The Uber Files

[Batman]

This seems like a bit of a bombshell.
Someone leaked 124,000 files to the Guardian — who shared them with a number of other news outlets and an international investigative journalism consortium — that detail how Uber broke laws in 40 countries, played shell games with police, purchased influence with politicians worldwide, got governments to rewrite laws in their favor, bribed academics to phony up research, and even exploited violent protests during their rise to prominence in the 2010s.
Among the politicians that are heavily implicated in playing Uber's game is French president Emmanuel Macron. Macron helped them in his former job as economy minister. A number of others, including Joe Biden (then the vice president), seem to have been influenced by Uber's lobbying to one degree or another.

Uber's former president, Travis Kalanick, denies it all, even though there are a number of documents that appear to have caught him red-handed. He left the company in 2017.
Uber's current leadership basically says, "It was all the other guy and we've cleaned up our act, we swear."

I think everybody knew Uber's business model (undercut the taxi industry with low prices, drive the competition out of business, then jack up rates when the coast was clear) was scummy. This is some next-level Bond villain stuff.

 

[goalmouth]

Uber and Lyft both managed to win exceptions to California's AB5, which classifies independent contractors as employees. Shocker.

 

[User 150927]

Lobbyists influence politicians? Shocking.

They write almost all bills now.

 

[da man]

Uber and Lyft both managed to win exceptions to California's AB5, which classifies independent contractors as employees. Shocker.

That was a referendum voted on by the public.

 

[goalmouth]

That was a referendum voted on by the public.

OK, didn't know that. But did Uber campaign vigorously for that outcome?

 

[da man]

OK, didn't know that. But did Uber campaign vigorously for that outcome?

Uhhhh... yeah. But campaigning in a public election is not illegal.

 

[Spartan Squad]

Uhhhh... yeah. But campaigning in a public election is not illegal.

They basically lied to the voters. They wrote it to skirt fair labor laws, made it impossible to ever repeal and then sold it to everyone as this amazing thing to save drivers’ jobs. In reality, they were fighting a state law that pushed fair wages to gig workers (with a few things that needed to be worked out) but was designed to stick it to Uber and Lyft. So they sunk millions to get a new law on the books.

 

[poindexter]

A politician was influenced by a lobbyist? THIS IS SHOCKING

 

[The Big Ragu]

I find it so difficult to get upset by the "they broke the law" thing when the laws and regulations they were scheming to get around were corrupt examples of government picking winners, creating and giving monopolies to the favorites of politicians, and generally not allowing people to provide and buy a service freely based on what they want (and based on whoever offered the best price to value as determined by people, not politicians).

The only thing that sucks about it is that others who should have had just as much of a chance to freely try to compete in that market the way Uber did to build a business, were likely discouraged because they would have been breaking the law. And that is unjust.

In the end, we all pay for it in terms of fewer services available and higher prices.

 

[Batman]

I find it so difficult to get upset by the "they broke the law" thing when the laws and regulations they were scheming to get around were corrupt examples of government picking winners, creating and giving monopolies to the favorites of politicians, and generally not allowing people to provide and buy a service freely based on what they want (and based on whoever offered the best price to value as determined by people, not politicians).

The only thing that sucks about it is that others who should have had just as much of a chance to freely try to compete in that market the way Uber did to build a business, were likely discouraged because they would have been breaking the law. And that is unjust.

In the end, we all pay for it in terms of fewer services available and higher prices.

From the sound of it, Uber schemed to get around those laws that picked winners and gave monopolies, by trying to create a new system where government picked one winner and monopoly — Uber. They weren't just doing these things to create an opening for themselves, they were doing it to crush the rest of the industry while also engaging in a number of other underhanded tactics (up to and including stoking violent confrontations between their employees and the company's competitors).
I get that that's how a lot of big business operates, to some degree or another. It just seems that Uber took it to another level.

 

[The Big Ragu]

From the sound of it, Uber schemed to get around those laws that picked winners and gave monopolies, by trying to create a new system where government picked one winner and monopoly — Uber. They weren't just doing these things to create an opening for themselves, they were doing it to crush the rest of the industry while also engaging in a number of other underhanded tactics (up to and including stoking violent confrontations between their employees and the company's competitors).
I get that that's how a lot of big business operates, to some degree or another. It just seems that Uber took it to another level.

