Is Uber The New SPECTRE?
In Ian Fleming’s series of spy novels, his English hero James Bond battles a new kind of threat to the United Kingdom, and perhaps the world: A smart, technology adept, centrally controlled, global criminal organization, SPECTRE (SPecial Executive for Counterintelligence, Terrorism, Revenge and Extortion). Their global members wear the network’s octopus symbol and follow the instructions of a cat-loving mastermind Ernst Stavro Blofeld.
In 2010, a new organization, UBER came on the scene in San Francisco, defying authorities and actually publicly vowing to break any laws it wanted to. In the years following, a series of criminal investigations and press reports revealed a systemically corrupt organization that battled authorities around the world, abused their employees, cheated their drivers, and spied on competitors, government officials and customers. Even now, Uber is under at least 5 Federal investigations of criminal wrongdoing and faces hundreds of lawsuits from employees, customers and competitors. It has been accused of infiltrating authorities in India, bribing regulators in Indonesia, lying to regulators in London, and bamboozling drivers worldwide to make bad personal investments to fund Uber’s growth. In France, their managers were arrested for operating illegally and hiding documents. Hardly a month or two goes by without another unethical or potentially criminal act being uncovered.
Towards the end of 2017, web author Kevin Kashman began compiling a rap sheet of criminal and ethical charges against Uber around the world. This is what he published:
Business Practices (26 entries)
These are scandals that involve Uber’s aggressive political lobbying and the tactics it uses to expand its business.
| CONTROVERSY | TIMEFRAME | DESCRIPTION | SOURCES |
|---|---|---|---|
| Artificially creating “surges” | unknown–present | There is evidence that Uber artificially creates “surges,” or periods of higher prices designed (supposedly) to induce drivers to work and serve high passenger demand. | 1 |
| Being banned in Italy | 2017 | Uber was banned in Italy in 2017 because their service was considered unfair competition for taxi drivers, who had to meet the country’s taxi regulations. | 1 |
| Opposing English-language requirements for drivers | 2017 | Uber opposed new regulations in London that require drivers to pass an English-proficiency test. This is likely more a statement about Uber’s need for drivers than a belief that the test is discriminatory, which is a valid concern. | 1 |
| Shareholders revolting against CEO Travis Kalanick | 2017 | Shareholders that owned about 40 percent of Uber ousted CEO Travis Kalanick. It’s important to note that while this is a rare and significant event, Uber is still closely held and controlled by a tight circle of people, including Kalanick. | 1 |
| Opposing the unionization of Uber drivers in Seattle | 2017 | Uber launched a number of efforts to oppose the unionization of its drivers in Seattle, including a scripted episode of the “Uber Seattle Driver Podcast,” and misleading phone calls to drivers. The unionization effort was stalled in April 2017 by a ruling blocking the law that permitted it. | 1, 2, 3 |
| Being tone deaf during the protests at JFK airport, leading to the #DeleteUber campaign | 2017 | Taxi drivers protested President Trump’s racist Executive Order banning people from certain countries from entering the U.S. by not picking up passengers at New York’s JFK airport. Uber’s response was to turn off surge pricing at the airport, which was widely condemned and started a #DeleteUber campaign, which caused a number of people to delete the Uber app. Uber actions are unclear — turning off surge pricing prevented opportunistic drivers from going to the airport, but also kept fares low for those wanting a ride. While the public response to Uber’s actions likely did not understand this nuance, there should be frustration that Uber drivers could not coordinate a strike like that of the taxi drivers and unions, which speaks more to Uber’s relationship with its drivers and how it has decided to structure its company. In addition, Lyft, the main rival to Uber, capitalized on Uber’s misstep, but it has many of the same problems as Uber. | 1, 2, 3 |
| Establishing a company, or “yellow,” union, and opposing unionization generally | 2016–present, 2009–present | Uber formed the Independent Drivers Guild for its New York City area drivers. The Guild was formed with International Association of Machinists and Aerospace Workers, who gave concessions to Uber (specifically, agreeing to overlook driver misclassification). The Guild has been used to address some issues drivers have, although others accuse it of deflecting attention from other, more pertinent issues. It has also been used to attack Uber’s competitors. The Guild is being used relieve pressure from drivers in an area (New York City) that has relatively significant oversight and regulation, and where drivers have more power. The Machinists have been criticized by other unions that believe a more traditional unionization effort would better serve drivers. Uber has generally opposed driver unionization, and the National Labor Relations Act does not give independent contractors the right to unionize, although places such as Seattle have passed laws to make it possible. | 1 |
| Stealing self-driving car technology from Google and the resulting lawsuit, operating a competitive intelligence practice | 2016–present | An Uber employee is accused of stealing self-driving car technology from his former employer, Google, and taking that technology to Uber. Google has filed a lawsuit, and the employee is prohibited from developing the technology in question at Uber. Uber has been accused of operating a competitive intelligence practice related to the suit, that acquired competitors’ software code and details about their drivers, among other things. | 1, 2, 3 |
