Uber (company)

For other uses, see Uber.
Uber Technologies Inc.
Private
Industry Technology
Founded March 2009 (2009-03) (as UberCab)
Founders Travis Kalanick
Garrett Camp
Headquarters San Francisco, California, United States
Area served
 Worldwide, 536+ cities[1]
Key people
 Travis Kalanick (CEO), Ryan Graves
Services Taxicab, Vehicle for hire
Revenue US$1.5 billion (2015)
Number of employees
 6,700[2]
Website www.uber.com
Uber

Uber Technologies Inc. is an American worldwide online transportation network company headquartered in San Francisco, California. It develops, markets and operates the Uber app, which allows consumers with smartphones to submit a trip request, which the software program then automatically sends to the Uber driver nearest to the consumer, alerting the driver to the location of the customer. Uber drivers use their own personal cars.[3][4] As of August 2016, the service was available in over 66 countries and 507 cities worldwide.[5][6] The Uber app automatically calculates the fare and transfers the payment to the driver. Since Uber's launch, several other companies have replicated its business model, a trend that has come to be referred to as "Uberification".[7][8]

The legality of Uber has been challenged by governments and taxi companies, who allege that its use of drivers who are not licensed to drive taxicabs is unsafe and illegal;[9] some taxi driver unions have called Uber drivers "pirate taxis". However it is now common for taxi drivers to also work for Uber; especially during "surge" periods when they can earn multiple times what they would under the taxi umbrella.[10]

History

Further information: Timeline of Uber

Early history

Travis Kalanick, co-founder and CEO of Uber, in 2013

Uber was founded as UberCab by Garrett Camp, the founder of StumbleUpon, and Travis Kalanick in 2009.[11][12] The company received $200,000 in seed funding that same year.[13] In 2010, Uber raised $1.25 million in additional funding.[13][14]

Following a beta launch in the summer of 2010, Uber's services and mobile app officially launched in San Francisco in 2011.[15][16] Initially, Ryan Graves was appointed as CEO, however, Kalanick replaced him in the role later that year.[15][17] Graves stepped down to become the company's COO.[18]

By the end of 2011, Uber had raised $44.5 million in funding.[19][20] That year, the company changed its name from UberCab to Uber.[21] The name "Uber" is a reference to the common (and somewhat slangy) word "uber", meaning "super", and having its origins in the German word über.[22][23]

Additional funding

On December 12, 2014, TechCrunch reported that the Chinese search engine Baidu, the mainland's largest, is expected to make a significant investment in Uber.[24] The deal, the details of which were not shared with the media, was confirmed on December 17, 2014, following a Beijing meeting involving Kalanick and Baidu chief executive and chairman Robin Lee, who made a commitment to connect the search engine's map and mobile-search features with Uber’s app. At the time of the arrangement, Uber existed in eight Chinese mainland cities. Kalanick told the media afterward of an absence of "pressing regulatory issues" for Uber in China.[25][26] In May 2015, Uber revealed plans to raise between $1.5 billion and $2 billion in new funding, raising the value of the company to $50 billion or higher. [27]

Google Ventures invested $258 million in 2013.[28] The Chinese search engine Baidu made an investment in Uber in December 2014 in a deal that also involved connecting Uber with Baidu's mapping apps.[24][29] In 2016, Toyota made an undisclosed investment in Uber and looked into leasing options, which could potentially aid Uber drivers financially, a move in response to the other partnerships between Toyota's and Uber's counterparts.[30]

Opposition

As Uber grew internationally, it also began to experience disputes with governments and taxi companies in those regions. In April 2014, Uber was banned by the government in Berlin, although the company remains active in other German cities. The ban is still being discussed as of December 2014.[31] Taxi drivers in London, Berlin, Paris and Madrid staged a large-scale protest against Uber on June 11, 2014.[32] In March 2015, UberPOOL was offered in Austin, Texas, in anticipation of the South by Southwest festival. As of May 2016, Uber has pulled their Austin program, due to stricter regulations from the government.[33]

Self-driving car research

Uber autonomous vehicle testing in San Francisco in October 2016.

Also in February 2015, Uber announced a collaboration with Carnegie Mellon to establish the Uber Advanced Technologies Center, a new facility in Pittsburgh meant to support research in the development of self-driving vehicles.[34] Uber announced the first customer trial of autonomous taxis which was to take place by the end of August 2016 in Pittsburgh, but was overtaken by nuTonomy, which launched the first public trial of electric self-driving cabs in Singapore on 25 August.[35] Uber launched its first self-driving car services to select customers in Pittsburgh, including Pittsburgh Mayor Bill Peduto, on September 14, 2016.[36] Uber has a fleet of Ford Fusion cars each equipped with 20 cameras, seven lasers and GPS and radar equipment. These enable the car to create a three-dimensional map utilising landmarks and other contextual information to keep track of its position.[37] They have established an 'Advanced Technology Center' to develop this technology in the Strip District, Pittsburgh.[37]

