by Isaac, Mike
—Keep your Uber phone off your windshield—put it down in your cupholder
—Ask the rider if they would sit up front
—Use the lanes farthest from the terminal curbside for pickup and dropoff
Remember, if you receive a ticket while picking up or dropping off Uber riders at the airport, Uber will reimburse your costs for the ticket and provide any necessary legal support. Take a picture of your ticket and send it to [email protected].
Thank you and have a wonderful day!
The email was written in a friendly tone, but it demonstrated that Uber was systematically schooling drivers to avoid detection.
After we finished our slices, Bob pulled a laptop out of his backpack. He opened up a web browser and punched in a URL. The page loaded to a three-year-old YouTube video posted by the Oregonian, the local newspaper in Portland. In the video, a transportation official, Erich England, was trying to hail a ride as a part of a sting operation to catch Uber illegally operating in the city. As we watched the video together, we saw England fail to catch an Uber. Two drivers agreed to pick him up and then quickly canceled, he explains, unsure what went wrong. “Must be high demand,” England says, shrugging. After that, the app showed no Ubers available at all. Eventually, he gives up.
“That was no accident,” Bob said. “That was Greyball.”
The genesis of Greyball, a software tool Uber used to systematically deceive and evade authorities, occurred in Philadelphia, one of the hardest fought markets Uber ever tried to enter. In the fall of 2014, as the company tried to launch UberX in Philadelphia, the Philadelphia Parking Authority sent a stern message to drivers. “If we find a civilian car operating as an UberX, we will take the vehicle off the streets. We will impound the vehicle,” a PPA official said at the time. The PPA started creating fake Uber accounts to conduct sting operations; when Uber drivers showed up, PPA officials impounded their cars and issued thousands of dollars in fines. It was effective; people became too scared to drive for Uber.
Uber city managers in Philadelphia were panicking. How could Uber convince people to drive for them if the police kept impounding their vehicles? Bob showed me an SMS text Uber’s Philadelphia managers sent to all of its drivers, reassuring them of Uber’s support:
UBERX: REMINDER: If you are ticketed by the PPA, CALL US at XXX-XXX-XXXX. You have 100% of our support anytime you are on the road using Uber—we are here for you, and we will get you home safe. All costs associated will be covered by us. Thank you [for] providing safe, reliable rides to the citizens of XXX-XXX-XXXX. Uber-ON!
Philadelphia’s operations team was pushing engineers back at headquarters to come up with a solution. As other teams across the country encountered similar challenges, the pressure in San Francisco mounted. The operations and engineering departments at HQ wanted to know the precise laws around operating UberX vehicles in Philadelphia. The legal department, led by Uber’s general counsel Salle Yoo, said it was a gray area; there were no specific laws about ride-hailing services, so technically, Uber would argue, it wasn’t illegal to drive for one.
The term “gray area” was music to Travis Kalanick’s ears. One talented engineer on the fraud team, Quentin, had an idea. Quentin’s team had dealt with the widespread fraud in China, and dealt with the fallout when Kalanick had to explain to Eddy Cue why Uber had broken Apple’s App Store rules. Quentin explained that when a rider opened the app there was a tool that controlled what cars the rider could see on the Uber map. They used the feature for all manner of things. If Uber was running a promotion, such as the popular “on-demand ice cream truck,” the feature would only show the customer the drivers who were delivering ice cream nearby, and hide all other Uber cars on the road. The tool was nicknamed “Greyball,” the idea being engineers were tricking customers—or “greying” over their eyeballs—to obscure or highlight specific vehicles.
What if, the engineers thought, they were able to “Greyball” the police or other parking enforcement officers who opened the app, hiding from them all UberX cars on the road? Authorities wouldn’t be able to figure out which cars were Ubers, while drivers would be safe from impound and customers would still be able to catch their rides. Everybody wins—that is, everybody except the Philadelphia Parking Authority.
