Uber only has itself to blame for London license loss

Uber only has itself to blame for London license loss

The tech industry’s over-processed supply of irony might not be enough to service all the ramifications of Uber being stripped of its London license by the city’s transport regulator.

Uber advocates were immediately scrambling to bust out the reactionary clichés — painting the regulator as “anti-innovation” and claiming London is now ‘closed for digital business’. (A point that might have more substance if they were talking about Brexit.)

Guys. Spare us. Please.

NB: A regulator’s job is literally to uphold a set of standards on behalf of the public, not to bow down before your shiny app.

The old ‘They’ve caved to the taxi cartels and/or the unions!’ refrain was also wheeled out and waxed off. Harder to spot: Any mention of how much Uber spends on lobbying lawmakers to influence regulatory decisions in its commercial favor.

Nor how Uber mobilizes its app infrastructure to create thousands-strong lobbying armies to apply pressure to city authorities at key moments of regulatory threat.

So — quelle surprise! — there’s already a petition with hundreds of thousands of signatures against TfL’s decision. A petition set up and promoted by, er, Uber, of course…

At the same time, some genuinely outraged London Uber users, who have become accustomed over the past five+ years to a VC-subsidized regime of unsustainably cheap cab rides, have taken to social media to cry that it’s simply not fair!

And to wonder aloud how they’ll be able to go anywhere without Uber. This in a city that has one of the most extensive and accessible public transport networks in the world — not to mention a large number of private hire vehicle companies other than Uber, some of which can also be summed by an app (such tech! much innovation! wow).

How will we get home safety now, fretted others — apparently untroubled by the fact that London’s Met Police had informed the regulator Uber was failing to report sex attacks by drivers on its platform. TfL cited Uber’s “approach to reporting serious criminal offenses” as a contributing factor to its decision to withdraw licensing.

The deepest irony of all is that Uber can continue to operate in London while it appeals the regulator’s decision. Which will, at very least, take months. It could take years.

Being told you’re not “fit and proper” to operate a service yet allowed to keep operating your service? Tell me again exactly how London is ‘closed for digital business’?

Uber for a laundry list of scandals

Corporate social responsibility? Uber’s company fabric has demonstrably been cut from a very different kind of cloth. That’s why its new CEO is right now having to triage a laundry list of scandals — from dealing with an internal culture of sexism and bullying; to privacy and security failings so massive Uber just had to agree to two decades of oversight by a US regulator; to what appears to be a disturbing habit of building software tools that aim to blur the line of legality — such as by helping it evade regulators or slurp data from rivals.

Meanwhile Uber intones that TfL’s decision will “put more than 40,000 drivers out of work”. And claims it’s going to court to “defend the livelihoods of all those drivers”.

Yes, this really is the same company that studiously avoids ’employing’ any of those thousands of platform dependents — rather it categorizes them as ‘self-employed contractors’. Being ‘in work with Uber’ means accepting the risk and responsibility of being precariously managed by a technology entirely beyond your control.

Uber has even tried to monetize that insecurity by selling personal injury and illness insurance to its drivers. How very innovative indeed! Such a shame it doesn’t provide sick pay in exchange for sweating toil in the first place.

In a test case last year, a UK employment tribunal disagreed with Uber’s classification of drivers as self-employed contractors — ruling the company must pay the individuals in question the national minimum wage, as well as cover holiday pay and provide adequate work breaks.

Uber’s business has of course been structured to try to avoid the expensive rights of millions and millions of workers landing on its balance sheet. Despite the fact that, without the labor (and possessions) of all those drivers it wouldn’t be able to deliver its service.

Displaying a very black sense of humor, Uber calls its powerless platform precariat “partners”. Even as it routinely instructs its lawyers to appeal decisions seeking to expand drivers’ rights. And even though it fought for so long against adding a tips option to its platform. (It routinely challenges any moves by cities trying to raise safety standards for Uber users too.)

But politicians are waking up to gig economy regulation. As indeed are gig economy workers. That Uber employment tribunal ruling looks like both warning klaxon and tip of a titanic iceberg.

