Harry here. It seems like the media usually likes to report on Uber drivers behaving badly, but this week there was a twist. A new video surfaced and an old friend also came back with a lawsuit against the driver he beat up.
Today, RSG contributor John Ince shares a couple stories on bad passenger behavior, GM’s foray into rideshare, a new money making opportunity and more.
Ex-Taco Bell Exec Who Attacked an Uber Driver Is Now Suing For $5 Million
Sum and Substance: After drunkenly attacking an Uber driver, former Taco Bell executive Benjamin Golden is suing him for $5 million. Golden, 32, was arrested and charged with assault and battery for attacking 23-year-old Edward Caban on Oct. 30, to which he pleaded not guilty.
Taco Bell immediately fired Golden, suggesting that he “seek professional help,” and Caban then sued him for damages mounting up to more than $25,000. The Orange County Register reported that Golden filed a cross-complaint against Caban, arguing that the driver recorded him and posted the video to YouTube without his consent.
Golden claims that he began to “fear for his safety and well-being” when Caban chose to pull over and kick him out of the car. As Fortune previously reported, he then started hitting the driver over the head and pulling his hair. Next, Caban sprayed Golden with Mace in defense, blinding him. The YouTube video, which has since been taken down, received millions of views. The complaint argues that as a result of Caban’s actions, Golden suffered emotionally, was humiliated, and lost his job. The lawsuit claims invasion of privacy, negligent and intentional infliction of emotional distress, and assault and battery. It’s requesting that Golden be compensated more than $5 million in damages.
My Take: By now most drivers have seen the video of the drunken passenger who attacked the Uber driver in SoCal and subsequently went public with a “remorseful” apology after he was fired by Taco Bell. One of the driver takeaways from that story was how smart the driver was to have documented the whole incident with a dash cam. Not so fast. This week, the “remorseful” Taco Bell guy has now sued the driver for $5 million for “illegally” recording the incident.
As a footnote, Harry’s blog post earlier this week, featured a video that’s gone viral about a Miami woman who attempted to hijack an Uber and kinda lost it when he refused. The whole incident was recorded by the guy who had requested the Uber in the first place. Will this Miami woman now sue? Stay tuned on this one.
Why we sold to GM
Sum and Substance: Yesterday news broke of General Motor’s acquisition of Sidecar assets. Why the sale? In short, we were forced to shut down operations and sell. We were unable to compete against Uber, a company that raised more capital than any other in history and is infamous for its anti-competitive behavior.
The legacy of Sidecar is that we out-innovated Uber but still failed to win the market. We failed for the most part because Uber is willing to win at any cost and they have practically limitless capital to do it.
When it was clear we needed to sell the company, it was important to the board and me that we continue Sidecar’s spirit of innovation and land Sidecar employees in great jobs. Finding a buyer like GM fulfilled our goals. Once the term sheet was signed with GM in December and the strategy was clear, we ceased operation of our ride and delivery operations and focused on closing the deal.
With the acquisition of Sidecar assets, GM gains the team and technology to accelerate their mobility plans and grow their new mobility offering into a world-class transportation service. The key component to the transaction is a license to Sidecar patents. Sidecar retains ownership of those patents.
My Take: While it’s easy to dismiss a story like this as a small footnote to Uber’s domination of the ride-hailing industry, there’s a kicker to this deal that could be huge – Sidecar owned and still owns the patent that just could be the most valuable asset in the entire industry.
In this deal Sidecar now licenses US Patent #6356838 for “a System and method for determining an efficient transportation route” and has other patents pending. Given that Uber owns no cars, and has very few tangible assets, this patent could be a huge strategic chip – and the license to use this patent now resides with GM – a company that has the wherewithal to compete with Uber where Sidecar couldn’t. With GM’s related announcement that it’s launching a ridesharing subsidiary called Maven, GM could potentially play the role of patent troll and throw another legal wrench into Uber’s plans for world domination. They certainly have the resources to mount an extended legal challenge to Uber’s for patent infringement. Or they could align their Maven with the Lyft that they just invested $500 million in. This plot just got very interesting.
Wrapify Is A Startup Paying Drivers To Wrap Their Car In Ads
Sum and Substance: Owning a car is expensive. Gas, insurance, and other miscellaneous car-related costs add up, and mean that in some cities it’s already cheaper to replace your car with ride-sharing services like Uber and Lyft.
One startup, Wrapify, is trying to buck this trend by putting money back into the pocket of car owners. The 6 month old-old startup pairs drivers willing to wrap their car with companies looking for a unique way to advertise.