Not sure where you are getting the "violent confrontations between there employees and the company's competitors" from. Where did you see that and when did it happen?

As far as Uber lobbying. ... it is backward ass to me for people to be upset with Uber (or any business for this). We have created a Frankenstein government that has corruptly and ineffeciently taken over large swaths of our economy (and our ability to freely make economic decisions for ourselves) and we are getting the corruption that we sanctioned. The problem isn't Uber (or anyone who buys a seat at the table and preference via regulation or legislation). They are playing the game we set up for them. The actual problem is what we have turned our government into -- with everyone waving money to buy access and the corrupt outcomes we get for it (and how we hurt ourselves in the process). It may be a barn door that is difficult to close at this point, but the solution isn't to tsk tsk at anyone who lobbies to buy preference. It's to make it so that our government can't give those preferences.

 

[FileNotFound]

@The Big Ragu is spot-on here.

The Uber business model was always this:

* Enter market where its service was either against the law or, at best, operating in a gray area.
* Operate anyway, because “your law is stupid and unfair and outdated.” Which wasn’t always wrong.
* Create great public demand for their borderline illegal service while trying to get the law changed.
* Grease the right palms and get the law changed, while undercutting the rest of the market but also providing a far superior service.

I rode in enough smelly 400,000-mile Crown Vic ****boxes and argued with enough cab drivers about taking ****ing credit cards that I didn’t shed a tear when Uber killed their business with generally clean vehicles, decent drivers and a transaction completed up front with clear pricing before I got in the car. It’s hard to argue there is anything at all bad about Uber’s product, even as I’m not crazy about its methods.

 

[The Big Ragu]

@The Big Ragu is spot-on here.

The Uber business model was always this:

* Enter market where its service was either against the law or, at best, operating in a gray area.
* Operate anyway, because “your law is stupid and unfair and outdated.” Which wasn’t always wrong.
* Create great public demand for their borderline illegal service while trying to get the law changed.
* Grease the right palms and get the law changed, while undercutting the rest of the market but also providing a far superior service.

I rode in enough smelly 400,000-mile Crown Vic ****boxes and argued with enough cab drivers about taking ****ing credit cards that I didn’t shed a tear when Uber killed their business with generally clean vehicles, decent drivers and a transaction completed up front with clear pricing before I got in the car. It’s hard to argue there is anything at all bad about Uber’s product, even as I’m not crazy about its methods.

Total agreement with you.

Consider this, too. In NYC, yellow taxis had a government-enforced monopoly prior to Uber and Lyft and ride sharing. You needed a medallion to operate a cab.

After the financial crisis, the Federal Reserve destroyed the debt markets to create phony prosperity on the back of mispriced money, which sent borrowing through the roof and blew the prices of anything you could speculate on into bubble territory.

That included. ... NYC taxi medallions, which reached a peak of $1.2 million in 2014 when the Fed was doing quantitative easing hand over fist to suppress interest rates. There were people who went into massive debt to buy medallions at $750,000, $900,000, a million dollars. ... that today are changing hands at less than $100,000 because of Uber and Lyft and ride sharing and what you described. I genuinely feel bad for some of those people. Some of them are immigrants who scrimped and saved and begged and borrowed. ... and went bankrupt because they didn't understand the dynamics and just how government monkeying with our markets in the name of whatever goal they announce, always comes with consequences (which don't get trumpeted the same way).

Uber, Lyft effectively popped that debt bubble by just ignoring regulations and building huge demand (i.e. public opinion) that the gatekeepers couldn't ignore. The problem with that was that anyone else who might have chosen to try to compete with a similar model had to choose between doing something illegal or staying away from that type of business, which kept a lot of people out of that business. Which is just unfair.

Then, circling back to the messed up incentives that the Fed created, in a relatively competition-free environment, Uber has not had to operate in a lean way, and like any number of businesses it loaded up on the cheap debt the Fed was saddling our economy with and has a balance sheet that looks like holy hell. Between $9 and $10 billion in long-term debt, which they used to essentially subsidized their riders, who needed to be paying more on the whole for the company to be profitable. And the company loses a lot of money. What that did was drive volume (there is more demand at the lower price point), which in turn kept competition even further away and created a survival of the unfittest atmosphere, where Uber could get bigger without EARNING it (which has the effect of stifling new competition). It's great for riders who have been subsidized for the last 10 years or so by that $9 to $10 billion in debt, but the cost of that is going to be the anchor on our economy of all of that debt (and the defaults if / when it starts to implode) in the future and the opportunity cost of how that capital would have been deployed (more competitively, more efficiently, with opportunity being open to anyone who could raise capital) in a free lending market.

