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Uber

From Wikipedia - Reading time: 28 min
For other uses, see Über and Uber (disambiguation).

Uber Technologies, Inc.
FormerlyUbercab (2009–2011)
Company typePublic
Industry
FoundedMarch 2009; 15 years ago (2009-03)
Founders
HeadquartersSan Francisco, California, U.S.
Area served
70 countries and 10,500 cities worldwide
Key people
Services
RevenueIncrease US$37.281 billion (2023)
Increase US$1.110 billion (2023)
Increase US$1.887 billion (2023)
Total assetsIncrease US$38.699 billion (2023)
Total equityIncrease US$12.028 billion (2023)
Number of employees
30,400 (2023)
Subsidiaries
Websiteuber.com
Footnotes / references
[1]
Uber Taxi

Uber Technologies, Inc. is an American multinational transportation company that provides ride-hailing services, courier services, food delivery, and freight transport.[1] It is headquartered in San Francisco, California, and operates in approximately 70 countries and 10,500 cities worldwide.[1] It is the largest ridesharing company worldwide with over 150 million monthly active users and 6 million active drivers and couriers. It facilitates an average of 28 million trips per day and has facilitated 47 billion trips since its inception in 2010.[2] In 2023, the company had a take rate (revenue as a percentage of gross bookings) of 28.7% for mobility services and 18.3% for food delivery.[2]

Uber classifies its drivers as gig workers or independent contractors, which has drawn criticism and legal challenges because it allows the company to withhold worker protections that it would have been required to provide to employees.[3][4] Studies have shown that, especially in cities where it competes with public transport, Uber contributes to traffic congestion, reduces public transport use, has no substantial impact on vehicle ownership, and increases automobile dependency.[5][6][7] Other controversies involving Uber include various unethical practices such as aggressive lobbying and ignoring/evading local regulations. Some of these conducts were revealed by a leak of documents showing controversial activity between 2013 and 2017 under the leadership of Travis Kalanick.

History

[edit]
For a chronological guide, see Timeline of Uber.
Travis Kalanick, former CEO of Uber, in 2013

In 2009, Garrett Camp, a co-founder of StumbleUpon, came up with the idea to create Uber to make it easier and cheaper to procure direct transportation. Camp and Travis Kalanick had spent $800 hiring a private driver on New Year's Eve, which they deemed excessive, and Camp was also inspired by his difficulty in finding a taxi on a snowy night in Paris.[8][9] The prototype of the mobile app was built by Camp and his friends, Oscar Salazar and Conrad Whelan, with Kalanick as the "mega advisor" to the company.[9]

In February 2010, Ryan Graves became the first Uber employee; he was named chief executive officer (CEO) in May 2010. In December 2010, Kalanick succeeded Graves as CEO and Graves became the chief operating officer.[10]

Following a beta launch in May 2010, Uber's services and mobile app launched publicly in San Francisco in 2011.[11][12] Originally, the application only allowed users to hail a black luxury car and the price was approximately 1.5 times that of a taxi.[13] In 2011, the company changed its name from UberCab to Uber after complaints from San Francisco taxicab operators.[14] Kalanick believed that in addition to efficiency, Uber offered elegance because all drivers had fancy black cars. He did not feel that regular cars would be attractive. When Wingz, Inc. launched in 2011 with the first ridesharing website in the world using regular drivers, he felt that Wingz was illegal and contacted authorities to stop regular drivers from giving rides. [15]

The company's early hires included a nuclear physicist, a computational neuroscientist, and a machinery expert who worked on predicting arrival times for Uber's cars more accurately than Google APIs.[8][16] In April 2012, Uber launched a service in Chicago, whereby users were able to request a regular taxi or an Uber driver via its mobile app.[17][18]

In April 2013, after Wingz, Inc. fought to become legal and obtained the first legal ridesharing license in the world, Uber copied this model and added regular drivers with personal vehicles to the UberX platform instead of only commercially-licensed vehicles, but subject to a background check, insurance, registration, and vehicle standards.[19][20][21] In July 2012, Uber had introduced UberX, a cheaper option that allowed drivers to use non-luxury vehicles, but still subject to having a California Public Utilities commercial license.[22][23] By December 2013, the service was operating in 65 cities.[24]

