found that Uber rides are made in additation taxi rides, and replace walking, bike rides, and bus rides, in addition to the Uber vehicles having a low average occupancy rate, all of which increases congestion. This increase in congestion has led some cities to levy fees on Uber and similar services.[193]

Controversies[edit]

Ignoring and evading local regulations[edit]

Uber has been criticized for its strategy of generally commencing operations in a city without regard for local regulations. If faced with regulatory opposition, Uber called for public support for its service and mounted a political campaign, supported by lobbying, to change regulations.[194][195][196][197][198][199][200][201] Uber argued that it is "a technology company" and not a taxi company, and therefore it was not subject to regulations affecting taxi companies.[202][203] Uber's strategy was generally to "seek forgiveness rather than permission".[204] In 2014, with regards to airport pickups without a permit in California, drivers were actually told to ignore local regulations and that the company would pay for any citations.[205] Uber's response to California Assembly Bill 5 (2019), whereby it announced that it would not comply with the law, then engaged lobbyists and mounted an expensive public opinion campaign to overturn it via a ballot, was cited as an example of this policy.[206][207]

In March 2017, an investigation by The New York Times revealed that Uber developed a software tool called "Greyball" to avoid giving rides to known law enforcement officers in areas where its service was illegal such as in Portland, Oregon, Australia, South Korea, and China. The tool identified government officials using geofencing, mining credit card databases, identifying devices, and searches of social media.[208][209][210] While at first, Uber stated that it only used the tool to identify riders that violated its terms of service, after investigations by Portland, Oregon,[211][212][213] and the United States Department of Justice,[214][215][216] Uber admitted to using the tool to skirt local regulations and promised not to use the tool for that purpose.[217][218] The use of Greyball in London was cited by Transport for London as one of the reasons for its decision not to renew Uber's private hire operator licence in September 2017.[219][220][221]

A January 2018 report by Bloomberg News stated that Uber routinely used a "panic button" system, codenamed "Ripley", that locked, powered off and changed passwords on staff computers when those offices were subjected to government raids.[222] Uber allegedly used this button at least 24 times, from spring 2015 until late 2016.[223][224]

Attempts to sabotage competitors[edit]

In 2014, Uber employees were caught ordering and then quickly cancelling rides on competing services Lyft and Gett, in an attempt to disrupt these services.[225] In 2014, Uber was also accused of recruiting people to use competing services for the sole purpose of recruiting their drivers to Uber, at which point the recruiter would receive a commission.[226][227] Uber denied that it had any involvement with the cancellation of orders or the recruitment efforts.[228][229]

Misleading drivers on potential earnings[edit]

In January 2017, Uber agreed to pay $20 million to the Federal Trade Commission to resolve allegations of having misled drivers about potential earnings.[230][231][232]

Alleged short-changing of drivers[edit]

In 2017, a class action lawsuit was filed on behalf of thousands of Uber drivers, alleging that Uber’s “upfront prices” policy did not provide drivers with the 80% of fares to which they were entitled. The lawsuit was settled for $345,622, with each driver in the class getting at least $20.[233][234][235]

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.[236]

Operating during a taxi strike[edit]

In late January 2017, GrabYourWallet advised to boycott Uber because Uber did not join taxis in halting service from John F. Kennedy International Airport as part of the Protests against Executive Order 13769 and because Travis Kalanick, then CEO of Uber, was a member of Donald Trump's "business advisory council" and GrabYourWallet was advising boycotts of businesses with ties to Trump.[237][238] Approximately 200,000 users deleted the Uber mobile app.[239][240] On February 2, 2017, Kalanick resigned from the council, which disbanded in August 2017.[241][242]

Sexual harassment allegations and management shakeup (2017)[edit]

On February 19, 2017, former Uber engineer Susan Fowler published on her website that she was propositioned for sex by a manager and subsequently threatened with termination of employment by another manager if she continued to report the incident. Kalanick was alleged to have been aware of the complaint.[243][244][245][246][247] On February 27, 2017, Amit Singhal, Uber's Senior Vice President of Engineering, was forced to resign after he failed to disclose a sexual harassment claim against him that occurred while he served as Vice President of Google Search.[248][249][250][251][252] After investigations led by former attorney general Eric Holder and Arianna Huffington, a member of Uber's board of directors,[253][254][255] in June 2017, Uber fired over 20 employees.[256][257] Kalanick took an indefinite leave of absence but, under pressure from investors, he resigned as CEO a week later.[258][259][260][261] Also departing the company in June 2017 was Emil Michael, a senior vice president who 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 targeting Sarah Lacy, editor of PandoDaily, who, in an article published in October 2014, accused Uber of sexism and misogyny in its advertising.[262][263][264][265][266][267][268][269] In August 2018, Uber agreed to pay a total of $7 million to settle claims of gender discrimination, harassment, and hostile work environment, with 480 employees and former employees receiving $10,700 each and 56 of those employees and former employees receiving an additional $33,900 each.[270] In December 2019, Kalanick resigned from the board of directors of the company and sold his shares.[271][272][273][274]

