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Speaker 1: Technology with tech Stuff from half stuff works dot com.

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Speaker 1: Hey there, and welcome to tech Stuff. I'm your host,

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Speaker 1: Jonathan Strickland. I'm an executive producer here at how stuff

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Speaker 1: Works and I love all things tech. And in our

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Speaker 1: last episode, I talked about the founding of Uber and

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Speaker 1: how it went from idea to a working service. I

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Speaker 1: also touched on why Uber and other ride hailing apps

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Speaker 1: have faced criticism and resistance from various cities and transportation agencies. Today,

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Speaker 1: we're going to look at a few other noteworthy elements

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Speaker 1: of Uber's history, and then we're really going to take

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Speaker 1: a deep look at what happened to the company during

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Speaker 1: two thousand seventeen, because boy howdy, was that a crazy year. Now,

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Speaker 1: one thing I did not cover in the previous episode

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Speaker 1: was Uber's surge pricing model. So Uber uses algorithms that

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Speaker 1: dynamically a just fair prices. When user demand is greater

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Speaker 1: than what the current Uber drivers on the road can supply,

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Speaker 1: the algorithm starts to crank up the cost of fares. Now,

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Speaker 1: not only can this curtailed demand, which alleviates stress on

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Speaker 1: the system and also creates an incentive for off the

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Speaker 1: clock drivers, they get a little notification that says, hey,

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Speaker 1: surge pricing is an effect that means that they are

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Speaker 1: more likely to go hit the roads and start picking

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Speaker 1: up some of those fares, and as the supply starts

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Speaker 1: to meet demand, the surge pricing prices come down. Meanwhile,

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Speaker 1: while surge prices are in effect, drivers are making more money.

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Speaker 1: They get to keep more money because the affairs are higher.

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Speaker 1: But the practice has prompted a backlash whenever its spirals

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Speaker 1: out of control. So for example, on New Year's Eve

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Speaker 1: two thousand and eleven, surge pricing drove fares up to

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Speaker 1: seven times the standard rate or even higher in some areas,

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Speaker 1: which would mean if you were taking a trip that

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Speaker 1: would normally cost ten dollars, that same trip would suddenly

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Speaker 1: cost you seventy dollars. In two thousand thirteen, Uber would

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Speaker 1: really get dragged over the coals for surge pricing when

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Speaker 1: New Yorkers in a snowstorm saw steep surge prices hit

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Speaker 1: the service, and that motivated Uber executives to promise they

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Speaker 1: would cap surge pricing during things like blizzards and floods

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Speaker 1: and other similar events. In May, Lift launched a beta

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Speaker 1: test of its ride hailing service, in San Francisco. Now.

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Speaker 1: The company behind Lift is zim Ride, which is a

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Speaker 1: network that connects people who wish to car pool with

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Speaker 1: each other. So, in other words, zim Right is what

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Speaker 1: I would call an honest to goodness ride sharing platform.

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Speaker 1: It lets people share rides with one another. While services

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Speaker 1: like Uber and Lift have been called ride sharing companies,

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Speaker 1: often by themselves, I would argue that's not really a

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Speaker 1: fair designation. Ride sharing to me suggests that the driver

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Speaker 1: is heading to a general location and is happy to

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Speaker 1: give a lift to someone else who also wants to

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Speaker 1: go that way. But what Uber and Lift do is

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Speaker 1: allow you to hail a ride and to direct a

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Speaker 1: driver to a specific destination that he or she may

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Speaker 1: not have been going toward otherwise. So I think of

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Speaker 1: that as a ride hailing company, not a ride sharing company.

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Speaker 1: And you might argue that this is all semantics, but

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Speaker 1: it turns out the ends up being really important when

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Speaker 1: you're looking at stuff like legislation. Anyway, in two thousand twelve,

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Speaker 1: zim Ride launched Lift. Their model was a slightly peculiar

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Speaker 1: one designed specifically to get around issues with regulation and licensing.

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Speaker 1: So it's not that I feel super cuddly toward Lift,

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Speaker 1: but I do acknowledge that they had a slightly different

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Speaker 1: way of going about things. Rather than set a fee

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Speaker 1: and return for a ride, drivers would get what Lift

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Speaker 1: was calling a donation from the rider. Lift would give

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Speaker 1: a uh suggested donation, and typically that was about thirty

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Speaker 1: percent less than what it would cost you to take

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Speaker 1: a cab to that same place. Lift also built in

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Speaker 1: a tipping feature in its app, allowing writers to add

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Speaker 1: a tip to their payments, something that Uber would not

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Speaker 1: offer until John Zimmer, the chief operating officer for Left,

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Speaker 1: told All Things d that quote. I'm sure people will

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Speaker 1: get upset about more competition, but our understanding is that

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Speaker 1: when it's ride sharing, you can use your personal insurance policy.

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Speaker 1: As for regulation, a lot of state laws are supportive

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Speaker 1: of car pooling and ride sharing and want to make

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Speaker 1: that work. End quote. Now, again, that seems like people

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Speaker 1: were playing a little fast and loose with definitions in

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Speaker 1: order to turn them to their advantage. Of course, a

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Speaker 1: lot of areas want to encourage car pooling in order

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Speaker 1: to alleviate traffic congestion. But that suggests that you are

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Speaker 1: having a group of people who are all going to

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Speaker 1: the same place anyway, and you just consolidate them into

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Speaker 1: a single vehicle, as opposed to each taking their own cars.

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Speaker 1: I would argue that Uber and Lift don't do that

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Speaker 1: because you have the drivers on the road already, But

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Speaker 1: it can help alleviate traffic if otherwise the people who

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Speaker 1: are taking Lift or Uber would be driving themselves. Still,

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Speaker 1: that's neither here nor there. Lift and Uber would engage

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Speaker 1: in a really bitter rivalry over the years. That's still

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Speaker 1: going on today, obviously, and that rivalry has had a

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Speaker 1: few scandals associated with it. In two thousand fourteen, news

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Speaker 1: outlets began to cover the ways that the two companies

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Speaker 1: were waging war against each other. Forbes reported that Uber

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Speaker 1: was offering Lift drivers big bonuses to jump ship and

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Speaker 1: work for Uber instead of Lift. Lift reportedly was following

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Speaker 1: suit shortly thereafter, creating something of a bidding war for drivers,

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Speaker 1: and both sides were accused of setting up rides with

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Speaker 1: their rivals in order to try and recruit drivers, or worse,

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Speaker 1: to arrange a ride and then cancel it after a

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Speaker 1: driver had already accepted the assignment, which would end up

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Speaker 1: jamming the system for both companies, with reportedly thousands of

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Speaker 1: bogus car requests hitting Both drivers were in the middle

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Speaker 1: of this, both as pawns and as victims. Uber and Lift,

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Speaker 1: in an attempt to hurt the other competitor, would lower

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Speaker 1: their fare prices on their services so they would attract

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Speaker 1: more customers, saying, hey, our prices are lower than Ubers,

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Speaker 1: or our prices are lower than Lifts, which was great

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Speaker 1: if you're a customer, but terrible if you're a driver,

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Speaker 1: because it meant that the drivers were taking home less

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Speaker 1: money on every ride, and the drivers were worrying that

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Speaker 1: customers would get used to those lower fares, meaning that

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Speaker 1: if one company were to win out over the other one,

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Speaker 1: there still would be an incentive to keep the fares

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Speaker 1: really low, because otherwise you could upset your customers. And

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Speaker 1: so they were worried that they were setting a precedent

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Speaker 1: that was ultimately going to hurt drivers in the long

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Speaker 1: run and make it less uh less, make less economic

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Speaker 1: sense actually drive for the companies. Now back to Uber's

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Speaker 1: timeline and back to two thousand twelve. Starting that summer,

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Speaker 1: Uber began to stretch beyond partnering with driver was of

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Speaker 1: town cars and limousines. The company introduced a news service

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Speaker 1: called Uber X, and this service included the option to

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Speaker 1: be picked up in a hybrid car like the Toyota Prius,

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Speaker 1: or in an suv or a couple of other options.

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Speaker 1: The fairs for those vehicles, on average were thirty lower

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Speaker 1: than if you were to try and get a town

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Speaker 1: car or a limo. So it was to kind of

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Speaker 1: open up the platform to both more drivers and more

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Speaker 1: riders to be more attractive for folks who you know,

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Speaker 1: didn't necessarily need to roll up in a town car

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Speaker 1: or a limo. Also, at that time, it was already

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Speaker 1: pretty clear that they were going to have to make

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Speaker 1: some adjustments because Lincoln was no longer making the town car,

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Speaker 1: so they had to figure something out otherwise their fleet

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Speaker 1: of vehicles would get progressively older and there will be

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Speaker 1: no replacement for them now. Kala Nick was quick to

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Speaker 1: dismiss claims that this turned Uber into a taxi service.

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Speaker 1: He actually told tech Crunch, the difference is that you

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Speaker 1: can also hail a taxi with an Uber you have

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Speaker 1: a prearranged situation, you have the driver's name and phone number,

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Speaker 1: end quote, and that distinction seems pretty flimsy to me.

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Speaker 1: But I'm not an expert in this area by any

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Speaker 1: stretch of the imagination. It is true that when you

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Speaker 1: hail a taxi, you typically have no idea which driver

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Speaker 1: is going to arrive, what is or her name is,

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Speaker 1: or how to contact them directly, because you're generally working

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Speaker 1: through the taxi company. If you haven't just hailed them

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Speaker 1: on the street and you've called a taxi cab company,

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Speaker 1: it's the dispatcher that's doing all of this for you,

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Speaker 1: and the company ends up taking care of all that

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Speaker 1: communication and you just stay out of the loop. But

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Speaker 1: I'm not sure that that difference is significant enough to

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Speaker 1: dismiss the argument that Uber was operating pretty much like

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Speaker 1: a taxi service. Now, in September, California would become the

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Speaker 1: first state to regulate services like Uber and Lift. According

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Speaker 1: to those regulations, drivers would first have to obtain a

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Speaker 1: permit from the cpu CE the California Public Utilities Commission

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Speaker 1: before being allowed to work for a ride hailing company.

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Speaker 1: The regulations also standardized criminal background checks and required the

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Speaker 1: companies to offer insurance coverage for their drivers. The CPUC

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Speaker 1: would also collect a third of a percent of total

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Speaker 1: revenues in fees as a result of all this. Meanwhile,

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Speaker 1: Uber was forming partnerships with several auto manufacturers to create

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Speaker 1: a program that would reduce car ownership costs for Uber drivers,

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Speaker 1: to try and create another incentive to work for Uber

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Speaker 1: as opposed to lift or some other service. Now, two

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Speaker 1: thousand fourteen began with a real horrible tragedy. And there

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Speaker 1: are a couple of these in this story and uh

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Speaker 1: or in this podcast, and it's gonna be tough for me,

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Speaker 1: but I'll try and get through it. So an Uber

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Speaker 1: driver hit a family that was crossing an intersection crosswalk,

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Speaker 1: and in the process, a six year old girl died

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Speaker 1: from her injuries. The family of that girl sued Uber

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Speaker 1: for damages, but the company fought back and said that

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Speaker 1: it wasn't their fault, their insurance shouldn't be held accountable,

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Speaker 1: they shouldn't have to cover it because the driver was

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Speaker 1: not actively in the process of completing a trip. And

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Speaker 1: whilst true he had his app open, his Uber app

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Speaker 1: open to look for the next fair, he had not

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Speaker 1: yet accepted a new job request at the time of

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Speaker 1: the accident, and so Uber was claiming that because this

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Speaker 1: was in between picking up and dropping off someone else

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Speaker 1: and taking the next job, they were not really responsible

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Speaker 1: for this. And they shouldn't be held accountable, and the

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Speaker 1: terrible experience led to more serious discussions about corporate liability

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Speaker 1: in the wake of accidents. Uber would eventually change his

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Speaker 1: policy to say it would cover accidents involving drivers who

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Speaker 1: had the app open, even if they were not actively

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Speaker 1: transporting someone or had not yet accepted a fair and

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Speaker 1: as for that lawsuit, Uber would eventually settle with the

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Speaker 1: girl his family out of court for an undisclosed amount.