The big problem, Bob explained to me, was figuring out how to spot who the authorities were so they would know which customers to start “Greyballing.” If Uber picked the wrong people, they could end up tricking a customer who wouldn’t be able to catch a ride.
So Uber engineers, fraud team members and field operatives came up with about a dozen ways to spot authorities. One method involved “geofencing”—or drawing a digital perimeter around police stations in a city that Uber attempted to enter. City managers would closely watch which customers within that perimeter were rapidly opening and closing the Uber app—a behavior engineers called “eyeballing,” or monitoring nearby drivers. City managers would also scan other details on new user accounts—personal information like credit cards, phone numbers, and home addresses—to check whether the data were tied directly to a police credit union or some other obvious giveaway. After Uber managers felt confident they had spotted police or parking enforcement, all it took was the addition of a short piece of code—the word “Greyball” and a string of numbers—to blind that account to Uber’s activities. It worked extremely well; the Philadelphia Parking Authority never noticed the deception and car impound rates plummeted.
Quentin’s fraud team created a new playbook for how city managers should use Greyball. The playbook was called “Violation of Terms of Service”—VTOS for short—and asserted that authorities using the app to fraudulently hail rides were violating Uber’s terms of service agreement. That violation gave Uber the right to deploy Greyball. Any employee could find the playbook in Uber’s internal, wiki-like information directory—alongside the dozens of other playbooks the company had created for other varied tasks.
With Uber facing opposition in almost every market it entered, the VTOS playbook and Greyball seemed like a godsend. In South Korea, for instance, local police were paying civilians to report drivers. A similar bounty program was conducted in Utah. The use of Greyball spread so quickly that members of the fraud team had to call a summit—attended by Uber general managers from more than a dozen countries around the world—to explain best practices.
As Bob explained the program to me at the pizza parlor, he started to relax. He felt relieved, he said, to finally explain it to someone after keeping it a secret for so long. Greyball might be illegal. Uber was potentially obstructing justice to make its numbers.
“I don’t know what you’re going to do with all of this,” he told me, pushing aside our empty paper plates to stow his documents. “I don’t know. Just meeting you, talking right now, whatever this is, I feel a little bit better.
“Maybe this will change something,” he said.
After we said our goodbyes, I left the pizza shop and walked back to my car, my mind spinning. Months later, the phone number Bob used to call me was disconnected. It was the first and last time I’d ever see him.
On the morning of March 3, the New York Times sent out a push alert to the mobile phones of subscribers: “Uber has for years used its app to secretly identify and sidestep law enforcement officials where it was restricted or banned,” the alert read.
The blowback was swift. Attorneys general across the United States began asking Uber whether or not it used Greyball in their cities. Days after the report, Joe Sullivan, Uber’s security chief, prohibited employees from using the Greyball tool to target authorities in the future, and said Uber was reviewing the use of Greyball over Uber’s entire history. The US Department of Justice opened a probe into Uber’s use of Greyball and whether or not it was lawful; the inquiry widened to Philadelphia, Portland, and other cities where it had been used. Uber already had the reputation for being uncooperative and aggressive. Now, people were calling them potent
ial criminals.
Attrition rates started climbing. Employees stopped wearing their Uber-branded T-shirts in public. During the Trump council revolts two months prior, protesters had handcuffed themselves to the front doors of Uber’s headquarters; now there were demonstrators out front almost weekly. The company’s reputation got so bad, employees stopped showing up to work. At one point, two of the remaining policy team employees in the office started rolling a ball down the entire length of Uber’s cement corridors—thousands of feet from one end to the other—just to see if anyone would notice.
No one did; no one was there.
After the offsite incident, the video of Travis berating a driver, and now the use of Greyball inviting federal investigation, Jeff Jones was done—he needed to get the hell out of Uber.