So if you’re an entrepreneur, and circumventing employment regulation is your benchmark for ‘innovation’, it’s really time to get a new playbook.

In Europe, governments are as un-fond of seeing their tax bases shrinking as workers are their rights evaporating. While legal minds do appear to have grokked how a tech business which replaces human managers with an app that barks orders is still, er, managing workers.

Europe also appears to be approaching a consensus legal view that a tech platform whose primary business is the delivery of transport services is — wait for it — a transportation company. And should therefore be regulated as a transportation company.

The legal mists Uber has exploited for so long look to be clearing.

And so if your ‘innovative’ business model is intent on siphoning ‘disruptive fuel’ from the tightly managed labor of thousands of people who you won’t classify as workers, you might find VCs aren’t as elated by your pitch as you imagined.

Mark Tluszcz, CEO at VC firm Mangrove Capital Partners, had this cautionary warning following the Uber decision: “There are fundamental issues with the business models of many gig economy companies. While they offer great services and excellent value for money, they are often dependent on not paying salaries, taxes and insurance.”


But no matter — none of that stuff is a barrier to Uber using the precarious livelihoods of its non-employees as an emotive cry for a brake on the TfL regulatory decision right now, and as the claimed justification for what could be years of legal action and uncertainty as it seeks to force the regulator into reverse.

Now don’t get me wrong. TfL isn’t perfect by any means. You can certainly — and people have — call out the regulator for letting Uber operate for more than five years in the face of mounting concerns. (Or, well, you could say it was demonstrating that London is open for digital business?)

Arguably it could and perhaps should have stepped in sooner to investigate issues being raised. Although it would surely have faced the same or an even more fierce cry of ‘anti-innovation’ had it moved to strip Uber’s license earlier.

The most biting response to TfL’s decision came from James Farrar, co-claimant in the Uber employment tribunal decision, who described it as “a devastating blow for 30,000 Londoners who now face losing their job and being saddled with unmanageable vehicle related debt”.

Although his assessment does also underline exactly how precarious it is for anyone to put their faith in a rights’ less platform to be their forever reliable non-employer.

I mean, this is also a company that has publicly stated its ambition is to remove human drivers from its business equation entirely — and replace them with autonomous machines. So its ‘partnership’ offer has always come with plenty of caveats.

But Farrar’s suggestion that TfL should have sought to “strengthen” its regulatory oversight earlier does have some merit. Specifically he says it should have curbed Uber’s “runaway licensing” and sought to protect “the worker rights of drivers”.

It’s the best critique I’ve seen of TfL’s ruling. However it does risk eliding the public safety issue.

As indeed do many of the male voices that have been so quickly raised to speak up for Uber and to brand TfL as ‘anti-innovation’.

Perhaps that’s unsurprising, given it’s women who are disproportionately the victims of sex crimes.

For most men a ride home with a stranger probably sounds like a welcome convenience. For most women the first consideration before getting into a car alone is: Is this going to be safe?

And on the topic of safety, did you hear the story of how an Uber user in the U.S. who was raped by an Uber driver in India is now suing the company for privacy violations after it emerged Uber’s president of business in AsiaPac had accessed, and was carrying around, her medical records? It’s hard to imagine a more textbook example of failing on all counts at corporate social responsibility.

The bottom line is a regulator’s responsibility is to ensure the entities it grants licenses to are up to its accepted standard. And TfL evidently believes it’s seen enough bad stuff attached to Uber’s business operations in London to merit revoking its pass to operate.

Given how tattered Uber’s corporate reputation is, who can blame them?

Even Uber’s new CEO has conceded this point — in an internal letter to staff about the London license loss, which was leaked to a journalist, he writes: “The truth is that there is a high cost to a bad reputation.”

The end of the road for antisocial?

Regulators are also, as a rule, underfunded and overworked. These public bodies don’t enjoy the kind of VC largess that allows an entity like Uber or Facebook to aspire to ‘move fast and break things’. So it’s unrealistic — and more than a little ridiculous — to demand that a small public body like TfL funds lengthy interventions aimed at educating far better resourced corporate giants on being socially responsible and on ensuring public safety.

