Uber

Uber Technologies Inc.
Formerly
 UberCab (2009–2011)
Private
Industry
Founded March 2009 (2009-03)
Founders Travis Kalanick
Garrett Camp
Headquarters San Francisco, California, United States
Area served
 Worldwide, 785 metropolitan areas[1]
Key people
Products Mobile app, website
Services
Revenue Increase US$6.5 billion (2016)[2]
Decrease −US$2.8 billion(2016)[2]
Total assets

Increase US$15.7 billion (2016)

Decrease US$15.3 billion (2017)
Number of employees
 12,000+[3]
Subsidiaries
Website www.uber.com/ Edit this on Wikidata
Uber logo used until September 2018
An Uber ride in Bogotá, Colombia running the Uber app on his dashboard-mounted smartphone
Yellow Uber car in Moscow

Uber Technologies Inc. (doing business as Uber) is a peer-to-peer ridesharing, taxi cab, food delivery, bicycle-sharing, and transportation network company (TNC) headquartered in San Francisco, California, with operations in 785 metropolitan areas worldwide.[1] Its platforms can be accessed via its websites and mobile apps. Uber has been prominent in the sharing economy, so much so that the changes in industries as a result of it have been referred to as Uberisation.[4][5][6]

Uber has also been the subject of protests and legal actions, including a criminal investigation for its use, until March 2017, of Greyball software to avoid giving rides to regulators. The name "Uber" is a reference to the common (and somewhat colloquial) word uber, meaning "topmost" or "super", and having its origins in the German word über, cognate with over, meaning "above".[7]

Product overview

Riding with Uber

Riders are quoted the fare that they will pay before requesting the ride.[8] Uber uses a dynamic pricing model; prices vary based on projected time and distance as well as the time of day and the supply and demand for rides at the time the ride is requested.[9] At the end of the ride, payment is made based on the rider's pre-selected preferences, which could be a credit card on file, Google Pay, Apple Pay, cash, or, in India, Airtel mobile wallet[10] or Unified Payments Interface.[11] After the ride is over, the rider is given the option to provide a gratuity to the driver, which is also billed to the rider's payment method.[12] Some features such as scheduling rides in advance, tipping, and rating scores are unavailable without the app.[13] Waiting fees apply after two minutes. Uber drivers are notified if the ride will be excessively long before accepting the ride, and rides to/from a distant remote area may be hard to find. Drivers who do take passengers to these areas may have difficulty finding a fare for the trip back.[9]

Levels of service

Rider service levels, each of which are only available in certain cities, include:[14]

  • UberASSIST provides additional assistance to senior citizens and passengers with a physical disability, but cannot transport a non-folding wheelchair (see UberWAV for wheelchair-accessible vehicles)
  • UberAUTO, available in India and Pakistan, provides transportation by auto rickshaw.[15][16]
  • Uber Bike is a dockless bicycle-sharing system that allows users to rent electric bicycles via Uber subsidiary Jump Bikes in 9 metropolitan areas in the United States including San Francisco and Washington, D.C.[17][18] Uber users are also able to rent Lime scooters in 46 cities via the Uber mobile app.[19]
  • UberBLACK provides a black luxury vehicle
  • UberBOAT, a water-taxi service, provides speedboats in the summer to/from points on the coast of Croatia.[20] UberBOAT has also offered transport across Biscayne Bay during Miami Art Week[21][22] and across the Bosporus strait in Istanbul in the summer.[23]
  • UberChapchap, available in Nairobi, Kenya is a low-cost service offering transport via a Suzuki Alto, a kei car. "Chapchap" means "faster" in the Swahili language.[24]
  • uberESPAÑOL is a version of UberX (see below) that allows Spanish-speaking riders to request Spanish-speaking drivers
  • UberFLASH, available in Singapore, is a service that combines both private cars and ComfortDelGro taxis.[25]
  • UberGO, available in India, provides for a ride in a hatchback.[26]
  • UberKIDS provides a car with a child safety seat for an additional charge
  • UberMOTO, available in India, Indonesia, Pakistan, and the Dominican Republic, provides transportation by motorcycle.[27][28][29][30]
  • UberPETS includes pet transport for an additional charge
  • UberPOOL, available for up to two people per party, provides a ride that is possibly shared with other riders going in the same general direction. Uber "Express" POOL, is a cheaper version of the service and requires the rider(s) to walk a short distance at both ends of the ride to save time for the driver and other riders. The pickup/drop-off locations are indicated via a map in the mobile app. Drivers may mix UberPOOL and ExpressPOOL riders.
  • UberPOP provides a compact or subcompact car
  • Uber Rent, powered by Getaround, is a peer-to-peer carsharing service available in San Francisco.[31]
  • UberSELECT provides a car with a leather interior
  • UberSUV provides a sport utility vehicle
  • UberTAXI allows users to summon a taxi using the Uber software application.[32] Users pay an additional booking fee and can leave a gratuity through the app.[32] The service was implemented to appease taxi drivers who protested the increased competition from Uber.[32]
  • UberX provides a private ride in a standard car for up to 4 passengers
  • UberXL provides a ride in a large vehicle that can seat up to 6 passengers
  • UberWAV provides a wheelchair accessible vehicle