The entire reason he was hired was to fix the broken relationships between Uber and its hundreds of thousands of drivers. The driver video alone would have been enough to scuttle his efforts. When Uber cut rates in 2015, rather than worry about the effects lower income would have on drivers, Kalanick was giddy. To Travis, lowering prices meant raising demand. Growth would explode again, and growth—not the concerns of his drivers—was Travis’s top priority.
It didn’t matter to Kalanick that drivers were logging more trips and picking up more people—basically doing twice the work—to make the same amount of money. It didn’t matter that drivers were commuting absurd distances to busy cities like San Francisco—often from places two hours away, but occasionally as many as six hours away—sleeping in their cars overnight on side streets and empty parking lots for the chance at more rides per hour. It didn’t matter that San Francisco lacked sufficient public bathrooms for drivers, forcing them to find coffee shop bathrooms, or, more often, make do elsewhere. And it certainly didn’t matter that drivers pulling dayslong shifts were overworked and under-slept.
Kalanick had no sympathy for drivers and their bills—vehicle wear and tear, medical insurance, among many others—and classified them all as 1099 freelance workers. The entire business model was based on Uber minimizing the company’s responsibility over its drivers.
Drivers did find ways to push back. They formed unofficial unions, and used forums like UberPeople.net to congregate, share information, and organize walkouts and other protests. Harry Campbell, an aerospace engineer who drove for Uber and Lyft on the side, started a personal blog to document tips and insights. He called it The Rideshare Guy. Drivers were starving for more help and support from Uber; instead, they found it amongst themselves.
Reporting to Kalanick, Jeff Jones was powerless to help them. As he surveyed the wreckage of the past six months, Jones decided to pull the ripcord. On March 19, 2017, Recode ran a story saying Jeff Jones, Uber’s president of ridesharing, had resigned from Uber, with sources claiming his departure was directly due to the string of controversies that plagued the company.
Kalanick tried to fight back in the press. He had his communications staff leak a memo to Recode. In it, Kalanick said Jones left after being passed over as a potential chief operating officer. But Jones wasn’t going to let his former boss trash him without a fight. After Uber’s statement, he sent an on-the-record comment to Recode, in which he directly blamed the company’s leadership culture for his departure:
I joined Uber because of its Mission, and the challenge to build global capabilities that would help the company mature and thrive long-term.
It is now clear, however, that the beliefs and approach to leadership that have guided my career are inconsistent with what I saw and experienced at Uber, and I can no longer continue as president of the ride sharing business.
There are thousands of amazing people at the company, and I truly wish everyone well.
In the world of carefully worded corporate communiques, this was Jones giving it to Kalanick with both barrels.
Jones’s maneuver worked. After time off, he would eventually go on to be hired as president and chief executive officer of H&R Block, the tax preparation giant. He moved to Kansas City, Missouri, home of H&R Block’s headquarters, and still lives there with his wife.
The month had not gone well for Uber. But the worst days were yet to come.
Also in March 2017, Gabi Holzwarth was still trying to get over her ex-boyfriend, Travis Kalanick. She was working her new job at an automotive startup—her first full-time gig since she split with Kalanick—when she received a call from Emil Michael.
After dating Kalanick for the better part of three years, the two had split towards the end of 2016. The breakup had been difficult for both of them. Friends and co-workers believed they both genuinely cared for one another. As Kalanick skyrocketed to fame, the two became each other’s support systems. When he wasn’t working, Kalanick spent most of his time with Holzwarth.
But there was a more difficult side to their relationship. Later, as Holzwarth reflected on her time with Kalanick, and would later tell reporters, she realized he could sometimes be emotionally insensitive. He never yelled, but Kalanick knew how to be cruel and cutting, both in his bullying and put-downs to employees at work and to Holzwarth at home. At his request, Holzwarth would help organize events like Kalanick’s birthday parties, flying models in to join them as scenery. Holzwarth went along with it at the time, but looking back she felt bad about herself, about how Kalanick treated her and the other women in his life.