The massive asymmetry between the understaffed regulatory overseers of civic society and the elite techno disruptors, stuffed to the gills with the finest engineers money can buy (but apparently no one who passed a course in ethics), has clearly enabled certain tech entities to accelerate their business growth at the expense of responsibility.

At times some are essentially dispensing with legality.

Uber grew by ignoring extant transport rules. Indeed, in the past, it was proudly and loudly breaking such rules. Told by a German court in 2014 to cease operating nationwide, Travis Kalanick era Uber told the judges to stuff their injunction and pressed the pedal to the metal.

So there’s another rich irony to Uber’s new CEO now pleading with the London regulator not to apply its rules, and calling for it to “work with us to make things right”… But hey, at least he’s gaslighting nicely.

While, in the case of another platform giant — Facebook — the result of being powered by a business logic that’s 100% geared towards commercial optimization at massive scale is currently being liberally painted across U.S. political headlines.

And across the prematurely aged visage of its remorseful-in-retrospect founder…

Facebook is a content-curating company that, until very recently, resisted being classified as a media company. For as long as possible it sought to eschew any kind of editorial responsibility for the user generated content flowing across its platform — even as its fleet of engineers worked to tune algorithms to distribute content at an unprecedentedly vast scale and with an invasively exact degree of interest-targeting.

‘But we didn’t think of that’, it bleats now, in response to the revelation that its ad system allowed the micro-targeting of ads to users with a stated preference for ‘burning Jews’.

‘We just didn’t imagine this vast anyone-can-advertise-to-anyone platform might be used by Kremlin agents — even though, well, they paid us in Rubles and hailed from a known pro-Putin troll farm,’ it now finds itself having to say.

It’s a vastly disingenuous response to a crisis entirely of Facebook’s own making.

Social responsibility? Oh hell no! We’re just engineers.

Here’s the postmortem on Facebook’s antisocial fuck-up: If your business is building powerful tech tools that you make freely available to almost anyone who wants to use them, and yet you also refuse to accept responsibility for ensuring those tools are not also misused at scale, then don’t be too surprised when the monster you’ve unleashed comes back to bite your personal political ambitions in the ass, Zuck.

Turns out if you’re truly fixated on moving fast and breaking stuff — and you have enough VC cash behind you to fuel your one-way rocket — you actually can end up breaking some really, really, REALLY big stuff — like, er, democracy…. Thing is, no one is clapping now are they Facebook? (Well, no one outside Russia.)

Uber’s bending of the transport rulebook might seem to pale in comparison beside Facebook’s insistence that ads on its platform are just another type of ‘user content’ to be inserted into anyone’s eyeballs so long as you hand it a little bit of fiat currency.

But the harm is actually more immediately obvious.

Those thousands of London Uber drivers who bought into its platform on the vague promise of a ‘partnership’. Who took out loans to fund the shiny vehicles that Uber’s business relies on. They’re the ones saddled with horrible uncertainty and terrible risk.

They have all the responsibility, and none of the rights.

And let’s not forget all the unseen risk being absorbed by individual Uber users getting into cars with strangers and taking at face value the company’s claims it is be safe for them to do so.

The regulator’s verdict is that no, actually, we are not convinced it is safe for you to get in the car.

Frankly this has nothing to do with innovation. And everything to do with how poorly Uber has operated as a company to have reached such a very low pass.

“We wouldn’t say that a car with no speed limits or seat belts is an innovative car. Innovation is precisely about coming up with new solutions to problems. Solutions that create more problems than they solve are not really solutions,” says Gemma Galdón, founder and CEO at data consultancy Eticas Research commenting on TfL’s Uber verdict.

“While Uber is free to design its business model, regulators need to ensure that the framework they operate in protects fundamental rights and values, including workers rights… If Uber cannot come up with a business model that, is both innovative and compliant with the law, this may say more about Uber‘s innovation capacity than about the regulator, who is just doing its job.”

“Not all tech innovations try to thrive regardless of their impact on labor rights, the environment or social inequalities,” she adds. “In the future, non-civic tech should be as unthinkable as cars without speed limits or belts.”