Services under development

  • UberAIR / UberElevate will provide short flights using VTOL aircraft. Demonstration flights are projected to start in 2020 in Dallas and Los Angeles. Commercial operations are projected to begin in 2023.[33] Although technically feasible, the program is expected to encounter safety and regulatory obstacles.[34]

Non-recurring / discontinued services

DeLorean "time machine" provided by Uber
  • On September 6-8, 2013, in San Francisco, Uber offered rides of up to 15 minutes each in the DeLorean DMC-12 car which was featured in the Back to the Future film franchise.[42]
  • Between March and May 2015, in collaboration with Dream Drive, Uber offered 15-minute rides in Lamborghini Gallardo Spyders or Maserati GranTurismos for S$200 each.[43]
  • On the morning of November 10, 2015, in collaboration with GrabOn, Uber offered hot air balloon rides to customers in Hyderabad, India for INR 1,000.[44]
  • On the evening of September 22, 2016, Uber customers in New York City had the opportunity to ride with a Bobbi Brown make-up artist and learn how to retouch make up on-the-go.[45]
  • On one day during National Ice Cream Month from 2012 to 2017, Uber users in several cities in North America were able to summon an ice cream van for on-demand delivery, with ice cream purchases billed to users' accounts.[46][47][48]
  • On National Cat Day in 2013-2015, certain Uber drivers delivered kittens for 15 minutes of cuddling in exchange for a $20 donation to an animal shelter.[49]
  • On one day in December, from 2013-2015, in 5 cities, Uber offered delivery of Christmas trees for $135 each.[50]
  • UberRUSH, a courier package delivery service in Chicago, New York City, and San Francisco was shut down in 2018.[51][52]
  • Uber Essentials or Corner Store service, in Washington, D.C., which allowed online ordering from a list of about 100 items, was cancelled in 2015.[53][54]

Driving with Uber

Uber drivers use their own cars although drivers can rent or lease a car to drive with Uber.[55][56][57]

Drivers must meet requirements for age, health, car age and type, have a driver's license and a smartphone or tablet, and must pass a background check.[56] In many cities, vehicles used by Uber drivers must pass annual safety inspections and/or must have an Uber emblem posted in the passenger window. Some cities also require Uber drivers to have a business license.[58]

Uber drivers are considered independent contractors and not employees, though this has been the subject of lawsuits in several jurisdictions. See Uber#Uber protests and legal actions.

The Uber driver app includes accommodations for hearing-impaired drivers.[59][60]

A mechanism called "Real-Time ID Check" requires some drivers to occasionally take selfies before accepting ride requests, to verify identity and prevent drivers' accounts from being compromised.[61][62]

Uber has a global partnership with TomTom to provide maps and traffic data for the Uber driver app.[63] Uber also maps cities to identify the best pick-up and drop-off points.[64]

Programs for drivers in the United States

Rating scores

After each journey, the users and drivers may both rate each other on a scale of 1 to 5 stars. Canceled rides are not rated. Uber can deactivate or otherwise punish drivers who receive low average ratings from riders.[69] Low-rated riders might find they have lower levels of availability from drivers, especially in smaller or under-served markets, and in some areas, may be banned from using the service.[70][71][72] Passengers can see the rating in their profiles a few days after using the service 5 times. Drivers can see a passenger's rating once a ride is requested; once the driver accepts, the passenger will see the driver's rating.

