Uber’s bid to be The Company, The Actions Of Which Most Closely Resemble The Actions Of Companies In William Gibson Novels continues. This time, Uber’s doing the equivalent of putting a pistol on a table during a negotiation, Cookie Brown style. The metaphorical pistol is aimed right at a journalist who has been critical of the company’s operations — but not to worry, Uber would never think of using it.
It started when Uber’s Emil Michael suggested at a media dinner/party that the company might spend a million dollars doing opposition research on four journalists who have been critical of the company’s “aggressive” business practices. He later on issued a remarkably unconcinving denial, which TechCrunch has difficulty even trying to believe:
The problem is that after Uber has tried to sabotage its opponent’s fundraising and recruiting efforts, after it hired a guy who reportedly stole confidential documents from the same competitor, after it pushed drivers who didn’t know better into subprime loans, there are seemingly no depths to which this company would not stoop in its megalomaniac efforts to win the market.
The problem is that most people don’t doubt for a second that Uber would do “oppo research” if it thought it could get ahead, and if it thought it wouldn’t get caught — if, as Michael reportedly said at the dinner, “Nobody would know it was us.”
There are certainly a few fascinating aspects of the story to consider here. The first is Uber’s demonstrated willingness to break the fourth wall of corporate personhood and act in a completely rogue fashion — something that’s been the staple of every cyberpunk novel since Neuromancer but which in the real world tends to run up against the unwillingness of individuals to commit felonies for the benefit of a corporation, pre-IPO or not. Why not attack its critics personally and viciously? If someone was trying to take a million dollars or more out of your pocket, wouldn’t you be willing to do them serious harm? That’s undoubtedly the moral position held by many Uber employees who stand to benefit spectacularly from a piece of the $18 billion pie.
The next aspect to consider is this: Should journalists be considered “noncombatants” in this sort of no-holds-barred corporate street-fighting? Perhaps in a bygone era where journalism was considered an honorable and nonpolitical profession, but in 2014 shouldn’t it be considered that Uber’s critics might simply be in the pay of, or ideological fellow-travelers of, state and city governments who have a massive vested interest in the existing taxi medallion scheme? When the battle is between millionaire medallion holders whose strength is augmented by the violent force of the government and millionaire Uber shareholders-to-be, isn’t it likely that money and influence is already affecting the journalists who report on the situation? If a journalist is actively protecting the interests of other millionaires, isn’t he or she a “player in the game” who deserves to be treated as such?
Last but not least: is this mess an indictment of the existing taxi system, a shining example of what’s necessary to fight a government big enough to take everything you have, or is it a demonstration of the need for stronger public oversight of a resource on which millions of people without cars of their own have come to depend?
The thing I don’t get is “why the large bankroll”? You can get decent dossiers on nearly every journalist in the Western World for a few hundred bucks from companies that specialize in such things. It may not contain blackmail material, but it’ll have just about everything you might want to know. (Their primary market is executives wanting information for interview prep.)
What I can’t figure out is why this guy is still employed. Journalists have long memories about this sort of thing, and this clowns credibility is thoroughly shot now and forever. The media is going to declare proverbial war on Uber. Another “UberKitten” stunt isn’t going to paper THAT over.
If he just made some foot-in-mouth gaffe (i.e. “I think most reporters are pinko commie traitors”), I could totally see him getting by with a milktoast apology and promises to keep his mouth shut. But instead he publicly announced he was thinking of instituting an expensive blackmail program… “it doesn’t reflect the views of the company” isn’t going to cut it. Plans for extortion aren’t “views”, they are facts.
P.S. I love the “and nobody will know it was us” bit… I think people might figure it out since you announced your mustache-twirling plot to a room with a bunch of reporters in it.
(For future reference, the word you’re searching for is milquetoast)
With respect, everyone is barking up the wrong tree about Uber. The real problem with Uber isn’t “subprime” loans, threats made at a liquor-lubricated dinner party to investigate journalists, or even trashing your potential competitors. The real problem is that Uber is nothing but a franchise operation that is not promising to limit the number of its franchisees. So, over time, choice markets will be flooded with Uber drivers and revenue per driver will fall. Uber doesn’t care about that, because it makes money per-ride. But the drivers might.
Not every major metro area in the U.S. has capped the number of licensed cabs like New York. So, it’s not necessarily the case that there’s a lot of pent-up demand waiting to be tapped. In DC, for example, the taxi business seems to have no particular governmental barriers to entry. And, indeed, most DC cabs are rolling wrecks, probably because neither the car owners nor the drivers can make decent money. Most DC cabbies are non-native born Americans and I doubt they make much money.
In defense of regulation, it would be nice to know that the car I’m riding in is regularly checked for decent brakes, tires and suspension. And it would be nice to know that the driver is covered by an insurance policy that includes using his vehicle for hire, so, if he’s in a wreck and I’m injured I don’t have to pay my medical bills.
