Ride-sharing company Uber used illegal tactics, ‘KIll Switch’ technology, and political lobby to save itself from regulators and expand its business in India among other countries, an investigation has revealed.
The investigation reveals how the company established itself as lobbyists pressed government officials to drop investigations, rewrite labour and taxi laws, and relax background checks on drivers
Ride-sharing company Uber used illegal tactics, ‘KIll Switch’ technology, and political lobby to save itself from regulators and expand its business in India among other countries, an investigation has revealed.
Termed “Uber Files”, the investigation reveals how the company established itself in nearly 30 countries as lobbyists pressed government officials to drop investigations, rewrite labour and taxi laws, and relax background checks on drivers.
According to a joint media investigation which includes The Indian Express and the International Consortium of Investigative Journalists (ICIJ), the company’s staff in its San Francisco headquarters panicked after a woman was raped in an Uber cab by its driver in Delhi in 2014. The company blamed the Indian background checking system and took the line that it was the “flawed” background checks of drivers in the country that led to the incident.
The internal communications showed that Mark McGann, the then Uber’s Head of Public Policy for Europe and the Middle East, wrote on December 8: “We’re in crisis talks right now and the media is blazing…The Indian driver was indeed licensed, and the weakness/flaw appears to be in the local licensing scheme.’’
Dubbed as “Uber Files”, the 1,24,000 internal documents, reveals how the company lobbied political leaders to relax labour and taxi laws as it aggressively pushed into markets around the world, according to a report published in the British newspaper The Guardian.
The Delhi Rape Case And Blame Game
India was one of Uber’s fastest-growing markets since it launched services in the country in 2013. Today, an estimated 6 lakh drivers in over 100 cities of the country work for Uber.
“We’ve definitely made a splash in our first year in India…We will likely have both local and national issues in almost every city in India…That’s life running a business at Uber,” its then Asia head Allen Penn wrote to the India team in August 2014, summing up Uber’s strategy, according to a report in The Indian Express.
In another email MacGann sent to his team, he wrote: “We are in the process of platinum-plating our background checks in other regions, given the issue in India (where the official State system is at fault, not Uber).”
The rape incident resulted in a “worst-case scenario” for Uber in the Capital. The Delhi government banned its services, and it took seven months and an intervention from the Delhi High Court for Uber cabs to be back on the roads.
In the aftermath of the Delhi rape case, the new safety features the company introduced, including the “panic button” in every cab, are still not in place, as per The Indian Express report.
Records also show the company’s run-ins with Indian regulatory authorities, including GST and Income Tax Departments as well as Consumer Forums, the Reserve Bank of India, and the Service Tax Department.
‘Violence Guarantees (s) Success’
The report also reveals that its former CEO Travis Kalanick saw the threat of violence against Uber drivers in France by aggrieved taxi drivers as a way to gain public support.
“Violence guarantee(s) success,” Kalanick texted colleagues.
Drivers across Europe had faced violent retaliation as taxi drivers felt their livelihoods were threatened. The investigation found that “in some instances when drivers were attacked, Uber executives pivoted quickly to capitalize” to seek public and regulatory support.
Uber had adopted similar tactics in European countries including Belgium, the Netherlands, Spain, and Italy, mobilizing drivers and encouraging them to complain to the police when they were victims of violence, in order to use media coverage to obtain concessions from the authorities.
Uber’s rapid expansion leaned on subsidized drivers and discounted fares that undercut the taxi industry, and “often without seeking licenses to operate as a taxi and livery service,” reported The Washington Post.
The Uber Files also claim the company cut its tax bill by millions of dollars by sending profits through Bermuda and other tax havens. It then “sought to deflect attention from its tax liabilities by helping authorities collect taxes from its drivers.”
Kalanick was forced to resign in 2017 following accusations of brutal management practices and several episodes of sexual and psychological harassment at the company.
How The Company Used Technology To Fend Off Investigations
The investigation also reveals Uber used “stealth technology” to get rid of investigations. The company used a “kill switch” that cut access to Uber servers and blocked authorities from grabbing evidence during raids in at least six countries.
During a Dutch raid, Kalanick personally issued an order: “Please hit the kill switch ASAP… Access must be shut down in AMS (Amsterdam),” the investigation reveals.
Kalanick spokesperson Devon Spurgeon said the former chief executive “never authorized any actions or programs that would obstruct justice in any country.”
‘Friends’ In High Places
The company also had prepared a list of more than 1,850 “stakeholders”, including public officials, bureaucrats, members of think tanks, and transportation experts from different countries, with whom its top brass could seek meetings.
The investigation also reveals Uber also lobbied governments to aid its expansion, finding, in particular, an ally in France’s Emmanuel Macron, who was economy minister from 2014 to 2016 and is now the country’s president.
The company believed Macron would encourage regulators “to be ‘less conservative’ in their interpretation of rules limiting the company’s operations,” The Washington Post reported.