The Uber app gives riders a quote for the fare before they commit to the ride. Uber uses a dynamic pricing model; prices for the same route vary based on the supply and demand for rides at the time the ride is requested. At the end of the ride, payment is made based on the rider's pre-selected preferences, which could be a credit card on file, Google Pay, Apple Pay, cash, or, in India, Airtel mobile wallet or Unified Payments Interface. After the ride is over, the rider is given the option to provide a gratuity to the driver, which is also billed to the rider's payment method. In some locations, if the driver has to wait more than a few minutes after arriving to the pickup location, riders are charged a wait time fee.
UberX, the basic level of service, provides a private ride in a standard car with driver for up to four passengers. Rider service levels, many of which are only available in certain cities, include:
UberBOAT, a water-taxi service, provides speedboats in the summer to/from points on the coast of Croatia. UberBOAT has also offered transport across Biscayne Bay during Miami Art Week and across the Bosporus strait in Istanbul in the summer.
UberMOTO, available in India, Indonesia, Pakistan, and the Dominican Republic, provides transportation by motorcycle.
UberPETS includes pet transport for an additional charge. Must be accompanied by pet's handler. Persons with a service animal may use any type of Uber service, as required by law.
UberPOOL, available for up to two people per party, provides a ride that is possibly shared with other riders going in the same general direction. Unless the rider pays an additional fee for door-to-door service, the rider(s) are required to walk a short distance at both ends of the ride to save time for the driver and other riders. The pickup/drop-off locations are indicated via a map in the mobile app.
UberTAXI allows users to summon a taxi using the Uber software application. Users pay an additional booking fee and can leave a gratuity through the app. The service was implemented to appease taxi drivers who protested the increased competition from Uber.
UberX provides a private ride in a standard car for up to 4 passengers.
UberXL provides a ride in a large vehicle that can seat up to 6 passengers.
UberWAV provides a wheelchair accessible vehicle.
UberAIR / UberElevate will provide short flights using VTOL aircraft. Demonstration flights are projected to start in 2020 in Dallas and Los Angeles. Commercial operations are projected to begin in 2023. Although technically feasible, the program is expected to encounter safety and regulatory obstacles.
Uber has also operated promotional limited services, such as rides of up to 15 minutes each on September 6–8, 2013 in San Francisco in the DeLorean DMC-12 car that was featured in the Back to the Future film franchise.
Drivers must meet requirements for age, health, car age and type, have a driver's license and a smartphone or tablet, and must pass a background check. In many cities, vehicles used by Uber drivers must pass annual safety inspections and/or must have an Uber emblem posted in the passenger window. Some cities also require Uber drivers to have a business license.
On New Year's Eve, after Camp and his friends spent $800 hiring a private driver, Camp wanted to find a way to reduce the cost of direct transportation. He realized that sharing the cost with people could make it affordable, and his idea morphed into Uber. Kalanick joined Camp and gives him "full credit for the idea" of Uber. The first prototype was built by Camp and his friends, Oscar Salazar and Conrad Whelan, with Kalanick being brought on as a "mega advisor" to the company.
Following a beta launch in May 2010, Uber's services and mobile app officially launched in San Francisco in 2011. Originally, the application only allowed users to hail a black luxury car and the price was 1.5 times that of a taxi.
In February 2010, Ryan Graves became the first Uber employee, getting the job by responding to a tweet from Kalanick announcing the job opening, and receiving 5–10% of the company. Graves started out as general manager and shortly after the launch was named as CEO. After ten months Kalanick succeeded Graves as CEO in December 2010. Graves stepped down to become the company's COO.
In 2011, the company changed its name from UberCab to Uber after complaints from San Francisco taxi operators.
The company's early hires included a nuclear physicist, a computational neuroscientist, and a machinery expert who worked on predicting demand for private hire car drivers and where demand is highest. In April 2012, in Chicago, Uber launched a service where users were able to request a regular taxi or an Uber driver via its mobile app.
In July 2012, the company introduced UberX, a service option that lets people drive for Uber using non-luxury vehicles, subject to a background check, registration requirement, and car standards. At first, rates were similar to those of taxis and were 35% cheaper than UberBLACK. By early 2013, the service was operating in 35 cities. Uber allowed drivers to use their personal vehicles as part of UberX starting in April 2013. Rates were quickly lowered, which caused some dissatisfaction among UberBLACK and taxi drivers, whose earnings decreased as a result of the increased competition at lower rates.
On September 14, 2016, Uber launched its first self-driving car services to select customers in Pittsburgh, including Pittsburgh Mayor Bill Peduto, using a fleet of Ford Fusion cars each equipped with 20 cameras, seven lasers, GPS, lidar, and radar equipment that enabled the car to create a three-dimensional map utilizing landmarks and other contextual information to keep track of its position.
