What Uber Did

Do you remember your first Uber ride? Mine was New Year’s Eve 2012; one of my best friends booked an Escalade for 10 people. At that time, the two-year-old company was mostly just a fancy online way to rent a limo. When we all jumped out of the massive luxury SUV in downtown Philadelphia, it felt like an incredibly ostentatious performance, one that I remember thinking that I would only use for special occasions. There was no way this would become a normal way of getting around a city.

Just about two years later, in late 2014, Uber’s cheaper UberX program came to the Philly region. This service looked like the smartphone-hailed rides in everyday cars we know today. Sensing a threat to taxis, the Philadelphia Parking Authority tried to crack down, banning Uber from the city and threatening to impound vehicles. But Uber had a trick up its sleeve: a program called Greyball, which used all kinds of data to identify police and city officials trying to catch drivers operating illegally and show them a different version of the app, which populated maps with fake cars that never came. They did the same thing in Portland, Oregon, that year.

But the existence of that secret program was not revealed until 2017, when an anonymous source shared its details with New York Times reporter Mike Isaac. In a dingy Palo Alto pizza joint, they went over documents showing how the company coached drivers to evade police detection. The resulting scandal added to the whirlwind of reputational problems that buffeted the company and its founder, Travis Kalanick, in 2017, from the #deleteUber boycott movement to a blog post from a former employee exposing the company’s failure to address sexual harassment in its ranks. Under pressure from investors, Kalanick resigned in June 2017.

But the seeds of his undoing were planted before that tumultuous year. Isaac’s new book, Super Pumped: The Battle for Uber, traces the company’s history up to the ouster of the CEO who embodied Uber’s techbro id. Taking its title from one of the founder’s testosterone-y management maxims, the book doubles as a biography of Kalanick, who spent wildly, partied hard, and broke rules to attract investors, impress journalists, recruit drivers, dominate competitors, and push his employees to the grindstone.

(W. W. Norton Co.)

Super Pumped is as much about the limits of economic growth as it is about Kalanick’s stubborn will as the company scaled up in cities around the world and became the poster child of Silicon Valley overreach. “The saga of Uber—which is, essentially, the story of Travis Kalanick—is a tale of hubris and excess set against a technological revolution, with billions of dollars and the future of transportation at stake,” Isaac writes.

CityLab caught up with Isaac to discuss what Uber’s unruly past can tell us about how it changed transportation, the tech industry, and the culture at large—and what cities have learned since. Our conversation has been edited for length and clarity.

The techniques that Uber used to enter markets in cities, like Greyball, caught city officials and transportation departments so flat-footed. What can that incident tell us Uber’s relationship with cities?

I tend to look at the 2014 to 2015 era of Uber as when they weaponized and systematized deceit in software. A lot of cities have learned a lesson about how much to trust a startup that’s just deciding to barge in. When companies tried to roll out scooters really rapidly in San Francisco, the transportation department immediately slapped them down and threatened to fine companies that pushed through. There are a lot of sore spots from how Uber flooded the zone. City transportation officials don’t want to go through that again. They just got completely railroaded.

Their technology really enabled them to pull one over on much slower institutions.

It’s like a form of guerrilla warfare. Cities only have so much in their budgets to employ people to enforce existing rules or laws. The way Uber saw it, the law was not what was written, it was what was enforced. You can only do so much, and Uber was really creative, if you want to call it that, in the ways that it figured out how to circumvent the way things work.

You mention how Uber changed its name from UberCab, in its earliest iteration. Does the fact that it was essentially a less-regulated taxi company explain Uber’s approach now?

They like to say they’re a logistics company, they’re a transportation network, they are just a software layer. That’s partly strategic and legal. They are now in an ongoing fight with various state attorneys general around the country around their classification of their workers. Are they workers? Are they contractors? It’s core to Uber’s business model that they define themselves as not a transportation company, as not a car service.

I don’t think they would ever even pretend to agree with that. From the beginning, when they called themselves UberCab, they were essentially dressed-up as a transportation company or cab service. When San Francisco came to shut them down in 2010, they said, “We’ll change our name since we’re not a taxi service but we’re just going to keep barreling ahead.” They have basically done that ever since.