Partnerships

In May 2015, Uber launched its UberMilitary Families Coalition, a new project to support its existing UberMilitary initiative.[38] The project seeks to partner Uber with existing military family organizations and hire more military dependents, in addition to veterans, as drivers.[38] In May 2015, Uber updated its app to include accommodations for drivers who are deaf or hard of hearing.[39]

In 2015 and 2016, Uber launched partnerships with several transit agencies to encourage trips that connect the first or last mile to public transit. These agencies included SEPTA,[40] Metropolitan Atlanta Rapid Transit Authority,[41] Los Angeles County Metropolitan Transportation Authority,[42] Dallas Area Rapid Transit,[43] and Pinellas Suncoast Transit Authority.[44]

Mapping UK city streets

In September 2016, Uber began mapping UK city streets in an effort to identify the best pick-up and drop-off points. The lift-sharing firm plans to extend its mapping activities to other British cities including Manchester, Birmingham and Leeds.[45]

Helicopter service

Also in 2016, the company partnered with Airbus to test an Uber service with helicopters in São Paulo, a city famous for its extreme traffic congestion and for having the largest helicopter fleet of any city in the world. The test, which lasted for one month, was Uber's first helicopter service that was not limited to specific events. Uber has offered helicopter service at the Cannes and Sundance Film Festivals.[46] In September 2016 Uber has announced that it's researching the possibility of developing small planes capable of vertical take-off and landing (VTOL), so they can be used for short-haul flights in cities.[47]

Uber Elevate

Uber announced on September 25, 2016 that it was looking into urban transportation with flying vehicles. At Re/code's Nantucket Conference, the head of Uber's products, Jeff Holden stated that the company wanted to "someday offer our customers as many options as possible to move around ... doing it in a three-dimensional way is an obvious thing to look at."

A statement at the AHS International-led joint workshop on Transformative Vertical Flight on September 29, Uber product manager Nikhil Goel stated that "To us, urban air transportation is simply a key initiative or our mission, right? Not only because it can cut congestion — it's got massive potential to do that — but it allows us to move people from Point A to B much, much faster than you would otherwise. If you do it in all-electric vehicles, you can do it with zero emissions."

Wired magazine broke the details of Uber's Project Elevate on October 27, 2016 article "Inside Uber’s Plan to Take Over the Skies With Flying Cars"

Uberization

Main article: Uberization

The rise of companies like Uber and GrabCar, and the changes they catalysed have started a discussion over the general transition to peer to peer transactions across industries.[48][49] The parallel rise of platforms such as Netflix, Apple TV, and AirBnB in other industries has led to comparisons with the rise of Uber and debate over whether and to what extent uberisation may displace traditional business models.[50]

Software and services

Uber mobile app icon as of November 2016.

The Uber app software requires the users and drivers to have a smartphone.

Pricing and payments

An Uber ride in Bogotá, Colombia running the Uber app on his dashboard-mounted smartphone.

Uber's pricing is similar to that of metered taxis, although all hiring and payment is handled exclusively through the Uber app and not with the driver personally. In some cities, if the Uber car is travelling at a speed greater than 11 mph (18 km/h), the price is calculated on a distance basis; otherwise, the price is calculated on a time basis.[51] At the end of a ride, the complete fare is automatically billed to the customer's credit card.[52] Uber has said its prices are the premium that the customers pay for a cab service that is not only reliable, but also punctual and comfortable.[53][54][55] In April 2016 Uber began allowing drivers to place signs in their windows stating that they can accept tips.[56]

In May 2015, Uber started testing cash payments in India. The pilot project was started in the Indian city of Hyderabad.[57] In September 2015, Uber tied up with Airtel India to allow cab users to pay using Airtel mobile wallet service. It also allows users to use Airtel 4G data at no charges.[58]

Surge pricing

Uber uses an automated algorithm to increase prices to "surge" price levels, responding rapidly to changes of supply and demand in the market, and to attract more drivers during times of increased rider demand, but also to reduce demand.[59][60] Customers receive notice when making an Uber reservation that prices have increased.[59] The company applied for a U.S. patent on surge pricing in 2013,[61][62] but it was rejected for being obvious.

The practice has often caused passengers to become upset and invited criticism when it has happened as a result of holidays, inclement weather, or natural disasters.[63] During New Year's Eve 2011, prices were as high as seven times normal rates, causing outrage.[64] During the 2014 Sydney hostage crisis, Uber implemented surge pricing, resulting in fares of up to four times normal charges; while it defended the surge pricing at first, it later apologized and refunded the surcharges.[65] Uber CEO Travis Kalanick has responded to criticism by saying: "...because this is so new, it's going to take some time for folks to accept it. There's 70 years of conditioning around the fixed price of taxis."[64][66] Uber released a post detailing why surge pricing is in place and how it works.[67] They emphasized that without surge pricing, Uber would not have its trademark service of pushing a button and getting a ride in minutes. This is detailed in a case study around a sold-out-concert at Madison Square Garden when surge pricing took effect. During this event, the number of people who opened the app increased 4x, but the actual ride requests only rose slightly, enabling ride requests to be completed with the usual ETAs.

