The online and offline media headlines are screaming about the global ride-hailing platform Uber and its unethical practices over the years to emerge as a global leader.
On Sunday morning, the world woke up to shocking news of ‘The Uber Files’. Originally leaked to ‘The Guardian’ and ‘The Internal Consortium of Investigative Journalists’, it was a treasure trove of almost 124,000 documents. These documents showed just how the tech giant was able to expand with rapidity and the illegal and often violent techniques it resorted to achieve.
On Monday, the shockwaves continued as Mark MacGann, Uber’s former chief lobbyist for Europe, the Middle East and Africa, identified himself as the source of the leaked data. Seeking higher ground, he said – “It is my duty to speak up and help governments and parliamentarians right some fundamental wrongs. Morally I had no choice in the matter.”
Founded as Ubercabs in San Francisco in 2009, by Garret Camp and Travis Kalanick, it came to be known as Uber Technologies, Inc. It is an American mobility service provider, allowing users to book taxis for transport via the Uber App.
Over the years, it has added various services like food delivery, package delivery, couriers, freight transportation, electric bicycle and motorized scooter through partnerships with various local operators.
Since 2013, Uber saw unprecedented growth across countries and emerged as the most popular ride-hailing company. In the fourth quarter of 2021 Uber had 118 million monthly active users globally and generated approximately 19 million rides a day.
Uber has received criticism for its treatment of taxi drivers, disruption of the taxicab businesses and an increase in traffic congestion. It has also been questioned about the low rates and heavy discounts it offers on its ride-share app, thus undercutting taxi drivers and forcing its partners to take lesser pay.
Unsurprisingly, Uber has reported losses of millions of dollars since 2014. In 2018, it exited markets in Russia, China and Southeast Asia in exchange for stakes in rival businesses.
Business Model of Uber
Uber acts as the intermediary between cabs and riders. It does not own any vehicles, but partners with taxi owners and receives a commission for each booking. The dynamic pricing model of Uber is based on the local supply and demand at the time of the booking. This fare is quoted to the customer in advance.
What Do the Uber Documents Leak Reveal?
Uber has courted controversy since 2009, when it was founded, from violent conflicts among drivers to the use of secret software to evade law enforcement.
‘The Uber Files’ span a period of 5 years, from 2013 to 2017, when it was run by its controversial co-founder Travis Kalanick. Kalanick was forced out of Uber in 2017 following constant controversies including allegations of data breach and sexual harassment scandals.
The period of his reign at Uber is controversial and shows how he utilised that chaos to speed expansion. He spearheaded Uber's expansion globally, albeit with illegal practices and lobbying with government heads to push through favourable laws.
Launch of Uber in Paris
In 2014, Uber launched in Paris – its first European launch. Kalanick established contact with Emmanuel Macron (President, France), who was then, the economy minister. Macron interceded on Uber’s behalf, even brokering secret deals with opponents in the cabinet, to help Uber operate undisturbed in Paris.
Entry into German Market
In 2014, the then mayor of Hamburg, Olaf Scholz (currently the German Chancellor), pushed against Uber lobbyists to ease the way for Uber to enter the German market.
Taking the help of Joe Biden
Kalanick had a meeting scheduled with the then, US Vice-President, Joe Biden at the World Economic Forum. The after effect of the meeting was an amended statement to his prepared speech at Davos when he referred to a CEO whose company would give millions of workers freedom to work as many hours as they wished and manage their lives the way they want to.
Uber took extensive steps to save itself from authorities. In addition to lobbying with politicians and government officials, Uber had also installed a ‘kill switch’ which they activated to stop the authorities from accessing the company’s computers. The ‘kill switch’ was used in Amsterdam, Canada, Belgium, India, Romania, Hungary and France.
Kalanick’s theory of embracing chaos included endangering drivers. Almost every market that Uber entered, triggered organised protests from taxi driver unions, that would sometimes turn violent. He mutely agreed to Uber drivers going to such protests. His ideology? “Violence guarantees success”.
The documents indicate Uber’s adeptness at finding unofficial routes to power. It shows a company that had a deliberate strategy of breaking or ignoring laws, and that it was very much aware of it.
The documents go on to reveal the role that lobbying and relationships with powerful politicians played in its global success. They also reveal that company executives were aware of the illegality of their entire operation.
Uber’s original idea of citizens driving citizens in their private cars without any permits or licenses mostly fell into a grey area legally.
Post 2017 - What Did and Did Not Change at Uber?
The chaos that Kalanick capitalized on has grown Uber to a USD 43 billion dollar company. However, soon after Kalanick was replaced by Dara Khosrowshahi accusations about the workplace culture and sexism seem to have stopped.
The company seems to have toned down its aggressive approach and now works with licensed drivers using specific permits. Despite all this, it faces multiple lawsuits regarding its employment strategies and its profitability remains in question.
Secondly, although it seems to now work in compliance, it does so only as little as necessary to get away from the attention of the authorities. They are not openly breaking rules anymore, but even its new business model remains close to its previous one. It continues to push for its preferred laws and regulations through courts or by finding legal loopholes.
The details of the expose will continue to grow in the coming days as more details will be made public. What is learned from all this is that apps like Uber and many others promised innovation.
Instead, they brought out barely disguised models of corruption and exploitation. One can only hope that there are severe penalties for tech entrepreneurs who blatantly break and bend laws. Maybe it will act as a deterrent for future cons.
What is the Uber leak?
Uber leak is a trove of 124,000 documents that show how the ride-hailing giant expanded its operations using illegal tactics.
Who leaked the Uber Files?
Mark MacGann, Uber’s former chief lobbyist for Europe, the Middle East and Africa came forward to take responsibility for the leaks.