Bloomberg reported that then-CEO Travis Kalanick encouraged then-General Counsel Salle Yoo to create a legal department with what Bloomberg called a “spirit of rule-breaking.” In a performance review, Kalanick told Yoo she needed to be more “innovative.” Bloomberg reports that Yoo considered herself “liberated” by not having to follow “best practices,” being allowed “to do things the way I think things should be done, rather than the way other people do it.” But Bloomberg says Yoo failed to challenge Kalanick and his deputies, or raise objections to Uber’s board.
Due diligence report on Otto and Anthony Levandowski revealed copying of Google information
Forensics firm Stroz Friedberg investigated the information Anthony Levandowski allegedly took from Google and whether or how it was destroyed. Stroz’s report conveys Levandowski’s admission that he had five discs of Google information which he says he destroyed (a claim Stroz was unable to verify).
Stroz found about 50,000 Google work emails on Levandowski’s personal computer, and there was evidence that he accessed some of the emails at about the same time he left Google, making it “difficult to believe” that he could not remember having those emails, as he claimed when interviewed.
Stroz found that Levandowski accessed certain Google files after his departure, then deleted them. Stroz also found evidence of Levandowski searching for instructions on secure file deletions, and telling coworkers to delete messages from him. These deletions are consistent with an attempt to destroy confidential Google information that Levandowski should not have had, but also consistent with a cover-up of information previously received and used.
A Google spokesperson said in a statement: “The Stroz Report unequivocally shows that, before it acquired his company, Uber knew Anthony Levandowski had a massive trove of confidential Waymo source code, design files, technical plans and other materials after leaving Google; that he stole information deliberately, and repeatedly accessed it after leaving Waymo; and that he tried to destroy the evidence of what he had done. In addition, Mr. Levandowski used his smartphone to take thousands of covert photographs of computer screens displaying Google confidential files. Knowing all of this, Uber paid $680 million for Mr. Levandowski’s company, protected him from legal action, and installed him as the head of their self-driving vehicle program.”
Uber Executive invoked Fifth Amendment; company fired him
Accused of stealing driverless car technology from Google (his former employer), Uber executive Anthony Levandowski invoked the Fifth Amendment and refused to testify.
In response to Levandowski’s refusal to cooperate in Uber’s response to Google (Waymo) litigation alleging that Uber stole Google/Waymo secrets, Uber fired Levandowski.
In a letter to Levandowski, Uber terminated him for cause. Uber noted its requirement that he cooperate with the litigation, which he did not do. Uber also noted that his employment agreement warranted that he had returned or destroyed all property and confidential information from any prior employer, but said that Levandowski’s actions gave Uber grounds to allege breach of these commitments.
See also Uber’s May 15, 2017 letter to Levandowski demanding that he comply with a court order, waive his Fifth Amendment protections, and cooperate with Uber’s defense of Google’s lawsuit. See also Levandowski’s May 18, 2017 motion asking the court to modify its order to avoid compelling Levandowski to waive his Fifth Amendment rights.
Former CEO Travis Kalanick unilaterally appointed two board members
Former Uber CEO Travis Kalanick appointed two new members to the Uber board. Kalanick explained in a statement:
“I am appointing these seats now in light of a recent Board proposal to dramatically restructure the Board and significantly alter the company’s voting rights. … It is therefore essential that the full Board be in place for proper deliberation to occur.”
Kalanick was responding to a proposal from Benchmark Capital, a large shareholder in Uber, seeking to eliminate super-voting power of shares held by Kalanick, other early executives, and investors. With two more board members receptive to Kalanick’s perspective, Benchmark’s proposal is correspondingly less likely to proceed. (Forbes called the appointees “presumed allies” to Kalanick.)
An Uber spokesperson indicated that Kalanick’s appointment of two new board members “came as a complete surprise to Uber and its board.” The New York Times reported that new Uber CEO Dara Khosrowshahi called Kalanick’s move “disappointing” in an internal memo to employees. Bloomberg reported that the appointment was contrary to a prior agreement associated with Kalanick’s resignation.
The New York Times called Kalanick’s approach a “power move.” Former Uber adviser David Plouffe indicated that events at Uber were crazy and that the Trump white house “seems sane by comparison.”
Texas firemen retirement fund claims Uber misled them about risks and law-breaking
In a lawsuit, the Irving Firemen’s Relief & Retirement Fund alleges that Uber and its former CEo Travis Kalanick knowingly misled them while raising funds, including failing to disclose that the company had broken laws.
The lawsuit chronicles a variety of Uber improprieties including “Greyball” evasion of law enforcement, “Hell” tracking of rivals, allegations of intellectual property theft from Google, sexual harassment and other human resources violations, knowingly renting out recalled and unsafe vehicles, and theft of a passenger’s medical records.
The lawsuit seeks class-action treatment for Uber investors.