Surge pricing makes supply and demand match so efficiently that the waiting time is almost always below five minutes, regardless of the circumstances. Surge pricing increases economic efficiency in two ways: 1. rising prices motivate more drivers to start driving, 2. when there are not enough drivers for everyone, the rising prices make only those customers accept a ride whose needs are highest.[68] When a surge in demand in the New Year's Eve did not raise prices, due to a fault in technology, fewer drivers chose to start driving and fewer customers chose alternative transportation methods. Therefore, waiting times became long and just a few lucky customers got a car, most were left without. In terms of efficiency the situation was a failure.[68] Many airline and hotel companies also price dynamically although this is often not clear, whereas Uber makes its pricing transparent.[69]

Rating score

Users of the app may rate drivers; in turn, drivers may rate users. A low rating might diminish the availability and convenience of the service to the user.[70]

Reception

Uber faces competition from lower-cost real-time ridesharing startups such as Lyft, Via, Sidecar (no longer in business),[71] DivvyRide, Ola Cabs, Didi Kuaidi, Haxi, and Juno. To compete at lower price levels, Uber introduced UberGo on Nov 19, 2014,[72] UberTaxi (partnerships with local taxi commissions) and UberX (non-luxury cars such as Toyota Prius hybrids).[73] This move led to dissatisfaction among existing Uber limo drivers who saw their earnings decrease.[74]

In 2011 Marc Andreessen expressed interest in investing in Uber. He told CNET, "Uber is software eats taxis. [...] It's a killer experience. You watch the car on the map on your phone as it makes its way to you."[75] The same year, the New York Times called Uber "clever but costly", noting the cars are "particularly nice by livery standards" and pickup times were slow compared with traditional New York City taxis and black cars.[53] In 2013 USA Today named Uber its tech company of the year.[76]

However, it has also received negative reception. In October 2014, Uber received an "F" rating from the Better Business Bureau (BBB), which cited complaints over unexpectedly high charges.[77][78]

Paris

In the first half of 2014, the UberPop version of the app was launched in Paris, France, whereby users are linked to drivers without professional taxi or chauffeur licenses, while Uber covers supplemental insurance. UberPop was expanded to other European cities over the course of the year.[79] The UberPool service was then introduced to the Parisian market in November 2014, a month after a French court had deemed the company's UberPop service to be illegal. Uber claimed that UberPool was the next iteration of the UberPop concept. Uber's Western Europe chief told reporters at the time that it was "very confident" about overturning the court decision.[79] At the start of February 2015, the UberPool service was still operational in Paris, France, despite the regulatory opposition in that country.[80] On July 5, 2015, Uber suspended UberPop in the face of pressure by the French government while awaiting a constitutional court decision on the legality of Uber's service.[81] On September 22, 2015, France’s highest constitutional authority rejected the challenge to a law that bans Uber's low-cost offering UberPop, keeping the legal pressure on the company.[82] Uber stated that the decision was disappointing but they will continue to work with the French government, trying to find a solution.[83]

Development history

During the initial development of the Uber app, the company created a think tank consisting of a nuclear physicist, a computational neuroscientist, and a machinery expert who worked on predicting demand for private hire car drivers and where demand is highest.[11][84] Later in 2012, Uber launched its Uber Garage initiative in Chicago. The experimental program allowed Uber to partner with local taxi cab drivers, alerting them when an app user requested a ride.[85][86] The company also introduced uberX in 2012, a service option which allows local drivers to respond to notifications on the Uber app by driving customers in their own non-luxury cars.[87] During 2013, Uber offered its first non-car option when it launched UBERChopper rides from New York City to the Hamptons for $3000 each.[88]

In August 2014, Uber launched UberPOOL, a carpooling service, in San Francisco and UberFRESH, a lunch delivery service, in Santa Monica.[89][90] In 2015 Uber CEO Travis Kalanick spoke about his desire to eventually move to using self-driving cars for Uber vehicles.[91] By May 2015 the company had hired a large number of Carnegie Mellon University researchers from the vehicle autonomy department to work at Uber's Advanced Technologies Center in Pittsburgh.[92] In August 2016 the company announced it would roll out the service on a pilot basis in the city by September 2016 using modified Ford Fusion vehicles with a support driver.[93]

Product expansion

In 2014, the company experimented with online food orders, pilot testing uberFRESH in Santa Monica, California.[94] In April 2014, Uber announced a courier package delivery service called Uber Rush, with pickup from anywhere in Manhattan.[95] While Rush only offers delivery,[96] the Uber Essentials or Corner Store service, starting testing in Washington D.C. in August 2014, allows online ordering from a list of about 100 items.[97][98] In April 2012, Uber launched the Uber Garage initiative, a project to experiment with other ideas for urban transportation services. The first project from Uber Garage was to give Uber users the option to hire a regular taxi driver, or a crowd-sourced Uber driver.[99]

The startup announced a new carpooling service called UberPool at the start of August 2014, after a beta testing phase in the San Francisco Bay Area. UberPool matches riders with another rider who is traveling in the same direction—the app will share the first name of the other rider and who is getting picked up first. If a match cannot be found, riders are offered a discount on a regular Uber trip.[100][101] In December 2014, Uber expanded the UberPool concept to New York City. The Uber blog announcement offered riders the possibility of reducing their journey costs by 20 to 50 percent, explaining: "On any given day, the vast majority of UberX trips in NYC have a 'lookalike' trip—a trip that starts near, ends near, and is happening around the same time as another trip".[102]

