Uber is estimated to have over 93 million monthly active users worldwide. In the United States, Uber has a 71% market share for ride-sharing and a 22% market share for food delivery. Uber has been so prominent in the sharing economy that changes in various industries as a result of Uber have been referred to as uberisation, and many startups have described their offerings as "Uber for X".
Like similar companies, Uber has been criticized for the treatment of drivers as independent contractors, disruption of taxicab businesses, and an increase in traffic congestion. The company has been criticized for various unethical practices and for ignoring local regulations, particularly under the leadership of former CEO Travis Kalanick.
Uber determines the fees and terms on which drivers transport riders. The company takes a 25% share of each fare provided by Uber's "partners". Uber uses a dynamic pricing model. Fares fluctuate depending on the local supply and demand at time of service. Customers are quoted the fare in advance.
Service is generally accessed via mobile app. Users set up a personal profile with a name, phone number, other information, and payment preference, which could be a credit card, e-commerce payment system or, in some cases, cash. After the service is complete, the customer may be given the option to provide a gratuity to the driver, which is also billed to the customer's payment method.
The status of drivers as independent contractors is an unresolved issue. Drivers provide a vehicle, which could be owned, rented, or leased. Drivers must meet requirements for age, health, car age and type, have a driver's license and a smartphone or tablet, and may be required to pass a background check. In many cities, vehicles must pass annual safety inspections and/or must have an emblem posted in the passenger window. Some cities also require drivers to have a business license. There may be accommodations for hearing-impaired drivers. Drivers may be notified before accepting a trip if it will be longer than 45 minutes. After each transaction, drivers and customers may rate each other and users with low ratings may be deactivated.
After Camp and his friends spent $800 hiring a private driver, he wanted to find a way to reduce the cost of direct transportation. He realized that sharing the cost with people could make it affordable, and his idea morphed into Uber. Kalanick joined Camp and gives him "full credit for the idea" of Uber. The prototype was built by Camp and his friends, Oscar Salazar and Conrad Whelan, with Kalanick as the "mega advisor" to the company.
Following a beta launch in May 2010, Uber's services and mobile app officially launched in San Francisco in 2011. Originally, the application only allowed users to hail a black luxury car and the price was 1.5 times that of a taxi. In 2011, the company changed its name from UberCab to Uber after complaints from San Francisco taxicab operators.
The company's early hires included a nuclear physicist, a computational neuroscientist, and a machinery expert who worked on predicting demand for private hire car drivers. In April 2012, Uber launched a service in Chicago where users were able to request a regular taxi or an Uber driver via its mobile app.
In July 2012, the company introduced UberX, a cheaper option that allowed people to use non-luxury vehicles, including their personal vehicles, subject to a background check, insurance, registration, and vehicle standards. By early 2013, the service was operating in 35 cities.
In December 2013, USA Today named Uber its tech company of the year.
Uber logo used from February 2016 until September 2018
In August 2016, facing tough competition, Uber sold its operations in China to DiDi in exchange for an 18% stake in DiDi. DiDi agreed to invest $1 billion in Uber. Uber had started operations in China in 2014, under the name (Y?ubù).
In August 2017, Dara Khosrowshahi, the former CEO of Expedia Group, replaced Kalanick as CEO. In July 2017, Uber received a five-star privacy rating from the Electronic Frontier Foundation, but was harshly criticised by the group in September 2017 for a controversial policy of tracking customers' locations even after a ride ended, forcing the company to reverse its policy.
In July 2019, the marketing department was reduced by a third, with the layoff of 400 people amidst continued losses. Engineer hires were frozen. In early September 2019, Uber laid off an additional 435 employees with 265 coming from the engineering team and another 170 from the product team.
In the same month, Uber sold its Indian Uber Eats operations to Zomato, in exchange for 9.99% of Zomato.
Also in January 2020, Uber tested a feature that enabled drivers at the Santa Barbara, Sacramento, and Palm Springs airports to set fares based on a multiple of Uber's rates for UberX and UberXL trips.
In early February 2021, Uber announced the purchase of Boston-based alcohol delivery service Drizly for $1.1 billion in cash and stock.
