After dropping out of college, Travis Kalanick started a company called Scour, which helped users find online files to download. Scour was primarily used to help download illegal files. Mike Isaac’s Super Pumped reports: “Soon, Scour was competing head-to-head with Napster for file-sharing dominance.” Later, Scour’s investors announced being “uncomfortable” with “the copyright implications” of Scour’s business, leading the company to be sold for parts in bankruptcy court. (pp.45-49)
Victims of sexual assault, rape, harassment, and gender-motivated violence criticized Uber’s arbitration clause
Fourteen victims of sexual assault, rape, harassment, and gender-motivated violence criticized Uber’s arbitration clause, which prevented them from bringing lawsuits about the harm they suffered. Their letter to Uber’s Board of Directors asked that Uber remove (or agree not to enforce) its arbitration clause as to these complaints. They noted a California case in which Uber aggressively sought to force one of their complaints into confidential arbitration. They also noted pending legislation in the United States Congress and New York State Senate that would disallow companies from requiring victims of sexual harassment or assault to proceed in arbitration.
News coverage from The Mercury News and Recode.
Female engineers sued, claiming unequal pay and benefits
Three Latina software engineers sued Uber, alleging that they, as women and people of color, were paid less than white male and Asian colleagues. They sought to represent all engineers similarly suited in a class action.
Uber ultimately agreed to settle the suit for $10 million. As part of the settlement, Uber agreed to enhance its systems for compensation and reviews, to regularly report diversity metrics, and to assure that company executives review diversity efforts twice a year.
Ignored multiple injunctions to cease operation in Argentina
Uber was found to be unlawful in Argentina, including for operating without a permit or tax-identification number.
A series of injunctions ordered the company to cease operations, and ordered telecommunications vendors and payment processors to cease supporting Uber. The Stanford Center for Internet & Society explained:
Shortly thereafter, a criminal prosecutor from the City of Buenos Aires issued an injunction ordering ENACOM (Argentina’s FCC) to block the UberApp. Apparently, ENACOM refused to comply with the injunction arguing that a local prosecutor was not a competent authority to order such a measure. On April 22, a criminal judge from the City of Buenos Aires ordered ENACOM to block Uber within the City of Buenos Aires jurisdictional limits. It is not clear whether ENACOM, a federal agency, will comply with a City of Buenos Aires order. Content circulation through communications networks is a federal matter in Argentina, which is supposedly beyond the reach of local government jurisdiction.
Finally, the Consumers Protection Agency of the City of Buenos Aires—an administrative agency—issued an injunction ordering telecoms to block the App and credit card companies to block any transaction related to the App. The injunction was issued against telecoms and credit cards as “contributors” to an allegedly harmful activity. A few days later, also a judge in Buenos Aires ordered credit card companies to cease their operations with Uber.
Nonetheless Uber continued operations, including encouraging Argentina users to pay via a Bitcoin-backed credit card.
Kalanick blamed Yoo for mishandling investigation of Otto
Loooking back at an outside investigator’s report that Uber managers did not receive, Kalanick blamed then-General Counsel Salle Yoo, suggesting that too many legal issues were falling through the cracks of her team.
Company leaders did not read report about confidential material held by Otto
Uber then-General Counsel Salle Yoo had insisted that Uber hire outside investigators to check for confidential information improperly held by Otto, before Uber acquired Otto. The resulting report revealed that Otto CEO Anthony Levandowski had copied Google information. But Uber leaders never saw the report because it was sent to outside counsel. Instead, they learned about the report only incidental to Google’s litigation against Uber alleging theft of Google secrets.
Settled Waymo (Google) litigation for $245 million
After four days of trial, Uber settled claims from Waymo (Google) that a former Google engineer had downloaded files before forming his own company that was later bought by Google. As part of the settlement, Waymo gets 0.34 of Uber’s equity, worth about $245 million at Uber’s estimated valuation of $72 billion.
Discussing the settlement, new Uber CEO Dara Khosrowshahi said his job includes “acknowledging and correcting mistakes of the past.” He continued: “The prospect that a couple of Waymo employees may have inappropriately solicited others to join Otto, and that they may have potentially left with Google files in their possession, in retrospect, raised some hard questions” though he continued to deny that any Waymo trade secrets made their way to Uber.
Kalanick’s stated objectives for acquisition of Otto
In litigation with Google about alleged theft of Google intellectual property, Google counsel presented notes from John Bares, then director of Uber’s driverless car center in Pittsburgh, from a December 2015 meeting with Uber then-CEO Travis Kalanick discussing:
TK what we want
source
all of their data
Tagging
road map
pound of flesh
IP
On one interpretation, the “what we want” was what Uber wanted from a prospective acquisition of Otto — but notably, what Otto would in turn bring from Google (where key staff had worked previously). In particular, Uber had no fight with Otto and no reason to want a “pound of flesh” from Otto. In contrast, Uber’s tensions with Google were longstanding and well known. In that case, these notes would also indicate Uber intentionally wanting “all of their [Google’s] data” as well as Google’s “source [code]” and more.
European Court of Justice said Uber is a transportation service, may be regulated at national level
The European Court of Justice (the highest court in Europe) held that Uber is a transportation service, which may therefore be regulated by each country in Europe. The ECJ explained:
The service provided by Uber connecting individuals with non-professional drivers is covered by services in the field of transport. Member states can, therefore, regulate the conditions for providing that service.
In contrast, Uber had argued that the company was an information technology service, subject only to Europe-wide regulation and exempt from national law.
Complained of “extortion” by a former employee, but paid $7.5 million anyway
When former employee Richard Jacobs sent a demand letter alleging possible criminal behavior by the Uber team where he previously worked, Uber viewed the claims as extortion. Uber deputy general counsel Angela Padilla said Jacobs’ claims were “extortionate.” Yet Uber paid Jacobs $4.5 million ($2 million upfront, $1.5 million in stock, and an additional $1 million to consult with the company and cooperate in any investigations over the course of the next year), plus an additional $3 million to his attorney.
Concerns resulting from Jacobs’ letter and the practices he reported