Other products and services

  • Uber Eats provides meal delivery from participating restaurants within 30 minutes, for a fee.[73]
  • Uber Health allows health care providers who are part of the system to arrange rides for patients to and from their appointments. Patients without smart phones can receive pickup information via SMS or by a paper printout from the provider's office.[74] For compliance with U.S. health privacy law (HIPAA), Uber drivers do not know which passengers are using Uber Health; they appear like other passengers on the Uber driver's app.[75]
  • Uber, in partnership with issuing bank Barclays and payment network Visa Inc., offers a credit card that offers customers a cashback reward program and other incentives.[76]
  • Uber Freight matches freight shippers with truckers in a similar fashion to the matching of taxi passengers with drivers.[77][78][79]

History

Travis Kalanick, former CEO of Uber, in 2013

Uber was founded in 2009 as UberCab by Garrett Camp, a computer programmer and the co-founder of StumbleUpon, and Travis Kalanick, who had sold his Red Swoosh startup for $19 million in 2007.[80][81]

On New Year's Eve, after Camp and his friends spent $800 hiring a private driver, Camp wanted to find a way to reduce the cost of direct transportation. He realized that sharing the cost with people could make it affordable, and his idea morphed into Uber. Kalanick joined Camp and gives him "full credit for the idea" of Uber.[82] The first prototype was built by Camp and his friends, Oscar Salazar and Conrad Whelan, with Kalanick being brought on as a "mega advisor" to the company.[82]

Following a beta launch in May 2010, Uber's services and mobile app officially launched in San Francisco in 2011.[83][84] Originally, the application only allowed users to hail a black luxury car and the price was 1.5 times that of a taxi.[85]

In February 2010, Ryan Graves became the first Uber employee, getting the job by responding to a tweet from Kalanick announcing the job opening, and receiving 5–10% of the company. Graves started out as general manager and shortly after the launch was named as CEO.[82] After ten months Kalanick succeeded Graves as CEO in December 2010.[82][83][86][87] Graves stepped down to become the company's COO.[88]

In 2011, the company changed its name from UberCab to Uber after complaints from San Francisco taxi operators.[89]

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.[80][90] In April 2012, in Chicago, Uber launched a service where users were able to request a regular taxi or an Uber driver via its mobile app.[91][92]

UberX

In July 2012, the company introduced UberX, a service option which allows people to drive for Uber using non-luxury vehicles, subject to a background check, registration requirement, and car standards.[93] At first, rates were similar to those of taxis and were 35% cheaper than UberBLACK.[94] By early 2013, the service was operating in 35 cities.[95] Uber allowed drivers to use their personal vehicles as part of UberX starting in April 2013.[96] Rates were quickly lowered, which caused some dissatisfaction among UberBLACK and taxi drivers, whose earnings decreased as a result of the increased competition at lower rates.[97]

UberPOOL

In August 2014, after a beta testing phase in the San Francisco Bay Area, Uber launched UberPOOL, a carpooling service.[98][99] In November 2014, the service launched in Paris.[100] In December 2014, UberPool launched in New York City.[101] In October 2015, UberPool launched in Washington, D.C.[102] In December 2015, UberPool launched in London.[103] In June 2016, UberPool launched in Singapore.[104] In September 2016, UberPool launched in Delaware.[105] In April 2018, UberPool launched in Sydney.[106] In June 2018, UberPool launched in Melbourne.[107]

Self-driving car research

Uber autonomous vehicle Volvo XC90 in San Francisco

In early 2015, the company hired many researchers from the robotics department of Carnegie Mellon University and established Uber's Advanced Technologies Center in the Strip District, Pittsburgh to develop self-driving cars.[108][109][110]

On September 14, 2016, Uber launched its first self-driving car services to select customers in Pittsburgh, including Pittsburgh Mayor Bill Peduto, using a fleet of Ford Fusion cars each equipped with 20 cameras, seven lasers, GPS, lidar, and radar equipment that enabled the car to create a three-dimensional map utilizing landmarks and other contextual information to keep track of its position.[111][112][113]