In December 2013, USA Today named Uber its tech company of the year.[25]

In August 2014, Uber launched a shared transport service in the San Francisco Bay Area[26][27] and launched Uber Eats, a food delivery service.[28][29]

Uber logo used from February 2016 until September 2018

In August 2016, facing tough competition, Uber sold its operations in China to DiDi in exchange for an 18% stake in DiDi.[30] DiDi agreed to invest $1 billion in Uber.[31] Uber had started operations in China in 2014, under the name 优步 (Yōubù).[32]

In 2016, Uber acquired Ottomotto, a self-driving truck company founded by Anthony Levandowski, for $625 million. Levandowski, previously employed by Waymo, allegedly founded Ottomotto using trade secrets he stole from Waymo. Uber settled a lawsuit regarding the use of such intellectual property and reached a deal to use Waymo's technology for its freight transport operations.[33][34]

In December 2016, Uber acquired Geometric Intelligence. Geometric Intelligence's 15 person staff formed the initial core of "Uber AI", a division for researching AI technologies and machine learning.[35][36] Uber AI created multiple open source projects, such as Pyro, Ludwig, and Plato. Uber AI also developed new AI techniques and algorithms, such as the POET algorithm and a sequence of papers on neuroevolution. Uber AI was shut down in May 2020.[37][36]

In August 2017, Dara Khosrowshahi, the former CEO of Expedia Group, replaced Kalanick as CEO.[38][39] Earlier in March 2015, as CEO of Expedia Group, Khosrowshahi had led a multimillion equity investment in Wingz, Inc., the first ridesharing company in the world.[40][41]

In February 2018, Uber combined its operations in Russia, Armenia, Azerbaijan, Belarus, Georgia and Kazakhstan with those of Yandex.Taxi and invested $225 million in the venture.[42] In March 2018, Uber merged its services in Southeast Asia with those of Grab in exchange for a 27.5% ownership stake in Grab.[43][44][45]

Between May 2018 and November 2018, Uber offered Uber Rent powered by Getaround, a peer-to-peer carsharing service available to some users in San Francisco.[46]

In November 2018, Uber became a gold member of the Linux Foundation.[47][48]

In 2018, Uber formed a partnership with Autzu, a Toronto-based ridesharing company. This collaboration provides Uber drivers with the opportunity to rent electric Tesla on an hourly basis.[49][50]

On May 10, 2019, Uber became a public company via an initial public offering.[51]

In the summer of 2019, Uber announced layoffs of 8% of its staff and eliminated the position of COO Barney Harford.[52]

In October 2019, Uber acquired 53% of Cornershop, a provider of grocery delivery services primarily in Latin America.[53][54] In June 2021, it acquired the remaining 47% interest in Cornershop for 29 million shares of Uber.[55]

Between October 2019 and May 2020, Uber offered Uber Works, a mobile app connecting workers who wanted temporary jobs with businesses in Chicago and Miami.[56][57][58]

In January 2020, Uber acquired Careem for $3.1 billion[59] and sold its Indian Uber Eats operations to Zomato.[60]

Also in January 2020, Uber tested a feature that enabled drivers at the Santa Barbara, Sacramento, and Palm Springs airports to set fares based on a multiple of Uber's rates.[61]

In May 2020, during the COVID-19 pandemic, Uber announced layoffs of over 14% of its workforce.[62][58]

In June 2020, in its first software as a service partnership, Uber announced that it would manage the on-demand high-occupancy vehicle fleet for Marin Transit, a public bus agency in Marin County, California.[63]

In September 2020, Uber committed to carbon neutrality globally by 2040, and required that, by 2030, in most countries, rides must be offered exclusively in electric vehicles.[64][65][66]

In December 2020, Uber acquired Postmates for $2.65 billion.[67][68][69]

Also in December 2020, Uber sold its Elevate division, which was developing short flights using VTOL aircraft, to Joby Aviation.[70][71]

