Uber (company)

Uber Technologies Inc.
Formerly called
 UberCab (2009–2011)
Privately held company
Industry
Founded March 2009 (2009-03)
Founders Travis Kalanick, Garrett Camp
Headquarters San Francisco, California
Area served
 Worldwide, 633 cities[1]
Key people
Products Mobile app, website
Services
Revenue Increase US$ 6.5B (2016)[2]
Decrease US$ -2.8B (2016)[2]
Number of employees
 More than 12,000[3]
Divisions UberEATS, Otto (company)
Website www.uber.com

Uber Technologies Inc. is an American technology company headquartered in San Francisco, California, United States, operating in 633 cities worldwide. It develops, markets and operates the Uber car transportation and food delivery mobile apps. Uber drivers use their own cars,[4][5] although drivers can rent a car to drive with Uber.[6]

The name "Uber" is a reference to the common (and somewhat slangy) word "uber", meaning "topmost" or "super", and having its origins in the German word über, meaning "above".[7]

Uber has been a pioneer in the sharing economy and the changes in industries as a result of the sharing economy have been referred to as "Uberification" or "Uberisation".[8][9][10] Uber has also been the subject of protests and legal actions.

Operations

Icon for rider app as of May 2017

The Uber app software requires the drivers to have a smartphone, and users must have access to either a smartphone or the mobile website.

Pricing and payments

An Uber ride in Bogotá, Colombia running the Uber app on his dashboard-mounted smartphone
Yellow Uber car in Moscow, Russia

In most cities, Uber offers "upfront pricing"; the rider is quoted the fare that he or she will pay before requesting the ride.[11] In some cities, Uber does not offer upfront pricing and instead calculates the price of a ride similar to a taximeter; the rider is charged based on the time and distance of the ride.[12] Uber also offers promotional rates on rides to/from certain areas at certain times.[13][14][15][16][17][18][19] At the end of the ride, payment is made based on the rider's pre-selected preferences, which could be a credit card on file, cash, or, in certain cities, other methods such as via Google Wallet or Airtel mobile wallet.[20] After the ride is over, in some cities, the rider is given the opportunity to provide a gratuity to the driver, which is also billed to the rider's payment method.[21]

Dynamic pricing

Uber fares are based on a dynamic pricing model, in which fares are higher during periods of high demand for rides. The same route costs different amounts at different times as a result of factors such as the supply and demand for Uber drivers at the time the ride is requested.[22] When rides are in high demand in a certain area and there are not enough drivers in such area, Uber fares increase to get more drivers to that area and to reduce demand for rides in that area.[22] The rate quoted to the rider will reflect such dynamic pricing.[11]

In 2012, then Uber CEO Travis Kalanick responded to criticism of dynamic pricing by saying: "it's going to take some time for folks to accept [dynamic pricing]. There's 70 years of conditioning around the fixed price of taxis."[23][24] Uber has defended this "surge pricing" on its website, arguing that without dynamic pricing, there would not be enough drivers to enable riders to get a ride immediately upon request.[25] Uber cited an example of the aftermath of a sold out concert at Madison Square Garden when pricing was increased. During this event, the number of people who opened the Uber app increased 400%, but, due to the higher prices, the actual ride requests only rose slightly, enabling ride requests to be completed within the usual timeframe.

Uber has been criticized for its extreme surcharges during emergencies such as Hurricane Sandy,[26][27] the 2014 Sydney hostage crisis,[28][29][30] and the June 2017 London Bridge attack,[31][32][33] especially when taxis offered to transport riders for free; however, in many cases Uber later refunded surcharges incurred by riders during these events. In 2014, Uber announced that it would not implement surge pricing during emergencies in the United States.[34][35][36]

Levels of service

Uber offers various service levels. Not all service levels are available in every city. UberPOOL is the least expensive level of service, in which the customer may share the ride with another passenger going in the same general direction. UberX (marketed as UberPOP in some European cities) is a level of service in which the rider will get a private ride. Other levels of service provide for a black luxury car, larger car, car with a car seat, SUV, wheelchair accessible transport, and pet transport.[37]

UberGo, available in India, provides for a ride in a hatchback.[38]

UberAUTO, available in Pakistan, is an Auto Rickshaws service for riders to travel within the city at much less cost compared to UberGO and UberX.[39][40]

UberTAXI, which is available in some markets, allows users to summon a taxi using the Uber software application.[41][42] Users pay an additional booking fee and can leave a gratuity through the app.[42] The service is designed to appease taxi drivers who protest the increased competition from Uber.[42]

UberEATS allows users to have meals delivered from participating restaurants by Uber drivers.[43] The service is available in 71 cities.[44]

UberRUSH is a courier package delivery service available in New York City, San Francisco, and Chicago.[45][46]

UberBOAT, available in Istanbul, is a water-taxi service that allows users to travel by Beneteau boats across the Bosporus strait.[47] UberBOAT has also run in other cities during special events such as across Biscayne Bay during Miami Art Week.[48] In 2017, UberBOAT has been launched in Croatia.[49]

Uber also offers additional services in certain cities during special events. During National Ice Cream Month, Uber users in certain cities can summon an ice cream van for on-demand delivery, with ice cream purchases billed to users' accounts.[50][51] On National Cat Day, certain Uber drivers deliver kittens for 15 minutes of cuddling in exchange for a donation to an animal shelter.[52] In some cities, during December, Uber offers delivery of Christmas trees.[53]

Rating scores

Users of the app may rate drivers; in turn, drivers may rate users, both on a scale of 1 to 5 stars. A low rating might diminish the availability and convenience of the service to the user.[54][55] If a driver rates a rider at three stars or below, the rider will never be paired with that driver again.[56] Uber can also deactivate or otherwise punish drivers that get low average ratings from riders.[57]

Requirements for driving

In some markets, where leasing arrangements for vehicles are available, the only requirement for driving for Uber, other than appropriate age, health, car age and type, and ability to drive, is passing a background check.[58][59] Both a smartphone or tablet, and a vehicle may be leased.[60] In many cities, vehicles used by Uber drivers must pass annual safety inspections and must have an Uber emblem posted in the passenger window.