Also in February 2021, Uber announced it would team up with Walgreens pharmacies to offer free rides to stores and clinics offering COVID-19 vaccines for those who live in underserved communities.
In April 2021, Uber said that its employees are expected to return to office by September 13 and to work at least three days per week from office. Later in the month, Uber announced it would be expanding upon its food-delivery features to further integrate them with its ride service to accommodate a vaccinated public. Vaccination appointments will be facilitated through the app as well.
On December 14, 2016, Uber began operating self-driving Volvo XC90 SUVs in its hometown of San Francisco. On December 21, 2016, the California Department of Motor Vehicles revoked the registration of the vehicles Uber was using for the test and forced the program to cease operations in California. Two months later, Uber moved the program to Arizona, where the cars were able to pick up passengers, although, as a safety precaution, two Uber engineers were always in the front seats of each vehicle. In March 2017, an Uber self-driving car was hit and flipped on its side by another vehicle that failed to yield. In October 2017, Uber started using only one test driver.
In November 2017, Uber announced a non-binding plan to buy up to 24,000 Volvo XC90 SUV vehicles designed to accept autonomous technology, including a different type of steering and braking mechanism and sensors.
In March 2018, Uber paused self-driving vehicle testing after the death of Elaine Herzberg in Tempe, Arizona. According to police, the woman was struck by an Uber vehicle while attempting to cross the street, while the onboard engineer was watching videos. Uber settled with the victim's family. Local authorities disagreed as to whether or not the car or Herzberg was at fault. In December 2018, after receiving local approval in Pittsburgh and Toronto, Uber restarted testing, but only during daylight hours and at slower speeds. In March 2019, Uber was found not criminally liable by Yavapai County Attorney's Office for Herzberg's death. The company changed its approach, inviting both Waymo and General Motors" Cruise self-driving vehicle unit to operate vehicles on Uber's ride-hailing network. In February 2020, Uber regained its self-driving vehicle permit and announced plans to resume testing in San Francisco.
In early 2019, Uber spent $20 million per month on research and development for autonomous vehicles; however, a source said that expenses on the autonomous vehicle program have been as high as $200 million per quarter.
In January 2021, Uber ATG was acquired by the self-driving startup Aurora Innovation for $4 billion and Uber invested $400 million into Aurora, taking a 26% ownership stake.
After spending over $925 million to develop autonomous trucks, Uber cancelled its self-driving truck program in July 2018. Uber acquired Otto for $625 million in 2016. According to a February 2017 Waymo lawsuit, ex-Google employee Anthony Levandowski allegedly "downloaded 9.7 GB of Waymo's highly confidential files and trade secrets, including blueprints, design files and testing documentation" before resigning to found Otto, which was purchased by Uber. A ruling in May 2017 required Uber to return documents to Waymo. The trial began February 5, 2018. A settlement was announced on February 8, 2018 in which Uber gave Waymo $244 million in Uber equity and agreed not to infringe on Waymo's intellectual property.
Uber's Elevate division was developing UberAir, which would have provided short flights using VTOL aircraft. In December 2020, Joby Aviation acquired Uber Elevate.
In October 2019, Uber launched Uber Works to connect workers who wanted temporary jobs with businesses. The app was initially available only in Chicago and expanded to Miami in December 2019. The service was shut down in May 2020.
On October 28, 2016, in the case of Aslam v Uber BV, the Central London Employment tribunal ruled that Uber drivers are "workers", not self-employed, and are entitled to the minimum wage under the National Minimum Wage Act 1998, paid holiday, and other entitlements. Two Uber drivers had brought the test case to the employment tribunal with the assistance of the GMB Union, on behalf of a group of drivers in London. Uber appealed to the Supreme Court of the United Kingdom; in February 2021, the court ruled that drivers should be classified as workers and not self-employed. Uber drivers won the right to minimum wage, holiday pay, and protection from discrimination in the ruling. After losing three previous court cases, the company had appealed to the Supreme Court, arguing that its drivers were independent contractors.
