Super Pumped: The Battle for Uber
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Read between March 24 - March 30, 2020
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You must know there are two ways of contesting, the one by the law, the other by force; the first method is proper to men, the second to beasts; but because the first is frequently not sufficient, it is necessary to have recourse to the second. —NICCOLÒ MACHIAVELLI, 1513
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They worked for the Portland Bureau of Transportation and had a mandate: Find and stop anyone driving for Uber, the fast-growing ride-hailing startup. After months of trying to work with city officials to make the service legal in the city, Uber had thrown negotiations out the window. The service was launching that evening, without the bureau’s approval.
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Uber’s nice-guy approach hadn’t worked. But it wasn’t designed to. Over the previous five years, the company had grown from a startup employing a couple of techies in a San Francisco apartment to a burgeoning global behemoth operating in hundreds of cities across the world. It had done so by systematically moving from city to city, sending a strike team of employees to recruit hundreds of drivers, blitz smartphone users with coupons for free rides, and create a marketplace where drivers were picking up passengers faster than the blindsided local authorities could possibly track or control. ...more
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The problem wasn’t Uber’s black car service, which functioned well in a number of cities because it adhered to standard livery and limousine service regulations. The problem was UberX, an ambitious, low-cost model that turned nearly anyone on the road who had a well-conditioned car and could pass a rudimentary background check into a driver for the company. Allowing random citizens to drive other people around for money opened up a slew of problems, most notably that no one had any idea whether or not it was legal. At Uber, no one really cared. Kalanick didn’t think much of the nice-guy ...more
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What England didn’t know was that Uber’s general managers, engineers, and security professionals had developed a sophisticated system, perfected over months, designed to help every city strike team—including the one in Portland—identify would-be regulators, surveil them, and secretly prohibit them from ordering and catching Ubers by deploying a line of code in the app. The effect: Uber’s drivers would evade capture as they carried out their duties. Officers like England could not “see” the shady activity, and could never prove it was happening.
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Behind the scenes, Uber was hardly innocent. Recruiting ex-CIA, NSA, and FBI employees, the company had amassed a high-functioning corporate espionage force. Uber security personnel spied on government officials, looked deep into their digital lives, and at times followed them to their houses. After zeroing in on problematic individuals, the company would deploy one of its most effective weapons: Greyball. Greyball was a snippet of code affixed to a user’s Uber account, a tag that identified that person as a threat to the company. It could be a police officer, a legislative aide or, in ...more
Joe
Greyball
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Greyball was consistent with one of Uber’s fourteen company values: Principled Confrontation. Uber was protecting its drivers while confronting what they saw as a “corrupt” taxi industry that had been protected by bureaucracy and outdated regulations. Concepts like “breaking the law” weren’t applicable, they believed, when the laws were bullshit in the first place. Kalanick was convinced that once everyone used the service, it would click—they’d understand that the old way was inefficient and expensive, and his way was the right way.
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As a Bay Area resident and professional journalist during the past decade, I saw Uber rise to power right in front of me. I witnessed how quickly a transformative idea can change the urban fabric of a city, and how strong personalities can have an outsized effect on shaping the way a startup operates.
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He went on to advise his staff not to throw large kegs off of tall buildings, and mandate no interoffice sex unless co-workers explicitly stated “YES! I will have sex with you” to one another.
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But for every WIRED cover story of a boy genius striking it rich with a smartphone app, there was a mess of secondary effects left in his wake. Many of the next generation of apps catered to the needs and whims of the white, upwardly mobile twentysomething males of Silicon Valley. The press gave significantly less ink to the latent misogyny bubbling up inside of tech companies, and the libertarian view that enabled tech figureheads to unwittingly enable these same biases. The divide between tech’s most talented, and the class who waited tables and served them coffee only grew starker by the ...more
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“There are forces all around you when you run a company, . . . ready to take you out,” Kalanick said. “The [CEOs] that survive are the ones that are supposed to be there.”
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Amazon Web Services powers cloud computing services for coders and entrepreneurs who can’t afford to build their own infrastructure or server farms on their own. If a startup is a house, AWS is the electric company, the foundation and the plumbing combined. It keeps the business up and running while the company founders can spend their time focusing on more important things like, say, getting people to come to their house in the first place.