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Speaker 1: In April, Uber branched out from the ride hailing business

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Speaker 1: and dipped its toes in bike messenger services, starting in Manhattan.

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Speaker 1: This service is called Uber Rush, and the fees begin

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Speaker 1: at three dollars as a flat fee, plus four dollars

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Speaker 1: per mile traveled by the courier, so a minimum of

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Speaker 1: seven dollars for one job. The service would eventually expand

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Speaker 1: to Chicago and to San Francisco, and at one point

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Speaker 1: it was a really popular option that restaurants were using

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Speaker 1: in order to send deliveries to people, but in seventeen

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Speaker 1: Uber said that restaurants would no longer be eligible to

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Speaker 1: use Uber Rush, and instead they would need to switch

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Speaker 1: over to a different program Uber was running. That Uber

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Speaker 1: had launched in twenty fifteen called Uber Eats, which is

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Speaker 1: an on demand food delivery service. Um It's in several

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Speaker 1: cities now, not just the three, not just New York,

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Speaker 1: San Francisco, and Chicago. In fact, Atlanta has it as well.

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Speaker 1: Rush also still exists still in New York, San Francisco,

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Speaker 1: and Chicago, but it's meant for other types of jobs,

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Speaker 1: not food delivery. Also was the year that Uber really

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Speaker 1: made its first serious steps into China, which ultimately would

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Speaker 1: become a quagmire for the company. The temptation to get

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Speaker 1: into China was huge because there was enormous potential to

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Speaker 1: do incredible amounts of business there. In fact, early reports

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Speaker 1: were suggesting that Uber's business in China was going to

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Speaker 1: outpace all other markets in the company by a crazy amount.

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Speaker 1: Like if you looked at the charts, you would see

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Speaker 1: all the figures for China were rocketing skyward while everything

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Speaker 1: else was kind of in a steady climb, which was,

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Speaker 1: you know, the steady climb is good, but the the

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Speaker 1: China numbers were out of this world. But while those

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Speaker 1: numbers look great, other issues told a different story. So

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Speaker 1: China already had a righte hailing service that was dominating

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Speaker 1: the market called d D Shu Shing and like Lift,

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Speaker 1: d D competed against Uber by offering bonuses to drivers

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Speaker 1: to work on d D service rather than its competitor,

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Speaker 1: and both de D and Uber were operating in a

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Speaker 1: This is what courts media called a legal gray zone,

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Speaker 1: meaning that most cities in China weren't really equipped to

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Speaker 1: handle this yet, and no one had quite figured out

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Speaker 1: how to regulate or legalize the sort of service, and

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Speaker 1: so there were a lot of questions about whether or

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Speaker 1: not what d D and Uber were doing would actually

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Speaker 1: be legal, and this would continue until when Chinese cities

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Speaker 1: began to actually create legislation and regulations for the industry.

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Speaker 1: Not long after that happened, d D, Shu Shing and

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Speaker 1: Uber would merge in a thirty five billion dollar deal,

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Speaker 1: so the new company was evaluated at a thirty five

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Speaker 1: billion dollars. D D ended up making a billion dollar

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Speaker 1: investment in Uber Global and Uber China's investors, the people

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Speaker 1: who had backed Uber's move into China in the first place,

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Speaker 1: would receive a ownership of the new company, which all

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Speaker 1: sounds pretty great, but really it marked an exit strategy

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Speaker 1: for Uber. The company had bet big on getting into

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Speaker 1: China and had burned a huge amount of cash competing

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Speaker 1: against d D without gaining enough of a foothold for

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Speaker 1: the effort to really be profitable. D D had been

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Speaker 1: dominating Uber with an eight percent hold on the market

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Speaker 1: share for ride haling services in the country, so Uber

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Speaker 1: was effectively defeated and dragging itself out of China. In fact,

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Speaker 1: if you here, if you read up on the the

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Speaker 1: stories of how much money Uber burned through over those years,

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Speaker 1: it is an astronomical amount of money. Now, Uber is

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Speaker 1: not a publicly traded company and as such it is

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Speaker 1: not required to report its earnings to the public. It's

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Speaker 1: not like a public filing where you can actually see

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Speaker 1: how much a company claims it made versus the expenses.

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Speaker 1: But there are a lot of phone calls that have

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Speaker 1: to happen with investors, and most of the time that

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Speaker 1: information ends up getting communicated to the outside world in

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Speaker 1: some way. And because of that, we know that Uber

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Speaker 1: was burning through billions of dollars per year. It was

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Speaker 1: not making a profit. Some of the cities were said

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Speaker 1: to be profitable, but overall, as a company, Uber was

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Speaker 1: spending more than it was making. Now. In August, Uber

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Speaker 1: announced Uberpool, and this is the service that lets you

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Speaker 1: share a ride with someone else going in the same

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Speaker 1: general location or direction of travel that you need to take.

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Speaker 1: The two parties in the car will split the fair,

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Speaker 1: so it ends up being cheaper. And if there aren't

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Speaker 1: any other passengers who need to go where you're going

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Speaker 1: or go in the same direction that you're going, you

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Speaker 1: would still get an Uber ride at a reduced fair. Now,

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Speaker 1: when it launched, Uber published a blog post that said,

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Speaker 1: quote on average, uber x already costs less than a taxi.

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Speaker 1: Imagine reducing that cost by up to another end quote.

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Speaker 1: So again, Uber's really playing to the customer there. Now,

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Speaker 1: for drivers, it's a different story because you know, you're

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Speaker 1: you're talking about cutting into the potential take home pay

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Speaker 1: as long as enough people are in the car where

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Speaker 1: you know, even though they're each splitting the fair, if

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Speaker 1: you add it up, it ends up amounting to a

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Speaker 1: decent fee for the trip. It's not that big a deal,

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Speaker 1: but it's one of those things that's a delicate balance.

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Speaker 1: How do you balance out the needs of the people

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Speaker 1: driving for you versus your customer base In two thousand fifteen,

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Speaker 1: Uber unveiled Uber Cargo in Hong Kong. Now this was

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Speaker 1: really Uber's foray into creating a logistics service. It just

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Speaker 1: happened to be a logistics service in the form of

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Speaker 1: a rent a van kind of business, but it really

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Speaker 1: meant the at Uber was starting to see the potential

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Speaker 1: of moving into logistics in general, and not just booking

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Speaker 1: a trip from point A to point B. According to

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Speaker 1: a blog post, Uber Cargo works like this. With Uber Cargo,

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Speaker 1: a van arrives wherever you want it to be in minutes.

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Speaker 1: You can load your items in the back of the

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Speaker 1: van yourself, or request the driver's assistants if you need

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Speaker 1: an extra hand. Deliveries can easily be tracked in real

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Speaker 1: time through the app. The item's location can be shared

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Speaker 1: with the recipient, and you can even ride along with

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Speaker 1: your goods, so you'll have ease of mind that your

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Speaker 1: items are safe. A couple of years later, Uber would

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Speaker 1: extend that branch of its business and create Uber Freight,

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Speaker 1: which connects truck drivers with people who need to uh

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Speaker 1: ship stuff a good distance away, So that would be

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Speaker 1: an extension of this logistics element of Uber's business. Also

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Speaker 1: in Uber was moving to make its first acquisition kind

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Speaker 1: of surprising that it took that long in some ways,

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Speaker 1: just because a lot of companies that's kind of how

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Speaker 1: they would grow early on, instead of just trying to

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Speaker 1: increase business, which I say dismissively, but it is actually

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Speaker 1: a really really hard thing to do. Some companies gobble

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Speaker 1: up other smaller companies and they are able to grow

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Speaker 1: that way. In this case, it was Uber's attempt to

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Speaker 1: build out its own capabilities and reduce its reliance on

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Speaker 1: third parties. The acquisition was Dakarta, which was a mapping

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Speaker 1: tech and company. It was a startup company that was

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Speaker 1: all about localized data, map applications, turned by turn directions,

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Speaker 1: that kind of stuff, and Uber executive said this was

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Speaker 1: to streamline operations behind the scenes, but a lot of

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Speaker 1: analysts pointed out that it also probably had something to

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Speaker 1: do with Uber wanting to decrease its reliance on Google

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Speaker 1: and Google Maps. Now, two other big things happened in

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Speaker 1: that I really really need to talk about. But first

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Speaker 1: let's take a quick break to thank our sponsor. All Right,

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Speaker 1: those two other things in that I mentioned before the break.

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Speaker 1: The first was that Uber snipe about forty people away

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Speaker 1: from Carnegie Mellon University in an effort to establish a

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Speaker 1: new robotics research facility. This was when the world learned

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Speaker 1: that the Calais vision of Uber's future was one in

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Speaker 1: which all those pesky drivers weren't part of the problem anymore. Instead,

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Speaker 1: a fleet of autonomous vehicles that would be owned and

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Speaker 1: operated by Uber would whisk across cities to pick up

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Speaker 1: and drop off people, and best of all, every single

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Speaker 1: scent earned would go to the company. There be no

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Speaker 1: need to pay a robot a wage, so you didn't

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Speaker 1: have to, you know, share the fair with the robots.

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Speaker 1: Tipping wouldn't be a consideration either. Now that could mean

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Speaker 1: that Uber could slash fair prices too, which would pass

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Speaker 1: savings on to the customers. But the focus was mostly

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Speaker 1: on how a company that depended upon a population of

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Speaker 1: contractors is now actively pursuing a strategy that could ultimately

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Speaker 1: render that population moot. Uber had been one of the

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Speaker 1: more aggressive companies pursuing an autonomous car future. Many in

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Speaker 1: the field give conservative estimates as to win will have

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Speaker 1: a truly autonomous vehicle fleet, something that is able to

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Speaker 1: handle virtually any scenario that could happen on the roads. Meanwhile,

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Speaker 1: Uber has launched pilot programs or maybe I should say

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Speaker 1: pilotless programs in a few cities to provide driverless car

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Speaker 1: service to test out the feasibility of the strategy. When

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Speaker 1: we get to seventeen and a little bit later in

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Speaker 1: this episode, i'll talk more about this program and some

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Speaker 1: of the concerns people had about it. The other major

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Speaker 1: news story happening to Uber in had to do with

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Speaker 1: a driver named Barbara and Berwick. Now. Berwick had started

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Speaker 1: driving for Uber in the summer, and that fall she

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Speaker 1: filed a claim with the California Public Utilities Commission arguing

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Speaker 1: that her status as contractor wasn't accurate and that she

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Speaker 1: should instead be considered an Uber employee. Being an employee

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Speaker 1: meant she would receive more benefits, such as reimbursements to

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Speaker 1: the tune of about four thousand dollars of owed expenses.