Legislation in some cities, such as San Francisco, requires individuals who drive for Uber to also have a business license in the city in which they drive.[61]

Uber drivers are considered independent contractors and not employees, though this has been disputed in some legal jurisdictions.[62]

Driver selfies as a safety mechanism

A mechanism called "Real-Time ID Check" requires some drivers to occasionally take selfies before accepting ride requests, to verify identity and prevent drivers' accounts from being compromised.[63][64][65]

History

Travis Kalanick, co-founder and CEO of Uber, in 2013

Uber was founded in 2009 as UberCab by Garrett Camp, the cofounder of StumbleUpon, and Travis Kalanick, who had sold his Red Swoosh startup for $19 million in 2007.[66][67]

Kalanick joined Camp and gives him "full credit for the idea"[68] of Uber. On New Year's Eve, Camp spent $800 hiring a private driver with friends and had been mulling over ways to decrease the cost of black car services ever since. He realized that sharing the cost with people could make it affordable, and his idea morphed into Uber.[68] "Garrett is the guy who invented that shit," Kalanick said at an early Uber event in San Francisco.[68] The first prototype was built by Camp, and his friends, Oscar Salazar and Conrad Whelan, with Kalanick being brought on as a "mega advisor" to the company.[68]

Following a beta launch in May 2010, Uber's services and mobile app officially launched in San Francisco in 2011.[69][70] Originally, the application only allowed users to hail a black luxury car and the price was 1.5 times that of a taxi.[71]

In February 2010, Ryan Graves became the first Uber employee, getting the job by responding to a tweet from Kalanick announcing the job opening, and receiving 5-10% of the company. Graves started out as general manager and shortly after the launch was named as CEO.[72] After ten months Kalanick succeeded Graves as CEO in December 2010.[68][69][73][74] Graves stepped down to become the company's COO.[75]

In 2011, the company changed its name from UberCab to Uber.[76]

During the initial development of the Uber app, the company created a think tank consisting of a nuclear physicist, a computational neuroscientist, and a machinery expert who worked on predicting demand for private hire car drivers and where demand is highest.[66][77]

UberX

In July 2012, the company introduced UberX, a service option which allows anyone to drive for Uber using their own car, subject to a background check and car requirements.[78][79] By early 2013, the service was operating in 35 cities.[80]

The launch of the UberX service caused some dissatisfaction among existing drivers whose earnings decreased as a result of the increased competition at lower rates.[81]

UberPOOL

Uber announced a carpooling service called UberPool at the start of August 2014, after a beta testing phase in the San Francisco Bay Area.[82][83] UberPool matches riders with another rider who is traveling in the same direction—the app will share the first name of the other rider and the planned route. The price for this service is less than all other Uber service levels.[84][85] To ensure there's room in the car for other UberPool riders along the driver's route, there's a two person maximum per ride request.

In December 2014, Uber expanded the UberPool concept to New York City.[86]

Self-driving car research

Uber autonomous vehicle Volvo XC90 in San Francisco

In 2015, Kalanick spoke about his desire to eventually move to using self-driving cars for Uber vehicles.[87] By May 2015, the company had hired many researchers from the robotics department of Carnegie Mellon University and established Uber's Advanced Technologies Center in Pittsburgh's Strip District.[88][89]

On September 14, 2016, Uber launched its first self-driving car services to select customers in Pittsburgh, including Pittsburgh Mayor Bill Peduto using a fleet of Ford Fusion cars each equipped with 20 cameras, seven lasers, GPS, lidar and radar equipment that enables the car to create a three-dimensional map utilizing landmarks and other contextual information to keep track of its position.[90][91]

On December 14, 2016, Uber began using self-driving Volvo XC90 SUVs in its hometown of San Francisco.[92] On December 21, 2016, the California Department of Motor Vehicles revoked the registration of the 16 vehicles Uber was using for the test and forced the program to cease operations in California.[93] Uber then moved the program to Arizona, where the cars are picking up passengers, albeit with 2 Uber engineers in the front seats as a safety precaution.[94] In March 2017, an Uber self-driving car was flipped on its side by a vehicle which failed to yield.[95]

Helicopter service

In July 2014, Uber partnered with Blade to offer helicopter rides from New York City to The Hamptons for $3,000 each, including during Independence Day,[96][97][98] in a service called "UberCHOPPER". In 2016, the company partnered with Airbus for a one-month trial of "UberCopter", a $63 Uber helicopter service, in São Paulo, a city famous for its extreme traffic congestion.[99][100] Uber, in partnership with Blade, has also provided helicopter service for specific events, including the Cannes Film Festival and Sundance Film Festival with flights from Salt Lake City International Airport to Park City, Utah.[99][101][102]

Uber announced on September 25, 2016 that it was looking into urban transportation with flying vehicles. At Re/code's Nantucket Conference, the head of Uber's products, Jeff Holden stated that the company wanted to "someday offer our customers as many options as possible to move around ... doing it in a three-dimensional way is an obvious thing to look at." A statement at the American Helicopter Society International-led joint workshop on Transformative Vertical Flight on September 29, Uber product manager Nikhil Goel stated that "To us, urban air transportation is simply a key initiative or our mission, right? Not only because it can cut congestion – it's got massive potential to do that – but it allows us to move people from Point A to B much, much faster than you would otherwise. If you do it in all-electric vehicles, you can do it with zero emissions." Uber published a 99-page "white paper" exploring the possibility of developing a "fully electric, vertical-takeoff-and-landing plane" network (called "Elevate") within ten years, for use in short journeys. Although technically feasible, the development of such a program is expected to encounter safety and regulatory obstacles.[103]