In April 2018, the Supreme Court of California ruled in Dynamex Operations West, Inc. v. Superior Court that Dynamex, a delivery company, misclassified its delivery drivers as independent contractors rather than employees. This ultimately led to California passing Assembly Bill 5 (AB5) on September 11, 2019, with a test to determine if a tasker must be classified as an employee and receive minimum wage protections and unemployment benefits. In December 2019, Uber and Postmates sued California, claiming AB5 is unconstitutional. In 2020, they spent tens of millions of dollars campaigning in support of California's Proposition 22, which passed, granting them a special exception to Assembly Bill 5 by classifying their drivers as "independent contractors", exempting employers from providing benefits to certain drivers.
In March 2021, the UK Supreme Court ruled that Uber has to classify all of its drivers not as independent contractors but as workers, complete with the standard benefits. This includes minimum wage and holiday pay with other potential benefits depending on the contracts.
Compliance with minimum wage laws
In some jurisdictions, drivers are guaranteed a minimum wage, such as in New York City, where drivers must earn $26.51/hour before expenses or $17.22/hour after expenses. Analyses have shown that absent such laws, many drivers earn less than the stated minimum wage. A May 2018 report by the Economic Policy Institute found the average hourly wage for drivers to be $9.21. Reports of poor wages have been published in Profil,Trend, and The Guardian. A 2017 report claimed that only 4% of all Uber drivers were still working as such one year after starting, primarily due to low pay.
However, a 2019 study found that "drivers earn more than twice the surplus they would in less-flexible arrangements."
Crimes have been committed by rideshare drivers as well as by individuals posing as rideshare drivers who lure unsuspecting passengers to their vehicles by placing an emblem on their car or by claiming to be a passenger's expected driver. The latter led to the murder of Samantha Josephson and the introduction of Sami's Law. Lawsuits claim that rideshare companies did not take necessary measures to prevent sexual assault. Rideshare companies have been fined by government agencies for violations in their background check processes. The 2016 Kalamazoo shootings in February 2016, which left six people dead in Kalamazoo, Michigan, were committed by an Uber driver. Although Uber was criticized for its background check process, the driver did not have a criminal record, and the background check did not cause alarm.
In November 2017, The Colorado Public Utilities Commission fined Uber $8.9 million after discovering that 57 drivers in the state had violations in their background checks, including a conviction felon that received permission to drive for Uber by using an alias. The fine amount equaled $2,500 per day that an unqualified driver worked.
In September 2017, Uber's application for a new license in London was rejected by Transport for London (TfL) because of the company's approach and past conduct showed a lack of corporate responsibility related to driver background checks, obtaining medical certificates and reporting serious criminal offences. In November 2019, Transport for London announced it would not renew Uber's license to operate in London on the grounds that Uber had failed to adequately address issues with checks on drivers, insurance, and safety. Part of TfL's rationale for removing Uber's licence was evidence that Uber driver accounts had been used by unauthorized drivers. In November 2019, Transport for London did not renew Uber's license to operate due in part to the ability of people to fake identities and use other drivers' accounts, circumventing the background check process.
Ridesharing has also been criticized for encouraging or requiring phone use while driving. To accept a fare, drivers must tap their phone screen, usually within 15 seconds after receiving a notification, which is illegal in some jurisdictions since it could result in distracted driving.
Ridesharing vehicles in many cities routinely obstruct bicycle lanes while picking up or dropping off passengers, a practice that endangers cyclists.
It is unclear if rideshare vehicles are less or more safe than taxicabs. Major cities in the United States don't have much data on taxi-related incidents. However, in London, data from Transport for London shows that in 2018, there were 21 Taxi and Private Hire journey-related sexual offences where a driver was charged, involving 17 individual drivers. More than half of the drivers involved, 11, were Uber drivers, one was a licensed taxi driver, one an unlicensed driver and the rest related to drivers affiliated with other private hire vehicle operators.
In the United States, drivers do not have any control over the fares they charge; lawsuits allege that this is an illegal restraint on trade in violation of the Sherman Antitrust Act of 1890.
Ridesharing has been criticized for providing inadequate accessibility measures for disabled people compared to the public transit it displaces.
