Harry here. I wasn’t that surprised when dash cam footage surfaced of Uber CEO Travis Kalanick arguing with a driver this week; I think that video pretty much sums up who he is and how he feels about drivers. But the bad news didn’t stop there and it seems like every day a shocking new story about Uber is hitting the press.
Today, senior RSG contributor John Ince gives us his take on the now infamous Uber CEO video, the lawsuit Google just filed against Uber and the Uber exec who was forced to resign this week.
In Video, Uber CEO Argues With Driver Over Falling Fares [Bloomberg]
Sum and Substance: When Uber Chief Executive Officer Travis Kalanick takes an Uber, he prefers a black car, the high-end service his company introduced in 2010.
On this particular night, Kalanick is seemingly at ease as the ride ends and his friends hop out of the car. … Kalanick thinks the ride is over. But having the CEO in his car is an opportunity Kamel has been waiting for…. Then Kamel says what every driver has been dying to tell Kalanick: “You’re raising the standards, and you’re dropping the prices.”
Kalanick: “We’re not dropping the prices on black.”
Kamel: “But in general the whole price is—”
Kalanick: “We have to; we have competitors; otherwise, we’d go out of business.”
Kamel: “Competitors? Man, you had the business model in your hands. You could have the prices you want, but you choose to buy everybody a ride.”
Kalanick: “No, no no. You misunderstand me. We started high-end. We didn’t go low-end because we wanted to. We went low-end because we had to because we’d be out of business.” …
Kamel: “But people are not trusting you anymore. … I lost $97,000 because of you. I’m bankrupt because of you. Yes, yes, yes. You keep changing every day. You keep changing every day.”…
Kalanick: “Bullshit.”… “You know what?”… “Some people don’t like to take responsibility for their own shit. They blame everything in their life on somebody else. Good luck!”
Kamel: “Good luck to you, but I know [you’re not] going to go far.”
The door slams. Kamel drives away. Later, the Uber driver app prompts him to rate Kalanick, as he does all his riders. Kamel gives him one star.
My Take: Fascinating conversation and kudos to Kamel, the driver, for challenging Kalanick over an issue that affects all drivers. The fallout from this video in the media has been swift and brutal because the Kalanick’s behavior fits the prevailing narrative about him and Uber. Mashable has gotten over a thousand shares for a story with the headline, Uber’s Travis Kalanick: Yep, I’m a jerk, basically.
I was struck by several things about the video. First, let’s give the Uber CEO some credit for taking the time, after the ride has ended, to engage with the driver, attempting to offer some explanations for the fare cuts. Not every corporate CEO would do that.
Second I was impressed by how casual and personable Travis Kalanick was – initially. I could see how he could easily charm people. But then I was struck by how quickly Kalanick shifted into attack mode. With little provocation, he dissed this driver and then dismissed him as one of them – the irresponsible types. Also, Kalanick showed little respect for the facts of the situation. He said it was “bullshit” that prices had dropped, when it isn’t bullshit.
Kalanick thought the driver was talking about Black Car fares, but those fares have dropped, and while they haven’t dropped as much, it’s still a drop. This is a matter of demonstrable fact, and Kalanick simply denied it.
According to the Boston Globe, “Kamel is generally correct that Uber fares have decreased in recent years. According to older versions of Uber’s website that were archived, an Uber Black ride in San Francisco in 2012 cost $4.90 per mile or $1.25 per minute when the vehicle slowed below 11 miles-per-hour in traffic. Today, the rate is just $3.75 per mile plus $0.65 per minute, regardless of speed.
Kamel flubbed the current mileage rate — he was low by a dollar — but it’s true that rates have declined, so we’ll give him the point. Rates have also gone down in Boston. In October 2013, the company slashed its base fare for Uber X rides in Boston from $5.00 to $2.50, the minimum fare from $10 to $4, and the per-mile rate from $2.60 to $2.05. Today, after further cuts, the per-mile Uber X rate in Boston is just $1.24, plus 20 cents per minute. Uber has also boosted its cut of every fare from 20 to 25 percent, further squeezing drivers. (The minimum fare has ticked back up to $6.35, though.)”
Furthermore, the fare cuts are a reality that Travis Kalanick is largely is responsible for, a reality that cuts into the earning potential of all drivers everywhere. In some markets, fares have been cut by more than 50% in three years. Drivers had no voice in these decisions.