Mapping technology

In November 2015, Uber signed a global partnership deal with Dutch satellite navigation company TomTom to provide maps and traffic data for the Uber driver app across 300 cities.[104] In September that same year, Uber began mapping UK city streets in an effort to identify the best pick-up and drop-off points. The lift-sharing firm plans to extend its mapping activities to other British cities including Manchester, Birmingham and Leeds.[105]

Other projects

In April 2012, Uber launched the Uber Garage initiative in Chicago, a project to experiment with other ideas for urban transportation services. The first project from Uber Garage was to give Uber users the option to hire a regular taxi driver, or a crowd-sourced Uber driver.[106][107]

In March 13, 2015, Uber and BYD expand their cooperation starting in Chicago, Illinois with Green Wheels USA.[108]

DeLorean "time machine" provided by Uber

In September 2013, Uber offered rides in the DeLorean DMC-12 car which was featured in the Back to the Future film franchise.[109] On September 4, 2013, Uber announced a promotion with the NFL Players Association to promote safe rides for NFL players.[110] In March 2015, in collaboration with Dream Drive, Uber offered a luxury car-rental service in Singapore that included Lamborghinis and Maseratis.[111]

In August 2014, Uber launched Uber Essentials or Corner Store service, in Washington, D.C., which allows online ordering from a list of about 100 items.[112] The service was cancelled in January 2015.[113]

In May 2015, Uber launched its UberMilitary Families Coalition, which partners with existing military family organizations to recruit more military dependents, in addition to veterans, as drivers.[114] In that same month, Uber updated its app to include accommodations for hearing-impaired drivers.[115] On March 10, 2015, Kalanick announced a partnership between Uber and UN Women, hoping to create 1,000,000 jobs for women globally by 2020. However, after pressure from trade unions and women's rights organizations, UN Women declined to participate, citing safety concerns.[116]

In November 2015, in collaboration with GrabOn, Uber offered Hot air balloon rides to customers in Hyderabad, India for INR 1,000.[117] In September 2016, Uber and Bobbi Brown Cosmetics made a partnership for Bobbi Brown x Uber Retouch campaign, to celebrate the launch of the Retouching Wands and Retouching Pencils. Customers got an opportunity to take a ride with a Bobbi Brown Makeup Artist and quick make up course how to retouch make up on-the-go.[118]

On April 11, 2017, Uber announced to launch a new patent purchase program, called UP3, which will seek to expedite the process of purchasing patents with an open application windows.[119] July 13, 2017, "Yandex.Taxi" and Uber signed an agreement on combining business and services on online taxi order in Russia, Azerbaijan, Armenia, Belarus, Georgia and Kazakhstan. The companies decided to invest $ 325 million in the joint structure. At 59.3 percent, the platform will be owned by Yandex, by 36.6 percent by Uber, and by 4.1 percent by platform employees.[120]

Financing

The founders invested $200,000 in seed money upon conception in 2009.[121] In 2010, Uber raised $1.25 million in additional funding.[121][122] By the end of 2011, Uber had raised $44.5 million in funding.[123][124] In 2013, Google Ventures invested $258 million in the company based on a $3.4 billion pre-money valuation.[125][126] In December 2014, Chinese search engine Baidu made an investment in Uber of an undisclosed amount.[127] The deal also involved connecting Uber with Baidu's mapping apps.[127][128] In January 2015, Uber raised $1.6 billion in convertible debt.[129] In May 2015, Uber revealed plans to raise between $1.5 billion and $2 billion in new funding, raising the value of the company to $50 billion or higher.[130] In September that year, Uber raised another $1.2 billion, led by another investment by Baidu.[131]

In 2016, Toyota made an undisclosed investment in Uber and looked into leasing options, which could potentially aid Uber drivers financially, a move in response to the other partnerships between Toyota's and Uber's counterparts.[132][133] In June 2016, with plans to expand in the Middle East, Uber received $3.5 billion from the Public Investment Fund of Saudi Arabia.[134] In July that same year, Uber raised $1.15 billion in debt financing.[135] In August, Uber agreed to sell its subsidiary company, Uber China, to China's leading taxi-hailing app Didi Chuxing. Didi also agreed to invest $1 billion into Uber Global.[136] In total, Uber has raised about $11.5 billion from 14 rounds of venture capital and private equity investors.[137]

Number of users

In 2015, Uber completed its 1 billionth ride, which was still below the 1.4 billion rides completed by Didi Chuxing at that time.[138][139] In October 2016, 40 million riders used the service in a single month and that riders spent an average of approximately $50 per month on the service.[140]

At the beginning of 2017, Uber's share of the United States ride hailing market was 84%. The number dropped to 77% in May according to Second Measure, possibly due to challenges and controversies faced by the company.[141]

Profitability

In 2016, Uber did not make a profit, having a reported net loss of $2.8 billion.[142]

Year 2014 2015 1Q'16 2Q'16
Net Revenue $495.3M[143] $1.5B $960M[144] $1.1B[144]
GAAP Loss -$671M[145] TBD -$520M[144] -$750M[144]

Company characteristics and impact

Effect on values of taxi medallions

The increased usage of Uber and other ride-sharing companies has negatively affected the values of taxi medallions in many cities.[146] Many banks that lent money against medallions as collateral faced increasing risks of default.[147] In early 2017, a New York City taxi medallion sold for a record low of $241,000, compared to the $1.3 million price tag they sold for just 4 years prior.[148]

