Speaker 1: Eric. On October three, something important was happening at Uber's
Speaker 1: headquarters in San Francisco. Yeah, they had sort of a
Speaker 1: brawler of a board meeting after sort of weeks of
Speaker 1: negotiations and now what nine months of trouble and trials
Speaker 1: and tribulations. On the table is a massive ten billion
Speaker 1: dollar potential investment from soft Bank, the Japanese technology giant
Speaker 1: run by the very shrewd Masa Yoshi Son. This is
Speaker 1: the deal that's supposed to sort of heal all wounds,
Speaker 1: somehow reform governance and just somehow make peace. So this
Speaker 1: is not just an investment, This is about healing the
Speaker 1: wounds of the past. Yeah, it's it's the kitchen sink,
Speaker 1: just sort of of reforms to try and prepare the
Speaker 1: new CEO, Dara Kazra Shah. He to sort of empower
Speaker 1: him to actually run the company and not have all
Speaker 1: this in fighting constantly. I am Brad Stone and I'm
Speaker 1: a Mary Newcover. And this week on Decrypted, we're bringing
Speaker 1: you an update on Uber, which was the ultimate Silicon
Speaker 1: Valley success story just a few months ago. But as
Speaker 1: you probably know, a series of high profile crises have
Speaker 1: brought this once mighty company to its knees. Today, Uber
Speaker 1: is facing five criminal probes from the Justice Department on
Speaker 1: topics ranging from bribery to price discrimination to theft of
Speaker 1: intellectual property. There's also facing dozens of civil lawsuits, including
Speaker 1: one from Alphabet, the parent company of Google, that's set
Speaker 1: to go on trial in December. So we'll ask how
Speaker 1: things that Uber went so badly wrong, and we'll introduce
Speaker 1: you to two Uber executives who behind the scenes, signed
Speaker 1: off on and supervised some of the company's most controversial programs. Finally,
Speaker 1: as a new CEO takes the reins, we'll see what
Speaker 1: lies ahead for the company. Stay with us. So, Eric,
Speaker 1: we're gonna work our way up to this portentous board
Speaker 1: meeting on October three. But you know, first, Uber goes
Speaker 1: into this moment with a reputation as an absolute corporate pirate, right,
Speaker 1: a lawbreaker. How did it develop that reputation in the beginning?
Speaker 1: Travis Kalenik, who is Uber CEO and is this fighter
Speaker 1: and sort of paranoid competitive guy, like, that's a deserved reputation.
Speaker 1: But in the beginning he was saying, oh, everybody should
Speaker 1: follow the law and not break the rules. Right, he
Speaker 1: was faced in two thousand twelve, after they had operated
Speaker 1: for a few years as a very legal black car company.
Speaker 1: By some other companies, Lift among them, that introduced the
Speaker 1: idea of ride sharing. Anybody could offer a ride in
Speaker 1: their own car, right, and Uber was opposed to that
Speaker 1: until they realized that regulators weren't going to do anything,
Speaker 1: and so that they were gonna lose out to this
Speaker 1: cheaper service and that they needed to take action. Now,
Speaker 1: around this time, Travis hires his really his corporate attorney, Sally.
Speaker 1: You tell us about her and why she's important. Yeah,
Speaker 1: she's like a litigator, like from law firms. She'd been
Speaker 1: there thirteen years, she'd made partner. She didn't really think
Speaker 1: she was gonna leave, but then a friend showed her
Speaker 1: this random job at Uber in the very early days,
Speaker 1: and she sat down with Travis and then quickly joined
Speaker 1: the company. And one of her first challenges that the
Speaker 1: company is should Uber a black car service, be more
Speaker 1: like Lift and a company called sidecar in the ride
Speaker 1: sharing category. Ultimately, obviously they decided to get into that
Speaker 1: with Uber X. What were the implications of that decision?
Speaker 1: So Travis writes this white paper number one, you know
Speaker 1: where they say where there's a legal gray area where
Speaker 1: the law is enforced. We're going to take that as
Speaker 1: a tacit endorsement that it's okay they've deleted that block post.
Speaker 1: I think it's where that's That's all you need to
Speaker 1: know on it um. But that idea that they would
Speaker 1: do what they wanted as long as somebody was stopping
Speaker 1: them define the company right. It meant that they were
Speaker 1: going to really challenge taxi regulations all around the world.
