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Uber

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Uber Technologies, Inc.
Formerly
Ubercab (2009–2011)
Public
Traded asNYSEUBER
Russell 1000 Index component
IndustryTransportation
FoundedMarch 2009; 11 years ago (2009-03)
FoundersGarrett Camp
Travis Kalanick
HeadquartersSan Francisco, California, U.S.
Area served
69 countries, over 900 metropolitan areas
Key people
Ronald Sugar (Chairman)
Dara Khosrowshahi (CEO)
Nelson Chai (CFO)
Tony West (CLO)
ProductsMobile app, website
ServicesVehicle for hire
Food delivery (Uber Eats)
Package delivery
Courier
Freight transport
RevenueIncrease US$14.147 billion (2019)
Decrease −US$8.596 billion (2019)
Decrease −US$8.506 billion (2019)
Total assetsIncrease US$31.761 billion (2019)
Total equityIncrease US$14.872 billion (2019)
Number of employees
26,900 (2019)
SubsidiariesUber Eats
Careem
Zomato (9.99%)
Websitewww.uber.com
Footnotes / references
[1][2][3][4]
Yellow Uber car in Moscow
DeLorean "time machine" provided by Uber. As a promotion, on September 6–8, 2013 in San Francisco, Uber offered rides of up to 15 minutes each in the DMC DeLorean that was featured in the Back to the Future film franchise.[5]
An Uber driver in Bogotá, Colombia with the Uber app on a dashboard-mounted smartphone

Uber Technologies, Inc., commonly known as Uber, offers vehicles for hire, food delivery (Uber Eats), package delivery, couriers, freight transportation, and, through a partnership with Lime, electric bicycle and motorized scooter rental. The company is based in San Francisco and has operations in over 900 metropolitan areas worldwide.[2] It is one of the largest providers in the gig economy and is also a pioneer in the development of self-driving cars.

Uber is estimated to have over 110 million monthly active users worldwide.[6] In the United States, Uber has a 67% market share for ride-sharing[7] and a 24% market share for food delivery.[8] 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,[9][10][11] and many startups have described their products as "Uber for X".[12][13][14]

Like similar companies, Uber has been criticized for treatment of drivers as independent contractors, disruption of the taxicab business, and an increase of traffic congestion. When it was under the leadership of former CEO Travis Kalanick, the company was criticized for several unethical practices.

Product overview[edit]

Uber does not provide transportation services, instead, Uber determines the terms on which independent drivers are allocated to customers and the prices that will be charged to them, including the share earned by the driver.[15] To facilitate the scheme, Uber utilizes dynamic pricing model; prices vary according to supply and demand at the time of service. However, customers are quoted the fare or delivery fee in advance.[16][17]

Service is generally accessed via mobile app. Users set up a personal profile with a name, phone number, other information, and payment preference, which could be a credit card, e-commerce payment system or, in some cases, cash. After the service is complete, the customer may be given the option to provide a gratuity to the driver, which is also billed to the customer's payment method.

The status of drivers as independent contractors is an unresolved issue. Drivers provide a vehicle, which could be owned, rented, or leased. Drivers must meet requirements for age, health, car age and type, have a driver's license and a smartphone or tablet, and may be required to pass a background check. In many cities, vehicles must pass annual safety inspections and/or must have an emblem posted in the passenger window. Some cities also require drivers to have a business license.[18] There may be accommodations for hearing-impaired drivers.[19] Drivers may be notified before accepting a trip if it will be longer than 45 minutes. After each transaction, drivers and customers may rate each other and users with low ratings may be deactivated.[20]

Pricing options[edit]

Uber’s dynamic pricing technology[edit]

According to Uber, “in the United States, upfront prices are based on the estimated length and duration of the trip. Estimates can vary based on demand patterns and real-world factors like traffic.” Uber holds absolute control over the pricing of all trips, as well as the distribution mechanism of the supply side.[21]

Multiples of Uber’s base rates[edit]