There’s yet another irony here: By failing to apply its ride-hailing technology in a socially responsible way Uber has made it more possible for fast-following competitors to elbow in and address those corporate failures — such as by offering a better ‘partnership’ package for drivers. Or by finding ways to make London’s more rigorously regulated black cabs more affordable for people to use.

Although Uber’s main weapon to stave off competition thus far has been to drive down fare prices. But even Uber can’t burn VC cash forever. It will have to raise prices to turn a profit or it can’t hope to deliver the necessary return to its many investors.

Analysis suggests its investors are subsidizing the cost of rides to the tune of around 60 per cent. Which means that that Uber trip which cost you £8 actually cost £20. Not so ‘price disruptive’ now, eh.

And given how many of the London Uber users complaining about TfL’s decision to strip the company of its license say it’s Uber’s “affordability” that they love, I’d wager that an Uber that charged fares far closer to the rates of London’s black cabs wouldn’t find itself half so popular.

On demand ride-hailing apps? They aren’t as innovative as they used to be. The question now is: What else does your business offer us?


Uber CEO Travis Kalanick has resigned due to investor pressure, and a search for a new leader is on

Uber CEO Travis Kalanick has resigned in response to demands from key investors for a change in leadership, Recode has confirmed.

 It’s about time.

Kalanick had become a giant liability to the car-hailing company for a growing number of reasons, from sketchy business practices to troubling lawsuits to a basic management situation that was akin to really toxic goat rodeo.

Thus, he had to go, even though some sources said he had the voting power to stay.

But big investors also have leverage and a big enough group of them joined to use it. Those investors include Benchmark, Fidelity and Menlo Ventures, all of whom sent Kalanick a joint letter called “Moving Uber Forward” on Tuesday afternoon. Interestingly, Google Ventures was not among the group, even though its parent company Alphabet is now in a major lawsuit with Uber over the alleged theft of self-driving car technology from its Waymo unit.

While a lot of the focus at Uber has been on pervasive sexism and sexual harassment — due to an explosive blog post by former Uber engineer Susan Fowler (kudos to her, by the way) — many think the Waymo litigation is a bigger threat to Uber.

Uber will now be searching for a new leader to replace Kalanick, which should greatly widen the pool of candidates from its COO search — many of those people did not want to be the No. 2 to the volatile Kalanick. Among the names who had been considered: Former Disney COO Tom Staggs, CVS’ Helena Foulkes and a range of media and transportation execs.

In addition, many expect Uber will need to raise more cash soon. It has already raised over $12 billion at a nearly $70 billion valuation, but it has heavily spent to expand globally and loses enormous amounts of money in the process.

Now, it will have to move on without key employees like Kalanick and his closest confidante Emil Michael, who was also forced to resign last week. Uber also does not have a CFO, CMO, head of engineering and attrition is increasing dramatically with all the scandals and investigations.

In a statement Kalanick provided to the New York Times, he wrote “I love Uber more than anything in the world and at this difficult moment in my personal life I have accepted the investors’ request to step aside so that Uber can go back to building rather than be distracted with another fight.”

Fights that Kalanick largely started, an unfortunate attribute of his pugnacious leadership style.

But Kalanick has yet to tell Uber employees about his departure, which seems to put a perfectly awful end point to his rocky tenure.

Uber confirmed the resignation, and the company’s board issued a statement that said, in part: “Travis has always put Uber first. This is a bold decision and a sign of his devotion and love for Uber.” (For those who don’t speak fluent tech director, there are four things in those two sentences that are not true.)

That board includes Benchmark’s Bill Gurley, who had grown weary of the growing range of troubles at the company, and of Kalanick.

Still, Gurley managed to dance the classic Silicon Valley two-step when he tweeted tonight about Kalanick. (For those who do not know it — you kill someone far later than you should have and then praise them.)

Kalanick’s supporters on the board included Arianna Huffington and Uber co-founder Garrett Camp.