In June 2015, in Istanbul, Uber launched a water-taxi service called UberBOAT, allowing users to travel by Beneteau boats across the city’s central Bosporus strait.[103] In November 2015 Uber signed a global partnership deal with Dutch satellite navigation company TomTom to provide maps and traffic data for the Uber driver app across 300 cities.[104] In June 2016, with an eye toward expansion in the Middle East, Uber received 3.5 billion dollars from Saudi Arabia's Public Investment Fund.[105]

Requirements for driving

In some markets, where leasing arrangements for vehicles are available, the only requirement for driving for Uber, other than appropriate age, health, and ability to drive, is passing a background check. Both a smartphone, called a "device" by Uber, and a vehicle may be leased.[106] Legislation in some cities (such as San Francisco[107]) requires individuals who drive for Uber to also own a business license in the city in which they drive. Uber argues that it is a mobile app company and therefore does not employ drivers, though this has been disputed in some legal jurisdictions.[108] As a result, Uber drivers are considered independent contractors and in need of a valid business license. Some analysts predict that the trend is likely to expand across the United States. There are companies that specialize in business license compliance specifically for Uber drivers.

As of September 23, Uber requires drivers to take selfies before accepting ride requests. The feature is called "Real-Time ID Check" and is meant to prevent fraud and protect drivers' accounts from being compromised.[109]

Marketing

Uber, led by David Plouffe, an experienced political operative, expands its operations though commencing operation, then engaging in a political campaign which mobilizes public support for the service. If, as is usually the case, its mode of doing business does not conform to local regulations, Uber, supported by a small army of lobbyists, mounts a campaign to change them.[110] Customers and potential customers are mobilized through social media including using the Uber app itself.[111] Bradley Tusk, a former campaign manager for Michael Bloomberg, has played a significant role in advising Uber with respect to cities.[112] In July 2012, in honor of National Ice Cream Month, Uber launched an "Uber Ice Cream" program in the U.S. so that users in seven cities could summon an ice cream truck for on-demand delivery, while purchases were billed to users' accounts.[113]

In July 2014, Uber partnered with Blade to offer "UberCHOPPER" helicopter rides from New York City to the Hamptons for US$3,000,[114][115] including availability during the July 4 holiday weekend.[116]

DeLorean "time machine" provided by Uber

Short-term promotions in the second half of 2013 included: the September hire of ice-cream trucks to deliver ice cream;[117] rides in the DeLorean DMC-12 car from the Back to the Future film franchise, that were also launched in September;[118] an October National Cat Day promotion for which Uber drivers delivered kittens;[119] and a Christmas-tree delivery service.[120]

In March 2015, Uber offered luxury car-rental service in collaboration with Dream Drive in Singapore until 20 May 2015.[121] In November 2015, Uber offered Hot air balloon rides to customers in Hyderabad, India for INR 1,000 in collaboration with GrabOn.[122] On September 4, 2013, Uber announced its first sports deal. The company held a promotion with the NFL Players Association to promote safe rides for NFL players.[123]

In January 2015, Uber announced a marketing program Kalanick called "principled confrontation" that included reaching compromises with local municipalities to compromise on new tax regulations. Since implementing this program, Uber has seen 17 new cities pass pro-Uber ordinances.[124] Uber had worked out an arrangement with the city of Boston to share quarterly data on the duration, locations, and times of day in which riders used the app to travel in or out of the city. This information was first delivered to the city in February 2015, and the report kept all individual user data private.[125] On March 10, 2015, Travis Kalanick, Uber’s founder and chief executive announced a partnership between Uber and the UN Women. They had intended to invest in local communities where the UN Women’s group was located hoping to create 1,000,000 jobs for women globally by 2020. However, after pressure from trade unions and women's rights organizations, UN Women declined to participate, citing Uber's legal status, safety, and privacy concerns.[126]

In September 2016, Uber and Bobbi Brown Cosmetics made a partnetship for Bobbi Brown x Uber Retouch campaign, to celebrate the launch of the Retouching Wands and Retouching Pencils. Customers will get an opportunity to take a ride with a Bobbi Brown Makeup Artist and quick make up course how to retouch make up on-the-go.[127]

Benefits

Uber gives consumers a choice between regulated taxi cab companies and other forms of transportation, and can potentially provide drivers with "flexible and independent jobs".[128] Users can track the car picking them up on their smartphone, which allows them to know when it will arrive. A receipt will be automatically sent via email.[129]

As Uber does not require cars to be hailed, its drivers can more easily pick up customers in less built up neighbourhoods. For this reason, Bloomberg Review said that Uber helps the poor by making it easier for them to get a taxi.[130] It also helps reduce congestion as, "because Ubers can’t accept street hails, they do much less unnecessary driving-around than either yellow cabs (who are cruising for hails) or individuals (who are looking for a parking spot)." This assumes that there is no extra traffic created by people who would otherwise have used public transport or walked.[131] One study showed that having Uber in a city reduced drunk driving rates;[132] however, a new study by the Washington Post refutes this claim.[133]

