Super Pumped: The Battle for Uber

by Mike Isaac

Uber already had an aura of arrogance about it in 2015. The pervasive trope of the “tech bro” was the ire of communications representatives across the Valley; young and moneyed, childless, these engineers and salesmen were unburdened by the daily concerns of the baristas, housekeepers, and wait staff they felt existed to serve them. A tech bro’s greatest worry was whether or not he was working at that year’s hottest “unicorn”—a noun coined in 2013 by a venture capitalist who used it to describe companies valued at more than $1 billion. By the fall of 2015, Uber was the unicorn to end all unicorns; every tech bro had to be there.

Managers were doing drugs with their subordinates—cocaine, marijuana, and ecstasy, mostly.

At the end of the week, Uber’s finance team added it all up. The entire “X to the x” celebration cost Uber more than $25 million in cash—more than twice the amount of Uber’s Series A round of venture capital funding.

The entire presentation was born directly from Kalanick’s obsession with Amazon, the online retailer led by Jeff Bezos, a founder every young entrepreneur idolized. Bezos’s path to success was the stuff of Kalanick’s dreams.

Kalanick imagined he would one day become a direct challenger to Bezos, reshaping the way people and goods moved major urban centers. Uber wanted to be the Amazon for the twenty-first century.

The audience read the list as Kalanick rattled them off aloud: Always Be Hustlin’ Be An Owner, Not Renter Big Bold Bets Celebrate Cities Customer Obsession Inside Out Let Builders Build Make Magic Meritocracy & Toe-Stepping Optimistic Leadership Principled Confrontation Super Pumped Champions Mindset / Winning Be Yourself

The list read like Amazon’s corporate values run through a bro-speak translation engine. People in Kalanick’s world were not happy or sad, they were “super pumped” or “super unpumped.” Company brainstorming meetings were “jam sessions.” Half the company enjoyed Kalanick’s colorful vocabulary. The other half bit their lips. Kalanick expected everyone to be as “super pumped” about the values as he was.

“Super pumpedness is all about moving the team forward, working long hours—pretty much a do-whatever-it-takes attitude to move the company in the right direction,” as one Uber employee explained the term. If there was one quality Travis Kalanick looked for in a new recruit, it was that they were as super pumped as he was to work for Uber.

One friend described him as a pit bull that spent its life getting kicked by its owners—no matter how beaten down Travis was, he never, ever gave up.

Work was everything to Kalanick. He didn’t have friends, he didn’t have girlfriends. To have a relationship with Kalanick, one former Scour colleague said, you had to be working alongside of him. Beyond his parents, Kalanick had few personal relationships.

An entire ecosystem of companies that catered to dot-com companies sprung up around the Valley (along with the popularity of the shopworn San Francisco adage that it’s better to sell shovels during a gold rush than to actually prospect for gold).

One fifth of all office space in the SoMa area was vacant in the summer of 2001, an enormous increase from the record lows of .06 percent just eighteen months before.

Finally, after six years of tireless hustling, Kalanick negotiated his best deal yet: he sold Red Swoosh to Akamai for nearly $20 million. After taxes, Travis personally netted roughly $2 million.

Aside from the money he made over ten years of dogfights in startup land, Kalanick had gained a great deal of practical experience and emerged with a new understanding of leadership. He now held a siege mentality, one that perceived dangerous enemies all around, and developed a quasi-Darwinian vision of what it takes to survive.

“They’re all so founder friendly! They exalt founders, put them on pedestals and say ‘we’re just the measly VCs!’ ” Kalanick later said to a group of entrepreneurs of his early startup experiences. “It is in the VC’s nature to kill a founding CEO. It just is.”

Since neither of them wanted to do the job, Camp and Kalanick decided that Graves, young and full of hustle, should be the company’s first chief executive. Graves was ecstatic; he finally had his chance to prove he could make it at a startup. It didn’t last long. Graves’s friends have always considered him an “A-plus guy,” but he turned out to be a B-minus chief executive. During the company’s early fundraising days, he’d walk into important meetings with venture capitalists and fumble stats or other talking points. Despite his confidence, he could never deliver a convincing enough pitch to seal the deal.

