The Uber, the Bad and the Ugly

The well known start up company Uber has been flagged lately with a lot of controversy, from not paying workers what they deserve to the stealing of intellectual property. The seemingly squeaky clean company may have a few dark secrets.

Uber is currently under investigation by the Department of Justice because of a tool they built to help their drivers avoid law enforcement in states where Uber is not currently legal. “We support the criminal investigation by the United States Department of Justice into Uber’s use of the Greyball tool to evade regulators, and will continue to move forward with our own efforts to subpoena the requested records from Uber,” Portland Commissioner Dan Saltzman said in a statement.

Uber is also currently in the courtroom for charges that they stole trade secrets and intellectual property for its self-driving car business from Google’s (GOOGL, Tech30) Waymo. The case may prove Uber officials wrong with what they call “potentially … the most lucrative business in history.” There are many things currently putting Uber at risk of losing customers and potentially even their legal standing.

Uber CEO Travis Kalanick recently bailed on appearing at a big tech conference amid an ongoing internal investigation into sexual harassment allegations made by a former employee. This may be one of the worst suits currently facing Uber, not from a legal standpoint, but from the bad publicity that could cause them to lose many of their clients.

Once a booming startup, Uber is now losing consumers support because of multiple law suits and bad headlines. Not to mention the fact that there are now competitors that cost less and have fewer dirty secrets. “Public perception is shaken,” Mike Walsh, an early Uber investor told CNNTech, “But I’m hopeful and confident that’ll come back.” The damage has been months in the making. Uber was hit by a viral boycott in late January after it was perceived as breaking up a strike of taxi drivers who were protesting President Trump’s travel ban. The next month it launched an “urgent” investigation in response to sexual harassment allegations. Weeks later, Kalanick was caught on camera arguing with an Uber driver.

Along the way, there have been a series of executive departures, including president Jeff Jones, who quit because of concerns over the firm’s management culture, and Rachel Whetstone, head of policy and communications. It “sends a bad signal to other employees and potential hires,” Walsh said. “A company can’t grow and excel without top talent, so this is concerning to me.” Meanwhile, some of Uber’s competitors are benefiting from its stumbles. Lyft, Uber’s top rival in the U.S., recently raised $600 million in funding and said it experienced a 60% increase in new passenger signups the week after the Uber boycott. “Lyft was doing well before Uber shot itself in the foot,” Michael Moe, a Lyft investor, told CNNTech in an interview last month. “But certainly those issues at Uber… have created an acceleration to Lyft’s business.”

That doesn’t mean Uber’s drivers are suddenly fleeing the service. Harry Campbell, a driver for Uber and Lyft who runs a popular blog for drivers in the industry, said “Uber is just as busy as ever for drivers.”

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