Uber's Legal Woes: Breaking The Law?

Uber, officially Uber Technologies Inc., has been the subject of numerous controversies since its founding in 2009. The company has been accused of unethical and illegal practices, including ignoring and evading local regulations, aggressive lobbying, and exploiting violence against drivers.

In July 2022, a leak of over 124,000 confidential documents, known as the Uber Files, revealed that the company had engaged in ethically questionable practices during its rapid global expansion. The files showed that Uber had flouted laws, duped police, and secretly lobbied governments, including attempting to influence Joe Biden, Olaf Scholz, and George Osborne.

Uber's aggressive tactics involved breaking numerous laws and regulations relating to traditional taxis and ignoring local regulations, claiming to be a “technology company” rather than a taxi company. The company also developed sophisticated methods to thwart law enforcement, such as a “kill switch that restricted officers' access to sensitive data during raids.

Despite Uber's claims of being a reformed company since 2017, when CEO Travis Kalanick resigned amid various concerns, it has continued to operate its service in cities where local laws stipulate that drivers must be treated as employees. The company's actions and justifications have sparked widespread debate and varied responses, with some calling for increased regulation and transparency while others defend the company's practices.

Uber's exploitation of violence against drivers

Uber's exploitation of violence against its drivers has been well-documented in the media, with sources citing leaked confidential files that reveal the company's unethical practices. The "Uber Files" leak, which includes more than 124,000 documents spanning from 2013 to 2017, exposes the company's aggressive expansion strategies and disregard for the safety of its drivers.

Uber often launched in new markets in violation of local regulations, provoking backlash from traditional taxi services and their drivers, who feared for their livelihoods due to Uber's low fares. This led to violent protests and attacks on Uber drivers, with incidents occurring in France, Belgium, Italy, the Netherlands, Spain, Switzerland, and other countries.

Instead of prioritizing the safety of its drivers, Uber exploited the violence to further its business interests. The company leveraged the attacks to pressure governments and win public sympathy, portraying itself as a victim of an outdated and monopolistic taxi industry. Uber's former CEO, Travis Kalanick, even went as far as to suggest that "violence guarantees success" in a text exchange with his executives.

Uber's strategy, as described by a former senior executive, was to "weaponize" its drivers and keep "the controversy burning." The company encouraged drivers to participate in counter-protests and civil disobedience, despite the risk of violence. Uber staffers exchanged emails on how to make use of the violence to win concessions and influence public opinion. They instructed driver victims to file police reports, which were then shared with the media to keep the "violence narrative going."

Uber's exploitation of violence against its drivers was not an isolated incident but a repeated pattern across multiple countries. The company's disregard for the safety and well-being of its drivers, prioritizing profits and expansion above all else, has been widely criticized and led to legal consequences in some cases.

Uber's use of a kill switch to avoid police detection

Uber's use of a "kill switch" to avoid police detection during raids has been revealed in a leak of confidential documents. The "kill switch" was a tactic used by Uber executives to prevent law enforcement from accessing sensitive data on company computers. During a raid, Uber executives would instruct IT staff to cut off access to the company's main data systems, preventing authorities from gathering evidence. This practice was deployed at least 12 times during raids in France, the Netherlands, Belgium, India, Hungary, and Romania.

The use of the "kill switch" was approved by Uber's lawyers and senior executives, including former CEO Travis Kalanick and current Uber Eats lead Pierre-Dimitri Gore-Coty. Emails show Kalanick and Gore-Coty instructing IT staff to "kill" access to computer systems during raids. Despite warnings that blocking access to laptops could result in employees being taken into custody, Uber executives continued to discuss ways to impede the investigation.

Uber's "kill switch" was part of a sophisticated global operation to thwart law enforcement and was developed in response to a flurry of raids by police and officials attempting to shut down Uber's unlicensed taxi service. While Uber claimed that the tactic was not designed to obstruct justice, legal experts raised questions about possible breaches of laws against obstructing justice in the countries where it was deployed.

The revelation of Uber's use of the "kill switch" is just one of the many unethical practices exposed in the leak, which also included lobbying governments, exploiting violence against drivers, and flouting local laws and taxi regulations. In response to the leak, Uber admitted to past mistakes and stated that it has not and will not make excuses for behavior that is not in line with its present values. The company also claimed that it has transformed since 2017 under the leadership of its current CEO, Dara Khosrowshahi.