On December 14, 2016, Uber began using self-driving Volvo XC90 SUVs in its hometown of San Francisco.[114] On December 21, 2016, the California Department of Motor Vehicles revoked the registration of the 16 vehicles Uber was using for the test and forced the program to cease operations in California.[115][116][117] Uber then moved the program to Arizona, where the cars are picking up passengers, albeit with two Uber engineers in the front seats as a safety precaution.[118] In March 2017, an Uber self-driving car was flipped on its side by a vehicle which failed to yield.[119] By October Uber moved from two test drivers to one despite some employees' safety concerns.[120]

In November 2017, Uber announced a non-binding plan to buy up to 24,000 Volvo XC90 SUV vehicles designed to accept autonomous technology between 2019 and 2021.[121] In 2016, Uber and Volvo announced that they planned to collaborate on the design and financing of autonomous cars. Such vehicles require a different type of steering and braking mechanism and sensors.[122] At the time of the 2017 announcement, Uber was defending a lawsuit by Waymo claiming that a former employee, who subsequently worked for an Uber subsidiary, had stolen trade secrets with regards to autonomous trucks. The lawsuit was expected to be a problem for Uber's development of autonomous cars; however, it was settled. See Uber#Accusation of trade-secret theft by Waymo.[123][124]

In March 2018, Elaine Herzberg was killed by an Uber self-driving vehicle in Tempe, Arizona.[125] According to police, the woman was run down by the Uber vehicle while attempting to cross the street.[125] In response, Uber pulled its self-driving cars off all public roads in Arizona, San Francisco, Toronto, and Pittsburgh and quickly reached a settlement with the victim's family.[126][127] Local police did not suspect the vehicle was at fault.[128][129] Tempe Police Commander Jeffrey Glover later stated that the police chief disagreed with The Arizona Republic's and San Francisco Chronicle's headlines that assigned no fault to Uber, saying her remarks were taken out of context, and that it was too early to say which party was more responsible.[130] Two experts who reviewed dashboard camera footage of the crash told The Associated Press that the system should have spotted Herzberg and her bicycle in time to brake.[131] Arizona Governor Douglas Ducey later suspended the company's ability to test and operate its autonomous cars on public roadways citing an "unquestionable failure" of the expectation that Uber make public safety its top priority.[132][133][134] It was later revealed through hundreds of emails obtained by The Guardian that Ducey had encouraged Uber to begin its self-driving car tests in Phoenix, Arizona in August 2016 without the public's knowledge.[135]

Autonomous trucks

After spending $925 million to develop autonomous trucks, Uber cancelled its self-driving truck program in July 2018.[77] Uber acquired Otto for $625 million in 2016 and was accused of trade-secret theft. See Uber#Accusation of trade-secret theft by Waymo.

Uber Eats

In August 2014, Uber launched UberEATS, a food delivery service.[136][137]

Financing

In total, Uber has raised $22 billion from 18 rounds of venture capital and private equity investors.[138]

The founders invested $200,000 in seed money upon conception in 2009.[139] In 2010, Uber raised $1.25 million in additional funding.[139][140] By the end of 2011, Uber had raised $44.5 million in funding.[141][142] In 2013, Google Ventures invested $258 million in the company based on a $3.4 billion pre-money valuation.[143][144] In December 2014, Chinese search engine Baidu made an investment in Uber of an undisclosed amount.[145] The deal also involved connecting Uber with Baidu's mapping apps.[145][146] In January 2015, Uber raised $1.6 billion in convertible debt.[147] In May 2015, Uber revealed plans to raise between $1.5 billion and $2 billion in new funding, raising the value of the company to $50 billion or higher.[148] In September 2015, Uber raised another $1.2 billion, led by another investment by Baidu.[149]

In 2016, Toyota made an undisclosed investment in Uber and looked into leasing options, which could potentially aid Uber drivers financially, a move in response to the other partnerships between Toyota's and Uber's counterparts.[150][151] In June 2016, with plans to expand in the Middle East, Uber received $3.5 billion from the Public Investment Fund of Saudi Arabia.[152] In July that same year, Uber raised $1.15 billion in debt financing.[153]

In August 2016, Uber sold its operations in China to Didi, in exchange for an 18 percent stake in Didi.[154] Didi also agreed to invest $1 billion into Uber Global.[155]

In January 2018, the company raised $1.25 billion in cash from an investor group including SoftBank, Dragoneer Investment Group, Sequoia Capital. The financing valued the company at $48 billion.[156]

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.[157]

