By on March 5, 2017

Uber ride, Image: Jason Tester Guerrilla Futures/Flickr

It would be an understatement to suggest that Uber has had a bad couple of weeks. It kicked off with a highly publicized blog posting from former engineer Susan Fowler describing intrinsic sexual harassment at the San Francisco-based ride-hailing service. This was followed by an open letter from two of its investors condemning the company for fostering poor corporate behavior and unhealthy business practices. This, of course, was fast followed by a lawsuit from Google-parent Alphabet’s Waymo that alleged Uber stole some of its driverless car technology.

That was last week. This week saw Uber CEO Travis Kalanick asking his senior vice president of engineering, Amit Singhal, to step down after it came to light that Singhal had neglected to reveal that he was the subject of an ongoing sexual harassment investigation at his previous employer Google. However, Kalanick ended up being the subject of his own controversy just a few days later. 

A remorseful Kalanick issued a public apology to his employees at Uber after a video surfaced on Bloomberg in which he had a heated exchange with one of his own drivers regarding declining fares. “My job as your leader is to lead,” Kalanick wrote. “That is not what I did, and it cannot be explained away. It’s clear this video is a reflection of me — and the criticism we’ve received is a stark reminder that I must fundamentally change as a leader and grow up. This is the first time I’ve been willing to admit that I need leadership help and I intend to get it.”

As if that were not enough bad publicity for the company, vice president of product growth Ed Baker left Uber after three years at the company amid the growing scrutiny of the company’s business practices and claimed toxic culture. Meanwhile, Fowler said on Thursday that she had obtained legal council while accusing her former employer of investigating her unfairly over a string of Uber app deletions.

The final blow came from a New York Times report that alleged Uber had been using a program, internally called Greyball, to circumvent authorities in markets where its ride-haling services were resisted or outright banned. Having been in place since 2014, the program uses data collected to avoid suspect hailers on a global scale.

In a statement, Uber claimed, “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.”

[Image: Jason Tester Guerrilla Futures/Flickr (CC BY-ND 2.0)]

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26 Comments on “So Far, 2017 Just Hasn’t Been Uber’s Year...”

  • avatar

    While these incidents are corrosive to the Uber’s reputation, none of these will sink it. However, the fact that their revenues only cover half their expenditures will. How long can Uber lose billions before investors wake up to this scam?

    • 0 avatar

      They should reduce their growth rate and investment in the business to become profitable now? Why exactly?

      • 0 avatar

        They can’t. The way the world is currently rigged, if they behave “financially responsibly”, Lyft or somebody will blow them out of the water market share wise. It’s the same story across most of Silicon Valley. The time honored tradition of organic growth by reinvested earnings, has been thoroughly supplanted by growth subsidized by debasing a once prosperous middle class. All in order to ensure a politically connected “investing” class can pretend relevance way beyond what their meager abilities to create value, would otherwise have afforded them.

        So, as long as the Feds music is playing, Uber has no choice but to keep dancing. Whether ultimately destroying more value than they add, or not. Since as long as that music plays, any value destroyed are more than made up for by forced transfers from the social classes less connected than the “investing” one.

      • 0 avatar

        @jmo: Are you asking me why a company should stop losing $2-3 billion dollars of their investors money each year?

    • 0 avatar

      I was under the impression (and I can’t remember where I read it) that Uber was using VC money to subsidize fares by as much as 30% as a tactic to drive down competition.

      (No pun intended.)

  • avatar

    My only interest in the Uber debacle is that Kalanick confirms something my Mom always said to me.

    Your face really *can* freeze that way.

  • avatar

    This is going to be the moment that Uber either descends into chaos or coalesces around better leadership and new direction. It’s also the time that competitors will be sitting up and paying attention.

    Both outcomes are a net positive: if Uber fractures, competition will have an opportunity to step in and enjoy second mover advantage from the groundwork they’ve laid. If they get new leadership and direction, then we may finally see a company worth the hype.

    • 0 avatar

      When you operate in an environment where the rules have yet to be either built at all, or has at least not been tested for basic sanity even if they have been built; a general attitude of better beg forgiveness than ask permission, is a good trait for management to have.

      Uber management’s responsibility is towards those using, or wishing to use, their services. Not to a bunch of self promoting, professional aggrievados whose knowledge of Uber stem more from reading sensationalist newsmedia about their frontman/men, than from personal experience with the service they provide.

      Most people who have tried Uber, likes it. Better than available alternatives. As long as that stays true, Uber will be OK. Like Walmart and Amazon. Two other outfits with happy customers. Who also seem to irk those whose profession is to be irked about something. As well as the latter’s hangers on, whose opinions are almost entirely arrived at by a pathological need to appear clued in, by parroting some yahoo, any yahoo, with access to a publishing outlet.

      In the long run, Uber will fail from investment grace because the service they provide will be commoditized. Theirs may be a tough path to initially map out, but an easy one to copy. So, in the time honored fashion of all disruptors-cum-hot-investments, their later stages will be one of trying to use the same levers of government to suppress more efficient competitors, as the current incumbents are using to suppress them.