 

[Spartan Squad]

We already knew Uber used brute-force tactics to get into a market and not only challenge local authorities to stop them, but actively subverted those authorities to keep operating. The new bit of information is the true depths they were willing to go, including greasing palms.

But the genius of Uber was to recognize just how outdated the taxi system was and how easily it could incorporate 21st century technology to gain a true foothold. They capitalized on Millennials who didn’t want to do things the same way when an app is way the hell more efficient. Taxi services refused to update to compete and instead relied on government-sponsored monopolies to keep going.

However, Uber isn’t Robin Hood here. They are more Napster. They found and exposed a need that could be done better. Napster finding and exposing how people wanted to interact with music differently. Uber finding and exposing how people didn’t want to stand on a corner hoping a cab would drive by. But they both flubbed it. Napster thought it could get around copy rights and deny musicians money. Uber is playing corrupt and it’s doing it with a dirt-cheap work force.

The two groups I feel for here, and I want to see Uber get theirs in some way, are the cabbies who payed into a system and followed the rules only to see that investment go to **** simply because they followed the rules. That isn’t right. Also, the actual Uber driver makes **** unless that is all they do. Uber’s initiative in California basically codified how they don’t have to pay drivers a fair wage or benefits and set the bar to ever repeal it so high, your only hope is to get a court to strike it down (that isn’t happening). And to get the law passed, they went on a PR campaign of how happy gig drivers were not being paid fairly because their jobs were flexible and they could make enough to do fun things and not be forced into a 9-5. And then they told hog drivers if this didn’t pass, all of them would be out of work because they would just leave. It was horse**** and it worked.

That all said, Uber isn’t going anywhere. There’s going to be some hemming and hawing and grandstanding about being against corruption and apart from maybe a couple of cases in Europe, nothing is going to happen.

 

[justgladtobehere]

We already knew Uber used brute-force tactics to get into a market and not only challenge local authorities to stop them, but actively subverted those authorities to keep operating. The new bit of information is the true depths they were willing to go, including greasing palms.

But the genius of Uber was to recognize just how outdated the taxi system was and how easily it could incorporate 21st century technology to gain a true foothold. They capitalized on Millennials who didn’t want to do things the same way when an app is way the hell more efficient. Taxi services refused to update to compete and instead relied on government-sponsored monopolies to keep going.

However, Uber isn’t Robin Hood here. They are more Napster. They found and exposed a need that could be done better. Napster finding and exposing how people wanted to interact with music differently. Uber finding and exposing how people didn’t want to stand on a corner hoping a cab would drive by. But they both flubbed it. Napster thought it could get around copy rights and deny musicians money. Uber is playing corrupt and it’s doing it with a dirt-cheap work force.

The two groups I feel for here, and I want to see Uber get theirs in some way, are the cabbies who payed into a system and followed the rules only to see that investment go to **** simply because they followed the rules. That isn’t right. Also, the actual Uber driver makes **** unless that is all they do. Uber’s initiative in California basically codified how they don’t have to pay drivers a fair wage or benefits and set the bar to ever repeal it so high, your only hope is to get a court to strike it down (that isn’t happening). And to get the law passed, they went on a PR campaign of how happy gig drivers were not being paid fairly because their jobs were flexible and they could make enough to do fun things and not be forced into a 9-5. And then they told hog drivers if this didn’t pass, all of them would be out of work because they would just leave. It was horse**** and it worked.

That all said, Uber isn’t going anywhere. There’s going to be some hemming and hawing and grandstanding about being against corruption and apart from maybe a couple of cases in Europe, nothing is going to happen.

What's a fair wage? Uber has people working a job that otherwise wouldn't exist. The whole concept depends on people being able to chose when and how much they work.

 

[Spartan Squad]

What's a fair wage? Uber has people working a job that otherwise wouldn't exist. The whole concept depends on people being able to chose when and how much they work.

A job that otherwise wouldn’t exist doesn’t make the job a fair paying job nor that the person wouldn’t otherwise be working.