A study by Judd Cramer and Alan B. Krueger showed that an Uber ride uses capacity more efficiently than traditional taxis. In terms of both working time and miles driven, a larger share is spent with a customer in the car. The reasons for this are:[134]

  1. Uber's technology matches its passengers and drivers efficiently
  2. larger scale
  3. inefficiencies caused by taxi regulation
  4. Uber's efficient labour model
  5. surge pricing adds efficiency to the matching between drivers and passengers

Competitive effects

Uber and other ride-sharing companies brought increased competition to the taxi industry.[135] One result has been a decline in the value of the limited-issue taxi licenses that have traditionally restricted the number of authorized taxis in a given locale. According to the Wall Street Journal, taxi medallion prices are plunging in some U.S. cities. For example, in New York City medallions valued at more than US$1.3 million in 2013 have decreased in value to US$700,000 to 800,000 in 2015, and in Chicago prices of more than US$360,000 in 2013 have decreased to US$240,000 in 2015.[136] The decline in the value of taxi medalions in turn hurt the financial position of lenders whose loan portfolios included them. Historically, some lenders have loaned up to 90 percent of a medallion's value. U.S. companies Signature Bank, Progressive Credit Union (85% of the total US$625 million loan portfolio was dedicated to taxi medallions in 2015), and Melrose Credit Union (which in 2015 has US$2 billion connected to taxi medallions) are all coming under solvency pressure. In addition, CitiGroup has initiated foreclosure proceedings on 46 taxi medallions.[136]

Criticism

Taxi company protesting against Uber - Budapest, 18 January 2016
Uber drivers on strike at Montparnasse, Paris, 3 February 2016

Uber is the subject of ongoing protests and legal action from taxi drivers, taxi companies, and governments around the world who are trying to stop Uber from operating in their areas. These groups say that Uber presents unfair competition to taxis because the company does not pay taxes or licensing fees; that it endangers passengers; and that drivers are untrained, unlicensed and uninsured. Lawsuits come from Uber drivers as well, who sometimes complain about being practically Uber's employees without enjoying the rights and remedies of this category of workers under employment law.[137] As of mid-2015, protests had been staged in Germany, India, Spain, Colombia, France, Italy, Denmark, Canada, China and England, among other nations, and dangerous incidents involving passengers have been documented.[138][139] Uber executives were arrested in France in June 2015. In December 2014, Uber was banned in Spain and in two cities in India. Uber continues to be involved in disputes with several governmental bodies, including local governments in the U.S., Australia and Brazil.

Governments have been largely unable to stop Uber's operations in their jurisdictions because its operations are conducted primarily over the Internet. Many have called for governments to relax legislation in favour of Uber.[140] At city jurisdictions, this might be easier to achieve.[141] In addition, Uber is said to use extremely aggressive tactics such as bullying and hiring investigators to "dig up dirt" on journalists who criticize them.[142] Portland, Oregon's transportation commissioner called Uber management "a bunch of thugs".[143] A commissioner in Virginia who opposed Uber was flooded with emails and calls after Uber distributed his personal contact information to all of its users in the state.[144]

The Australian New South Wales government created a taskforce to look into the Uber problem stating that the existing regulatory framework is "difficult to enforce", and therefore not as effective as it could be. The taskforce also noted that ride sharing services "appear to meet the criteria of a public passenger service" under the 1990 Act and drivers are therefore required to pay local government services tax GST.[145] This is despite the fact Uber claims that it is not a taxi service and should not have to operate under taxi regulation.[146][147]

Lawsuits by private entities

On December 31, 2013, Uber driver Syed Muzaffar ran over and killed six year old Sofia Liu in San Francisco, severely injuring her mother and brother in the same incident. The driver was logged in and waiting for a fare, but not carrying a passenger, at the time of the accident. Liu's family filed a wrongful death claim against Uber, claiming that this made Uber responsible for the driver's actions.[148][149][150] Uber deactivated Muzaffar's account after the accident. Syed Muzaffar was arrested on the scene and was charged with misdemeanor vehicular manslaughter on December 8, 2014.[151] Uber said in a written statement that all drivers had undergone a "stringent" background check, and Muzaffar's was "clear". Muzaffar had been arrested in Florida in 2004 on a reckless driving charge, but California law prohibited private background check services like Uber's from reporting arrests and crimes more than seven years old.[152] Syed Muzaffar's vehicular manslaughter trial was scheduled to start August 5, 2015. In July 2015, Uber reached a settlement with the family for an undisclosed sum.[153]

In September 2014, a class-action lawsuit was filed by Atlanta, Georgia taxicab drivers and CPNC holders as the plaintiff class, against Uber Technologies, Inc., its subsidiary Raiser LLC (which operates UberX), and in a rare move, all of both companies' drivers as a defendant class in the Superior Court of Fulton County, Georgia, for restitution of all metered fares collected via the Uber and UberX apps for trips originating within the Atlanta city limits.[154] In December 2014, Checker Cab Philadelphia and 44 other taxi companies in Philadelphia, Pennsylvania filed a lawsuit in the Federal Court of the Eastern District of Pennsylvania, alleging that Uber was operating illegally in the city.[155][156] On March 3, 2015, U.S. District Judge Nitza I. Quinones Alejandro denied a motion for a preliminary injunction against Uber.[157]