      Simply because the ideal, most efficient solution to the problem Uber is trying to solve, is unregulated pirate taxis. And in that game, the drivers and passengers have very little reason to cut some middle man in for more than the tiniest share. Not even close to enough to make Uber’s current valuation sustainable.

  • avatar

    Know what’s funny?

    Most taxi companies STILL haven’t adopted Uber’s most appealing concepts like real-time ride tracking, cashless payment, honest routing, and generally higher standards in their motor pool.

    • 0 avatar

      Their business model is not to beat the competition on features. Hence they see no reason to spend money on that.

      Instead, their model is to harass the complication out of existence. Hence, the money Uber spends on features, the Taxi rackets spend on lawyers and lobbyists. As well as on hacks who write cheesy stories about how many “mean” words some Uber employee used, in a tweet about something. Something that is inevitably utterly and entirely irrelevant, for anyone whose goal is just to get from A to B efficiently by hiring a ride.

    • 0 avatar

      On a side note: it’s city ordinance in Chicago that fares have the right to pay by credit card. It’s been that way for a while but has only reached 90%+ adoption in the last few years. I’ve had a few free cab rides because the cab didn’t have a working CC swiper.

      • 0 avatar
        87 Morgan

        90% adoption of cashless payment. This drives me nuts.

        I travel weekly for work. I carry enough cash for tips etc, not enough to pay for taxi fares. Nothing is more frustrating than getting in a cab to find out they only take cash.

        As a side note, I am the worst guy ever to mug. If you ask nicely I will just give you the $15 in my wallet, no need for anyone to get hurt or commit a felony.

  • avatar

    Is that a 2016ish Ford Flex in the image?

    It sure looks like an older style Flex/Taurus interior but it has the newer non-Microsoft infotainment and it’s definitely not an Explorer as it sits too low compared to the Echo in front. No?

  • avatar
    Arthur Dailey

    Good, hope that Uber disappears to be replaced by an organization that actually respects the laws of the areas where they are working.

    • 0 avatar

      You mean taxi companies? Of course they operate poorly and offer inferior service, hence why ride sharing became a thing in the first place.

      • 0 avatar
        Arthur Dailey

        No a better ‘ride sharing’ service which is actually a misnomer because Uber is not ride sharing it is a taxi operation just like unlicensed minicabs were in the UK.

  • avatar

    Hey, tinbad, who do you think you are, asking a question about cars on TTAC?

  • avatar

    OK, add all these together, compare assumed valuation to GM, … it’s time. It’s time for the Uber Death Watch.

  • avatar

    Uber should fail. I mean the economics of it are awful to start. But also they way they approached changing regulation should have never happened. They started working the edges and using loopholes which is great, but then they switched to outright breaking laws until the laws changed to benefit them more then their competitors (Taxi’s). We are a country of laws, they should have been shut down when they started running Uber X in NYC, instead they got the best possible outcome light regulation on them while maintaining heavy regulations on Taxi’s. If the law was changed to allow Uber x then the same laws should have allowed for Taxis to be regulated in the same way.

    Uber is essentially the worst possible example of crony capitalism in the history of the US.

  • avatar

    Bottom Line Uber’s real problem is this: Too many driver’s chasing too few fares. There is a reason that NYC enacted a taxi medallion scheme in the 1930s.

  • avatar

    Long ago I would have been interested in using Uber but after their policy change after the incident in Chicago I no longer have any interest in giving them money.

  • avatar

    The idea that taxi service is a stupid industry in desperate need of disruption, and the idea that Uber is a den of flagrant jerks who profoundly deserve all the bad things that happen to them, are not mutually exclusive. Both of those things can be true at the same time.

  • avatar
    DC Bruce

    Washington DC used to have some of the worst taxicabs ever. No meters, just “zones” which even a 37-year resident like I am could never figure out. And, of course, the zones do not extend to any of the 3 DC area airports. Most of the vehicles were clapped-out Panthers, purchased after a hard life in police duty, with busted seats, busted shock absorbers and oil-smoke spewing exhausts. And the drivers almost all “just off the boat” who knew only how to get from the major airports and the major downtown hotels. Unlike some other cities, e.g. NYC, there was no “medallion” system and no legal monopoly.

    So, I was an early adopter of Uber. They usually under-priced the cabs, you didn’t have to deal with cash and they were dependable. (I had quite a few instances of cabs failing to show for early-morning pickups at my house to the airport.)

    That said, I’m not insensitive to the plight of their drivers. I have a feeling that a lot of them who signed up early on and maybe even purchased a vehicle based on the expectation of a certain amount of revenue are getting squeezed as Uber ratchets the prices down to compete with Lyft. Like a franchisor that won’t commit to a maximum number of franchised stores in a given territory, Uber’s interests and it’s drivers’ interests are not aligned.

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