Gaining local support in dealing with regulators

Uber generally commences operation in a city, then, if transportation network companies (TNCs) are not legal in such city, Uber mobilizes public support for its service, and, supported by a small army of lobbyists, mounts a political campaign to change regulations.[149][150] In January 2015, Uber announced a program Kalanick called "principled confrontation" that included reaching compromises with local municipalities on new regulations. Since implementing this program, Uber has seen 17 cities pass new favourable ordinances.[151] Uber had worked out an arrangement with the city of Boston to share quarterly data on the duration, locations, and times of day in which riders used the app to travel in or out of the city. This information was first delivered to the city in February 2015, and the report kept all individual user data private.[152] Bradley Tusk, a former campaign manager for Michael Bloomberg, has played a significant role in advising Uber with respect to cities.[153] In 2014-2015, Uber used the services of David Plouffe,[154] in 2016-2017, communications was led by Rachel Whetstone, and Jill Hazelbaker is now the senior vice president of policy and communications.[155]

Classification of drivers as contractors or employees

Uber contracts with their driver partners under legal arrangements as contractors, and not employees. Since taxation, work hours, overtime benefits, and so forth may be treated differently by various political jurisdictions globally, this designation has been controversial.[156] In the United States, the US Department of Labor issued guidelines in July 2015 to deal with, what it considers, "misclassification" of workers. It argues that any "worker who is 'economically dependent' on the employer should be treated as an employee. By contrast, a worker must be in business for himself or herself to be an independent contractor."[157] The guideline is non-binding, but is expected to have some influence in various court cases which may establish new common law around the issue.[157][158]

Lawsuits have been filed by Uber drivers complaining that they do not enjoy the rights and remedies of being considered "employees" under employment law.

In a class action lawsuit filed in the United States District Court for the Northern District of California on August 16, 2013 Uber drivers plead that they were employees who had been misclassified as independent contractors in violation of the California Labor Code and demanded that they be given any tips Uber had collected on their behalf and payment of business expenses such as gas and maintenance of their vehicles.[159] The District Judge, Edward M. Chen, ruled in the plaintiffs' favor with respect to a motion for summary judgement by defendants on March 11, 2015 holding that whether Uber drivers were employees was a disputed fact to be resolved by the jury.[160] On September 1, 2015 Chen certified the class but generally limited it to drivers in California hired before June 2014 (when an opt-out arbitration clause was included in the contract) who had directly contracted with Uber.[161][162]

In the United Kingdom on October 28, 2016, the Central London Employment Tribunal ruled that Uber drivers are "workers" entitled to the minimum wage, paid holiday and other normal worker entitlements, rather than self-employed. Two Uber drivers had brought the test case to the employment tribunal with the assistance of the GMB Union, on behalf of a group of drivers in London. Uber will appeal against the decision.[62][163]

Employee diversity

Uber's diversity report published in 2017 shows the company has a predominantly white and male staff.[164] According to previous unofficial statistics, female employees decreased from 25% to 6%, and specifically 3% in the engineering teams (less than 5 out of 150).[165]

Competitive advantage due to less regulation than taxi companies

According to Marxian economist Richard D. Wolff, Uber and other TNCs resemble preceding taxi services that started out more than a century ago in the United States:

Eventually these businesses were reined in by government after public outcry to make sure the taxis were safe and did not harm their customers. Uber is competing with licensed taxi drivers who are vetted and certified and have vehicles that are maintained for safety. Being unregulated allows Uber to charge less for the same service as taxis. Claims by Uber to have 'new technology' or 'shared value' or 'ridesharing' are merely public relation strategies.
— Richard D. Wolff [166]

Transportation network companies are regulated in most jurisdictions. Regulations can include requirements for driver background checks, fares, the number of drivers, and licensing.

Uber has been banned from or has voluntary pulled out of, due to legal restrictions, the following jurisdictions: Alaska, Oregon (except Portland) in the United States, Vancouver in Canada, Bulgaria, Denmark, Hungary, Italy, Germany, the Northern Territory in Australia, Japan, and Taiwan.[167]

Australia

Uber is banned in the Northern Territory.[168] The New South Wales government created a taskforce to look into regulating Uber, stating that the existing regulatory framework is "difficult to enforce", and therefore not as effective as it could be. The taskforce also noted that ride sharing services "appear to meet the criteria of a public passenger service" under the 1990 Act and drivers are therefore required to pay local government services tax GST.[169] This is despite the fact Uber claims that it is not a taxi service and should not have to operate under taxi regulation.[170][171] In Brisbane, Australia, the legal status of Uber's service has been challenged by governments and taxi companies, which allege that its use of drivers who are not licensed to drive taxicabs is unsafe and illegal.[172]

Canada

Uber operates in several major cities in Ontario, Quebec, and Alberta. It does not operate in British Columbia due to the province's current transportation regulations.

In July 2015, a $400M class-action lawsuit was filed against UberX and UberXL in Toronto, Ontario, Canada on behalf of Ontario taxi and limo drivers, brokers, and owners. The statement of claim alleged that UberX and UberXL violated section 39.1 of the province's Highway Traffic Act by having unlicensed drivers picking up passengers and transporting them for compensation.[173] In March 2016, Sukhvir Tehethi, a local taxi driver, filed an injunction against Uber. Toronto's city council amended a bylaw in October 2015 and, according to Tehethi's lawyer, Uber drivers are in violation of it. Tehethi decided to take action saying that it could be months, or even years, if he waits for City Hall to act.[174]

Denmark

Following a court ruling and tightened regulations, Uber in Denmark chose to close on 18 April 2017 affecting 2,000 drivers and 300,000 users.[175]

U.A.E (Dubai)

In January 2017, after a long spat with regulators, Uber signed an agreement with the Roads and Transport Authority of Dubai. Under this deal, Uber will be entitled to deploy about 14,000 vehicles around the city.[176]

