Uber has been burning capital for some time now. This includes not just real money but also that intangible commodity known as goodwill.
In recent weeks, Uber has taken the sort of beating that most taxi companies get only from a poorly maintained city street. A string of embarrassing disclosures has led some longtime company observers to wonder how long the ride-hailing service will be around — or at least how long co-founder Travis Kalanick will be its chief executive.
“Uber is doomed,” Jalopnik pronounced last month in an article explaining why the money-losing venture would end up in a ditch. And that was before the run of bad news accelerated. The Atlantic’s CityLab also sees a cloudy future for Uber, but not as dark as others may forecast. Among the painful disclosures in recent weeks:
- Uber developed a secret weapon to evade regulators. Known as “Greyball,” the software was designed to fool hostile traffic officials into thinking they were hailing rides through the app when in fact Uber was making sure that drivers avoided picking up undercover agents who might be part of a sting. On Wednesday, the San Francisco-based company said it would stop using the tool to thwart regulators. Use of the software was first reported by the New York Times.
- Former employees say that Uber, which launched a self-driving vehicle project in San Francisco last year without the approval of California state regulators, later blamed human drivers for serious lapses caused by its technology, the Times also reported. Citing accounts from former employees and Uber documents, the news organization said the company’s autonomous cars blew through six red lights because of flaws in its mapping technology.
- Kalanick received the sort of publicity no one would want after Bloomberg published a video of the CEO arguing with one of his drivers about pricing policy. “I lost $97,000 because of you. I’m bankrupt because of you,” the driver says in the video. Kalanick’s temper heats up as the exchange continues. “You know what, some people don’t like to take responsibility for their own,” Kalanick says in the video. “They blame everything in their life on somebody else. Good luck!”
The argument — which was captured by a dash cam — went viral, leading Kalanick to issue an apology later.
- A self-driving car company that had been created by Google filed a lawsuit accusing Uber of stealing technology. The lawsuit, filed by Waymo, says a former tech wiz who now works for Uber raided his former employer’s servers before leaving.
- A barrage of stories suggesting that Uber has fostered a male-dominated libertarian corporate culture that Ayn Rand might find creepy and over-the-top. Susan J. Fowler, a former site-reliability engineer, said in a blog post last month that sexual harassment was common and sometimes winked at by higher-ups. The company’s frat house rep has become so well known that former Uber employees now have to “prove” they’re not jerks, according to an account in the Guardian.
For some, Uber’s turnabout is the stuff of Greek tragedy, a form of divine justice directed toward a company whose credo has been growth at all costs, even if it meant breaking all the rules.
“It’s sort of the culture that got them there,” said Harry Campbell, a ride-hailing driver who runs the Rideshare Guy blog. Now, many people are acting as if they’re not so sure they like what they used to cheer on, back in the days when Uber was the upstart overturning the taxi and limousine business city by city, before the underdog became the uber-dog.
Campbell said the two most devastating stories in the recent cycle of bad press for Uber are the sexual harassment allegations and the dash cam video — and that might be enough to knock any company off balance.
“Now, with the pile-on, it shows it’s more systemic,” he said.
Steven Hill, who wrote about Uber in his book about the sharing economy, compared Uber’s alleged deception about its autonomous vehicles to the practices of Big Tobacco. Uber is betting big on developing an autonomous fleet of driverless taxis, but it has also been accused of deceptive claims about its self-driving program before. Last September, Uber launched a self-driving demonstration in Pittsburgh that was designed for maximum media attention. It was supposed to show that the company was making progress in its plan to put a fleet of autonomous vehicles on the road.
“Instead, they revealed that autonomous vehicles are still pretty clunky contraptions and nowhere near-ready for prime time,” Hill said.
Hill, author of “Raw Deal: How the Uber Economy and Runaway Capitalism Are Screwing American Workers,” said several accounts of the project published by ride-along journalists generated more skepticism than belief. Some noted that human drivers had to keep their hands on the steering wheel at all times in case they had to steer out of trouble when the algorithms went off course. During one trip, the human overseer had to take command at least 30 percent of the time, Hill said.
“There were other reported problems, too,” Hill said in a post for Tripping. “The self-driving cars couldn’t pass on the left, even to move around a truck blocking the right lane; they couldn’t make right turns at red lights, since the algorithms can’t edge forward and scan for traffic — which frustrated the heck out of human drivers waiting behind.”
Some self-driving cars moved like snails and still got into scrapes and fender benders, Hill said. One autonomous vehicle headed down a one-way street.
“What was Uber’s response?” Hill said. “Blame the human drivers.”
Perhaps Uber has to shift the blame, since Kalanick has been quoted as saying that building an autonomous fleet is of “existential” importance to his company. Robotic vehicles offer a potential workaround for that most vexing problem: human drivers, and the need to be paying and constantly recruiting them.
That may explain why Kalanick’s video cameo was so damning: It seemed to confirm the low opinion the company is said to have for the proles who drive for it.
“Drivers get a lot out of Uber, but at the same time, Uber doesn’t treat drivers with a whole lot of respect,” Campbell said.
Uber has shown signs that it’s taken the criticism to heart — and chin, and face, and backside. Besides curtailing its use of “Greyball,” the company announced Tuesday that it was hunting for a chief operating officer to become the embattled Kalanick’s deputy.
But you can bet Kalanick would never give up control or consider parting with his creation, Campbell said: “It’s over Travis’s dead body. Everything he’s shown is that he’s a fighter. That’s really the story of Uber.”
A previous version of this report gave an incorrect last name for the founder of the Rideshare Guy blog and for Susan Fowler. He is Harry Campbell. This story has been corrected.
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