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Salle Yoo demanded $100 million when leaving Uber, got most of it

Business Insider reports that when then-General Counsel Salle Yoo prepared to leave Uber, she sought a $100 million severance package, entailing the repurchase of her Uber shares. Travis Kalanick thought that amount was excessive, but BI says the final amount was “tens of millions” although less than 2/3 of her requested amount.

BI reported Yoo grounding her demand in thoughts about gender:

Yoo thought it was only fair because she had seen male executives ask for huge exit packages and get them. She had spent her career at Uber encouraging women to lean in. So she took her own advice, opened her negotiations with Kalanick by shooting high and held her breath.

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Salle Yoo questioned Kalanick’s handling of Levandowski

In addition to insisting that Uber hire outside investigators to check what improper information Otto held, then-General Counsel Salle Yoo questioned other aspects of Kalanick’s handling of that acquisition. Business Insider explains that she said she wanted Uber to fire Levandowski long before the company did so, and also that she was excluded from critical discussions about Levandowski. Business Insider reports that these disagreements led to Yoo’s departure from Uber.

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Company leaders did not read report about confidential material held by Otto

Uber then-General Counsel Salle Yoo had insisted that Uber hire outside investigators to check for confidential information improperly held by Otto, before Uber acquired Otto. The resulting report revealed that Otto CEO Anthony Levandowski had copied Google information. But Uber leaders never saw the report because it was sent to outside counsel. Instead, they learned about the report only incidental to Google’s litigation against Uber alleging theft of Google secrets.

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Regulators sued Uber for failing to disclose data breaches

After a data breach in which hackers stole data from about 600,000 drivers globally, for which Uber paid a ransom to hackers but did not notify affected drivers, regulators pursued Uber’s violation of applicable law, including state laws about notifying those subject to data breaches.

  • The FTC filed a revised complaint adding additional concerns to a prior action against Uber. Uber responded by agreeing to expand its prior settlement with the FTC over charges that it deceived consumers about its privacy and data security practices. The FTC specifically criticized Uber for failing to disclose the breach to the FTC until November 2017, fully a year after the breach occurred, even though the FTC was already investigating other Uber data security practices.
  • Pennsylvania sued, threatening a penalty of up to $13.5 million ($1000 for each of the 13,500 Pennsylvania drivers affected).
  • The city of Chicago also sued (complaint), seeking $10,000 per day for each day that Uber violated the state’s disclosure ordinance, as well as $50,000 for violating the Illinois Consumer Fraud Act.
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Australian study finds drivers paid below applicable minimum wage, concludes “exploitation”

Jim Stanford of the Centre for Future Work (Australia) analyzed payments to UberX drivers in six Australian cities. He found that drivers earn less than would be required under the applicable Australian wage requirements. After deducting Uber’s fees, applicable taxes, and the cost of vehicle and maintenance, the study found driver pay of A$14.62 per hour, well below the national statutory minimum wage (A$18.29) and less than half the weighted-average minimum wage including casual loading and penalty rates for evening and weekend work that would apply to similar waged employees in Australia (Modern Award #MA00063 for Passenger Vehicle Transportation). The study finds that this underpayment adds up to hundreds of millions of dollars per year in Australia alone.

The study notes that Uber’s prices are well below taxis, and asks how Uber gets the cost advantage that allows it to offer notably lower prices. Finding similar technology — drivers driving cars — the study concludes that underpayment of UberX drivers has been essential to Uber’s growth.

The study also criticized Uber’s right to change its contract with drivers at any time (which it suggested might violate Australia’s Competition and Consumer Act regarding fair contracts), Uber’s monitoring of driver performance through online ratings (which may not be reliable and are vulnerable to bias), that driver vehicles lack certain safety equipment regularly installed on taxis, that drivers work excessive hours, and that Uber seeks to provide excess capacity which can harm both drivers and congestion.

The study was particularly pointed in its assessment of who gains and who loses in Uber’s model: “The effective transfer of wealth from Uber drivers to the company’s owners (some of whom are billionaires)… is an especially galling distributional outcome.” The study’s conclusion is that Uber’s labor practices are “negative and exploitive.”

Study: Subsidising Billionaires: Simulating the Net Incomes of UberX Drivers in Australia and introduction

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Uber CEO Dara Khosrowshahi’s Tweet criticized as “insulting” and “destroy[ing] months of hard work”

Responding to a study by MIT researchers that found low earnings by Uber drivers, Uber CEO Dara Khosrowshahi replied:

MIT = Mathematically Incompetent Theories (at least as it pertains to ride-sharing).

Inc.com criticized Khosrowshahi’s response, calling that Tweet inconsistent with a company “eager to learn from its mistakes and play nice with others” and questioning Khosrowshahi’s “mocking tone.”

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MIT researchers estimated median Uber driver profit at $3.37/hour

Four researchers associated with the MIT Center for Energy and Environmental Policy Research studied Uber drivers earnings. Based on drivers’ responses to a survey, the researchers estimated that the median driver earned $3.37 per hour before taxes, and 74% earn less than minimum wage in their respective states. Net of vehicle expenses, 30% of drivers are losing money driving for Uber.

The authors also studied the impact of deductions on taxation of driver earnings. Based on IRS rules about deductability of vehicle expenses, the researchers estimated that 74% of driving is untaxes (because deductions exceed driver earnings).

Uber’s chief economist responded by questioning the researchers’ methodology, including survey questions, driver understanding, and possible errors in analysis. Uber CEO Dara Khosrowshahi responded on Twitter: “MIT = Mathematically Incompetent Theories (at least as it pertains to ride-sharing).”

After criticism, lead author Stephen Zoepf offered a statement agreeing that alternative methods of calculating revenue and profit yield higher profit to drivers, and planning a revision of the paper with this principle in mind. Zoepf also called on Uber to provide more data about driver profits net of vehicle costs and to distinguish actual and tax-reportable vehicle expenses in order to clarify driver true economic profit versus tax subsidies.

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