In January 2021, Uber Advanced Technologies Group (ATG), a joint venture minority-owned by SoftBank Vision Fund, Toyota, and Denso that was developing self-driving cars, was sold to Aurora Innovation for $4 billion in equity and Uber invested $400 million into Aurora.[72][73]

In March 2021, the company moved to a new headquarters on Third Street in Mission Bay, San Francisco, consisting of several 6- and 11-story buildings connected by bridges and walkways.[74]

In October 2021, Uber acquired Drizly, an alcohol delivery service, for $1.1 billion in cash and stock; it was shut down in early 2024.[75][76]

On January 20, 2022, Uber acquired Australian car-sharing company Car Next Door.[77]

On September 15, 2022, Uber discovered a security breach of its internal network by a hacker that utilized social engineering to obtain an employee's credentials and gain access to the company's VPN and intranet. The company said that no sensitive data had been compromised.[78][79]

Controversies

[edit]
Main article: Controversies surrounding Uber

Like other ridesharing companies, the company classifies its drivers as gig workers/independent contractors. This figure has become the subject of legal action in several jurisdictions. The company has disrupted taxicab businesses and allegedly caused an increase in traffic congestion. Ridesharing companies are regulated in many jurisdictions and the Uber platform is not available in several countries where the company is not able or willing to comply with local regulations. Controversies involving Uber include various unethical practices such as aggressive lobbying and ignoring and evading local regulations. Many of these were revealed by a leak of documents showing controversial activity between 2013 and 2017 under the leadership of Travis Kalanick.

Ignoring and evading local regulations

[edit]

Uber has been criticized for its strategy of generally commencing operations in a city without regard for local regulations. If faced with regulatory opposition, Uber called for public support for its service and mounted a political campaign, supported by lobbying, to change regulations.[80] Uber argued that it is "a technology company" and not a taxi company, and therefore it was not subject to regulations affecting taxi companies.[80] Uber's strategy was generally to "seek forgiveness rather than permission".[81] In 2014, with regards to airport pickups without a permit in California, drivers were actually told to ignore local regulations and that the company would pay for any citations.[82] Uber's response to California Assembly Bill 5 (2019), whereby it announced that it would not comply with the law, then engaged lobbyists and mounted an expensive public opinion campaign to overturn it via a ballot, was cited as an example of this policy.[80][83]

More than 124,000 Uber documents covering the five-year period from 2012 to 2017 when Uber was run by its co-founder Travis Kalanick were leaked by Mark MacGann, a lobbyist who "led Uber's efforts to win over governments across Europe, the Middle East and Africa",[84] to The Guardian newspaper and first printed on 10 July 2022 by its Sunday sister The Observer. The documents revealed attempts to lobby Joe Biden, Olaf Scholz and George Osborne; how Emmanuel Macron secretly aided Uber lobbying in France, and use of a kill switch during police raids to conceal data. Travis Kalanick dismissed concerns from other executives that sending Uber drivers to a protest in France put them at risk of violence from angry opponents in the taxi industry, saying "I think it's worth it, violence guarantees success".[85]

Taxi companies sued Uber in numerous American cities, alleging that Uber's policy of violating taxi regulations was a form of unfair competition or a violation of antitrust law.[86] Although some courts did find that Uber intentionally violated the taxi rules, Uber prevailed in every case, including the only case to proceed to trial.[87]

In March 2017, an investigation by The New York Times revealed that Uber developed a software tool called "Greyball" to avoid giving rides to known law enforcement officers in areas where its service was illegal such as in Portland, Oregon, Australia, South Korea, and China. The tool identified government officials using geofencing, mining credit card databases, identifying devices, and searches of social media.[88][89][90] While at first, Uber stated that it only used the tool to identify riders that violated its terms of service, after investigations by Portland, Oregon,[91][92][93] and the United States Department of Justice,[94][95][96] Uber admitted to using the tool to skirt local regulations and promised not to use the tool for that purpose.[97][98] The use of Greyball in London was cited by Transport for London as one of the reasons for its decision not to renew Uber's private hire operator licence in September 2017.[99][100][101] A January 2018 report by Bloomberg News stated that Uber routinely used a "panic button" system, codenamed "Ripley", that locked, powered off and changed passwords on staff computers when those offices were subjected to government raids.[102] Uber allegedly used this button at least 24 times, from spring 2015 until late 2016.[103][104]

