Flawed sequencing in Khosrowshahi hiring, and generous compensation

Mike Isaac’s Super Pumped (p.389) reports that the public had learned that Uber’s board wanted Khosrowshahi as its next CEO — before he and the company had agreed on terms.  As a result, Khosrowshahi was in a particularly strong position to negotiate high payment.

Isaac reports that if Khosrowshahi was able to take Uber public by the end of 2019 at a valuation of $120 billion, he would be paid more than $100 million. But when Uber went public, its IPO price was $45 per share, and it sank as low as $22 in both 2020 and 2022.

Strategic Services Group spied on competitors, politicians, and police

Mike Isaac’s Super Pumped (p. 310) reports that Uber’s Strategic Services Group spied on political figures, lawmakers, and polite in cities where Uber was under scrutiny.  He explains:

They followed people on foot and in cars, tracking their digital activities and movements, and even took photographs of officials in public places.

Isaac reports that Uber SSG also pursued competitors:

SSG operatives recorded private conversations between opponents at DiDi and at Grab, their Southeast Asian competitor. One Lyft executive grew so paranoid about being followed by Uber that he walked out onto his porch, lifted both middle fingers in the air and waved them around, sending a message to the spies he was absolutely sure were watching.

Isaac questions whether these efforts were actually useful for Uber:

It was unclear how much of this intelligence was actionable or even valuable.  Nonetheless Kalanick okayed budgets that spun into the tens of millions for surveillance activity, global operations, and information collection.

Uber Xchange leases to marginal drivers

Mike Isaac’s Super Pumped (p. 265) describes perils in Uber’s Xchange program, in which Uber provided vehicles to high-risk driver with poor or nonexistent credit.  One, these drivers had disproportionate rates of safety incidents including speeding tickets and sexual assaults. Two, dealerships were pushing these drivers into expensive leases that lowered profits for both drivers and Uber — causing Uber to lose more than $9,000 per vehicle.  Furthermore vehicles were returned in far worse condition than anticipated.

Lavish corporate real estate

Mike Isaac’s Super Pumped (p. 190) describes lavish corporate real estate including a $40 million facility in Pittsburgh (hosting just 200 employees), a beachfront property in Santa Monica, and a new San Francisco facility for which the staircase alone cost multiple million dollars. In a war room, a switch could change all glass to frosted, to hide company secrets from outsiders.

Millions of dollars wasted on fraud in China

Mike Isaac’s Super Pumped (p. 183) describes scams in China seeking to steal sign-up incentives:

[I]n China, drivers and riders colluded to scam Uber out of billions in incentives, divvying the rewards. Most scammers found each other over text-based Chinese internet forums, a simple, anonymous way to match people who wanted to make a quick buck. They developed their own codified language; drivers seeking a fake ride would ask for “an injection,” a reference to the small, red digital pin that signaled a user’s location inside the Uber app. A “nurse,” or scammer, could respond in kind to give a “shot” to the original poster by creating a new fake account and going on a fake ride with the driver. The two parties would then split the bonus incentive payment from Uber. Repeated over and over across dozens of cities, small driver bonuses mushroomed into millions in squandered cash.

The obvious solution was to better verify drivers and passengers, to prevent repeat signups.  But this was off the table:

To juice growth, Kalanick had made the new user sign-up process as simple as possible. Joining Uber only required a name, email address, phone number, and credit card number, all of which were easily replicable. Fraudsters simply entered fake names and emails. Then they used apps like “Burner” or “TextNow” to create thousands of fake telephone numbers to be matched with stolen credit card numbers. But requiring Chinese users to add other, more precise, forms of identification would add more friction to the process. And, as Kalanick’s data scientists found in their research, adding friction slowed growth. For Kalanick, putting a dent in growth was not an option.

Isaac then explains the additional methods scammers implemented to create fake riders, including cheap cell phones and disposable SIM cards to simulate additional personas.

Excesses at Las Vegas party

Mike Isaac’s Super Pumped reports excesses at an Uber employee event in Las Vegas. Total cost exceeded $25 million in cash plus $6 million of stock to performer Beyonce.  In addition to transportation and lodging payments, each employee received a prepaid Visa card with additional spending money. An employee called the event “baller as fuck.”

Yet Uber’s  communications leaders realized the risk to the company of such a lavish celebration. Employees were banned from wearing Uber apparel, and the Uber logos on corporate email accounts were removed so that a bystander glancing at devices would not know which company was spending so freely.

(pp. 26-29)

Outrageous Miami party required pointed instructions to employees

Mike Isaac’s Super Pumped describes a large party Uber hosted for employees — where company leaders anticipated such problematic behavior that they had sharp guidance for employees:

[Kalanick] went on to advise his staff not to throw large kegs off of tall buildings, and mandate no interoffice sex unless coworkers explicitly stated “YES! I will have sex with you” to one another.  He also noted that ny puking on hotel grounds would result in a $200 fine.  The email set the tone for the rest of the retreat.

(p.23)