There’s a familiar line of thinking among the technorati: Good ideas are important, but venture capital is all about making the right bet on the right person at the right time. When sizing up a founder, a venture capitalist asks: Will this guy—and in the sexist tech industry, it was almost always a guy—be the one to take a startup from a handful of hard-working kids to a Fortune 500 company someday? Will this guy stick around when the shit hits the fan? Is this a guy I’m willing to bet millions of dollars on? People liked Graves. But for most of the VCs who met him, the answer to those questions was no.

The first version of UberCab was not an app. Users logged in to a desktop computer browser, navigated to UberCab.com, requested a black car and, in theory, would receive a ride within ten minutes or less for only one and a half times the price of a yellow cab.

On October 20, 2010, just days after Graves had agreed to officially step aside as Uber’s CEO, transportation officials showed up at the offices of the young startup. They hadn’t read TechCrunch and asked to see Graves. UberCab, they said, had been served with a cease and desist order; the company was breaking the law by skirting existing transportation regulations, the San Francisco Municipal Transportation Agency said. Every day UberCab was in operation, the company faced fines of up to $5,000 per trip. The potential fines were enough to put the company out of business. UberCab was already completing hundreds of trips per day in San Francisco. Moreover, Graves, Kalanick, and other employees faced up to ninety days in jail for each day the company remained in operation beyond October 20.

Venture capital isn’t as much a profession as it is a brawl. If it were a sport, it would be like rugby without the mouthguards. There are no real rules, except that players should do whatever they need to do to seal a deal.

Venture capital is risky. Roughly one-third of VC investments will fail.

It wasn’t uncommon for a new hire to enter Uber’s headquarters having never managed anything more than a Starbucks, and be sent out to take over a new city.

Kalanick trusted his employees with significant power. Each city’s general manager became a quasi-chief executive, given the autonomy to make significant financial decisions. Everyone was responsible for “owning” their position.

Top managers in Uber’s San Francisco office barely knew employees in, say, Chicago or Philadelphia. And they had little oversight over the money. Local managers were greenlighting seven-figure promotional campaigns based on little more than a hunch and data from their personal spreadsheets.

There were drawbacks. Give too much autonomy to a legion of twentysomethings, and you’ll occasionally empower a battalion of douchebags. In France, one local promotion boasted “free rides from incredibly hot chicks.” The New York office was infamous for its bro-culture. Helmed by Josh Mohrer, a former frat boy turned MBA graduate, the bravado and aggression of management led to resignations and allegations of harassment. Every city office had its own cultural microclimate, for better or worse.

Sunil Paul, a serial entrepreneur and longtime transportation geek, was experimenting with a different way of offering rides to people with his San Francisco–based startup, Sidecar. Paul saw what Uber was doing and appreciated their intensity and aggression. But Paul realized there was a much larger market opportunity in what he called “peer-to-peer ride-sharing.” That is, instead of focusing on professional limo drivers, Paul wanted to convince normal, everyday people who owned cars to become part-time drivers themselves. The way Paul saw it, the roads were already packed with underutilized vehicles, four- and six-seated vehicles that only contained one person driving the car. It was a glut of capacity, otherwise wasted space.

another startup was mulling the same approach. Zimride, a carpooling startup co-founded in the Bay Area by a transportation enthusiast and an ex-Lehman Brothers employee (who escaped the firm just three months before its 2008 bankruptcy), was considering a pivot of its own. Until then, Zimride focused mostly on long-distance carpooling between college campuses, something co-founder Logan Green had been obsessed with since his days at UC Santa Barbara. But despite working long hours with his partner, John Zimmer, Zimride was mired in the doldrums. Peer-to-peer sharing—the kind Sunil Paul was pursuing at Sidecar—presented an interesting opportunity.