Uber's classification of drivers as gig workers/independent contractors

Uber's classification of its drivers as independent contractors has been a highly controversial topic, with the company facing legal challenges in several jurisdictions, including California. This classification allows Uber to avoid providing certain benefits and protections to its drivers, such as minimum wage, overtime pay, health insurance, and unemployment insurance.

Arguments in Favour of Classifying Uber Drivers as Employees

One of the key factors in determining whether a worker is an independent contractor or an employee is the level of control exerted by the hiring company. Uber exerts significant control over its drivers, including fare prices, routes taken, and performance standards. Uber also has the ability to monitor and discipline drivers who do not meet these standards. This suggests that Uber drivers are not truly "free from the control and direction" of the company, which is a key factor in determining independent contractor status.

Another important consideration is the degree to which the worker is integrated into the hiring company's business. Uber drivers are integral to the company's operations and the service it provides. Without drivers, Uber would not exist, indicating that the work performed by Uber drivers is not "outside the usual course" of the company's business—another factor in determining independent contractor status.

Arguments Against Classifying Uber Drivers as Employees

One of the key characteristics of an independent contractor is their independence. Independent contractors are typically in business for themselves and can negotiate the terms of their engagement. Uber drivers have the flexibility to choose when and how often they work and can also work for other ride-sharing companies. This level of independence suggests that Uber drivers are indeed independent contractors rather than employees.

Another characteristic of independent contractors is their entrepreneurial spirit. They are responsible for their success or failure and can build their own businesses. Many Uber drivers consider themselves entrepreneurs, using the Uber platform to build their businesses and earn more money. This suggests that Uber drivers are not merely employees but are running their own businesses.

Uber's Response to the Debate

Uber has stated that the U.S. Department of Labor's Worker Classification Rule does not materially change the law under which the company operates and will not impact the classification of its drivers as independent contractors. Uber emphasizes that its drivers value their independence and flexibility, and the company aims to provide models that offer both flexibility and benefits to its drivers. For example, in California, Proposition 22 ensures that drivers maintain their independent status while gaining access to benefits such as a minimum earnings standard and occupational accident insurance.

Uber's use of stealth technology to avoid government investigations

One of the stealth tactics Uber employed was the use of a "kill switch" to thwart law enforcement. The "kill switch" was a mechanism that allowed Uber to cut off access to its data systems during raids by government authorities, preventing them from gathering evidence. This technique was deployed at least 12 times during raids in France, the Netherlands, Belgium, India, Hungary, and Romania, according to the leaked files.

In one instance, during a police raid in Amsterdam, Kalanick personally issued an order to activate the "kill switch" as soon as possible, stating that "access must be shut down in AMS (Amsterdam)".

In addition to the "kill switch", Uber also employed other stealth tactics to avoid scrutiny. The company lobbied world leaders and government officials to relax labour and taxi laws, rewrite regulations, and drop investigations. Uber also channelled money through tax havens like Bermuda to reduce its tax bill and used violence against its drivers by the taxi industry as a way to gain public sympathy and support for its business.

Uber's attempts to sabotage competitors

Uber has been accused of engaging in various unethical practices, including aggressive lobbying and ignoring and evading local regulations. In 2014, Uber employees were caught ordering and then quickly cancelling rides on competing services Lyft and Gett, in an attempt to disrupt these services. This practice became known as "Operation SLOG", an acronym for a "special ongoing project". Uber provided its contractors with burner phones and credit cards, and encouraged them to strike up conversations with drivers from competing services, and attempt to recruit them. In some cases, Uber employees would text Gett drivers in an attempt to poach them.

In addition to this, Uber has been accused of recruiting people to use competing services for the sole purpose of recruiting their drivers to Uber. Uber has denied any involvement in these cancellation or recruitment efforts.

Uber's aggressive tactics reflect the fact that ridesharing is largely a zero-sum game: a driver picking up an Uber customer cannot simultaneously pick up a Lyft customer. Having more active drivers on the road creates a virtuous circle that improves geographical coverage, increases demand, and allows services to lower prices by taking a smaller cut from a growing number of rides. Uber and Lyft are competing to become the first app customers think of when they need a taxi, and the service with the most drivers likely stands the best chance of winning.

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