Super Pumped : The Battle for Uber (9780393652253)

by Isaac, Mike

  Khosrowshahi then revamped Uber’s overarching philosophy. Uber’s fourteen values, once sacrosanct, were replaced with a list of eight simple maxims. Items like “super pumped” and “always be hustlin’ ”—values sprung from the mind of an arrogant young man—were discarded. Instead they were replaced with a set of fairly bland platitudes that touched on “customer obsession,” à la Jeff Bezos, and a celebration of employee differences. The most important norm was the one Khosrowshahi repeated at nearly every press appearance and television interview during his extended 2018 apology tour: “We do the right thing. Period.”

  The new values were a full-throated repudiation of Khosrowshahi’s predecessor; where the old boss was a ne’er-do-well, the new boss had integrity. With a warm smile, balding hairline and fuzzy beard, Dara Khosrowshahi was dubbed the new “Dad” of Silicon Valley.

  Nearly overnight, “Dad” was everywhere. Over the airwaves, in magazines and newspapers, and across YouTube, Uber blanketed media with ads featuring Khosrowshahi’s face. The company earmarked half a billion dollars for 2018 solely to repair and rebrand its battered image. They bought ads widely over the NBA playoffs and finals games, prime-time popular TV shows, and major publications like the Wall Street Journal.

  But beyond the positive media blitz, executives at the company were happy to make as little news as possible. After spending nearly a full year with negative Uber headlines plastered across print, TV, and the internet, the company intentionally tried to stay as dull as possible.

  “Khosrowshahi has been perfecting his brand of boring for 365 days,” WIRED said of the CEO’s one-year anniversary at the company in the fall of 2018.

  Image and public relations were no small tasks, but Khosrowshahi had a much larger and thornier challenge ahead: reining in Uber’s profligate spending and creating a path to profitability. For years, Kalanick had no checks on his decisions. He had burned through billions of dollars, for example, in money-losing wars with other ride-hailing companies across multiple continents. Khosrowshahi, a CFO for years under Barry Diller at InterActiveCorp, was a number-cruncher, an executive who met budgets. As he looked at Uber’s balance sheet, awash in red ink, he began to cut losses. That meant selling off Uber’s business in Southeast Asia to Grab, the local ride-hailing competitor, for a 27.5 percent ownership stake in the Singaporean company. Where Uber was notorious for poaching employees from competitors in earlier years, Khosrowshahi stopped flinging around enormous pay packages to compete with Facebook and Google for engineering talent.

  Uber’s self-driving division, one of the biggest drains on Uber’s finances and once considered an “existential” area of development for the company, is in limbo at the time of this writing.

  After his days at Uber, Anthony Levandowski, now disgraced in Silicon Valley, would not go quietly into the night. Levandowski would go on to form another self-driving trucking startup, Pronto.ai, that provided an off-the-shelf kit to bring autonomous driving to long-haul truckers for only $5,000. “I know what some of you might be thinking: ‘He’s back?’ ” he wrote in a blog post announcing his new company. “Yes, I’m back.”

  When not working on his startup, Levandowski was busy founding his own religion: a church devoted to Artificial Intelligence as a godhead. It was called the “Way of the Future.”

  Employees have found solace with the state of things under Khosrowshahi, largely happy that their employer has emerged from being one of the most hated companies in America, as it was in 2017. Cocktail parties are safe again. But for some, there remains a lingering, persistent concern: Is Uber under Dara Khosrowshahi still going to swing for the fences? Or has Uber lost its appetite for moonshots and world domination—the alluring, Travis-like quests that attracted them to the company in the first place?

  As one former employee put it: “Is Uber going to be an Amazon, a company that dominates in every sector it branches into? Or are we going to be another eBay?”

  Life for Bill Gurley has grown quite a bit easier.

