U.S. markets open in 1 hour 24 minutes
  • S&P Futures

    +7.75 (+0.20%)
  • Dow Futures

    +56.00 (+0.18%)
  • Nasdaq Futures

    +53.25 (+0.40%)
  • Russell 2000 Futures

    +5.60 (+0.26%)
  • Crude Oil

    -0.29 (-0.54%)
  • Gold

    +0.90 (+0.05%)
  • Silver

    +0.15 (+0.58%)

    +0.0040 (+0.33%)
  • 10-Yr Bond

    0.0000 (0.00%)
  • Vix

    -1.93 (-8.30%)

    +0.0062 (+0.45%)

    -0.1500 (-0.14%)

    -1,120.62 (-3.34%)
  • CMC Crypto 200

    -57.63 (-8.23%)
  • FTSE 100

    +7.09 (+0.11%)
  • Nikkei 225

    +233.60 (+0.82%)

Uber’s Very Bad Week

Daniel Howley
·Technology Editor

Uber, the app-based car-hiring service, has been in the news a lot this week, and for all the wrong reasons. The company has seen its executives accused of offenses such as tracking reporters without their consent and of plotting a smear campaign against critics.

Most recently, Ashton Kutcher — yes, that Ashton Kutcher — joined the conversation, and didn’t really help much. Uber’s bad week shows no sign of ending.

Here’s a quick explainer on what’s going on with Uber, what led to the current fracas, and what it means for you.

Car on fire
Car on fire


When did Uber first get into trouble?
Uber’s model is based on disrupting entrenched transportation industries (taxis and limos), and the company’s service was seen as questionably legal from the start. 

Uber has been battling with taxi drivers, companies, and commissions in its mission to become a viable alternative to existing taxi services. For example, the company is currently being sued in Atlanta, according to The Atlanta Journal-Constitution, by cab drivers who claim that Uber is operating a taxi service without a permit.

In California, taxi drivers have taken to the streets to protest Uber, as well as its rideshare competitors (Lyft and Sidecar), saying that it is unfair that its drivers don’t have to abide by the same regulations as established taxi companies.

What’s the latest issue?
Early this week, BuzzFeed Editor-in-Chief Ben Smith published a piece in which he described attending an Uber-hosted dinner with media bigwigs. Uber founder and CEO Travis Kalanick was on hand for the evening, as well as Uber SVP of Business Emil Michael.

USA Today columnist Michael Wolff, who invited Smith to the event, said he knew journalists weren’t supposed to report on the evening, but he failed to mention that to Smith.

During the dinner, Smith reported, Michael made comments regarding Sarah Lacy, the editor-in-chief of tech site PandoDaily. Lacy had previously written a column in which she spoke out against a campaign by one of Uber’s French offices that offered passengers the opportunity to call cars driven by “hot chicks” to drive them to their destinations.

Lacy suggested in her column that Uber’s corporate culture was one of sexism and that the company didn’t care about the safety of its female drivers and riders.

Uber’s Michael, upset with Lacy’s piece, reportedly stated that Uber could hire dedicated muckrakers to dig up dirt on Lacy. Since Smith published that initial article, Michael has apologized for his statements via Twitter, and Kalanick has called them “terrible.” At the same time, Kalanick basically said the whole mess was essentially a learning experience.

Tweets from Travis Kalanick
Tweets from Travis Kalanick

So what’s this whole tracking riders thing?
In September, venture capitalist and author Peter Sims wrote a blog post explaining that several years ago he received a disturbing text message while riding in an Uber cab in New York City.

According to Forbes, the message was from journalist Julia Allison. She asked Sims if he was in an Uber cab at a specific location. 

Allison explained that she was at a launch party for Uber’s Chicago operation, where company representatives were showing off a live map of specific Uber riders in New York City — complete with their names and locations.

Fast-forward to early this week when BuzzFeed published its initial piece. At the end of the article, Smith said he spoke to Uber spokesperson Nairi Hourdajian, who explained that Uber has a privacy policy in place that prohibits company executives from accessing riders’ data. 