Soon after, Green and Zimmer announced their pivot. Zimride would abandon its long-distance carpooling program and launch a new service called Lyft; the plan was to make casual ride-sharing a fun, friendly experience, asking passengers to ride shotgun next to their drivers and strike up friendships while joyriding to their destination. The cherry on top was a cutesy pink mustache. Lyft sent all of its drivers giant, whimsical, plush hood ornaments to affix to the front of their cars.*** It was an instant hit.

Graves, Geidt, and especially Kalanick weren’t above playing dirty. They started booking secret meetings with regulators in San Francisco and encouraging them to go after Lyft and Sidecar. Where once Uber had scoffed at City Hall, now they implored city officials to shut the other companies down.

Uber decided to go all in. In a policy paper published to the company’s website, Uber announced that it had created a low-cost option, “UberX,” that allowed for ride-sharing. Uber was going head-to-head with Lyft.

Did not know Lyft and Sidecar were first here

Most people who know Travis Kalanick remark on one thing: in every game he plays, every race he enters, in anything where he’s asked to compete against others, he seeks nothing less than utter domination.

“You’ve got a lot of catching up to do,” Kalanick would tweet at Zimmer. He loved adding the hashtag “#clone” to his tweets, insinuating that Lyft was an Uber copycat. Zimmer tried to take the high road when he responded, but Kalanick was pissing him off.

All around San Francisco, Uber bought street signs and billboards targeting Lyft. Each billboard showed a large, black disposable razor blade with “Uber” printed on the handle, poised above one of Lyft’s pink, cuddly trademark. In the text beside the graphic, Uber made its message clear: “Shave the ’Stache.”

Kalanick’s data showed that by the time a customer used Uber an average of 2.7 times, they became a customer for life. The product was just that good.

Anyone who has met Larry Page knows that he is not a personable guy, and the furthest thing from anyone’s “big brother.” Page is an engineer’s engineer; socially awkward, disinclined to take meetings with anyone outside of his inner circle, and obsessive about the incredibly complex problems he wishes to solve.

If you weren’t ready to stay late at the office and work nights and weekends, you shouldn’t be working at Uber. Company-wide dinner service—a perk that most large Silicon Valley companies offered for those who worked after hours—wasn’t served until 8:15 p.m. That meant you couldn’t work an extra hour after five o’clock and strategically grab a free meal at, say, six on your way out the door. You’d have to work an extra 3.25 hours to get your meal.

The medallion system—a market based entirely on scarcity and exclusivity—was threatened to its core. With UberX, the company’s peer-to-peer service, anyone with a car could drive for Uber. That simple concept destroyed Big Taxi’s barrier-to-entry system, sending the price of medallions plummeting. In 2011, medallions in Manhattan were going for $1 million apiece; six years later, one fire-sale auction of forty-six medallions in Queens fetched an average price of $186,000 per medallion. Overnight, taxi drivers whose entire livelihoods were tied up in paying off an expensive medallion went underwater.

From Uber’s early days up through 2018, more than a dozen other taxi drivers in New York and other major metropolitan areas also took their own lives.

Later, as Uber matured, the company’s staff swelled to include nearly four hundred paid lobbyists across forty-four states; the number of ride-hailing lobbyists outnumbered the paid lobbying staffs of Amazon, Microsoft, and Walmart combined.

That meant Uber could define Uber drivers as contract workers—designated 1099 in tax code parlance—which allowed Uber to skirt paying for benefits like unemployment tax, insurance, and health care. Avoiding these normal employment expenses saved enormous amounts of money, and wildly decreased Uber’s liability for drivers’ actions.

Kalanick’s network of spies in the Valley—mostly made up of other tech workers and venture capitalists—picked up early rumors of Lyft’s new carpooling service. To get the jump on Lyft, Kalanick tasked his chief product officer, Jeff Holden, to drop everything and copy the carpooling feature immediately. Uber announced the impending launch of “Uberpool,” a carpooling feature, mere hours before Lyft announced the product it had invented.