Speaker 1: And it also meant that they were going to get
Speaker 1: into a very competitive environment with a lot of down
Speaker 1: pricing pressure, which of course would have implications for all
Speaker 1: their drivers, would have implications for how they had to
Speaker 1: function as a competitor because they're competing basically in a
Speaker 1: modified environment. So we're in the year two thousand thirteen.
Speaker 1: Here uber X rolls out, and this is a period
Speaker 1: of hyper growth for the company. It's valued at seventeen
Speaker 1: billion dollars. It's expanding in cities every single week. We
Speaker 1: sort of thought this was coming, but now we know
Speaker 1: it's confirmed seventeen billion dollars, and there was a lot
Speaker 1: of competition to leave the rounds other investors in the round.
Speaker 1: Kleiner Perkins, Google Ventures, and low Ventures. Obviously, demand was
Speaker 1: very much there. Travis is a competitive guy, as we
Speaker 1: both know. What are some of the techniques he introduces
Speaker 1: back then to compete against companies like Lift. I mean,
Speaker 1: I think it's so funny that Uber is this quote
Speaker 1: unquote technology company, but it was really sort of fighting
Speaker 1: in the streets. And one of the key elements was
Speaker 1: this thing called slogging. You know, where they would have
Speaker 1: employees and this happened all over the world go and
Speaker 1: ride in a competitor's car and say hey, why don't
Speaker 1: you work for Uber? And you know, that's a very
Speaker 1: manual way to get new business. They would also say
Speaker 1: that their competitors did that to them as well. Yeah,
Speaker 1: I mean, it was sort of industry practice. But this
Speaker 1: is like the level of street fighting we're talking about.
Speaker 1: It's one to one, like spend employee time going to
Speaker 1: recruit individual drivers to get them on your team. So
Speaker 1: slogging may have been industry practice. But around this time,
Speaker 1: Uber starts to introduce other programs that are somewhat unique
Speaker 1: and perhaps ethically dubious. For the first time, you reported
Speaker 1: on one of those programs called surf Cam. There's another
Speaker 1: one called Hell doesn't sound so good. They're really good
Speaker 1: at naming. Really what what are? What were these things?
Speaker 1: They let Uber scrape their competitors API, which is a
Speaker 1: way of saying, okay, as a tech co'many you put
Speaker 1: out this information for people to sort of partner with you.
Speaker 1: Uber would abuse that information and use it to understand,
Speaker 1: you know, where a lift was it any given time,
Speaker 1: more in Southeast Asia, where grabs car was, or how
Speaker 1: how much they were being utilized, like, learn things about
Speaker 1: their competitors and what was the Hell program? Hell is
Speaker 1: the u S version of that. It's sort of a
Speaker 1: tongue in chic name. So Uber internally has Heaven, which
Speaker 1: is their sort of view of everything where all their
Speaker 1: cars are ating and given moment. So Hell is the
Speaker 1: version where they get to figure out where they're competitors
Speaker 1: cars are and you know, take advantage of that information.
Speaker 1: So now going back to sal you the in house lawyer,
Speaker 1: what is she thinking about all this? So the legal
Speaker 1: team gives sort of initial okays of you know, Hell
Speaker 1: and these other programs. They look at it and say,
Speaker 1: all right, you know, API scraping is okay within these parameters.
Speaker 1: But then the programs sort of go wild. By the
Speaker 1: way back into fourteen, these programs were still very secretive, right,
Speaker 1: nobody really knew about them. But what was starting to
Speaker 1: bubble up where some of these very bad incidents you
Speaker 1: know in ubers, including a sexual assault case in India.
Speaker 1: Think we would both argue that perhaps that was a
Speaker 1: little bit of a turning point for Uber's reputation, right, so,
Speaker 1: that a woman you know, was in an Uber and
Speaker 1: was raped by a driver. The driver was later convicted.
Speaker 1: It was a crazy story in India. The company, though
Speaker 1: internally handled it poorly. So at the time of this incident,
Speaker 1: Uber is consumed with the competitive environment and and somewhat grotesquely,
Speaker 1: you know, management thinks that this could be you know,
Speaker 1: a competitive tactic. This this sex crime by a rival
Speaker 1: in India. UM they they hire a firm to investigate it,
Speaker 1: and the firm obtains the medical records of the victim,
Speaker 1: and then maybe some Uber executives to get those medical records.