While companies have strict requirements to transport service animals, drivers have been criticized for refusal to transport service animals, which, in the United States, is in violation of the Americans with Disabilities Act. In one case, this resulted in a lawsuit, which was referred to arbitration. The case was eventually ruled in favor of the visually impaired passenger, Lisa Irving, with Uber ordered to pay her out $1.1 million.
Antitrust and unfair competition allegations
Uber has been the subject of several antitrust investigations and lawsuits.
Uber faced significant antitrust and unfair competition lawsuits from taxi companies across the United States, with federal courts hearing cases in cities such as Boston,Houston, and Philadelphia. Taxi companies also sued cities for allowing Uber to operate a taxicab business without complying with the local taxi regulations. Courts sided with Uber in almost every case: "The only case to proceed to trial resulted in a verdict for Uber on plaintiffs' unfair competition claims and claims under the state consumer protection statute." That case did find, however, that Uber violated applicable local taxi regulations, although "Out of some 29 million Uber trips taken during the conduct period, 497 citations issued to Uber drivers represented a relatively insignificant violation of the Taxi Rules." One legal scholar summarized this taxi litigation as, that "In almost every case, on almost every claim, courts found that there is no legal claim for relief that medallion holders could have brought to vindicate the
injury to their medallions."
Uber has also faced allegations that it facilitates an illegal price-fixing scheme. Antitrust law generally holds that price-setting activities are permissible within business firms, but bars them beyond firm boundaries. Uber has argued that it does not provide services to consumers directly. Instead, the company argued that it only connects riders and drivers, sets service terms, and collects fares. When a consumer brought a class action alleging that "the Uber application allows third-party drivers to illegally fix prices,", Uber was able to force that lawsuit into arbitration.
While Uber was led by Travis Kalanick, the company had an aggressive strategy for dealing with obstacles, including regulators. In 2014, Kalanick said "You have to have what I call principled confrontation." Uber's strategy was generally to commence operations in a city without regard for local regulations. If faced with regulatory opposition, Uber called for public support for its service and mounted a political campaign, supported by lobbyists, to change regulations. For example, in June 2014, Uber sent a notice to riders with the email address and phone number of a commissioner in Virginia who opposed the company and told riders to lobby the official, who received hundreds of complaints. In November 2017, CEO Dara Khosrowshahi proclaimed an end to the "win at all costs" strategy and implemented new values for the company, including "we do the right thing".Vice argued that Uber's response to California bill AB 5 in 2019 showed that "Uber's strategy to ignore or fight regulations remains the same as it's always been."
Attacks on competitors
Uber issued an apology on January 24, 2014 after documents were leaked claiming that Uber employees in New York City deliberately ordered rides from Gett, a competitor, only to cancel them later. The purpose of the fake orders was to waste drivers' time and delay service to legitimate customers.
Following Lyft's expansion into New York City in July 2014, Uber, with the assistance of TargetCW, sent emails offering a "huge commission opportunity" to several contractors based on the "personal hustle" of the participants. Those who responded to the solicitation were offered a meeting with Uber marketing managers who attempted to create a "street team" to gather intelligence about Lyft's launch plans and recruit their drivers. Recruits were given two Uber-branded iPhones (one a backup in case the person was identified by Lyft) and a series of valid credit card numbers to create dummy Lyft accounts. Participants were required to sign non-disclosure agreements.
In August 2014, Lyft reported that 177 Uber employees had ordered and canceled approximately 5,560 Lyft rides since October 2013, and that it had found links to Uber recruiters by cross-referencing the phone numbers involved. The report identified one Lyft passenger who canceled 300 rides from May 26 to June 10, 2014, and who was identified as an Uber recruiter by seven different Lyft drivers. Uber did not apologize, but suggested that the recruitment attempts were independent parties trying to make money.
In 2017, a class action lawsuit was filed on behalf of thousands of Uber drivers, alleging that Uber's "upfront prices" policy did not provide drivers with the 80% of fares they were entitled to.
In May 2017, after the New York Taxi Workers Alliance (NYTWA) filed a class-action lawsuit in federal court in New York, Uber admitted to underpaying New York City drivers tens of millions of dollars over 2.5 years by calculating driver commissions on a net amount. Uber agreed to pay the amounts owed plus interest.
