Everybody knows that for decades Big Tobacco profited from deception and clever marketing. The companies even conducted their own studies and concluded—surprise, surprise—that tobacco was a safe product with no link to cancer.
Now Uber has been caught in a similar ruse. The new revelation, tucked away inconspicuously inside a New York Times story, hasn’t received as much attention as a string of other high profile Uber scandals that has recently shaken the company to its core. But it is perhaps even more significant in its overarching import.
The first Uber scandal came about as a result of the Trump administration's ban on Muslim immigrants in late January. In New York City, a taxi strike was launched by Muslim taxi drivers as a protest against the ban. Uber announced that it would suspend “price surging” in the immediate area, which effectively lowered its prices.
Suddenly Uber found itself in the middle of a firestorm, accused of trying to break the taxi driver strike. Uber denied that was its motivation, but nevertheless thousands of social media users began deleting the Uber app, and the tweet #DeleteUber began trending worldwide (an estimated 200,000 users canned the app). One scathing tweet said, “You tried to profit off a strike against an unconstitutional immigration ban. See you in scab hell, assholes.”
With February only came more scandal. Jarring headlines resulted from a sexual harassment claim by a former female Uber employee, with startling revelations about Uber’s sexist bro-culture. That was quickly followed by news of a lawsuit filed by Google in which it accused Uber of stealing trade secrets regarding self-driving technology.
As if January and February weren’t bad enough, early March already has produced more scandal. The New York Times, which reportedly has made contact with several whistleblowers of current and former Uber employees, reported that Uber has developed secret software that has allowed it to evade local authorities. Called “Greyball,” the technology was used to assist Uber drivers in canceling any rides for city officials who might be part of a sting operation trying to enforce local laws. After being caught red-handed, Uber now says it will cease using this tool for this purpose, but much damage has been done to its reputation.
Perhaps feeling the heat of these mounting scandals, CEO Travis Kalanick recently lost his cool with an Uber driver, who told Kalanick “I lost $97,000 because of you. I’m bankrupt because of you.” Kalanick reacted with scorn, and the exchange was captured on video, which went viral.
So it’s been a couple of bad months for Kalanick and his company, with several of its venture capital investors questioning the CEO’s ability to lead the company. And it’s not over. Another claim from Uber whistleblowers is perhaps the most explosive of all. This claim does further damage to Uber’s reputation as a leader in the invention of autonomous vehicles, which the company has invested in heavily.
Recall that just before the Christmas holidays, Uber’s self-driving experiment in San Francisco was shut down after only a few days by California regulators because CEO Travis Kalanick, who has always played by his own rules, refused to apply for an easily obtained $150 permit that 20 other companies had received.
It made no sense that Kalanick wouldn’t shell out the price of a good bottle of 18-year-old Jameson whiskey to comply. But the permit came with a specific condition: participating companies had to disclose certain information to public officials, including reports of any accidents or incidents. Kalanick has long refused to provide such information to regulators, and instead relocated his autonomous fleet to Arizona.
As reported previously in The American Prospect and elsewhere, those vehicles actually committed a number of unsafe traffic violations in San Francisco. Besides cutting off bicyclists in bike lanes and clogging up traffic with their slow pace, it was reported that at least two of Uber's autonomous autos ran red lights. One of these was captured by a dashboard video camera on a taxi, which went viral on the internet. The other red light runner accelerated into an intersection and nearly caused a collision.
Despite eyewitness claims to the contrary, Uber blamed these violations on its human drivers instead of its faulty technology. Incredibly, Uber cited the incidents as further proof that self-driving vehicles are safer than human drivers. A company spokesperson announced, with great bravado, “These incidents were due to human error. This is why we believe so much in making the roads safer by building self-driving Ubers.”
In Uber’s posturing bro culture, you never admit mistakes and the best defense is a good offense. Well now it turns out that, according to two Uber employees who spoke to The New York Times on the condition of anonymity, as well as according to Uber’s own internal documents viewed by Times reporters, the mapping programs used by Uber’s cars in fact were to blame for the San Francisco incidents. The algorithms failed to recognize at least six traffic lights in the downtown core. That’s during just a few days of operation. Uber’s documents stated bluntly about one such incident, “In this case, the car went through a red light.”
Yet this wasn’t the first time that Uber had been exposed fudging its autonomous vehicles’ performance. Last September in Pittsburgh, Uber conducted self-driving experiments that ran into similar problems. According to USA Today, The New York Times, and other media outlets, the human drivers, who had to keep their hands on the steering wheel at all times, often had to take back control from the algorithms. One rider reported that the human had to commandeer control at least 30 percent of the time. The auto cars also crawled along sluggishly, causing one observer to compare it to “grandma coming home from church real slow.” Yet the vehicles still managed to get into various scrapes and fender benders, and one drove the wrong way down a one-way street.
What was Uber’s response? You guessed it: It blamed those incidents on the human drivers.
Uber has been making its case that self-driving vehicles are safer than human drivers, citing the 33,000 people who are killed each year in auto accidents. But given the number of traffic violations committed by a handful of self-driving vehicles in just a few days of testing, and factoring in the two recent driver deaths in Tesla’s autonomous vehicles, the assumption that automated driving will be safer than humans seems wildly premature. Imagine what could happen if Uber unleashed millions of these vehicles all over the streets, as Travis Kalanick has proposed?
Of course the biggest Uber challenge of all is that, as far as anyone can tell, the company continues to lose a truckload of money—according to some tech analysts, faster than any technology company ever. That includes losing money on its core business, that of being a taxi business for the digital age. Uber is banking on being able to deploy autonomous vehicles and subtract drivers’ wages from its bottom line, but don’t hold your breath. “To have the car understand every single possibility is a massive challenge,” says an expert with Audi.
Uber has bet not only billions of dollars but also its reputation as a disruptive, futuristic technology company on its effort to produce self-driving autos. Kalanick’s ability to keep attracting venture capital investors that are subsidizing his money-losing company could be further undermined by his “blame it on the human instead of the algorithm” deception. The fact that Uber feels it has to conceal its technological deficits is just further proof that this technology is very far from being ready for prime time.
Interestingly, the sources for Uber’s terrible recent headlines have been whistleblowers, both current and former Uber employees. Will that become a trend? Will more of Uber's VC investors also start rebelling? Silicon Valley is a competitive place, with dozens of name-brand companies competing for top talent. If Uber starts giving off the whiff of a sinking ship, we may see a rush for the exits and a lot more insider Uber tales to follow.