  At the end of 2017, Gurley stood on the floor of the Nasdaq stock exchange with Katrina Lake, the entrepreneur and CEO of Stitch Fix who counseled him earlier in the year. That day in November, Lake addressed her newfound public investors for the first time with her fourteen-month-old son in tow. Gurley towered behind her, tall and awkward in a black suit and sky-blue tie, his fast-graying dark hair neatly parted to the left, as he smiled and applauded his entrepreneur, the youngest female founder ever to take a company public. It was protégés like Lake that made him the proudest. Lake was thirty-four. She had fought for every inch of ground that her startup had gained since she founded it at age twenty-eight. Lake valued Gurley’s advice and direction but was confident following her own instincts, building Stitch Fix into a public company with integrity.

  He wouldn’t be able to do the same with Kalanick. The SoftBank deal had been a sad coda to the relationship between a founder and an investor who once considered themselves the closest of allies and friends. And the damage to Benchmark’s “founder friendly” image was going to last indefinitely.

  Still, things had changed. Back during Uber’s darkest times, Gurley wondered if the entire business was destined to fail. He had truly believed tens of billions of dollars in value might evaporate in an instant, all because Gurley had failed to save the company from a risk-taking madman named Travis Kalanick. It was a thought that kept him up late into the night.

  Gurley didn’t have to worry about that anymore. He was sleeping much better lately.

  At the end of November 2017, Joe Sullivan was in the mountains near Lake Tahoe with his family. Sullivan and his daughters were preparing for Thanksgiving dinner the next day, a tradition they spent at the family’s cabin just a few hours north of San Francisco. As Sullivan was cooking and half-listening to a football game playing on television in the other room, he got a message from Uber’s human resources department, asking him to join a conference call later that day.

  Sullivan wasn’t stupid. Executives don’t just get surprise emails from human resources asking to arrange an emergency phone call the evening before a holiday weekend. He replied, refusing the offer and demanding to know what was going on.

  The HR rep responded: Uber was firing him. More than a year ago, when Uber suffered a security breach that resulted in the theft of millions of drivers’ identities, Sullivan had not sought outside legal advice or counsel, nor did he inform the authorities it had occurred. Sullivan and his team had spent millions in an operation to find the hacker, pay a bounty for them to delete the data, and keep the incident quiet.

  For Sullivan, the payment was considered part of a “Bug Bounty” program, a common Silicon Valley tactic by which corporations paid out so-called “White Hat” hackers—or “good guy” hackers—to find security flaws in a company’s systems and point them out or exploit them, then notify the company. For their trouble, companies would pay the hackers a bounty; the bigger the “bug,” the heftier the bounty. Sullivan paid this hacker, known as “Preacher,” $100,000 for his bounty. The operation had been successful, Sullivan believed, as he managed to thwart a potentially catastrophic incident.

  New management at the company saw it differently. Tony West, now Uber’s chief legal officer, was furious that Sullivan or Kalanick hadn’t informed authorities immediately of the breach. West was baffled as to why Sullivan spent millions to track down “Preacher”—the hacker who turned out to be a twenty-one-year-old man named Brandon, living with his mother and brother in a trailer park in Florida. Sullivan should have turned Brandon in to the authorities, West said, because Uber was required to notify consumers in the event of a data breach. Not doing so would ultimately result in millions of dollars of payments. Instead, Sullivan paid “Preacher” off and sent the hacker on his way.

  For the better part of an hour, Sullivan tried to explain to Uber’s legal and human resources representatives that they had it wrong, that the way h
e and his team handled the breach was all aboveboard.

  His efforts were in vain. The best they could offer was a lump-sum payment if Sullivan agreed to sign a non-disparagement agreement. Sullivan was too pissed off to even consider it; he declined.

  He didn’t ponder the decision he had made for long. Forty-five minutes later, Sullivan got a phone call from a reporter, requesting comment on his handling of the 2016 data breach and hacker payments. Uber executives had sanctioned a leak to the reporter that claimed Sullivan had led a cover-up operation to pay off hackers and hide the evidence of the incident from consumers. Fifteen minutes after that, the reporter’s story went live to the world.

  Before he even had time to react, Sullivan’s electronics stopped working. His company laptop was remotely wiped of all its contents from Uber headquarters. Shortly thereafter, his Uber-issued iPhone was “bricked,” rendered just as useless as his laptop and wiped of its data.

