This project provides resources about controversies involving Uber, the taxi company. While perhaps always controversial, Uber’s toxic workplace culture and the company’s decisions during immigration protests touched off a wave of bad press in 2017. Despite a new CEO and recent public relations efforts, Uber continues to struggle amid deepening problems.
At a time when Uber continues to hold significant political clout and market power, this compendium seeks to be a resource that thoroughly documents Uber’s scandals, bad corporate behavior, and structural problems. It also aims to connect the dots between different issues and broaden criticism beyond the company itself.
At the core of Uber’s problems is its staggeringly unprofitable business model. Uber’s plan has always been to use venture capital to make up for its heavy losses in order to undercut competitors and shove aside other modes of transportation, especially in cities. This is often accomplished by illegally entering markets, building up a customer base and threatening local officials, and then aggressively lobbying states to interfere or preempt local laws.
This strategy provides temporary gains to passengers via subsidized prices but also necessitates that passengers, drivers, and the public be exposed to additional risks and costs (facets of many of these are described in this project). Although Uber loses money on every ride, its passengers become an important political base as the company expands. Together with an aggressive political lobbying operation, Uber conquers cities. This business model, although unsustainable and unprofitable, was designed to “disrupt” the profitable yet regulated taxi industry — something long promoted in right-wing policy circles. The culture of “disruption” which justifies the business model is also undoubtedly part of the reason why the company has such a toxic corporate culture.
Because Uber is not close to profitability, it will eventually be forced to raise prices, and so there will be even more risks and costs in the future. For example, Uber will need to extract more and more money from its passengers, who, like everyone else, will be left with cities that are much less able to provide affordable transportations options because of Uber’s dominance. Uber has spent significant resources to obscure these realities. It promotes various narratives where the company’s underlying fundamentals are radically different in the future (because of, for example, self-driving cars) but these are more public relations strategies than likely business plans. They distract from Uber’s financial performance, undercut competitors and investment in public transportation, and ensure investment continues to flow into the company. It also seeks to normalize parts of its business model, like its decision to classify its employees are contract workers: it wants to set up a 401(k)-type system for “portable benefits” that would have far-reaching effects on employment generally.
While Uber’s business model is at the heart of its problems, this project should also make it clear that Uber’s problems are not isolated to specific parts of its business, such as its culture, nor solely the product of certain individuals, such as former CEO Travis Kalanick, who resigned in June 2017. Rather, these problems permeate Uber as a whole. Many of these issues could be extended to other ride-hailing companies specifically and other companies in Silicon Valley more broadly. It should also be clear that not only do many of these problems still exist but that many of the root causes of these problems still exist as well.
Indeed, under new CEO Dara Khosrowshahi, Uber completed a “180 days of change” campaign in late 2017, which was intended to repair Uber’s public image as well as its relationship with drivers. However, because Uber is invested in its current business model and the toxic culture of “disruption” which justifies it, it cannot fundamentally change certain aspects of its operations, like how much it pays drivers or how it classifies them as independent contractors. Nor was the campaign able to stop more scandals from coming to light, such as the revelations that it kept a data breach secret and paid the hackers $100,000 to delete the stolen data.
What’s the solution to all of these problems? There is nothing special about Uber as a company that means it is owed a large share of the taxi industry, especially since its drivers are the core of its business (and they own its fleet). Many aspects of Uber’s business are unoriginal and poorly implemented but are still useful, like the basic idea of having an app to order taxis. Combined with heavy regulation and worker or public ownership of the app, the regulated taxi industry (which has problems of its own, of course, but these problems still do not justify Uber’s existence) could provide better and fairer service. It could do this without squeezing passengers and drivers or subjecting them to undue risks; it could do this without permanently altering cities for the worse, leaving everyone with unaffordable transportation options; it could do this without enriching venture capitalists and rewarding people who have exhibited extraordinarily bad judgment.
For more context on Uber and its problems, please see this earlier introduction to the project, which identifies other important themes.
The following is a non-comprehensive database of Uber’s noteworthy controversies. The database is divided into the six categories below. Many issues could be categorized in several of these, so an effort has been made to select a main category. Specific instances of larger problems are listed independently if they are significant or unique. If neither, they are generalized.
- Business Practices;
- Social Costs;
- Misuse of Data and Software;
- Corporate Culture;
- Passenger Issues; and
- Driver Issues.
Please contact me if you have corrections, suggestions, or additions.
Business Practices (26 entries)
Social Costs (15 entries)
Misuse of Data and Software (11 entries)
Corporate Culture (13 entries)
Passenger Issues (11 entries)
Driver Issues (15 entries)
If Uber has all of these problems, why is it doing so well?
Is Lyft (or any other ride-hailing company) better than Uber?
Isn't Uber better than regular taxis? Regular taxis are awful! Plus, there are more options for getting around now.
Don't Uber drivers like their work? My Uber driver said she did.
Why are there so many Uber drivers if they hate their jobs? Don't they enjoy the flexibility?
Should I feel bad about using Uber?
What would be the best taxi system?
In addition to the introduction to this project and the sources in the database, these resources (in chronological order) are useful in developing a broader understanding of Uber.
- News/aggregation: Here Is Where Uber And Lyft Are Facing Regulation Battles In The United States, from BuzzFeed (February 5, 2015)
- Research: How Much Uber Drivers Actually Make Per Hour, from BuzzFeed (June 22, 2016)
- Research/analysis: Will the Growth of Uber Increase Economic Welfare? and this Naked Capitalism series, by Hubert Horan (November 30, 2016)
- Feature: How Uber Deceives the Authorities Worldwide, from The New York Times (March 3, 2017)
- Aggregation/mapping: Why everyone hates Uber, from SumOfUs , and How Uber conquers a city in seven steps, from The Guardian (April 12, 2017)
- Feature: Uber’s C.E.O. Plays With Fire, from The New York Times (April 23, 2017)
- News/aggregation: Uber’s no good, very bad year: A timeline, from PitchBook (June 21, 2017)
- News: Uber Founder Travis Kalanick Resigns as C.E.O., from The New York Times (June 21, 2017)
- Simulation: The Uber Game, from The Financial Times, describes what it’s like to be an Uber driver and the difficult decisions you need to make it (October 4, 2017)
- News/aggregation: Uber is involved in at least five separate criminal investigations: report, from The Verge (October 11, 2017)
- News/aggregation: The Verge 2017 tech report card: Uber, from The Verge (December 29, 2017)
- Research: Uber State Interference: How Transportation Network Companies Buy, Bully, and Bamboozle Their Way To Deregulation, from National Employment Law Project and Partnership for Working Families and related coverage (January 18, 2018)
- Feature: The Fall of Travis Kalanick Was a Lot Weirder and Darker Than You Thought, from Bloomberg (January 18, 2018)
- First posted June 13, 2017
- Updated January 7, 2018: added several entries and links to the database, updated several entries, added resources section
- Updated January 15, 2018: added FAQs section
Thanks to Lara Merling, Daniel Ramirez, Hannah Emple, and Ivy Lee for research help and for useful suggestions.