Speaker 1: That is, you know, just by any measure, grotesquely wrong. Right.
Speaker 1: This went to the top levels of the organization. I mean,
Speaker 1: Travis Kalenik was involved in sort of raising questions even
Speaker 1: after the woman s driver was convicted of the rape,
Speaker 1: about whether their competitor, Ola had set them up for this,
Speaker 1: and his top business executive in a close confidence on
Speaker 1: it of his Eric Alexander had the report at one
Speaker 1: point and was going around talking about the woman's very
Speaker 1: private rape report. And so that's continuing to haunt them,
Speaker 1: and there are questions now about how they got in
Speaker 1: the first place and whether they were in violation of
Speaker 1: you know, anti bribery laws. So Eric tell us more
Speaker 1: about Sally. You are are her and Travis kind of
Speaker 1: birds of a feather when it comes to pushing the
Speaker 1: boundaries of the law. She really has this funny moment
Speaker 1: where Travis tells her he wants her to be innovative.
Speaker 1: It really made her angry. In another interview, Uh sort
Speaker 1: of accounts, you know, playing tennis with her husband and
Speaker 1: getting this feedback that Travis wanted her to be innovative,
Speaker 1: and at the end of the match she's sort of,
Speaker 1: I guess, as exhausted as processed it and decides that
Speaker 1: you know, he's telling her that their their team can
Speaker 1: act differently than everybody else's legal team, that Uber can
Speaker 1: be creative in ways that other people won't, and that
Speaker 1: Basically she needs to sort of figure out how to
Speaker 1: make it possible for Uber to do all this stuff
Speaker 1: even when the law doesn't seem to be in their favor.
Speaker 1: By the way, I mean that in most cases was
Speaker 1: a successful approach. Right. If they hadn't pushed the boundaries,
Speaker 1: Uber never would have launched in cities like New York
Speaker 1: or London or San Francisco for that matter. Okay, so
Speaker 1: now I want to introduce another person in a position
Speaker 1: of authority at Uber. His name is Joe Sullivan. Most
Speaker 1: people have never heard of him, but he's a big
Speaker 1: tech figure. He worked at Hey pal eBay, he was
Speaker 1: the head of security for Facebook, and so Uber brings
Speaker 1: him in as his heavy hitter. But then his portfolio
Speaker 1: is like all the sketchy stuff, like all the dark
Speaker 1: arts of Uber is basically Joe Sullivan's organization. Yeah, you
Speaker 1: describe him in a in a recent story as running
Speaker 1: kind of a corporate spy agency inside Uber and all
Speaker 1: these programs that we've just talked about, these ethically dubious
Speaker 1: kind of monitor your rivals programs, Like hell, Joe runs those, right.
Speaker 1: Any program with idious sounding name was part of his organization.
Speaker 1: You know, one part of his fifdom was called competitive Intelligence.
Speaker 1: They called it coin that contained hell and other data
Speaker 1: scraping efforts. He ran SSG, which you know literally sounds
Speaker 1: like the KGB, which strategic services group, which would hire
Speaker 1: people to surveil competitors and their employees. Right, Uber had
Speaker 1: the head of its Chinese business who was the cousin
Speaker 1: to the head of its primary rivals business d D.
Speaker 1: And we reported in a recent story that you know,
Speaker 1: allegedly Joe's group had their own employee monitored because perhaps
Speaker 1: they were questioning her loyalty to the company. Yeah, they
Speaker 1: just want to make sure she didn't interfere with the
Speaker 1: deal and sort of help her cousin out right the
Speaker 1: deal where Uber sold its business to d D in China.
Speaker 1: But here's the key question, you know, which is to
Speaker 1: what extent did Uber's board know about all of these
Speaker 1: slightly nefarious activities. Certainly the board claims and not have
Speaker 1: known knowing Uber and Travis, they must have known that
Speaker 1: they were pushing the boundaries and then chose not to
Speaker 1: get into the specifics. I think that's how it's looking
Speaker 1: right now, and certainly on a lot of fronts, there's
Speaker 1: an effort from the board to say, we had no
Speaker 1: idea what was going on right now. Throughout this period
Speaker 1: of time around two thousand and fifteen, the company is
Speaker 1: growing by leaps and bounds. But we've been told that
Speaker 1: Sally You, the chief lawyer, is starting to get a
Speaker 1: little nervous and she cautions Travis. But you know, Travis headstrong,
Speaker 1: very competitive. He keeps pushing the boundaries of the law.