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Speaker 1: The CPUC eventually ruled in her favor, saying she was

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Speaker 1: in fact an employee, since that set a precedent at

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Speaker 1: Uber and completely would turn their business model topsy turvy.

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Speaker 1: The company immediately filed an appeal. Now, Berwick's case did

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Speaker 1: not mean that all other Uber drivers in California magically

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Speaker 1: transformed into employees. They would have to take their cases

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Speaker 1: individually to the cpu C to argue for that designation,

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Speaker 1: but a group of them did get together to file

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Speaker 1: a class action lawsuit against Uber to make it a

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Speaker 1: more broad, sweeping change. And Uber has been fighting that

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Speaker 1: court case and it kind of stagnated in the court system.

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Speaker 1: The plaintiffs filed a new, updated lawsuit in summer of seventeen,

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Speaker 1: and that has yet to be resolved. Alright, so we're

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Speaker 1: up to seen and then after that we'll get to

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Speaker 1: look at what I'd argue has been Uber's most important

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Speaker 1: years so far. But big stuff also happened in sixteen.

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Speaker 1: At the beginning of the year, Travis Kalanik addressed investors

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Speaker 1: and talked about the expense Uber shouldered as part of

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Speaker 1: the battle in China. Analysts estimated that Uber would lose

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Speaker 1: about two point eight billion dollars over the course of

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Speaker 1: ten even as its valuation would top sixty billion dollars.

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Speaker 1: So here's a company that is considered to be worth

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Speaker 1: more and more while it's still losing billions of dollars

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Speaker 1: of cash, which I know I work for how stuff works.

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Speaker 1: But y'all I don't know how that works, all right.

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Speaker 1: Uber was battling one class action lawsuit with drivers in California,

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Speaker 1: but it also saw a second class action lawsuit come

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Speaker 1: to a close. Now, this time it was with passengers.

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Speaker 1: This revolved around Uber using certain phrases in their advertising

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Speaker 1: language that may have stretched the truth a bit. Phrases

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Speaker 1: like referring to its background check process as quote industry

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Speaker 1: leading end quote, for example, and passengers were saying there

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Speaker 1: were numerous examples of the background checks failing to bring

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Speaker 1: out the criminal past of various drivers, or Uber was

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Speaker 1: ignoring it. In any case, Saying it was industry leading

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Speaker 1: was misleading, and the cost of that mistake was twenty

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Speaker 1: eight and a half million dollars. Now that amount was

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Speaker 1: divided up among the twenty five million people represented in

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Speaker 1: the class action lawsuit minus lawyer fees, so you know,

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Speaker 1: people got like a nickel per rider or something. Sixteen

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Speaker 1: was also the year that Uber pulled out of Austin, Texas.

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Speaker 1: So did Lift for that matter. I mentioned this in

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Speaker 1: Part one of the Uber story, but this was in

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Speaker 1: response to a voter referendum that ruled rid hailing services

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Speaker 1: would need to require drivers to submit to a fingerprint

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Speaker 1: based background check. Uber and Lift didn't want to do that,

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Speaker 1: largely because it could be seen as a quote unquote

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Speaker 1: control move. Now, that could mean that drivers would be

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Speaker 1: able to make the argument that they are more employees

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Speaker 1: than contractors, because one of the defining elements of employees,

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Speaker 1: at least in California is the amount of control a

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Speaker 1: company has over that employees day to day duties. And

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Speaker 1: again that would mean both Uber and Lift would have

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Speaker 1: to change how they compensate and reimburse drivers, changing up

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Speaker 1: their business strategy. So if they make this exception in

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Speaker 1: Texas and say, yeah, well, fingerprint background check these folks,

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Speaker 1: that could have a ripple effect throughout other states, which

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Speaker 1: then could end up making them have to change the

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Speaker 1: designation of contractor to employee and that would affect their

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Speaker 1: bottom line. And ultimately that is the real reason why

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Speaker 1: they pulled out of Austin, Texas, mostly in the hope

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Speaker 1: that at the state level, the state government would end

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Speaker 1: up changing rules that would benefit them and allow them

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Speaker 1: to come back and work in those places. Toyota and

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Speaker 1: Uber entered into what they called a strategic partnership in

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Speaker 1: two thousand and sixteen. As part of that agreement, Uber

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Speaker 1: drivers could lease vehicles from Toyota and cover their vehicle

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Speaker 1: payments through their earnings as Uber drivers. Over on the

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Speaker 1: corporate side, it also meant that Uber and Toyota would

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Speaker 1: start looking into countries that did not yet have rides

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Speaker 1: sharing markets and look into introducing services there. Toyota also

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Speaker 1: agreed to invest money in Uber, but they were a

435
00:25:33,280 --> 00:25:37,280
Speaker 1: little shy when it came to how much money that was.

436
00:25:37,320 --> 00:25:40,960
Speaker 1: They didn't they didn't say. But in July two thou sixteen,

437
00:25:41,520 --> 00:25:45,240
Speaker 1: another big setback for Uber. They pulled up stakes in Hungary.

438
00:25:45,920 --> 00:25:49,960
Speaker 1: The country's government had passed legislation that Uber executive said

439
00:25:49,960 --> 00:25:53,040
Speaker 1: would make it impossible for Uber to operate there. The

440
00:25:53,280 --> 00:25:56,479
Speaker 1: followed This followed months of strife in Hungary. There were

441
00:25:56,520 --> 00:25:59,920
Speaker 1: taxi drivers who were protesting across the country. This follow

442
00:26:00,040 --> 00:26:03,359
Speaker 1: to other protests that had happened in places like England

443
00:26:03,400 --> 00:26:07,040
Speaker 1: and France. And France it got really violent, actually, uh

444
00:26:07,040 --> 00:26:11,080
Speaker 1: and so they were saying Uber was coming in and

445
00:26:11,200 --> 00:26:14,879
Speaker 1: they were being an unfair competitor against the taxi industry.

446
00:26:15,040 --> 00:26:18,000
Speaker 1: So Hungary passes this law and it gave the Department

447
00:26:18,040 --> 00:26:21,399
Speaker 1: of National Communications the authority to block internet access to

448
00:26:21,480 --> 00:26:25,840
Speaker 1: what we're considered quote illegal dispatcher services end quote, and

449
00:26:25,960 --> 00:26:29,160
Speaker 1: Uber says, well, we can't really do anything here, so

450
00:26:29,720 --> 00:26:33,119
Speaker 1: peace out, y'all and they left. Also in July, a

451
00:26:33,200 --> 00:26:36,280
Speaker 1: judge had harsh words for Uber executives who apparently decided

452
00:26:36,320 --> 00:26:39,840
Speaker 1: to go all cloak and dagger on perceived threats. So

453
00:26:39,880 --> 00:26:43,320
Speaker 1: what exactly happened? Well, back in December two thousand fifteen,

454
00:26:43,359 --> 00:26:46,479
Speaker 1: there was a lawyer named Andrew Schmidt who took up

455
00:26:46,480 --> 00:26:49,359
Speaker 1: the case that was filed by his client, Spencer Meyer,

456
00:26:49,880 --> 00:26:52,639
Speaker 1: and that case was against Uber. The claim stated that

457
00:26:52,720 --> 00:26:58,240
Speaker 1: Uber was violating anti trust laws through coordinated surge pricing. Now,

458
00:26:58,320 --> 00:27:01,119
Speaker 1: left alone, that case probably have just fizzled out or

459
00:27:01,320 --> 00:27:04,320
Speaker 1: been quietly settled. But instead, someone at Uber decided to

460
00:27:05,000 --> 00:27:09,280
Speaker 1: go a touch nuclear in their attack. According to the

461
00:27:09,280 --> 00:27:13,359
Speaker 1: proceedings in court, top executives at Uber reached out to

462
00:27:13,400 --> 00:27:16,879
Speaker 1: an investigative firm staff with former c i A and

463
00:27:17,040 --> 00:27:20,719
Speaker 1: National Security Council employees in an effort to dig up

464
00:27:20,800 --> 00:27:24,360
Speaker 1: dirt on Schmidt and his client. Schmidt got wise when

465
00:27:24,359 --> 00:27:26,479
Speaker 1: he found out some of his colleagues and friends were

466
00:27:26,480 --> 00:27:29,400
Speaker 1: getting these weird phone calls about him, so he confronted

467
00:27:29,480 --> 00:27:32,440
Speaker 1: Uber in a letter, and he was assured by Uber

468
00:27:32,480 --> 00:27:36,080
Speaker 1: that they weren't responsible for all those calls, and then

469
00:27:36,119 --> 00:27:38,920
Speaker 1: a little later he got another call from Uber that said, well,

470
00:27:39,000 --> 00:27:43,920
Speaker 1: hang on, maybe we're a little responsible. The judge said

471
00:27:43,960 --> 00:27:48,080
Speaker 1: that Uber's actions created quote a reasonable basis to suspect

472
00:27:48,200 --> 00:27:51,919
Speaker 1: the perpetration of fraud end quote. This would not be

473
00:27:52,000 --> 00:27:55,760
Speaker 1: the last time that Uber would employ or executives at Uber,

474
00:27:55,800 --> 00:27:58,240
Speaker 1: I guess I should say, would employ these sort of

475
00:27:58,280 --> 00:28:03,680
Speaker 1: tactics that get real super dodgy. So what exactly happened

476
00:28:03,760 --> 00:28:06,760
Speaker 1: behind the scenes. Well, according to The Verge, which has

477
00:28:06,800 --> 00:28:11,960
Speaker 1: an excellent piece about this story, Uber's general counsel Sally You,

478
00:28:12,320 --> 00:28:16,200
Speaker 1: sent an email to Uber's chief security officer, Joe Sullivan,

479
00:28:16,720 --> 00:28:20,440
Speaker 1: and she asked for more information on Schmidt. That request

480
00:28:20,520 --> 00:28:23,639
Speaker 1: was routed to Matthew Henley, who was the head of

481
00:28:23,760 --> 00:28:28,520
Speaker 1: Uber's Global Threat Intelligence, which, wow, it's a heck of

482
00:28:28,520 --> 00:28:31,879
Speaker 1: a name for a department. Surely thereafter, Henley engaged a

483
00:28:31,960 --> 00:28:37,800
Speaker 1: research firm called Global Precision Research LLC, also known as ERGO,

484
00:28:37,920 --> 00:28:40,600
Speaker 1: and Ergo's job was to dig up the dirt. And

485
00:28:40,640 --> 00:28:42,400
Speaker 1: as I said, that wasn't the only time Uber was

486
00:28:42,440 --> 00:28:44,840
Speaker 1: said to engage in such tactics. There was a journalist

487
00:28:44,960 --> 00:28:48,280
Speaker 1: named Sarah Lacey who had criticized the company multiple times.

