Yahoo Finance Uber has had 5 major scandals in just 2 weeks
An extended string of bad news about Uber continued on Friday with a New York Times report that Uber has used, for years, a surreptitious data tool to deceive authorities in unfriendly markets.
It was only one month ago that the hashtag #DeleteUber began trending during protests to President Trump’s travel ban, leading CEO Travis Kalanick to step down from Trump’s business council. But that already feels like eons ago.
In the time since, Uber has been at the center of an additional 5 scandals that have brought more negative scrutiny on the hot taxi company—which was already no stranger to scandal—than ever before.
How the company deals with each of these storms could determine its future.
I. Former employee’s bombshell blog post
On Feb. 19, Susan Fowler Rigetti, a former Uber engineer now working at payments company Stripe, wrote an eye-opening blog post alleging that she received repeated sexual advances from a male colleague, reported him to HR, and HR did nothing to address the situation. She also said that other female employees had told her of similar experiences.
After the blog post went live and quickly rocketed around the Internet, Kalanick said in a statement, “What [Fowler] describes is abhorrent and against everything Uber stands for and believes in.”
But only three days a later, a deep-dive New York Times story on Uber’s culture suggested that, contrary to what Kalanick said, Fowler’s story is not at all contrary to what Uber believes in.
II. New York Times story on bad culture
The Times story published on Feb. 22, citing interviews with more than 30 current and former Uber employees, concluded that Uber’s workplace culture is “aggressive” and “unrestrained.”
Specifically, the Times mentions allegations of a man groping a female coworker’s breasts at a company retreat, homophobic slurs from a manager to a coworker, and physical threats from a manager to a coworker.
Four days after the Times story ran, Uber fired a senior engineer for not disclosing former harassment accusations against him from his time at Google. Uber has also opened up an internal investigation into the many harassment claims, led by boardmember Arianna Huffington and former US Attorney General Eric Holder. But promises of a serious internal review may no longer be enough to smooth over the storm that has resulted from Fowler’s post and the Times story.
III. Google lawsuit
If all of the harassment allegations aren’t enough, Uber is also dealing with a legal threat from a competitor: Google’s self-driving car division, Waymo, filed a serious lawsuit (on the same day as the Times story, by the way) alleging that Uber stole trade secrets and intellectual property from Waymo.
Uber called the lawsuit “baseless,” but Wired reports that the lawsuit is extremely serious and, if it goes Google’s way, could end up with Uber executives getting prison sentences.
IV. Kalanick caught on camera
On Tuesday, Bloomberg shared a shocking video that may be Uber’s most difficult scandal to smooth over: Kalanick, caught on camera, arguing with one of his own Uber drivers over the company’s shifting price policies.
The driver, Fawzi Kamel, tells Kalanick respectfully that the company’s price drops have hurt him financially. The two debate the issue, but it gets more and more heated. “People are not trusting you anymore. … I lost $97,000 because of you,” Kamel says. Eventually, Kalanick accuses him, “Some people don’t like to take responsibility for their own sh—.” (Kalanick also says “bullsh—” twice in the argument.)
After the video quickly made the media rounds, Uber publicly posted a short email Kalanick sent to all employees. Kalanick apologized to the driver, and added, “I must fundamentally change as a leader and grow up.” He also appeared to congratulate himself for his apology: “This is the first time I’ve been willing to admit that I need leadership help and I intend to get it.”
In the wake of the video, many speculated that Kalanick will have to step down as CEO. Rafat Ali, for example, the CEO of travel site Skift, theorized that Kalanick “will become chief evangelist or some such thing.”
It's over. Travis will be resigning soon, there is no way forward from here. https://t.co/iznOFyXYtv
— Rafat Ali (@rafat) February 28, 2017
But based on the language of his statement, that does not appear likely—or it didn’t in the hours after the video emerged. But that was before a Times story highlighted yet another serious issue about the company’s tactics.
V. New York Times story on circumventing law enforcement
On March 3, the New York Times reported that Uber has used a data-collecting program called Greyball to identify law enforcement officials and avoid picking them up. The Times says that Uber has used the tool in markets like Australia, China, and South Korea.
According to the story, authorities that opened up the Uber app would see icons of cars nearby that did not actually represent real cars, and when they did successfully hail a car, the driver would cancel.
Uber is still using Greyball today, the Times reports.
best part of the @MikeIsaac Uber story is Uber being like "hell yeah we had a program to evade law enforcement, why wouldn't we" pic.twitter.com/Wt3FZ5ufTr
— Matt Levine (@matt_levine) March 3, 2017
Greyball is part of Uber’s VTOS (violations in terms of service) program, and the company told the Times it’s straightforward: “This program denies ride requests to users who are violating our terms of service — whether that’s people aiming to physically harm drivers, competitors looking to disrupt our operations, or opponents who collude with officials on secret ‘stings’ meant to entrap drivers.”
But based on reaction to the story so far, Uber’s use of Greyball is not being received as unremarkable, standard operating procedure.
—
Daniel Roberts is a writer at Yahoo Finance, covering sports business and technology.
Read more:
The pressure is back on Uber after yet another scandal
Uber, Airbnb walk a tightrope in Trump era
Uber faces a legal battle in Florida with a party company called Uber