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Garrett Camp was pissed off. It was 2008—the twenty-first century—in one of the richest, most forward-thinking cities in the entire world, and he couldn’t catch a taxi in under a half hour. At only seven-by-seven square miles, San Francisco was small enough that one could survive without owning a car, but still large enough for a person to be annoyed they didn’t have one. He could always bike across the city, though a six-speed didn’t work so well climbing up steep hills like those on Divisadero Street. And a bike wasn’t going to help him get home from a bar at two o’clock in the morning—at ...more
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Garrett Camp still couldn’t get the idea out of his head. The cabs in his city were shit. Worse, since he’d been blackballed from most of the services, he had begun resorting to black car services, and had collected a laundry list of the best private drivers in San Francisco, repeatedly pinging them whenever he needed a ride for a night out. But even that was imperfect. The money, the complexity of arranging pickups, the confusion of sharing rides with friends. It was too messy. He needed the best kind of cab—one he or any of his friends could hail directly from their iPhones. He needed an ...more
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Camp couldn’t leave out the best part. They’d market UberCab to professionals in dense cities—people like themselves—and try to make it feel exclusive, almost like a club. You’ve got to be a member to use it, guaranteeing a “respectable clientele,” and they’d only accept top-of-the-line luxury vehicles. The kind you’d want to be seen in riding around town: Mercedes, BMW, Lincoln. Best-case scenario, Camp believed, is that he created a market leader in private transportation, with the possibility of hundreds of millions in annual revenue. At worst, he’d create a small black car service for ...more
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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. It was more expensive, yes, but the idea was people would pay more for the reliability and convenience of on-demand service. Soon enough, the company farmed out development, and contract programmers hacked together a rudimentary version of an UberCab iPhone app. It was buggy and slow, but it worked. Camp, a sucker for luxury, focused on ...more
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For instance, often when people called for a traditional taxi, they didn’t know whether it’d be there in a matter of minutes or if it wouldn’t show up at all. When a user ordered an UberCab, she could watch the car’s journey, pixel by pixel, across the map on the screen of their iPhone. San Francisco’s aging taxicabs were grimy, their seats sticky and torn. UberCab’s private black cars would show up spotless, with slick black leather interiors and comfortable air conditioning, replete with wintergreen breath mints and chilled bottles of Aquafina. One of the most important parts of the UberCab ...more
Joe
Uber in two paragraphs
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If your consumer-tech iPhone app doesn’t flourish in San Francisco, you might as well pack up and go home. Twenty-four-year-old Austin Geidt was tasked with figuring this out.
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“We ignore it,” Kalanick repeated. “We’ll drop ‘Cab’ from our name,” he said, something his lawyers claimed gave the company greater legal exposure to false advertising claims. UberCab was now known as “Uber,” and it was staying open for business.
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Now, with Uber, Kalanick was selling a winning product that was landing at an ideal time. Above all else, Kalanick was in complete control. Everything about Uber—from the design of the app to the raucous, take-no-prisoners culture—was his. He saw himself locked in an existential battle with corrupt, entrenched taxi operators and the politicians they paid to protect them. Kalanick was the general on the front lines.
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“There’s been so much corruption and so much cronyism in the taxi industry and so much regulatory capture that if you ask for permission upfront for something that’s already legal, you’ll never get it,” Kalanick once told a reporter. Kalanick evidently believed there was no way Uber could win if it played by the rules—his competition certainly wouldn’t. The founder’s instinct proved correct. Uber’s guerilla tactics far outmatched the resources and technical acumen of government workers or taxi operators. In Seattle, for instance, Austin Geidt dropped in like a paratrooper, quickly hiring ...more
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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. Kalanick was growing nervous. Across town at Uber’s headquarters, he had heard about Zimride’s plans, and he had heard whispers about Sunil Paul’s escapades, too. Kalanick considered Mark Zuckerberg a friend—or at least a familiar ...more
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Joe
Lyft gets serious and Uber tries to knee-cap them
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Uber had discovered a winning formula to expansion. But each new city required capital, an upfront investment to kickstart what they called the demand “flywheel.” Drivers wouldn’t work for Uber unless there was enough demand from riders. And new riders wouldn’t sign up or return unless there was a critical mass of available drivers. It was a classic chicken-and-egg problem. “Uber solved that problem by straight-up buying the chicken,” Ilya Abyzov, an early Uber manager in San Francisco, told friends of the strategy. Uber began torching hundreds of thousands of dollars, giving away the money as ...more
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Uber had what was called “negative churn”—a term often used to describe software as a service, or SaaS, companies. Having negative churn meant that once customers used the product, they were more likely to keep using it regularly thereafter. “It means that customer accounts are like high-yield savings accounts,” a venture capitalist once wrote of the term. “Every month, more money comes in, without much effort.”