But according to Smith, BuzzFeed reporter Johana Bhuiyan had her travel data accessed by Uber New York General Manager Josh Mohrer.

That incident, which, according to BuzzFeed, occurred in November, took place when Bhuiyan was visiting Uber’s New York office to interview Mohrer. When she pulled up to the office, Bhuiyan said, Mohrer met her outside, and explained that he knew when she would arrive because he was tracking her cab. Bhuiyan, however, never gave consent for him to track her whereabouts.

Uber, according to BuzzFeed, is now investigating Mohrer’s use of Bhuiyan’s data.

Since then, Uber has written a blog post regarding its privacy policy, explaining that accessing user data is prohibited by anyone in the company. Exceptions are made for select employees during certain situations such as assisting drivers or riders “in order to solve problems brought to their attention by the Uber community.”

The company further states that “access to rider and driver accounts is being closely monitored and audited by data security specialists on an ongoing basis, and any violations of the policy will result in disciplinary action, including the possibility of termination and legal action.”

So what does Ashton Kutcher have to do with all of this?
People outside of tech circles might not know this, but Kutcher is an investor in several technology companies. One of them is Uber.

Following the news about Michael’s comments regarding Lacy, Kutcher took to Twitter asking, “What is so wrong about digging up dirt on [a] shady journalist?”

Tweet from Ashton Kutcher
Tweet from Ashton Kutcher

Kutcher then went on to say, “We are all public figures now!” and later added, “So long as journalist [sic] are interested and willing to print half truths as facts… Yes we should question the source.”

At no point did Kutcher mention why Lacy is a “shady journalist,” nor did he state what “half-truths” had been reported.

What a mess. Anything else I should know about Uber?
Uber has previously been accused of having insufficient regard for its customers’ safety. In one instance, a customer complained to the company that a driver had driven her around for more than two hours against her will, taking her 20 miles out of her way.

When she filed a complaint with Uber, the woman received an automated reply, according to Valleywag, apologizing for the “inefficient route.”

Uber, however, refuted the woman’s claims, saying that she was intoxicated and insisted on taking an extended trip. 

For its part, an Uber company post in October said that Uber was “on track to complete more than 2 million background checks for potential drivers in 2014.” 

Before that incident, Uber was accused of calling for and canceling rides for rival ride-sharing services Lyft and Gett, thus disrupting the operations of those competitors. According to The Verge, Uber also developed an aggressive recruiting tactic to pull drivers from Lyft in New York City over to Uber. The scheme involved canceling Lyft rides in the process.

Similarly, CNN previously reported that Uber made and canceled more than 5,000 calls for rides.

Should I still use Uber?
Based on what’s been reported, Uber’s corporate culture appears to be uncommonly aggressive. And while that may have been an important survival trait when the company first launched, as Reuters columnist Robert Cyran points out, it’s completely inappropriate today, especially for a company valued at $30 billion.

Uber’s corporate practices aren’t necessarily representative of its drivers, none of whom are employees. But you might rightfully wonder how much of the company’s culture extends to its service providers.

What’s next for Uber?
Although Uber’s recent problems may simply disappear with time, it’s looking more and more likely that the company will have to answer for them in some way. 

On Wednesday, Sen. Al Franken, who is the chairman of the Senate Subcommittee on Privacy, Technology, and the Law, sent a letter to Uber CEO Kalanick asking him to address a multitude of questions regarding the controversy, including what disciplinary action Kalanick has taken in response to Michael’s statements.

Franken also questioned who has access to Uber’s “God View” tool, as well as what disciplinary actions the company has taken against employees who have accessed the tool.

Influential tech writer and former technology evangelist at Microsoft Robert Scoble has flat-out called for Kalanick’s ouster as CEO of Uber via a Facebook post. “It is the only way to reboot the culture there and have Uber regain its loved status,” Scoble wrote.

Read more: Uber Secrets: 18 Things You Didn’t Know About Uber or Lyft — and Some You Wish You Still Didn’t

Email Daniel at dhowley@yahoo-inc.com; follow him on Twitter at @DanielHowley or on Google+ here.