France

Uber executives were arrested in France in June 2015 after Uber continued to operate despite being declared illegal.[177] In the first half of 2014, the UberPop version of the app was launched in Paris, France, whereby users are linked to drivers without professional taxi or chauffeur licenses, while Uber covers supplemental insurance. UberPop was expanded to other European cities over the course of the year.[178] The UberPool service was then introduced to the Parisian market in November 2014, a month after a French court had deemed the company's UberPop service to be illegal. Uber claimed that UberPool was the next iteration of the UberPop concept. Uber's Western Europe chief told reporters at the time that it was "very confident" about overturning the court decision.[178] At the start of February 2015, the UberPool service was still operational in Paris, France, despite the regulatory opposition in that country.[179]

On July 5, 2015, Uber suspended UberPop in the face of pressure by the French government while awaiting a constitutional court decision on the legality of Uber's service.[180] On September 22, 2015, France's highest constitutional authority rejected the challenge to a law that bans Uber's low-cost offering UberPop, keeping the legal pressure on the company.[181] Uber stated that the decision was disappointing but they will continue to work with the French government, trying to find a solution.[182]

Germany

In Germany, government commissions have severely limited or banned Uber for their drivers not meeting safety and maintenance standards.[183] In September 2014 courts banned Uber in Germany because the company violated regulations requiring all transport companies to use licensed drivers.[184][185]

India

In Delhi, Uber is faced with limits to the number of drivers that are allowed to operate.[186]

Italy

In May 2015, the Milan Court banned Uberpop alleging "unfair competition" and violation of the local jurisdiction regulating taxi services. The lawsuit was originally initiated by the Italian taxi drivers union.[187]

After a Rome judge ruled in favor of Italy's major taxi associations that the ride-hailing service constituted unfair competition, Uber was banned throughout Italy at the beginning of April 2017. Uber Italy expressed to use its right to appeal this decision.[188][189] One week later, another court in Rome suspended the initial ruling after accepting Uber's appeal, allowing the service to remain in Italy.[190][191]

Poland

In Poland, following protests by taxi drivers, laws were modified so that Uber drivers do not enjoy a regulatory advantage over taxi drivers.[192]

Spain

Uber was banned from Spain in December 2014 and returned to Spain in March 2016, this time using only licensed drivers.[193][194]

Taiwan

In July 2013, Uber started services in Taiwan; however, as the company registered as an information service firm, it did not have any permission to operate transportation services. This led to protests from taxi drivers and fines in millions of dollars from the government. Refusing to pay the penalties, Uber was banned in February 2017. In April 2017, the company resumed services after constructive talks with authorities and partnered with licensed car rental companies.[195][196] The service can only operate within Taipei, but it will eventually expand to other cities.[197] However, Ho Chen Tan, Minister of Transportation and Communications, said that Uber is not welcome if the fines aren't paid to the government; the company must switch its business registration as well in order to operate legally.[198][199]

Pakistan

In January 2017, Uber was asked to obtain a no-objection certificate, a fitness certificate and a route permit in order to continue their services in Pakistan. Uber fulfilled all the legal formalities in the given one month time.[200]

United Kingdom

In March 2017 Uber lost a legal case against Transport for London that attempted to stop a written English exam being required for drivers to obtain a minicab licence.[201] Uber's five year licence to operate in London has been extended for only four months from May 2017.[202]

United States of America

Atlanta, Georgia

In September 2014, a class-action lawsuit was filed by taxicab drivers and holders of a vehicle for hire Certificate of public convenience and necessity in Atlanta against Uber as well as its drivers for restitution of all metered fares collected via the Uber and UberX apps for trips originating within the Atlanta city limits.[203] The lawsuit claimed that Uber drivers were not properly licensed.[203]

Austin, Texas

In March 2015, UberPOOL was offered in Austin, Texas, in advance of the annual South by Southwest festival.[204] In May 2016, Uber pulled its Austin program due to stricter regulations from the government.[205] Compared to most taxi companies in the United States, which use Live Scan, a fingerprinting service that checks for matches in FBI and state databases, Uber's background check policy in Texas has been critiqued for not being as safe.[205] The only cities where Uber mandates fingerprint scanning are New York, where a fingerprint scan is needed to apply for a Taxi and Limousine Commission license, and Houston, which has required fingerprint scans for ride sharing drivers since 2014. However, Uber claims that the extra step of fingerprinting drivers in Houston has slowed down driver sign-ups, and as a result wait times are on average 35% longer.[205] In May 2016, Uber stopped operations in Austin, Texas after the city "...voted 56% to 44% against Proposition 1, which would have allowed ride-hailing companies to continue using their own background check systems." Instead, Uber and other ride sharing companies would have to convert to fingerprint scanning, which is far more expensive and even less effective according to some.[206] Uber "argues that the fingerprint databases are often out of date and biased against minorities who have been fingerprinted but never charged with a crime."[207]

California

Lawsuit regarding denial of services to blind passengers

A lawsuit was filed in the U.S. state of California on September 9, 2014 by the state chapter of the National Federation of the Blind, in response to the reported denial of services to "more than 30" blind customers—the lawsuit claimed that the conduct was in violation of the Americans with Disabilities Act of 1990 and California state law. The Washington Post published a direct quote from the complaint, in which the Federation claims that its constituency "face the degrading experience of being denied a basic service that is available to all other paying customers." Two cases were described in the Post article: First, a California UberX driver allegedly stored a service dog in the trunk of his vehicle and refused to acknowledge the blind passenger's concern upon the latter's realization of what had occurred; second, a driver allegedly cursed at a blind passenger during a verbal exchange, in which the latter was explaining the nature of the guide dog. According to the complaint, the driver suddenly accelerated, and nearly injured the dog, while also striking the passenger's blind friend with an open car door.[208] Uber responded to a number of blind passengers who reported their experiences, stating that since Uber drivers were independent contractors, the company was unable to oversee their conduct. The Federation replied in a public statement that Uber closely monitored its drivers' work practices through the Uber app, that Uber advised blind passengers to notify drivers about their guide animals in advance, and that the Federation was proceeding with the filing of the lawsuit after Uber refused to enter into a negotiation with them to resolve the issue.[208]