Traffic congestion

[edit]

Studies have shown that especially in cities where it competes with public transport, ridesharing contributes to traffic congestion, reduces public transport use, has no substantial impact on vehicle ownership, and increases automobile dependency.[5][105][6][7]

Dead mileage specifically causes unnecessary carbon emissions and traffic congestion.[106] A study published in September 2019 found that taxis had lower rider waiting time and vehicle empty driving time, and thus contribute less to congestion and pollution in downtown areas.[107] However, a 2018 report noted that ridesharing complements public transit.[108] A study published in July 2018 found that Uber and Lyft are creating more traffic and congestion.[109][110][111] A study published in March 2016 found that in Los Angeles and Seattle the passenger occupancy for Uber services is higher than that of taxi services, and concluded that Uber rides reduce congestion on the premise that they replace taxi rides.[112] Studies citing data from 2010 to 2019 found that Uber rides are made in addition to taxi rides, and replace walking, bike rides, and bus rides, in addition to the Uber vehicles having a low average occupancy rate, all of which increases congestion. This increase in congestion has led some cities to levy taxes on rides taken with ridesharing companies.[113] Another study shows that the surge factor pricing mechanism used for ridehailing services are informative for predicting taxi bookings as well, and that taxis incorporating this relative price can improve allocative efficiency and demand prediction.[114]

A study published in July 2017 indicated that the increase in traffic caused by Uber generates collective costs in lost time in congestion, increased pollution, and increased accident risks that can exceed the economy and revenue generated by the service, indicating that, in certain conditions, Uber might have a social cost that is greater than its benefits.[115]

Counter-intelligence research on class action plaintiffs

[edit]

In 2016, Uber hired the global security consulting firm Ergo to secretly investigate plaintiffs involved in a class action lawsuit. Ergo operatives posed as acquaintances of the plaintiff's counsel and tried to contact their associates to obtain information that could be used against them. The result of which was found out causing the judge to throw out evidence obtained as obtained in a fraudulent manner.[116][117]

Sexual harassment allegations and management shakeup (2017)

[edit]

On February 19, 2017, former Uber engineer Susan Fowler published on her website that she was propositioned for sex by a manager and subsequently threatened with termination of employment by another manager if she continued to report the incident. Kalanick was allegedly aware of the complaint.[118][119] On February 27, 2017, Amit Singhal, Uber's Senior Vice President of Engineering, was forced to resign after he failed to disclose a sexual harassment claim against him that occurred while he served as Vice President of Google Search.[120] After investigations led by former attorney general Eric Holder and Arianna Huffington, a member of Uber's board of directors,[121] in June 2017, Uber fired over 20 employees.[122][123] Kalanick took an indefinite leave of absence but, under pressure from investors, he resigned as CEO a week later.[124][125] Also departing the company in June 2017 was Emil Michael, a senior vice president who suggested that Uber hire a team of opposition researchers and journalists, with a million-dollar budget, to "dig up dirt" on the personal lives and backgrounds of journalists who reported negatively on Uber, specifically targeting Sarah Lacy, editor of PandoDaily, who, in an article published in October 2014, accused Uber of sexism and misogyny in its advertising.[126][127][128][129][130][131] In August 2018, Uber agreed to pay a total of $7 million to settle claims of gender discrimination, harassment, and hostile work environment, with 480 employees and former employees receiving $10,700 each and 56 of those employees and former employees receiving an additional $33,900 each.[132] In December 2019, Kalanick resigned from the board of directors of the company and sold his shares.[133][134][135][136]

Delayed disclosure of data breaches

[edit]

On February 27, 2015, Uber admitted that it had suffered a data breach more than nine months prior. Names and license plate information from approximately 50,000 drivers were inadvertently disclosed.[137] Uber discovered this leak in September 2014, but waited more than five months to notify the affected individuals.[138]