On January 29, 2015, a 25 year old Delhi woman who claims to have been raped in her city by Uber driver Shiv Kumar Yadav filed a lawsuit against the company for negligence in US courts.[158] The plaintiff filed a motion for voluntary dismissal of the case on September 1, 2015, which was granted September 2, 2015.[159] In May 2015, the Milan Court banned Uberpop alleging "unfair competition" and violation of the local jurisdiction regulating taxi services. The lawsuit was originally initiated by the Italian taxi drivers union.[160]

In July 2015, a $400M class-action lawsuit was filed against UberX and UberXL in Toronto, Canada on behalf of Ontario taxi and limo drivers, brokers, and owners. The statement of claim alleged that UberX and UberXL violated section 39.1 of the province’s Highway Traffic Act by having unlicensed drivers picking up passengers and transporting them for compensation.[161] In March 2016, Sukhvir Tehethi, a local taxi driver, filed an injunction against Uber. Toronto’s city council amended a bylaw in October 2015 and, according to Tehethi’s lawyer, Uber drivers are in violation of it. Tehethi decided to take action saying that it could be months, or even years, if he waits for City Hall to act.[162] In January 2016, a $1.5M lawsuit was filed against Uber in Philadelphia, Pennsylvania, by Sergei Lemberg on behalf of a Philadelphia taxicab medallion owner. The suit claimed that Uber engaged in tortious interference with a prospective business advantage and engaged in false advertising under the Lanham Act.[163]

National Federation of the Blind lawsuit

A lawsuit was filed in the U.S. state of California on September 9, 2014 by the state chapter of the National Federation of the Blind, in response to the reported denial of services to "more than 30" blind customers—the lawsuit claimed that the conduct was in violation of the Americans with Disabilities Act of 1990 and California state law. The Washington Post published a direct quote from the complaint, in which the Federation claims that its constituency "face the degrading experience of being denied a basic service that is available to all other paying customers." Two cases were described in the Post article: First, a California UberX driver allegedly stored a service dog in the trunk of his vehicle and refused to acknowledge the blind passenger's concern upon the latter's realization of what had occurred; second, a driver allegedly cursed at a blind passenger during a verbal exchange, in which the latter was explaining the nature of the guide dog. According to the complaint, the driver suddenly accelerated, and nearly injured the dog, while also striking the passenger’s blind friend with an open car door.[164] Uber responded to a number of blind passengers who reported their experiences, stating that since Uber drivers were independent contractors, the company was unable to oversee their conduct. The Federation replied in a public statement that Uber closely monitored its drivers' work practices through the Uber app, that Uber advised blind passengers to notify drivers about their guide animals in advance, and that the Federation was proceeding with the filing of the lawsuit after Uber refused to enter into a negotiation with them to resolve the issue.[164]

Protests

A protest against Uber in Portland, Oregon in January 2015

On January 13, 2014, cab drivers in Paris attacked an Uber driver's car near Charles de Gaulle Airport, protesting competition from the transportation startup.[165] On June 11, 2014, in a concerted action, taxis blocked roads in major European cities in protest against what they perceive as a threat to their livelihoods from companies such as Uber. The cabbies contended that Uber and similar smartphone app-based services have an unfair advantage because they are not subject to the same kinds of fees and regulations placed on taxis.[166][167] On June 25, 2015, cab drivers in Paris "locked down" Paris in an anti-Uber protest.[168] Musician Courtney Love got caught in the protest and live tweeted as her Uber cab was violently attacked and she and her driver were held hostage.[169]

On July 24, 2015 a thousand taxi drivers in Rio de Janeiro blocked traffic during the morning rush hour protesting Uber's expansion there. (Lawmakers have voted to ban Uber in São Paulo and Brasilia.).[170] On August 21, 2015 Uber started operations in Costa Rica. That same day the government asked the taxis for "help" to locate all Uber drivers. This call resulted in traps set by the taxis and even the vandalism of an Uber driver's car. Uber stated that it will help and pay for all the inconvenience caused to their drivers.[171] On November 26, 2015 an Uber driver was beaten by taxi drivers in Brazil, and similar attacks followed.[172]

On 22 March 2016, thousands of taxi drivers in Jakarta demonstrated against Uber and a similar service, Grab. Several places were targeted during the protests, including the Indonesian Presidential Palace, the People's Council Building, and the Ministry of Communication and Informatics central office.[173] Taxi drivers accused that Grab and Uber were causing them to receive smaller daily incomes due to the rising number of app users. The demonstrators also demanded that the government ban the apps and issue a governmental decree concerning this problem.[174] In Cape Town, South Africa on the 3 June 2016 metered taxi drivers blockaded the road to the city's airport and forced passengers out of vehicles whilst attacking Uber drivers.[175]