It’s interesting that originally, they kind of found slack in the luxury driving market—picking up extra hours for luxury car drivers to drive during their downtime, which is totally different than what driving for Uber is like now.

That’s where they found their first entry. The ironic thing is that they weren’t the first ones to break the law or push into the peer-to-peer stuff. They thought it would have been too much heat to break the rules and go peer-to-peer, but they saw Sidecar and Lyft really moving people and decided to chase it. That opened up a whole new battleground with cities and regulators across the country and around the world.

One of the things I didn’t know about Travis Kalanick was that his previous companies, Scour and Red Swoosh, were built around the online peer-to-peer network parts of the internet. It’s weird to think of ride-hailing having its roots in the Napster-era of file-sharing and music piracy.

I think a lot of it is about efficiency, like different ways to figure out a seamless efficient way to network people. It’s trite because everyone recognizes it, but I do think the iPhone was the key to unlocking in the physical world what had only existed in networked computers in the digital world. We all have our iPhones with us at every moment of the day and that just changes so much about how you can incorporate computing into daily life. That thread is a through-line to every company.

As Uber rushed into cities to build market share as fast as it could, it really gave an enormous amount of freedom to the managers setting up those operations. What worked and what backfired?

It’s a double-edged sword. On the one hand, Travis’s idea of empowering city managers on the ground rather than having them report back to headquarters for permission for everything was helpful in the sense that operating conditions are different in Paris than they are in Indonesia or New York. Each general manager was given autonomy. That probably helped them move just a lot more quickly. You can argue that was the smart way of expansion.

But the flip side of that is when you’re empowering 20-somethings that never managed something bigger than a Starbucks, people go off and do things that end up not being that smart in retrospect. One of the prime examples of that was giving managers the ability to spend millions of dollars on incentives in their city without necessarily proving it was worth it.

What does Uber’s story tell us about how Silicon Valley has influenced the world? And what norms did it disrupt there?

For a very long time in the Valley, there’s been this idea that tech is a unilaterally positive force in the world, that moving fast and breaking things is the way to accomplish great change, and you can get rich while doing it. And then there was the 2016 election, with Russians spreading disinformation on Facebook. That brought along the idea that maybe there are a lot of bad things that tech can bring or at least have unintended side effects that can cause problems.

Uber was kind of the tip of that spear. Now all these tech companies have to deal with regulators meaningfully for the first time in a long time. They’re figuring out what their limits are, how they’re going to operate, and if they can get away with as much as they could in the past.

Just the retelling of the #deleteUber boycott—which was triggered when the company promoted turning off surge pricing during President Trump’s travel ban protests—shows how Uber quickly became a focus for these concerns, even though transportation had almost nothing to do with the 2016 election.

It was weird that they got caught up in that nexus. You’re exactly right—why would you even think about Uber after the election? But that came at the first moment where Trump really upset a lot of people. It was the first time that people felt they could stick it to whoever; it just became this weird sort of horrible timing for Uber.

Right after that controversy, Uber gets hit with an early version of a #MeToo moment when former Uber employee Susan Fowler wrote a blog post that opened up questions about a culture of discrimination and sexual harassment at Uber. Kalanick had already made sexist comments that primed people with an arrogant tech bro image, but there was also something systemic about it.

I think founders set the tone at the top. The main priority for them was just getting growth, and Travis had a real aversion to feeling like a “big company.” But at the same time, they didn’t have proper systems to spell out quite basic internal processes. With that came complete disregard for legitimate problems like sexual assault or sexual harassment, or drugs and partying. It was just kind of built into the system. And then when you have a bunch of super-aggressive personality types running around, you’re setting yourself up to fail.

One of the mantras Kalanick had about Uber is the idea of “transportation that is as reliable as running water.” That’s something local transportation departments have been trying to do forever on their own. How does Uber’s notion of doing this map onto the “grow or die” attitude?

Travis wanted to compete for most, if not all, of transportation. I don’t think that he would have been satisfied with saying “We’re just going to get so many people, but then just leave existing ridership on public transportation.” I think they wanted to go for it. That’s why they did those carpooling options and shuttles. That’s problematic in and of itself, because it creates a cycle in which [transit] ridership goes down, perhaps funding goes down, and some fundamental public services start to see problems.

