By on October 11, 2017

uber volvo

Uber Technologies is about to be probed to a degree that would make even the most compliant alien abductee blush. The company is now looking at a minimum of five criminal investigations from the U.S. Justice Department regarding claims of bribes, illicit software usage, unfair marketing practices, corporate espionage, questionable pricing strategies, and theft of a competitor’s intellectual property.

The ride-hailing firm is also involved in dozens of lawsuits from from customers and employees — and one very public suit with autonomous research rival Waymo. But Uber’s skirting of the law was what made it so profitable to begin with. Its take-no-prisoners attitude may have been the thing that ultimately ousted founder and CEO Travis Kalanick and severely tarnished its corporate image, but it’s also an aspect that ensure its success. Still, nobody likes learning how the sausage is made and every look behind Uber’s curtain revealed another fresh horror the press couldn’t resist mentioning — including yours truly.

Reincarnated as a kinder brand, Uber is now headed by Dara Khosrowshahi. The new CEO has told employees not to expect a peaceful 2017 as officials spend the next six months holding the company accountable for its misdeeds. During that time, Uber plans to clean up its image and prepare for its initial public offering sometime between 2019 and 2021.

However, what the company will look like by then is anyone’s guess. A lot of locations have had it with Uber’s behavior and some have even begun banning the service. According to Bloomberg, London has effectively outlawed the service, citing “a lack of corporate responsibility.” One of the touchiest of subjects is the company infamous software, known as Greyball.

Uber claims Greyball was never used within Britain, but London’s transportation authority said its very existence, along with insufficient vetting of drivers and mishandling of criminal offenses, were enough to withhold its private-hire certification. As of September 30th, the company has no legal grounds to operate within London.

Of course, it’s still operating as if nothing happened. The app has not been affected whatsoever by the government’s decision to ban it and a London-based enthusiast verified Uber remained fully functional as of this morning. The ride-hailing firm is attempting to lodge an appeal and convince social media users to take its side. It claims the decision to ban its service would put 40,000 drivers out of work by the decree of  “a small number of people who want to restrict consumer choice.”

Skirting the law is a tradition at Uber. Kalanick even set up the company’s legal department with the directive to push the legal envelope as often as possible. And, while the company may be trying to clean up its act, the very nature of its business exists in a gray area of what’s lawful in some regions. Some countries are attempting to regulate the business similarly to taxi companies while others are attempting to ban it outright.

It wasn’t always this way, though. Upon the company’s inception, Uber sought only to hire professionally licensed drivers and adhere to the letter of the law. Things changed after Lyft entered the market with non-professional drivers under contract. Uber’s response was to convince local governments to stop Lyft from breaking the law. When nobody bothered, Kalanick decided it was time for more aggressive tactics and opened hiring up to anyone with a car.

“Uber will roll out ridesharing on its existing platform in any market where the regulators have tacitly approved doing so,” Kalanick said in 2013. The company was forced to deal with some regulatory hurdles but with little to no enforcement, was able to expand. The CEO told employees it was fine to operate anywhere rules weren’t being actively enforced and even had staff book rides with competitors just so they could convince drivers to switch to Uber. By 2014, market analysts were singing the company’s praises and it received a $17 billion valuation.

So can Uber be as successful when it plays by the rules? With the company facing more scrutiny than its peers, we’re likely to find out. In addition to its corporate rebranding, the business is also losing quite a bit of its vintage staff.

Currently, its higher-ranking executives is a mixture of new and old faces but veteran employees continue to abandon ship as the rules of conduct keep shifting. Salle Yoo, Uber’s longtime legal chief will soon leave the company for this very reason. Yoo admitted to being on board with Kalanick’s vision. “I tell my team, ‘We’re not here to solve legal problems. We’re here to solve business problems. Legal is our tool,’” she explained on the Legal Talk Network earlier this year. “I am going to be supportive of innovation.”