And I fail to see the basis for the hysteria about “sub-prime” car loans. Unlike a house, which is not particularly liquid and has a market value that fluctuates, cars are pretty liquid assets and their value is pretty well known. And, unlike a house for which foreclosure by the mortgage is often a slow, complicated and expensive process, repo’ing a car is short and sweet. BTW, where is Steve Lang? I miss him.
I miss Steve Lang, too.
For the insurance part, Uber does carry insurance for the rides. I signed up to be a driver and that was prominent in the info they put out.
+1 on Steve Lang
Three weeks ago, the DC government passed the “Vehicle-for-Hire Innovation Act of 2014.”
The law requires background checks on Uber drivers going back seven years, annual safety inspections, and $1 million in liability insurance.
I don’t know how this will play out in Maryland and Virginia. Personally, I just took my first Uber ride 2 weeks ago. Dude showed up in a nice, clean, quiet E-Class.
Better, by far, than the years of dealing with rattletrap Panthers with vinyl seats, and listening to the driver talk on the phone non-stop in some language I can’t understand during the entire trip.
“So, over time, choice markets will be flooded with Uber drivers and revenue per driver will fall.”
I haven’t seen much demographic data on Uber drivers, but I’m going to guess that many of them are doing it as a stop gap or part time, and won’t commit to it for long. A stronger economy would probably hurt the company as it would reduce the supply of drivers, and there probably isn’t room for more than one operator. (That would make Lyft an acquisition target.)
Aside from reducing the value of medallions in certain markets, I don’t see this doing very much. Taxi companies could adjust to it easily enough if they made the effort.
“In defense of regulation, it would be nice to know that the car I’m riding in is regularly checked for decent brakes, tires and suspension”
And they do that for cabs? That must explain why I never in a panther with completely blown shocks and every light on the dash lit up. Oh, right. They are all like that.
As for insurance:
You’ll be happy to know that most medallion owners carry minimal insurance and set up various shell companies so they end up judgement proof.
“Most of the city’s 12,000 cabs and 30,000 car-service vehicles carry minimal liability insurance, far less than most trucking and bus companies. Many taxi owners, including those with large fleets, organize their operations into subsets of much smaller companies, protecting the bulk of their assets from lawsuits.
And the biggest asset in the yellow cab industry, the taxi medallion, is the hardest to seize. As the taxi industry has boomed and the limited pool of medallions — the valuable permits to operate a cab — has soared in value to an average of $275,000 each, owners have routinely used them as security for loans. So even when the rare victim tries to seize a medallion in court, it is common to find that the owner has attached so much debt to it that there is little money left to recover.
In Mr. Shalala’s case, the owners of the taxi company — two former city cabbies — borrowed $100,000 against their medallions just as a state court judge was entering the $3.2 million judgment, complicating Mr. Shalala’s efforts to collect.”
http://www.nytimes.com/1998/05/24/nyregion/taxi-owners-deftly-dodge-claims-of-accident-victims.html
Uber has built their business on a bed of sand. Unlike your traditional franchisee (say a McDonalds) their operators cost to get in is a car and their cost to get out is zero. Switching to a competing service is as easy as walking in & handing an iPhone back. For customers the commitment can be severed with 30 seconds at the app store of your choice.
I’ve got many hundreds of rides in Uber’s system, both in the US & abroad and most of the drivers I talk to are new to the company (within 3 months) which perhaps isn’t surprising since the service is still in start up mode. What is surprising is both the lack of commitment to Uber from the new guys (“thought I’d try this for a bit”) and a lot of complaining from the long-timers (“rates keep getting cut”).
Uber’s business model is under threat from so many external forces (drivers tracking female customers, labor organizing, dubious insurance coverage) that they need a real customer (and their customers are their drivers) focused CEO who can delicately and responsibly navigate the minefield they’ve set in front of themselves. Obviously the current loud mouth clown is not that person.
I’ll give it 12 months before one market decides to form it’s own driver’s co-op, hire some web developers and implement a more ethical system controlled by the operators. If that market is San Francisco or New York, look for customers to switch in droves.
I’m not so sure about zero cost to get out. I don’t know the take rate, but I know Uber has an aggressive (sorry, oxymoron in this case) program for drivers to finance new vehicles directly through Uber. I’m sure many of the spotless, brand-new Camry Hybrids I’ve ridden in the drivers couldn’t have purchased any other way.
There was also a fascinating story up on ValleyWag this morning about Uber quietly rolling out a student debt consolidation pilot, were Uber would become the direct servicer of your loans!
So bottom line, I think they’re trying to make it very hard for drivers to simply hand their phone back and quit. And no, it’s not by offering good pay and benefits and building employee loyalty…
So they loan money to sub-primes? I’ll add that to my external forces list.