Philadelphia, Pennsylvania

In December 2014, Checker Cab Philadelphia and 44 other taxi companies in Philadelphia, Pennsylvania filed a lawsuit alleging that Uber was operating illegally in the city.[209][210] On March 3, 2015, U.S. District Judge Nitza I. Quinones Alejandro denied a motion for a preliminary injunction against Uber.[211] In January 2016, a $1.5M lawsuit was filed against Uber in Philadelphia, Pennsylvania, by Sergei Lemberg on behalf of Philadelphia taxicab medallion owners. The suit claimed that Uber engaged in tortious interference with a prospective business advantage and engaged in false advertising under the Lanham Act.[212] The case was dismissed in August 2016.[212]

Upstate New York

In February 2017, the New York Senate approved legislation that allowed ride sharing companies to operate in upstate cities. The bill sponsored by state Sen. Jim Seward, who chairs the Senate Insurance Committee, passed by a 53-5 vote.[213] In June 2017, Uber and other ride sharing companies like Lyft became available to the rest of New York State.[214][215]

Criticism

Protests

Uber drivers on strike at Montparnasse, Paris, February 3, 2016
A protest against Uber by taxi drivers
A protest against Uber in Portland, Oregon in January 2015
Taxi company protesting against Uber – Budapest, January 18, 2016

Uber has been the subject of protests and legal action from – among others – taxi drivers and taxi companies around the world. These groups allege that Uber bypasses local licensing and safety laws and amounts to unfair competition.[216] Taxi drivers in London, Berlin, Paris and Madrid staged a large-scale protest against Uber on June 11, 2014.[217] In some countries, Uber drivers were also targets of attacks by taxi drivers.

On January 13, 2014, cab drivers in Paris attacked an Uber driver's car near Charles de Gaulle Airport, protesting competition from the transportation startup.[218] On June 11, 2014, in a concerted action, taxis blocked roads in major European cities in protest against what they perceive as a threat to their livelihoods from companies such as Uber. The cabbies contended that Uber and similar smartphone app-based services have an unfair advantage because they are not subject to the same kinds of fees and regulations placed on taxis.[219][220] On June 25, 2015, cab drivers in Paris "locked down" Paris in an anti-Uber protest.[221] Musician Courtney Love got caught in the protest and live tweeted as her Uber cab was violently attacked and she and her driver were held hostage.[222]

On March 22, 2016, thousands of taxi drivers in Jakarta demonstrated against Uber and a similar service, Grab. Several places were targeted during the protests, including the Indonesian Presidential Palace, the People's Council Building, and the Ministry of Communication and Informatics central office.[223] Taxi drivers accused that Grab and Uber were causing them to receive smaller daily incomes due to the rising number of app users. The demonstrators also demanded that the government ban the apps and issue a governmental decree concerning this problem.[224]

On July 24, 2015 a thousand taxi drivers in Rio de Janeiro blocked traffic during the morning rush hour protesting Uber's expansion there. (Lawmakers have voted to ban Uber in São Paulo and Brasilia.).[225]

On November 26, 2015 an Uber driver was beaten by taxi drivers in Brazil, and similar attacks followed.[226]

On August 21, 2015, Uber started operations in Costa Rica and multiple Uber drivers were immediately attacked by taxi drivers.[227]

In Cape Town, South Africa on June 3, 2016 metered taxi drivers blockaded the road to the city's airport and forced passengers out of vehicles while attacking Uber drivers.[228]

In January 2017, the New York City Taxi Workers Alliance called for a halt in pickups from JFK Airport in New York City in response to Donald Trump's Executive Order 13769, which banned entry to the United States from citizens of 7 predominately Muslim countries.[229] Uber users accused the company of attempting to profit from the strike and were angered that Uber did not halt pickups from JFK Airport in solidarity.[230] Some users deleted the Uber app from their phones.[230][229] Kalanick responded by signing an open letter to President Donald Trump that requested he rescind his executive order.[231]

Alleged cancellation of orders to disrupt competitors

Uber issued an apology on January 24, 2014, after documents were leaked to the Valleywag and TechCrunch publications saying that, earlier in the month, Uber employees in New York City deliberately ordered rides from Gett, a newly established competitor, only to cancel them later. The purpose of the fake orders was two-fold: wasting drivers' time to obstruct legitimate customers from securing a car, and offering drivers incentives — including cash — to join Uber.[232] Uber later issued a statement about the incident on its website.[233]

In August 2014, Lyft, another ridesharing service, reported to CNNMoney that 177 Uber employees had ordered and canceled approximately 5,560 rides since October 2013, and that it had found links to Uber recruiters by cross-referencing the phone numbers involved. The CNN Money report identified one Lyft passenger who canceled 300 rides from May 26 to June 10, 2014, and who was identified as an Uber recruiter by seven different Lyft drivers. On this occasion, Uber did not issue an apology, but suggested in a statement on its website that the recruitment attempts were possibly independent parties trying to make money.[234][235] A Lyft spokesperson stated to CNN Money: "It's unfortunate for affected community members that they have used these tactics, as it wastes a driver's time and impacts the next passenger waiting for that driver."[234]