Uber Board Member Arianna Huffington said sexual harassment not a “systemic problem”; Eric Holder report disagreed
In March 2017 remarks, in response to a widely-circulated blog by former Uber employe Susan Fowler about sexual harassment and the company’s refusal to respond to complaints of sexual harassment, Uber Board Member Arianna Huffington denied that sexual harassment at Uber was a “systemic problem”:
Yes, there were some bad apples, unquestionably. But this is not a systemic problem
In sharp contrast, when former Attorney General Eric Holder and colleagues examined misconduct at Uber, their report found 215 complaints of inappropriate workplace conduct, yielding at least 20 firings, 31 retrainings, and 7 final warnings.
Uber investor alleged former CEO Kalanick interfered with CEO search
In a lawsuit, Uber investor Benchmark Capital alleged that former Uber CEO Travis Kalanick is interfering with Uber’s CEO search. Benchmark says “various potential candidates have withdrawn from consideration because of Kalanick’s continued participation in the search and his efforts to re-assert influence over the company.” In a letter to Uber employees, Benchmark explains the impact of Kalanick’s actions:
Travis’s failure to make good on this promise, as well as his continued involvement in the day-to-day running of the company, has created uncertainty for everyone, undermining the success of the CEO search. Indeed, it has appeared at times as if the search was being manipulated to deter candidates and create a power vacuum in which Travis could return.
Uber investor challenged “fraud” by former CEO Travis Kalanick
In a Delaware complaint, Uber investor Benchmark Capital Partrners challenged “the fraud, breaches of fiduciary duty, and breaches of contractual obligations perpetrated by” former Uber CEO Travis Kalanick “to entrench himself on Uber’s Board of Directors and increase his power over Uber for his own selfish ends.” The lawsuit focused in part on Kalanick’s “fraudulently obtain[ing] control” of three new seats on Uber’s boards through “his material misstatements and fraudulent concealment … of material information” that would have led Benchmark to reject the request.
Benchmark said Kalanick engaged in “gross mismanagement and other misconduct” which it summarizes as follows:
Kalanick’s personal involvement in causing Uber to acquire a self-driving vehicle start-up that, according to a confidential report not disclosed to Benchmark at the time (the “Stroz Report”), allegedly harbored trade secrets stolen from a competitor; an Uber executive’s alleged theft of the medical records of a woman who was raped by her Uber driver in India; a pervasive culture of gender discrimination and sexual harassment that ultimately prompted an investigation by the former U.S. Attorney General Eric Holder; and a host of other inappropriate and unethical directives issued by Kalanick.
Benchmark said Kalanick “knowingly concealed these matters from” it and other investors.
Benchmark explained its approach and its concerns in a letter to Uber employees.
In a statement, Kalanick replied: “I am disappointed and baffled by Benchmark’s hostile actions, which clearly are not in the best interests of Uber and its employees on whose behalf they claim to be acting.”
Kalanick moved to send the lawsuit to arbitration, avoiding a deposition that Recore said could have been “damaging.” On August 30, 2017, the Court agreed, ending the public litigation docket and putting all further proceedings in confidential arbitration.
Ties to Trump
CEO Travis Kalanick served on Donald Trump’s economic advisory council. After intense criticism, Kalanick stepped down in February 2017, indicating that he did not intend the advisory council participation to be an endorsement of the president’s agenda but understood that it had been interpreted in that way.
Kalanick said Lyft’s casual drivers are “non-licensed” and “quite aggressive”
In 2013, when Uber focused on operations using properly-licensed black cars, CEO Travis Kalanick wrote a lengthy post assessing Lyft’s “ridesharing” using ordinary drivers:
Over the last year, new startups have sought to compete with Uber by offering transportation services without traditional commercial insurance or licensing. Uber refrained from participating in this technology sector — known as ridesharing — due to regulatory risk that ridesharing drivers may be subject to fines or criminal misdemeanors for participating in non-licensed transportation for compensation.
In most cities across the country, regulators have chosen not to enforce against non-licensed transportation providers using ridesharing apps. This course of non-action resulted in massive regulatory ambiguity leading to one-sided competition which Uber has not engaged in to its own disadvantage.
He continued:
[G]iven existing regulations, the Lyft/Sidecar approach is quite aggressive. The bet they are making is two-fold:
1. Uber, already a market leader, is too weary to enter the non-licensed market in the face of existing regulatory scrutiny.
2. Regulators for the most part will be unable to act or enforce in time to stop them before they have a critical mass of consumer support.
Kalanick specifically criticized incomplete enforcement and ambiguity that let some companies take a lead through aggressive interpretations rather than superiority on the merits:
[T]he lack of real clarity has created massive regulatory ambiguity. Without clear guidance or enforcement, this ambiguity has led to one-sided competition in which Uber has not engaged to its own disadvantage. It is this ambiguity which we are looking to address with Uber’s new policy on ridesharing.
After I posted an article quoting and discussing Kalanick’s post, Uber removed that document from its site. But Archive.org kept a copy. I also preserved a screenshot of the first screen of the document, a PDF of the full document, and a print-friendly PDF of the full document.