  As he sat in the living room of the cabin, stunned and angry, Sullivan tried to figure out what he was going to do next. He had done his job trying to protect the company, and he believed he had done it well. Before he arrived in 2015, Uber’s security systems were in complete shambles, practically nonexistent. They had him to thank for cleaning up the first data breach, not to mention the second one, and the nightmare of privacy violation issues Uber was dealing with at the time. Now, Uber’s executive, legal, policy, and press leaders had effectively damaged his reputation and career in Silicon Valley. For at least a time in 2017, federal prosecutors would look into his actions for any possible criminal violations.

  He didn’t believe what he had done was wrong. But after spending the past three years of his life inside Kalanick’s orbit and nebulous approach to ethics, Sullivan realized something: his life, for the foreseeable future, was going to get a whole lot worse.

  As Joe Sullivan’s life was falling apart, new billionaire Travis Kalanick’s was just beginning.

  By 2018, Kalanick left his full-time home in San Francisco with its enormous 13.3 percent state income tax rate and spent time in Miami—a haven for the fabulously wealthy, with no state income tax. Kalanick was joined by two fellow Silicon Valley outcasts, his former lieutenant Emil Michael, and early Uber investor and friend Shervin Pishevar, both of whose reputations in the tech press had been tarnished. Kala­nick’s friends quickly established residency in the state, protecting their new fortunes from the government.

  In the months after their ousters, the fallen Uber executives are convinced they fell victim to the ineptitude and trickery of Uber’s communications team. Eric Alexander, who was pushed out after it was reported that he retained the private medical file of the rape victim in India, has sued Rachel Whetstone, Uber’s former head of policy and communications; Alexander, Michael and others believe Whetstone conspired to knife them by soliciting information to reporters while she was still at the company. In a response to the suit, Whetstone strenuously denied the assertions. As of this writing, the lawsuit remains unresolved.

  Kalanick, still a bachelor, quickly found his place in the Miami nightlife scene. Flocking from one club to another with friends, he had a habit of informing dates and female acquaintances of his new status as a member of the revered “three comma club”—a reference to the three commas present in the number 1,000,000,000. When he wasn’t in Miami, he could be found aboard yacht parties in the French West Indies, or at one of his two houses in Los Angeles—one for both the East and West sides of LA, depending on where traffic kept him that day.

  His entrepreneurial days far from over, Kalanick is in the midst of working on his next startup: a real estate play, purchasing underutilized buildings and creating so-called “micro-kitchens” inside them, which will serve food delivered by Uber Eats. His plan, should it succeed, rests largely on the continued success of Uber.

  Some are worried what that will mean for Uber in the long run.

  Travis Kalanick showed up on the steps of the Phillip Burton Federal Building and US Courthouse at 450 Golden Gate Avenue on February 6, 2018, steeled and prepared for an afternoon of testimony.

  Wearing a solid black suit, a lavender shirt, and a black and white tie, the former chief executive looked good for his day in court. Later that day he would take the stand in Waymo v. Uber, which after months of deliberation and discovery had finally gone to trial. A gaggle of paparazzi huddled around the building entrances, waiting to snap photos of the fallen billionaire. Reporters lined the hallway of the nineteenth floor. They had camped out since five o’clock in the morning in hopes of getting a seat in the courtroom.

  Confident yet measured, Kalanick would go on to deliver compelling testimony later that day, assuring jurors that his actions surrounding Uber’s Otto deal were on the level. He testified that when Uber began developing its own autonomous vehicle research, Google CEO Larry Page grew increasingly “unpumped”—the polar opposite of “super pumped.” Sipping from a bottle of water, Kalanick was intense and charming, and his demeanor seemed be having a positive effect on some of the jurors, to the frustration of Waymo’s trial lawyers.

  “He answered every question, cool and calm,” Miguel Posados, one of the jurors, said of Kalanick to a reporter after the trial had concluded. Steve Perazzo, another juror, said Kalanick “really seemed like a good guy,” like “a guy who took this idea and was pretty aggressive with it and wanted to be the best in the world.”