In January of 2020, Uber has released new test feature in select California service areas to enable drivers at the Santa Barbara, Sacramento and Palm Springs airports to set a fair based on a multiple of Uber’s base, time and distance rates for UberX and UberXL trips.[22]

Price fixing implications[edit]

As part of the measure to enable drivers set multiples of the Uber’s base rates in select areas in California, Uber states in its directives to drivers that "it is illegal under state and federal law for anyone, including rideshare drivers, to engage in price fixing. This includes agreeing or coordinating with other drivers (in airport staging lots or elsewhere) on pricing and surge pricing. The law requires that drivers must make decisions about pricing and surge pricing on their own."[23] The purpose of price fixing is to coordinate pricing for mutual benefit. Price fixing is an antitrust offense that is considered “per se” unreasonable restraints of trade. The courts have reasoned that price fixing has no legitimate justification and lack any redeeming competitive purpose and should, therefore, be considered unlawful without any further analysis of their reasonableness, economic justification, or other factors.[24]

Pricing control by California PUC[edit]

In California, Uber is a public utility, and operates under the jurisdiction of the California Public Utilities Commission. California Public Utilities Commission regulates public utilities within its jurisdiction, including by setting rates for transportation services provided by Uber’s “partner drivers.” Uber is considered a transportation network company under state law. The California Supreme Court has ruled that the state utilities commission has jurisdiction over its rates and has been studying the ride-hailing company’s rate-setting procedures for the past seven years, but has not acted to regulate those rates or announced any intention to do so.[25]

Service options[edit]

UberX, the basic level of service, includes a private ride in a standard car with driver for up to four passengers. Depending on the location, Uber offers various other levels of transportation service at different prices including: black luxury vehicles, newer or premium level vehicles, cars with leather seats, sport utility vehicles, minivan, vans, Suzuki Altos, hatchbacks, electric cars, hybrid vehicles, motorcycles, auto rickshaws, actual taxicabs, lower-cost shared transport with other passengers going in the same general direction (suspended during the COVID-19 pandemic), child safety seats, pet shipping, guaranteed Spanish language-speaking drivers, additional assistance to senior citizens and passengers with a physical disability, and wheelchair accessible vans.[26][27][28][29][30][31][32][33][34][35][36][37][38][39]

Persons with a service animal may use any type of Uber service, as required by law.

Through a partnership with Lime, users are able to rent Jump electric bicycles and motorized scooters.[40][41][42]

Uber offers health professionals in the United States 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.[43]

Air services[edit]

Operated by HeliFlite, Uber Copter offers 8-minute helicopter flights between Manhattan and John F. Kennedy International Airport for approximately $200 per passenger.[44]

UberAir, under development, 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.[45]

Uber Freight[edit]

Uber Freight matches freight shippers with truckers in a similar fashion to the matching of passengers with drivers.[46][47]

Boat transportation[edit]

In partnership with local operators, Uber offered boat transportation during peak season in several locations including Croatia,[48] Miami,[49][50] and Istanbul.[51]

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.[52]

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.[53] The first prototype was built by Camp and his friends, Oscar Salazar and Conrad Whelan, with Kalanick as the "mega advisor" to the company.[53]

Following a beta launch in May 2010, Uber's services and mobile app officially launched in San Francisco in 2011.[54][55] Originally, the application only allowed users to hail a black luxury car and the price was 1.5 times that of a taxi.[56][57]

In February 2010, Ryan Graves became the first Uber employee. Graves started out as general manager and was named CEO shortly after the launch.[53] In December 2010, Kalanick succeeded Graves as the CEO of Uber.[53][54][58][59] Graves became the company's chief operating officer (COO).[60] By 2019, Graves owned 31.9 million shares in the company.[61]

In 2011, the company changed its name from UberCab to Uber after complaints from San Francisco taxicab operators.[62][63]

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.[52][64] In April 2012, Uber launched a service in Chicago where users were able to request a regular taxi or an Uber driver via its mobile app.[65][66]