On December 14, 2016, Uber began using self-driving Volvo XC90 SUVs in its hometown of San Francisco. On December 21, 2016, the California Department of Motor Vehicles revoked the registration of the 16 vehicles Uber was using for the test and forced the program to cease operations in California. Uber then moved the program to Arizona, where the cars were able to pick up passengers, albeit with two Uber engineers in the front seats as a safety precaution. In March 2017, an Uber self-driving car was flipped on its side by a vehicle that failed to yield. In October 2017, Uber started using only 1 test driver despite some employees' safety concerns.
In November 2017, Uber announced a non-binding plan to buy up to 24,000 Volvo XC90 SUV vehicles designed to accept autonomous technology (including a different type of steering and braking mechanism and sensors) between 2019 and 2021.
In March 2018, the death of Elaine Herzberg by an Uber self-driving vehicle in Tempe, Arizona resulted in temporary pause to Uber's self driving vehicle testing. According to police, the woman was run down by the Uber vehicle while attempting to cross the street, while the person in the vehicle was watching videos on her phone. Uber pulled its self-driving cars off all public roads and quickly reached a settlement with the victim's family. There was disagreement among local authorities as to whether or not the car or the victim was at fault. In December 2018, after receiving local approval, Uber restarted testing of its self driving cars, only during daylight hours and at slower speeds, in Pittsburgh and Toronto.
Cancellation of research on autonomous trucks
After spending $925 million to develop autonomous trucks, Uber cancelled its self-driving truck program in July 2018. Uber acquired Otto for $625 million in 2016. According to a February 2017 lawsuit filed by Waymo, owned by an affiliate of Google, ex-Google employee Anthony Levandowski allegedly "downloaded 9.7 GB of Waymo's highly confidential files and trade secrets, including blueprints, design files and testing documentation" before resigning to found Otto, which was purchased by Uber. A ruling in May 2017 required Uber to return documents to Waymo. The trial began February 5, 2018. A settlement was announced on February 8, 2018 in which Uber gave Waymo $244 million in Uber equity and agreed not to infringe on Waymo's intellectual property.
In total, Uber has raised $24.2 billion from 22 rounds of venture capital and private equity investors.
The founders invested $200,000 in seed money upon conception in 2009. In 2010, Uber raised $1.25 million in additional funding. By the end of 2011, Uber had raised $44.5 million in funding. In 2013, Google Ventures invested $258 million in the company based on a $3.4 billion pre-money valuation. In December 2014, Chinese search engine Baidu made an investment in Uber of an undisclosed amount. The deal also involved connecting Uber with Baidu's mapping apps. In January 2015, Uber raised $1.6 billion in convertible debt. In May 2015, Uber revealed plans to raise between $1.5 billion and $2 billion in new funding, raising the value of the company to $50 billion or higher. In September 2015, Uber raised another $1.2 billion, led by another investment by Baidu.
In 2016, Toyota made an undisclosed investment in Uber and looked into leasing options, which could potentially aid Uber drivers financially, a move in response to the other partnerships between Toyota's and Uber's counterparts. In June 2016, with plans to expand in the Middle East, Uber received $3.5 billion from the Public Investment Fund of Saudi Arabia. In July that same year, Uber raised $1.15 billion in debt financing.
In August 2016, after facing tough competition in China, Uber sold its operations in China to DiDi, in exchange for an 18% stake in Didi. Didi also agreed to invest $1 billion into Uber Global. Uber had started operations in China in 2014, under the name 优步 (yōubù).
In January 2018, the company raised $1.25 billion in cash from an investor group including SoftBank, Dragoneer Investment Group, and Sequoia Capital. The financing valued the company at $48 billion.
In March 2018, Uber merged its services in Southeast Asia with those of Grab in exchange for a 27.5% ownership stake in Grab.
On August 27, 2018, Toyota announced a partnership with Uber to bring an on-demand autonomous ride-hailing service to market, a deal that included a $500 million investment from Toyota in Uber at a $72 billion valuation.
Bradley Tusk, a former campaign manager for Michael Bloomberg, played a significant role in advising Uber on New York City regulations. Instead of taking a $25,000 per month fee, Tusk received Uber stock as compensation, which is now worth over $100 million.
In April 2018, men accounted for 62.0% of overall company employment, 51.4% of support staff, and 82.1% of technology-related employment. In the United States, White people made up 48.6% of the overall employment base and Asian people account for 32.3%. However, for technology-related jobs, White people were 46.3% of employees, while Asian people accounted for 44.7% of employment.
The taxi industry has claimed that TNCs skirt regulations that apply to passenger transport and TNCs are therefore illegal taxicab operations. This has resulted in additional regulations imposed on TNCs and, in some jurisdictions, certain TNCs are banned from operating.
Effect on values of New York City taxi medallions
In New York City, use of TNCs has negatively affected the values of taxi medallions, transferable permits or licenses authorizing the holder to pick up passengers for hire. After soaring in value after the Great Recession due to their perceived safety, New York City taxi medallions were again trading for around $170,000 each in 2018. Annual rental rates were $30,000. A couple of credit unions that lent money secured by medallions suffered from bank failure.