Speaker 1: Right in an all hands meeting to his employees, like
Speaker 1: lots of people there, he says they don't need to
Speaker 1: follow laws that aren't being enforced. He says, you know,
Speaker 1: we'll have to see what the regulators doing. If they're
Speaker 1: not doing anything to our competitors, we should push the
Speaker 1: boundaries too. And Sally's just like, you can't say that,
Speaker 1: Like she sends an email be like, you know, the
Speaker 1: message of compliance is very important here, and this is
Speaker 1: gonna matter if we face criminal investigations down the line,
Speaker 1: because if something individually does something bad, the whole company
Speaker 1: could be held responsible if we don't have a good
Speaker 1: corporate compliance culture. So, in other words, after a two
Speaker 1: year period of successful what they would call legal innovation,
Speaker 1: Sally You and Travis Klinik are on a collision course.
Speaker 1: By now, it's the summer of two thousand sixteen, and
Speaker 1: Uber is a huge company. It's raised twelve billion dollars.
Speaker 1: It's evaluation is an insane sixty nine billion dollars. And
Speaker 1: amidst all this kind of hype and energy, Uber very
Speaker 1: quietly changes the way it calculates fairs. So Uber announces publicly, Okay,
Speaker 1: we're gonna do upfront fars. We're gonna be super transparent,
Speaker 1: We're telling people beforehand how much we're charging you. But
Speaker 1: what they didn't really make clear publicly is that that
Speaker 1: also meant that they were going to start paying drivers
Speaker 1: in dependently from what they charged passengers, which made it
Speaker 1: possible for them to find all sorts of crafty ways
Speaker 1: to charge passengers more without paying drivers more. There is
Speaker 1: a federal statute called the Robinson Patment Act, which you know,
Speaker 1: forbids any kind of pricing discrimination. You know, to what
Speaker 1: extent is Uber wandering into this, you know, legally gray
Speaker 1: or even just a illegal territory? And what a sally
Speaker 1: you thinking about this? Well, they're being investigated for their
Speaker 1: pricing policy, so definitely wandered sufficiently for prosecutors to look
Speaker 1: into it. I think there are all sorts of questions.
Speaker 1: I mean, Uber's operating in physical locations, going from neighborhoods,
Speaker 1: you can imagine actual discrimination, not just pricing discrimination being
Speaker 1: an issue. So yeah, it's it's a big set of
Speaker 1: their troubles at this point. And then at the same time,
Speaker 1: as it is experimenting with some of these pricing tools
Speaker 1: with names like Casscade and Firehouse, Uber makes what I
Speaker 1: might argue is its biggest mistake yet, which is over
Speaker 1: the summer of two sixteen, it acquire fires a small
Speaker 1: autonomous car startup in San Francisco called Auto and Otto
Speaker 1: is run by a farmer, a very recently former Weymo
Speaker 1: division of Google executive named Anthony Lewandowski. In when they
Speaker 1: bought Auto, they seemed like geniuses, Like it looked like
Speaker 1: Uber was flying high. The valuation was super high. They
Speaker 1: just expanded their self driving car unit. It seemed like
Speaker 1: they were really on the path to do great things. Well,
Speaker 1: it was a bold move, right because it's not it's
Speaker 1: really not related to Uber's business, you know, And they say,
Speaker 1: we're going to get into deep tech and compete with Google.
Speaker 1: So they buy Auto, which is largely made up of
Speaker 1: former Google employees and run by a former Google employee,
Speaker 1: and that seems great. It's going quiet, quite quiet, and
Speaker 1: then all of a sudden, alphabet the barren company of Weymo.
Speaker 1: You know that Google. They have so many names over there.
Speaker 1: But you know, basically, Google sues Uber and a mega
Speaker 1: lawsuit and says you stole our trade secrets by buying
Speaker 1: this company, and it turns the attention to the question
Speaker 1: of okay, uh, Anthony Lewandowski, you know, it's still I
Speaker 1: guess allegedly had downloaded all these files from Google before
Speaker 1: he left. And the question that you know, Sally you
Speaker 1: must have been asking herself, is you know, how much
Speaker 1: did Uber know about the way in which Anthony Lewanowski
Speaker 1: had left Google? A lot? A lot. I mean, that's
Speaker 1: what we've been learning now that Uber. It wasn't like
Speaker 1: they bought the company and then they realized, oh crap,
Speaker 1: this guy might have stolen stuff from Google. It was, oh,
Speaker 1: it seems like he's taken He's told us that he's
Speaker 1: taken five hard disks of information. What do we do now?