488
00:28:48,640 --> 00:28:53,240
Speaker 1: On her website Pando Daily. Lacy published stories detailing accounts

489
00:28:53,240 --> 00:28:56,080
Speaker 1: of Uber passengers who said they had been attacked or

490
00:28:56,160 --> 00:28:59,400
Speaker 1: harassed by their drivers, and she referred to Uber as

491
00:28:59,440 --> 00:29:04,960
Speaker 1: the most misogynistic startup in Silicon Valley, according to BuzzFeed

492
00:29:05,080 --> 00:29:10,040
Speaker 1: editor Ben Smith, and Uber executive named Emil Michael voiced

493
00:29:10,080 --> 00:29:13,520
Speaker 1: how he'd like to employ researchers to dig up dirt

494
00:29:13,640 --> 00:29:18,719
Speaker 1: on Lacey's background, her friends, and her family. So Smith

495
00:29:18,800 --> 00:29:21,880
Speaker 1: calls up Lacy and says, Hey, I was at a

496
00:29:21,960 --> 00:29:25,640
Speaker 1: dinner thing and this Uber guy was saying this stuff

497
00:29:25,680 --> 00:29:27,360
Speaker 1: about you, saying that you know, you were worth like

498
00:29:27,400 --> 00:29:31,760
Speaker 1: a million dollars worth of expenses to to shut you up.

499
00:29:31,800 --> 00:29:33,520
Speaker 1: Do you have a quote for me? Do you have

500
00:29:33,560 --> 00:29:36,360
Speaker 1: a response to that? And she debated on whether or

501
00:29:36,440 --> 00:29:39,760
Speaker 1: not she wanted to get into this fight, and ultimately

502
00:29:39,800 --> 00:29:42,880
Speaker 1: decided she did, and so she gave a statement. And

503
00:29:43,280 --> 00:29:46,520
Speaker 1: after he told her about this conversation, and then since

504
00:29:46,560 --> 00:29:49,600
Speaker 1: that point, she said she was perpetually hounded by Uber

505
00:29:49,680 --> 00:29:54,520
Speaker 1: and its investors for speaking out. In seventeen, her accusations

506
00:29:54,520 --> 00:29:58,640
Speaker 1: against Uber would find some validation because of the actions

507
00:29:58,720 --> 00:30:01,840
Speaker 1: of another woman who had awful story to tell, and

508
00:30:01,920 --> 00:30:05,560
Speaker 1: that woman was Susan Fowler. Now, I have a story

509
00:30:05,560 --> 00:30:08,040
Speaker 1: I want to talk about from January seen, but I'm

510
00:30:08,040 --> 00:30:09,960
Speaker 1: going to come back to that in just a minute.

511
00:30:10,200 --> 00:30:14,760
Speaker 1: It's an important story in Uber's year of tumultuous chaos.

512
00:30:15,400 --> 00:30:18,880
Speaker 1: But I think we really first should continue this threat

513
00:30:18,920 --> 00:30:23,920
Speaker 1: about Susan Fowler. Her story would really unveil in February seventeen.

514
00:30:24,040 --> 00:30:26,479
Speaker 1: She had worked for Uber as an engineer, and on

515
00:30:26,480 --> 00:30:30,000
Speaker 1: February nineteen seventeen, she published a blog post that laid

516
00:30:30,000 --> 00:30:34,640
Speaker 1: out a really ugly picture of Uber's corporate culture. The

517
00:30:34,720 --> 00:30:39,200
Speaker 1: post is titled reflecting on one very very strange year

518
00:30:39,320 --> 00:30:44,280
Speaker 1: at Uber. Now, Fowler had left Uber in December, and

519
00:30:44,360 --> 00:30:46,959
Speaker 1: she had started work at another company called Stripe at

520
00:30:46,960 --> 00:30:49,680
Speaker 1: the beginning of twenty seventeen. She said a reason for

521
00:30:49,720 --> 00:30:51,880
Speaker 1: writing the blog post was because she had repeatedly been

522
00:30:51,920 --> 00:30:53,960
Speaker 1: asked by people what it was like working for Uber

523
00:30:53,960 --> 00:30:56,240
Speaker 1: and why did she leave, and so she thought, rather

524
00:30:56,280 --> 00:30:58,120
Speaker 1: than go through it over and over again, she would

525
00:30:58,160 --> 00:31:01,600
Speaker 1: lay out the entire story and everyone could just read it.

526
00:31:02,120 --> 00:31:05,400
Speaker 1: She had begun at Uber in November two thousand fifteen,

527
00:31:05,440 --> 00:31:09,720
Speaker 1: as part of the site reliability engineering team. She had

528
00:31:09,720 --> 00:31:12,160
Speaker 1: the opportunity to choose the team she'd work with, and

529
00:31:12,200 --> 00:31:15,160
Speaker 1: she made the decision to work with some fellow engineers

530
00:31:15,320 --> 00:31:17,480
Speaker 1: that were focusing on a project she felt she was

531
00:31:17,560 --> 00:31:21,920
Speaker 1: really well suited for, and immediately it seems trouble began.

532
00:31:22,200 --> 00:31:24,360
Speaker 1: She wrote that on her first day of working with

533
00:31:24,400 --> 00:31:26,840
Speaker 1: the team, she received a string of messages from her

534
00:31:26,840 --> 00:31:31,560
Speaker 1: manager that we're implying he wanted to have sex with her. Uh.

535
00:31:31,560 --> 00:31:35,560
Speaker 1: This is obviously beyond problematic when a boss is intimating

536
00:31:35,920 --> 00:31:38,920
Speaker 1: that he wants to have sex or she, for that matter,

537
00:31:39,000 --> 00:31:41,320
Speaker 1: wants to have sex with an employee. Even if you

538
00:31:41,360 --> 00:31:43,320
Speaker 1: wanted to be generous, which by the way, I do

539
00:31:43,440 --> 00:31:45,920
Speaker 1: not want to be generous, you'd have to say these

540
00:31:45,920 --> 00:31:50,960
Speaker 1: messages were wildly inappropriate for the workplace. Fowler took screenshots

541
00:31:51,080 --> 00:31:53,560
Speaker 1: of the chat messages she was receiving from her manager,

542
00:31:53,880 --> 00:31:57,240
Speaker 1: and she reported his behavior to Human Resources. Now. The

543
00:31:57,280 --> 00:32:00,560
Speaker 1: response she got from HR and upper management was not

544
00:32:00,720 --> 00:32:03,880
Speaker 1: what she expected. She was told her manager was a

545
00:32:03,960 --> 00:32:07,520
Speaker 1: quote high performer end quote in the company and that

546
00:32:07,600 --> 00:32:11,000
Speaker 1: this marked his first offense with those qualifiers in mind,

547
00:32:11,160 --> 00:32:14,680
Speaker 1: the company's response would be a warning to the guy

548
00:32:14,800 --> 00:32:17,840
Speaker 1: to say, hey, knock that off, don't do that. As

549
00:32:17,880 --> 00:32:20,400
Speaker 1: for Fowler, she was told she could either go work

550
00:32:20,480 --> 00:32:24,040
Speaker 1: for another team and remove herself from the situation, or

551
00:32:24,160 --> 00:32:26,880
Speaker 1: she could stay on the team that she had picked.

552
00:32:27,040 --> 00:32:29,400
Speaker 1: But it was almost certain that her manager would give

553
00:32:29,440 --> 00:32:32,120
Speaker 1: her a poor performance review no matter how well she

554
00:32:32,240 --> 00:32:35,360
Speaker 1: did her job, and there just wasn't anything management could

555
00:32:35,400 --> 00:32:38,080
Speaker 1: do about that. So, in case you weren't aware, this

556
00:32:38,160 --> 00:32:42,000
Speaker 1: is a classic case of victim blaming, a classic and

557
00:32:42,080 --> 00:32:47,640
Speaker 1: brazen case, and it is really awful Fowler chose to

558
00:32:47,760 --> 00:32:50,560
Speaker 1: leave her team despite the fact that she had really

559
00:32:50,600 --> 00:32:53,080
Speaker 1: wanted to work on this project and go and find

560
00:32:53,160 --> 00:32:55,920
Speaker 1: a different group to work with. She would meet with

561
00:32:55,960 --> 00:32:58,040
Speaker 1: other women in Uber, and she found out that a

562
00:32:58,120 --> 00:33:01,760
Speaker 1: lot of them had similar experiences. Them even had experiences

563
00:33:01,760 --> 00:33:04,520
Speaker 1: with that same manager, and they had said they also

564
00:33:04,640 --> 00:33:09,040
Speaker 1: filed complaints. This contradicted HRS claim that it was the

565
00:33:09,080 --> 00:33:13,000
Speaker 1: manager's first offense. According to Fowler, another engineer complained about

566
00:33:13,040 --> 00:33:17,040
Speaker 1: the same manager later on after Fowler's complaint, and that

567
00:33:17,240 --> 00:33:20,720
Speaker 1: lady was told it was the manager's first offense. So

568
00:33:20,760 --> 00:33:24,560
Speaker 1: apparently every offense he committed was his first one. Fowler

569
00:33:24,720 --> 00:33:28,280
Speaker 1: also said that management at Uber was incredibly cut throat.

570
00:33:28,720 --> 00:33:33,880
Speaker 1: Sometimes managers were actively working against other departments in an

571
00:33:33,880 --> 00:33:37,360
Speaker 1: effort to advance their own personal careers. Projects would get

572
00:33:37,360 --> 00:33:40,520
Speaker 1: started and abandoned because of this sort of action, and

573
00:33:40,560 --> 00:33:42,920
Speaker 1: a lot of progress was lost as a result of it,

574
00:33:43,400 --> 00:33:45,960
Speaker 1: and a lot of people were kind of tossed aside

575
00:33:46,080 --> 00:33:49,040
Speaker 1: in the in the whole process. She recounted stories about

576
00:33:49,040 --> 00:33:52,320
Speaker 1: how her own advancement was being blocked because her manager

577
00:33:52,360 --> 00:33:56,560
Speaker 1: wanted to keep her in place because her work made

578
00:33:56,720 --> 00:34:00,560
Speaker 1: his team look good, so rather than lose a star performer,

579
00:34:00,920 --> 00:34:03,440
Speaker 1: he worked very hard to make sure any request she

580
00:34:03,480 --> 00:34:06,960
Speaker 1: had to transfer into another department was blocked. She also

581
00:34:07,000 --> 00:34:12,000
Speaker 1: said that her organization's demographic was originally women when she started,

582
00:34:12,320 --> 00:34:14,760
Speaker 1: but that number had dropped to less than six percent

583
00:34:14,920 --> 00:34:18,520
Speaker 1: at this point. She said that the misogynistic culture and

584
00:34:18,560 --> 00:34:21,680
Speaker 1: the office politics were the two main contributing factors driving

585
00:34:21,680 --> 00:34:24,640
Speaker 1: women out of her part of Uber, and she said

586
00:34:24,640 --> 00:34:27,120
Speaker 1: that on the day she left the company, the number

587
00:34:27,200 --> 00:34:31,560
Speaker 1: was down to three percent. Now, Fowler's blog post didn't

588
00:34:31,600 --> 00:34:35,319
Speaker 1: just fade away. Uber executives couldn't sweep it under the rug.

589
00:34:35,400 --> 00:34:38,960
Speaker 1: It started a much more critical analysis of Uber's culture.