Operation SLOG

In August 2014, the online publication The Verge reported that a secret Uber project, called "Operation SLOG" – which recruits members with the assistance of TargetCW, a San Diego, California-based employment agency – appeared to be an extension of the company's activities in relation to Lyft. As reported, on July 9, 2014 following Lyft's expansion into New York City, Uber sent an email offering what it called a "huge commission opportunity" to several contractors based on the "personal hustle" of the participants.[236] Those who responded met with Uber marketing managers who attempted, according to one of the contractors, to create a "street team" to gather intelligence about Lyft's launch plans and recruit their drivers to Uber. Recruits were given two Uber-branded iPhones (one a backup, in case the person was identified by Lyft) and a series of valid credit card numbers to create dummy Lyft accounts.[236] After being contacted for comment, Target CW warned its contractors against talking to the media, stating that it represented a violation of a non-disclosure agreement they signed.[236]

Aggression towards local officials and journalists

An Uber executive is said to have advocated hiring investigators to "dig up dirt" on journalists who criticize them.[237] Portland, Oregon's transportation commissioner called Uber management "a bunch of thugs".[238] A commissioner in Virginia who opposed Uber was flooded with emails and calls after Uber distributed his personal contact information to all of its users in the state.[239]

At a private dinner in November 2014, Emil Michael, senior vice president of Uber, suggested that Uber hire a team of opposition researchers and journalists, with a million-dollar budget, to dig into the personal lives and backgrounds of media figures who reported negatively about Uber. Specifically, he targeted Sarah Lacy, editor of the technology website PandoDaily, who has accused Uber of sexism and misogyny.[240] The controversy made national news and stirred criticism against Uber. "The comments, reportedly made by senior vice president for business Emil Michael at a New York dinner attended by BuzzFeed editor-in-chief Ben Smith," wrote a Washington Post columnist, "ignited a powder keg of criticism about a company already perceived as cut-throat – landing Uber on the front pages of The Washington Post, USA Today and The New York Times."[241] Michael issued a public apology.[242] Later, he sent an email to Lacy: "I was at an event and was venting, but what I said was never intended to describe actions that would ever be undertaken by me or my company toward you or anyone else. I was definitively wrong and I feel terrible about any distress I have caused you."[243]

Speaking with the Australian media publication The Conversation on November 20, 2014, European PR agency FINN partner Raf Weverbergh said that Uber does not realize exactly how upset journalists are in the wake of the Michael incident. On the same date, the publication reported that more journalists deleted their Uber apps. Uber's Brisbane spokesperson stated that journalists will not be investigated by the company in the Australian state of Queensland, in light of the legislative difficulties that were occurring at the time.[244]

Evasion of law enforcement operations using Greyball

Uber developed an internal tool called Greyball which uses data collected from the Uber app and by other means to avoid giving rides to certain individuals. The tool was used starting in 2014. By showing "ghost cars" driven by fake drivers to the targeted individuals in the Uber app, and by giving real drivers a means to cancel rides requested by those individuals, Uber can avoid operations by known law enforcement officers in areas where its service is illegal. An investigative report by The New York Times published on March 3, 2017 described Uber's use of Greyball in 2014 to evade city code enforcement officials in Portland, Oregon, Australia, South Korea, and China.[245] In response to the report, Uber stated that Greyball was designed to deny rides to users who violate Uber's terms of service, including those involved in sting operations.[245][246] According to Uber, Greyball can "hide the standard city app view for individual riders, enabling Uber to show that same rider a different version."[247] Uber has reportedly used Greyball to identify government officials through such factors as whether a user frequently opens the app near government offices.[245] Uber employees also reviewed social media profiles to identify law enforcement personnel.[245] In the days following the publication of the New York Times story, Uber admitted that it had used Greyball to thwart government regulators,[248] and it promised to stop using the tool for that purpose.[247]

In May 2017, the United States Department of Justice opened a criminal investigation into Uber's use of Greyball to avoid local law enforcement operations.[249][250][251]

User privacy

Kalanick received a letter, dated November 19, 2014, from U.S. Senator Al Franken, Chairman of the United States Senate Judiciary Subcommittee on Privacy, Technology and the Law, over user privacy. In addition to a list of 10 questions, Franken stated that the company had a "troubling disregard for customer privacy" and that he was "especially troubled because there appears to be evidence of practices inconsistent with the policy [Uber spokesperson] Ms. Hourajian articulated" and that "it appears that on prior occasions your company [Uber] has condoned use of customers' data for questionable purposes." Franken concluded his letter by asking for a response by December 15, 2014.[252] Concerns have been raised about internal misuse of the company's data, in particular the ability of Uber staff to track the movements of its customers, known as "God View". In addition to the aforementioned use of the service to track journalists and politicians, a venture capitalist disclosed in 2011 that Uber staff were using the function recreationally and viewed being tracked by Uber as a positive reflection on the subject's character.[253] An individual who had interviewed for a job at Uber said that he was given unrestricted access to Uber's customer tracking function as part of the interview process, and that he retained that access for several hours after the interview ended.[254] On February 27, 2015, Uber admitted that it had suffered a data breach more than nine months before. Driver names and license plate information on approximately 50,000 drivers were inadvertently disclosed.[255] Uber discovered this leak in September 2014 but waited more than five months to notify the people affected.[256]

Safety concerns

Safety concerns have been raised after Uber drivers were reportedly involved in sexual assault against passengers, as well as other crimes. On the other hand it is unclear if the service is less or more safe than regular taxi cabs, as major cities don't have much data on taxi-related incidents.[257]

Drivers involved in crimes

In March 2016, two Uber drivers in East Lansing, Michigan, were arrested on sexual assault charges stemming from incidents where they inappropriately touched female Michigan State University students.[258]

In February 2016, Uber's vetting procedures came under scrutiny once more following the 2016 Kalamazoo shootings, purportedly committed by Jason Dalton, an Uber driver in Kalamazoo, Michigan. Dalton is believed to have been driving for Uber at the time while allegedly conducting a shooting spree that left six people dead and two others wounded. This led to a seven-hour manhunt for the suspect, during which it is believed that Dalton continued to drive and accept fares. Uber was aware of the issues with Dalton's driving skills, having received multiple complaints, though critics agree that Dalton would not have raised any red flags since he did not have a criminal record.[259]