An announcement in November 2017 revealed that in 2016, a separate data breach had disclosed the personal information of 600,000 drivers and 57 million customers. This data included names, email addresses, phone numbers, and drivers' license information. Hackers used employees' usernames and passwords that had been compromised in previous breaches (a "credential stuffing" method) to gain access to a private GitHub repository used by Uber's developers. The hackers located credentials for the company's Amazon Web Services datastore in the repository files, and were able to obtain access to the account records of users and drivers, as well as other data contained in over 100 Amazon S3 buckets. Uber paid a $100,000 ransom to the hackers on the promise they would delete the stolen data.[139][140] Uber was subsequently criticized for concealing this data breach.[141] Dara Khosrowshahi publicly apologized.[142][143] In September 2018, in the largest multi-state settlement of a data breach, Uber paid $148 million to the Federal Trade Commission, and admitted that internal access to consumers' personal information was closely monitored on an ongoing basis was false, and stated that it had failed to live up to its promise to provide reasonable security for consumer data.[144] In November 2018, Uber's British divisions were fined £385,000 (reduced to £308,000) by the Information Commissioner's Office.[145]

In 2020, the US Department of Justice announced criminal charges against former Chief Security Officer Joe Sullivan for obstruction of justice. The criminal complaint said Joe Sullivan arranged with Travis Kalanick's knowledge, to pay a ransom for the 2016 breach as a "bug bounty" to conceal its true nature, and for the hackers to falsify non-disclosure agreements to say they had not obtained any data.[146]

Privacy

[edit]

In July 2017, Uber received a five-star privacy rating from the Electronic Frontier Foundation,[147] but was harshly criticized by the group in September 2017 for a controversial policy of tracking customers' locations even after a ride ended, forcing the company to reverse its policy.[148]

In January 2024, Uber was fined 10 million euros ($11 million) by the Dutch Data Protection Authority for violating privacy regulations pertaining to the personal data of its drivers. The authority determined that Uber had failed to provide clear information in its terms and conditions regarding the duration for which it retained drivers' personal data, as well as the measures taken to secure this data when transmitting it to undisclosed entities outside the European Economic Area.[149]

In August 2024, Uber was fined €290m euros ($324 million) by the Dutch Data Protection Authority for transferring the personal data of European drivers to US servers in breach of the GDPR.[150]

Labor

[edit]

In February 2023, Uber drivers went on strike in the US and UK to protest wages and fees. They were joined by drivers from Lyft and DoorDash delivery workers.[151]

Ads and promotions

[edit]

In March 2024, The Wall Street Journal reported a trend of popular service apps like Uber emphasizing higher margin advertising to increase profits. The reporting mentioned Uber personalizing content based on user data and maintain the balance between increasing ad revenue and annoying and turning away customers. It noted that Uber was showing customers one ad per trip and how it tried to implement push alerts before moving away from them given the response from customers.[152]

Finances

[edit]
Uber revenue and net income in billion US$[153]
Year Revenue Net income
2023 37.3 1.887
2022 31.8 −9.1
2021 17.4 −0.4
2020 11.1 −6.7
2019 14.1 −8.5
2018 11.3 1
2017 7.9 −4
2016 5 −3.6
2015 1.7 −1.6
2014 0.4 −0.7

Uber has posted hundreds of millions or billions of dollars in losses each year from 2014 until 2022 except for 2018, when it exited from the markets in Russia, China, and Southeast Asia in exchange for stakes in rival businesses.[154] By the end of 2022, Uber had US$32.11 billion in assets and $24.03 billion in liabilities. Uber posted annual operating profits in 2023, totaling $1.88 billion,[1] after accumulating $31.5 billion in operating losses since 2014.[155]

[edit]
  • An Uber driver in Bogotá, Colombia with the Uber app on a dashboard-mounted smartphone
    An Uber driver in Bogotá, Colombia with the Uber app on a dashboard-mounted smartphone
  • Uber Boat by Thames Clippers on River Thames, London
    Uber Boat by Thames Clippers on River Thames, London

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[edit]
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