Then there’s another part that’s still playing out: the privatization of gaps in transportation. At one point, Uber was marketing itself as a last-mile solution. They were saying, “We’re the one that serves you in these transportation deserts.” The scooter and bike stuff is very experimental and I’m curious about how they can actually make money on it. But it’s just hard. Clearly public transit hasn’t served every single need, but it might be getting harmed by this private company moving in.

At the same time, how are these private transportation services shaping the way the city operates? It may be having effects that were not even planned for. In San Francisco, where I live, traffic has dramatically increased just by the amount of Uber and Lyft drivers coming in from halfway across the state because the city is the best place to drive for profits. There are all these effects that I don’t think anyone at the company could have really foreseen or has been able to head off.

After a decade, it’s almost impossible for some people to imagine not having access to ride-hailing apps. But Uber is losing multiple billions of dollars every quarter. Is this ever going to be a sustainable business?

People ask me sometimes what the endgame is. I actually don’t know. The company isn’t profitable, and the ways of getting to profit are either increase fares for riders or decrease pay for drivers or some other magic profit center from one of their many initiatives that I haven’t really understood yet. I’m curious to think five years from now what that’s going to look like. It’s a great big question mark. After 10 years of existence, it does seem indispensable. But what is this going to look like in another 10 years?

You mention briefly how different the world could have been if Lyft had been bought by Uber. How much has Lyft influenced Uber as a company?

For a lot of Uber and Lyft’s lifespans, at least pre-2017, they were basically defined against each other. Lyft was the good-guy foil and Uber was the bad-guy dominant player. Lyft almost went out of business, and Uber brought it back from the brink through its own stumbles. They exist as the yin-yang in ride-sharing, even though they are largely the same service and similar people drive for both companies.

Now ride-sharing is a hard category to be in, and both company stocks are taking a hammering. They’re both going to be pressed to prove profitability. So we’ll probably see changes, whether that means higher fares or drivers get screwed. In the private company world, they were both defined against each other; now, in a public realm, they are both just in the same category of troubled company.

Uber is also spending so much to research driverless cars, especially with the legal trouble it created for Uber with Google and Waymo.

It really dawned on Travis that he let the fox in the henhouse when he let Google invest in his company. Google is working on this business that could totally take over Uber one day. Whether you believe or not that driverless cars are going to save everything—I’m not convinced—I think there are a host of other issues that come with moving into that besides the fact that technology is just not there. [Kalanick] believed that it was totally existential and they needed to pour billions into researching it. They still are, and it’s curious to me what the future of it is going to look like now, because it doesn’t seem super important to [current CEO Dara Khosrowshahi] externally and some of the enthusiasm is dampened. Killing a pedestrian in Arizona was a big deal, and that really hurt public sentiment.

It also just feeds right into the hubris that people see in Uber, with not caring about the consequence for other people.

It’s hard because people that work there do consider themselves harbingers of progress. I think the mentality for a lot of people that work on big systems that disrupt entrenched things is that there are going to be side effects; not all of them are going to be positive, but we’re moving toward something bigger and better. The point of this book, for me, is to be willing to take a closer look at the side effects and pay attention to them. With all “progress” you have to see what the costs are and how those play out and who they affect.

Something that I did not understand the scope of before reading your book was how much cybersecurity plays a role in these companies. These apps are able to see where all of their users and drivers are, and they can identify them in so many other ways. One data scientist at Uber compared their view into the world as being an “ant farm.” Are we not paying enough attention to the power that Uber and Lyft have over regulators, drivers, customers, and even journalists?

Oh my God, it’s unbelievable. Honestly, take it further than Uber and Lyft: Just imagine any company with the amount of information they have and what they can do.

Once you get to a big-enough size, you’re supposed to limit the ability of any employee to access information about an individual user, or at least have the system flag if someone gets into their accounts. These are just safeguards because companies are made up of people and people are flawed. Uber didn’t have any of those controls for a very long period of time. It was basically a free-for-all for anyone’s data internally, and they played with that and they have very little regard for how they treated it. It was disturbing. They tracked a journalist from her ride over to meet someone, and they displayed the entire driver map of people taking trips to a dinner party in Chicago. It’s real scary.