Whether there will be a board shake-up due to the Kalanick departure is also a good question to ask right about now. That is because, in the end, the entire board of Uber has been complicit in this mess that has manifested itself over years. The directors coddled Kalanick’s antics — part of a founder-above-all ethos in tech — and looked the other way as evidence of trouble continued to grow.

Kalanick announced that he was taking a leave of absence last week, as the company revealed the findings of an investigation into what many call a broken culture and a deeply dysfunctional management. Kalanick — who wrote in an email to staff announcing his leave that he intended to return to the company as “Travis 2.0” — will remain on the board of the company.

Many inside and outside the company did not agree with this move, noting the many legal and ethical messes that had been created under Kalanick’s leadership, and that he had not paid the price for them and had become too radioactive to stay.

Well, now that Kalanick is gone, Uber can close a chapter and presumably start building a fresh start to its uncertain future.

Uber CEO to leave post















7年前的夏天,一个叫特拉维斯•卡兰尼克(Travis Kalanick)的美国小子用一款软件颠覆了地球人的出行。当时,他才33岁。










如今,哥们已是不惑之年,Uber也已进入70多个国家450多个城市,估值接近700 亿美元,但这家伙,始终没把自己修炼成国际公司掌舵人该有的样子。


今年1 月,纽约出租司机联合会呼吁包括Uber在内的全体出租车罢工,抗议特朗普“穆斯林入境禁令”,但Uber当地主管在推特上宣布照常营运。



进入2 月份,Uber一名女工程师在社交平台曝料,自己工作时遭到性骚扰,人力部门却袒护男性同事。已经了解这一事件的小卡同学至少应该说点对不起什么的吧,但他却兴高采烈地参加奥斯卡派对去了



紧接着,Google 母公司旗下的自动驾驶公司Waymo,也对卡同学发起挑战:向法院起诉Uber利用从原告处挖走的技术高管,盗窃其无人驾驶技术的关键部分。







近5个月来,除了实施性骚扰和涉嫌窃取Waymo公司机密的两位高管离开外,已相继有7位重要高管离职,其中包括仅次于卡兰尼克的二号人物Jeff Jones总裁。



















甚至记者,也都成了Uber攻击的对象。Uber的一位前高管曾对媒体动不动就做关于Uber的负面报道相当不满,他的解决办法之一是:悬赏100 万美元,去挖掘曝光那些不友好的记者的隐私。

















































Uber“jerk culture(混蛋文化)”的罪魁祸首正是卡兰尼克本人,如果他还继续在CEO的位置待着,Uber能和这种文化说再见吗?







Uber’s books still top secret, but its biggest weakness isn’t

Uber has raised $12.5 billion at an implied valuation of $66 billion, all without having to show the world its books. But without intending to, Uber may have revealed a major weakness that may bring it back down to Earth: wider adoption of its business model.

The creation of Uber in the wake of the 2008 financial crisis can be compared to an earlier disruptive innovation: the supermarket.

In 1930, in the early months of the Great Depression, Michael J. Cullen leased a vacant garage in Queens, New York, and built King Kullen, what is widely considered the first-ever supermarket and example of the “resource integration” model that has created the Uber ecosystem.

In the case of King Kullen, “the resource integration included the use of the customer to self select, pay cash and carry the groceries home. Previously, the merchant selected, gave store credit and often delivered the groceries,” explained Bob Lusch, entrepreneurship chair at the University of Arizona and a member of the CNBC Disruptor 50 advisory council. The new model also led to much-needed cost savings for consumers and created much-needed new jobs.

Sound familiar?

Like King Kullen, Uber is the result of “clever resource integration” on the part of its founders, serial entrepreneurs Travis Kalanick and Garret Camp. “They integrated a mostly unused stockpile of personal automobiles, a large pool of potential drivers … [and] the resources of a digital ecosystem that can be accessed on a smartphone,” Lusch said.

At the time of Cullen’s innovation, none of the existing big dry grocery chains, including two of Cullen’s former employers, Kroger and A&P, had thought to do what he did. But its merits were clear, and the idea caught on quickly, the textbook definition of a disruptive innovation. And here is where Uber should hope the comparison ends. The King Kullen business model proved easy to replicate, and eventually the big chains did. Today, Kroger is America’s largest supermarket chain, with a 16.1 percent share of the national market; King Kullen remains a small local chain.

