Super Pumped: The Battle for Uber

by Mike Isaac

“Hell” was devised to monitor the locations of all Uber drivers who also drove for Lyft. Uber employees at headquarters would create fake Lyft accounts, which tracked nearby vehicles—up to eight per fake account. Information about those vehicles was then sent back to Uber and stored in a database. “Hell” created a way for Uber to monitor the real-time positions of Lyft drivers. And because many of those drivers worked for Uber as well, Uber could monitor the rates Lyft was offering for drivers and outbid them, thereby swaying drivers to work more regularly for Uber.

The problem became so significant that later, the company would create its own taxonomy of twenty-one different classifications of sexual misconduct and assault in order to properly organize the sheer number of annual incidents reported.

Uber would outsmart Lyft at nearly every turn. Green and Zimmer were competitive and ambitious, but Kalanick always faster, and more willing to use questionable tactics. Kalanick didn’t just attack Lyft’s userbase, he went after their best personnel.

After Uber launched its carpooling product in New York, the office sent a survey to its drivers to see how things had gone. As a roomful of Uber employees examined the results, one manager expressed disgust with the spelling and grammatical errors the drivers included in their responses. “God, I can’t believe these people’s votes count the same as ours,” he quipped to his subordinates.

Roughly a quarter of Uber’s drivers churned out every three months.

Kalanick knew what he wanted in his employees—who were mostly white, male, and in their twenties—and made his hiring decisions based on that instinct. The result was a workforce that largely reflected Kalanick himself.

Lyft’s executives then pulled a well-executed PR stunt, publicly donating $1 million to the American Civil Liberties Union over four years, making themselves look like white knights while Uber was groveling before Trump.

With this lawsuit, Waymo was sending a message—to Levandowski and to the rest of Silicon Valley. No one steals from Larry Page and gets away with it.

The Waymo lawsuit—which landed just four days after Fowler’s post—created an enormous new problem: Uber’s new self-driving leader appeared to be a literal thief and potential criminal.

Nonetheless, Kalanick began to push back on Jones’s findings immediately, rebutting the data he saw on the wall. “Nuh-uh,” Kalanick said. “I don’t believe it, man. I don’t see it.”

Kalanick—the flesh-and-blood one in the hotel that Tuesday morning—already brought to his knees, began muttering to his lieutenants. “This is bad, this is really bad.” He fell further forward, writhing around on the floor. “What is wrong with me?” he yelped.

The group made a brief call to Steven Rubenstein, a crisis PR expert who regularly worked for the Murdoch family. Rubenstein ultimately decided not to take on Kalanick as a client, though he would cross paths again with Kalanick less than a month later. But as a parting gift, Rubenstein offered two pieces of advice: First, Kalanick had to “find his Sheryl,” a reference to Mark Zuckerberg’s relationship with Sheryl Sandberg, then widely considered a competent counterbalance to Zuck’s leadership. Second, he said Kalanick needed to take a leave of absence. “You either shoot yourself in the foot, or the press will end up shooting you in the head.”

They pleaded with the board for the termination of Emil Michael, who leaders saw as an accelerant to Kalanick’s worst impulses.

founder of Lowercase Capital, once considered himself a friend to Kalanick. Sacca’s $300,000 early investment in Uber also gave him a sizeable portion of the company. But when Sacca began attempting to buy up shares of Uber from other early investors—a practice known as “secondary share purchasing”—Kalanick turned on him. The CEO stopped allowing Sacca to attend board meetings as an observer; the two rarely spoke afterwards.

It was clear that everyone on the board liked Dara. But it was also clear that none of them quite loved Dara. As a result, he became an emergency back-up candidate, a safe pick for the group. His identity was kept well hidden from the press through the process.

Graves was upfront: “We want you, Meg.” He all but guaranteed Whitman would have the job if she came back and presented to the board over the last weekend in August. Meg Whitman had made up her mind: She wanted to be the next CEO of Uber. “Okay then,” she told Graves. “Let’s talk.”

Immelt went first, and he was a disaster. He seemed completely out of touch and unprepared. He seemed not to understand what went into running a sophisticated, heavily regulated three-sided marketplace. One board member called the entire spiel “a bad joke.”

At one point during the presentation, Khosrowshahi pulled up a slide on his PowerPoint deck that made everyone in the room tense up: “There Cannot Be Two CEOs,” the slide read. As Khosrowshahi looked across the room, directly at Travis Kalanick, he made clear that were he to become Uber’s new leader, Kalanick would truly have to take a hike. The former chief’s only involvement would be his board duties, but no more, Khosrowshahi said.

Then, some believe, Cohler made a miscalculation. The Benchmark partner gave the table an ultimatum: If the board voted for Whitman, Benchmark would drop its lawsuit against Kalanick. It read to the room as an ultimatum. This was the price of peace. For once, Kalanick wasn’t the only one who directors felt was acting childish. Cohler’s brinksmanship dismayed almost everyone in the room. Instead of following a fair process to determine the best candidate, Benchmark was effectively holding the board hostage to approve the candidate of their choice. Cohler’s speech may have cost Whitman the job. After the next secret ballot, the votes came in again, but this time it was not deadlocked. It was five to three in favor of Khosrowshahi. The group had chosen Uber’s next CEO.

Khosrowshahi negotiated himself quite a package as a result; if he was able to take Uber public by the end of 2019—roughly two years from his hiring—at a valuation of $120 billion, Khosrowshahi would net a personal payday of more than $100 million.

Over the next eighteen months, Uber’s new chief executive Dara Khosrowshahi would systematically undo nearly everything his predecessor had stood for.

Khosrowshahi then revamped Uber’s overarching philosophy. Uber’s fourteen values, once sacrosanct, were replaced with a list of eight simple maxims. Items like “super pumped” and “always be hustlin’ ”—values sprung from the mind of an arrogant young man—were discarded. Instead they were replaced with a set of fairly bland platitudes that touched on “customer obsession,” à la Jeff Bezos, and a celebration of employee differences. The most important norm was the one Khosrowshahi repeated at nearly every press appearance and television interview during his extended 2018 apology tour: “We do the right thing. Period.”

But for some, there remains a lingering, persistent concern: Is Uber under Dara Khosrowshahi still going to swing for the fences? Or has Uber lost its appetite for moonshots and world domination—the alluring, Travis-like quests that attracted them to the company in the first place?

Kalanick, still a bachelor, quickly found his place in the Miami nightlife scene. Flocking from one club to another with friends, he had a habit of informing dates and female acquaintances of his new status as a member of the revered “three comma club”—a reference to the three commas present in the number 1,000,000,000.

This is also a referece to the show Silicon Valley

His entrepreneurial days far from over, Kalanick is in the midst of working on his next startup: a real estate play, purchasing underutilized buildings and creating so-called “micro-kitchens” inside them, which will serve food delivered by Uber Eats. His plan, should it succeed, rests largely on the continued success of Uber.

By the end of the day, Uber had lost more in dollar terms than any other American initial public offering on Wall Street since 1975. Uber’s coming-out party was a disaster.