It’s been a incremental process Kalanick defends as a business necessity. No! It isn’t necessary to offer a product to passengers at below market rates, thus subsidizing passenger fares. This was a huge gamble by Kalanick and team, spurring a price war, designed to put their competitors (Lyft and taxis) out of business, so that Uber gains a monopoly and then can raise fares at will.
It hasn’t worked out that way. Lyft is using all the bad news about Uber to raise at least another $500 million from investors at a higher valuation. Uber’s aggressive pricing strategy / gamble, at least in the short term, has resulted in bigger losses than any startup in history – over $3 billion in FY 2016. This money comes directly out of the cash hoard Uber has raised from investors. Slashing prices has been controversial from the get-go, a very tenuous proposition from a business perspective.
After the argument over fares, the Kalanick / Kamel conversation rapidly degenerated, with both Travis and Kamis talking over each other. Finally when all else failed, Kalanick reverted to default line of thinking for many people in his position – “some people don’t like to take responsibility for their own shit. They blame everything in their life on somebody else. Good luck!”
What? Travis, you’re worth how much? $6 billion (at least on paper) all of it made on the backs of the drivers. Here one of your most loyal and longest-tenured drivers tells you he’s worked for years for you. He’s taken risks for you, personal and financial risks for you, resulting in a loss of $97,000 (not sure where this figure comes from) and bankruptcy (again unexplained). Nevertheless Kalanick accuses the driver of not taking responsibility for his own life?
What do you think? If you had Travis in the back seat of your car, what would you say to him? My advice to him would be: “Travis, buckle up your seatbelt (which does not appear to be on in the video) … this ride is about to get pretty wild.”
Meet The Former Google Engineer Who Allegedly Stole Secrets For Uber [Forbes]
Sum and Substance: In Oct. 2016, when Anthony Levandowski showed FORBES a demo of Uber Technologies’ nascent self-driving car project, he was less than a year removed from Google. At 36, Levandowski had spent almost nine years at the search giant, spearheading its autonomous vehicles unit. But in Jan. 2016, he abruptly left and cofounded a new self-driving startup called Otto Trucking, which Uber bought less than seven months later for a reported $680 million.
During that interview, Levandowski, vice president of Uber’s advanced technologies group, went out of his way to say that his current project was not built on the intellectual property of anything he had worked on at Google. “We did not steal any Google IP,” he told FORBES at the time. “Just want to make sure, super clear on that. We built everything from scratch and we have all of the logs to make that—just to be super clear.”
On Thursday, Waymo, the self-driving technology subsidiary of Google’s parent company, Alphabet, sued Uber alleging that the San Francisco-based ride-sharing company had stolen proprietary technology and infringed on its patents. Levandowski, who is not personally named as a defendant in the suit, is accused of taking data and plans from the company’s self-driving car project just weeks before he resigned to start his own venture—and then bringing those plans to Uber.
In its lawsuit, Waymo said that in Dec. 2015, Levandowski “downloaded more than 14,000 highly confidential and proprietary files,” which he allegedly transferred to an external drive before attempting to reformat his laptop “to erase any forensic fingerprints.” In that data, Waymo claimed, was information about the components of the advanced LiDAR laser system both companies now use for their self-driving test vehicles. Waymo added that “this calculated theft reportedly netted Otto employees over half a billion dollars and allowed Uber to revive a stalled program, all at Waymo’s expense.” …
While Levandowski joined Google in 2007 to work on mapping technology, it wasn’t until 2011 that the search giant acquired the company he founded, 510 Systems and its sister company Anthony’s Robots. That deal was done in secret, with some employees signing non-disclosure agreements that prevented them discussing the acquisitions, according to one report.
510 became core to Google’s self-driving technology and in May 2012, Levandowski took part in the first government-run autonomous vehicle test, which took place along the Las Vegas strip…. “Beyond Mr. Levandowski’s actions, we discovered that other former Waymo employees, now at Otto and Uber, downloaded additional highly confidential information pertaining to our custom-built LiDAR including supplier lists, manufacturing details and statements of work with highly technical information,” Waymo said in a blog post on Thursday. “Months before the mass download of files, Mr. Levandowski told colleagues that he had plans to ‘replicate’ Waymo’s technology at a competitor.”