590
00:34:39,480 --> 00:34:42,239
Speaker 1: Fowler's account also became one of the critical pieces of

591
00:34:42,280 --> 00:34:45,840
Speaker 1: information to get the hashtag me too movement going, and

592
00:34:45,840 --> 00:34:48,040
Speaker 1: will likely see more of that as time goes on

593
00:34:48,400 --> 00:34:51,040
Speaker 1: and more women step forward to speak out about behaviors

594
00:34:51,040 --> 00:34:54,680
Speaker 1: that for decades were ignored or sometimes even encouraged in

595
00:34:54,800 --> 00:34:59,840
Speaker 1: male dominated businesses. Fowler's essay demanded a response from Uber,

596
00:35:00,040 --> 00:35:02,120
Speaker 1: and the company would go on to hire two law

597
00:35:02,200 --> 00:35:06,160
Speaker 1: firms to launch investigations into our allegations. I'll talk more

598
00:35:06,200 --> 00:35:09,040
Speaker 1: about what they found in a little bit, but first

599
00:35:09,640 --> 00:35:19,719
Speaker 1: let's take another quick break to thank our sponsor. I

600
00:35:19,840 --> 00:35:23,960
Speaker 1: mentioned that Uber had a different pr problem before Fowler's

601
00:35:24,080 --> 00:35:28,799
Speaker 1: essay was published earlier in seventeen. Something had happened in January. Well,

602
00:35:29,000 --> 00:35:31,960
Speaker 1: that was when many people felt Uber was taking advantage

603
00:35:31,960 --> 00:35:35,879
Speaker 1: of a politically charged situation, particularly after the company made

604
00:35:35,880 --> 00:35:41,560
Speaker 1: the decision to disabled searge pricing for JFK Airport see

605
00:35:41,600 --> 00:35:45,080
Speaker 1: Donald Trump had placed an immigration ban and New York

606
00:35:45,120 --> 00:35:47,920
Speaker 1: City's JFK Airport in particular, and in reaction to this,

607
00:35:48,480 --> 00:35:52,480
Speaker 1: taxi drivers called for a strike in protest. Uber at

608
00:35:52,520 --> 00:35:56,840
Speaker 1: first committed to continuing service to JFK with the elimination

609
00:35:56,840 --> 00:36:00,600
Speaker 1: of searge pricing, and that seemed to undermine the protest.

610
00:36:01,120 --> 00:36:03,200
Speaker 1: It seemed to be saying, hey, if you can't get

611
00:36:03,200 --> 00:36:05,000
Speaker 1: a cab, at least you can get an Uber and hey,

612
00:36:05,000 --> 00:36:08,360
Speaker 1: there's no searge pricing. So a lot of people, including celebrities,

613
00:36:08,360 --> 00:36:12,560
Speaker 1: began to promote a new hashtag, hashtag delete Uber, and

614
00:36:12,600 --> 00:36:18,560
Speaker 1: it went viral. Now here's an ironic part. What is

615
00:36:18,560 --> 00:36:22,000
Speaker 1: it ironic? I don't know. I need to ask Atlantis Morisset.

616
00:36:22,080 --> 00:36:25,759
Speaker 1: But anyway, here's the thing. It's possible that Uber was

617
00:36:25,840 --> 00:36:29,120
Speaker 1: viewing this as a way to support the protest, not

618
00:36:29,239 --> 00:36:32,840
Speaker 1: to undermine it. Let me explain. By removing searge pricing

619
00:36:32,880 --> 00:36:37,319
Speaker 1: from JFK Airport fairs, Uber was removing an incentive for

620
00:36:37,440 --> 00:36:41,560
Speaker 1: drivers to actually go to JFK Airport because they wouldn't

621
00:36:41,600 --> 00:36:45,160
Speaker 1: make as much money off of regular priced fares from

622
00:36:45,200 --> 00:36:48,480
Speaker 1: the airport without that searge pricing. In effect, other areas

623
00:36:48,480 --> 00:36:51,799
Speaker 1: of New York City might still have searge pricing, so

624
00:36:51,880 --> 00:36:55,000
Speaker 1: drivers would more likely be lured elsewhere in New York

625
00:36:55,040 --> 00:36:58,840
Speaker 1: City away from JFK Airport until the matter was resolved.

626
00:36:59,120 --> 00:37:01,719
Speaker 1: But the percept sin was that Uber was trying to

627
00:37:01,760 --> 00:37:04,880
Speaker 1: take advantage of this situation, and that became the narrative,

628
00:37:04,920 --> 00:37:06,840
Speaker 1: and Uber never managed to get out in front and

629
00:37:06,880 --> 00:37:10,160
Speaker 1: say no, let me explain how our model works and

630
00:37:10,200 --> 00:37:14,320
Speaker 1: what our thinking was behind this. Lift, on the other hand,

631
00:37:15,320 --> 00:37:17,520
Speaker 1: got in front of it right away. They did not

632
00:37:17,800 --> 00:37:21,479
Speaker 1: touch their surge pricing during the strike. They still serve

633
00:37:21,600 --> 00:37:25,640
Speaker 1: JFK Airport as well. However, the company donated a million

634
00:37:25,680 --> 00:37:29,560
Speaker 1: dollars to the a c l U, and they publicly

635
00:37:29,640 --> 00:37:34,080
Speaker 1: denounced Trump's immigration ban, which made Lift seem like the

636
00:37:34,160 --> 00:37:37,880
Speaker 1: much more woke company and it worked. People began to

637
00:37:38,000 --> 00:37:41,440
Speaker 1: leading their Uber apps and for the first time, Lift

638
00:37:41,520 --> 00:37:47,000
Speaker 1: app downloads outnumbered Uber downloads. Also in January, Uber had

639
00:37:47,040 --> 00:37:50,640
Speaker 1: to pay twenty million dollars to the United States government

640
00:37:50,680 --> 00:37:54,000
Speaker 1: in order to resolve an FTC complaint that the company

641
00:37:54,080 --> 00:37:58,360
Speaker 1: had misled drivers about potential earnings. Essentially, the argument stated

642
00:37:58,400 --> 00:38:01,880
Speaker 1: that Uber's claims were at best wildly optimistic and based

643
00:38:01,880 --> 00:38:04,719
Speaker 1: off an unreasonable number of hours driven per week in

644
00:38:04,800 --> 00:38:07,440
Speaker 1: order to make the amount of money they were claiming

645
00:38:07,440 --> 00:38:11,800
Speaker 1: a driver can make working for Uber back in February.

646
00:38:11,840 --> 00:38:14,879
Speaker 1: To get back to February twenty seventeen, Uber was scrambling

647
00:38:14,960 --> 00:38:18,760
Speaker 1: to respond to Fowler's blog post, so the company hired

648
00:38:18,800 --> 00:38:22,360
Speaker 1: former U S Attorney General Eric Holder to investigate the matter,

649
00:38:22,440 --> 00:38:24,920
Speaker 1: as well as a second law firm to look into it.

650
00:38:25,200 --> 00:38:28,200
Speaker 1: Holder would eventually file a report with thirteen pages of

651
00:38:28,239 --> 00:38:32,600
Speaker 1: recommendations to make big, big changes at Uber. This would

652
00:38:32,600 --> 00:38:35,520
Speaker 1: happen later on, like in June of twenty seventeen, but

653
00:38:35,560 --> 00:38:40,520
Speaker 1: among those recommendations were to reallocate Travis Kalini's responsibilities. The

654
00:38:40,560 --> 00:38:42,760
Speaker 1: CEO was getting a lot of heat for the culture

655
00:38:42,800 --> 00:38:47,160
Speaker 1: at the company, and while many people, including Klinis eventual successor,

656
00:38:47,400 --> 00:38:49,719
Speaker 1: would say it would be unfair to lay all the

657
00:38:49,760 --> 00:38:54,360
Speaker 1: blame on any single person, many also acknowledged that as CEO,

658
00:38:54,840 --> 00:38:58,360
Speaker 1: kalin Nick had to assume responsibility for many of the

659
00:38:58,400 --> 00:39:02,040
Speaker 1: problems the company found its health in his report also

660
00:39:02,120 --> 00:39:05,279
Speaker 1: urged the company to adopt a zero tolerance policy for

661
00:39:05,320 --> 00:39:09,400
Speaker 1: any substantiated complaints to HR, regardless of whether or not

662
00:39:09,440 --> 00:39:13,120
Speaker 1: the focus of the complaint was on the previously bulletproof

663
00:39:13,320 --> 00:39:17,719
Speaker 1: high Performers list. He recommended that Uber create an employee

664
00:39:17,719 --> 00:39:20,879
Speaker 1: Diversity Advisory Board to help address problems with the lack

665
00:39:20,920 --> 00:39:24,720
Speaker 1: of diversity in the company's management, and the company would

666
00:39:25,200 --> 00:39:28,560
Speaker 1: should agree rather to publish diversity statistics on a regular

667
00:39:28,560 --> 00:39:31,080
Speaker 1: basis to see how things are going in order to

668
00:39:31,120 --> 00:39:34,640
Speaker 1: kind of take a metric of this. He also recommended

669
00:39:34,640 --> 00:39:37,240
Speaker 1: that the company restructure the board of directors to create

670
00:39:37,320 --> 00:39:40,160
Speaker 1: new independent seats that could be occupied by people who

671
00:39:40,160 --> 00:39:43,200
Speaker 1: are not employed by Uber to provide some more oversight

672
00:39:43,239 --> 00:39:46,440
Speaker 1: to the company. And he said that Uber should launch

673
00:39:46,520 --> 00:39:50,560
Speaker 1: some training programs for all levels of employees, particularly leadership

674
00:39:51,040 --> 00:39:54,359
Speaker 1: on appropriate workplace behavior, leadership behavior, that kind of thing,

675
00:39:55,040 --> 00:39:58,040
Speaker 1: and that they should review their pay practices to verify

676
00:39:58,080 --> 00:40:00,800
Speaker 1: that they were actually complying with state and federal equal

677
00:40:00,840 --> 00:40:03,920
Speaker 1: pay laws. Oh, and he should say that the company

678
00:40:04,160 --> 00:40:08,640
Speaker 1: needed to target some really rich, diverse sources of talent

679
00:40:09,040 --> 00:40:13,600
Speaker 1: and perhaps employ some good practices like blind resume reviews,

680
00:40:13,680 --> 00:40:16,600
Speaker 1: meaning you're not looking at anything that would identify a

681
00:40:16,640 --> 00:40:20,279
Speaker 1: person the UH for a to a specific ethnicity or

682
00:40:20,960 --> 00:40:24,680
Speaker 1: culture or anything like that. You're looking specifically at their qualifications.