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Taxi owners knew they had to stop Uber. In some major cities, taxi owners had paid hundreds of thousands of dollars to purchase “medallions,” taxi-service permits required by the local government. Medallions could be absurdly expensive, upwards of a million dollars in peak markets like New York City. Drivers and dispatchers took out huge mortgages to buy them. The limited number of medallions created an artificially constrained market, which meant cab drivers and taxi company owners could charge enough to earn a decent living (and pay for the medallion.) Then Uber showed up. The medallion ...more
Joe
The taxi market explained
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Taxi drivers who didn’t give in to despair, however, fought back. Some tried to beat Uber at its own game by forming taxi alliances and creating their own apps like iRide, Arro, Curb, and others. But taxi operators soon found the best way to fight back wasn’t to compete with an app. It was to protect the turf they already had. When Uber launched in a new city, taxi operators would often lean on their local transit agencies and taxi authorities, who would dispatch an official to Uber’s local headquarters. Armed with a thick rulebook and a scowl, officials in New York, Nevada, Oregon, Illinois, ...more
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Uber made it as easy as possible for drivers to sign up. The company used a background check system that moved new recruits through the system quickly. Taxi and livery services used fingerprint testing, which offers a thorough history of a driver’s past, but often took weeks to complete. Uber used an outside firm, Hirease, which boasted an average turnaround time of “less than 36 hours.” Hirease did not require fingerprint tests. Waiting weeks for a background check was intolerable for Uber. A week was a year; a month was eternity. After perfecting the quick background check process, Uber’s ...more
Joe
Fingerprints checks for taxis
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Uber hired Ben Metcalfe, a caustic, outspoken British engineer who described his job on LinkedIn as building “custom tools to support citizen engagement across legislative matters” to drive “social good and social change.” Metcalfe and his team built automated tools that the company used to spam lawmakers and rally users. With easy, in-app buttons, users could send emails, texts, and phone calls to elected officials whenever an important legislative matter was up for debate. By 2015, more than half a million drivers and riders had signed petitions supporting the company across dozens of ...more
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If you were bold enough to challenge Kalanick, you had better back up your arguments with cold, hard data. Kalanick wouldn’t listen to anything else. For years, general managers begged Kalanick to let them build a tipping function into the app so that riders could toss a few extra dollars to drivers at the end of a ride. It was a simple gesture that would earn the company significant goodwill with their driver base; besides, Lyft offered it. Yet Kalanick remained staunchly against tipping. Kalanick felt Uber worked so well because of the frictionless payment experience. A passenger could exit ...more
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Eight days after the first story broke, Quentin’s team was hit with a bombshell. As scrutiny intensified in the wake of Uber’s recent scandals, an enterprising young hacker in Arizona named Joe Giron had decoded Uber’s Android application and found the list of data access permissions Uber’s app requested upon installation. The litany went far beyond what most Uber users expected: phone book, camera access, text message conversation logs, access to Wi-Fi connections. These were permissions that were suspect for any app to request, much less a taxi service. Why would a ride-hailing app need ...more
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Cue hammered Kalanick from the start. “We want you to walk us through exactly what happened here, from the beginning how we ended up in this room today.” Kalanick stammered, shaken, but started from the beginning. He walked Cue and Schiller through the massive fraud across the platform, through the ingenious solutions scammers had and the problems Apple’s iOS updates had created for halting fraud. Emil Michael, the point person for dealing with Cue and the Apple blowup, had prepped Kalanick well. Kalanick was trying on a new face for this meeting, one of conciliatory regret. He knew he could ...more
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there were severe safety issues. The India rape scandal was just the tip of the iceberg. Unbeknownst to outsiders, Uber operations teams dealt with thousands of misconduct cases every year, including increasing instances of sexual assault. As the service grew, millions and ultimately billions of rides were taken. The power of large numbers meant that assaults and sex crimes were probably inevitable. But Uber had so lowered the bar to become a driver that people who might have been prevented from driving in the official taxi industry could easily join Uber. The problem became so significant ...more
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Whether it was hackers in Romania running massive fraud schemes or blackmailers bilking innocent women, Joe Sullivan was good at finding people on the internet, and keeping people safe. It was the reason he had been recruited to Uber. And it was why Sullivan ultimately said yes to the job. He looked at Uber and saw a rat’s nest of problems: widespread fraud, competitors across four continents, hackers laying siege to the company’s valuable stockpile of personal information. Plus, Uber offered him the chance to be more than an internet cop; the very nature of Uber’s service meant dealing with ...more
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Larry Page—a transportation obsessive—had invested more than a billion dollars and tens of thousands of employee hours into the problem by the time he and Sergey felt comfortable enough to show their egg-shaped car to the world. No one was more determined to bring robot cars to life than Larry Page. No one except, perhaps, for Anthony Levandowski. The lanky, cantankerous engineer was still working on “Project Chauffeur,” the company’s pet name for autonomous vehicle research. But his position was growing tenuous. For one, Levandowski was a poor leader. He would get in constant fights with ...more
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personal blog, susanjfowler.com. The entry clocked in at more than three thousand words, the length of a magazine article. She was nervous when she scanned the title: “Reflecting On One Very, Very Strange Year At Uber.” Would anyone actually read this? Would anyone actually care? “It’s a strange, fascinating, and slightly horrifying story that deserves to be told while it is still fresh in my mind,” Susan Fowler wrote in the introductory paragraph of her blog post. “So here we go.”
