The Uber files are old news
If you didn't know Uber used brash tactics and aggressive lobbying, you weren't paying attention
Hello and welcome to Oversharing, a newsletter about the proverbial sharing economy. If you’re returning from last time, thanks! If you’re new, nice to have you! (Over)share the love and tell your friends to sign up here.
Over the weekend, newsrooms led by the Guardian rolled out long series of exposés they’re calling the Uber files. The stories are based on more than 124,000 files from 2013 to 2017 leaked to the Guardian by Mark MacGann, a former top lobbyist for Uber in Europe, the Middle East, and Africa, who reportedly met Guardian reporters in Geneva this past January with suitcases filled with “laptops, hard drives, iPhones and bundles of paper.” The documents include emails, text messages, memos, presentations, notebooks, briefing papers, and invoices. The Guardian shared the document trove with 180 journalists at more than 40 media organizations via the International Consortium of Investigative Journalists, who collaborated on a global investigation.
Here are some of the Uber files headlines:
Uber broke laws, duped police and secretly lobbied governments, leak reveals (The Guardian, July 10)
Uber paid academics six-figure sums for research to feed to the media (The Guardian, July 12)
‘They were taking us for a ride’: how Uber used investor cash to seduce drivers (The Guardian, July 12)
Uber promised South Africans better lives but knew drivers risked debt and danger (Washington Post, July 11)
Uber leveraged violent attacks against its drivers to pressure politicians (Washington Post, July 10)
And here is a summary of key Uber Files takeaways from WaPo:
The documents reveal how the ride-hailing company aggressively entered cities around the world — while frequently challenging the reach of existing laws and regulations.
While users saw a handy app that brought rides to them with a few taps on their smartphones, executives behind the scenes were pumping billions of dollars of investor cash into an explicit corporate strategy of taking down “Big Taxi” and defeating other rivals. The money paid for hefty driver subsidies that were withdrawn once Uber got established, undermining earnings of those who had bought or leased cars to work for the company. It also offered deep, but temporary, discounts for passengers who grew accustomed to convenience offered at an artificially low price.
It’s obviously exciting as a reporter to be offered suitcases full of documents on one of the biggest and most disruptive companies in recent memory. Personally I haven’t seen the files but would of course be interested in looking through them. You also have to admire the collaborative nature of the project—it’s always nice to see journalists working together on an investigation of this scale rather than jockeying for bylines and individual credit. As someone who’s been covering and writing about Uber for a long time though, my initial excitement at seeing “Uber files” and “124,000 confidential documents” dissipated once I started reading through story after story about how Uber broke rules and laws to expand its service globally; poured money into lobbying and public relations efforts to codify the ride-hail model; deployed venture-capital subsidies to lure drivers onto its network; and worked with prominent academics to build a body of research that legitimized its business and policy goals. All of these things are important chapters in the Uber story and vital to understanding how powerful and well-funded Silicon Valley startups can do business. But if you didn’t already know that Uber was doing this, you haven’t really been paying attention.
“Uber broke laws, duped police and secretly lobbied governments”
One of the big storylines from the Uber files is how Uber broke laws, lobbied governments, and leveraged violence and social unrest to advance its business model. Both the Guardian and WaPo cite text messages sent by Uber co-founder and then-CEO Travis Kalanick in 2016 pushing for a counterprotest in Paris despite the potential for violent clashes. “I think it’s worth it,” Kalanick wrote. “Violence guarantee success.” The Guardian reports that the strategy of sending Uber drivers into potentially explosive protests to stir up controversy and villainize the taxi industry was one Uber repeated across European countries. (A Kalanick spokesperson disputed this account.) WaPo rehashes how Uber hired former Obama campaign manager David Plouffe to lead its global lobbying efforts. Uber also reportedly developed a “kill switch” strategy letting IT staff cut access to the company’s main data systems to thwart law enforcement raids on its offices.