In July 2012, the company introduced UberX, a cheaper option that allows people to drive for Uber using non-luxury vehicles, including their personal vehicles, subject to a background check, registration requirement, and car standards.[67][63] By early 2013, the service was operating in 35 cities.[68][69][70]

In December 2013, USA Today named Uber its tech company of the year.[71]

In August 2014, Uber launched UberPOOL, a shared transport service in the San Francisco Bay Area.[72][73] The service soon launched in other cities worldwide including Paris,[74] New York City,[75] China,[76] Washington, D.C.,[77] London,[78] Boston,[79] Hyderabad, Kolkata, Mumbai, Singapore,[80][81] Delaware,[82] Toronto,[83] Nashville,[84] Sydney,[85] and Melbourne.[86]

In August 2014, Uber launched Uber Eats, a food delivery service.[87][88]

Uber logo used from February 2016 until September 2018

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.[89] Didi also agreed to invest $1 billion in Uber.[90] Uber had started operations in China in 2014, under the name 优步 (Yōubù).[91]

In August 2017, Dara Khosrowshahi, the former CEO of Expedia Group, became the CEO of Uber.[92][93]

In July 2017, Uber received a five-star privacy rating from the Electronic Frontier Foundation,[94] 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.[95]

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.[96]

In March 2018, Uber merged its services in Southeast Asia with those of Grab in exchange for a 27.5% ownership stake in Grab.[97][98][99]

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.[100]

In November 2018, Uber became a gold member of the Linux Foundation.[101][102]

On May 10, 2019, Uber became a public company via an initial public offering.[103] Following the IPO, Uber's shares dropped 11%, resulting in the biggest first-day dollar loss in IPO history for the US.[104] A month after going public, both COO Barney Harford and CMO Rebecca Messina stepped down.[105][106] Uber posted a US$1 billion loss in the first quarter of 2019, and a US$5.2 billion loss of for the second quarter of 2019.[107][108]

In July 2019, the marketing department was reduced by a third, with the lay-off of 400 people after the company experienced continued losses.[109][110] Engineer hires were frozen.[111]

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.[112][113]

In October 2019, Uber launched Uber Works to connect workers who want temporary jobs with businesses. The app was initially available only in Chicago and expanded to Miami in December 2019.[114][115] The service was shut down in May 2020.[116]

In October 2019, in partnership with HeliFlight, Uber began offering a helicopter taxi service between Manhattan and John F. Kennedy International Airport.[117]

In January 2020, Uber acquired Careem for $3.1 billion.[118][119][120] In the same month, Uber sold its Indian Uber Eats operations to Zomato, purchasing 9.99% of Zomato.[121]

On May 5, 2020, during the COVID-19 pandemic, Uber announced plans to layoff 3,700 employees, around 14% of its total workforce.[122] On May 18, 2020, 3,000 more job cuts and 45 office closures were announced.[116]

In July 2020, Uber agreed to acquire Postmates for $2.65 billion, with closing in the fourth quarter of 2020.[123]

In June 2020, Uber announced that it will manage the on-demand high-occupancy vehicle fleet for Marin Transit, a public bus agency in Marin County, California. This partnership is the first SaaS partnership for Uber.[124]

Self-driving car research[edit]

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.[125]

In early 2015, the company hired approximately 50 people from the robotics department of Carnegie Mellon University.[126]

On September 14, 2016, Uber launched its first self-driving car services to select customers in Pittsburgh, using a fleet of Ford Fusion cars. Each vehicle was equipped with 20 cameras, seven lasers, Global Positioning System, lidar, and radar equipment that enabled the car to create a three-dimensional map.[127][128]

On December 14, 2016, Uber began using self-driving Volvo XC90 SUVs in its hometown of San Francisco.[129] On December 21, 2016, the California Department of Motor Vehicles revoked the registration of the vehicles Uber was using for the test and forced the program to cease operations in California.[130] Two months later, Uber moved the program to Arizona, where the cars were able to pick up passengers, although, as a safety precaution, two Uber engineers were always in the front seats of each vehicle.[131] In March 2017, an Uber self-driving car was hit and flipped on its side by another vehicle that failed to yield.[132] In October 2017, Uber started using only one test driver, despite some employees' safety concerns.[133]

