Has Uber’s day of reckoning arrived?

by Sean Riley


Uber has been burning capital for some time now. This includes not just real money but also that intangible commodity known as goodwill.

In recent weeks, Uber has taken the sort of beating that most taxi companies get only from a poorly maintained city street. A string of embarrassing disclosures has led some longtime company observers to wonder how long the ride-hailing service will be around — or at least how long co-founder Travis Kalanick will be its chief executive.

“Uber is doomed,” Jalopnik pronounced last month in an article explaining why the money-losing venture would end up in a ditch. And that was before the run of bad news accelerated. The Atlantic’s CityLab also sees a cloudy future for Uber, but not as dark as others may forecast. Among the painful disclosures in recent weeks:

  • Uber developed a secret weapon to evade regulators. Known as “Greyball,” the software was designed to fool hostile traffic officials into thinking they were hailing rides through the app when in fact Uber was making sure that drivers avoided picking up undercover agents who might be part of a sting. On Wednesday, the San Francisco-based company said it would stop using the tool to thwart regulators. Use of the software was first reported by the New York Times.
  • Former employees say that Uber, which launched a self-driving vehicle project in San Francisco last year without the approval of California state regulators, later blamed human drivers for serious lapses caused by its technology, the Times also reported. Citing accounts from former employees and Uber documents, the news organization said the company’s autonomous cars blew through six red lights because of flaws in its mapping technology.
  • Kalanick received the sort of publicity no one would want after Bloomberg published a video of the CEO arguing with one of his drivers about pricing policy. “I lost $97,000 because of you. I’m bankrupt because of you,” the driver says in the video. Kalanick’s temper heats up as the exchange continues. “You know what, some people don’t like to take responsibility for their own,” Kalanick says in the video. “They blame everything in their life on somebody else. Good luck!”

The argument — which was captured by a dash cam — went viral, leading Kalanick to issue an apology later.

  • A self-driving car company that had been created by Google filed a lawsuit accusing Uber of stealing technology. The lawsuit, filed by Waymo, says a former tech wiz who now works for Uber raided his former employer’s servers before leaving.
  • A barrage of stories suggesting that Uber has fostered a male-dominated libertarian corporate culture that Ayn Rand might find creepy and over-the-top. Susan J. Fowler, a former site-reliability engineer, said in a blog post last month that sexual harassment was common and sometimes winked at by higher-ups. The company’s frat house rep has become so well known that former Uber employees now have to “prove” they’re not jerks, according to an account in the Guardian.

For some, Uber’s turnabout is the stuff of Greek tragedy, a form of divine justice directed toward a company whose credo has been growth at all costs, even if it meant breaking all the rules.

“It’s sort of the culture that got them there,” said Harry Campbell, a ride-hailing driver who runs the Rideshare Guy blog. Now, many people are acting as if they’re not so sure they like what they used to cheer on, back in the days when Uber was the upstart overturning the taxi and limousine business city by city, before the underdog became the uber-dog.

Campbell said the two most devastating stories in the recent cycle of bad press for Uber are the sexual harassment allegations and the dash cam video — and that might be enough to knock any company off balance.

“Now, with the pile-on, it shows it’s more systemic,” he said.

Steven Hill, who wrote about Uber in his book about the sharing economy, compared Uber’s alleged deception about its autonomous vehicles to the practices of Big Tobacco. Uber is betting big on developing an autonomous fleet of driverless taxis, but it has also been accused of deceptive claims about its self-driving program before. Last September, Uber launched a self-driving demonstration in Pittsburgh that was designed for maximum media attention. It was supposed to show that the company was making progress in its plan to put a fleet of autonomous vehicles on the road. [MORE]