683
00:40:25,400 --> 00:40:28,839
Speaker 1: And he presented his report in an epic six hour

684
00:40:29,000 --> 00:40:31,440
Speaker 1: long meeting at Uber, at the end of which the

685
00:40:31,520 --> 00:40:36,000
Speaker 1: board voted unanimously to adopt all of his recommendations. That

686
00:40:36,080 --> 00:40:39,040
Speaker 1: thirteen page report is available to read if you search

687
00:40:39,120 --> 00:40:42,799
Speaker 1: for it. On Google. On top of those recommendations, UH,

688
00:40:42,840 --> 00:40:46,480
Speaker 1: the other law firm had investigated Uber and as a

689
00:40:46,520 --> 00:40:50,400
Speaker 1: result of that investigation, more than twenty people were fired

690
00:40:51,040 --> 00:40:55,359
Speaker 1: during that whole rigamar role. Reasons for the terminations ranged

691
00:40:55,440 --> 00:40:59,960
Speaker 1: from allegations of sexual harassment to using retaliatory tactics. Again,

692
00:41:00,200 --> 00:41:03,920
Speaker 1: employees and a few high ranking Uber executives left the

693
00:41:03,920 --> 00:41:06,960
Speaker 1: company or were fired as part of that fallout. Some

694
00:41:07,080 --> 00:41:11,600
Speaker 1: of them left because they were being wrapped up in this,

695
00:41:11,680 --> 00:41:13,799
Speaker 1: some of them left because they were disgusted by it,

696
00:41:14,239 --> 00:41:16,640
Speaker 1: and a few of them didn't leave on their own account,

697
00:41:16,680 --> 00:41:19,120
Speaker 1: they were fired by the company. It was an incredibly

698
00:41:19,120 --> 00:41:22,440
Speaker 1: disrupt a few months for Uber, and based upon the report,

699
00:41:23,160 --> 00:41:27,479
Speaker 1: this was a shakedown that was long overdue. And while

700
00:41:27,480 --> 00:41:31,560
Speaker 1: that story would be a big one throughout, it's really

701
00:41:31,600 --> 00:41:35,200
Speaker 1: just part of the overall chaos Uber waited through that year.

702
00:41:35,360 --> 00:41:38,240
Speaker 1: Let's get back to the calendar. I'm gonna skip over

703
00:41:38,400 --> 00:41:41,080
Speaker 1: any stories that had to do with the investigation because

704
00:41:41,080 --> 00:41:43,319
Speaker 1: we pretty much covered that and enough to tail with

705
00:41:43,520 --> 00:41:47,400
Speaker 1: maybe one or two tiny exceptions. February was when Google

706
00:41:47,719 --> 00:41:50,880
Speaker 1: made allegations against Uber, and this was another huge story

707
00:41:50,920 --> 00:41:54,680
Speaker 1: in twenty seventeen. They were claiming that Uber had possession

708
00:41:54,760 --> 00:42:01,239
Speaker 1: of stolen proprietary information courtesy of Anthony Lewandowski. Lewandowski had

709
00:42:01,280 --> 00:42:05,000
Speaker 1: worked for Google's self driving car division later known as Weymo,

710
00:42:05,520 --> 00:42:08,759
Speaker 1: but he had left Google and first he created his

711
00:42:08,800 --> 00:42:12,279
Speaker 1: own company called Auto O T t O that was

712
00:42:12,360 --> 00:42:17,040
Speaker 1: consulting for Uber, and later he ended up joining Uber itself. Now,

713
00:42:17,080 --> 00:42:20,319
Speaker 1: this in particular is an ongoing story and not all

714
00:42:20,320 --> 00:42:23,560
Speaker 1: the details are out, but Lewandowski has since gone on

715
00:42:23,680 --> 00:42:26,840
Speaker 1: to found a religion that plans to worship an artificially

716
00:42:26,840 --> 00:42:31,120
Speaker 1: intelligent godhead. I'm gonna have to do an episode about that,

717
00:42:31,400 --> 00:42:33,440
Speaker 1: or get stuff they don't want you to know to

718
00:42:33,480 --> 00:42:36,799
Speaker 1: do an episode about that. Anyway. Lewandowski first said he

719
00:42:36,840 --> 00:42:39,799
Speaker 1: was moved to Uber projects that were unrelated to his

720
00:42:39,880 --> 00:42:43,560
Speaker 1: work at Google, and then later still he was fired

721
00:42:43,640 --> 00:42:46,960
Speaker 1: by Uber. Uber stated the reason for firing Lewandowski was

722
00:42:47,000 --> 00:42:50,560
Speaker 1: his refusal to hand over thousands of documents as requested

723
00:42:50,560 --> 00:42:54,040
Speaker 1: by a judge in the Google Uber case. In late

724
00:42:54,080 --> 00:42:59,560
Speaker 1: February early March, Kalinek suffered some public embarrassment. Bloomberg published

725
00:42:59,600 --> 00:43:02,840
Speaker 1: a record warding of Klani swearing at an Uber driver

726
00:43:03,160 --> 00:43:06,719
Speaker 1: who had been complaining about fair prices. Now, this did

727
00:43:06,719 --> 00:43:09,919
Speaker 1: not make Klink sound like a leader, and he would

728
00:43:09,920 --> 00:43:12,680
Speaker 1: eventually apologize for this outburst, but it didn't do his

729
00:43:12,760 --> 00:43:16,400
Speaker 1: reputation any favors. Following hot on the heels of that

730
00:43:16,480 --> 00:43:20,160
Speaker 1: recording was news that California had forced Uber to agree

731
00:43:20,200 --> 00:43:23,680
Speaker 1: to file for a testing permit for self driving cars

732
00:43:23,719 --> 00:43:25,759
Speaker 1: after the company had run a test program in San

733
00:43:25,800 --> 00:43:30,160
Speaker 1: Francisco without going to the trouble of getting permission first.

734
00:43:30,560 --> 00:43:33,239
Speaker 1: Uber's defense was that there was always a driver in

735
00:43:33,280 --> 00:43:36,239
Speaker 1: the driver's seat during these tests, but the state was

736
00:43:36,400 --> 00:43:39,759
Speaker 1: firm and said that any test involving autonomous cars would

737
00:43:39,760 --> 00:43:43,239
Speaker 1: first require a permit. Uber would later move much of

738
00:43:43,239 --> 00:43:46,680
Speaker 1: its autonomous car tests to Arizona as a result of this.

739
00:43:47,440 --> 00:43:50,840
Speaker 1: A couple of weeks after Uber's capitulation to the California government,

740
00:43:51,160 --> 00:43:54,440
Speaker 1: a report concluded that Uber's self driving cars weren't doing

741
00:43:54,520 --> 00:43:58,120
Speaker 1: so well without human intervention. According to the report, the

742
00:43:58,239 --> 00:44:01,840
Speaker 1: drivers had to step in on average once per mile.

743
00:44:02,400 --> 00:44:05,680
Speaker 1: Compare that with Google's tests, which said their testers had

744
00:44:05,719 --> 00:44:10,280
Speaker 1: to intervene once every five thousand miles, and that doesn't

745
00:44:10,280 --> 00:44:13,880
Speaker 1: sound like Uber was doing really well. Also in March,

746
00:44:14,200 --> 00:44:17,400
Speaker 1: the New York Times published a piece about a tool

747
00:44:17,560 --> 00:44:21,080
Speaker 1: that Uber was using called gray Ball. Now. Grey Ball's

748
00:44:21,120 --> 00:44:24,600
Speaker 1: apparent purpose was to confound law enforcement officials in various

749
00:44:24,640 --> 00:44:29,400
Speaker 1: places that either resisted or outright banned Uber's operation. It

750
00:44:29,440 --> 00:44:33,239
Speaker 1: would collect information about specific individuals using the Uber app

751
00:44:33,320 --> 00:44:37,160
Speaker 1: and other methods, identify them as law enforcement, and then

752
00:44:37,600 --> 00:44:40,520
Speaker 1: steer drivers away from them. In other words, gray Ball

753
00:44:40,640 --> 00:44:44,120
Speaker 1: was a tool that helped Uber evade law enforcement and

754
00:44:44,160 --> 00:44:49,239
Speaker 1: regulatory enforcement. Gray Balls origins were arguably from a legitimate

755
00:44:49,360 --> 00:44:52,120
Speaker 1: use of this technology. It was part of Uber's response

756
00:44:52,160 --> 00:44:55,240
Speaker 1: to v toss vt o S that stands for violation

757
00:44:55,320 --> 00:44:58,360
Speaker 1: of terms of service. Uber wanted to create a tool

758
00:44:58,600 --> 00:45:01,960
Speaker 1: that made it easy for the system to identify problem individuals,

759
00:45:02,000 --> 00:45:05,400
Speaker 1: such as people who were abusing the system to cause trouble. So,

760
00:45:05,480 --> 00:45:08,160
Speaker 1: for example, I mentioned in those battles between Uber and Lift,

761
00:45:08,280 --> 00:45:12,520
Speaker 1: sometimes the employees of one company were accused of arranging

762
00:45:12,600 --> 00:45:15,520
Speaker 1: and then canceling a trip that with the other company,

763
00:45:15,560 --> 00:45:18,080
Speaker 1: and this was all on an effort to tie drivers

764
00:45:18,160 --> 00:45:21,279
Speaker 1: up on wild goose chases across the city. And the

765
00:45:21,360 --> 00:45:24,240
Speaker 1: v t o S tool was meant to identify accounts

766
00:45:24,239 --> 00:45:26,799
Speaker 1: that engaged in that kind of behavior and then effectively

767
00:45:26,960 --> 00:45:30,240
Speaker 1: ignore them boot them from the system. Gray Ball, however,

768
00:45:30,800 --> 00:45:34,640
Speaker 1: was really meant to help Uber sidestep investigations. A video

769
00:45:34,680 --> 00:45:38,400
Speaker 1: recorded in showed it in use. There was a code

770
00:45:38,520 --> 00:45:43,480
Speaker 1: enforcement inspector named Eric England out of Portland, Oregon, and

771
00:45:43,520 --> 00:45:45,600
Speaker 1: he was part of a sting operation who was trying

772
00:45:45,600 --> 00:45:49,400
Speaker 1: to hail an Uber ride in downtown Portland. Now, the

773
00:45:49,480 --> 00:45:53,440
Speaker 1: city had deemed Uber illegal within the city limits, but

774
00:45:53,560 --> 00:45:57,280
Speaker 1: Uber was being Uber then operating within the city anyway,

775
00:45:57,400 --> 00:46:00,120
Speaker 1: and essentially just waiting for legislation to catch up and

776
00:46:00,160 --> 00:46:01,920
Speaker 1: make it legal for them to do what they were

777
00:46:01,920 --> 00:46:05,319
Speaker 1: already doing. England was essentially just trying to catch out

778
00:46:05,400 --> 00:46:08,560
Speaker 1: Uber by hailing a ride, but Uber had used gray

779
00:46:08,560 --> 00:46:13,040
Speaker 1: ball to identify England as a problem. So when he

780
00:46:13,080 --> 00:46:16,120
Speaker 1: opened up his Uber app, it would show cars in

781
00:46:16,200 --> 00:46:19,600
Speaker 1: the area, drivers in the area that could potentially come

782
00:46:19,600 --> 00:46:21,920
Speaker 1: and pick him up. But those were fake. They were

783
00:46:21,960 --> 00:46:24,840
Speaker 1: just icons on a map. They weren't representative of actual

784
00:46:24,880 --> 00:46:27,359
Speaker 1: real cars. This was gray ball in action, giving a

785
00:46:27,400 --> 00:46:31,480
Speaker 1: false sense of where things were going for the investigator,

786
00:46:31,800 --> 00:46:34,399
Speaker 1: and meanwhile, all of his requests were being canceled behind