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.[134][135]

Incidents[edit]

In March 2018, there was a temporary pause to Uber's self-driving vehicle testing after the death of Elaine Herzberg by an Uber self-driving vehicle in Tempe, Arizona.[136] According to police, the woman was struck by the Uber vehicle while attempting to cross the street, while the Uber engineer in the vehicle was watching videos on her phone.[136] Uber pulled its self-driving cars off all public roads[137] and reached a settlement with the victim's family.[138] There was disagreement among local authorities as to whether or not the car or the victim was at fault.[139] 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[140][141] and Toronto.[142] In March 2019, Uber was found not criminally liable by Yavapai County Attorney's Office for the death of Herzberg.[143] 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.[144] In February 2020, Uber regained the permit to test self-driving vehicles on public roads of California with backup drivers and announced plans to resume testing in San Francisco.[145]

Timing[edit]

In September 2016, Uber projected the potential operation of 75,000 autonomous vehicles in 13 cities by 2022 and that 13,000 autonomous Uber vehicles could be operating by 2019.[146] 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."[144]

Research and development spending[edit]

In early 2019, Uber spent $20 million per month on research and development for autonomous vehicles;[146] however, a source said that expenses on the autonomous vehicle program have been as high as $200 million per quarter.[144]

Cancellation of research on autonomous trucks[edit]

After spending over $925 million to develop autonomous trucks, Uber cancelled its self-driving truck program in July 2018.[46] Uber acquired Otto for $625 million in 2016.[147][148] 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.[149][150] A ruling in May 2017 required Uber to return documents to Waymo.[151] The trial began February 5, 2018.[152] 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.[153]

Leadership[edit]

List of former chief executives[edit]

  1. Ryan Graves (2010)
  2. Travis Kalanick (2010–2017)

Criticism[edit]

Classification of drivers 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.[154] However, drivers do receive certain flexibilities that are not common among employees.[155]

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.[156]

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.[157] 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.[158] Uber appealed to the Supreme Court of the United Kingdom; a hearing took place on 21 July 2020.[159]

In March 2018, the Federal Department of Economic Affairs, Education and Research of Switzerland ruled that drivers should be classified as employees.[160]

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.[161] 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. A referendum to provide exemptions is scheduled for a vote in November 2020.[162] In December 2019, Uber and Postmates sued California, claiming AB5 is unconstitutional.[163]

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.[164]

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.[165] A May 2018 report by the Economic Policy Institute found the average hourly wage for drivers to be $9.21.[166] Reports of poor wages have been published in Profil,[167] Trend,[168] and The Guardian.[169] 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.[170]

However, a 2019 study found that "drivers earn more than twice the surplus they would in less-flexible arrangements."[171]

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.[172] 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.[173][174] In some cases, this resulted in extreme surcharges during emergencies such as Hurricane Sandy,[175] the 2014 Sydney hostage crisis,[176] and the 2017 London Bridge attack.[177]

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.[178][179]

Safety concerns[edit]

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, taxi drivers were responsible for 5 times the number of incidents of sexual assault as compared to Uber drivers.[180] Crimes have been committed by rideshare drivers[181] 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.[182] 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.[183][184]

Rideshare companies have been fined by government agencies for violations in their background check processes.[185][186][187]

In November 2019, Transport for London did not renew Uber's license to operate due in part to the ability of people to fake identities and use other drivers' accounts, circumventing the background check process.[188][189][190]

Increased traffic congestion, carbon emissions, and reduced usage of public transport[edit]

