Advertisement

Uber’s big problem is a culture of dishonesty

Font Size

lie

By Leonid Bershidsky

UBER’S voluntary disclosure of a year-old hack that exposed the personal data of 57 million drivers and customers could be taken as a sign that under new Chief Executive Officer Dara Khosrowshahi, the company is changing its ways. But no, Uber’s biggest problem is still its culture of dishonesty — something the leadership change hasn’t fundamentally altered.

The October 2016 cyberattack was not the only one Uber tried to cover up under CEO Travis Kalanick. Last year, the company was fined for failing to disclose a 2014 hack.

In the more recent case, the company merely paid hackers $100,000 — ostensibly for not using the stolen data, but really for their silence.

There are numerous examples of a deceitful culture at Uber, from the use of the Greyball software, which made it difficult for law enforcement officials to book rides, to the surreptitious tracking of iPhones in violation of Apple’s terms of service.

More examples keep coming out.

On Monday, the Colorado Public Utilities Commission fined Uber $8.9 million for not running proper background checks and letting dozens of people with felony convictions and driver’s license issues ferry passengers around.

The background check issue is chronic: It’s at the heart of the London transportation authority’s decision to lift Uber’s license. Uber has pretended to go along with requirements but often neglected to do it in practice.

All this, Khosrowshahi would have us believe, is now a thing of the past. “While I can’t erase the past, I can commit on behalf of every Uber employee that we will learn from our mistakes,” he wrote in a press statement after the hack disclosure. But how much has really changed?

The hack admission was the result of an investigation by a law firm hired by Uber’s board, which is trying to minimize the company’s legal problems. It wasn’t an internal investigation. Uber couldn’t have swept its results under the rug. Khosrowshahi has published a new, vegetarian set of the company’s cultural norms (“We are customer obsessed … we celebrate differences … we do the right thing … we value ideas over hierarchy”) — but in his preface to the publication, he mentioned the limits of his overhaul: “Rather than ditching everything, I’m focused on preserving what works while quickly changing what doesn’t.”

“What works” appears to include fighting prolonged legal battles in which Uber is clearly in the wrong, on principle if not necessarily in the legal sense.

Instead of complying with the requirements of London regulator Transport For London, Uber is still pursuing an appeal against its license ruling in the courts. The process, according to London Mayor Sadiq Khan, could take “years,” allowing Uber to keep operating without a license — not the kind of responsible behavior that’s covered by the new cultural norm that says Uber seeks to “harness the power and scale of our global operations to deeply connect with the cities, communities, drivers and riders that we serve, every day.”

It was clearly wrong for Uber to hire engineer Anthony Levandowski from Google affiliate Waymo and pay $680 million for his just-created self-driving truck start-up: Both decisions only made sense if Levandowski could bring over his Waymo work. Uber actually fired the engineer in May, and he’s refused to testify, citing his Fifth Amendment rights. But Uber is still fighting Waymo in court rather than admit that it had tried to cheat in order to jump ahead technologically. It won’t even settle the case and “do the right thing”; instead, it’s clearly doing “what works.”

In another sign that the company hasn’t changed much, Khosrowshahi, like Kalanick before him, won’t admit that Uber is a transportation company rather than a tech “platform” — the key issue in a European Court of Justice case brought by a Spanish taxi lobbying group that didn’t take kindly to Uber’s attempts at regulatory arbitrage.

But Khosrowshahi’s biggest business move so far — the plan to buy 24,000 self-driving Volvos, more than $1 billion’s worth — shows the company’s insistence that it’s an app-based marketplace is no more than a ruse. If it owns the cars and the technology needed to operate them, it’s very clearly in the transportation business.

And, in some parts of the world, Uber has already bought cars. In Singapore, this practice, combined with the company’s trademark contempt for safety rules, led to an Uber-owned car’s catching fire with a driver inside. But, instead of admitting the obvious, Khosrowshahi is content to keep defending the “platform” claim.

Uber, already under Khosrowshahi, fought to the bitter end in a London arbitration case, in which two drivers insisted they were really employees, not independent contractors picking up orders on a “platform.” That ended in defeat — but Khosrowshahi didn’t come out with any plan to provide more protections for drivers in the UK or elsewhere. Instead, Uber announced the Volvo deal, showing the company would rather replace the drivers — whom it still calls “partners” in promotional material — with robots.

Essentially, doing “what works” was Kalanick’s approach, too. Continuity is usually good for business, but not in Uber’s case. Complete honesty and openness — about the business model, the relationship with “partners,” the origins and functions of technology used, the old (and possibly new) cover-ups — would be costly but transformative and also potentially life-saving.

As it is, Uber continues to run the risk of ending up like Enron, a company brought low by the same kind of dishonesty that still runs in Uber’s veins.

BLOOMBERG

Advertisement