Here’s how it works: Wrapify has a two-sided marketplace that lets drivers signup, decide the extent that their car will be wrapped (partial, full, etc.), and even choose which marketer they want to work with to wrap their car. After accepting an ad campaign, drivers drop their car off for a free wrap, then get paid an average of $450 a month for the length of their contract. Drivers use Wrapify’s smartphone app to track the length of their commute, and are paid per mile based on a variety of factors, including if the wrapped car was driving through a highly-populated area, or if it was sitting in traffic for a lengthy period of time (where it would get a lot of eyeballs).
My Take: First off, be clear – this is not an option for Uber drivers. The company does not allow drivers’ cars to be wrapped. So if you want to do this, you need to give up your Uber life (or lie?). But for those who are upset about fare cuts – it might make an interesting and alternative way to earn extra income. Ask yourself, how many hours would I have to drive to earn $450? Would it be easier just to leave your car somewhere near lots of passing eyeballs, and then let your car sit there while you do something else more productive and possible more lucrative with your time?
Uber relaxes restrictions on nonviolent criminals becoming drivers in California
Sum and Substance: Uber will begin to allow more people with nonviolent criminal convictions to become drivers in California. According to The Wall Street Journal, Uber will lift its ban on certain nonviolent and nonsexual offenses, including petty theft and check fraud, that were previously flagged during background checks and prevented people from becoming drivers.
Uber essentially says this is a way for it to offer work to people who might otherwise have a hard time finding it, even as they’re trying to turn their lives around. “We should all be in favor of giving everyone a fair chance,” Joe Sullivan, Uber’s chief security officer, tells the Journal.
It’s not stated whether this new policy will extend outside of California. Another policy, however, will certainly be exclusive to the state: Uber will begin to email drivers who are being rejected because of a felony conviction that they may be able to reduce under California’s Proposition 47, a 2014 initiative that reclassifies certain drug felonies and thefts as misdemeanors.
Uber will maintain its blanket ban on felonies, but applicants who reduce their conviction could become eligible. The Journal reports that Uber will also refer applicants with felony convictions to nonprofits dedicated to helping former inmates with jobs and skill training.
My Take: Harry has repeatedly suggested that Uber is in a race to the bottom in it’s efforts to recruit new drivers. This is one more step in the downward direction. Uber is attempting to frame this move as an effort to give former felons a path back to economic self-sufficiency. Somehow, Uber’s image as a socially conscious employer doesn’t seem credible in the face of so many other moves that smack of naked and self interested capitalism. And what will Uber’s explanation be if one of these former felons somehow compromises the safety of a passenger? Stay tuned.
Uber Prepares Meal-Delivery Service for 10 U.S. Cities
Sum and Substance: Uber Technologies Inc. is preparing to go live with a full-scale meal delivery service across 10 cities in the U.S., an expansion that will test the company’s ability to use its drivers to move goods.
In the coming weeks, customers in such cities as Los Angeles, Chicago, New York and Austin, Texas, will be able to use a new, dedicated UberEats app to order from the full menus of dozens of local restaurants and have their food quickly delivered by an Uber driver, a company spokeswoman said in an interview.
Uber aims to build a new stream of revenue in food delivery, a highly competitive and still-speculative business where a range of venture-funded startups—from Postmates Inc. to DoorDash Inc.—already vie for customers. Some of these companies have struggled to demonstrate they can operate profitably, leading to difficulty raising new funding at high valuations and a slowdown in hiring.
One of Uber’s early ride-hailing competitors, Sidecar Technologies Inc., experimented with delivering food and packages over the past year before shutting down last month and selling its assets to General Motors Co. In a blog post on Wednesday, Sidecar co-founder and Chief Executive Sunil Paul said his company “out-innovated Uber but still failed to win the market…because Uber is willing to win at any cost and they have practically limitless capital to do it.”
The UberEats delivery service, an expansion of a lunchtime-only service Uber began offering in a dozen cities last year, will use its network of more than a million drivers to transport goods, in addition to people. In recent years, Uber has had mixed results when it tried its hand at local logistics, transporting everything from designer suits in New York to toothpaste in Washington, D.C.
My Take: Ever wonder why investors are still clamoring to get in on Uber’s latest fundraising round? Here’s part of the answer. Uber presents itself to investors as much more than a taxi company. They start with the assumption that they have this obedient corps of 1 million drivers, who are dutifully responding to Uber’s latest gambit – always wanting more ways to earn income. So Uber then layers on top of it all kinds of business models – food delivery – package delivery – in car advertising – on and on. Yet no one in that investor class scrutinizes the basic assumption – are drivers really in Uber’s pocket or will they bolt the moment a better opportunity arises? You’re in the driver’s seat – what do you think?
-John @ RSG