In March 2018, Uber announced the merger its services in Southeast Asia with those of Grab in exchange for a 27.5% ownership stake in Grab.[158] The transaction is being reviewed by regulators.[159]

On August 27, 2018, Toyota announced a partnership with Uber to bring an on-demand autonomous ride-hailing service to market, a deal which included a $500 million investment from Toyota in Uber.[160]

Possible initial public offering

On May 30, 2018, CEO Dara Khosrowshahi said Uber is "on track" have an initial public offering in 2019, but he also said, "Lots of things can happen in the world but we have a reasonable buffer as well, so I think we're in a pretty good spot".[161]

On August 21, 2018, Uber announced the hire of a new CFO, Nelson Chai. With this hire, Uber expects to file for an IPO in 2019.[162][163]

Market share and number of users

As of March 2018, Uber's market share in the United States was 73% according to Second Measure, an analytics platform, based on credit card data. Uber internally calculated its market share in the United States to be between 70% and 72%.[164] In March 2018, Uber had 41.8 million users in the United States.[165]

Profitability

In 2014, Uber reported a loss of $671 million[166] on $495.3 million of revenue.[167]

In 2015, Uber's revenue grew to an estimated $1.5 billion.[168]

In 2016, Uber reported a $2.8 billion loss.[169]

In 2017, losses grew 60% to $4.5 billion.[170]

In the first quarter of 2018, Uber's loss, excluding the profit from the sale of its operations in Southeast Asia to Grab, was $577 million.[171]

In the second quarter of 2018, Uber's net loss was $891 million.[172]

Company characteristics and impact

Effect on values of New York City taxi medallions

In New York City, the increased usage of Uber and other transportation network companies has negatively affected the values of Taxi medallions, transferable permits or licenses authorizing the holder to pick up passengers for hire. After soaring in value after the Great Recession due to their perceived safety, New York City taxi medallions were again trading for around $175,000 each in 2018. Annual rental rates were $30,000.[173] Many banks that lent money against medallions as collateral faced increasing risks of default.[174]

Strategy for dealing with regulators

When Uber was led by Travis Kalanick, Uber 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.[175][176][177]

In 2014, while in the midst of a regulatory battle, Portland, Oregon's transportation commissioner called Uber management "a bunch of thugs".[178]

In June 2014, Uber distributed to its riders the personal contact information of a commissioner in Virginia who opposed the company and told riders to flood his inbox with complaints.[179][180]

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".[181]

Communications and policy executives

Bradley Tusk, a former campaign manager for Michael Bloomberg, played a significant role in advising Uber on New York City regulations. Instead of taking a $25,000 per month fee, Tusk received Uber stock as compensation, which is now worth over $100 million.[182]

From September 2014 to May 2015, Uber used the services of David Plouffe.[183]

In May 2015, Rachel Whetstone became the senior vice president of policy and communications. In April 2017, Whetstone left and was replaced with Jill Hazelbaker.[184]

Employee diversity

According to statistics published by the company in April 2018, men account for 62.0% of overall company employment, 51.4% of support staff, and 82.1% of technology-related employment. In the United States, White people make up 48.6% of the overall employment base and Asian people account for 32.3%. However, for technology-related jobs, White people are 46.3% of employees, while Asian people account for 44.7% of employment.[185]

Opinion of anti-capitalist Richard D. Wolff

In a video posted on YouTube, Marxian economist Richard D. Wolff, a supporter of anti-capitalism, called Uber and similar services an "old scam", "nothing new", and similar to other unsafe capitalist industries such as taxis, which initially originated as a way to competitively undercut prevailing systems by offering cheaper services produced with lower standards, only to eventually come under regulation due to public concerns over safety. Wolff predicted that TNCs would eventually fall under the same type of regulation as taxi companies.[186]

Uber for X

Following Uber's success, there was an influx of new startups describing their product as "Uber for X". According to Wired, Uber for X "has become a kind of shorthand for convenience—a technological solution for any of life's frustrating, dull tasks, one that either makes them more convenient or automates them completely".[187]