Sabotage against competitors

Uber issued an apology on January 24, 2014, after documents were leaked to the Valleywag and TechCrunch publications saying that, earlier in the month, Uber employees in New York City deliberately ordered rides from Gett, a newly established competitor, only to cancel them later. The purpose of the fake orders was two-fold: wasting drivers' time to obstruct legitimate customers from securing a car, and offering drivers incentives — including cash — to join Uber.[176] Uber later issued a statement about the incident on its website.[177]

In August 2014, Lyft, another ridesharing service, reported to CNNMoney that 177 Uber employees had ordered and cancelled approximately 5,560 rides since October 2013, and that it had found links to Uber recruiters by cross-referencing the phone numbers involved. The CNN Money report identified one Lyft passenger who canceled 300 rides from May 26 to June 10, 2014, and who was identified as an Uber recruiter by seven different Lyft drivers. On this occasion, Uber did not issue an apology, but suggested in a statement on its website that the recruitment attempts were possibly independent parties trying to make money.[178][179] A Lyft spokesperson stated to CNN Money: "It's unfortunate for affected community members that they have used these tactics, as it wastes a driver's time and impacts the next passenger waiting for that driver."[178]

Operation SLOG

In August 2014, the online publication The Verge reported that a secret Uber project, called "Operation SLOG" — which recruits members with the assistance of TargetCW, a San Diego, California-based employment agency — appeared to be an extension of the company's activities in relation to Lyft. As reported, on July 9, 2014 following Lyft's expansion into New York City, Uber sent an email offering what it called a "huge commission opportunity" to several contractors based on the "personal hustle" of the participants.[180] Those who responded met with Uber marketing managers who attempted, according to one of the contractors, to create a "street team" to gather intelligence about Lyft’s launch plans and recruit their drivers to Uber. Recruits were given two Uber-branded iPhones (one a backup, in case the person was identified by Lyft) and a series of valid credit card numbers to create dummy Lyft accounts.[180] After being contacted for comment, Target CW warned its contractors against talking to the media, stating that it represented a violation of a non-disclosure agreement they signed.[180]

Contractors or employees

Uber contracts with their driver partners under legal arrangements as contractors, and not employees. Since taxation, work hours, overtime benefits, and so forth may be treated differently by various political jurisdictions globally, this designation has been controversial.[181] In the United States, the US Department of Labor issued guidelines in July 2015 to deal with, what it considers, "misclassification" of workers. It argues that any "worker who is 'economically dependent' on the employer should be treated as an employee. By contrast, a worker must be in business for himself or herself to be an independent contractor."[182] The guideline is non-binding, but is expected to have some influence in various court cases which may establish new common law around the issue.[182][183]

In a class action lawsuit filed in the United States District Court for the Northern District of California on August 16, 2013 Uber drivers plead that they were employees who had been misclassified as independent contractors and violations of the California Labor Code and demanded that they be given any tips Uber had collected on their behalf and payment of business expenses such as gas and maintenance of their vehicles.[184] The District Judge, Edward M. Chen, ruled in the plaintiffs' favor with respect to a motion for summary judgement by defendants on March 11, 2015 holding that whether Uber drivers were employees was a disputed fact to be resolved by the jury.[185] On September 1, 2015 Chen certified the class but generally limited it to drivers in California hired before June 2014 (when an opt-out arbitration clause was included in the contract) who had directly contracted with Uber. [186][187]

In the United Kingdom on 28 October 2016, the Central London Employment Tribunal ruled that Uber drivers are "workers" entitled to the minimum wage, paid holiday and other normal worker entitlements, rather than self-employed. Two Uber drivers had brought the test case to the employment tribunal with the assistance of the GMB Union, on behalf of a group of drivers in London. Uber will appeal against the decision.[108][188]

Threatening journalists

At a private dinner in November 2014, Emil Michael, senior vice president of Uber, suggested that Uber hire a team of opposition researchers and journalists, with a million-dollar budget, to dig into the personal lives and backgrounds of media figures who reported negatively about Uber. Specifically, he targeted Sarah Lacy, editor of the technology website PandoDaily, who has accused Uber of sexism and misogyny.[189] The controversy made national news and stirred criticism against Uber. "The comments, reportedly made by senior vice president for business Emil Michael at a New York dinner attended by BuzzFeed editor-in-chief Ben Smith," wrote a Washington Post columnist, "ignited a powder keg of criticism about a company already perceived as cut-throat — landing Uber on the front pages of The Washington Post, USA Today and the New York Times."[190] Michael issued a public apology.[191] Later, he sent an email to Lacy: "I was at an event and was venting, but what I said was never intended to describe actions that would ever be undertaken by me or my company toward you or anyone else. I was definitively wrong and I feel terrible about any distress I have caused you."[192]

Speaking with the Australian media publication The Conversation on November 20, 2014, European PR agency FINN partner Raf Weverbergh said that Uber does not realize exactly how upset journalists are in the wake of the Michael incident. On the same date, the publication reported that more journalists deleted their Uber apps. Uber's Brisbane spokesperson stated that journalists will not be investigated by the company in the Australian state of Queensland, in light of the legislative difficulties that were occurring at the time.[193]