  The jury wouldn’t get a chance to render a verdict. Shortly after Kalanick’s testimony, Waymo sensed its case going sideways. Uber ultimately ended up settling with Waymo for $245 million in company equity, abruptly ending the trial. However, there were some strings attached to the deal. As part of the terms of the settlement, Uber agreed that it would not use any of Waymo’s trade secrets in developing its autonomous vehicle program. Additionally. Uber’s self-driving division would be subject to independent, third-party reviews to be sure it no longer used any of Waymo’s proprietary information. Nevertheless, Waymo too would have a stake in Uber’s success.

  I had showed up to the courtroom on the morning of Kalanick’s first day of testimony, assuming my editor at the Times might want me to write a piece for the paper. I was on leave, in the process of writing this book, but the ending had yet to come—the case was still playing out.

  After a midday recess from the court, Kalanick was expected to testify next going into the afternoon. As a stable of lawyers on both plaintiff and defendant’s sides filed into the courtroom, followed closely by the press, I headed down the hallway to quickly pop into the bathroom before proceedings began again.

  By the time I got back to the courtroom, I was too late. They had closed the doors and the trial was back under way. I missed my chance to report on Kalanick’s testimony from the witness stand. In the long wood-and-granite-lined hallway outside of the courtroom, I stood cursing myself quietly, hoping the armed US marshals would eventually let me back inside. The way things were going, I wasn’t holding my breath.

  Then I realized: Kalanick wasn’t in the courtroom yet. He was walking briskly down the hallway behind me, towards the courtroom doors, waiting to be called to the stand. The guards held the doors shut, motioning for Kalanick to wait in the chambers outside, with me and a few others, before he was called in to testify.

  Kalanick waited, quiet and unaccompanied, outside the courtroom. I hadn’t seen or talked to him in months, and didn’t expect he’d be particularly chatty right before one of the most important moments in his professional life. Our last real interaction had been in June 2017, when I had contacted him for comment before I had run the story of his ouster. I imagined he hated my guts. Some ten feet separated us in those quiet chambers outside of the courtroom. As he backed away from the doors, he walked to the other side of the room, putting the bodies of three idle lawyers between us.

  A minute passed, and his head snapped up, as if he had decided something. Kalanick walked directly over to me,
meeting my gaze, and stuck out his hand. “Hey man, how are you doing?” he asked me in a hushed voice in the quiet hallway, shaking my hand and putting an arm around my shoulder. I’m sure he considered me a bitter enemy, and yet here he was, leaning into his charm. I smiled, returning the handshake.

  “Are you gonna be okay in there, sitting down?” I said, trying to break some of the tension. “They won’t let you pace back and forth!”

  “God, I don’t know!” he said, chuckling but clearly nervous. By the end of his testimony later that day, which would last just under an hour, he would finish nearly four bottles of water.

  Kalanick caught himself, as if someone had reminded him he was talking to a reporter. “Can we go off the record now?” he asked, wanting to chat but clearly not trusting me to keep things between us.

  I agreed to go off the record, an agreement I will continue to honor here. We spoke in that hallway for about ten minutes, as if things were normal between us, as if the multibillion-dollar company he built wasn’t at risk of a legal defeat that could bring about technological and financial ruin. Despite everything that had happened the past year—his ouster, the death of his mother, the loss of practically every friend he had—Kalanick was still capable of conjuring up his charming, bubbly self. Kalanick was still here, still standing.

  I wondered if he had learned anything from the last nine years of his life. He was rich—filthy, stinking, three-comma-club rich. And he was famous, or infamous, now. He was trying to rehab his image—to truly become a “Travis 2.0” version of himself. I was told that two months before today, he spent his Christmas in St. Bart’s. Days were spent with his father, who had recovered from his injuries since the accident in Fresno, and Kalanick’s siblings; for Christmas, they all dressed up in holiday pajamas and posed for photos on Kalanick’s Inst­agram account. Nights were spent on yachts, drinking and partying with friends and models.