by Isaac, Mike
To some extent, he was right. As of this writing, Uber operates worldwide. It is present on almost every continent, with copycats and competitors trying to mimic the growth and power Kalanick achieved in the eight years he was at the helm. Uber has struck deals with local governments to become as ubiquitous as public transit, and is working on a future in which the cars that people request will drive themselves.
And yet, Uber is not always seen as a success story. Uber’s rapid rise was nearly undone in 2017, as the company faced the consequences of years of Kalanick’s boundary-pushing behavior, unabashed pugnacity and, eventually, the CEO’s own personal decline. Kalanick’s story is whispered as a cautionary tale for founders and venture capitalists alike, emblematic of both the best and worst of Silicon Valley.
The saga of Uber—which is, essentially, the story of Travis Kalanick—is a tale of hubris and excess set against a technological revolution, with billions of dollars and the future of transportation at stake. It’s a story that touches on the major themes of Silicon Valley in the last decade: how rapid developments in technology can crash into long-entrenched labor systems, throw urban development into upheaval, and overturn an entire industry in a matter of years. It is the story of a deeply sexist industry, fueled by gender imbalance and a misguided belief in a tech-supported meritocracy, blind to its own biases. It is the story of the sweeping but poorly understood ways that startups are financed today, and how this can affect the leaders, employees, and customers of fast-growing companies. It is the story of the ugly decisions made around user data and personal information as technology firms seek to exploit consumer data. But most of all, it is a story about how blind worship of startup founders can go wildly wrong, and a cautionary tale that ends in spectacular disaster.
Travis Kalanick and his executive team created a corporate environment that looked like an admixture of Thomas Hobbes, Animal House, and The Wolf of Wall Street. This toxic startup culture was the result of a young leader surrounded by yes-men and acolytes, being given nearly unlimited financial resources and operating without serious ethical or legal oversight. At war with outsiders and among themselves, the company engaged in spying, backbiting, and litigiousness as it struggled for power and supremacy over a multi-billion-dollar empire.
As a result of Kalanick’s actions, Uber’s valuation was cut by tens of billions of dollars, competitors that might have been vanquished were strengthened and found new footing around the world, and the company faced a half dozen federal investigations into its sordid history. More than once, investors and employees worried that the entire future of the company was at stake.
As a Bay Area resident and professional journalist during the past decade, I saw Uber rise to power right in front of me. I witnessed how quickly a transformative idea can change the urban fabric of a city, and how strong personalities can have an outsized effect on shaping the way a startup operates.
I began covering Uber for the New York Times in 2014. Those were Uber’s glory days, when Kalanick’s cunning and street-fighting sensibilities helped to outwit competitors, seal billion-dollar financing deals, and make Uber’s global conquest seem inevitable.
Just a few years later, Uber was on a collision course with itself, and Kalanick’s leadership had grown into a liability: 2017 turned into one of the worst years of sustained crises for any corporation in the history of Silicon Valley, as Uber suffered blow after self-inflicted blow in full view of the public.
My coverage ultimately led me to becoming part of the story, wrapped up in the twisted saga of lies, betrayal, and deceit that Kalanick and other company leaders used to build and control a tech juggernaut, one of the first unicorns of the mobile era, a company worth billions of dollars that succeeded in changing the way we move through the world, yet nearly destroyed itself in a bonfire of bad behavior, ugly decisions, and greed.
I feel lucky to have been along for the ride.
PART Ⅰ
Chapter 1
X TO THE X
The email blast went out to employees across the world: Uber had passed another milestone. It was time for Uberettos* to celebrate.
It was an Uber tradition for Travis Kalanick to take the company on the road after hitting growth targets. Funded by billions of venture capital dollars, the trips were conceived as morale boosters, a way to bring employees closer together. But they were also an excuse for a week-long bacchanal in some far-flung part of the world. For this celebration, Kalanick had a special city in mind: Las Vegas.
Kalanick would have to be creative in Vegas if he wanted to top Uber’s previous company-wide retreat. In 2013, he had organized a blowout bash in Miami to celebrate Uber reaching $1 billion in gross ride bookings—an enormous feat at the time. The trip was memorialized internally with the Chinese symbol , a character that stood for the number 9. He claimed it had “internal meaning at Uber,” but was “something we do not discuss externally,” according to a letter he sent to the entire company before the retreat. He went on to advise his staff not to throw large kegs off of tall buildings, and mandate no interoffice sex unless co-workers explicitly stated “YES! I will have sex with you” to one another. He also noted that any puking on hotel grounds would result in a $200 fine. The email set the tone for the rest of the retreat.
Miami would be dwarfed by what Kalanick had in store for Las Vegas. This one was special, a celebration of a key internal metric. Every time the company reached a revenue milestone that corresponded with an exponent of the number ten, Uber celebrated with a party. But as the company swelled in headcount and number of cities served, so did the scope of Uber’s celebrations. With every new zero added to the revenue figure, Uber’s thousands of employees were rewarded with an all-expenses-paid trip to another global destination.