“You go to an event and there’s just a bunch of models they’ve flown in,” she later said. “That’s what they like to play with. That’s pretty much it.”
One event, however, stood out in her mind years later. In mid-2014, Holzwarth was on a business trip with Kalanick in Seoul. Uber had faced numerous problems with Seoul officials while trying to launch UberX in the region. One evening, a group that included Kalanick, Holzwarth, Emil Michael, and another female Uber employee joined a handful of South Korean Uber managers for a night of drinking. Things got wild, and the group ended up at what they thought was just a standard karaoke bar.
As the group from Uber stumbled in, another group of women who worked for the establishment sat in a circle in front of the bar’s patrons, each with a different numbered “tag” attached to their miniskirts. The men were allowed to look over the women, sizing them up. Customers could then pick a number, and the woman would follow them to a separate room to sing karaoke together, or the woman would serve the patrons drinks. Sometimes, after a few rounds of karaoke, the women would go home with the customer.
At least some in the group quickly surmised that the numbered bar girls were escorts for hire. Holzwarth and the female Uber employee were uncomfortable, but went along with things so as not to make the situation awkward for the others. Four of the South Korean male Uber managers picked out women to join the group to sing karaoke. After a few minutes, the female Uber employee left, appearing visibly shaken. After a round or two of karaoke—Michael sang “Sweet Child O’ Mine”—Holzwarth, Kalanick, and several others departed, leaving the local Uber managers with their escorts at the bar.
By all accounts, Kalanick, Michael, and others had done little more than sing karaoke in a public room at the bar and order drinks from the servers. Nevertheless, the outing could have landed everyone in deep trouble. Kalanick and Michael had appeared indifferent as their subordinates cavorted with sex workers. Months afterward, the female employee complained to human resources, and later told Kalanick she was uncomfortable about the situation. Little was done; human resources briefly raised the issue with the executives, but it seemed like everyone had chosen to forget the entire thing.
Holzwarth hadn’t planned on saying anything about it to anyone, either. That is, until she got a telephone call from Emil Michael.
On March 1, Michael texted Holzwarth out of the blue. She hadn’t spoken to him since before she and Kalanick had broken up late in 2016. He asked to call her, and she agreed.
They made small talk initially; Holzwarth was never close with Michael, though she often s
pent time with him and his girlfriend, since he was Kalanick’s wingman. “Things have been really rough out here,” Michael said. They both acknowledged the difficulties Uber had been going through. Then, Michael got down to business.
“Remember that night in Korea?” Michael asked. “Well, there are reporters digging around, trying to break the story. I just want to go over things with you,” he continued. “We just went to a karaoke bar and that’s all that happened, right?”
Holzwarth was getting upset. To her, Michael sounded like a thug, like some mafia consigliere, trying to tie up loose ends. He would tell others that he was simply trying to warn her that the incident might appear in the press.
“Can you just leave me out of it?” Holzwarth said. She was trying to move on with her life, and was having a difficult enough time doing it with her ex-boyfriend’s face plastered across every website and newspaper. Now she had Michael elbowing his way back into her life, bullying her.
He wouldn’t drop the issue, pressing her on the events. The karaoke bar, he insisted, was the only thing they did that evening in South Korea. “Right?” he said. “That was it, right?”
Holzwarth started to cry. “I’m dealing with my own shit!” she sputtered, in between sobs into her iPhone. “Just please, please leave me out of this!”
Eventually, Holzwarth agreed to keep quiet and stay away from reporters if they tried to call her. Michael feigned support at the end of the conversation, attempting his best impression of a concerned friend as she sniffled through tears on the other end of the line. “I hope everything’s OK,” Michael said.
“Thank you, take care of yourself,” Holzwarth responded. They said their goodbyes and hung up.
After she got off the phone, Holzwarth burst into violent sobs. Everything about her failed relationship—the way Kalanick treated her, the way she felt like she debased herself by being with him—she would later tell others that it all came flooding back.