Kalanick’s texts add color to the backstory (what else would you expect from the man who wanted a “pound of flesh” from an ill-advised acquisition) but other than that it’s hard to see what’s new here. I mean, look, the thing about Uber is that not only did it do a lot of shady stuff in its early years, a lot of the time it didn’t even try to hide it. Remember Operation SLOG? The oppo research debacle? That time Uber’s New York GM used “God View” to track a reporter on her way to a meeting and then told her he’d been tracking her? Here is a story I wrote for Slate in December 2014 with the headline “2014 Was the Year Uber Expanded Aggressively and Pissed Off Just About Everyone” listing the many times Uber was banned, sued, and declared illegal, or snarled cities as tens of thousands of taxi drivers protested its service. Here are some other stories I wrote for Slate and Quartz about how Uber won New York, laid siege to San Antonio, and waged a spectacularly successful political campaign to get the ride-hail model codified state by state across the U.S.
It’s not surprising that Uber broke laws, evaded law enforcement, and lobbied aggressively. What’s more interesting is the messages that show a lot of people at Uber knew what they were doing was wrong. The Guardian highlights private exchanges among Uber executives and staffers with references to Uber’s “other than legal status,” a statement by one executive that “we have officially become pirates,” and a blunt message from former head of global comms Nairi Hourdajian that “Sometimes we have problems because, well, we’re just fucking illegal.” (Hourdajian declined to comment to the Guardian.)
“Uber used investor cash to seduce drivers”
I mean, yes, of course it did. We talk all the time in Oversharing about how Uber has for many years been in the business of using VC subsidies to boost wages for drivers and lower fares for riders. Lately the story has been about Uber’s efforts to reduce its reliance on incentives and freebies to make the business profitable, but back in the Kalanick era the money flowed freely, as did Uber’s claims for how great driving for Uber could be. I always go back to the time Uber advertised the median annual wages of a driver in New York City as $90,766, then couldn’t find a single driver actually earning that much. It never fails to amaze me how people will lie about things that are so obviously disprovable, but the American dream mythology is strong. Uber later paid $20 million to the FTC to settle charges that it recruited drivers with misleading earnings claims, including that $90,000 figure it trumpeted in New York.
“Uber paid academics six-figure sums for research to feed to the media”
One of my favorite stories I wrote for Quartz was about Uber’s in-house economics team, known by some as “Ubernomics.” The story was about how Uber used its rising-star status, political influence, and extraordinary trove of real-time data to attract respected academic collaborators on research papers that were favorable to Uber. The most famous of these was the initial labor market analysis that Uber published in January 2015 in collaboration with famed labor economist Alan Krueger, who died in 2019. Uber disclosed that it had paid Krueger for his work but not how much; the Uber files report his fee was around $100,000 and that other academic collaborators in the U.S. and Europe received six-figure sums to produce research that could arm Uber’s lobbyists.
Obviously that is a lot of money, but as I said, the real influence Uber held over academics was its own data. Uber has the kind of data that as little as 10 years ago researchers could only dream of. It has millions of drivers who provide millions of trips around the world, with demand-responsive fluctuations in routes, wait times, and price. It was the data that got economists in the door, and Uber knew that. When I spoke with Uber chief economist Jonathan Hall in 2018, he told me it was a mistake to pay Krueger, who “would have done it for free had he understood what our team’s capabilities were.”
Paid posts.
It was a big week for antitrust in Oversharing! Upgrade to a paid membership to learn all about the antitrust case building against the gig economy, including insight from Marshall Steinbaum, a consulting expert on the ride-hail litigation. Discounted group subscriptions available through this link.
Other stuff.
Startup funding drops the most since 2019. Amazon partners with Grubhub to offer Prime customers meal delivery perks. New Shipt CEO sees plenty of growth ahead for grocery deliveries. Amazon revamps Dash Cart. Amazon Hub in Newark Is Canceled After Unions and Local Groups Object. Union Organizing Efforts Rise in First Half of Year. Google Offers Concessions to Fend Off U.S. Antitrust Lawsuit. DoorDash launches PAC. Some DoorDash drivers are rejecting 9 out of 10 orders after fuel surcharge is scrapped. Cruise’s Robot Car Outages Are Jamming Up San Francisco. Instacart shakes up leadership structure. Inside Ola’s lobbying blitz to find a parking spot in India’s policy circles. Hackers Are Helping to Speed Up China’s Electric Scooter Boom. E-bike sales in U.K. and Europe jump 12% in 2021. Argo AI lays off 150. Layoffs at Ola. Peloton to Stop Making Bikes Itself. Theranos ex-COO Sunny Balwani found guilty on all 12 fraud charges. Instacart shopper rewards. Lime Vision. The Reinfection Wave.