The breakup letter Uber investors wrote to Travis Kalanick

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Getting around.

Shared rides company Via is providing rides to and from three transit hubs in Los Angeles County under a yearlong pilot program with the city’s transit authority. The program kicked off Jan. 28. The contract is valued at $2.5 million, and funded in part by a $1.35 million grant from the Federal Transit Administration.

The Via program is geared toward helping LA residents get to and from three transit hubs: Compton, El Monte, and North Hollywood. Commuters with a metro “TAP” card can book a trip through Via’s app for $1.75, provided it either begins or ends at one of those three locations and stays in the designated zone. Commuters on Life, the local low-income fare subsidy program, ride for free. Everyone else—e.g., tourists and non-locals who haven’t invested in a TAP card—pays $3.75 per Via ride. The initial pilot will have 15 vehicles operating across the three zones.

Via beat out competitors including Lyft for this program, a testament to the company’s collaborative, transit-friendly approach. Via is like Uber and Lyft in the three US cities—Chicago, New York, and Washington DC—where it provides on-demand rides to anyone with the app. Most of these rides are shared. Via typically asks passengers to walk a block or two to a convenient street corner instead of picking up at their exact location to create a more streamlined route.

In addition to this commercial service, Via has slowly built out transit partnerships in other parts of the country. In December, for example, Via renewed a one-year, $2.1 million contract to effectively replace bus service in Arlington, Texas (known as the largest city in the US with no mass transit). The program is funded mostly by the city and Federal Transit Administration, and a bit by fares from an estimated 170,000 riders, who pay $3 per trip.

Such partnerships are especially valuable as cities probe whether ride-hail services are good or bad for their overall transit infrastructure. Congestion and all the problems that come with it—slower commutes, polluted air, carbon emissions—is getting worse in many cities, and both regulators and academics think companies like Uber might be partly to blame. Uber also knows this, and is dabbling in a number of public-transit experiments outside the US, the Wall Street Journal reports:

Last year, the ride-sharing giant created an internal team with a focus on partnerships with local transit officials, a shift for a company that previously had run-ins with regulators as it expanded around the globe. The move comes as Uber seeks to evolve from being primarily a taxi-like service to a wider transportation platform, offering options like electric bikes and scooters—and eventually public bus and train tickets.

The experiments include a bus service in Cairo, Egypt; discounted shared rides to a ferry terminal in a suburb of Sydney, Australia; and a partnership with metro systems in New Delhi and Hyderabad in India. Uber also once had a partnership to offer first- and last-mile transit in Summit, New Jersey—but when it came time for the town to renew, it decided to switch to Lyft.

Unsealed.

Waymo and Uber settled their trade secrets dispute nearly a year ago, but confidential documents from the case were just made public this week. The document dump included the letter that Uber investors hand-delivered to company founder and former CEO Travis Kalanick at a hotel in Chicago in June 2017 asking him to resign, and an August 2017 deposition of Benchmark partner and former Uber board member Bill Gurley discussing what, exactly, went down at that hotel.

Fun stuff, right? Below is a copy of the letter asking for Kalanick’s resignation. (And as that is probably hard to read, Bloomberg transcribed it here.)

The letter calls events at Uber in 2017 “enormously troubling” and notes a public perception “that Uber fundamentally lacks ethical and moral values.” (True!) It calls for steps that are by now ancient Uber history: Kalanick’s immediate resignation and the hiring of a “trusted, experienced, and energetic new CEO” (👋 Dara), oversight from an independent board, and an experienced chief financial officer. “We hope you will agree to move forward with us on this path,” the investors signed off, which is a very pleasant way to end a list of demands forcing someone out of his own company.

Here is Gurley, describing how the letter was delivered in his deposition:

WAYMO: Did Mr. Kalanick have any advance indication that this was going to be presented to him?

GURLEY: There had been a number of one-on-one conversations that related to trying to find solutions to move past some of the many issues outlined here.

Some of that related to a COO search.

Some of those related to various other alternatives, like coaching and that kind of thing.

Some of those had been had, not just with me, but with Matt and Trav- -- and Travis.

But there was not a -- there was nothing that said, "Hey, we're bringing" -- there was not a communication that said, "Hey, we're about to bring you this letter."

It was, like, "We need to desperately sit down and talk," and then the letter was presented.

What a terrible breakup! First it’s like, it’s ok, we can work this out, let’s try coaching, let’s try a mentor. And then after that obviously didn’t work it escalates to “we need to talk right now” and finally “gtfo.” This is not to excuse Kalanick’s behavior, which was often inexcusable, but I feel like this could have been handled better! Like, at least a heads up would have been nice, instead of cornering the guy in a hotel room.

WeWon’t.