Speaker 1: And Travis is like, no, we should definitely buy the company. Still,
Speaker 1: let's figure out how to protect ourselves. So to your
Speaker 1: point that Uber knew before they finalized the acquisition of Otto.
Speaker 1: They hired a forensics firm called Straws Friedberg, Right, And
Speaker 1: and Straws goes and tries to assemble a portfolio of
Speaker 1: all the information that Anthony has his team have from
Speaker 1: Google and kind of isolated, get it out of the company, right,
Speaker 1: The ideas of it never gets to Uber. We're fine,
Speaker 1: And I mean it was sort of you can read
Speaker 1: the report now and Lewandowski is literally like emptying the
Speaker 1: trash on his computer like the day of their meeting
Speaker 1: with him. It's just it's clear that the investigators themselves
Speaker 1: are sort of troubled by some of the activity when
Speaker 1: he's really supposed to try and hand everything over to
Speaker 1: them so they can sort of know about it and
Speaker 1: wall it off from Uber so that Uber can't get
Speaker 1: in trouble. And this is all happening very quietly over
Speaker 1: the summer and fall of two thousand and sixteen, so
Speaker 1: quietly that board member Bill Gurley from from Benchmark, one
Speaker 1: of Uber's investors, claims he doesn't even know about that. Right.
Speaker 1: He testified under oath that the board was never told
Speaker 1: about Uber's findings. Meanwhile, they'd approved all these contractual things
Speaker 1: like indemnifying Anthony Lewandowski for past bad acts. So hopefully
Speaker 1: we've laid the groundwork here for what then happens. In
Speaker 1: early two thousand and seventeen. You know, Donald Trump has
Speaker 1: been elected. It's sort of different political environment that sends
Speaker 1: on Silicon Valley, and it's in that environment that we
Speaker 1: start to see the delete Uber hashtag. Susan Fowler, a
Speaker 1: former Uber employee, writes a very critical blog post of
Speaker 1: of what she called the misogynistic and harassing culture for women,
Speaker 1: and one by one, a rough week for Uber appears
Speaker 1: to be getting rougher. The New York Times is reporting
Speaker 1: Uber you use software to elude authorities in cities where
Speaker 1: the ride hailing service is not yet approved by using
Speaker 1: the program known as gray Ball. And amid all these crises,
Speaker 1: all these controversies, a video emerges, a very unflattering video
Speaker 1: of Travis Klink. It's so funny because it's so mundane
Speaker 1: in some ways. I mean, Travis is just bopping around
Speaker 1: in the back of the car with these two women
Speaker 1: and having sort of mild conversation, and then the women
Speaker 1: get out of the car and the driver sort of
Speaker 1: starts interacting Travis, and Travis opened the conversation and by
Speaker 1: the end of it they're having this fight where Travis
Speaker 1: is swearing and it's just very unco like and also
Speaker 1: it just sort of shows is sort of lack of
Speaker 1: compassion for one of his drivers. But people are not
Speaker 1: trust in you anymore. Do you think people would blank
Speaker 1: cards anymore? I lost plenty seven thou dollars because of you.
Speaker 1: I bankrupt because of you. Look, he does, he does,
Speaker 1: he does? You keep changing every day? What you keeping?
Speaker 1: What have I changed about black? What have you changed
Speaker 1: the whole business? What you dropped the prices on black? Yes?
Speaker 1: You did? Did with twenty dollars. He started with twenty dollars.
Speaker 1: You know how much is the mile now to you
Speaker 1: know what? What? Some people don't like to take responsibility,
Speaker 1: to take something playing everything car good luck. And then
Speaker 1: what happens is earlier in the summer, you know, all
Speaker 1: the scruise and t Havis's position becomes basically untenable. The board,
Speaker 1: led by you know, the investors at a benchmark who
Speaker 1: have claimed to be surprised by all the things that
Speaker 1: we've talked about. Uh, you know, they confront him in
Speaker 1: a hotel in Chicago and they tell him that his
Speaker 1: his tenure as CEO is over. So Eric back to
Speaker 1: the board beating on a Cobra third. In light of
Speaker 1: all of these scandals, it's it's not that surprising that
Speaker 1: the board wants to further limit Travis Kalinic's power. Right,
Speaker 1: he's no longer CEO, but he's on the board. He
Speaker 1: controls two other seats. Maybe one day he'll come back.