| Serving on President Trump’s Advisory Council | 2016–2017 | Uber’s CEO Travis Kalanick served on President Trump’s economic advisory council until he resigned under pressure from his employees, who were upset with President Trump’s immigration executive order. | 1 |
| Being banned in Austin | 2016 | Uber and Lyft were banned in Austin after they refused to comply with regulation requiring background checks that required fingerprinting, claiming that they were too onerous. They spent over $8 million lobbying against the rules. It is likely that Uber did not want to have the fingerprinting used as evidence that its drivers are employees rather than independent contractors. Several other companies set up to fill the void, all complying with the regulation. | 1, 2 |
| Illegally lobbying Chicago’s mayor | 2015 | In 2017, former Obama administration official David Plouffe was fined $90,000 for illegally lobbying former Obama administration official and current Chicago Mayor Rahm Emanuel on behalf of Uber. Plouffe did not file as a lobbyist, although he contacted Emanuel regarding regulations on Uber operating at airports. | 1 |
| Conducting a deeply flawed study of its drivers’ pay that mislead its drivers and prospective drivers | 2015 | Uber recruited President Obama’s former chief economist Alan Krueger to conduct a study on driver pay. Because the study did not include information that could be useful in determining driver expenses, it was used to misrepresent driver pay as higher than it was. Uber undoubtedly has data on these expenses. | 1, 2 |
| Suspending its UberPop service in France | 2015 | Uber suspended its low-cost UberPop service, which allowed passengers to hail unlicensed drivers, after protests from French taxi drivers which shut down airports. The service was in violation of a new law, but Uber continued to operate it. Eventually, it capitulated. | 1, 2 |
| Using a bait-and-switch approach to distract from problems at the company | 2014–present | Uber’s fundamental product — taxi service — is not profitable. To distract from this issue and manipulate investors and regulators, Uber has at various points in time shifted its public relations to other products. This includes the lower cost uberX service, uberPOOL carpool service, UberEATS and other logistics services, as well as various visions for the future (displacement of car ownership, driverless cars, and flying cars). These visions for the future are often said to be mere years away. | 1, 2, 3 |
| Suggesting using opposition researchers to smear a female journalist | 2014 | Uber’s Senior Vice President Emil Michael suggested hiring a team of opposition researchers to spread information about the personal life of a journalist critical of the company. Michael believed he was speaking off-the-record. | 1, 2 |
| Being banned in New Delhi | 2014 | Uber was banned from New Delhi after a driver raped a passenger. The driver had an incorrect permit and was not allowed to operate in New Delhi for point-to-point trips in the city. The proper permit might have prevented the incident since it required a background check, which would have revealed the driver had spent two years in prison for rape. | 1 |
| Evading taxes | 2013–present | Uber set up a sophisticated structure for its business, sheltering itself from taxes. It also evaded VAT taxes in the European Union, which it now has to repay to all EU governments. | 1, 2 |
| Using anti-competitive tactics including disrupting competitors with fake ride requests | 2013–2014 | Uber employees sent thousands of fake ride requests to competitors Lyft and Gett. The intention was to make it more attractive to drivers and passengers to use Uber. After competitors entered the New York City market, Uber sent a text message to its drivers saying they were not allowed to work for both companies, which was untrue. Uber also sent messages to Gett drivers in order to recruit them to Uber. | 1, 2 |
| Claiming that it is a technology company, not a taxi company | 2009–present | Uber has often claimed that it is a technology company, not a taxi company, meaning that it is not responsible for meeting taxi regulations. It often points to other lines of its business, which are nevertheless insignificant compared to its taxi business. The European Court of Justice, however, disagreed with Uber’s characterization and set the stage for a ruling that it is a taxi company, which would have wide ranging effects on its business and costs. | 1 |
| Setting up a large and aggressive lobbying practice to bully local jurisdictions that challenged it and to change federal law; using passengers to as lobbying tools | 2009–present | Uber has shown contempt for local laws and regulation, aggressively challenging jurisdictions that opposed it and, in many cases, continuing to operate even when the service was deemed illegal. (This “disruption” could also be called the “corporate nullification” of laws.) It used a variety of tools to oppose these rules: Its team of lobbyists including some former Obama administration officials; pressure from passengers to oppose regulation (in some jurisdictions, like New York City, it emailed its users and also paid for their rides to pro-Uber protests); and tools like Greyball that prevented enforcement activities by regulators. Uber’s tactics have been summarized as its playbook for conquering cities. | 1, 2, 3, 4, 5, 6, 7, 8 |