Operating during a taxi strike
In late January 2017, Uber was targeted by GrabYourWallet for collecting fares during a New York City taxi strike in protest of Executive Order 13769. Uber removed surge pricing from JFK airport, where refugees had been detained upon entry. Uber was targeted because Kalanick had joined the administration's Economic Advisory Council. A social media campaign known as #DeleteUber formed in protest, leading approximately 200,000 users to delete the app. Statements were later e-mailed to former users who had deleted their accounts, asserting that the company would assist refugees, and that Kalanick's membership was not an endorsement of the administration. On February 2, 2017, Kalanick resigned from the council.
Evasion of law enforcement operations
Starting in 2014, Uber used its Greyball software to avoid giving rides to certain individuals. By showing "ghost cars" driven by fake drivers to the targeted individuals in the Uber mobile app, and by giving real drivers a means to cancel rides requested by those individuals, Uber was able to avoid giving rides to known law enforcement officers in areas where its service was illegal. A New York Times report on March 3, 2017, made public Uber's use of Greyball, describing it as a way to evade city code enforcement officials in Portland, Oregon, Australia, South Korea, and China. At first, in response to the report, Uber stated that Greyball was designed to deny rides to users who violate Uber's terms of service, including those involved in sting operations. According to Uber, Greyball can "hide the standard city app view for individual riders, enabling Uber to show that same rider a different version". Uber reportedly used Greyball to identify government officials by noting whether a user frequently opens the app near government offices, using users' social media profiles to identify law enforcement personnel, and noticing credit cards associated with the Uber account.
On March 6, 2017, the City of Portland, Oregon announced an investigation into whether Uber had obstructed the enforcement of city regulations. The investigation by the Portland Bureau of Transportation (PBOT) found that: "Uber used Greyball software to intentionally evade PBOT's officers from December 5 to December 19, 2014 and deny 29 separate ride requests by PBOT enforcement officers." Following the release of the audit, Portland's commissioner of police suggested that the city subpoena Uber to force the company to turn over information on how Uber used software to evade regulatory officials. On March 8, 2017, Uber admitted that it had used Greyball to thwart government regulators and pledged to stop using the service for that purpose. In May 2017, the United States Department of Justice opened a criminal investigation into Uber's use of Greyball to avoid local law enforcement operations.
After a police raid on Uber's Brussels office, a January 2018 report by Bloomberg News stated that "Uber routinely used Ripley to thwart police raids in foreign countries." It offered a "panic button" system, initially called "unexpected visitor protocol", then "Ripley". It locked, powered off and changed passwords on staff computers when raided. Uber allegedly used this button at least 24 times, from spring 2015 until late 2016.
Sexual harassment allegations and management shakeup (2017)
On February 20, 2017, former Uber engineer Susan Fowler stated that she was subjected to sexual harassment by a manager and subsequently threatened with termination by another manager if she continued to report the incident. Kalanick was alleged to have been aware of the complaint.
On February 27, 2017, Amit Singhal, Uber's Senior Vice President of Engineering, was forced to resign after he failed to disclose a sexual harassment claim against him that occurred while he served as Vice President of Google Search.
In June 2017, Uber fired over 20 employees as a result of the investigation. Kalanick took an indefinite leave of absence. Under pressure from investors, he resigned as CEO a week later.
At a private dinner in November 2014, senior vice president Emil Michael suggested that Uber hire a team of opposition researchers and journalists, with a million-dollar budget, to "dig up dirt" on the personal lives and backgrounds of media figures who reported negatively about Uber. Specifically, he targeted Sarah Lacy, editor of PandoDaily, who, in an article published in October 2014, accused Uber of sexism and misogyny in its advertising. Michael issued a public apology and apologized to Lacy in a personal email, claiming that Uber would never actually undertake the plan. After additional scandals involving Michael, including an escort-karaoke bar scandal in Seoul and the questioning of the medical records of a rape victim in India, he left the company in June 2017 when Kalanick, who reportedly was protecting Michael, resigned.
