Like it or not, Uber has revolutionized the way we move. The company’s app-based platform connects passengers and drivers with the kind of smoothness and quickness taxi operators struggle to match. It promises convenience through upfront pricing, a small army of drivers ready to pick up a fare around the clock, and availability in hundreds of cities around the world. The nine-year old firm’s meteoric rise toward the top of the tech industry hasn’t been trouble-free, however.
Uber’s problems began in earnest during the summer of 2014, when taxi drivers in major European cities staged massive protests. They claimed, in a nutshell, that ridesharing applications like Uber were killing their business. Taxi drivers blocked roads, airports, and sometimes violently attacked Uber drivers. The protests led some nations (including France, Germany, and, later, Italy) to declare Uber illegal. That’s a crippling setback on its own, but it was just the tip of the iceberg when it comes to the San Francisco-based company’s troubles.
Alleged attempts to sabotage Lyft (August 2014)
With its giant pink mustaches, Lyft emerged early on as one of Uber’s biggest competitors. Instead of playing by the market rules, Uber hired so-called brand ambassadors to undermine Lyft and other rivals. These ambassadors received burner phones and credit cards, according to The Verge, and were paid to recruit Lyft drivers by requesting rides and striking up a conversation. They’d also cancel rides at the last minute to waste drivers’ time. The company called the program Operation SLOG, according to internal documents.
Uber rolled out SLOG to dozens of cities. CNN reported its employees ordered and canceled more than 5,000 Lyft rides between October 2013 and August 2014. Uber was also accused of using a similar tactic on Gett. Caught red-handed, it promised to “tone down” its sales tactics.
Uber vs. California’s Labor Commission (June 2015)
After a drawn-out court battle, California’s Labor Commission ruled Uber drivers can be considered employees, not independent contractors. The decision came after San Francisco-based driver Barbara Ann Berwick sued Uber and won $4,000 for her troubles. “The California Labor Commission’s ruling is nonbinding and applies to a single driver,” Uber pointed out at the time. The company was correct. To this day, it refers to drivers as “partners” that it provides with “business opportunities.”
Uber’s DMV problem (December 2016)
Uber rolled out a small batch of self-driving cars on the streets of San Francisco in late 2016. It was an extension of a similar program already in place on the streets of Pittsburgh. The pilot program got off to a rocky start after the San Francisco Bicycle Coalition noted the prototypes had a dangerous tendency to cut across bike lanes. Footage from a taxi dash cam showing one of the cars running through a red light added fuel to the fire. The issues inevitably caught the attention of California’s Department of Motor Vehicles (DMV).
While California’s self-driving car regulations are relatively loose, the DMV noted that companies wishing to test the technology on public roads must apply for a $150 permit. They are also required to submit regular reports detailing accidents and any situation where the human behind the wheel needed to take control. Uber refused to comply, stating “we didn’t get a permit in California because we don’t believe we need one.” A spokesperson for the company explained its Volvo XC90-based prototypes can’t operate without a human behind the wheel, so they don’t qualify as autonomous and thereby don’t require a permit.
The DMV threatened to revoke the registration of all 16 cars if Uber failed to apply for a permit in a timely manner. Uber thought California officials were bluffing, but it turns out they had zero interest in playing poker. The DMV canceled the registrations, making it illegal for the cars to operate on public roads under any circumstance, autonomous or not. Uber then trucked its fleet of prototypes to Arizona, where governor Doug Ducey promised permit-free testing anywhere in the state.
Uber settles claims that it misled drivers (January 2017)
The Federal Trade Commission (FTC) accused Uber of misleading its drivers with promises of unattainable salaries. The company’s website noted some drivers made up to $90,000 annually in New York City and $74,000 annually in San Francisco. In fact, Uber grossly — and, according to the FTC, intentionally — underestimated the cost of owning or leasing a car. The actual figures were $61,000 and $53,000, respectively. Uber paid $20 million to settle the case, according to Reuters.