| Misclassifying its drivers as independent contractors | 2009–present | Uber classifies its drivers as independent contractors rather than full employees. This classification was likely illegal in many places because, among other things, Uber controls the conditions of work for its drivers. However, the misclassification lets Uber avoid paying taxes on its drivers, and shifts the burden of taxes and expenses to the drivers. It also does not need to provide benefits to drivers, and does not protect drivers from exploitation. The Fair Labor Standards Act and other regulations, which establish minimum wages and overtime protections, as well as workers’ compensation and unemployment benefits, do not apply to independent contractors. It is also more difficult for drivers to unionize, as independent contractors do not have the right to unionize like employees do. It is estimated that Uber’s costs would be 30 percent more if it properly classified drivers. The questionable legality of this situation, and the myriad lawsuits regarding the misclassification, has led Uber to push for an “independent worker” classification with rights somewhere between independent contractors and full employees (boosted by former Obama chief economist Alan Krueger), as well as for a private system of “portable benefits.” In the meantime, Uber has had partial success fending off misclassification suits, paying a large settlement to resolve two cases. In 2017, Uber lost a case in the United Kingdom that ruled that its drivers were employees. It subsequently lost an appeal. | 1, 2, 3, 4, 5, 6, 7, 8, 9, 10, 11 |
| Not being profitable or having a viable business model, despite a valuation in the tens of billions of dollars | 2009–present | Uber reports losses of hundreds of millions of dollars or more annually. This may be an understatement because, as a private company, it has fewer reporting and accounting obligations. It loses money because its fares are too low — it effectively subsidizes its rides — and it cannot take advantage of the efficiencies that ordinary taxi fleets can take advantage of. Even its app (which was not the first taxi app) can easily be replicated. There are few reasons why Uber would, necessarily, hold onto its market share. Thus, it has engaged in anti-competitive practices and obscured its financial situation to regulators and investors, using rapid growth as well as distractions (like its promotion of unproven driverless car technology) to generate cover for its dismal performance. One venture capitalist even compared Uber to a Ponzi scheme. Without rapid growth and anti-competitive practices, and barring fundamental changes to transportation in general, Uber has few paths forward as a company. The questions about its future have intensified in 2017. | 1, 2, 3, 4. See this series by Hubert Horan as well. |
| Buying personal data from users’ email from a data broker in order to monitor a competitor | 2011(?)–unknown | Uber purchased user data from Unroll.me in order to keep tabs on competitors. | 1 |
| Being banned from London | 2017 | Uber was banned from London in September 2017 because it was “…not fit and proper to hold a private hire operator licence.” | 1 |
| Ruled as a transportation service, not a technology company by the European Court of Justice | 2017 | Uber was “…declared that Uber was a transportation business, not just a technology platform” by the European Union’s highest court, paving the way for equal treatment for Uber with regulated taxis. | 1 |
| Lobbying states to interfere or preempt local laws | 2009–present | A recent report from National Employment Law Project and Partnership for Working Families detailed how Uber “successfully adopted state interference, an antidemocratic legislative practice favored by the gun and tobacco industries and popularized by the ultraconservative American Legislative Exchange Council (ALEC), in order to rewrite the law” concerning its operations. |
1 |
Social Costs (15 entries)
Uber often causes and exacerbates social problems, many of which have significant costs or far-ranging implications.
| CONTROVERSY | TIMEFRAME | DESCRIPTION | SOURCES |
|---|---|---|---|
| Aggressively pursuing and testing driverless car technology | 2016–present | Uber illegally tested driverless cars in San Francisco, where at least one of its cars ran a red light. Uber claimed that the backup human driver was at fault, although this was shown to be untrue. Uber also deployed driverless cars that illegally turned through cycling lanes. Uber resisted complying with the law, which it opposed on principle. | 1, 2, 3 |
| Possibly making the spree shootings in Kalamazoo, MI worse | 2016 | In 2016, an Uber driver murdered and injured several people in Kalamazoo, MI. In between these incidents, he took fares on the Uber app, sometimes driving erratically. Passengers reported this to Uber, who apparently did nothing with the information. | 1 |
| Claiming its uberPOOL service had environmental benefits | 2016 | Uber made spurious claims about the environmental benefits of its carpool service, uberPOOL. Its study did not analyze effects fom the service that could have negative environmental aspects. It also did not take into account the additional pollution from the increased traffic from additional Ubers, or the environmental impacts from Uber drivers’ time driving outside of trips in the app. | 1 |
| Trying to reinvent the bus | 2015–present | uberPOOL added features that mimicked bus service in a variety of ways; other ride-hailing companies have followed suit. | 1, 2 |
| Taking advantage of cities like Pittsburgh via a race-to-the-bottom dynamic, and receiving public subsidies | 2015–present | Pittsburgh raced to the bottom to accommodate Uber and its desire to test driverless cars. It gave the company permission to test its cars on its streets, endangering its citizens, in addition to other incentives. Uber proceed to gut Carnegie Mellon’s robotics departments, poaching the employees that work there. Pittsburgh officials are now saying the company operates as though “they have been given carte blanche access to our city.” Uber, for example, requested a list of infrastructure projects that the city would pay for, essentially subsidizing the company. | 1, 2 |
| Releasing questionable research on drunk driving | 2015 | Uber claimed a study showed it “likely prevented” 1,800 crashes over the previous two-and-a-half years, in 2015. It did not initially release a methodology for the study. When one was eventually provided, it did not show the results that Uber claimed. | 1 |