Settlement with victims
In August 2018, Uber agreed to pay a total of $7 million to 480 workers to settle claims of gender discrimination, harassment, and hostile work environment.
God view and privacy concerns
On November 19, 2014, then U.S. SenatorAl Franken, Chairman of the United States Senate Judiciary Subcommittee on Privacy, Technology and the Law, sent a letter to Kalanick regarding privacy. Concerns were raised about internal misuse of the company's data, in particular, the ability of Uber staff to track the movements of its customers, known as "God View". In 2011, a venture capitalist disclosed that Uber staff members were using the function to track journalists and politicians as well as using the feature recreationally. Staff members viewed being tracked by Uber as a positive reflection on the subject's character. An Uber job interviewee said that he was given unrestricted access to Uber's customer tracking function as part of the interview process.
Delayed disclosure of data breaches
On February 27, 2015, Uber admitted that it had suffered a data breach more than nine months prior. Names and license plate information from approximately 50,000 drivers were inadvertently disclosed. Uber discovered this leak in September 2014, but waited more than five months to notify the affected individuals.
An announcement in November 2017 revealed that in 2016, a separate data breach had disclosed the personal information of 600,000 drivers and 57 million customers. This data included names, email addresses, phone numbers, and drivers' license information. Hackers used employees' usernames and passwords that had been compromised in previous breaches (a "credential stuffing" method) to gain access to a private GitHub repository used by Uber's developers. The hackers located credentials for the company's Amazon Web Services datastore in the repository files, and were able to obtain access to the account records of users and drivers, as well as other data contained in over 100 Amazon S3 buckets. Uber paid a $100,000 ransom to the hackers on the promise they would delete the stolen data. Uber was subsequently criticized for concealing this data breach. Khosrowshahi publicly apologized. In September 2018, in the largest multi-state settlement of a data breach, Uber paid $148 million to the Federal Trade Commission, admitted that its claim that internal access to consumers' personal information was closely monitored on an ongoing basis was false, and stated that it had failed to live up to its promise to provide reasonable security for consumer data. Also in November 2018, Uber's British divisions were fined £385,000 (reduced to £308,000) by the Information Commissioner's Office.
In 2020, the US Department of Justice announced criminal charges against former Chief Security Officer Joe Sullivan for obstruction of justice. The criminal complaint said Sullivan arranged, with Kalanick's knowledge, to pay a ransom for the 2016 breach as a "bug bounty" to conceal its true nature, and for the hackers to falsify non-disclosure agreements to say they had not obtained any data.
Use of offshore companies to minimize tax liability
In April 2021, an arbitrator ruled against Uber in a case involving Lisa Irving, a blind American customer with a guide dog who was denied rides on 14 separate occasions. Uber was ordered to pay US$1.1 million, reflecting $324,000 in damages and more than $800,000 in attorney fees and court costs.
Court of Amsterdam case on 'robo-firings'
In April 2021, the court of Amsterdam ruled that Uber has to reinstate six drivers that were allegedly terminated based solely on algorithms and pay them a compensation fee. The practice of firing employees via automated means is against Article 22 of GDPR, which relates to automated decisions causing "legal or significant impact". Uber challenged the ruling, claiming it was not aware of the case and that the judgement was brought by default without the company ever being notified. A court representative said the decision would be upheld and the case is now closed.
Economist John A. List analyzed company data to explore the effect of customer problems and company response on future customer orders. For example, Uber's algorithms might inform the rider that a trip will take 9 minutes, while it actually takes 23 minutes. The analysis found that people with a bad experience later spent up to 10% less with Uber. List then observed how different company responses to the experience affected future use. Options include a "sincere apology", an admission that the company had failed, a commitment to "ensure that this will not happen again" and a discount on their next ride. Apology was ineffective in retaining customers. A US$5 discount voucher did reduce losses. Repeated bad experiences followed by apologies further alienated customers.
Male vs. female driver earnings
Data analysis found that male drivers earn about 7% more than women; men were found to drive on average 2.5% faster, enabling them to serve more customers. Women passengers gave tips averaging 4%, while men gave 5%; but women drivers received more tips--so long as they were below 65 years of age.