Studies have shown that traffic congestion has increased in New York City, San Francisco, Mumbai, New Delhi and Bangalore where extensive public transport networks are in place.[191][192][193][194][195] Many people who use these services would otherwise be using public transport.[196] Taxicabs were noted to have lower rider waiting time and vehicle empty driving time, and thus contribute less to congestion and pollution in downtown areas.[197] However, another report noted that these companies serve as complements to public transit.[198]

In 2020, the Union of Concerned Scientists found that due to dead mileage, "ride-hailing trips produce 47 percent more carbon emissions than a similar trip taken in your own private car."[199]

Insufficient wheelchair accessible vans[edit]

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.[200]

Driver refusals to transport service animals[edit]

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.[201][202]

Use of phones while driving[edit]

To accept a fare, drivers must 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.[203]

Decline in value of taxi medallions[edit]

Values of taxi medallions, transferable permits or licenses authorizing the holder to pick up passengers for hire, have declined in value significantly. A couple of credit unions that lent money secured by medallions suffered from bank failure.[204]

Antitrust price fixing allegations[edit]

Uber has been a subject of several antitrust legal cases. Antitrust law generally holds that price setting activities are permissible within business firms, but bars them beyond firm boundaries. Uber does not actually provide services to consumers directly, instead, drivers are independent contractors and not employees. The antitrust law’s firm exemption strictly applies to entities that a platform have a direct control over, such as employees. The core of Uber’s business model is the coordination of consumer prices across drivers as means to deliver upfront fares calculated by an algorithm. Uber has managed to avoid directly litigating this antitrust problem by compelling a consumer (Meyer v. Uber Technologies, Inc.) lawsuit to be moved into arbitration.[205]

In the 1951 antitrust case United States v. Richfield Oil Co., the court ruled unequivocally for the government on the grounds that Richfield Oil Co. exercised de facto control over “independent business men,” in contravention of the antitrust laws, despite the fact that they were not employees of the company. This has become the basis for delineation between the realm of labor and antitrust: if subordinate entities are “independent business men” and not employees, it is illegal to exercise control. The United States Supreme Court affirmed the same basic principle against coercion of non-employees by vertical supply contract in the 1964 case Simpson v. Union Oil Co. of California.

Microlabor online marketplaces like Uber, Lyft, Handy, Amazon Home Services, DoorDash, and Instacart have perfected a process where workers deal bilaterally with gigs whose employers have none of the standard obligations of employers, while the platform operates the entire labor market to its own benefit – what some antitrust experts call a “for-profit hiring hall.”[206]

Uber drivers are not employees, and hence Uber setting the terms on which they transact with customers, including fixing the prices charged to customers, constitutes a violation of the ban on restraints of trade in the Sherman Antitrust Act of 1890. The issue whether Uber is a price-fixing conspiracy, and whether that price-fixing is horizontal has yet to be resolved at trial. Uber publicly stated that: “we believe the law is on our side and that’s why in four years no anti-trust agency has raised this as an issue and there has been no similar litigation like it in the U.S.”[207]

Driver refusal to transport a service animal[edit]

In March 2018, a lawsuit filed against Uber in the United States claimed that on at least 25 occasions, a woman with cerebral palsy was refused service due to her service dog, in violation of the Americans with Disabilities Act and the Texas Human Resources Code.[208][209] The dispute was sent to arbitration.[210]

Safety concerns[edit]

It is unclear if Uber is less or more safe than taxicabs, as major cities don't have much data on taxi-related incidents.[211]

Inadequate background checks and vetting of drivers[edit]

Violent crimes, including sexual abuse of passengers, have been committed by both Uber drivers[212] or by individuals posing as Uber drivers who lure unsuspecting passengers to their vehicles by placing an Uber sticker on their dashboard or by claiming to be a passenger's expected driver.[213] The latter led to the Murder of Samantha Josephson and the introduction of Sami’s Law.