Two innovations recently made public include Uber’s Surfcam and Firehouse software. Surfcam is named after the webcams that help surfers identify the best times to hit the waves. It uses scraped data published online by competitors to figure out how many drivers were on their systems and where they were, thereby allowing the company to predict when there is a “swell” of competition. Meanwhile, Firehouse allowed Uber to charge passengers a fixed rate that was partly reliant on computer-generated assumptions of what people traveling on a particular route would be willing to pay.

While neither program is likely to be considered as nefarious as Uber’s Grayball and Hell software, both of which operate on the very fringes of what is legal. As a result, authorities may have to “get creative” in order to effectively prosecute the company, said Yochai Benkler, co-director of Harvard University’s Berkman Klein Center for Internet and Society.

“There are real political risks for playing the bad guy, and it looks like they overplayed their hand in ways that were stupid or ultimately counterproductive,” Benkler told Bloomberg. “Maybe they’ll bounce back and survive it, but they’ve given competitors an opening.”

[Image: Volvo/Uber]

Get the latest TTAC e-Newsletter!

Recommended

15 Comments on “Can Uber Survive Being Placed Under the Microscope?...”


  • avatar

    “But Uber’s skirting of the law was what made it so profitable to begin with”

    The company is not even remotely profitable.

  • avatar
    VoGhost

    The sooner Uber can be done with all these human drivers, the better.

  • avatar
    SCE to AUX

    Uber will survive because people don’t like taxis.

    • 0 avatar

      The concept will survive. Not so sure about the company.

      • 0 avatar
        stuki

        Eventually, the ability to settle payments outside of walled corporates like Apple and Google, will enable drivers and hailers to squeeze the middleman pretty thin. Like all once revolutionary technology, Uber’s is getting commoditized as well. The kind of childish witch hunts, by the usual gaggle of look-at-me less-than-zeros that Uber has been enduring, will just speed that process up.

  • avatar
    I_like_stuff

    Progressives on Monday: Isn’t it great how we have all this cool technology that is disruptive. Anyone who doesn’t love disruption is an old white male conservative who is afraid of change. Disruption to infinity!!!!

    Progressives on Tuesday: Whaaaaa? How dare Uber disrupt the taxi industry. We must protect this 100+ year old industry and all the union jobs that go along with it.

  • avatar
    conundrum

    Once upon a time only 30 years or so ago, there were manufacturing plants all across the USA for well-known consumer brands. I travelled, I saw them.

    Ah, said the corporate climbers, but what if we move our plants to China where we can pay peanuts for labor? What do we care about our fellow Americans and providing jobs for them? We’re capitalists, and the next quarterly report looms. So what if US wages gradually lower to where a good proportion of the population can no longer afford to buy much? Or has to work two cr*p jobs to make ends meet? Who cares? Not us.

    I’d argue the very same phenomenon still carries on today. These “disrupters” like Amazon and Uber aggregate money to corporate centers. Who cares if tens of thousands of small retail businesses go under and towns turn into hulks? Who cares about taxi drivers making a living wage? To help it all along Walmart sells cheaply made overseas products and also takes out local businesses with predatory pricing, while siting just outside town in the county to lower property tax. They don’t even run lunch counters.

    Over and over again, aggregators of money run roughshod over the common man, ripping apart the fabric of society for their own gain. The PR machine is geared up, and anyone who objects is branded a Luddite, unable to keep up with progress, and seriously uncool because Online is magic.

    And the dull, without the apparent logic of a flea, go along with this, peering at their smartphones. The society which formerly flourished with reasonable income even in small towns is flung to the four winds for the corporate good and no one else’s. Objections are overcome with lawyering of the Uber kind, the average small-minded twit unable to even comprehend that what money they once spent on taxi fares stayed local and aided the economy there, only aware that hey, I saved 7 bucks today! What do I care if the profits now go to some corporate entity far away? It’s all cool because there’s an app for that. Personal greed is exactly what these aggregators relied on to grow their hegemonic businesses.

    We got economists who claimed the free market will solve everything, touted the trickle-down theory (which certainly enriched China) and before long people espoused these things as some kind of ultimate truth, even as they committed ritual suicide on their own society. Apparently without giving it much thought.