| Creating much more traffic in places like New York City and San Francisco | 2013–present | Without limits on Uber drivers, or with high ceilings for the number of drivers allowed to operate, there are likely too many taxis on streets. In the fall of 2016, San Francisco estimated that 45,000 Ubers and Lyfts operated in the city, compared to about 1,800 regulated taxis. This amount of cars creates significant traffic problems. The subsidized rates for Ubers also induces, rather than only shifts, trips, making the problem worse. | 1, 2, 3 |
| Undermining public transportation | 2013–present | Uber is explicitly seeking to undermine cash-strapped public transportation systems with its taxi service, which it already does intrinsically by subsidizing passengers’ rides and shifting trips to its service (which is not a sustainable transportation system to begin with). This included replacing regulated systems with discounts or vouchers for Ubers, especially in paratransit and other demand responsive transport, like that serving seniors. These developments present a number of problems, including the need for passengers to have a smartphone and credit card as well as issues related to unions and driver exploitation. Fundamentally, it remains an open question whether Uber could operate an equivalent service for less money and still equitably serve the community. In addition, Uber’s vision for the future includes reinventing buses as private vehicles and using them along with other private vehicles to meet a city’s transportation needs. This is likely impossible on a large scale. | 1, 2, 3, 4, 5 |
| Lacking adequate insurance, to the detriment of passengers, drivers, and others | 2009–unknown | In the early days of Uber, there were no insurance instruments that covered drivers adequately, but they still drove for the service. | 1 |
| Oversupplying drivers | 2009–present | Uber’s business, not as tightly overseen by taxi commissions or medallion systems, allows drivers to quickly start driving for the service. While lower barriers to entry might seem beneficial especially for passengers, an oversupply of drivers means that all drivers have their pay reduced. Indeed, there is evidence that pay is too low for Uber drivers, some of whom sleep in their cars in especially competitive cities. In addition, the high number of Uber taxis contributes to social costs from things like traffic, pollution, degradation of infrastructure, and traffic collisions. And since taxis generally use public, shared resources, it makes sense that their number would be limited in some way. In addition, the popularity of Uber, which circumvented the medallion system, caused the price of medallions in New York City to plummet. This unfairly penalizes drivers participating in a flawed, but ultimately better designed system. | 1, 2 |
| Aggressively promoting and defending its business practices, leading to, in part, the Uberification of the economy | 2009–present | Uber is perhaps the leading proponent and example for the further shift of the economy toward informal work conducted by independent contractors (“Uberification”). By being one of the first companies to successful deploy its drivers as independent contractors, Uber set the tone for other companies whose business models are predicated on this arrangement (“Uber but for…” companies). It also overemphasizing the shift to “gig economy” work; this work is a small percentage of overall employment. Indeed there are some signs, like a report from Chase, that suggest that workers tire of the gig economy model. | 1, 2, 3, 4, 5, 6, 7, 8 |
| Causing the decline of the regulated taxi industry | 2009–present | Around the world, regulated taxi drivers have protested Uber’s deprofessionalization of their industry, which has most notably led to significant decreases in their pay and overall business and the decline of union representation in the industry. In addition to a reduction in pay, the decline of the regulated industry has led to access issues for the disabled, as well as other problems. | 1, 2, 3, 4, 5, 6, 7, 8 |
| Allowing racial and other discrimination by both drivers and passengers | 2009–present | Although having taxi service mediated by an app presents an opportunity to clamp down on discrimination, Uber allowed discrimination on the part of drivers and passengers. By revealing the names of passengers and photos after booking, drivers can cancel trips based on discriminatory factors. Passengers can do the same based on the driver’s identity. In addition, passengers and drivers can introduce bias when rating drivers, rating drivers and passengers of color poorly, for instance, as a lawsuit alleged. | 1, 2, 3, 4 |
| Increasing danger to pedestrians and cyclists, creating unclear responsibility for crashes | 2009–present | The sheer number of Uber’s taxis on roads has caused traffic problems and also accidents. This follows from what is known about how much additional traffic the service has caused in specific cities. Accidents are likely worse for Uber’s taxis because they do not have livery, unlike taxis in many large cities. For example, for pedestrians and cyclists, sudden (and illegal) stops are very dangerous, but both Ubers and regulated taxis often engage in this behavior. With regulated taxis with livery, it is easier to anticipate and avoid dangerous drop-offs and pick-ups. In addition to possible increased danger, it is sometimes unclear who should take responsibility if a cyclist or pedestrian is hit. Uber has declined to take responsibility in the past, claiming it is not liable (for example, in the death of a six-year-old girl), and has been sued as well. | 1, 2, 3, 4 |
| Promoting a system for “portable benefits” for its employee-drivers | 2018–present | Uber, according to a letter published in 2018, wants to set up a 401(k)-type system for “portable benefits” that would have far-reaching effects on employment generally. | 1 |
Misuse of Data and Software (11 entries)
Uber’s collection and monitoring of data are integral to its operations. The absence of (or lax enforcement of) rules regarding the access and use of sensitive data, as well as the illegal collection of data and use of certain data tools, has led to a number of scandals.