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.[214]

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, including a conviction felon that received permission to drive for Uber by using an alias. The fine amount equaled $2,500 per day that an unqualified driver worked.[215]

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.[216] In November 2019, Transport for London announced it would not renew Uber's license to operate in London on the grounds that Uber had failed to adequately address issues with checks on drivers, insurance, and safety.[217][218][219] Part of TfL's rationale for removing Uber's licence was evidence that Uber driver accounts had been used by unauthorized drivers.[220][221]

Controversies under former CEO Travis Kalanick[edit]

Principled confrontation[edit]

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.[222][223][224][225] For example, in June 2014, Uber sent a notice to riders with the email address and phone number of a commissioner in Virginia who opposed the company, and told riders to lobby the official, who received hundreds of complaints.[226][227] 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".[228]

Alleged cancellation of ride requests to disrupt competitors[edit]

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.[229]

SLOG plan to disrupt Lyft[edit]

Following Lyft's expansion into New York City in July 2014, Uber, with the assistance of TargetCW, 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.[230][231]

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.[232][233]

Misleading drivers of potential earnings[edit]

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.[234][235][236]

Alleged short-changing of drivers[edit]

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.[237]

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.[238]

Criticism for collecting fares during a taxi strike[edit]

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.[239] 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.[240] A social media campaign known as #deleteuber was formed in protest, resulting in approximately 200,000 users deleting the app.[241] Uber added user account deletion to meet the resulting surge in requests.[242] 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.[243] On February 2, 2017, Kalanick resigned from the business advisory council.[244]

Evasion of law enforcement operations[edit]

Greyball[edit]

Starting in 2014, Uber used an internal software tool it developed called Greyball, which uses data collected from the Uber mobile app and other means, to avoid giving rides to certain individuals. 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.[245] 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.[245][246] 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.[245]

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.[247] 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."[248] 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.[249]

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.[250][251]

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.[252]

Ripley[edit]

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."[253] 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.[254][255]

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

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. CEO Travis Kalanick and CTO Thuan Pham were reportedly aware of and ignored the harassment issues; however, an investigation by TheInformation and Buzzfeed showed that Pham was not actually aware of the issues.[256][257][258][259]

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.[260][261][262]

Uber hired former attorney general Eric Holder to investigate the claims and Arianna Huffington, a member of Uber's board of directors, also oversaw the investigation.[263] [264][265]

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 was the Vice President of Google Search.[266][267][268][269][270]

In June 2017, Uber fired over 20 employees as a result of the investigation.[271][272] Kalanick took an indefinite leave of absence from Uber; however, under pressure from investors, he resigned as CEO a week later.[273][274][275][276]

In 2019, Kalanick resigned from the board of directors of the company and sold all of his shares.[277]

Scandals and departure of Emil Michael[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 up dirt" on the personal lives and backgrounds of media figures who reported negatively about Uber.[278] 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.[279][280][281] Michael issued a public apology[282] and apologized to Lacy in a personal email, claiming that Uber would never actually undertake the plan.[283][284] Several journalists deleted their Uber apps.[285] 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.[286]

Settlement with victims[edit]

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.[287]

God view and privacy concerns[edit]

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.[288][289][290] 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.[291] 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.[292]

Non-immediate disclosure of data breaches[edit]

On February 27, 2015, Uber admitted that it had suffered a data breach more than nine months prior. The names and license plate information from approximately 50,000 drivers were inadvertently disclosed.[293] Uber discovered this leak in September 2014, but waited more than five months to notify the affected individuals.[294]

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 gained 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.[295][296] Uber was subsequently criticized for concealing this data breach.[297] Incoming CEO Dara Khosrowshahi apologized.[298][299] 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.[300][301][302] Also in November 2018, Uber's British divisions were fined £385,000 (reduced to £308,000) by the Information Commissioner's Office.[303]

In 2020, the federal Department of Justice announced criminal charges against former Chief Security Officer Joe Sullivan for obstruction of justice. The criminal complaint said Sullivan arranged, with the knowledge of CEO Travis Kalanick, to have a ransom for the 2016 breach paid 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.[304]

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.[305][306]

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Further reading[edit]

Scholarly papers

Books

External links[edit]