The ten billion revenue figure was special. Everyone appreciated the significance of such a big, round number, and Kalanick in particular had an affinity for the mathematics of exponential growth. They would call this milestone party “X to the x”—ten to the power of ten. He dispatched an entire team of designers to work on the aesthetics of the trip. The invitations, the signage, even the wristbands all had the same look: A large, white “X,” raised to the power of a smaller white “x” against a square, black backdrop. It was very Uber.
High-end party branding aside, some form of celebration was appropriate. By the fall of 2015, Uber employed nearly five thousand people globally, the result of an endless talent poaching campaign across Silicon Valley. Engineers from Amazon, Facebook, Apple, Tesla, and especially Google, came flooding into the company as quickly as recruiters could pluck them from places like the Creamery, the Battery, WeWork—VC-funded startups themselves—that had become the usual haunts of coders in San Francisco.
Engineers had seen the adjectives the press used to describe the company. Uber was “fast-growing,” “pugnacious,” a “juggernaut.” They heard the whispers of staggering revenue growth, and saw the company’s surging valuation, which was already well into the billions. They loved how Kalanick brought a hacker-like mentality to the way he built and ran his company. No one wanted to miss their shot at entering the next Google or Facebook on the ground floor.
Recruiters knew exactly how to sell it, tweaking the FOMO† of ambitious engineers. “You don’t want to miss this rocket ship,” the headhunters said, as they flooded the LinkedIn boxes of engineers across the Valley. Securing equity in a fast-growing company like Uber could one day let them cash out and buy a mini-mansion in San Francisco, the white-hot center of the Bay Area real estate market. Others dreamed of doing four years inside of Uber, then using their vested riches to start new companies of their own.
The Bay Area had seen this before. After the initial public offerings of Google, Twitter, and Facebook, Silicon Valley had absorbed hundreds of newly minted millionaires. And now, for thousands of young engineers who had heard stories from older colleagues about the heady days of the Web 1.0 boom, l
anding a job at Uber meant they, too, might realize their dreams of tech riches.
Joining Uber in those days was a statement, like driving a Tesla or wearing a Rolex. The anxiety, stress, and crushing schedule of twelve-plus-hour days was all going to be worth it. They were all going to get paid, big time.
In October of 2015, thousands of Uber employees flew into McCarran International Airport in Las Vegas, walked out in the hundred-degree heat, and piled into a line of shuttles and taxicabs,‡ headed to their hotels on the strip. It was time to party.
Kalanick spared no expense. Uber rented hundreds of rooms up and down the strip at Bally’s, the Quad, the Flamingo, and others. Each employee was given Visa prepaid credit cards filled with money for food, fun, and festivities. They didn’t always need them; the private parties were stocked with free food and open bars. A company-issued wristband with the “X” logo gained one access to all of the planned Uber events. Before the trip, engineers quickly spun up an app that served as a personal guide to the week’s festivities. Everyone was given small, temporary stick-on tattoos that all read the same: “X to the power of x.”
While Kalanick insisted on extravagance, some executives had the foresight to worry about the optics of the celebration. Rachel Whetstone, a former Googler and Uber’s top policy and communications executive, sent out memo after internal memo detailing how employees should not behave. No Uber T-shirts, no discussion of company numbers or metrics, absolutely no talking to press. Even the small Uber logos on employees’ corporate Gmail accounts were removed and replaced with the “X” logos, in case bystanders happened to see an engineer working in public.
Uber already had an aura of arrogance about it in 2015. The pervasive trope of the “tech bro” was the ire of communications representatives across the Valley; young and moneyed, childless, these engineers and salesmen were unburdened by the daily concerns of the baristas, housekeepers, and wait staff they felt existed to serve them. A tech bro’s greatest worry was whether or not he was working at that year’s hottest “unicorn”—a noun coined in 2013 by a venture capitalist who used it to describe companies valued at more than $1 billion. By the fall of 2015, Uber was the unicorn to end all unicorns; every tech bro had to be there.
Uber wasn’t alone as a haven for tech bros. Snapchat, once a darling in the Valley for its innovative approach to social networking, was under fire for emails its founder had sent to fraternity brothers during his college days at Stanford. (“Fuck Bitches Get Leid,” [sic] one read.) A group of Dropbox and Airbnb employees were filmed trying to kick a group of San Francisco kids off a soccer field to make room for their corporate league game. The clip went viral, and the companies were forced to apologize to an outraged public. Whetstone and other communications team staff cringed at the thought of seeing Uber’s Vegas blowout splashed across the pages of Silicon Valley tech blogs—or worse, the Daily Mail.
Some took it too far, even by Uber standards. One employee hired a pair of prostitutes to join him in his hotel room. The next morning, he and his roommate woke up with all of their belongings stolen, including their work laptops. Uber management, terrified of company secrets being sold on the black market, fired the employees on the spot and tried to track down the hardware.
A Los Angeles general manager was fired in 2015 for groping the breasts of one of his team members. Managers were doing drugs with their subordinates—cocaine, marijuana, and ecstasy, mostly. Then there was the employee who managed to steal a party transportation shuttle and joyride it with other Uber employees looking for a good time.
Executives designed each night to outdo the previous one. One memorable evening saw employees flood into XS, a club inside the sleek Encore Las Vegas. That night, Kygo and David Guetta—two renowned electronica musicians—played a private set for Uber staff into the early hours of the next morning.