| CONTROVERSY | TIMEFRAME | DESCRIPTION | SOURCES |
|---|---|---|---|
| Using a program to defraud passengers and drivers | unknown–2017 | A recent lawsuit accused Uber of charging passengers based on a longer, slower route than the route that was displayed to drivers. The drivers would be paid for the shorter route, and Uber would keep the difference. | 1, 2 |
| Secretly tagging iPhones even after the Uber app was deleted and the phone was erased | unknown–2015 | Supposedly to detect fraud, Uber tagged iPhones that had installed its app, data which was available to the company even if the app was deleted or the phone erased. | 1 |
| Collecting passengers’ background data | 2016–present | In an app update released in 2016, Uber began collecting background data from its users even if the app was no longer in the foreground or being used for a ride, up until five minutes after a trip. Uber claims this is to improve pick-ups and drop-offs. The move prompted a complaint to be filed with the Federal Trade Commission. New York came to an agreement with Uber that put in place certain security measures around the collection of background data. In addition, Uber has the ability to collect background data all the time, not only for just five minutes after a trip. | 1 |
| Failing to validate rides with passengers | 2015–present | In 2015, Uber riders were charged for trips they did not take after their login details were stolen and sold. There are also reports that Uber rides are sometimes stolen by people who opportunistically get into the vehicle first. | 1, 2 |
| Using its “Greyball” tool | 2014–present | Uber maintained a program that showed a different version of the app to users it suspected to be regulators, and prevented them from booking trips. The Department of Justice has opened a criminal probe into the tool and its use. | 1, 2, 3 |
| Using its “Hell” tool | 2014–2016 | Uber spied on its drivers who also worked for rival Lyft by creating fake Lyft accounts, and then using software to track and identify them. Using this information, Uber targeted these drivers with “special bonuses, encouraging them to drive exclusively for Uber.” The FBI opened an investigation into these practices in 2017. | 1, 2 |
| An Uber executive carrying around the confidential medical files of a woman that was raped by one of its drivers | 2014 | Uber’s Eric Alexander carried around the confidential medical records of a woman who was raped and assaulted by one of its drivers in India. He likely suspected that a competing company staged the incident, and he and other executives raised questions about the legitimacy of the records. | 1, 2 |
| Using its “Heaven,” or “God View,” tool and having questionable data security and privacy practices in general | 2011–present | The company’s Heaven, or “God View,” tool provides realtime information on current trips in an area. It was improperly accessed or used a number of times, including to entertain people at a party. An Uber executive also proposed using the tool to gather information about a journalist critical of the company, and to track a reporter coming to its offices for an interview. A former employee claimed that Uber employees would routinely use Uber’s tools to access information about celebrities (like Beyoncé), politicians, and ex-partners. Uber even bragged publicly about tracking passengers who took “rides of glory,” or late night rides back homes. In general, Uber does not have the internal controls to maintain the privacy of its drivers and passengers. In 2017, the FTC issued penalties to Uber for its practices with data, asserting, “Uber failed consumers in two key ways: First by misrepresenting the extent to which it monitored its employees’ access to personal information about users and drivers, and second by misrepresenting that it took reasonable steps to secure that data.” | 1, 2, 3, 4, 5, 6, 7, 8 |
| Refusing to give data to regulators in New York City | 2009–present | Uber often refuses to give data to regulators, claiming that the data is sensitive, that they don’t gather it, or that it is confidential business information. In New York City, Uber refused to hand over data on where and when its drivers drop off passengers, which was intended to be used to ensure drivers meet safety regulations. | 1, 2 |
| Generally, not sharing data freely with the public or regulators | 2009–present | Uber does not freely share much data with the public or regulators. Thus, it is harder to regulate the company or its drivers, or examine its impact on society. For example, Uber’s effects on traffic, accidents, taxi driver pay, and transportation in general are relatively unknown. Of the data it has shared, it has been of limited use, or only provided to hand-picked researchers. | 1, 2, 3 |
| Uber kept quiet about a 2016 data breach, which exposed more than 57 million people | 2016–present | Uber kept an October 2016 data breach secret for a year, paying the hackers $100,000 to delete the data they stole. |
Corporate Culture (13 entries)
Arguably the area where Uber gets the most attention is its corporate culture. Uber has created a culture dominated by sexism and as well as a growth-at-any-cost mentality.
| CONTROVERSY | TIMEFRAME | DESCRIPTION | SOURCES |
|---|---|---|---|
| An Uber board member making a sexist remark at a meeting about sexism at the company | 2017 | Uber board member David Bonderman made a sexist remark directed at a female board member at a meeting held in response to the rampant sexism at the company. He resigned from the board a few hours later. | 1, 2 |
| CEO Travis Kalanick fighting with a driver who brought concerns to him | 2017 | Uber’s CEO Travis Kalanick fought with an Uber driver that had just finished driving him somewhere, using profanity and dismissing the man’s, Fawzi Kamel’s, concerns. Kamel had used the opportunity to bring concerns about cuts in driver pay to Kalanick. | 1 |
| Creating a workplace environment where an engineer, Joseph Thomas, committed suicide | 2016 | Joseph Thomas experienced immense pressure and stress at as a software engineer at Uber, having “panic attacks, trouble concentrating and near-constant anxiety.” Likely some of his difficulties were caused by racism at the company as well. He committed suicide in August 2016, and Uber denied his family’s benefits claim through their insurer. | 1 |
| Dismantling the shelters of homeless people in order to have place to store its driverless cars | 2016 | Uber dismantled a homeless encampment and displaced the residents so that it would have a place to store its driverless cars, which it then operated illegally. | 1 |