My Take: It’s getting difficult to find any positive news about Uber these days, and there’s a pattern emerging here. Uber’s key executives, an elite inner circle of mostly white males, operate without regard or respect for the people who are making their success possible. Sometimes their behavior is obnoxious. Sometimes it’s dishonest or immoral. And sometimes, like here, it skirts the law.
Uber execs deny everything until it comes into public view in bold relief, in a way that they can no longer avoid, through an article, a video or a lawsuit. Then suddenly the execs express remorse.
But the remorse is shallow. They don’t yield on any of the matters that affect they ability to continue along their current course. Their public statements deflect attention from their bottom line. They prefer to settle out of court without admitting guilt, than potentially have the facts of the situation become a matter of public record.
They promise to change their ways. But they don’t change. Instead they push the limits of legality as far as they can get away with, until again someone else steps forward with something that can’t be shoved under the rug. Don’t believe me on this? Just Google “Uber lawsuit.” There are almost 100 lawsuits pending, and scandals breaking every day. What’s next? Who knows, as the Uber saga has only begun. This is a company adrift, without a principled leader at the helm or moral rudder to steer the ship.
Uber’s SVP of engineering is out after Recode surfaces previous sexual harassment allegation [Mashable]
Sum and Substance: Finally, some evidence that Uber is taking sexual harassment allegations seriously. Amit Singhal, formerly Uber’s senior vice president of engineering, has resigned after reports surfaced of him leaving his previous job at Google due to sexual harassment allegations, Recode reported Monday. CEO Travis Kalanick asked for Singhal’s resignation Monday morning.
The news comes just a week after Susan Fowler Rigetti brought attention to Uber problems with a toxic work culture and sexism in the workplace with a blog post on her personal experience. Kalanick said he would conduct a thorough investigation of the matter with Attorney General Eric Holder and Uber board member Arianna Huffington. But apparently this latest development is not due to that team and can be chalked up as another failure by Kalanick and his executive team. Uber executives were informed of the situation after Recode’s Kara Swisher informed them of the matter.
“Sources at Uber said that the company did extensive background checks of Singhal and that it did not uncover any hint of the circumstances of his departure from Google. Singhal disputed the allegation to Google execs at the time,” Swisher wrote. The absence of that knowledge by Uber is quite unfathomable. Swisher spoke to multiple sources and had internal notes read to her that provided evidence of an alleged encounter between Singhal and a female employee.
To be sure, Google HR was not contractually obligated to tell Uber HR of Singhal’s full reason for departure. No charges were made. The female employee who filed the complaint did not want to go public, according to Recode. Singhal had spoken with former Google HR head Laszlo Bock and Google CEO Sundar Pichai on the claims in late 2015, Swisher wrote. He resigned from Google in early 2016.
Singhal denied the allegations in an email to Swisher. “Harassment is unacceptable in any setting. I certainly want everyone to know that I do not condone and have not committed such behavior,” he wrote. “In my 20-year career, I’ve never been accused of anything like this before and the decision to leave Google was my own.” Uber declined to comment. Google did not immediately respond to a request for comment.
My Take: The news about Uber is getting a bit surreal. After numerous news stories surfaced with multiple accounts of Uber’s HR department glossing over allegations of sexual harassment within their own house, they now summarily dismiss (or force resignation) their Senior Vice President of Engineering for something he allegedly did while at Google.
The first question that comes to mind is how this guy passed inspection at Uber in the first place if he had this cloud hanging over his head. And why is he being thrown under the bus now? I can certainly understand why Uber might want to make a very public announcement – taking firm action on sexual harassment. But the accused has vehemently denied the allegations, and he has been denied any semblance of due process from Uber.
Uber’s at-will firing policy permits them to do this with any employee, creating a culture of fear within the company. Of course denial of due process by Uber is nothing new. How many drivers have been de-activated on the basis of unsubstantiated allegations from passengers? I’m not defending this guy. I’m just asking basic legal questions and wondering how Uber might answer them. After all, Uber has become a very popular target of legal action. I wonder why?
Readers, what do you think of this week’s round up? And what would you say to Travis if you had him in your car?
-John @ RSG
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