But the crown jewel was the final musical guest. As Uberettos lined the venue inside the Palms hotel, the house lights went dark and the stage filled with smoke. A voice began to sing the first few slow bars of a familiar song. Then she appeared. Wrapped in a blood-red jumpsuit, sequins shimmering against the neon beams behind her, fog machines wrapping her in mist. The words started coming into focus, a hit all the twentysomething employees knew by heart: “Got me looking so crazy right now, your love’s got me looking so crazy right now. . . .”
Employees began screaming as the singer stepped into the spotlight. They realized what Kalanick had done: He got Beyoncé.
The night exploded, with employees dancing and singing along to a string of number-one hits. The crowd hushed for a haunting acoustic rendition of “Drunk in Love,” a standby. Up in the rows of seats facing the stage sat Beyoncé’s husband, Jay-Z, smoking a cigar and smiling.
As Beyoncé’s set came to a close, Kalanick stumbled on stage: His employees, giddy with song and free-flowing Cîroc, were loving every moment. They were all celebrities that night.
“I fucking love you! ALL of you!” Kalanick yelled into the microphone, holding Beyoncé’s hand, clearly drunk. “I fucking love you back!” one woman screamed back at him.
Then, Kalanick dropped another bomb: Beyoncé and her husband, Jay-Z, were now stockholders in Uber. What he didn’t tell them was how the celebrity couple had decided to invest; Kalanick had paid Beyoncé $6 million in Uber restricted stock units for her performance. The stock’s value would increase by 50 percent in less than a year.
At the end of the week, Uber’s finance team added it all up. The entire “X to the x” celebration cost Uber more than $25 million in cash—more than twice the amount of Uber’s Series A round of venture capital funding.
Employees across the company had to appreciate the moment. Many of them were nerds in high school. In college, velvet ropes had kept them out of stylish lounges. Now, they were being ushered into a Las Vegas nightclub with open arms, treated to a private performance by one of the world’s biggest musical superstars. The engineers from Stanford, Carnegie Mellon, MIT were suddenly ballers, in business directly with Jay-Z.
The whole ordeal was supposed to be “baller as fuck,” as someone put it. And it was.
“X to the x” perfectly emblematized a particular moment in Silicon Valley history. After the dot-com-era bust of the early 2000s, a wave of mobile-device innovation quickly swept the world. The unveiling of the iPhone in 2007 put a handheld computer in everyone’s pocket. Here, in Las Vegas, Uber employees were celebrating a smartphone app—which they had personally built—that summoned a taxi at the push of a button. Their labor had brought them absurd, unimaginable wealth. Multi-million-dollar mansions, day trips to Napa Valley vineyards, and lakefront properties in Tahoe were within their reach practically overnight.
Their response to this was not to pause and marvel at their astonishing luck to work at a time and place where fortunes came gushing to twentysomethings via smartphone apps. Instead, they imagined taking their few million from Uber and creating a unicorn of their own—for surely their success thus far showed they were destined for even greater success in the years to come.
But for every WIRED cover story of a boy genius striking it rich with a smartphone app, there was a mess of secondary effects left in his wake. Many of the next generation of apps catered to the needs and whims of the white, upwardly mobile twentysomething males of Silicon Valley. The press gave significantly less ink to the latent misogyny bubbling up inside of tech companies, and the libertarian view that enabled tech figureheads to unwittingly enable these same biases. The divide between tech’s most talented, and the class who waited tables and served them coffee only grew starker by the day. Fast-rising rents pushed wage earners out of San Francisco, while landlords flipped those former apartments to new, wealthier tenants. The “gig economy” unleashed by companies like Uber, Instacart, TaskRabbit, and DoorDash spurred an entirely new class of workers—the blue-collar techno-laborer.
With the rise of Facebook, Google, Instagram, and Snapchat, venture capit
alists looked everywhere to fund the next Mark Zuckerberg, Larry Page, or Evan Spiegel—the newest brilliant mind who sought, in the words of Steve Jobs, to “make a dent in the universe.” And as more money flowed into the Valley from outside investors—from hedge funds and private equity firms, sovereign wealth funds and Hollywood celebrities—the balance of power shifted from those who held the purse strings to the founders who brought the bright ideas and willingness to execute them. With money easier to come by, founders were able to exact more favorable terms for themselves, wresting control of the companies from the money men—who required diligence, profitability plans, and oversight.
This shift in the funding of American technology businesses would change the way a generation of the most successful startup founders would expect to be treated by their backers—the “cult of the founder” meant celebrating the vision of the founder no matter what, a slavish devotion to the CEO of a company simply because he was the CEO. Twelve-hour workdays and a nonexistent social life became things to be celebrated, the markers of a “hustle culture” that the tech bro founders embodied. (Of course, these hardworking bros also played hard, at events like X to the x.) Even when those founders were bending rules and even laws, they were treated as Platonic philosopher kings. Many believed the founders were remaking the world, making it smarter, more logical, meritocratic, efficient, and beautiful—delivering a new and much improved version: an upgrade on life.