Drivers using the app while driving

Concerns also arose regarding the manner in which the Uber app notifies drivers about new requests for pick-up from customers and how the drivers must respond to such requests.[260] When a customer makes a request, drivers are notified on an official Uber mobile app and are provided the customer's location. In order to accept the request, the driver has approximately 15 seconds to tap the phone to accept the request.[261] An Uber driver reported that drivers can be temporarily suspended for ignoring these requests. Deborah Hersman of the National Transportation Safety Board criticized the 15-second system, saying that it presents a significant distraction to drivers, as drivers are financially motivated to respond to fares while driving. In response, Uber has stated that the app "was designed with safety in mind," and that drivers are not required to physically look at the device to accept a fare.[260]

Allegations of inadequate background checks on drivers

On December 31, 2013, Uber driver Syed Muzaffar ran over and killed six-year old Sofia Liu in San Francisco, severely injuring her mother and brother in the same incident. The driver was logged in and waiting for a fare, but not carrying a passenger, at the time of the accident. Liu's family filed a wrongful death claim against Uber, claiming that this made Uber responsible for the driver's actions.[262][263][264] Uber deactivated Muzaffar's account after the accident. Syed Muzaffar was arrested on the scene and was charged with misdemeanor vehicular manslaughter on December 8, 2014.[265] Uber said in a written statement that all drivers had undergone a "stringent" background check, and Muzaffar's was "clear". Muzaffar had been arrested in Florida in 2004 on a reckless driving charge, but California law prohibited private background check services like Uber's from reporting arrests and crimes more than seven years old.[266] Syed Muzaffar's vehicular manslaughter trial was scheduled to start August 5, 2015. In July 2015, Uber reached a settlement with the family for an undisclosed sum.[267]

Lawsuits

In January 2017, Uber agreed to pay $20 million to the US government to resolve accusations by the FTC of having misled drivers about potential earnings.[268][269][270]

According to a February 2017 lawsuit filed by Waymo, owned by an affiliate of Google, ex-Google employee Anthony Levandowski allegedly "downloaded 9.7 GB of Waymo’s highly confidential files and trade secrets, including blueprints, design files and testing documentation" before resigning to found Otto, which was purchased by Uber.[271][272] A ruling in May 2017 required Uber to return documents to Waymo.[273]

In 2017 a suit was filed against Uber alleging that Uber uses "sophisticated software" to defraud both drivers and passengers. According to the suit, under the upfront pricing model, when a passenger is quoted a price the app shows a longer more expensive route, meanwhile would-be drivers are shown a shorter cheaper route. The passenger is charged for the more expensive route, while the driver is paid the cheaper, with Uber pocketing the difference.[274]

Workplace culture

In early 2017, Uber was described by insiders as having an "asshole culture".[275][276] Uber's organizational culture was described as one in which employees are lauded for bringing incomplete and unreliable solutions to market in order for Uber to appear to be an innovator and winner.[275] In a corporate culture likened to the novels and TV series A Game of Thrones, in which rivals for the throne vie for power, the company encourages aggression[277] and "back stabbing" (criticizing) of co-workers, in which peers undermine each other and their direct superiors to climb the corporate ladder.[275][277]

Some human resource managers in the software industry see Uber as a potential black mark on the resumes of ex-Uber employees, with one industry manager saying, in reference to “If you did well in that environment upholding those values, I probably don’t want to work with you.”[275] Some Silicon Valley computer programmers labeled Uber as "poisonous" and encouraged any friends who work for the company to quit.[278]

Criticism of Kalanick

In February 2017, a video was released where Kalanick was shimmying between two women in an UberBLACK, before arguing with an Uber driver during a heated debate.[279][280]

In March 2017, Uber VP of Business, Emil Michael contacted Kalanick's ex-girlfriend in an attempt to silence her and get her to hide a human resources complaint. This backfired, with her being sourced as present during an executive team outing with Kalanick, where Michael, and four more Uber managers selected numbered women at a Korean hostess bar, prompting a sexism complaint by the female manager who attended.[281][282]

Sexual harassment allegations and management shakeup

On February 20, 2017, former Uber engineer Susan J. Fowler stated that she was sexually harassed by a manager and threatened with termination by another if she continued to report the incident. CTO Thuan Pham had knowledge of Susan Fowler's sexual harassment allegation at Uber and her manager's threatened retaliation, and did nothing; Kalanick was also reportedly aware of the harassment issues.[283][284] Uber hired former attorney general Eric Holder to investigate the claims.[285] Arianna Huffington, a member of Uber's board of directors, also oversaw the investigation.[286] On February 20, 2017, Kalanick led a meeting with employees that was described by the participants as honest and raw.[287]

On February 27, 2017, Amit Singhal, Uber's Senior Vice President of Engineering, was forced to resign after it was revealed that he failed to disclose a sexual harassment claim against him that occurred while he was the Vice President of Google Search.[288][289][290] New York Times journalist Farhad Manjoo wrote that the scandal is expected to be a "watershed" for women engineers.[291] Analysts expected that the sexism claims could damage Uber's brand and delay its initial public offering.[292]

On June 6, 2017, Uber announced that it fired over 20 employees as a result of the investigation.[293][294] On June 13, 2017, Kalanick took an indefinite leave of absence from Uber.[295][296] On June 20, 2017, after multiple shareholders reportedly demanded his resignation, Kalanick resigned as CEO.[297][298]

2014 reviews by the Better Business Bureau

In October 2014, Uber received an "F" rating from the Better Business Bureau (BBB), which cited complaints over unexpectedly high charges and lack of response to customer complaints.[299][300]

Awards

In 2013, USA Today named Uber its tech company of the year.[301]

See also

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