| Tolerating the sexual harassment of Uber engineer Susan Fowler | 2015–2017 | Susan Fowler detailed the workplace environment and sexual harassment she faced at Uber. Her blog post in 2017 started a wave of criticism of the company, but was not the first instance of sexual harassment. Due to the backlash, Uber undertook a very public investigation into the culture generally, led by former Obama administration Attorney General Eric Holder (who worked directly with Uber previously), the results of which were available in June 2017. | 1, 2 |
| Throwing a company-wide party in Las Vegas that crossed several workplace boundaries | 2015 | According to a news report: “Uber’s aggressive workplace culture spilled out at a global all-hands meeting in late 2015 in Las Vegas…[b]etween bouts of drinking and gambling, Uber employees used cocaine in the bathrooms at private parties, said three attendees, and a manager groped several female employees. (The manager was terminated within 12 hours.) One employee hijacked a private shuttle bus, filled it with friends and took it for a joy ride, the attendees said.” | 1 |
| Announcing a partnership with UN Women, a UN organization that advocates for women’s issues | 2015 | Uber announced a partnership with UN Women in order to create driving jobs for women (a lack of drivers is a significant impediment to its growth). It received criticism for this, as it has a history of ignoring sexual assaults and rapes in its taxis. UN Women disavowed the partnership shortly after it was announced. | 1 |
| CEO Travis Kalanick comparing regulatory issues the company was having to the protests and struggles in Ferguson, MO | 2014 | At a “ritzy gathering of bankers and tech tycoons in Las Vegas, hosted by Goldman Sachs” Kalanick made a comparison suggesting that the company’s troubles with regulators in Las Vegas were akin to the protests in Ferguson, MO, sparked by the racist murder of unarmed teenage Michael Brown by police. | 1 |
| CEO Travis Kalanick referring to Uber as “Boob-er” | 2014 | CEO Travis Kalanick referred to Uber as “Boob-er” in a 2014 GQ interview because of his ability to use his position and company to attract women. | 1 |
| Uber executives visiting an escort/karaoke bar | 2014 | CEO Travis Kalanick and other Uber executives visited an escort/karaoke bar in 2014, prompting an HR complaint by an employee | 1 |
| Sending a crude email to employees about “sex rules” for a company retreat | 2013 | Uber’s CEO Travis Kalanick sent the “Miami letter” to staff at a retreat in 2013, which set rules for employee relationships. It was widely regarded as cavalier and crude in its tone and content. | 1 |
| Tolerating sexual harassment and creating a culture dominated by sexism, aggression, and discrimination | 2009–present | The problems with Uber’s culture have been well-documented since its founding, although employees and others have been more willing to come forward recently. Uber currently faces at least three lawsuits regarding sexual harassment or verbal abuse. The company’s aggressive nature and disregard for laws and norms have been at the core of its practices since its founding. Even investors have called out the company (however, only recently). Uber’s management and human resources department failed to adequately investigate or address many issues reported to it. Uber had an outside team investigate the issues with its corporate culture in spring 2017, led by former Obama-administration official Eric Holder, who previously worked for the company directly. The results of the investigation were available in June 2017. Another separate investigation investigated 215 complaints the company received about its workplace, the results of which led to the firing of 20 employees, also in June 2017. CEO Travis Kalanick also resigned in June 2017. Despite Kalanick’s repudiation, some Uber employees lobbied for his return, or quit as a result of Kalanick’s ouster. In addition, some board members fought against Kalanick’s departure. | 1, 2, 3, 4, 5, 6, 7, 8, 9 |
| Uber board member and promoter Arianna Huffington killed a story critical of the company and said the company had no systemic problem with sexism | 2016, 2017 | Uber board member and promoter Arianna Huffington killed a story critical of Uber and dismissed allegations of a systematic sexual harassment problem at the company | 1, 2 |
Passenger Issues (11 entries)
Passengers are greatly affected by Uber’s mismanagement; most significantly, from safety and access issues. Uber has consistently failed to proactively address potential impacts to its passengers and has often been negligent after incidents occur (and had little in the way of due process).
| CONTROVERSY | TIMEFRAME | DESCRIPTION | SOURCES |
|---|---|---|---|
| Charging fees for services not rendered | unknown–unknown | Uber charged passengers fees related to tolls and background checks even though neither of those services were always provided, or provided adequately in the case of background checks. Uber passengers have also reported being charged cleaning fees erroneously. | 1, 2, 3 |
| Having serious safety issues in Brazil | 2014–present | Uber made little effort to make cash transactions and overall conditions safer in Brazil before there were many violent incidents and even deaths. Even now, the company claims little liability for problems involving its taxi service. In some cases, it even denied refunds of those attacked. | 1 |
| Not accommodating those with disabilities | 2009–present | A lawsuit accused Uber of having an adherence to federal disability laws that “rang[ed] from token to non-existent.” There have been many instances of people with disabilities being refused service. And although Uber does have offer some services on paper — for example, vehicles that can accommodate wheelchairs — there is poor coverage. Uber has claimed in the past that it does not need to adhere to disability laws because it is a technology company. Uber is now requiring its drivers to allow service animals, also due to a lawsuit. There are many instances of Uber drivers refusing service animals in their vehicles. The decline of regulated taxis due to Uber’s growth has also led to a reduction in the capacity to serve the disabled. | 1, 2, 3, 4, 5, 6, 7 |
| Allowing racial and other discrimination by both drivers and passengers | 2009–present | Although having taxi service mediated by an app presents an opportunity to clamp down on discrimination, Uber allowed discrimination on the part of drivers and passengers. By revealing the names of passengers and photos after booking, drivers can cancel trips based on discriminatory factors. Passengers can do the same based on the driver’s identity. In addition, passengers and drivers can introduce bias when rating drivers, rating drivers and passengers of color poorly, for instance, as a lawsuit alleged. | 1, 2, 3, 4 |
