Company / division: Uber
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.
We finally have a fleshed-out response from Uber to the Waymo lawsuit over stealing of LIDAR technology, and it doesn’t do much more than muddy the water over this issue. The biggest sticking point here is that Anthony Levandowski, who is alleged to have stolen files from Waymo before he left and used these to develop LIDAR technology at Otto and then Uber, refuses to cooperate with the investigation, and Uber refuses to compel him as an employee to cough up the files. Uber also argues that its LIDAR design is different in key respects from Waymo’s and therefore that it clearly hasn’t been copied from it. The judge seems to be highly skeptical of Uber’s claimed inability to do anything with regard to the Levandowski files, and seems minded to grant at least a temporary injunction against Uber’s LIDAR technology. Uber’s claims that such an injunction would significantly harm its business seem like nonsense – this technology has nothing to do with its core business today and is merely being tested in a few cities. A longer-term injunction would obviously be more damaging because it would stop Uber from advancing the technology, but in and of itself that’s not a valid argument against such an injunction should the judge determine that the design was copied. Lots more to come on this, no doubt.
via Business Insider
This isn’t a particularly new idea, and in fact it’s one that ride sharing companies have used for some time now in trying to convince regulators to allow them to operate. But it’s always good to see real data behind an idea, and in this case it seems to back it up pretty well, at least in New York City. The data isn’t consistent across the boroughs, but there’s certainly a clear trend suggesting the introduction of Uber in the City did indeed reduce drink driving, which is obviously a good thing. That’s a nice counterpoint to all the negative news stories recently about Uber in particular and ride sharing in general (including the one I just shared about driver vetting).
via The Economist
8,000 Uber, Lyft, ride-hailing drivers fail new background checks in Massachusetts – The Boston Globe (Apr 5, 2017)
Massachusetts put in place a new law requiring drivers for ride sharing services to acquire a license, which in turn requires passing an extensive background check. Of the 71,000 existing drivers who applied, a little over 11% failed these background checks, in many cases because of issues with driver’s licenses, at least some of which should have been caught by Uber and Lyft. Those companies, in turn, countered that they either don’t have access to longer criminal histories or that they have deliberately ignored older offenses as a way to help people with troubled pasts move on. Though there’s some truth to the former point, the latter is at least partly spin. Sex offenders, of whom 51 were rejected by Massachusetts, have to register, and presumably blocking them from becoming drivers would be both easy and desirable, no matter how long ago the offenses. The Massachusetts law is stricter than in other states and as such helps highlight how the background checks the companies themselves conduct can miss potentially serious issues in drivers’ histories.
via Boston Globe
This article is based on a study by a company called Navigant Research, and it seems to be an evaluating of companies’ strategic assets rather than any actual capabilities today, so it’s worth noting that context for their rankings of companies here. Notably, they rank traditional carmakers in the first six spots, with Waymo apparently the first non-traditional / tech company in the rankings. That’s notable, because all the numbers suggest Waymo is out in front in testing of autonomous driving technology in California by a long way, and although we don’t have equivalent data for Michigan, where Ford does much of its testing, I’d be surprised if it had done many more miles. So this is mostly an evaluation of the benefits the big automakers derive from their existing massive scale and capabilities in building vehicles and bringing them to market, something none of the pure tech companies has (Tesla, of course, has some small-scale manufacturing capability and is looking to ramp fast, but comes in 12th in the rankings nonetheless). This jives with my perception that, even as these tech companies do increasingly well in developing their own technology, they’re very unlikely in most cases to build the cars, and as such the traditional car companies are still in a position of strength and potential leadership when it comes to actually building and deploying the technology.
via USA Today
I think the headline here would more appropriately read “Uber crash shows bystanders see human traits in self-driving software” because there’s no evidence that the car actually gunned a light turning yellow in this case, but that’s how witnesses perceived it. (I joked on Twitter earlier that perhaps Uber’s autonomy software had been taught the company’s values, one of which is “always be hustlin'”.) The reality is that self-driving cars are often taught to emulate human behavior rather than driving in some idealized perfect way, because that’s what makes human passengers feel comfortable and ultimately trust the technology. But I very much doubt that Uber’s cars are taught to accelerate through lights in the process of turning yellow or red. It appears that police concluded Uber’s technology was not at fault in this crash, and after a brief break over the weekend, its cars are back on the roads in the various cities where they’re operating. But given Uber’s failure rates relative to Waymo’s, and the fact that Uber cars are carrying paying customers, there’s certainly potential for a lot more crashes, some of them actually Uber’s fault.