Waymo vs. Uber (February 2017)
Google’s Waymo division filed a lawsuit against Uber claiming Anthony Levandowski, one of its former employees, stole intellectual property before leaving to join the ridesharing giant. Levandowski once led technical development for Google’s self-driving car program. He resigned in 2016 to form a company named Otto that Uber purchased shortly after. Waymo claims Otto was an elaborate ruse established solely so it wouldn’t look like Uber poached Levandowski.
“We found that six weeks before his resignation … Levandowski downloaded over 14,000 highly confidential and proprietary design files for Waymo’s various hardware systems, including designs of Waymo’s Lidar and circuit board,” Google wrote in a blog post. Uber vehemently denied the accusations. Recently, a letter from the Department of Justice (DOJ) confirmed a criminal investigation into Uber’s behavior, while adding that the company consciously used “non-attributable devices” (like burner phones) to cover up illegal behavior.
It was Uber’s biggest scandal yet. The company vehemently denies wrongdoing, but it recently settled the lawsuit out of court for approximately $245 million.
Fraud allegations (April 2017)
Los Angeles-based Uber driver Sophano Van sued the company for running a “clever and sophisticated” fraud in April 2017. The case claims the Uber application shows drivers and passengers a different route when they accept a fare. The driver’s route is shorter and, consequently, less expensive. The user’s route is longer and more expensive. Uber pockets the difference, according to the plaintiff.
The Greyball case (May 2017)
The DOJ launched an investigation into Uber’s illegal use of a software that helped its drivers avoid picking up known undercover law enforcement officials and regulators in areas where the service was either banned or not yet approved. The software was called Greyball, and Uber willingly acknowledged its existence. The company initially insisted it merely used the program to “check ride requests to prevent fraud and safeguard drivers,” according to Reuters. It ultimately admitted wrongdoing and promised to stop Greyballing.
Uber CEO resigns (June 2017)
In the wake of the numerous scandals that emerged in 2017, Uber co-founder and CEO Travis Kalanick resigned from his position after taking a leave of absence. He remains on the company’s board and still holds a considerable amount of voting power.
Allegations of corporate spying (November 2017)
Judge William Alsup delayed the Waymo vs. Uber trial in November 2017 after examining a letter that explains how the defendant attempted to spy on its rivals. It was written by a lawyer representing Richard Jacobs, Uber’s former manager of global intelligence. Jacobs stressed that, as far as he knows, Uber only spied on overseas competitors. The letter makes no mention of Waymo or its intellectual property.
The document claims Uber’s “market analytics team” went to great lengths to interfere with the numerous lawsuits filed against the company while trying to keep tabs on its rivals in a bid to obtain secret information. It also asserts a man named Ed Russo joined Uber specifically to access technology by poaching employees from rival firms. Russo denied this claim. Jacobs claimed Uber paid him $4.5 million to keep quiet about what he knew, which he did until it became part of a criminal investigation.
Massive Uber hack comes to light (December 2017)
Dara Khosrowshahi knew he was taking the helm of an embattled company when he became Uber’s CEO in August 2017, but he likely had no idea how deep the company’s problems ran. Writing on its official blog, Uber admitted it was the target of a massive hack in October 2016 that affected 57 million users, including 7 million drivers. When Kalanick found out about the breach, he tracked down the 20-year old man responsible and paid him $100,000 to keep quiet and destroy every piece of data obtained through the hack. Uber’s new management ordered an investigation into the hack before telling the public — and the authorities — about it.
For some, it was déjà vu. Attackers hacked Uber in September 2014, obtaining confidential information on 50,000 drivers and their cars. The company didn’t tell anyone about the breach until February of the following year.
Lenza McElrath III vs. Uber (December 2017)
The latest lawsuit comes from Lenza McElrath III, an Uber investor and formerly one of its engineers. It bolsters Waymo’s accusations by raising important questions about Uber’s acquisition of Otto. The purchase represents “an improper and potentially criminal raiding of Google’s assets,” according to court documents. McElrath claims the company ignored “red flags” that cast doubts on Otto’s business practices and the source of its intellectual property. The engineer partially blames Kalanick, who is named as one of the defendants in the lawsuit, for the cover-up.
