Today’s round up is somewhat like a “weekly weird” round up, with a little critique (or observation) of capitalism thrown in. In this round up, senior RSG contributor John Ince covers a suspiciously high cost ride charged to a passenger, a car stolen and possibly used to drive for Lyft, and the fact that Uber’s rise and fall would have happened no matter what. Let us know your thoughts on this round up in the comments!
Uber Charged This Passenger $15,000 for a 20-Minute Ride [Slate]
Sum and Substance: Uber apologized to a Toronto man who was accidentally charged more than $14,000 for a 20-minute journey. Hisham Salama was expecting to pay around $20 for the ride last Friday, which he said he was taking to visit a friend in hospital. Instead, he was hit with a bill for $18,518 (in Canadian dollars), which is about $14,420 when converted to U.S. dollars.
“My first reaction was to just laugh,” Salama told Vice. However he soon realized it was no joke when Uber initially refused to refund him. A customer support officer reportedly told him: “I can confirm that based on the pickup and drop-off locations of the trip you took, this fare is correct.” But Salama refused to accept that response, and took to social media. “Obviously, no 20 min fare is $18,500,” he tweeted at the company.
His tweet received more than 400 retweets, and eventually Uber backed down. “There was an error here and it has been resolved,” an Uber spokesperson told Slate. “We have provided a full refund to this rider and apologized to him for this experience. We have safeguards in place to help prevent something like this from happening, and we are working to understand how this occurred.”
My Take: Great timing for Uber. A PR blunder of huge proportions just as chief rival Lyft arrives in town. What I found particularly interesting about this episode is that not once, but twice, Uber responded by disputing the veracity of the passenger’s claim. Any reasonably sentient human being can quickly determine that something’s not right with a $15,000 charge for a 20 minute ride.
It’s either incompetence or dishonesty and I’m leaning towards the latter. Uber is a data company. Surely Uber knows what percentage of claimants drop matters if they get one denial. They know what percentage give up after two denials.They probably even know how claimant persistence varies according the the amount at stake. If Uber can save significantly by instructing their customer reps to automatically start with two denials, would Uber be capable of that? It’s happened to me. Has it happened to you? You decide.
Former Facebook exec Chamath Palihapitiya: Uber is ‘the great American tragedy playing out’ [Business Insider]
Sum and Substance: Over the course of 2017, Uber went from one of the most admired companies in Silicon Valley to one of the most vilified. Many executive heads have rolled including former CEO Travis Kalanick. But investors also have responsibility in how a company is run, one famous VC and former Facebook exec argues. He applauds Uber’s biggest VC, Benchmark, for the drastic steps it took this year.
The wave of scandal and controversy that washed over Uber this year has been nothing short of spectacular. But the sad truth is, almost any Silicon Valley startup could be the next Uber. That’s because every startup is encouraged to begin operating with the same “growing at all costs” playbook that Uber relied on, says Chamath Palihapitiya, the outspoken founder of venture capitalist firm Social Capital….
Uber is the ultimate example. It’s fall from grace this year is “the great American tragedy playing out in a company,” Palihapitiya recently told Business Insider All successful company go through several chapters and the first chapter is always about survival, an “existential … I am going to die … fight or flight” stage, Palihapitiya says.
My Take: The article, grounded by comments from Chamath Palihapitiya, drives home an important point – much of what has become the negative Uber narrative is simply standard course for companies that are hell bent on disrupting markets.
A few years ago, before Uber’s fall from grace, I heard an early investor praising Travis Kalanick for “near flawless execution of a disruptive business plan.” That’s what Silicon Valley companies do – they invent new technologies and processes and aggressively move into set markets – flouting norms and rules as they go. Perhaps, then, the fault lies less with Uber and more with the ecosystem in which it was spawned.
As Uber wraps up its driver improvement campaign, its head of driver product is leaving the company [Recode]
Sum and Substance: Uber’s head of driver product, Aaron Schildkrout, is leaving the company after three years. Schildkrout, who previously co-founded dating site HowAboutWe, announced his decision in an email to Uber staff on Wednesday. His departure comes just as the company wrapped up its 180-day driver campaign — an effort that Schildkrout led with Rachel Holt, the regional general manager of the U.S. and Canada. The driver campaign, launched in June with the introduction of a long-sought after tipping feature, was part of Uber’s larger effort to repair its relationship with its drivers in the hope of retaining them on the platform.
The company began working on the campaign in the winter of 2016, as it became increasingly clear to many people internally that Uber’s relationship with its drivers had deteriorated. But it wasn’t just a moral or public image problem; it was a business one. The company had reached such a scale in the U.S. that the pool of available new drivers it could tap into had dwindled. That’s why it was imperative to make retaining drivers more of a focus.
My Take: Maybe this is a good moment to take stock on the 180 Days of Change initiative. On balance, I see it as a net positive: added in app tipping option, included pay for longer trips, started charging passengers for long waits and improved rating system.
It’s almost everything a driver could have asked for, except: higher fares, benefits, compensation for expenses – all the things that would affect Uber’s bottom line. That, after all, is the bottom line – Uber will happily give on issues that don’t cost them money – and give themselves a big PR pat on the back for doing so. But asking them to share more equitably with drivers is out of the question.
Their car was stolen. When they got it back, it had Lyft stickers and 11,000 more miles [San Francisco Chronicle]
Sum and Substance: Cierra and Josh Barton purchased a new Honda HR-V at the beginning of summer. It was stolen while parked in front of their Livermore apartment complex at the end of August. Four months later, Hayward police called the Bartons to say they had recovered the vehicle….
What they found, to their surprise, was a car in relatively good shape — a few dents, a rattling hood. But in the back and front windows were Lyft stickers, Cierra Barton said. The odometer had spiked from 2,000 miles to more than 13,000. And in the back seat, Cierra said she found a pillow, a jacket and a stuffed animal.
When asked what sorts of safeguards Lyft has in place to prevent stolen vehicles from being registered, Lyft gave SFGATE the following statement: “The safety of the Lyft community is our top priority and we take these allegations seriously. Given the information provided, we are unable to match this vehicle to any Lyft accounts in the area. We have reached out to Ms. Barton and we stand ready to assist law enforcement in any investigation.”
According to Lyft’s California driver application requirements, required documents include a vehicle inspection form, a California driver’s license and personal vehicle insurance, a driver photo and a California license plate.
Barton said the car was so new, it still had paper dealership plates at the time of the theft. To add to the mystery, DeCosta said a metal plate registered to the vehicle was discovered by Pleasanton Police weeks ago….
My Take: So let’s try to solve this mystery: was the stolen car used to drive for Lyft? First, the Lyft stickers could easily have been planted. Either a taxi driver or someone associated with Uber, or anyone with an ax to grind with ridesharing could have left the stickers to mislead.
Just as easily the guy could have put new plates on the car and slipped through Lyft’s screening processes. But otherwise, I see it as a guy down on his luck who found a creative way out of onerous car leasing contracts. Hey, the guy didn’t even have to worry about depreciation, or wear and tear on the vehicle. What do you think happened in this situation?
Readers, what do you think of this week’s round up? Was Uber’s rise in the market inevitable, just another product of capitalism? Let us know in the comments!
-John @ RSG