787
00:46:34,480 --> 00:46:37,560
Speaker 1: the scenes. The Justice Department would later launch a criminal

788
00:46:37,600 --> 00:46:39,960
Speaker 1: probe to investigate this issue, and we're still kind of

789
00:46:39,960 --> 00:46:41,960
Speaker 1: waiting to hear more about that as of the recording

790
00:46:42,000 --> 00:46:46,480
Speaker 1: of this podcast. At the end of March, the Uber

791
00:46:46,600 --> 00:46:49,560
Speaker 1: president Jeff Jones announced he was going to leave the

792
00:46:49,560 --> 00:46:52,279
Speaker 1: company because he felt his own personal values did not

793
00:46:52,440 --> 00:46:56,040
Speaker 1: mesh with the corporate culture at Uber. Specifically, he said

794
00:46:56,080 --> 00:46:59,440
Speaker 1: in a statement to Recode, the beliefs and approach to

795
00:46:59,520 --> 00:47:03,239
Speaker 1: leadership that have guided my career are inconsistent with what

796
00:47:03,360 --> 00:47:06,160
Speaker 1: I saw and experienced at Uber, and I can no

797
00:47:06,239 --> 00:47:10,560
Speaker 1: longer continue as president of the ride sharing business. So

798
00:47:10,600 --> 00:47:14,800
Speaker 1: this was another blow in that series of detailed accounts

799
00:47:14,800 --> 00:47:16,560
Speaker 1: of what was going on behind the scenes at Uber

800
00:47:16,640 --> 00:47:19,200
Speaker 1: and seemed to give a lot of legitimacy to the

801
00:47:19,400 --> 00:47:24,239
Speaker 1: claims and allegations. In April, the Mayor of Pittsburgh, Bill Paduto,

802
00:47:24,440 --> 00:47:26,520
Speaker 1: said in an interview with The Wall Street Journal that

803
00:47:26,640 --> 00:47:29,399
Speaker 1: Uber was falling short on the promises the company had

804
00:47:29,440 --> 00:47:32,800
Speaker 1: made to the city with regards to their self driving

805
00:47:32,840 --> 00:47:35,120
Speaker 1: cartest program. They had said that they were going to

806
00:47:35,160 --> 00:47:37,440
Speaker 1: do a lot of contributions to the city of Pittsburgh

807
00:47:37,440 --> 00:47:39,279
Speaker 1: and seemed to be falling short on that, and so

808
00:47:39,320 --> 00:47:43,200
Speaker 1: the shine was wearing off on the self driving program

809
00:47:43,239 --> 00:47:46,680
Speaker 1: within the city of Pittsburgh. Also in April, the Information

810
00:47:47,040 --> 00:47:50,120
Speaker 1: A Journal filed a story that said Uber had a

811
00:47:50,200 --> 00:47:54,800
Speaker 1: top secret internal program code named Hell, which identified lift

812
00:47:54,920 --> 00:47:58,759
Speaker 1: drivers and also set out processes to create incentives for

813
00:47:58,880 --> 00:48:01,120
Speaker 1: drivers who worked both for Lift and for Uber, with

814
00:48:01,200 --> 00:48:03,320
Speaker 1: the goal of getting those drivers to commit to Uber

815
00:48:03,520 --> 00:48:06,760
Speaker 1: over Lift, and some said that process marked an unfair

816
00:48:06,800 --> 00:48:11,319
Speaker 1: business practice and could be legally actionable. Back in California,

817
00:48:11,680 --> 00:48:13,640
Speaker 1: Uber was alerted that it might have to pay more

818
00:48:13,680 --> 00:48:16,399
Speaker 1: than a million dollars in fines after a report showed

819
00:48:16,440 --> 00:48:21,160
Speaker 1: that Uber had only investigated of passenger reports claiming their

820
00:48:21,239 --> 00:48:24,200
Speaker 1: Uber driver was operating a vehicle while under the influence

821
00:48:24,200 --> 00:48:27,200
Speaker 1: of alcohol, and Uber had promoted its service as a

822
00:48:27,239 --> 00:48:29,880
Speaker 1: way to be responsible by avoiding drunk driving, so this

823
00:48:29,960 --> 00:48:33,560
Speaker 1: was particularly problematic for a company that was claiming it

824
00:48:33,640 --> 00:48:38,560
Speaker 1: was trying to solve a problem while seemingly ignoring that problem.

825
00:48:38,640 --> 00:48:41,640
Speaker 1: In June of seventeen, Uber fired an executive who had

826
00:48:41,680 --> 00:48:45,400
Speaker 1: apparently obtained private medical records of an alleged rape victim

827
00:48:45,440 --> 00:48:48,680
Speaker 1: in India who was pursuing a case against Uber after

828
00:48:48,719 --> 00:48:51,279
Speaker 1: she had been assaulted by an Uber driver. Now, the

829
00:48:51,320 --> 00:48:54,040
Speaker 1: Uber driver was found guilty of rape, and he was

830
00:48:54,080 --> 00:48:58,279
Speaker 1: sentenced in fifteen to life in prison. The victim then

831
00:48:58,400 --> 00:49:01,120
Speaker 1: sued Uber and the and he settled with her out

832
00:49:01,120 --> 00:49:04,719
Speaker 1: of court. But then she discovered that this particular executive

833
00:49:04,800 --> 00:49:09,000
Speaker 1: had obtained her private medical records without her permission, so

834
00:49:09,040 --> 00:49:12,120
Speaker 1: she filed a new lawsuit against Uber. Now eventually the

835
00:49:12,160 --> 00:49:17,600
Speaker 1: company would settle that second lawsuit in December. Also in June,

836
00:49:18,000 --> 00:49:20,440
Speaker 1: kala Nick announced he would take a leave of absence

837
00:49:20,440 --> 00:49:25,040
Speaker 1: from the company. Not only was Uber weathering this PR storm,

838
00:49:25,120 --> 00:49:29,560
Speaker 1: the series of PR storms these disasters, but Klinik had

839
00:49:29,640 --> 00:49:33,960
Speaker 1: also suffered a personal tragedy. His parents were in a

840
00:49:33,960 --> 00:49:39,320
Speaker 1: boating accident in California. His mother tragically died from her injuries,

841
00:49:39,320 --> 00:49:41,520
Speaker 1: and his father was badly hurt. So he said he

842
00:49:41,560 --> 00:49:43,880
Speaker 1: needed to have some time to grieve, as well as

843
00:49:43,920 --> 00:49:46,919
Speaker 1: time to care for his father. One of Uber's board

844
00:49:46,920 --> 00:49:49,440
Speaker 1: of directors, a guy by the name of David Bonderman,

845
00:49:49,600 --> 00:49:53,200
Speaker 1: resigned in June after making a tasteless joke about women

846
00:49:53,360 --> 00:49:58,600
Speaker 1: at Uber during an all hands meeting, which definitely didn't

847
00:49:58,600 --> 00:50:00,520
Speaker 1: sound like a good use of d jgment and in

848
00:50:00,600 --> 00:50:04,239
Speaker 1: fact seemed indicative of the very cultural problems Uber had

849
00:50:04,239 --> 00:50:08,719
Speaker 1: been accused of. Uber then launched a PR program a

850
00:50:08,719 --> 00:50:10,839
Speaker 1: little late, but they did it to try and turn

851
00:50:10,880 --> 00:50:13,640
Speaker 1: things around. It started on June twenty and it was

852
00:50:13,680 --> 00:50:17,880
Speaker 1: called on eighty Days of Change. The following day, that

853
00:50:17,960 --> 00:50:22,120
Speaker 1: change took on real meaning because Kalenik, who was pressured

854
00:50:22,160 --> 00:50:26,440
Speaker 1: by major Uber investors, resigned as CEO. It was pretty

855
00:50:26,440 --> 00:50:29,440
Speaker 1: clear that Kalinnick didn't do this of his own choice.

856
00:50:29,520 --> 00:50:32,799
Speaker 1: He was kind of forced to by the investors. He

857
00:50:32,880 --> 00:50:34,960
Speaker 1: was still on the board, however, and he tried to

858
00:50:34,960 --> 00:50:37,719
Speaker 1: convince the board to bring on Jeffrey Immelt, who was

859
00:50:37,760 --> 00:50:41,080
Speaker 1: the former chief of General Electric and someone that Kalinnik

860
00:50:41,200 --> 00:50:44,280
Speaker 1: was buddies with. The directors disagreed, and instead they hired

861
00:50:44,320 --> 00:50:48,520
Speaker 1: on Dara kasro Shah, He the CEO of Expedia Incorporated. Now.

862
00:50:48,520 --> 00:50:51,960
Speaker 1: According to Bloomberg, kasro Shah he told friends that it

863
00:50:52,040 --> 00:50:54,560
Speaker 1: still felt like Kalenik was calling the shots when he

864
00:50:54,600 --> 00:50:58,439
Speaker 1: first came over to Uber, and he's a very different person.

865
00:50:58,560 --> 00:51:02,080
Speaker 1: Casro Shah he is uh from Kalinnik. He's known as

866
00:51:02,080 --> 00:51:04,759
Speaker 1: a listener and for being diplomatic. Kala Nick is known

867
00:51:04,800 --> 00:51:08,120
Speaker 1: for being very uh to the point and not really

868
00:51:08,200 --> 00:51:11,760
Speaker 1: much of a listener very aggressive and direct, and in September,

869
00:51:13,120 --> 00:51:16,400
Speaker 1: news broke that the City of London had decided not

870
00:51:16,520 --> 00:51:19,880
Speaker 1: to renew Uber's license to operate within the city at

871
00:51:19,880 --> 00:51:22,120
Speaker 1: the end of the month for a host of reasons,

872
00:51:22,160 --> 00:51:25,879
Speaker 1: including the use of gray ball, among them kausro Shaw.

873
00:51:25,960 --> 00:51:28,600
Speaker 1: He wrote an open letter saying that Uber would appeal

874
00:51:28,719 --> 00:51:32,320
Speaker 1: this decision, but also acknowledged that Uber had to change

875
00:51:32,360 --> 00:51:35,239
Speaker 1: the way it did business. And he also said we

876
00:51:35,320 --> 00:51:39,240
Speaker 1: don't have a PR problem, we have an US problem,

877
00:51:39,239 --> 00:51:42,839
Speaker 1: stating that Uber's culture was the heart of the problem,

878
00:51:42,920 --> 00:51:46,960
Speaker 1: not public relations. Uber's leadership was owning up to a

879
00:51:47,000 --> 00:51:51,280
Speaker 1: systemic cultural problem within the company. This is a positive

880
00:51:51,360 --> 00:51:54,840
Speaker 1: change in my view, but obviously just the beginning of change.

881
00:51:55,280 --> 00:51:59,520
Speaker 1: In August, Ryan Graves, the quote unquote first employee at Google,

882
00:52:00,040 --> 00:52:02,880
Speaker 1: although not really he had followed a couple of engineers,

883
00:52:03,000 --> 00:52:05,520
Speaker 1: announced that he was leaving his position as s VP,

884
00:52:05,680 --> 00:52:08,279
Speaker 1: but he would stay on as Uber's on Uber's board

885
00:52:08,280 --> 00:52:11,080
Speaker 1: of directors and help with the transition of c e O.

