Uber's bumpy road to world domination

For over a decade, Uber and taxis have been locked in a desperate battle for control of cities across the world. In one corner, the century-old practice of raising your hand to hail a ride. In the other, pressing a button on your smartphone to summon a car.

But while Uber has succeeded in decimating the cab industry in many cities, it has failed to completely wipe it out. In fact, the taxi business is thriving, with the number of drivers in the US almost tripling in recent years. And now, there are signs that the long and bitter struggle between Uber and taxis is fading as more and more taxi fleets are choosing to be folded into Uber’s cold, technological embrace.

To get to the Uber conference on flying cars in Los Angeles last week, where I was scheduled to interview Uber CEO Dara Khosrowshahi, I hailed a Lyft. My driver was understandably amused about where I was going.

“Flying cars?” he said, laughing. “That makes more sense than the self-driving ones.”  

Japanese tech giant SoftBank Group has bought a 20 percent stake in Uber, completing a months-long process, according to the Wall Street Journal. The move drops Uber’s value by about 30 percent from around $70 billion to $48 billion — a reflection of the trouble that the ride-hailing company has experienced across 2017.

More important than the valuation change, though, could be the impact SoftBank’s new stake will have on the influence former CEO Travis Kalanick still has on the company. Kalanick resigned from his post earlier this year after a number of scandals, but still maintains a seat on the company’s board of directors, where he is surrounded by allies and controls 16 percent of the voting power.

The Justice Department is investigating allegations that Uber stole trade secrets related to Alphabet’s self-driving car project, Waymo, according to Bloomberg. Waymo sued Uber in February, claiming the ride-hail service benefited from the pilfered documents. That case is scheduled to go to trial in December, but regardless of the outcome, it looks like Uber will face questions from federal prosecutors as well.

US district court judge William Alsup referred the case to the DOJ, two sources told Bloomberg. There are currently five criminal investigations into Uber’s business practices. Federal investigators are also looking into a software tool used to hide its vehicles from law enforcement officials called Greyball. There is a criminal bribery probe, which includes questions of how an ex-Uber official obtained medical records of a woman raped by an Uber driver in India. There are also inquiries into whether Uber violated anti-pricing discrimination laws, as well as the company’s use of software (codenamed “Hell”) to track Lyft drivers.

Today, Uber said it will cease operations in Quebec next month after the Canadian province passed new regulations that the company opposed, Reuters is reporting. The decision to pull out of Canada’s second most populous province comes as Uber is battling a decision by London officials to revoke its license, dealing a blow to new CEO Dara Khosrowshahi’s effort to rebuild the company’s image.

Uber’s general manager in Quebec said the company would end its service on October 14th, leaving open the possibility that a deal could be struck with regulators in the meantime. The company called on the government to rethink new rules that require drivers to undergo 35 hours of training, in line with requirements for traditional taxi drivers.

Uber is announcing a few notable changes today, starting with a new feature that allows drivers to offer an additional layer of feedback to unruly riders. Working off the assumption that no one likes IRL confrontation, drivers can now choose from a preselected list of reasons to explain why they rated a passenger as less than five stars. So the next time you take too long getting in the car, or you have a loud phone conversation in the back seat, you’ll be hearing about it from your Uber driver.

The update will ask drivers “what went wrong” if they select a four-star rating or less. They can then choose from a list of reasons: “wait time,” “patience,” “number of riders,” “attitude,” “wanted new route,” or “other.” If a rider gets the same “tag” twice within 30 days, a notification will appear when they open the Uber app to let them know that their behavior is affecting their rating.

There are a lot of immediate winners and losers from today’s news that Uber lost its license to operate in London. Obvious winners: London’s black cab owners and drivers who lobbied hard for the decision, as well as second-tier ride-hail apps like myTaxi and Gett. Clear losers: the perpetually scandal-tossed Uber, thousands of drivers who will now be scrambling to find work with less reliable services, and devoted customers who prefer the ride-hail app over the dozens of other transportation options available in London (the Tube, bike share, double-decker buses, etc).

The app will still be operational in London while Uber appeals the decision to the courts. In the meantime, Uber will likely be engaged in intense negotiations behind the scenes with Transport for London, the city’s transportation authority, to get its license back. Uber is unlikely to abandon its largest UK market without a fight, but the ramifications of that battle could force Uber to change its ways beyond the borders of London — especially as it relates to safety and the way the company classifies its drivers.

Uber’s rise into the Silicon Valley stratosphere has been swift, but the consensus is that as the operation expands, the way the company does business needs to change. Because during that ascent, and especially this year, evidence has mounted of a toxic company culture that is hostile toward women. It was only after public outcry and the resulting pressure from some major investors that CEO Travis Kalanick resigned back in June. For months, speculation ran high over who would replace him and, more importantly, whether that person could improve Uber’s internal woes and sustain its fast-paced growth.

