Uber looks to bounce back from rough 2017

Uber looks to bounce back from rough 2017
© Getty Images

Uber is eager to put 2017 in the rear-view mirror after a year mired in controversies.

The year began with the “delete Uber” campaign and ended with revelations the ride-hailing firm paid to cover up a massive data breach.

ADVERTISEMENT

But even under fresh new leadership, the embattled start-up continues to be haunted by past missteps, increasing the chances that Uber, once a darling of the tech industry, could have federal regulators on its back.

Here is a look at Uber’s tumultuous year — and how it could impact the transportation company’s fate in Washington in 2018. 

 

The delete Uber campaign

Uber's woes began in January after President TrumpDonald John TrumpDems flip Wisconsin state Senate seat Sessions: 'We should be like Canada' in how we take in immigrants GOP rep: 'Sheet metal and garbage' everywhere in Haiti MORE signed an executive order barring foreign nationals from seven primarily Muslim countries from entering the U.S.

Taxi cab drivers decided to go on strike at New York's John F. Kennedy International Airport to protest the order.

The company decided to drop surge pricing during the strike, prompting many to accuse Uber of undermining the protesters.

The allegations sparked the #DeleteUber hashtag, which got a boost when Uber competitor Lyft announced that it would donate $1 million to the ACLU in response to Trump’s travel ban. Downloads of the Uber app dropped significantly as Lyft surged in the following week.

After several days of mounting public pressure, founder and CEO Travis Kalanick announced that he would step down from Trump’s Strategic and Policy Forum, an advisory group of business leaders.

But the incident only marked the beginning of problems for Uber’s brand.

 

Sexual harassment allegations

Allegations of sexual harassment in the workplace roiled Silicon Valley earlier this year – and Uber was no exception.

Former Uber employee Susan Fowler wrote an explosive blog post on Feb. 18 detailing how her reports of sexual harassment to Uber human resources were not only dismissed, but in many cases led to threats of retaliation.

The New York Times then published a report suggesting the problems were more widespread, and over 100 female Uber engineers brought their concerns to Kalanick in a meeting.

Then another former female Uber employee leveled a new set of complaints against the firm in a scathing Medium post.

Uber sprang into damage control mode, swiftly acknowledging mistakes and outlining actions to remedy them.

The company also hired former Obama Attorney General Eric HolderEric Himpton HolderFlake's anti-Trump speech will make a lot of noise, but not much sense Former Fox News correspondent James Rosen left amid harassment allegations: report Issa retiring from Congress MORE to probe the sexual harassment allegations by female workers.

 

Google's lawsuit

Uber's public relations were once again tested after Google decided to sue the ride-hailing firm in February over the alleged theft of trade secrets.

Google’s self-driving car subsidiary Waymo accused Uber of patent infringement and stealing trade secrets.

The company alleged that a former Google employee stole Waymo’s sensor technologies, which he incorporated at his own startup, Otto, before it was purchased by Uber.

The ugly legal battle has dragged on all year.

 

Uber's CEO caught arguing with driver

While trying to recover from the string of controversies, Kalanick himself created a new one. 

Kalanick was captured on video in February getting into a heated argument with an Uber driver who blamed the Uber CEO for bankrupting him.

He finished the exchange by accusing the driver of not taking “responsibility for [his] own shit.”

Kalanick, who struggled for months to contain the fallout from the various crises, was eventually forced to step down as CEO.

 

Uber caught evading regulators

In March, The New York Times revealed that Uber had been using a software tool called “Greyball” to secretly evade law enforcement in areas where it wasn’t supposed to operate.

The tool allowed Uber to deny rides to city officials who were trying to perform sting operations on the ride-hailing firm.

Uber has a long history of acting first and dealing with regulators later, especially in the company’s early days.

But Uber’s use of Greyball caught the eye of the Justice Department, which opened a criminal investigation into the practice.

 

Privacy concerns

The bombshells kept on coming for Uber in the spring and summer.

The New York Times published a report in April that said Uber was secretly identifying and tagging iPhones even after its app was deleted and had gone to great lengths to hide the maneuver from Apple.

Uber says it used so-called fingerprinting in order to detect fraudulent behavior and has modified the practice to fully comply with Apple’s rules.

A consumer watchdog group filed a formal complaint with the Federal Trade Commission (FTC), claiming Uber was engaged in unfair and deceptive practices. 

It was also revealed in June that the FTC was investigating Uber over some of its privacy practices, including past reports that employees had misused an internal tool called “God View” to live-track politicians, celebrities and other users on the ride-hailing app.

Uber agreed to settle with the FTC in August over claims it failed to protect sensitive consumer data.

Many lawmakers had agreed that there wasn’t a role for Congress to play in most of the issues that previously dogged Uber, but the privacy concerns crossed a line that could create headaches for the company in Washington.

Lawmakers on Capitol Hill have called for hearings on the issue, while other members have pushed for greater consumer privacy protections in the tech world at large.

 

Massive data breach

After Dara Khosrowshahi became Uber’s new chief executive officer in August, the former Expedia CEO appeared poised to lead the company in a new, scandal-free direction.

But in November, it came to light that Uber covered up a massive cyberattack that exposed the data of 57 million passengers and drivers, suggesting that Khosrowshahi will be stuck picking up the pieces left by his predecessor.

Hackers reportedly stole the names, email addresses and phone numbers of 50 million Uber riders around the world in October 2016, as well as the personal information of about 7 million drivers, including about 600,000 U.S. driver’s license numbers.

No Social Security numbers or trip location details were taken, according to Uber, but the embattled transportation company reportedly paid hackers $100,000 to delete the data and keep the breach under wraps.

As a result of the hack, the ride-share company now faces probes from multiple state attorneys general, as well as regulators in Europe. The incident could also trigger an investigation by the FTC.

And key lawmakers are planning to grill Uber over the incident on Capitol Hill.

“We expect to have a hearing on that in the not-too-distant future, Sen. John Thune (R-S.D.), chairman of the Commerce, Science and Transportation Committee, told reporters last month.

 

Uber sells stake to Softbank

To close out the year, a group of Uber investors agreed to sell a significant stake, at least 14 percent of the company, to Softbank Group, a Japanese firm.

Khosrowshahi had long pushed for giving SoftBank a stake and Bloomberg reported Thursday that the changes would lead to internal reforms at Uber, including expanding the size of the board of directors.

The deal reportedly will make SoftBank one of Uber's largest shareholders and give the company two seats on the board.

The new investment could also settle investors ahead of Uber's planned 2019 initial public offering.

But the sale price is reportedly about $33 a share. That would put the value of Uber at $48 billion, a sharp drop from the company's valuation of $70 billion in June 2016, capping off a difficult year.