Criticism

Major litigation

Criminal probe due to use of Greyball

Uber developed an internal software tool called Greyball, which uses data collected from the Uber mobile app other means, to avoid giving rides to certain individuals. The tool was used starting in 2014. By showing "ghost cars" driven by fake drivers to the targeted individuals in the Uber mobile app, and by giving real drivers a means to cancel rides requested by those individuals, Uber was able to avoid giving rides to known law enforcement officers in areas where its service is illegal. Investigative journalism by The New York Times and the resulting report, published on March 3, 2017, made public Uber's use of Greyball since 2014, describing it as a way to evade city code enforcement officials in Portland, Oregon, Australia, South Korea, and China.[188] 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.[188][189] 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.[188]

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.[190][191]

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.[192][193][194][195]

Treatment of drivers as independent contractors

The United States Department of Labor issued guidelines in July 2015 to deal with, what it considers, "misclassification" of workers. It argues that any "worker who is 'economically dependent' on the employer should be treated as an employee. By contrast, a worker must be in business for himself or herself to be an independent contractor."[196] The guideline was non-binding, but is expected to have some influence in various court cases which may establish new common law on the issue.[196][197]

Underpayment of drivers

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.[198][199][200]

Accusation of trade-secret theft by Waymo

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.[201][202] A ruling in May 2017 required Uber to return documents to Waymo.[203] The trial began February 5, 2018.[204] A settlement was announced February 8, 2018 with Uber giving Waymo $244 million in Uber equity and an agreement to ensure Uber does not infringe Waymo's intellectual property.[205]

Alleged short-changing of drivers

In 2017 a lawsuit was filed alleging that Uber uses "sophisticated software" to defraud both drivers and passengers. According to the suit, under the upfront pricing model, when a passenger is quoted a price the app shows a longer more expensive route, meanwhile would-be drivers are shown a shorter cheaper route. The passenger is charged for the more expensive route, while the driver is paid the cheaper, with Uber pocketing the difference.[206]

Denial of service to passenger with service animal

In March 2018, a lawsuit was filed against Uber in the United States accusing the company's drivers of not serving a woman with cerebral palsy due to her service dog in violation of the Americans with Disabilities Act and the Texas Human Resources Code.[207][208]

Protests and lawsuits

Uber operates as a transportation network company, which, in some regions, are illegal to operate. Regulations can include requirements for driver background checks, fares, the number of drivers, and licensing.[209] Local taxi industry groups have complained that the company's Illegal taxicab operations are taking away their business.[210] Many Uber drivers have complained that Uber treats them as independent contractors and not employees, hence affecting benefits.

In 2017, Uber was targeted by GrabYourWallet for its alleged relation to Trump travel ban Executive Order 13769, which has also been referred to as a de facto "Muslim ban."[211] 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 CEO Travis Kalanick was on an Economic Advisory Council with President Trump.[212] A social media campaign known as #deleteuber was formed in protest, resulting in approximately 200,000 users deleting the app.[213] Uber added user account deletion to meet the resulting surge in requests, [214] and Kalanick resigned from the Council.[215] Statements were emailed to former users who had deleted their accounts, asserting that the company would be assisting refugees, and that CEO Kalanick joining the Council was not an endorsement of President Trump.[216]In June 2017, Kalanick resigned as CEO of Uber.[217]

Dynamic pricing

Uber fares are based on a dynamic pricing model, in which fares are higher during periods of high demand for rides. The same route costs different amounts at different times as a result of factors such as the supply and demand for Uber drivers at the time the ride is requested.[218] When rides are in high demand in a certain area and there are not enough drivers in such area, Uber fares increase to get more drivers to that area and to reduce demand for rides in that area.[219] The rate quoted to the rider reflects such dynamic pricing.[220]

In 2012, then-CEO Travis Kalanick responded to criticism of dynamic pricing by saying that it will take time for customers to get used to dynamic pricing after decades of fixed rates in taxis.[221][222] Uber argued that without dynamic pricing, there would not be enough drivers to enable riders to get a ride within minutes. Uber cited an example of the aftermath of a sold out Ariana Grande concert at Madison Square Garden in March 2015. As the concert ended, the number of people who opened the Uber app increased four-fold, but, due to the higher prices, the actual ride requests only rose slightly, enabling ride requests to be completed within the usual timeframe.[223]

Uber was criticized for its extreme surcharges during emergencies such as Hurricane Sandy,[224][225] the 2014 Sydney hostage crisis,[226][227][228] and the June 2017 London Bridge attack,[229][230][231] especially when taxis offered to transport riders for free; however, in many cases, Uber later refunded surcharges incurred by riders during these events. In 2014, Uber announced that it would not implement surge pricing during emergencies in the United States.[232][233][234] During the 2017 Central Mexico earthquake, Uber offered free rides.[235]