That person is finally here. Uber’s board of directors spent this past weekend discussing, and eventually voting on, a replacement for Kalanick. It’s not General Electric chairman Jeff Immelt, who was the leading candidate at one point. And it isn’t Hewlett Packard Enterprise CEO Meg Whitman, who, despite having sworn herself out of the race on Twitter in July, was apparently very much back in the mix over the weekend. It is Dara Khosrowshahi, the “dark horse candidate” whose name hadn’t even been mentioned in the mix until Recode’s Kara Swisher broke the news Sunday night.

Travis Kalanick has stepped down as CEO of Uber. The news comes as the company has been hit with an extended barrage of scandal and controversy; Kalanick had already recently taken a leave of absence following the death of his mother.

According to The New York Times, a group of major Uber investors demanded Kalanick’s immediate resignation earlier Tuesday. Kalanick acquiesced after “hours of discussions,” but will reportedly stay on Uber’s board and still controls a majority of voting shares.

Uber has fired more than 20 employees as part of its investigation into sexual harassment claims at the company, according to Bloomberg. Employees were told at an all-hands meeting at Uber’s San Francisco headquarters about the terminations.

An outside law firm that was retained to investigate claims of sexism and harassment at Uber gave the report today at the meeting, Bloomberg reports. The investigation uncovered over 200 reports of inappropriate conduct, like harassment, bias, bullying, discrimination, and retaliation. Half of the reported incidents were dismissed with no action taken, while 31 employees are in training or counseling, and seven were handed written warnings. Fifty-seven cases are still being investigated.

Uber has fired Anthony Levandowski, the former head of its self-driving car project. Levandowski came to Uber after a long stint at Google, where he shepherded that company’s own self-driving car program before it was spun off into a standalone business called Waymo. Earlier this year, Waymo filed a lawsuit against Uber, alleging that Levandowski stole some 14,000 documents from Waymo, and that the information became the technological basis for Uber’s self-driving cars. The news was first reported by The New York Times.

Levandowski had already stepped away from running Uber’s self-driving car project, with the company moving him to an operations role in late April. Uber has denied the allegations against Levandowski, and in the meantime has been trying to prove in court that it developed its own self-driving technology independently. Levandowski’s refusal to cooperate with those efforts was the reason for his firing, according to his termination letter, which you can see below.

Walk into any McDonald’s in the world and, other than some localized decorations and special menu items, it’s essentially the same thing as any other: same burgers, same fries, same macronutrient (im)balance, same standards of cleanliness and speed of service. That’s the goal, anyway, and our expectations of globalized services of this kind can be summarized in one word: consistency. Well, having spent the better part of a week in Silicon Valley to cover Google I/O, let me tell you, Uber is not one of these consistent operators. Not even close.

In my native Europe, hailing a ride via Uber takes a few minutes. This makes sense, because not every car on the road is an Uber driver, and not every Uber driver is free to respond to my whims. In Palo Alto, on other hand, Ubers arrive within seconds. Same for San Francisco, which seems to have completely abandoned the concept of conventional taxis in favor of a fleet of supposedly self-employed Uberinos. It’s simultaneously bewildering and seductive.

Today, Uber announced a new Privacy Settings system within the app, rolling out to users over the next few weeks. The new controls will give users more control over mobile notifications sent by Uber and any contacts shared with the system. The new settings also let users grant or withhold location data from within the app, a choice previously made at the operating system level.

The biggest functional change is the system for deleting accounts, which users will now be able to do from within the app itself. Simply uninstalling the Uber app doesn’t delete server data, and deleting that data previously required directly contacting Uber’s support team. The new process lets users start an automatic 30-day countdown from the Privacy Settings page, after which all customer data will be deleted, including data from the UberEats app.

The week began with a terribly embarrassing video of Uber CEO Travis Kalanick being a jerk to one of his drivers, and ended with a bombshell report about a secret and legally questionable program used by Uber to evade government scrutiny globally called “Greyball.” For any other company, this confluence of bad press would have seemed catastrophic. For Uber, it was just another week in February.  

Uber has been engulfed in a new scandal almost every week for the past month, and every single day for the past two weeks, from allegations of a toxic, misogynistic workplace to the revelation that its self-driving cars were malfunctioning and possibly running on stolen technology.

Late last month, Uber sued the city of Seattle, challenging the city’s authority to implement a landmark law allowing drivers in the gig economy to unionize. It was an opening shot in what is likely to be a long and costly legal battle.

Uber’s legal challenge comes at an awkward time for the ride-hailing juggernaut. The company recently named 2017 “the year of the driver” and has said it will devote energy and resources to improving its relationship with the hundreds of thousands of people who drive on its platform. But the company’s bungled response to a taxi strike during the recent JFK protests led to a grassroots #DeleteUber campaign that saw 200,000 riders canceling their accounts. This latest situation in Seattle may further complicate Uber’s attempts to reverse the negative effects of that campaign.

Uber announced today its plan to join forces with German auto giant Daimler on the deployment of self-driving cars. The cars, along with the autonomous technology, will be manufactured by Daimler before being introduced into Uber’s ride-hailing network, the companies say.

