Uber Reeling From Privacy Scandal

Part 1: The Uber Dark Side

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San Francisco based Uber has been the poster-child of the sharing economy.  In five years it has grown to service  200 cities in 45 countries and the privately-held Uber has a valuation of $18.2 billion. As Uber has grown, so have negative news reports questioning its practices and ethics, with reports such as:

• Uber drivers being arrested for kidnapping in Los Angeles and sexual assault in the District of Columbia and Florida;
• Uber being sued for refusing to serve blind patrons;
• Uber drivers do not make anything close to the $90,000 claimed by Uber and, in fact, some barely make minimum wage;
• Revelation that Uber engineered a denial of service attack against competitor Lyft when it used 177 workers to book and then back out of 5,500 rides with competitor Lyft over a ten-year period (which led Lyft investor Peter Thiel to call Uber “the most ethically challenged” company in Silicon Valley);
• Uber disclosing it tracked “one night stands” – which it called “Rides of Glory” – and calculated areas having the highest concentration of them;
• Uber denying any liability for the death of a pedestrian struck by an Uber driver or an assault in which a Uber driver struck a passenger in the eye with a hammer potentially blinding the victim;
• Uber’s using its “God View” profile of activity at a Chicago launch party to reveal the location of certain well known users (including writer Steve Sims) and to track the location of a reporter without her permission;
• Uber’s “Surge Pricing” model being used to price gouge following emergencies such as Hurricane Sandy or after a Cal Trans train crash; and
• Uber’s provocative French campaign to pair Uber Riders with “hot chick” drivers which was announced via a blog post that began “Who said women don’t know how to drive?”  This type of campaign may not come as a surprise when its CEO says calls the service “Boober” because of its impact on his sex life.

Part 2: The First Backlash

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These acts fueled a backlash among women tech writers, led by Pando Daily’s  Sarah Lacy whose “The horrific trickle down of Asshole culture: Why I’ve just deleted Uber from my phone” column caused quite a stir.  Elizabeth Plank, in a Mic column entitled “If You Care About Women, Delete Your Uber Account” summarized  women’s complaints against Uber:

It’s hard to count all of the ways Uber has degraded, diminished and generally harmed women since its founding in 2009. Whether it’s the CEO openly referring to the company as “Boober,” the company’s chauvinistic ad campaigns, the alleged slut-shaming of female passengers who accused drivers of assault, or the reports that drivers “choked” and even attempted to abduct female passengers, the company has built a reputation for an increasingly problematic and misogynistic management style and culture. And that’s saying something in Silicon Valley.

Steve Sims, the writer who was tracked via “God View” at Uber’s Chicago launch party, reached out to Uber’s CEO and founder Travis Kalanick CEO to see if it was just a misunderstanding but got no response.  He commented,

Uber suffers from a paradoxical challenge. Its leadership is clearly smart and strategic as hell, yet at the same time, the company’s culture reeks of immaturity and a lack of ethics.

Part 3:  The Empire Strikes Back

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Uber was not pleased.  BuzzFeed’s Ben Smith reported about comments made at a private party by Emil Michael, Uber’s Senior Vice President of Business who has a political background, about Uber’s plan to spend

a million dollars” to hire four top opposition researchers and four journalists. That team could, he said, help Uber fight back against the press — they’d look into “your personal lives, your families,” and give the media a taste of its own medicine.

Then in comments that would make Lee Atwater blush, Michael went after Pando Daily’s Lacy, expressing anger over her “Asshole culture” column

and said that women are far more likely to get assaulted by taxi drivers than Uber drivers. He said that he thought Lacy should be held “personally responsible” for any woman who followed her lead in deleting Uber and was then sexually assaulted. Then he returned to the opposition research plan. Uber’s dirt-diggers, Michael said, could expose Lacy. They could, in particular, prove a particular and very specific claim about her personal life…

Once this was reported , Michael apologized and Uber CEO’s denounced the comments, but then at the same time Uber allies’ questioned the accuracy of the reports.  Uber investor Ashton Kutcher tweeted that he did not see the harm in “digging up dirt on shady journalist?”  One Uber exectutive dismissed the controversy in a tweet as “haters gonna hate”.

Uber’s luke warm response was undermined by the fact that no disciplinary action was taken against any of those involved.  Uber did indicate it was investigating the employee who tracked a BuzzFeed reporter without her permission which it said was in violation of its privacy policy that it published for the first time last week (although it indicated it had always been in effect).

Part 4: The Second Backlash

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Uber’s threat and then less than sincere response to the threat, fueled an even bigger backlash with many commentators  calling for a change in leadership.  The New York Times’ Neil Irwin explained that while

[t]he company has renounced the thuggish campaign of targeting critics that its senior vice president for business, Emil Michael, described in a dinner party attended by the BuzzFeed editor Ben Smith. But there are signs that Uber has taken an aggressive stance toward the media outlets that cover it and that it lacked internal protections against the misuse of customers’ travel information.

A writer for San Francisco Magazine said this week that sources inside the company warned her that the company might monitor her rides. A Buzzfeed reporter wrote that when she attended a meeting with an Uber executive in New York, he was monitoring her arrival in one of the company’s cars. Add in an account by the author Peter Sims that his personal travel information was apparently shown on a wall at an Uber launch party, and the anecdotal evidence that the company has played fast and loose with its customers’ data is pretty compelling.

. . . What all these incidents have in common is that they offer a portrait of a company without adults in charge. From the top executive ranks to individual operational units around the world, the mentality seems to be one in which sheer belief in the rightness of their cause overwhelms what to an outsider seems at best questionable and at worst immoral practices.

MarketWatch’s Therese Poletti wrote that

Uber exemplifies the cowboy capitalism that both Silicon Valley venture capitalists and Wall Street investment bankers adore. It is disrupting an antiquated industry that was in need of a shakeup, and one impact has been improved taxi service. But perhaps the only way for Uber to learn that its obnoxious behavior is unacceptable is for consumers take their business elsewhere.

Columnist Joe Nocera weighed in on the New York Time’s Op Ed page, noting that “[a]t Uber, the inmates are running the asylum. That needs to change, while there’s still time.”

Uber has tapped IBM’s former privacy chief, Harriet Pearson (who has appeared on CLBR), to conduct an audit of their data use practices in an attempt to restore user trust.  She will need to act quickly because Capitol Hill is already asking questions.