He name-dropped boutique hotels in Miami like the Shore Club and SLS as places he’d rather be than hustling at Uber. He was trying to be honest—and perhaps a little bit cool—but to the public he sounded like an enormous douchebag.

Kalanick wanted to keep Uber from feeling too “big company,” like a Google or an Apple. That meant protecting his employees from corporate bureaucracy. He wanted them to ignore all rules except Kalanick’s beloved fourteen principles. As Kalanick looked upon his empire, he was proud of what he saw—dozens of young, hungry entrepreneurs, autonomous and improvising as each situation required. What Gurley saw was a sprawling mess. He was trying and failing to convince Kalanick to hire another CFO.

Most scammers found each other over text-based Chinese internet forums, a simple, anonymous way to match people who wanted to make a quick buck. They developed their own codified language; drivers seeking a fake ride would ask for “an injection,” a reference to the small, red digital pin that signaled a user’s location inside the Uber app. A “nurse,” or scammer, could respond in kind to give a “shot” to the original poster by creating a new fake account and going on a fake ride with the driver. The two parties would then split the bonus incentive payment from Uber. Repeated over and over across dozens of cities, small driver bonuses mushroomed into millions in squandered cash.

Some of Uber’s China problems were self-inflicted. For one, Uber still relied on Google Maps to guide drivers from pickup to drop-off. That proved to be a terrible choice; while Google has mapped much of the developed world with unmatched precision, China remains one of Google’s blind spots. Uber’s Google-powered navigation software often confused drivers with awful directions, and irritated riders who were frustrated when their driver took a slower route.

After Uber built a new version of its app with the InAuth code installed, Quentin watched the fraud numbers fall off a cliff. When a scammer tried to create a new account on a device Uber had fingerprinted, Uber’s anti-fraud systems would kick in and the account would be banned automatically. Finally, after years of being ripped off, Uber had found a way to fight back. There was one problem: InAuth’s service blatantly violated Apple’s rules regarding user privacy. So everything between Uber and InAuth had to be kept secret. if Apple found out, both Uber and InAuth could be in serious trouble, and could even get Uber’s app banned from the iPhone.

“The board is irrelevant,” Kalanick said, waving them off of the idea. “I hand pick all of these guys. They do what I tell them, and the way I’ve structured things, I do what I want.”

But this new idea was as brazen as the Trojan Horse. The engineer’s idea was to trick Apple by using a technique called “geofencing,” using the GPS and IP address data from the phone to tell Uber where the user was located. A “geofence” acts much like it sounds; if the user is within a specific geographic radius, the app would perform a certain way. In Uber’s case, if the Uber app was used within the Bay Area or near Apple’s Cupertino headquarters, it wouldn’t run the InAuth “library” of code, which asked for the personal data needed to fingerprint phones. What that Uber engineer assumed—incorrectly, as it turned out—was that all of Apple’s App Store code reviewers were located in Cupertino and the San Francisco Bay Area. Eventually, an Apple reviewer who wasn’t based in California stumbled upon the InAuth code library. Uber’s ruse was up.

As usual, Kalanick paced around the room as the gravity of his team’s actions sank in. In his defense, Kalanick had never told the engineer to lie or cheat Apple. After all, the people working on that team were layers below Kalanick. He expected his leaders to handle their staff appropriately. What Kalanick did tell his teams was consistent: “We need to win, no matter what. Do whatever it takes.”

For Cook, there was no greater sin than breaching the privacy of his users. Cook would later fight the FBI in public, refusing to unlock the smartphone of a mass murderer in San Bernardino, and would slam Facebook at public events for the company’s intrusive privacy practices. He had no problem supporting Cue on this decision: if Uber didn’t cut it out, Cook and Cue would ban Uber from the App Store.