God view and privacy concerns[edit]

In November 2014, then U.S. Senator Al Franken, Chairman of the United States Senate Judiciary Subcommittee on Privacy, Technology and the Law, expressed concerns regarding Ride Sharing Privacy, specifically Uber's "God View", whereby the whereabouts of specific customers, including journalists and politicians, are able to be tracked by Uber insiders.[275][276][277][278][279] In December 2014, in response to Franken, Uber implemented restrictions on its "God View".[280][281]

Delayed disclosure of data breaches[edit]

On February 27, 2015, Uber admitted that it had suffered a data breach more than nine months prior. Names and license plate information from approximately 50,000 drivers were inadvertently disclosed.[282] Uber discovered this leak in September 2014, but waited more than five months to notify the affected individuals.[283]

An announcement in November 2017 revealed that in 2016, a separate data breach had disclosed the personal information of 600,000 drivers and 57 million customers. This data included names, email addresses, phone numbers, and drivers' license information. Hackers used employees' usernames and passwords that had been compromised in previous breaches (a "credential stuffing" method) to gain access to a private GitHub repository used by Uber's developers. The hackers located credentials for the company's Amazon Web Services datastore in the repository files, and were 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.[284][285] Uber was subsequently criticized for concealing this data breach.[286] Khosrowshahi publicly apologized.[287][288] In September 2018, in the largest multi-state settlement of a data breach, Uber paid $148 million to the Federal Trade Commission, admitted that its claim that internal access to consumers' personal information was closely monitored on an ongoing basis was false, and stated that it had failed to live up to its promise to provide reasonable security for consumer data.[289][290][291] Also in November 2018, Uber's British divisions were fined £385,000 (reduced to £308,000) by the Information Commissioner's Office.[292]

In 2020, the US Department of Justice announced criminal charges against former Chief Security Officer Joe Sullivan for obstruction of justice. The criminal complaint said Sullivan arranged, with Kalanick's knowledge, to pay a ransom for the 2016 breach as a "bug bounty" to conceal its true nature, and for the hackers to falsify non-disclosure agreements to say they had not obtained any data.[293]

Use of offshore companies to minimize tax liability[edit]

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.[294][295]

Gender pay gap[edit]

A 2018 study found that male drivers earn about 7% more than female drivers. The gap was explained to be as a result of men driving 2.5% faster, work in more lucrative areas, and had 30% more experience than women. Women passengers gave tips averaging 4%, while men gave 5%; but women drivers received more tips—so long as they were below 65 years of age.[296][297][298]

Discrimination against a blind customer[edit]

In April 2021, an arbitrator ruled against Uber in a case involving Lisa Irving, a blind American customer with a guide dog who was denied rides on 14 separate occasions. Uber was ordered to pay US$1.1 million, reflecting $324,000 in damages and more than $800,000 in attorney fees and court costs.[299]

Court of Amsterdam case on 'robo-firings'[edit]

In April 2021, the court of Amsterdam ruled that Uber has to reinstate and pay compensation to six drivers that were allegedly automatically terminated solely due to algorithms, which is in violation of Article 22 of GDPR, which relates to automated decisions causing "legal or significant impact". Uber challenged the ruling, claiming it was not aware of the case and that the judgement was brought by default without the company ever being notified; however, the decision was upheld.[300]

Racial shortcomings of facial recognition system[edit]

In October 2021, Uber was sued in London over allegations that its facial recognition system is not able to effectively identify people with darker skin and has precluded some people from using the platform, thereby discriminating against people of color.[301][302][303]

Data[edit]

Customer service[edit]

Economist John A. List analyzed company data to explore the effect of customer problems and company response on future customer orders. For example, Uber's algorithms might inform the rider that a trip will take 9 minutes, while it actually takes 23 minutes. The analysis found that people with a bad experience later spent up to 10% less with Uber. List then observed how different company responses to the experience affected future use. Options include a "sincere apology", an admission that the company had failed, a commitment to "ensure that this will not happen again" and a discount on their next ride. Apology was ineffective in retaining customers. A US$5 discount voucher did reduce losses. Repeated bad experiences followed by apologies further alienated customers.[304]

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Further reading[edit]

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