In order to make any kind of money (which Uber conveniently leaves out of the marketing material) you basically have to treat it like a full time job to make less than $40k a year. Minus cost to maintain your car and no health benefits. And as an independent contractor, you have to pay your own taxes unless you make less than a certain amount.

 

[justgladtobehere]

Then don't do it. You make these people out to have no autonomy.

 

[Spartan Squad]

I love the argument of well if it sucks hard enough, just don’t do it! Solves everything.

First, I said fair wage not slave wages. It works for some and they figure it out. I imagine it isn’t a forever job, much like fast food, which I also think doesn’t pay people enough to actually live in some places. But it’s the system we have for people trying to get a few extra dollars while in school or whatever.

Second, the fair wage comment really is about my beef with big companies and others who feed people a load of crap to get them to work for them. Flexible hours, get paid right away, be your own boss! But to really get paid, you need to work 40 hours during peak times and in high traffic areas while the company gets a cut off what you make and cashing out is only going to be a few bucks unless you bank it and you have to cover all the other expenses which eat into what you make. And when California tried to correct that and force Uber and Lyft to admit these drivers were in fact employees, they spent millions to keep their labor expenses low and profits up. But capitalism; it’s how we do things.

Gig jobs and MLMs promise making a living but they leave out that only a few will see real money and to make real money, your flexibility isn’t there. MLMs are worse by far but gig jobs still suck.

Anyone who works them good on them. You do you. I don’t have to like that Uber is using them but if that’s their jam, I am not stopping them.

I was just pointing out the obvious. The pay isn’t what the promos would have you believe. I’m not advocating Uber be shut down. Nor am I going to picket Uber and all of that. But can we dispense with the argument that because people take the jobs we can’t say they suck. They suck. Drivers should be paid better. But the system isn’t changing and people like it. Good for them.

 

[FileNotFound]

At the risk of sounding like I’m some sort of apologist for Uber, I gotta push back a bit on the wage issue, too. Last I remember, driving for Uber wasn’t being sold as any sort of “career,” at least not in the early days. It was more, “Hey, you’re going somewhere anyway, why not make a few extra bucks and pick some people up along the way?” The one thing that would cause Uber to buckle would be a lack of drivers. There will always be demand for rides, but if Uber doesn’t have drivers, it fails.

In Australia, for example, Uber has had to compete. The big taxi companies in Sydney all have apps. They all drive clean, well-maintained Toyota Camry hybrids. A taxi ride from SYD airport to the central business district is usually a few dollars less than an Uber. And, on occasion here, it’s hard to get an Uber because of a driver shortage. It’s never hard to find a taxi.

It is possible to compete with Uber. But you have to compete with Uber by playing its game, not by trying to play your old Yellow Cab game.

 

[qtlaw]

At the risk of sounding like I’m some sort of apologist for Uber, I gotta push back a bit on the wage issue, too. Last I remember, driving for Uber wasn’t being sold as any sort of “career,” at least not in the early days. It was more, “Hey, you’re going somewhere anyway, why not make a few extra bucks and pick some people up along the way?” The one thing that would cause Uber to buckle would be a lack of drivers. There will always be demand for rides, but if Uber doesn’t have drivers, it fails.

In Australia, for example, Uber has had to compete. The big taxi companies in Sydney all have apps. They all drive clean, well-maintained Toyota Camry hybrids. A taxi ride from SYD airport to the central business district is usually a few dollars less than an Uber. And, on occasion here, it’s hard to get an Uber because of a driver shortage. It’s never hard to find a taxi.

It is possible to compete with Uber. But you have to compete with Uber by playing its game, not by trying to play your old Yellow Cab game.

I'm going to venture into potential-GOP rhetoric but I agree, it's no mystery about what Uber was offering to drivers. How about driving someone around for some $$? You could work however long you want or not at all, its all in front of them, revenues in, costs out.

I certainly understand how people then get roped into doing it more and more, then the big picture is revealed and "damn Uber makes X for doing only Y?" But its all in front of you.

Its similar IMHO to how we legislated against "predatory financing", negative amortization loans, etc. How did you ever think you could afford the house when you're rolling in accumulated interest into the loan? Its right in front of you isn't it?

I admit I may be on Uber/Lyft's side because its made my life unbelievably better compared to the 80's & 90's and trying to find a cab.