“Auto manufacturers like Daimler are crucial to our strategy because Uber has no experience making cars—and in fact, making cars is really hard,” Uber CEO Travis Kalanick said in a blog post published Tuesday. “This became very clear to me after I visited an auto manufacturing plant and saw how much effort goes into designing, testing and building cars.”

One of Uber’s self-driving Volvo XC90 SUVs has been spotted out in the wild. A tipster in Pittsburgh sent us this image, as well as the video below, that confirms that Uber is in the process of testing out the newest member of its self-driving vehicle fleet. The Volvo was spotted on Morewood Street, in front of the Carnegie Mellon campus around 5PM on Monday, the tipster said.

As of last month, Uber said its self-driving Volvos were still under development, so this would mark one of the first times that the vehicle was spotted in public. It’s unclear whether they are being used to pick up and drop off passengers. We’ve reached out to Uber for comment and will update this story when we hear back.

A few months ago, drivers stuck in Mexico City traffic were greeted with a strange sight: drones carrying signs advertising UberPool. “The city would be for you, not 5.5 million cars,” one drone’s sign read. “Driving by yourself? This is why you can never see the volcanoes,” another read, a reference to the smog that obscures the mountains surrounding the city.

Photos of the unique drone-based advertising strategy first surfaced in an article published last week in Bloomberg about Uber’s growth in Latin America. MIT Technology Review characterized the drones as “heckling” drivers, while Jalopnik said they were being “badgered.” Popular Science fretted over whether we could soon see ad-bearing drones here in the US.

Lately, Uber has been positioning itself as the ultimate solution to the eternal challenge of shuttling people between transit hubs and their homes, also known as the “last mile challenge.” To that end, the ride-hail giant announced today that it struck a deal with the suburban town of Summit, New Jersey, to launch the state’s first subsidized commuter program.

Under the deal, Uber will offer free or extremely cheap rides to commuters who have struggled to find parking at Summit’s New Jersey Transit station. In exchange, the city, which is 30 miles from Manhattan, will subsidize the rides, paying Uber directly to cover the costs of the trips. The city says the deal will help free up nearly 100 parking spots at the transit station, as well as keep it from having to spend millions of dollars to build additional parking.

Uber is partnering with Yext, a New York-based startup that specializes in location data for businesses, to help online shoppers book rides to their favorite store or restaurant. The partnership will also allow corporations to serve up marketing material and ads to consumers on Uber’s platform. Depending on your point of view, that will either be super helpful or super annoying.

The announcement is an extension of Uber’s decision to open its application program interface (API) software to third-party developers. Since then, a variety of businesses have taken advantage, including Google Maps, Open Table, and Trip Advisor.

Uber announced today that it’ll require drivers to snap selfies before signing on to the platform and accepting ride requests. The new feature, called Real-Time ID Check, is described as a way to prevent fraud and protects drivers’ accounts from being compromised, but some critics say it’s an acknowledgement by Uber that some drivers have never undergone background checks. It’s also an interesting addition from a company that has long resisted other security measures such as fingerprinting drivers to check for criminal records.

Uber, which has been piloting the driver selfie checks for several months, says that under the new requirement, drivers will be asked periodically to take a selfie in the app before they accept rides. "We then use Microsoft’s Cognitive Services to instantly compare this photo to the one corresponding with the account on file," Uber’s chief security officer Joe Sullivan wrote in a blog post. "If the two photos don’t match, the account is temporarily blocked while we look into the situation."

Ride-hailing services like Uber and Lyft have been Silicon Valley’s big disruptive success story of the last five years. They upended the market, beat the policymakers, won over consumers, and saved democracy. Or at least that’s the story Uber and Lyft are selling, especially as they pivot to the next big thing: self-driving cars.

But the ride-hail industry is still at loggerheads with state governments across the US over a number of sticky issues. After winning a series of legislative victories from 2012 to 2015, ride-hailing companies encountered pushback in five of the six largest states that considered legislation to regulate these services, according to a new report from transportation policy expert Bruce Schaller.

Uber is planning on opening a new facility in Detroit, aka Motor City, which appears to be geared toward growing the ride-hail company’s self-driving car efforts. The news of the new engineering space comes a few days after Uber rolled out its driverless cars in Pittsburgh for a limited public test.

Sherif Marakby, Uber’s new vice president of global vehicle programs, told Automotive News that the facility would allow the ride-hail startup a chance to work with automakers in the area to develop and modify its autonomous fleet. He also confirmed that the company is working closely with city and state officials on its plans.

Uber won preliminary approval to settle a claim that it misled riders about a 20 percent gratuity for drivers. According to Bloomberg, US District Court Judge Edward Chen in San Francisco gave an early thumbs up to a deal that would have Uber repay $384,000 to 47,000 customers.

For over a year, users claimed Uber charged them a 20 percent tip for drivers, but then would only pass along less than half the tip amount to those drivers. Uber collected about $860,000 from users for the gratuity charge, according to the court filing.