Speaker 1: But this is Silicon Valley, right, We revere the founder,
Speaker 1: We revere the founding CEO, which Travis basically is well.
Speaker 1: Part of the fight here is just how bad was
Speaker 1: it uber. I think they're different camps. There's sort of,
Speaker 1: you know, the benchmark camp, which is it was terrible,
Speaker 1: like we are being sued by Alphabet like everything is.
Speaker 1: And then there are board members who want to sort
Speaker 1: of saying, you know, it's sort of bad. We got
Speaker 1: rid of him, but he can stick around. I think
Speaker 1: another key point is that when Travis resigned, he agreed
Speaker 1: to hand over a lot of his power over these
Speaker 1: board seats, and then he renegged on the deal like
Speaker 1: in the other aspect. And this is a little technical,
Speaker 1: but it's it's true. At a lot of Silicon Valley companies.
Speaker 1: There are different classes of stock, right, and Travis owns
Speaker 1: shares of stock that come with super voting powers, and
Speaker 1: the board at this momentous meeting is trying to get
Speaker 1: rid of those and limitous power in that way too.
Speaker 1: And ahead of the board meeting, fearing that the board
Speaker 1: was gonna take away a lot of his power, it
Speaker 1: Travis filled his two board seats suddenly, uh John Thane
Speaker 1: and Ursula Burns to you know, very senior former executives
Speaker 1: one Merrill Lynch, one Xerox. But he fills them, sort
Speaker 1: of proving the impulsiveness and sort of power of this
Speaker 1: ousted founder that wasn't going to go quietly. And and
Speaker 1: this is a very fractis board, right. You have Travis
Speaker 1: and some of his supporters. I think Ariana is still
Speaker 1: somewhat in as camp You have you know, the first
Speaker 1: seat EO. Ryan Graves and the one of the co founders,
Speaker 1: Garrett camp Um. But you've got Benchmark, you know, You've
Speaker 1: got David Trujillo at TPG. I mean, yeah, there are
Speaker 1: a lot of characters, and it was an eleven person
Speaker 1: board before this meeting started, and Darak shah He the
Speaker 1: new CEO who's right in the middle and really trying to,
Speaker 1: you know, get rid of all this divisiveness and just
Speaker 1: safeguard the future for the company. Dark as are Shah
Speaker 1: He the new CEO who would come over from Expedia,
Speaker 1: the dark horse candidate who is now controlling everything. He's
Speaker 1: doing a pretty good job of playing the convener, like
Speaker 1: getting everybody on the same page. Even as he's one
Speaker 1: of the authors of these reforms. They're gonna live a
Speaker 1: limit Travis's power. His appointment surprised almost everyone. Right the
Speaker 1: names we were hearing were Meg Whitman from HP or
Speaker 1: Jeff Emil formerly from g e U Dara. You know,
Speaker 1: as a as a professional CEO, he ran Expedia for
Speaker 1: many years. He feels like an adult frankly in this
Speaker 1: scenario for sure. Yeah, And I think he wants to
Speaker 1: make sure that it while he's new and he has
Speaker 1: all his support and good press and everything, that he
Speaker 1: can sort of get the company's governance under control. So
Speaker 1: that meant, you know, moving the company to one share,
Speaker 1: one vote, having a lot of new independence board members,
Speaker 1: so that the power of Travis spord members and the
Speaker 1: current board that's dysfunctional would be deluded. And meanwhile, they
Speaker 1: needed to figure out how to integrate soft bank into
Speaker 1: the company if they're going to make this deal. And
Speaker 1: before we get to the finalization on the soft bank decision,
Speaker 1: as if this situation needed to be any more complicated.