Increase in traffic congestion

A report published by Schaller Consulting in July 2018 showed that traffic congestion increased as a result of Uber and Lyft, contrary to the companies' claims.[236][237]

Alleged cancellation of ride requests to disrupt competitors

Uber issued an apology on January 24, 2014, after documents were leaked to Valleywag and TechCrunch saying that, earlier in the month, Uber employees in New York City deliberately ordered rides from Gett, a competitor, only to cancel them later. The purpose of the fake orders was two-fold: wasting drivers' time to obstruct legitimate customers from securing a car, and offering drivers incentives — including cash — to join Uber.[238]

Operation SLOG plan to disrupt Lyft

Following Lyft's expansion into New York City in July 2014, Uber, with the assistance of TargetCW, a San Diego, California-based employment agency, sent emails offering a "huge commission opportunity" to several contractors based on the "personal hustle" of the participants. Those who responded to the solicitation were offered a meeting with Uber marketing managers who attempted to create a "street team" to gather intelligence about Lyft's launch plans in New York City and recruit their drivers to Uber. Recruits were given 2 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.[239][240]

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 7 different Lyft drivers. Uber did not apologize, but suggested that the recruitment attempts were possibly independent parties trying to make money.[241][242]

Evasion of law enforcement operations

Greyball

For information on Uber use of a software tool called Greyball, see § Criminal probe due to use of Greyball.

Ripley

After a police raid in Uber's Brussels office, a January 2018 report by Bloomberg L.P. stated that "Uber routinely used Ripley to thwart police raids in foreign countries."[243] 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.[244][245]

User privacy and data breaches

God view

On November 19, 2014, then U.S. Senator Al Franken, Chairman of the United States Senate Judiciary Subcommittee on Privacy, Technology and the Law, sent a letter to Kalanick regarding user privacy.[246][247][248] 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.[249] 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.[250]

Data breaches

On February 27, 2015, Uber admitted that it had suffered a data breach more than 9 months earlier. Names and license plate information of approximately 50,000 drivers were inadvertently disclosed.[251] Uber discovered this leak in September 2014 but waited more than 5 months to notify the affected people.[252]

In November 2017, it was revealed that a data breach, which occurred in 2016, disclosed personal information on about 600,000 drivers and 57 million customers, including license information of drivers, and names, email addresses, and phone numbers. Uber paid a $100,000 ransom to the hackers on the promise they would delete the stolen data.[253][254] The company was subsequently criticized for concealing the loss of data.[255] CEO Dara Khosrowshahi apologized.[256][257]

In September 2018, Uber accepted a settlement of $148 Million[258] from the Federal Trade Commission admitting to falsely claiming that internal access to consumers' personal information was closely monitored on an ongoing basis, and also stating that Uber had failed to live up to its promise to provide reasonable security for consumer data.[259] According to The Washington Post, this settlement "is among the biggest in Uber’s history and marks the first time the company has settled a matter with the top law enforcement officials from all 50 states and the District. It is the largest multistate penalty ever levied by state authorities for a data breach."[260]

Safety concerns

It is unclear if Uber is less or more safe than regular taxi cabs, as major cities don't have much data on taxi-related incidents.[261]

Allegations of inadequate background checks and vetting of drivers

Concerns regarding Uber's background checks were raised after reports of sexual abuse of passengers by Uber drivers.

In February 2016, Uber was criticized following the 2016 Kalamazoo shootings, purportedly committed by Jason Dalton, an Uber driver in Kalamazoo, Michigan. Dalton is believed to have been driving for Uber while allegedly conducting a shooting spree that left 6 people dead and 2 others wounded. This led to a 7 hour manhunt for the suspect, during which it is believed that Dalton continued to drive and accept fares. Uber was aware of the issues with Dalton's driving skills, having received multiple complaints, though critics agree that Dalton would not have raised any red flags since he did not have a criminal record.[262]

In November 2017, The Colorado Public Utilities Commission fined Uber $8.9 million after discovering that 57 drivers in the state had violations in their background checks. The fine amount equaled $2,500 per day that an unqualified driver worked.[263]

