The NMA Foundation presents the Car of the Future weekly feature:
What’s wrong with Uber? Sure, the company might be considered one of the most disruptive companies on Earth in 2017. Uber found an angle into the transportation industry that was ripe for disruption. Founders have been applauded as masters of the universe and peacock their way around the world making grand pronouncements about the future of car ownership, driverless ridesharing cars and even now flying autonomous cars. Sometimes though, it seems Uber is getting away with something that is not quite right from calling themselves a tech company instead of a transportation company and the way drivers are treated and how they are paid.
With a click of the finger, an Uber account holder can summon a car through an app on his or her smart phone–pretty convenient for the hipster and the oldster. Except why would anyone want to ride or even drive for a company like Uber that from the outside seems to be a toxic mixture of hubris, sexism and just down right meanness?
Many experts say that ridesharing will eventually replace car ownership–especially in urban cores. That is one possible scenario but the way Uber seems to be connecting with the world currently–will this company even survive the next five years? No doubt, Uber has grown tremendously worldwide since its 2009 founding in San Francisco. Does that give the company license however to act is if the rules do not apply? Industry disruption is one thing but good ole boy tactics seem out of touch with current business practices and public opinion.
Even though Uber is not yet publically traded, its market value has been estimated as high as $70 billion which is this side of crazy if you think about it—GM is valued at $51 billion and Ford is valued at $44.6 billion. The difference—both GM and Ford make close to $10 billion in annual profits whereas Uber loses billions every year.
But it is not even about the money—it is about Uber itself. Here are just some of the news stories, I have been tracking since the beginning of the year.
- Hell tracking–On April 24, Lyft drivers filed a class action against Uber in San Francisco federal court for the use of a spyware code-named Hell. Goal in using the spyware was to recruit drivers for Uber. The suit claims the spyware was used from 2014-2016.
Operation Slog: In another lawsuit filed last year, Lyft drivers accused Uber of creating fake Lyft accounts to lure Lyft drivers to phony ride requests which would then drive longer wait times for Lyft pushing riders over to Uber.
- On April 24 in a hearing of Europe’s top court in Luxembourg, Uber described itself as a digital platform connecting passengers to drivers not a transport service. France recently passed a law that targets online taxi services. Taxi services see Uber and other ridesharing companies as unfair competition bypassing strict licensing and safety rules. A non-binding opinion on this case will be out July 4.
- Drunk Driver Allegations: Uber faces a $1.1 million fine after a complaint was filed April 11 to the California Public Utilities Commission. Company officials are accused of failing to investigate many “zero tolerance” cases involving alleged drunk drivers. Uber received 2,047 complaints of drunk drivers between August 2014 and August 2015. Uber investigated and suspended 574 drivers. The complaint specifically focuses on 154 cases during this one year period and the suit claims that Uber only conducted investigations in 21 of those cases.
- 8,000 Massachusetts drivers who wanted to drive for Uber (or Lyft) did not pass a background check. Many reasons why they did not pass but this is an important step to insure that users are safe. Lawmakers around the country are trying to play catch up in regulating this new tech transportation phenomenon.
- Uber CEO Travis Kalanick was caught on camera patronizing and swearing at an Uber driver and the video went viral.
- Greyball: New York Times outed Uber over greyballing city officials. With a special tool, Uber used geolocation data, credit card information, etc. to identify city officials who were carrying out sting operations in Boston, Las Vegas, Philadelphia and Portland, Oregon, as well as in Australia, China, France, Italy and South Korea. When these targeted officials attempted to hail an Uber during a sting operation they were greyballed which helped Uber drivers avoid being ticketed. Uber says they have now stopped this practice.
- Uber Executive Revolving Door: Since the beginning of the year and especially following the sexual harassment allegations (see February 2017 information below), the following executives have left:
- Uber president Jeff Jones left after six months
- VP of Engineering Amit Singhal
- VP of Maps Brian McClendon
- VP of product and growth Ed Baker
- VP of global vehicle programs Sherif Marakby
- VP of policy and communications Rachel Whetstone
- AI Labs Director Gary Marcus
- Senior Director of engineering at Uber’s Advanced Tech Center Raffi Krikorian
- Senior engineer of Uber’s AV division Charlie Miller
- Uber’s self-driving cars come back to California after leaving in December due to being sidelined by the state DMV. Uber did not obtain any permits in 2016 to legally operate self-driving vehicles in California.
- Former Uber software engineer Susan Fowler published an expose on the culture of sexism and sexual harassment at the company. Many reports followed from other female employees with a large backlash from the public and the media. The hashtag campaign #DeleteUber reached new heights. Former Attorney General Eric Holder was quickly hired to handle the internal sexual harassment investigation. His internal report is due anytime.
- Google/Alphabet/Waymo sues Uber for infringing patents related to self-driving cars. The trial continues today.
- Driver Settlement: Uber settled with the Federal Trade Commission on $20 million dollars that would mostly be given back to drivers over claims that Uber misled drivers on how much they could earn as independent contractors.
- Surge Pricing at New York City’s JFK airport was announced after President Trump announced his first Muslim travel ban and after the New York Taxi Workers Alliance called on its members to avoid JFK International for one hour. The hashtag campaign #DeleteUber went viral.
I would not be surprised if more allegations of bad practices continue to surface. Uber seems to be in free fall and news about the company seems to accelerate each week.
Despite all this chaotic media circus over the negative, Uber continues to announce their grand plans. In the last week of April, Uber announced the company plans to provide flying autonomous cars in Dallas and Dubai within 10 years or less.
But will Uber even survive that long?
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