User privacy

Kalanick received a letter, dated November 19, 2014, from Senator Al Franken, Chairman of the United States Senate Judiciary Subcommittee on Privacy, Technology and the Law, over user privacy. In addition to a list of 10 questions, Franken stated that the company had a "troubling disregard for customer privacy" and that he was "especially troubled because there appears to be evidence of practices inconsistent with the policy [Uber spokesperson] Ms. Hourajian articulated" and that "it appears that on prior occasions your company [Uber] has condoned use of customers’ data for questionable purposes." Franken concluded his letter by asking for a response by December 15, 2014.[194] Concerns have been raised about internal misuse of the company's data, in particular the ability of Uber staff to track the movements of its customers, known as "God View". In addition to the aforementioned use of the service to track journalists and politicians, a venture capitalist disclosed in 2011 that Uber staff were using the function recreationally and viewed being tracked by Uber as a positive reflection on the subject's character.[195] An individual who had interviewed for a job at Uber said that he was given unrestricted access to Uber's customer tracking function as part of the interview process, and that he retained that access for several hours after the interview ended.[196] On February 27, 2015, Uber admitted that it had suffered a data breach more than nine months before. Driver names and license plate information on approximately 50,000 drivers were inadvertently disclosed.[197] Uber discovered this leak in September 2014 but waited more than five months to notify the people affected.[198]

Safety

Checkr Inc., a company that runs security checks on its drivers by identifying addresses that the potential driver lived at in the past seven years and then matching any convictions to the addresses, screens Uber drivers. Compared to most taxi companies, which use Live Scan, a fingerprinting service that checks for matches in FBI and state databases, Uber’s policy has been critiqued for not being as safe.[199] The only cities where Uber mandates fingerprint scanning are New York, where a fingerprint scan is needed to apply for a TLC license, and Houston, which has required fingerprint scans for ride sharing drivers since 2014. However, Uber claims that the extra step of fingerprinting drivers in Houston has slowed down driver sign ups, and as a result wait times are on average 35% longer.[199] On August 4, 2014, the company announced the scheduled removal of a driver from the service pending a medical review, after the driver suffered an epileptic seizure while driving that resulted in a crash with a pedestrian in San Francisco. The 56-year-old driver was hospitalized after hitting three parked cars and then a man on the sidewalk; an Uber spokesperson said in the announcement that the driver "has an outstanding record of service and safety with no prior incidents."[200]

In December 2014, the New York Times reported on concerns regarding the manner in which the Uber app notifies drivers about new requests for pick-up from customers.[201] When a customer makes a request, drivers are notified on an official Uber mobile app and are provided the customer's location. In order to accept the request, the driver has approximately 15 seconds to tap the phone to accept the request.[202] An Uber driver reported that drivers can be temporarily suspended for ignoring these requests. Deborah Hersman of the National Transportation Safety Board criticized the 15-second system, saying that it presents a significant distraction to drivers, as drivers are financially motivated to respond to fares while driving. In response, Uber has stated that the app "was designed with safety in mind," and that drivers are not required to physically look at the device to accept a fare.[201] According to South Carolina State Law (Governor's Action: June 24, 2015, Signed), Uber Transportation Network Company Partner vehicles must pass annual safety inspections and post an Uber emblem in the lower right (passenger) side of the windshield. This is a safety provision that was added to the South Carolina Statutes (SC Statutes A88, R126, H3525), Chapter 23, Title 58 of the 1976 Code is amended by adding: Section 58-23-1610.)

In February 2016, Uber's vetting procedures came under scrutiny once more following a shooting spree purportedly committed by Jason Dalton, an Uber driver in Kalamazoo, Michigan. Dalton is believed to have been driving for Uber at the time while allegedly conducting a shooting spree that left six people dead and two others wounded. This led to a seven-hour manhunt for the suspect, during which it is believed that Dalton continued to drive and accept fares. Uber was aware of the issues with Dalton, having received multiple complaints.[203] In March 2016, two Uber drivers in East Lansing, Michigan, were arrested on sexual assault charges stemming from incidents where they inappropriately touched female Michigan State University students.[204]

In May 2016, Uber stopped operations in Austin, Texas after the city "...voted 56% to 44% against Proposition 1, which would have allowed ride-hailing companies to continue using their own background check systems." Instead, Uber and other ride sharing companies would have to convert to fingerprint scanning, which is far more expensive and even less effective according to some.[205] Uber "argues that the fingerprint databases are often out of date and biased against minorities who have been fingerprinted but never charged with a crime."[206]

Finances

Uber has raised about $11.5B from 14 rounds of venture capital and private equity investors.[207] In August 2016 "Uber agreed to sell its subsidiary company, Uber China, to Didi. Didi also agreed to invest $1 billion into Uber Global."[208]

Year 2014 2015 1Q'16 2Q'16
Net Revenue $495.3M[209] $1.5B $960M[210] $1.1B[210]
GAAP Loss -$671M[211] TBD -$520M[210] -$750M[210]

See also

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  211. ↑ http://www.businessinsider.com/uber-financials-for-2014-and-2015-2016-1

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