Not directly, but they funnel drivers to lenders like Santander. ValleyWag writes in that horrible Gawker style, but they’ve done a few interesting pieces on Uber.
Uber has no requirement of exclusivity from their drivers. I’ve been in plenty of cars at this point that were in Uber, Lyft, and Sidecar networks all at once. Drivers tell me they’ll just run 2 or 3 phones (Uber will give them a free iPhone now) and take fares from whoever is paying the most that hour. Of the ones that used to drive medallion taxis all, 100%, tell me they’re making more and feel safer than when they were driving “real” cabs.
I’m sure Uber is pretty ruthless as a company, but the existing Yellow/Checker-type taxi services treat drivers drivers horribly and make it very difficult for them to make money on a shift.
A little bit of history can be very instructive. The idea of destroying your competition by any means necessary is not news. It was the primary method of doing business in the late 19th century, when Andrew Carnegie, John D. Rockefeller and others had no interest in fostering competition, but happily ruined anyone that offered an alternative to their products or services. It took Teddy Roosevelt and an intrusion by the federal government into the marketplace to establish a fairer market – busting oil, railroad, steel and other monopolies.
Now, the new young capitalists in the middle-man busting world of the internet are showing the same colors. Competition is NOT good as far as they are concerned and any regulation that might inhibit them is righteously condemned or ignored. They will invite their own regulation when the next Teddy Roosevelt appears on the scene (and, the sooner the better).
The problem with your theory is that Rockefeller’s near monopoly on lighting (with his kerosene) was effectively disrupted by Edison who in turn had to deal with Westinghouse. Undoubtedly there were dirty deeds done, and powerful interests will always use that power to maintain it, but Rockefeller couldn’t stop electricity and Edison couldn’t stop alternating current. Promising ideas will usually find capital and then it’s a question of who wins. Sometimes it’s a battle of titans. I’ll have to check, but I think Westinghouse was backed by J.P. Morgan. All of this took place years before Teddy Roosevelt was in the White House.
On a historical note of interest to car enthusiasts, it was Rockefeller’s loss of his effective monopoly on lighting that led him to foster the use of what had previously been a waste product used mainly as a cleaning solvent, gasoline. Rockefeller subsidized farmers and factories switching to gasoline stationary engines to replace their steam engines (this was when a typical factory would have stationary steam engines that ran shafts near the ceilings that would run the length of the shop, with pulleys for power take off at work stations). Without the stationary and marine engine markets, internal combustion engines may never have been developed enough to be practical for driving a vehicle. At least as far as the domestic auto industry is concerned, all of the earliest pioneers like Henry Leland, the Dodge brothers and David Buick, started out making engines for farms, factories and boats.
As I understand it, Morgan originally backed Edison and DC current, but when Westinghouse’s AC prevailed in the market, Morgan used his financial resources and insider rumors to effectively take over Westinghouse. While the superior technology won out, the people behind it were not well treated in the marketplace.
Uber is a corporate douchebag, and intimidating journalists is generally counterproductive, as it tends to sic the rest of them on you. But I see nothing felonious here. There’s no law against investigating journalists (or anyone else for that matter).
In fact, much of what journalists do for a living could be described as opposition research, so it’s kind of hysterical to see them flying off the handle at the prospect of someone doing the same to them.
I watched Sara Lacy on Bloomberg this morning. From what she said, it seems to me that only ONE of the journalists at the dinner where these comments were made, thought it was wrong for Uber to launch such a campaign. And then there is the whole David Plouffe thing.
I think Sara Lacy may be on to something here, plus the complaints of the women who were assaulted when using Uber’s services.
Going after someone’s family and kids is not even something that organized crime would do, or even has done, IIRC. I believe this warrants further investigation by law enforcement since it was made clear through the comments that Uber’s fingerprints would not be on this “campaign.”
It gets worse:
http://www.theverge.com/2014/11/19/7245447/uber-allegedly-tracked-journalist-with-internal-tool-called-god-view
Nice questions. Definitely the ones not everyone is asking.
And this what happens when you lose control of the narrative;
http://www.thedailybeast.com/articles/2014/11/19/the-ten-worst-uber-horror-stories.html?via=desktop&source=twitter
http://www.nydailynews.com/new-york/uber-driver-told-cancer-patient-deserves-patient-article-1.2015510
The old “we hire 2000 drivers a week, a few bad apples…” is probably not going to be much of a salve in a country where 2 cases of Ebola threw a national panic.
Uber SHOULD throw some elbows, given their business environment. Opposition research is quite appropriate when dealing with J-skool economic illiterates who pimp for the status quo.