Uber’s fundamental flaw

Erkko Autio of Imperial College Business School in London and also a member of the Disruptor 50 advisory council, said, “Uber’s business model is fundamentally flawed.” What is fiercely guarded as one of its biggest strengths — the controversial model of making all drivers operate as independent contractors — also means Uber allows drivers to work for its competitors. “Uber does not remove drivers from the driver pool. The platform is novel and revolutionary even, but not difficult to replicate. It will get replicated,” Autio said.

Speaking to CNBC from last week’s Code Conference, Jean Liu, the president of Chinese ride-sharing company Didi Chuxing, pulled out a smartphone to show that the Uber app is directly referencing Didi Chuxing in aggressive discount offers: “I find it quite cute because I’ve never seen a company put their competitor’s brand on their own homepage. … This is very strong proof to show that we have better service.” Didi Chuxing recently received a $1 billion investment from Apple.

Uber’s patent protection is not in the top tier among CNBC Disruptor 50 companies, according to MCAM International, which provided CNBC with a database of patent, trademark and other intellectual property information and analysis. Uber receives a lower-tier score on defensibility of technology, MCAM found.

Uber did not respond to a request for comment by press time.

Nevertheless, it should come as no surprise to see Uber atop the CNBC Disruptor 50 list in 2016. To anyone who follows Silicon Valley, it’s an obvious choice as the first company that comes to mind when you think of a disruptor. Uber is in more than 450 cities across Asia, Europe, the Middle East, Africa, Australia/New Zealand and the Americas. In the United States alone, more than 450,000 drivers use the Uber app daily, according to the company.

Some innovation experts contend the independent contractor model remains worth much more than it could ever cost Uber. “I have no trouble believing they’re here for the long term,” said Andrew McAfee, a scientist with the MIT Initiative on the Digital Economy. “It’s brilliant that [Uber] didn’t try to lock down drivers into an employment situation,” he said. “A huge part of their success and growth is, all you have to do is turn on an app and you can start making money with your car — on a schedule that you the individual choose.”

The question, then, is what will Uber be in the long term?

Uber, Lyft? Never heard of them

A Pew Research study last month found that despite all the attention, 51 percent of the U.S. population has heard of ride-hailing apps like Uber and its closest rival, Lyft (No. 27 on this year’s Disruptor 50 List) but never used them; one-third of the county hasn’t even heard of them; and only 15 percent of adults told Pew they have used a ride-sharing service. (The popularity does go up as the age of adult goes down: Roughly one-quarter of 18- to 29-year-olds (28 percent) and 1-in-5 30- to 49-year-olds (19 percent) have used ride-hailing.

Is Uber destined to be just another app in a sea of sharing-economy choices used by a fraction of the population? Or will it instead retain its competitive edge and become the next company like Amazon or Xerox or GE — a company that starts with a core business model and through innovation, clever resource consolidation and smart execution becomes something much bigger and more important?

The key to Uber’s long-term success may lie in how the company deploys its mountain of cash. Last week Saudi Arabia’s investment fund revealed a $3.5 billion investment. “Free venture money is like doping,” Autio said. “They have so much money, they can do anything. But that will not last.”

Recently, Uber has watched cash flow to its competitors, as big public incumbents take aim at both its core business and its potential paths to future growth. In addition to Apple deploying $1 billion of its cash stockpile to invest in Didi Chuxing, which already had the upper hand on Uber in China, Lyft got a $500 million investment from General Motors last year, as well as $100 million from famed investor Carl Icahn. Lyft and GM recently announced a short-term car-rental program together that would bring more drivers into the driver pool and at the same time keep those new drivers from using Uber.

“Execution really matters,” said Matt Glickman, a serial entrepreneur and guest lecturer at the Stanford Graduate School of Business (and member of the Disruptor 50 advisory council). “It’s the sustained, continued push to adapt and to improve that leads to long-term success.”

We’ve heard this before: “Innovate or die.” Or become just another supermarket … from the 1930s.