License suspended in Sheffield, UK

The city of Sheffield, UK suspended Uber’s license. Uber said this was an “administrative error” resulting from the company’s failure to change the name on its license based on the departure of the company’s UK head. Sheffield said such a change is not permitted, while Uber said it successfully made this change in other jurisdictions.

Regulators criticized company’s cover-up of data breach

After a data breach exposed information about 57 million user accounts and Uber covered it up (including paying hackers a ransom), multiple regulators criticized Uber’s response.

The FTC said it was “closely evaluating the serious issues raised.”

The New York Attorney’s General office said it opened an investigation of Uber’s actions. The Massachusetts Attorney General reported “serious concerns” about Uber’s conduct. Attorneys general in New York, Illinois, and Connecticut also opened investigations, as did the city of Portland, Oregon.

The UK Information Commissioner’s Office pointed out that “Deliberately concealing breaches from regulators and citizens could attract higher fines.” Current British law imposes penalties up to 500,000 pounds for failing to notify users and regulators about data breaches. More than 2.7 million UK users were affected.

Mexico’s National Institute of Transparency, Access to Information and Protection of Personal Data also criticized the breach and Uber’s response, seeking information about effects on Mexican citizens.

In addition, Uber faced three class action lawsuits alleging that it was negligent in its failure to protect consumer data.

Possible bribery in China, India, Indonesia, Malaysia and South Korea

Uber’s attorneys are investigating the possibility of improper payments in Asia, including what Bloomberg calls “suspicious activity” in China, India, Indonesia, Malaysia and South Korea.

In one incident in Jakarta, Indonesia, an Uber employee is said to have “decided to dole out multiple, small payments to police in order to continue operating there.” The company’s head of Indonesia approved the expense report — and was later placed on leave and left the company.

In another instance, Uber contributed tens of thousands of dollars to the Malaysian Global Innovation and Creativity Centre, a government-backed entrepreneur hub. Soon thereafter, the Malaysian government passed laws favorable to Uber. Lawyers are assessing whether this was a quid-pro-quo or otherwise improper.

Legal department “spirit of rule-breaking”

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.

At least five criminal probes by US Justice Department

In October 2017, Bloomberg reported at least five criminal probes of Uber by the US Department of Justice, two more than previously reported. Additions:

  • violations of price-transparency laws
  • Uber’s role in the alleged theft of schematics and other documents related to Google autonomous-driving technology

London Employment Tribunal determined that Uber unlawfully denied basic workers’ rights

Having determined that Uber drivers are employees, the London Employment Tribunal further determined that Uber unlawfully denied drivers certain basic rights guaranteed to all employees.

Among other rights, GMB alleged that Uber drivers were entitled to holiday pay, a guaranteed minimum wage, and breaks.

GMB specifically challenged the amount that drivers are paid. After deducting costs and fees, GMB found that members could make as little as 5 GBP per hour, well below the national minimum wage of 7.20 GBP. They also challenged Uber’s practice of deducting sums from drivers’ pay including in response to customer complaints.

LET also found that, contrary to Uber’s insistence that Netherlands law governs the relationship between Uber and its London drivers, in fact British law governs because the relationship “relevant to the situation” was the UK.

Uber appealed the decision. A judgment of the appeal is expected in late 2017.