If Uber feels “opposition research” is worth the money, who cares? If there is a problem with Uber, it is that they’re valuation, hence command over resources, is blown through the roof. On the backs of working people and retireds, by way of currency debasing to make money available to banksters. Who then have little choice but to drive up the price of any old nonsense, in order to skim some billions of the top. And of course, Uber employees are statistically, and conveniently, the children of banksters….
This currency debasing… Is that why oil just fell below $75/barrel?
No, that would be some pull-back thinking that the Nobel Prize winning war child president was probably going to fail at further war with divided government, and his saber rattling in the Ukraine and poking the bear will probably subside, just as the previous war child president had his military expeditions curtailed by divided government in his “fourth quarter”. It’s far from principle – it’s a desire to make the current president and his party look bad in the hopes of having a change of executive party next time around, because it’s perma-election.
Oil is a political commodity, but it’s inescapable that purchasing power just keeps bleeding out of the dollar. Gold is running awful high. Silver can never be trusted post-Nixon, since the silver market is more subject to manipulation. All sorts of food costs a lot more. A full-sized Buick Park Avenue 20 years ago was around $20-25k; the substitute (as in equal positioning, not the old hamburger-for-porterhouse dodge) Lexus ES is about a $40-45k car. It’s the same positioning – quiet luxury, the features of the day piled on it.
If it were just supply and demand, with the North Dakota miracle, we’d see overproduction drive that price down to the barely-stable level for oil from shale, which I’ve heard has to be about $35, which also looks like the macro-trand steady-state number.
Do you forget how Nancy Pelosi ran hearings and charged Dick Cheney with illegal manipulation of the cost of oil when gas got above $2.50/gal? And we’ve now become inured to $3.50 being a great deal, $3 a godsend? Like the homeless, the high cost of gasoline only matters when journalists think somebody who isn’t on their side is in charge of things.
That would be the divided government; oil’s a political commodity. Echos of Bush, the Nobel-prize-winning war child will have his foreign expeditions curtailed, like Bush had his foreign expeditions curtailed, because we’re already starting campaign 2016, and nobody wants to be James Buchanan.
And ram chips even further….
The short answer to the entirety of Jack’s penultimate graf is “no.” And I think if Jack were ever on the receiving end of what a company like Uber would give if it thought it could get away with it, I suspect he would agree if he doesn’t already. The answer to his final pair of questions is “neither”
I’ve already been comprehensively “oppo’ed” by at least two entities in this industry, one of which took the time to circulate a file about me to every manufacturer in the market.
Apropos of not a whole lot, but I work at a rather well-known restaurant in SF, where Mr.Kalanick dined recently.
I had the (dis)pleasure of taking care of him and his female companions, and while we get a lot of douchy tech bros(Sergey Brin was in a few months back), Mr. Kalanick was the absolute worst.
Used to utilize Uber quite a bit, but have completely switched to Lyft on account of his douchiness.
Couple this behavior with some of his more public antics, and I can’t wait to see them go down in flames.
I disagree with you quite a bit here.
Let’s say I (hypothetically!!) video record myself every night tucking it between my legs and dancing like Buffalo Bill in “Silence of the Lambs” but I also happen to know that Cyberdyne Systems doesn’t have proper security controls over their defense network. However, I’m not going to say anything because I know that my crazy videos might get leaked when the company wants revenge.
What is the good that comes from this situation? Does my being a weirdo make what I know any less true?
I remember a lawyer 10 years ago talking about the post-Clinton reality; he told me that anything was forgivable and Puritanism of all stripes was dead and buried. Today, you can get a million angry Twitter warriors saying you’re a horrible person no matter what you do as long as it has some sizzle, so I guess we’re in a new neo-puritanical mode where a freak can’t speak the truth.
Uber’s business model is built on breaking the law and cheating. We can argue the merits of taxi regulation, medallions, etc., but truth be told, Uber’s business model is built on running outside the law. They try to justify this through lots of handwaving, “free market”, “internet”, “it’s what the customers want”, etc. (which equate to the same level as “everyone else is doing it”, or “my dog ate my homework”…).
Uber’s business model is equivalent to a builder that doesn’t bother to get building permits, build to code, etc., but you can order your house THROUGH THE INTERNET!!!! (er, an app on your phone). As if that magically makes it alright.
Screw Uber. They are a bunch of crooks. Meanwhile, some immigrant that plays by the rules is getting screwed.
The trouble with Uber is that it as a company has a don’t-give-a-fart attitude towards laws and regulation. When told that their business model is illegal and/or must face some sort of regulation in any given city or country, their response to change their definition of what the company does and carry on while thumbing their noses.
Uber has a completely blase attitude towards use privacy, going as to far as to broadcast “notable” NYC users’ location data in real time without their consent at a launch party in Chicago.
Uber is a shady, unethical company run by shady, unethical people. Does it surprise anyone that they’d be talking about oppo/doxing reporters?