    As things got worse and the drones grew restless in an unfocused way, these undereducated nitwits started to blame foreigners for their problems, completely forgetting that it was their country’s rich corporate management were the ones who initiated the downward spiral. Drum up patrotism and blame those foreigners. It’s all their fault. Enter that well-known intellectual and all round well-read deep thinker Trump. Blame everyone but the real people at fault because they’re corporate cousins after all, beat the patriotic chest, understand the pain to an extent, and then go off on a tangent once in power.

    Apparently, logic is missing at the very most basic level, and kept that way on purpose by the powerful, usually beating patriotic jungle drums and lobbying politicians. All the while the corporations milk the populace for everything they’re worth. Uber ranks right up there as a slightly bent, over-aggressive aggregator, one that is willing to stomp on competitors because monopoly is great. Not that the competitors aren’t trying to be aggregators too. The losers in all this, families once able to live a decent life when goods were made in and all over the US, now face bankrupt local government, poor schools and the loss of social society where people didn’t have to spend 60 or more hours a week to make ends meet, but who are now dog-tired and have no time for local boosterism. To make it worse, corporations imported temporary foreign workers rather than train its native fellow citizens and by paying them less, further hollowed out America for that upbeat quarterly report.

    Well, you guys let it all happen to yourselves. I buy local as much as I can, or in-country made as second choice. Because this same corporate disease has been exported to my country and it’s going down the tubes as well. I simply don’t trust a single oligarch, their fake institutes trying to prove unfettered capitalism is the Truth and filling people’s heads with dumb and dumber thoughts over and over and over until they parrot it like brainwashed dolts.

    Well, society as a whole let those bigshots ruin things. Now don’t give me bigshot logic as if it were even close to reality. Uber is a nasty outfit, but it isn’t the only one, and none of the elite are patriotic in the real sense of looking out for their own countrymen even at a basic level. The west has been shystered by hucksters.

  • avatar
    Nick_515

    I hope not.

  • avatar
    thegamper

    I am an infrequent ride share user, but I will use Lyft whenever possible and tell my wife and others they should as well because if you can avoid doing business with the dirtbags at Uber, why not.

    Lyft may have its own issues, but I haven’t heard them so they are at least trying harder.

  • avatar
    turf3

    I still maintain that sooner or later there will be a horrific incident and finally people will recognize Uber for what it really is: a giant gypsy cab company running unlicensed cabs with no protection for their employees (which is what they are, despite what Uber says) and precious few protections for their customers.

    The software thing is just a smokescreen that allows them to call their unlicensed cab operation something else.

    I’m sorry but just because you call something a name (“We’re not a cab company, we’re a software company”) in order to make it appeal to the masses, who are now all convinced that everything “computer” is inherently wonderful and that anyone who questions the wonderfulness of everything “computer” is beneath contempt, it doesn’t mean that it is what you call it. I can call a squirrel an elephant all day long, but it will not gain one ounce of weight by my doing so.

  • avatar
    jdmcomp

    Just wait until the IRS gets hold of the financial records and starts looking into who is paying taxes on income from UBER.


Back to TopLeave a Reply

You must be logged in to post a comment.

Recent Comments

  • eggsalad: I once asked a Hyundai salesdork why the Accent didn’t come with a spare tire. His response:...
  • geozinger: Yes, Cadillac has released some fantastic concepts over the last ~30 years. None of them have become...
  • deanst: Yeah, who watches ads? Unless you watch live sports or news – and I do neither – I don’t...
  • brandloyalty: Though there’s not much that’s exemplary on my Escape, the stainless steel hardware for...
  • Big Al from Oz: I do think if Caddy and Lincoln want to achieve sales they need to look at the EU market and produce...

New Car Research

Get a Free Dealer Quote

Staff

  • Contributors

  • Matthew Guy, Canada
  • Ronnie Schreiber, United States
  • Bozi Tatarevic, United States
  • Chris Tonn, United States
  • Corey Lewis, United States
  • Mark Baruth, United States
  • Moderators

  • Adam Tonge, United States
  • Corey Lewis, United States