TechCrunch wasn’t the only publication to go with a headline like this, and it makes sense: Uber’s diversity report in many ways mirrors those from other big companies in the tech industry, and doesn’t appear noticeably worse on several of the big metrics. Indeed, if you were reading the report itself including the commentary about the various efforts Uber is engaged in, you’d get the impression that Uber was a forward-looking, tolerant, diverse, and vibrant place for people of all backgrounds to work. And that’s the problem with these reports – they say nothing about what it’s actually like to work at the company if you’re in one of the underrepresented groups, and we know from recent news that Uber can actually be pretty awful if you’re a woman, especially in a technical role. So even though Uber comes off not much worse than other big tech companies from the report alone, that shouldn’t be all that reassuring. Since this is the first of these reports, we also have zero data about how things have changed in the past year, and whether they’ve got better or even worse, something some past female employees have suggested. But numbers alone don’t tell the story, and that’s why the investigation – flawed though it is – is critical for evaluating and hopefully changing the other aspects of Uber’s culture as regards diversity which this report says nothing about.
Uber Press Call Highlights Huffington’s Conflict of Interest (Mar 21, 2017)
One of the more troubling things about the sexual harassment investigation at Uber is that Arianna Huffington, who is helping to lead that investigation, is also currently acting as both Uber and Travis Kalanick’s most visible public defender, undermining claims that the investigation is independent. Either Huffington is committed to getting to the bottom of what has happened (and may still be happening) at Uber, or she can defend it and its leadership, but she can’t do both. That she reiterated those public defenses of Kalanick personally on this press call today just reinforces that point. Meanwhile, the call itself revealed little that was new, by all accounts – a previously promised diversity report is indeed on the way, and both the investigation and the COO search are ongoing, with nothing new to report for now. Meanwhile, Kalanick himself was apparently too busy with that COO search to appear on the call, while Uber’s (female) HR manager was available. (The headline here is mine – the headline on the Axios piece linked below focuses on the diversity report.)
Uber president Jeff Jones is quitting, citing differences over ‘beliefs and approach to leadership’ – Recode (Mar 20, 2017)
This is the first high-profile departure from Uber’s executive ranks which is being explicitly described as a response to the toxic culture at the company – Amit Singhal was forced out, while Ed Baker’s reasons for leaving were at least somewhat opaque. But Jeff Jones is, at least by his telling, leaving precisely because of the toxic culture and an unwillingness to stay at a company where he clearly doesn’t feel comfortable. Travis Kalanick’s explanation – which I think can probably be dismissed as face-saving – is that Jones decided to leave after Kalanick announced that he was hiring a COO. The fact that Recode had sources saying Jones’ reason for leaving was cultural even before Jones himself spoke out certainly reinforces that fact. Kalanick’s response just reinforces the sense that he hasn’t changed at all, and that if Uber’s culture is going to change meaningfully, that COO had better be a very strong individual, able to stand up to Kalanick and force real changes.
Uber’s autonomous cars drove 20,354 miles and had to be taken over at every mile, according to documents – Recode (Mar 16, 2017)
One of the great things about autonomous driving technology is that regulators require companies to keep track of how those cars are performing, and in the case of California that data is published annually, providing a great insight into how each company’s technology is advancing. However, occasionally, internal documents on testing emerge that provide lots of detail too, and such documents have apparently been leaked to Recode (and BuzzFeed). There’s lots of interesting data here, and it suggests progress is being made and Uber is driving lots of miles in its various cars. It’s worth comparing some of the numbers here for Uber with those reported by other companies in California by way of putting them in context: Uber says its rate of disengagements per mile is 0.8, for example, whereas Waymo’s cars in California are now at a rate of 0.2 per 1000 miles, or some 4,000 times better. Now, Waymo’s cars have been driving in the state for much longer than Uber’s, but that’s still a massive discrepancy in performance. And it’s also worse than Tesla’s rate of 182 disengagements over 550 miles driven in 2016. So it appears Uber has a long way still to go in autonomous driving, and it’s therefore remarkable that it’s already using these cars to ferry real passengers around Pittsburgh.
This feels like something of a slime ball move on Uber’s part on two fronts: firstly, trying to move the court case with Waymo out of open court and behind closed doors; and secondly, essentially trying to push the case off its back and onto Levandowski’s. I had said previously that the course was going to be fascinating for the details it would provide about how Uber developed technologies and how it would defend against what look like fairly solid allegations, but if it gets its wish here we won’t get to see any of that. But I think it’s the attempt to make this a case about an employee rather than the company that seems particularly sleazy – if the allegations are indeed true, then Uber and not Levandowski benefited the most, and making this seem like a dispute between an employee and former employer feels like a total misrepresentation.
via USA Today
Uber Gears Up to Block Bid to Form a Union in Seattle – WSJ (Mar 13, 2017)
As with Uber’s eventual exit from Austin over fingerprinting, it’s threatening to leave Seattle if its drivers there join a union, and is also actively trying to dissuade drivers from doing so in a range of podcasts and other messages arguing that unionization could be bad for them. Seattle is something like the 20th largest city in the US, and a disproportionately influential one given its status as a tech hub and bastion of somewhat left-wing values. So if Seattle went this way, other cities might follow, and Uber is therefore fighting unionization there tooth and nail. This is just one of several fronts on which Uber is fighting its drivers, from unionization to employment status and benefits to pricing. And although it argues it’s acting in drivers’ interests here, it’s clearly mostly acting in its own, possibly to their detriment.