Speaker 1: In September, the city of London, one of Uber's biggest markets,
Speaker 1: basically refuses to renew Uber's license to operate there. This
Speaker 1: is Dara's basically first big test as the CEO of
Speaker 1: of Uber, and Dara went to London. He met with
Speaker 1: the head of TfL Transport for London, and he talked
Speaker 1: to the mayor and afterwards they were saying nice things
Speaker 1: about Uber. Was sort of remarkable. So let's finally get
Speaker 1: back to a soft bank. The sort of underlying question
Speaker 1: of this episode. They're offering a ten billion dollars a
Speaker 1: little bit to Uber, but also many to the early
Speaker 1: investors and employees to give them some liquidity. It's a
Speaker 1: huge sum of money. Uber doesn't really need the money, right,
Speaker 1: so this isn't really about Uber getting new money. Uber
Speaker 1: is getting a billion dollars new which for the company
Speaker 1: was like, whatever, we've raised more than fifteen billion, what's
Speaker 1: really interesting, here is the other nine billion, which is
Speaker 1: buying out the existing shareholders. Fine, it's like a mini
Speaker 1: I p oh. It's going to be the largest if
Speaker 1: this thing finishes, the largest private stock sale ever. So
Speaker 1: it is gonna be a huge cash change of hands.
Speaker 1: And it's all happening sort of in this negotiated private way,
Speaker 1: not in an I P O. Right, and it has
Speaker 1: so many implications for governance of the company, Travis's role,
Speaker 1: the future of Uber. What does the board decide? So
Speaker 1: the board up until like this Tuesday meeting, they're like
Speaker 1: negotiating their writing things throughout the night, tweaking provisions, and
Speaker 1: so finally, I mean they all unanimously agree because they
Speaker 1: can see the right on the wall. I mean, I
Speaker 1: think Dara Benchmark, the people who wanted to sort of
Speaker 1: rain in Travis got what they wanted here. They moved
Speaker 1: to one share, one vote, But Travis got enough concessions
Speaker 1: from the original proposal that he looked pretty good too.
Speaker 1: We got to keep his two board members, and they
Speaker 1: agreed to move the board to seventeen people. You know,
Speaker 1: I I don't know how many of Uber's problems this solves, right,
Speaker 1: There's still been a lot of turnover of topics X.
Speaker 1: I would have to imagine moral is pretty low, and
Speaker 1: a lot of Uber's, you know, biggest competitors like Lift,
Speaker 1: like Ola on India, Grab in Southeast Asia have used
Speaker 1: this period of incredible turmoil to raise money themselves and
Speaker 1: to improve their their positions on the market. Yeah. I
Speaker 1: think this is sort of the baseline thing that Dara
Speaker 1: needed to do. This needs to get done just so
Speaker 1: he doesn't have Travis trying to come back, so the
Speaker 1: boards more functional, their independence, so that people can get
Speaker 1: liquidity and sell some of their shares. But there's, like
Speaker 1: you said, there's so much more that they need to do.
Speaker 1: They're gonna have. They have to fight five criminal probes
Speaker 1: like at least yes yeah so, and the Waymo lawsuit
Speaker 1: and many many other private lawsuits. And it was just
Speaker 1: reported that Google wanted a billion dollars to settle that.
Speaker 1: So it's it doesn't stop. There's a lot of problems
Speaker 1: for him to solve. And to that point, are legal
Speaker 1: guardians at Uber, Sally you and Joe Sullivan. What has
Speaker 1: become of them? So Joe is still there the board
Speaker 1: in the investigation into his team is ongoing. Sally is
Speaker 1: on the way out. I mean she's she's stepping away.
Speaker 1: Dara is looking for a general counsel right now to
Speaker 1: be interesting to see, and she's helping with the process, yes,
Speaker 1: but I think she's been alienated from the company a
Speaker 1: little bit here. And I mean they know they need
Speaker 1: a new lawyer, but I think it's it's gonna be
Speaker 1: a hard job, so it'll be interesting to see if
Speaker 1: they can get someone. And Travis Kalanek, he's not CEO,
Speaker 1: but I get the impression, and I don't know about you,
Speaker 1: that Uber is still his life and he's still behind
Speaker 1: the scenes working pretty much NonStop on on the least
Speaker 1: board issues. Yeah, he's super involved. It'll be interesting to
Speaker 1: see if you can starting a company or find some
Speaker 1: philanthropy to sort of give the company some space. And
Speaker 1: that's it for this week's Decrypted. Thanks for listening. We
Speaker 1: want to hear what you think of the show. You
Speaker 1: can email us at Decrypted at Bloomberg dot net or
Speaker 1: on Twitter, I'm at Eric Newcomer. If you work for Uber,
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Speaker 1: in front of new listeners. This episode was produced by Piaga, Cary,
Speaker 1: Liz Smith, Magnus Hendrickson. We'll see you next week.