| Not allowing passengers to pay for rides without a credit card or booking a ride without a smartphone | 2009–present | The inability to use cash to pay for Uber rides, as well as the inability to book an Uber without a smartphone, excludes many (usually already disadvantaged) groups from using the service. | 1 |
| Using “surge” pricing to jack up fares when there is a lot of demand for taxi service; manipulating passengers into paying more | 2009–present | Uber raises prices significantly in order to meet demand at various times. The disadvantages to this are that customers feel like they have been taken advantage of, especially in times where the cause is extreme weather, terrorist attacks, or transit strikes. Surges make the cost of service unknown until right before the ride, which is a downside that is not tolerated in transit systems. In addition, like with drivers, Uber is exploring using the asymmetric information it knows about customers to “mislead, coerce, or otherwise disadvantage” them, usually to make them pay more to Uber (but not necessarily the driver). | 1, 2, 3, 4 |
| Not taking sexual assault, other violence, or danger toward passengers seriously | 2009–present | Uber has never taken sexual assault and violence toward passengers seriously, nor did it have the capacity to deal with these issues, even though it is likely one of its biggest problems. Numerous rapes, sexual assaults, kidnappings, and attacks have been reported. While it is hard to use data to determine that they occur at a higher incidence than regulated taxis, the amount of incidents that Uber passengers have reported suggests it. In addition, Uber does not conduct equivalent backgrounds checks on drivers, and it cycles through many more drivers due to the nature of its work. | 1, 2, 3, 4, 5, 6, 7, 8, 9, 10, 11, 12. See a more complete list of incidents here. |
| Having inadequate and negligent customer service | 2009–present | Uber outsourced its customer service, and not only treated those working for them poorly, but also reduced its capacity to meaningfully respond to issues with drivers and passengers, at one point dismissing thousands of support tickets involving rape or sexual assault by saying they were typos. To boot, it released almost the same statement every time there was an issue with a driver. | 1, 2, 3 |
| Not conducting adequate background checks of drivers in many jurisdictions | 2009–present | Uber was sued for not conducting adequate background checks in California — it did not fingerprint drivers — yet it was telling riders it had an “industry-leading background check process.” (This was one of the reasons Uber was forced out of Austin, TX.) Uber settled a $32.5 million class action suit regarding this issue, around claims its made about its background check process from 2013–2016. | 1, 2 |
| Allowing discrimination by drivers based on passengers’ disabilities | 2009–present | Since Uber lets drivers rate customers, they have the ability to rate customers with disabilities, who might take a long time to enter the taxi or otherwise inconvenience the driver, poorly. | 1 |
| Despite that Uber’s app mediates transactions between passengers and drivers, some drivers have found ways to game the system and artificially raise fares | 2017 | Uber drivers in Nigeria were able to use another app to artificially raise fares in Uber’s app. | 1 |
Driver Issues (15 entries)
An inadequate supply of drivers is a severe bottleneck in Uber’s growth, which its business model is predicated on. Thus, Uber focuses intently on the recruitment and retention of drivers, as well as the dedication of drivers to its platform. At the same time, Uber wants to limit its drivers’ compensation because it is not a profitable business. Thus, Uber misrepresents itself in various ways to entice drivers to sign up and be tied to the service, but also consistently squeezes drivers, giving them a smaller and smaller piece of fares. This is possible because Uber controls the rules of its platform. Uber also does not generally vet drivers adequately and pushes for the deprofessionalization of the occupation, likely to increase the number of potential drivers.
| CONTROVERSY | TIMEFRAME | DESCRIPTION | SOURCES |
|---|---|---|---|
| Not providing unemployment benefits to drivers, some of whom sued and won the benefits | 2016 | Uber drivers are not typically eligible for unemployment benefits because they are independent contractors. Successful lawsuits have established that some Uber drivers in various jurisdictions are, in fact, employees and/or entitled to unemployment benefits, while others have determined that drivers are not eligible. | 1, 2, 3 |
| Shortchanging New York drivers by calculating commissions incorrectly | 2014–2017 | Despite being aware of the problem in 2015, Uber continued taking too large a commissions from New York drivers by calculating it from the total fare rather than the fare minus taxes. Drivers had notified Uber of this issue repeatedly. Uber said it would fix the problem when it acknowledged the error in 2017. | 1, 2, 3 |
| Not notifying drivers about a data breach | 2014–2015 | An Uber database containing the personal information of tens of thousands of drivers was improperly accessed in May 2014. Uber says they became aware of it in September 2014. In February 2015, it notified some drivers of the breach. Uber notified more drivers who were affected by that breach in June 2016 and August 2016. | 1 |
| Advertising misleading and inaccurate information on driver pay and vehicle financing | 2014 | Uber claimed that the median driver income was much higher than it actually was, even claiming that the median driver made over $90,000 per year in New York City. These estimates were based on unrealistic assumptions and did not deduct substantial expenses or taxes. Uber also promised best-available financing for vehicles, but the actual rates were worse than what could be obtained by drivers on their own. Uber agreed to pay $20 million to settle an FTC lawsuit in response to these allegations. | 1, 2, 3, 4 |
| Pushing subprime and predatory auto loans on its drivers and changing requirements for vehicles | 2013–present | Uber introduced its drivers to auto financing partners that offered often subprime loans for cars and had exploitative terms. These included very high interest rates and fees, and sometimes the deduction of payments automatically from a driver’s earnings. Together with Uber’s promises on pay, changes in vehicle requirements (for instance, requiring a car of a certain model year or newer), and uncertain expenses and tax liabilities, Uber creates a situation where drivers are tied to the service, or would suffer significant financial penalties if they stopped driving for it. Some drivers took on onerous loans for new cars they needed for the service only to find out the Uber’s requirements for late-model vehicles had been relaxed. Uber ended its leasing business in 2017. | 1, 2, 3, 4 |
