Uber is in the news for all the wrong reasons, and there are major changes expected in management as well as company policy going forward. However, for those tracking the cab aggregator, the news is only the latest in a series of underhanded tactics the company employs around the world for its own benefit and to stay competitive. We take a closer look at some of the sneaky ways the company has operated so far.
1. Underpay drivers for two and a half years: In the US, Uber underpaid drivers for two and a half years. Uber has indicated that an "error" in their systems was the reason that the drivers were underpaid. The “upfront pricing” on the application allowed Uber to collect a certain fare from users, while not paying the drivers as much. The drivers themselves had to come together and point out the error to Uber. A guild representing 50,000 drivers in New York City demanded an investigation into the practices by Uber.
2. Avoid paying taxes in the UK: Uber uses a clever legal loophole to avoid paying taxes in the UK. Uber's competition in the UK pays 20 percent value added tax (VAT) on booking fees, a fee that Uber does not pay. Uber manages to avoid paying the taxes by treating each of its 40,000 drivers operating in the UK as separate businesses. Each of the businesses on their own are too small to pay the tax. The amount that Uber manages to save every year by exploiting this loophole is estimated to be around 40 million pounds.
3. Tracking Apple users: Uber was caught red handed tracking iOS users after they have uninstalled the application. Uber did this to prevent users from getting first user offers by repeatedly signing up for the service. The process of tracking the users, known as fingerprinting, was not a violation of the terms of service on Android, but was not in line with the stricter privacy requirements for applications on Apple's iOS ecosystem. To hide the activity from Apple employees, Uber actually geofenced the Apple campus and executed a different version of the code on Apple company premises. However, Apple employees came to know of the tactics anyway, and this prompted Tim Cook to call Travis Kalanick to his office and reprimand him.
4. The "Hell" Tracking program: As part of the "Hell" tracking program, Uber used fake Lyft profiles to track Lyft drivers. This allowed the cab aggregator to get an idea of the number of active drivers on the platform offered by its competition. The program also individually tracked drivers who were active on both Uber and Lyft, and attracted the drivers with customised offers. The bonuses were designed to convince the drivers to choose Uber over Lyft. Uber has not confirmed the existence of the "Hell" software.
5. The Greyball tool: The Greyball program was a tool used to avoid law enforcement authorities and surprise checks on Uber drivers. According to Uber, Greyball "denies ride requests to fraudulent users who are violating our terms of service — whether that’s people aiming to physically harm drivers, competitors looking to disrupt our operations, or opponents who collude with officials on secret ‘stings’ meant to entrap drivers." The tool displays fake ghost cars to riders to fool them into thinking that there are no Uber rides available. Uber finally prohibited the use of the program when its presence was revealed.
Uber has demonstrated time and again that it is willing to to go any extent to remain profitable. While some of its tax evasion techniques are used by other large tech companies such as Google and Facebook, the tracking tools show that end users may not exactly be aware of what the app is doing when it gets you a ride.
Published Date: Jun 14, 2017 08:25 am | Updated Date: Jun 14, 2017 08:25 am