Drivers using the app while driving

When a customer makes a pick-up request, a driver is notified on the Uber driver mobile app and is provided the customer's location. The driver has approximately 15 seconds to tap the phone to accept the request.[264][265] An Uber driver reported that drivers can be temporarily suspended for ignoring these requests. In 2014, Deborah Hersman of the National Transportation Safety Board criticized the 15-second system, saying that it presents a significant distraction to drivers, as drivers are financially motivated to respond to fares while driving. In response, Uber stated that drivers are not required to physically look at the device to accept a fare.[264]

Sexual harassment allegations and management shakeup (2017)

On February 20, 2017, former Uber engineer Susan Fowler stated that she was subjected to sexual harassment by a manager and subsequently threatened with termination of employment by another manager if she continued to report the incident. CTO Thuan Pham had knowledge of Susan Fowler's sexual harassment allegation at Uber and her manager's threatened retaliation, and did nothing; Kalanick was also reportedly aware of the harassment issues.[266][267] Uber hired former attorney general Eric Holder to investigate the claims.[268] Arianna Huffington, a member of Uber's board of directors, also oversaw the investigation.[269] On February 20, 2017, Kalanick led a meeting with employees that was described by the participants as honest and raw.[270]

On February 27, 2017, Amit Singhal, Uber's Senior Vice President of Engineering, was forced to resign after it was revealed that he failed to disclose a sexual harassment claim against him that occurred while he was the Vice President of Google Search.[271][272][273][274] New York Times journalist Farhad Manjoo described the scandal as a "watershed" for women engineers.[275]

On June 6, 2017, Uber announced that it fired over 20 employees as a result of the investigation.[276][277] On June 13, 2017, Kalanick took an indefinite leave of absence from Uber.[278][279] On June 20, 2017, after multiple shareholders reportedly demanded his resignation, Kalanick resigned as CEO.[280][281]

Criticism of workplace culture amid the scandals

In early 2017, after the revelations by Fowler, Leslie Miley, a veteran software engineer, claimed that Uber had an "asshole culture" and said "If you did well in that environment upholding those values, I probably don't want to work with you."[282]

A job interviewee described Uber's organizational culture as one in which employees are lauded for bringing incomplete and unreliable solutions to market in order for Uber to appear to be an innovator and winner.[282]

In addition, 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.[282][283][284]

In March 2017, some Silicon Valley computer programmers labeled Uber as "poisonous" and encouraged friends who worked for the company to quit.[285]

Scandals and departure of Emil Michael

At a private dinner in November 2014, Emil Michael, senior vice president of Uber, suggested that Uber hire a team of opposition researchers and journalists, with a million-dollar budget, to "dig up dirt" on the personal lives and backgrounds of media figures who reported negatively about Uber.[286] 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.[287][288][289] Michael issued a public apology.[290] Emil Michael apologized to Lacy in a personal email and claimed that Uber would never actually undertake the plan.[291][292] Several journalists deleted their Uber apps.[293]

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.[294]

Settlement with victims

In August 2018, Uber agreed to pay a total of $7 million to 480 workers to settle claims of gender discrimination, harassment and hostile work environment.[295]

Use of offshore companies to minimize tax liability

In November 2017, the Paradise Papers, a set of confidential electronic documents relating to offshore investment, revealed that Uber is one of many corporations that used an offshore company to minimize taxes.[296][297]

Awards

In 2013, USA Today named Uber its tech company of the year.[298]

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Further reading

Scholarly papers
  • Laurell, Christofer; Sandström, Christian (June 28, 2016). "Analysing Uber in social media – disruptive technology or institutional disruption?". International Journal of Innovation Management. 20 (5): 1640013. doi:10.1142/S1363919616400132.
  • McGaughey, E. (2018). "Uber, the Taylor Review, mutuality, and the duty to not misrepresent employment status". Industrial Law Journal. SSRN 3018516.
  • Petropoulos, Georgios (February 22, 2016). "Uber and the economic impact of sharing economy platforms". Bruegel.
  • Rogers, B. (2015). "The Social Costs of Uber". University of Chicago Law Review Dialogue. 82: 85.
  • "Uber law and awareness by design. An empirical study on online platforms and dehumanised negotiations". Academia.edu. October 11, 2016.
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