As part of his resignation, Kalanick had agreed to surrender his seat on Uber’s board as well as two other seats he controlled. But Bloomberg reported that he reneged on this agreement as he unilaterally appointed two board members.
Huffington accused of self-dealing
Bloomberg reported that Uber board member Arianna Huffington was accused of self-dealing. For one, she sought to have Uber provide driver hubs with “nap pods” from her new wellness company. Furthermore, Huffington’s new company received $50,000 in consulting fees from Uber, though Uber staff objected to those payments and the funds were ultimately returned.
Kalanick didn’t abide by leave
When pressed to take leave in response to mounting scandals, then-CEO Travis Kalanick was seen not to comply with the leave. Board member Arianna Huffington was seen as his proxy. Bloomberg reported that Uber’s finance team was spreading the word that Kalanick was still in charge. Among Kalanick’s activities while on leave was searching employee emails to investigate leaks.
Bloomberg reported that Kalanick’s handpicked executive team objected to his meddling while on leave and sent a letter asking him to stop. Business Insider added that a sixteen-person senior management team sent a letter to Uber’s Board, complaining that Kalanick was interfering with their work and asking the Board to intervene.
Kalanick resigned
In June 2017, Kalanick resigned from his position as Uber CEO.
Bloomberg reports that Kalanick’s resignation was to be presented as a graceful departure. Mike Isaac’s Super Pumped (p. 363) reports that Kalanick and investors had agreed to tell the press — falsely! — that Kalanick decided, on his own, to step down.
But a detailed New York Times article revealed the departure as the ousting it actually was. See also Investors asked Kalanick to resign.
Board member Arianna Huffington seen as Kalanick’s proxy
After the Uber board forced Kalanick to take leave, Bloomberg reported that other executives and board members suspected that Uber board member Arianna Huffington was serving as his proxy.
Kalanick re-debated with Uber driver, then (without authority) promised equity in Uber
After being caught on video arguing with Uber driver Fawzi Kamel, Kalanick sought to meet with the driver again to try to make things right. Bloomberg reports that Kalanick had planned to meet with the driver briefly, as little as five minutes, for a simple apology. Instead, the meeting lasted more than an hour, and Kamel and Kalanick reopened their debate about Uber’s pricing policies.
As part of the discussion, Kalanick suggested that he give the driver Uber stock. Uber attorneys rejected the proposal, seeing it as improper that Uber shareholders pay to clean up Kalanick’s personal problem. Kalanick ended up paying Kamel $200,000 of personal funds.
Escort bar visit
Covered up 2016 hack, paid hackers to delete data, and failed to disclose to regulators
In an October 2016 attack, hackers extracted names, email addresses, and phone numbers of 50 million Uber riders (details), as well as personal information about 7 million drivers (including 600,000 US drivers license numbers). Details from Uber. A subsequent FTC investigation found that more than 25 million names and email addresses, and more than 22 million names and phone numbers, were affected.
Uber did not tell the public about the hack or alert the affected drivers or passengers. Nor did Uber tell regulators, although at the same time Uber was negotiating with the US FTC about other claims of privacy violations. As of November 2017, when the attack was publicly revealed, Uber admitted that it was required to disclose the hack because driver’s license information was among the information taken.
Instead of disclosing the hack to regulators or the public, Uber paid the hackers $100,000 to delete the data and not tell anyone what had happened. The New York Times reported that Uber also pushed the hackers to sign nondisclosure agreements, and that the company “made it appear” as if the $100,000 payout had been part of a “bug bounty” program (paying hackers to find problems) rather than a response to hackers’ demands.
Uber then-CEO Travis Kalanick learned of the breach in November 2016, a month after it took place. Reuters indicated that new CEO Dara Khosrowshahi indicated only having learned about the problem “recently.”
Uber Chief Security officer Joe Sullivan oversaw Uber’s response to the hack. As part of Uber’s 2017 investigation of the situation, new CEO Dara Khosrowshahi fired Sullivan along with Craig Clark, who had been legal director of security and law enforcement (reporting to Sullivan).
Upon learning of Uber’s failure to disclose the privacy breach, multiple regulators criticized the company’s action and opened investigations.
In a December follow-up, Reuters reported that the hacker was a 20-year-old man from Florida.
Sought to conceal embarrassing court proceedings from the public
In Google’s lawsuit against Uber as to alleged theft of self-driving car technology, Uber sought to hold a hearing in camera, closed to the public. Judge Alsup concluded that Uber sought confidentiality not for any proper purpose permitted under law, but to avoid embarrassment. From the court transcript for March 26, 2017:
Mr. Gonzalez (for Uber): Your Honor, the reason why we wanted it in chambers is because of the adverse impact that we think it would have on our client. If there’s a headline tomorrow saying this guy is asserting the Fifth Amendment —
The Court: Listen, please don’t do this to me again. There’s going to be a lot of adverse headlines in this case on both sides. And I can’t stop that.
[T]he public has a right — in fact, this whole transcript, I’m going to make it public.
Details in The Verge
Uber then-General Counsel prioritized solving business problems over legal problems
In a 30 minute podcast on Legal Talk Network, Uber then-General Counsel Salle Yoo remarked:
I tell my team, “We’re not here to solve legal problems. We’re here to solve business problems. Legal is our tool.”
She continued: “I am going to be supportive of innovation” — broadly indicating prioritizing innovation ahead of compliance with the law.