886
00:52:11,200 --> 00:52:13,799
Speaker 1: S oh, and there was one more disaster to cover

887
00:52:14,440 --> 00:52:18,760
Speaker 1: before we conclude. Actually, there are quite a few others

888
00:52:18,800 --> 00:52:22,279
Speaker 1: I could cover, but this episode is running along, so

889
00:52:22,320 --> 00:52:25,920
Speaker 1: we'll just focus on one. In November, several magazines and

890
00:52:26,000 --> 00:52:29,919
Speaker 1: journals reported that Joe Sullivan, Uber's chief security officer, had

891
00:52:29,960 --> 00:52:33,240
Speaker 1: tried to cover up a data breach by paying hackers

892
00:52:33,320 --> 00:52:36,879
Speaker 1: one hundred thousand dollars in return for which they would

893
00:52:36,960 --> 00:52:40,279
Speaker 1: delete the stolen data they had taken. Stolen data the

894
00:52:40,320 --> 00:52:46,320
Speaker 1: represented personal information of fifty seven million Uber drivers and customers,

895
00:52:46,360 --> 00:52:49,480
Speaker 1: so Sullivan wanted the hackers to sign a non disclosure agreement,

896
00:52:49,560 --> 00:52:52,480
Speaker 1: and according to The New York Times, he had Klini's

897
00:52:52,520 --> 00:52:57,000
Speaker 1: approval to do all of this. Uber ultimately fired Sullivan.

898
00:52:57,080 --> 00:53:00,440
Speaker 1: He had earned a reputation for clandestine and frankly kind

899
00:53:00,440 --> 00:53:04,560
Speaker 1: of shady dealings, including ordering surveillance on potential problematic people.

900
00:53:04,719 --> 00:53:07,840
Speaker 1: I mentioned some of that before UH. He had himself

901
00:53:07,880 --> 00:53:12,280
Speaker 1: designated as Deputy General Counsel, presumably in order to grant

902
00:53:12,320 --> 00:53:18,000
Speaker 1: his communications secrecy under attorney client privilege and other somewhat

903
00:53:18,840 --> 00:53:22,799
Speaker 1: suspicious kind of policies, like he wanted everyone to use

904
00:53:23,200 --> 00:53:26,640
Speaker 1: apps that would allow people to send messages, but those

905
00:53:26,680 --> 00:53:28,879
Speaker 1: messages would be deleted after a certain amount of time,

906
00:53:28,920 --> 00:53:31,440
Speaker 1: so there would be no trail left in case there

907
00:53:31,480 --> 00:53:35,160
Speaker 1: was a following investigation. Kind of black ops sort of

908
00:53:35,160 --> 00:53:39,040
Speaker 1: stuff if you ask me. Now. Kalink recently announced that

909
00:53:39,080 --> 00:53:42,200
Speaker 1: he plans to sell about of his stake in Uber.

910
00:53:42,719 --> 00:53:46,520
Speaker 1: That wouldn't let him about one point four billion dollars.

911
00:53:46,520 --> 00:53:48,759
Speaker 1: So he's not exactly hurting for cash in the wake

912
00:53:48,840 --> 00:53:51,520
Speaker 1: of all this, but he might find it could take

913
00:53:51,560 --> 00:53:53,239
Speaker 1: a while for some people to view him in a

914
00:53:53,239 --> 00:53:58,240
Speaker 1: positive light given the way things unfolded at Uber. And

915
00:53:58,280 --> 00:54:01,279
Speaker 1: by the way, Bloomberg states that at Uber operated at

916
00:54:01,320 --> 00:54:05,719
Speaker 1: a loss of four billion dollars in seen and yet

917
00:54:05,800 --> 00:54:10,239
Speaker 1: investors are still optimistic. They point to Amazon and they say,

918
00:54:10,280 --> 00:54:12,560
Speaker 1: look over here, there's a company that operated in the

919
00:54:12,600 --> 00:54:15,200
Speaker 1: red for years before it ever turned a profit. And

920
00:54:15,239 --> 00:54:18,400
Speaker 1: that's true. Amazon did not operate at a profit for

921
00:54:18,480 --> 00:54:22,160
Speaker 1: many years. They took losses for quite some time, but

922
00:54:23,440 --> 00:54:26,520
Speaker 1: nowhere near on the same level as Uber. Like, the

923
00:54:26,560 --> 00:54:30,000
Speaker 1: losses didn't come in the form of a billions of dollars.

924
00:54:31,040 --> 00:54:35,080
Speaker 1: So Uber has a lot of challenges. They've got tough

925
00:54:35,120 --> 00:54:38,279
Speaker 1: competition with Lift and other competitors. They've got a huge

926
00:54:38,360 --> 00:54:41,880
Speaker 1: hurdle to overcome along with a with a public perception.

927
00:54:42,160 --> 00:54:45,920
Speaker 1: They have to shed a tarnished reputation that seems like

928
00:54:45,920 --> 00:54:48,680
Speaker 1: it was really well earned. They have to demonstrate that

929
00:54:48,719 --> 00:54:51,880
Speaker 1: it's a new company with new values that it's absolutely

930
00:54:51,880 --> 00:54:54,799
Speaker 1: committed to support. And they need to make sure that

931
00:54:54,840 --> 00:54:58,080
Speaker 1: they are not just catering to their customers, who definitely

932
00:54:58,120 --> 00:55:01,880
Speaker 1: need to be thought about, but also their drivers, whether

933
00:55:02,120 --> 00:55:06,000
Speaker 1: that's to acknowledge that drivers are employees and thus change

934
00:55:06,040 --> 00:55:09,759
Speaker 1: their business model or treat them well as contractors. They

935
00:55:09,760 --> 00:55:11,600
Speaker 1: have to do all of these things, and none of

936
00:55:11,600 --> 00:55:14,200
Speaker 1: them are easy. They're they're easy to say, but they're

937
00:55:14,239 --> 00:55:16,920
Speaker 1: not easy to enact. But if they can do all

938
00:55:16,960 --> 00:55:20,399
Speaker 1: of that, then Uber might just emerge as that powerhouse

939
00:55:20,480 --> 00:55:24,759
Speaker 1: that the investors believe it is going to be. And

940
00:55:24,800 --> 00:55:29,040
Speaker 1: if they can't, they might just continue on until the

941
00:55:29,120 --> 00:55:32,080
Speaker 1: investment money starts to dry up and the company ends

942
00:55:32,160 --> 00:55:37,360
Speaker 1: up spending itself out of business. UH. Personally, I really

943
00:55:37,360 --> 00:55:40,200
Speaker 1: hope they're able to turn things around for the sake

944
00:55:40,239 --> 00:55:42,920
Speaker 1: of the people working for Uber and the people who

945
00:55:42,960 --> 00:55:46,600
Speaker 1: depend upon Uber. I really hope the company can can

946
00:55:46,640 --> 00:55:50,840
Speaker 1: fix things, because Uh, I don't want to see anyone fail.

947
00:55:51,280 --> 00:55:54,720
Speaker 1: At the same time, I am hopeful that the trend

948
00:55:54,760 --> 00:55:59,000
Speaker 1: we're seeing where they're accepting accountability for some pretty questionable

949
00:55:59,120 --> 00:56:02,520
Speaker 1: and in some cases potentially illegal decisions that have been

950
00:56:02,560 --> 00:56:06,040
Speaker 1: made by various executives throughout the years can be corrected.

951
00:56:06,640 --> 00:56:11,480
Speaker 1: That's my hope. Now that concludes the Uber story for now. Anyway,

952
00:56:11,640 --> 00:56:13,719
Speaker 1: Hopefully we'll have more to talk about in a couple

953
00:56:13,760 --> 00:56:16,520
Speaker 1: of years, maybe some great success stories. I would love

954
00:56:16,560 --> 00:56:19,880
Speaker 1: to do an episode that talks about how they rose

955
00:56:19,960 --> 00:56:24,359
Speaker 1: from the ashes and and really blossomed. But until then,

956
00:56:24,520 --> 00:56:27,240
Speaker 1: I'm going to have to start looking at other topics.

957
00:56:27,320 --> 00:56:29,600
Speaker 1: But you guys can help me out. You could suggest

958
00:56:29,640 --> 00:56:32,279
Speaker 1: topics I should cover for tech Stuff. You can get

959
00:56:32,280 --> 00:56:35,000
Speaker 1: in touch with the via email. The addresses tech Stuff

960
00:56:35,160 --> 00:56:37,720
Speaker 1: at how stuff works dot com, or you can drop

961
00:56:37,760 --> 00:56:40,880
Speaker 1: me a message on Twitter or Facebook. The handle I

962
00:56:41,000 --> 00:56:43,800
Speaker 1: use for the show is text stuff h s W.

963
00:56:44,400 --> 00:56:46,719
Speaker 1: Follow us on Instagram. You can see all sorts of

964
00:56:46,760 --> 00:56:50,640
Speaker 1: cool stuff over there. And remember on Wednesdays and Fridays,

965
00:56:50,960 --> 00:56:55,359
Speaker 1: I record this show, and I typically recorded live on

966
00:56:55,400 --> 00:56:58,280
Speaker 1: twitch dot tv slash tech Stuff, so you can actually

967
00:56:58,280 --> 00:57:00,440
Speaker 1: tune in and watch me record the show live if

968
00:57:00,480 --> 00:57:02,520
Speaker 1: you like. We have a chat room there. You can

969
00:57:02,680 --> 00:57:04,719
Speaker 1: talk with me in the chat room. Every time I

970
00:57:04,719 --> 00:57:07,640
Speaker 1: haven't a break, I chat with everybody who's there, and

971
00:57:07,680 --> 00:57:10,040
Speaker 1: you can see when I mess up, and believe me,

972
00:57:10,120 --> 00:57:13,080
Speaker 1: if you could have seen this recording session, you would

973
00:57:13,080 --> 00:57:16,400
Speaker 1: have noticed it on multiple occasions. Also, yeah, I know

974
00:57:17,120 --> 00:57:20,400
Speaker 1: I've pronounced Kala Nick's name in two totally different ways

975
00:57:20,400 --> 00:57:23,360
Speaker 1: in two different episodes. I know that. Uh if you

976
00:57:23,440 --> 00:57:25,800
Speaker 1: wrote to me to explain how stupid I am for

977
00:57:26,080 --> 00:57:28,720
Speaker 1: pronouncing it one way and then pronouncing it the other way,

978
00:57:28,880 --> 00:57:33,080
Speaker 1: ha ha, I knew already and you probably didn't even

979
00:57:33,160 --> 00:57:36,680
Speaker 1: listen to this, So that shows who's the stupid one now,

980
00:57:36,720 --> 00:57:40,240
Speaker 1: stupid face, But now you you guys, I love. I

981
00:57:40,320 --> 00:57:42,480
Speaker 1: love all of you, the ones who actually listened. It's

982
00:57:42,520 --> 00:57:45,840
Speaker 1: the stupid faces who stopped. I should probably go and

983
00:57:45,840 --> 00:57:48,480
Speaker 1: get some COYE and I'll tell to you guys again

984
00:57:49,280 --> 00:57:57,800
Speaker 1: really soon. For more on this and thousands of other

985
00:57:57,840 --> 00:58:04,280
Speaker 1: topics because it has to have works dot com who