| Not covering drivers with workers’ compensation insurance, leaving them vulnerable if they are injured on the job | 2009–present, 2015 | A lawsuit sought class action status to seek worker’s compensation coverage from Uber after a driver was attacked by a passenger in San Francisco. Uber is not required to hold the insurance, unlike regulated taxis. | 1, 2 |
| Routinely raising its commissions and fees | 2009–present | Uber has cut driver pay repeatedly in many different cities over its history. This includes raising its commission as well as raising or instituting fees. For example, in 2014, Uber raised the UberX commission in San Francisco to 25 percent, and instituted a fee for using provided phones (which were free). On the heels of changes like these, Uber claims that drivers actually will be making more money than under the old schemes, although drivers dispute that characterization. Changes like these led to driver protests and strikes around the world. | 1, 2, 3 |
| Deprofessionalizing taxi driving and causing the decline of the regulated taxi industry | 2009–present | Uber deprofessionalized the taxi occupation, leading to a reduction in driver pay and competence (in addition to creating social costs). The transformation to informal, part-time work, under the guise of “sharing,” has made drivers more susceptible to exploitation and reduced their rights as workers. Uber’s finances, predicated on rapid growth, also leads to aggressive recruitment of drivers including, for example, enticing teachers and seniors to drive for the service. Others drive for Uber to promote political messages (for example, their anti-abortion views) or their other businesses . Around the world, regulated taxi drivers have protested Uber’s deprofessionalization of their industry, which has most notably led to significant decreases in their pay and overall business and the decline of union representation in the industry. | 1, 2, 3, 4, 5, 6, 7, 8 |
| Creating driver precarity through many different policies, leading to, for instance, drivers sleeping in their cars | 2009–present | Because Uber drivers are independent contractors and not subject to labor laws, they do not have minimum wage or overtime protections. In addition, there are many misunderstandings about the expenses of driving for Uber (sometimes created or perpetuated by Uber). These expenses include taxes (some Uber drivers are hit with large, unexpected tax bills), Uber’s commission, insurance, and vehicle costs (e.g. leasing or depreciation costs, gasoline, maintenance, cleaning, etc.). For these and other reasons, many drivers find it hard to make ends meet. Others will sleep in their cars. | 1, 2, 3, 4, 5 |
| “Nudging” drivers to do things that help Uber’s bottom line, sometimes at the expense of drivers; this includes artificially creating surges and “pay-to-drive” schemes | 2009–present | Uber uses psychological tricks to manipulate its drivers into working more or to serve specific areas, for instance. These tricks present safety issues if they encourage drivers to work an excessively long time. The goals, for example to serve a specific area, may also be to the benefit of Uber but not the driver. In addition, drivers benefit from scarcity and higher fares, which does not necessarily line up with Uber’s goals. The company has also been accused of artificially creating “surges,” or areas with supposed high demand. In 2017, Uber introduced programs where drivers buy bonuses from Uber in exchange for working more, but if drivers don’t work, they are still charged for the bonuses. | 1, 2, 3, 4 |
| Disregarding due process for drivers and having undue control of drivers | 2009–present | Despite labeling drivers as independent contractors and touting the “flexibility” of the arrangement, Uber has significant power over its drivers, and has used it to deactivate drivers for things that are clearly not issues related to the platform. For instance, an Uber driver was deactivated for posting “hateful statements regarding Uber through Social Media.” Passengers can also rate drivers poorly for not providing mints, water, phone chargers, or nonessential luxury items or services, leading to a deactivation if a driver’s rating falls below a certain level. Uber, in general, controls its platform in several key ways which suggest there might be antitrust, driver misclassification, and other issues to be dealt with, as recent lawsuits allege. This control is fundamental to Uber’s business model, and is often couched in language that neutralizes decisions that are clearly made to benefit the company at the expense of drivers. Uber has also fired drivers for choosing to work during surges, or times when rides cost more. For a while, Uber drivers were forced to accept UberPOOL carpool rides, although this has been somewhat relaxed. | 1, 2, 3, 4, 5, 6, 7 |
| Allowing racial and other discrimination by both drivers and passengers | 2009–present | Although having taxi service mediated by an app presents an opportunity to clamp down on discrimination, Uber allowed discrimination on the part of drivers and passengers. By revealing the names of passengers and photos after booking, drivers can cancel trips based on discriminatory factors. Passengers can do the same based on the driver’s identity. In addition, passengers and drivers can introduce bias when rating drivers, rating drivers and passengers of color poorly, for instance, as a lawsuit alleged. | 1, 2, 3, 4, 5 |
| Not allowing tipping of drivers | 2009–2016 | Uber had a no-tip policy until 2016, and also charged commissions on automatic tips in the app. A lawsuit and settlement forced the company to allow drivers to ask for tips, although it is not possible to tip drivers via the app. Another lawsuit refunded riders who were made to believe that automatic tips went solely to the drivers. As of June 2017, Uber permitted tipping via its app. | 1, 2, 3 |
| Not notifying prospective drivers its intent to run background checks | 2009–2015 | Uber was subject to a class action settlement that alleged that it did not adequately notify prospective drivers of its intent to run background checks on them. | 1 |
| Not allowing advertising in drivers’ vehicles | 2015 | Although Uber does not consider its drivers employees, its customer service reps told drivers they could not advertise in their vehicles | 1 |