Company / division: Uber
Uber’s Relationship with Pittsburgh Worsens (May 22, 2017)
Uber Launches Uber Freight for Truckers (May 18, 2017)
Waymo-Uber Injunction Made Public (May 15, 2017)
Uber’s Bid to Move Waymo Case to Arbitration Fails (May 11, 2017)
We’ve already seen some juicy stuff come out of the Uber-Waymo case, and we’ve only been in the preliminary stages of the lawsuit. Uber had therefore understandably moved to have the case decided in arbitration rather than open court, away from public eyes, but it has today failed in that attempt as a judge decided the case will be heard in court as Waymo wanted. That, in turn, means we’ll likely have lots more details about Uber and Anthony Levandowski’s actions aired in court, something Uber likely desperately wanted to avoid given all the bad press it’s already had since the beginning of the year over its support for the Trump administration, its toxic culture, its CEO’s treatment of drivers, and so on and so forth. And of course, there’s still the possibility the case ultimately goes against Uber, though based on the preliminary hearings it sounded like Waymo hadn’t yet found its smoking gun in proving that Uber and Levandowski stole and used confidential information. However, the judge has referred the case to the US Attorney for consideration as a criminal case as well, so things just keep getting worse for Uber here. see also this Axios piece, which not only does a better job of explaining the situation with regard to arbitration but includes a rebuke of Uber by the judge. And lastly notes that Waymo has been granted a partial injunction against Uber, though the details remain secret.
Uber says its delayed report from its internal investigation into reports of harassment and other issues will finally be made public the week of June 5. The report was due to have published earlier but was pushed back when those leading the investigation said they needed more time, which seemed at the time as a sign that key personnel at Uber weren’t cooperating with the investigation. That’s going to be a busy week for news, with Apple’s WWDC keynote on the Monday, but I would guess this report will attract plenty of attention anyway. As has been the case from the start, the big question is how honest and critical the report ends up being, because if it’s anything less than forthright it will do more harm than good.
Chinese ride-sharing company Didi Chuxing has raised what Bloomberg says is the largest single funding round ever, apparently to help pay for a long-expected international expansion. Didi now of course owns Uber’s business in China and also received a billion-dollar investment from Apple last year, but has mostly stuck to its home market for now. People in the know have been saying it was going to start trying to build a business outside of China for some time, so this move isn’t that surprising, but it’s almost certain to bump up against its part owner Uber in at least some markets given the latter company’s international reach, which could get interesting. Big Chinese tech companies have mostly failed to expand much beyond China with the exception of those selling cheap electronics, and Didi will face an uphill battle in ride sharing markets internationally unless it partners with local players (possibly including Uber). I’m very curious to see which markets it goes after and how.
Anthony Levandowski, who has until now led Uber’s self-driving group, has been removed from his role during the lawsuit between the company and Waymo over the alleged stealing of LIDAR technology by Levandowski. He’s staying at Uber, and will continue in various other responsibilities there, but will no longer be involved in the area of technology which is at the heart of the case, which means that group will have a new lead from among the group of employees Uber poached from Carnegie Mellon some years ago. That’s interesting, because there’s been some conflict between Levandowski’s group and the CM group at Uber in the past. This week, Levandowski also failed in his bid to use the 5th amendment to protect himself and Uber during the lawsuit, which should make the case both more interesting and potentially more damaging for him. Uber has tried to distance itself from the issues at the core of the lawsuit, suggesting that the alleged actions would have been taken Levandowski operating as an individual employee rather than on behalf of the company, but that argument is getting harder to make. Removing Levandowski at least limits the perception that he’s still using what he learned at Waymo to help Uber with its own LIDAR technology, something Uber has denied all along. The lawsuit, meanwhile, is getting increasingly nasty, with Uber targeting senior Waymo executives for depositions apparently on the basis of mere spite, because they have nothing to do with the details of the litigation.
via Business Insider
The Uber investigation into harassment and discrimination claims is being extended by another month or so because the people running it haven’t finished their work yet, and importantly haven’t been able to interview several key people including HR execs. While it’s certainly better to be thorough than quick in a case like this, that seems worryingly like a sign of lack of cooperation from key people, which makes me wonder how effective the investigation will end up being. One would assume that Arianna Huffington and other board members would be putting significant pressure on executives and employees in general to cooperate, so any barriers to that cooperation are signs of some pretty deep dysfunction within the company (not that that would be surprising at this point). But it also means all this will be hanging over Uber for even longer than previously anticipated.
The Information has quite a bit of both data on Uber’s driver retention rates and on its efforts to do better in keeping drivers. The headline I’ve seen shared is that it retains just 4% of drivers, but that’s a bit misleading because it’s based on those that apply to be drivers, only 20% of which make it through that process. The more meaningful retention rate is the 25% of those who drive at least once for Uber who are still driving for it a year later. That’s still low, but far better than 4%. Still, Uber is sometimes compared to an early stage SaaS company, many of which exhibit the same low margins and high growth rates as Uber, and which generally become profitable over time as recurring revenue from earlier cohorts of customers offsets customer acquisition costs. Uber’s problem with such low retention rates is that it continually has to spend massive amounts to attract and retain drivers even as its business matures. In addition, better retaining those drivers going forward ultimately means paying them more, and if it’s also to reduce its subsidies for rides that’s going to mean large price increases, which in turn may well affect demand unless it’s squeezed out all its competitors by that stage, which seems unlikely. As such, even though VCs commonly scoff at the notion that Uber should worry about its lack of profits, I do think there are some legitimate concerns over its current finances.
via The Information
Uber Exec in Charge of Pittsburgh Self-Driving Test Quits (Apr 18, 2017)
Uber’s financial results frequently leak through various online publications, and this year it seems to have decided to shortcut the process and speak directly to Bloomberg, which of course also gives it the opportunity to present the most flattering version of the numbers along with commentary. The highlights are that Uber grew revenues significantly year on year, but losses also grew. Uber emphasized that revenue growth outpaced growth in losses, but of course what you really want is for revenue growth to outpace cost growth, because that’s how you eventually become profitable, but that isn’t happening yet. Uber’s revenue growth was also helped by the different accounting treatment of UberPool rides (for which Uber records the full revenue as net revenue) versus other rides (for which it only reports its cut) which has the effect of making losses seem smaller in comparison to revenues, but is really just financial jiggery pokery. The headline financials shared with Bloomberg also exclude both the Chinese business, which was hugely loss-making for Uber, and various other items including car purchases (presumably as part of its autonomous technology testing operation). So these really are a pretty sanitized set of results, which nonetheless show significant and even growing losses.
Uber Had a Program Called Hell Designed to Undermine Lyft (Apr 13, 2017)
Uber comms head Rachel Whetstone is departing – Recode (Apr 11, 2017)
Yet another executive departure from Uber, this time its head of PR. It’s impossible not to see this in the context of Uber’s overall recent troubles, but Whetstone has been there for a number of years now, and interestingly is handing over to another woman. I say interestingly because her successor will have to deal with the reaction to the internal investigation at Uber over sexual harassment, which I can’t imagine will be fun, especially if the investigation concludes that it’s a bad place for women to work. On the other hand, having a woman leading the charge on getting that PR message out could also be seen cynically as a clever strategic move.