Shared office companies are gobbling up iconic properties in New York City. In October 2017, WeWork bought Lord & Taylor’s flagship store on Fifth Avenue for $850 million. The store closed its doors earlier this month. Now, flexible office provider Knotel is looking to lease Manhattan’s Flatiron building—beating out WeWork in the process!—the Financial Times reported:

The fast-growing start-up has become the favourite to secure the lease, drawing ahead of two rivals in the sector — WeWork and the Blackstone-owned Office Group — according to three people familiar with the talks.

Knotel is preparing to take out a long-term lease on the wedge-shaped building, one of the people said. The New York-based company plans to open its 22 storeys as a flexible-office site in 2019 or 2020 after Macmillan Publishers move out this year, the person added.

WeWork has ballooned into the largest private tenant in Manhattan and central London, according to the FT. Knotel, which was only even founded in 2016, claims to have more than 125 sites worldwide, totaling more than 2.5 million square feet. While WeWork is funded by ultra-rich Softbank, Knotel is backed by Germany’s Rocket Internt, a publicly traded startup incubator known for making cheap copies of successful companies.

As of September, Knotel claimed it had more New York City leases than WeWork, and said it was on track to surpass WeWork in the city in terms of total square footage as well. Knotel’s New York collection also includes a 51,000-square-foot sublease in the former New York Times building in midtown Manhattan.

SuperShuttle.

For-hire vehicle service SuperShuttle hires its drivers as franchisees or, in SuperShuttle’s opinion, “independent business people.” These drivers pay SuperShuttle an initial franchise fee, a weekly fee to use its brand and dispatch system, and a decal fee. They must supply their own shuttle van, using one of five acceptable models. Their vans must be painted in SuperShuttle’s trademark blue and yellow and bear its logo. They must have uniform seats, no dents, no dirt, no grease. SuperShuttle drivers are prohibited from cursing, soliciting, sleeping on the job, and visibly consuming food or drink. They are prohibited from “loud boisterous conduct.” SuperShuttle can fire its drivers for at least 25 different reasons.

On Jan. 25, the Republican-majority National Labor Relations Board (NLRB) ruled in a 3-1 vote along party lines that these shuttle van drivers are independent contractors, not employees. The ruling strips SuperShuttle drivers in Dallas-Fort Worth, who had sought to organize, of that right. Protected bargaining is only granted to traditional employees. The NLRB’s reasoning goes like this: “Franchisees set their own work schedules and select their own assignments; SuperShuttle does not set schedules or routes, not does it require franchisees to be active during certain days or hours. Thus, franchisees have complete control over their schedules.” (The full decision, and the dissent, are available for download here.)

The decision is not about Uber, and yet it is significant for Uber. “Drivers set their own schedules” has been a crux of Uber’s argument for why its drivers are contractors and not employees for nearly a decade. Like SuperShuttle, Uber’s drivers don’t receive benefits and aren’t entitled to a minimum hourly wage. They are required to supply their own vehicles and pay on-the-job expenses, like gas and insurance. Uber sets the fares riders pay, wages drivers earn, and routes they are assigned through its routing software. But drivers do indeed set their own schedules.

The employment status of Uber’s drivers remains a question mark as the company contemplates a 2019 initial public offering. While a nationwide class-action lawsuit failed to get Uber drivers classified as employees, a handful of state-level decisions have recognized certain drivers as eligible for employee benefits. And in the UK, an employment tribunal found them to be somewhere between employees and contractors, and entitled to certain benefits (Uber has repeatedly appealed that decision and lost). Driver pay is already Uber’s biggest expense, and having drivers deemed employees would almost certainly make that labor more costly.

The NLRB isn’t the final word on employment classification, but for Uber this ruling is still a win. Uber drivers have decidedly more “entrepreneurial opportunity” than SuperShuttle drivers. They can wear what they want, drive a variety of cars, and decorate those cars as they like. There is no required training or explicit prohibition on “boisterous conduct.” They can work for a competitor like Lyft. If SuperShuttle drivers, with all their restrictions and prohibitions, aren’t employees in the eyes of a Republican NLRB, then Uber’s case before that same board feels like a slam dunk.

This time last year.

Uber sells Xchange, Lyft employees spied on riders, sexual harassment in the gig economy

Other stuff.

There are more female cab drivers in Nairobi than ever before. Mom Carrying Baby in Stroller Dies After Falling Down Subway Stairs. Madrid taxis jam road in anti-Uber protest. UberEats toys with expanding beyond restaurant deliveries in Canada. Airbnb buys business-trip bookings site Gaest. Soho House plans co-working space in Dumbo. Jyve raises $35 million to compete with Instacart. Airbnb adds office space in Dublin. European Commission investigating whether home-sharing rules in Brussels breach EU law. $5 million Denver mansion turns into Airbnb party house. Second Arizona City Reports People Attacking Waymo Cars. Uber rewards program could increase congestion. Postmates hires two execs from Pinterest. Why Do All These Robots Have Cartoon Eyes? Meet Uber’s first chief privacy officer. Arbitration hell. Uber offers consolation prize to fans of losing Super Bowl team.


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