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His thinking on keeping his seat on the council didn’t last long. In the span of a week, more than 500,000 people deleted their Uber accounts entirely, not counting the incalculable others who simply deleted the app from their phones. Uber’s all-important ridership growth curves—for years always hockey-sticking up and to the right—started turning downward. Kalanick began to sweat. Lyft, at that point running out of money and on the verge of surrender, benefitted enormously from the backlash. People began to ditch Uber and switch over to Lyft. (Protest felt good, but people still needed to be ...more
Joe
How Lyft survived
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Susan Fowler gave one last look at the words on the screen. “Reflecting On One Very, Very Strange Year At Uber,” the title of the post read. She took a breath.
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Travis Kalanick woke up to an iPhone on nuclear meltdown. Within hours, the link to Susan Fowler’s blog post had been shared internally, across private messages and chat rooms hundreds of times. Uber employees were buzzing with ire, excitement, confusion. It was raining in San Francisco that Sunday morning, but Kalanick was in Los Angeles. Groggy, he began returning the flood of calls that had come in from Uber’s top executives about Fowler’s whistleblowing memo. Fowler had never ranked high enough in the company to cross his radar. And yet this one woman—a single engineer in Uber’s sprawling ...more
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Whereas over the course of 2014 through 2016, Uber was hiring thousands of Google employees away, now Google began rehiring Uber’s conscience-stricken workforce in droves; Airbnb, Facebook, even Lyft started to pick off Uber employees. Uber needed to fix its morale problem. Fowler’s blog post had only made it worse.
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Rachel Whetstone, Kalanick’s senior vice president of communications and public policy, was nervous. She was an operator, a longtime communications and policy executive who had worked for Google for nearly a decade, rising to the top of the comms food chain, before coming to Uber. Thin and anxious, with wisps of long, strawberry blonde hair and a posh British accent, Whetstone came from the cutthroat world of Conservative British politics before diving headlong into the tech sector. She was a natural strategist, had a knack for seeing around corners, figuring out where the press was going to ...more
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My reporter trick is to play dumb and friendly; dumb and friendly is always more approachable than eager and prodding.
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It didn’t matter to Kalanick that drivers were logging more trips and picking up more people—basically doing twice the work—to make the same amount of money. It didn’t matter that drivers were commuting absurd distances to busy cities like San Francisco—often from places two hours away, but occasionally as many as six hours away—sleeping in their cars overnight on side streets and empty parking lots for the chance at more rides per hour. It didn’t matter that San Francisco lacked sufficient public bathrooms for drivers, forcing them to find coffee shop bathrooms, or, more often, make do ...more
Joe
Uber business model
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“I wanted to make a few comments just to put all of this in perspective,” Gurley began, his towering frame always at odds onstage with the awkwardness of his personality. “This company is undoubtedly the most successful startup in the history of Silicon Valley. It grew faster, bigger, it touched more people customers, countries cities faster than ever before. “But I want to bring up a phrase you hear pretty often but I think is applicable,” Gurley continued, his tone turning grave. “With great success comes great responsibility. We are no longer considered a startup by the outside world. We ...more
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Khosrowshahi’s first job was to repair relationships with its hundreds of thousands of regular drivers after years of abuse and neglect. By the time Khosrowshahi was voted in, Uber was halfway through its “180 days of change” campaign to improve relations. Led by two executives from Kalanick’s reign—Rachel Holt and Aaron Schildkrout—the campaign involved an extended listening tour and apology, as well as new features and improvements drivers had been requesting for years. One of the most meaningful changes was something Kalanick had personally prevented: the ability to tip drivers. After ...more
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For the first time in its nine-year history, Uber had installed proper corporate governance—mechanisms and officers that Bill Gurley had long desired.
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Uber’s self-driving division, one of the biggest drains on Uber’s finances and once considered an “existential” area of development for the company, is in limbo at the time of this writing.
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Everyone has a motivation to speak with a reporter, but many of my best sources felt they were doing the right thing by coming forward and telling their story in hopes it would help people to better understand the story of Uber. I want to express my thanks to all of you here: I truly could not have done it without you.