Driver criticism of classification of independent contractors
Unless otherwise required by law, TNC drivers are independent contractors and not employees. This designation may affect taxation, work hours, and overtime benefits and lawsuits have been filed by drivers alleging that they are entitled to the rights and remedies of being considered "employees" under employment law. In response, TNCs say they provide "flexible and independent jobs" for drivers.
TNCs use dynamic pricing models; prices for the same route vary based on the supply and demand for rides at the time the ride is requested. When rides are in high demand in a certain area and there are not enough drivers in such area, fares increase to get more drivers to that area and to reduce demand for rides in that area. The rate quoted to the rider reflects such dynamic pricing.
TNCs were criticized for increasing traffic congestion in New York City and San Francisco. A report published by Schaller Consulting in July 2018 showed that traffic congestion increased as a result of TNCs.
However, some reports say TNCs reduce traffic congestion; since their cars "can't accept street hails, they do much less unnecessary driving-around than either government-licensed/regulated taxi cabs (who are cruising for hails) or individuals (who are looking for a parking spot)." A March 2016 study by Judd Cramer and Alan B. Krueger of the National Bureau of Economic Research showed that a ride via a TNC uses capacity more efficiently than traditional taxicabs as TNC drivers are more likely to have a passenger than a taxicab.
In some areas, TNCs are required by law to have a certain amount of wheelchair accessible vans (WAVs) on the road at any given time. This can be a difficult requirement for TNCs to meet because TNCs don't provide vehicles and most drivers do not own a WAV, causing a shortage.
When a customer makes a pick-up request, a driver is notified via mobile app and is provided the customer's location. The driver has approximately 15 seconds to tap the phone to accept the request. In many jurisdictions, tapping a phone while driving is against the law as it could result in distracted driving.
In 2017, lawyers for drivers filed a class action lawsuit that alleged that Uber did not provide drivers with the 20% of collections they were entitled to.
In May 2017, after the New York Taxi Workers Alliance (NYTWA) filed a class action lawsuit in federal court in New York, Uber admitted to underpaying New York City drivers tens of millions of dollars over 2.5 years by calculating driver commissions on a net amount. Uber agreed to pay the amounts owed plus interest.
Driver refusal to transport a service animal
Criticism for collecting fares during a taxi strike
In late January 2017, Uber was targeted by GrabYourWallet for collecting fares during a taxi strike in New York City in protest of Trump travel banExecutive Order 13769. The Order had triggered a taxi strike in New York City, to which Uber responded by removing surge pricing from JFK airport, where Muslim refugees had been detained upon entry. Uber was also targeted because then-CEO Travis Kalanick joined an Economic Advisory Council with Donald Trump. A social media campaign known as #deleteuber was formed in protest, resulting in approximately 200,000 users deleting the app. Uber added user account deletion to meet the resulting surge in requests. Statements were e-mailed to former users who had deleted their accounts, asserting that the company would assist refugees, and that CEO Kalanick joining the Council was not an endorsement of President Trump. On February 2, 2017, Kalanick resigned from the business advisory council.
Aggressive strategy for dealing with regulators
When Uber was led by Travis Kalanick, Uber took an aggressive strategy in dealing with obstacles, including regulators. In 2014, Kalanick said "You have to have what I call principled confrontation." Uber's strategy was generally to commence operations in a city, then, if it faced regulatory opposition, Uber mobilized public support for its service and mounted a political campaign, supported by lobbyists, to change regulations.
In 2014, while in the midst of a regulatory battle, Portland, Oregon's transportation commissioner called Uber management "a bunch of thugs".
In June 2014, Uber distributed to its riders the personal contact information of a commissioner in Virginia who opposed the company and told riders to flood his inbox with complaints.
In November 2017, CEO Dara Khosrowshahi dropped the "win at all costs" strategy and implemented new values for the company, including "we do the right thing".
Alleged cancellation of ride requests to disrupt competitors
Uber issued an apology on January 24, 2014, after documents were leaked to Valleywag and TechCrunch saying that, earlier in the month, Uber employees in New York City deliberately ordered rides from Gett, a competitor, only to cancel them later. The purpose of the fake orders was two-fold: wasting drivers' time to obstruct legitimate customers from securing a car, and offering drivers incentives—including cash—to join Uber.
Following Lyft's expansion into New York City in July 2014, Uber, with the assistance of TargetCW, a San Diego, California-based employment agency, sent emails offering a "huge commission opportunity" to several contractors based on the "personal hustle" of the participants. Those who responded to the solicitation were offered a meeting with Uber marketing managers who attempted to create a "street team" to gather intelligence about Lyft's launch plans in New York City and recruit their drivers to Uber. Recruits were given 2 Uber-branded iPhones (one a backup in case the person was identified by Lyft) and a series of valid credit card numbers to create dummy Lyft accounts. Participants were also required to sign non-disclosure agreements.
In August 2014, Lyft reported that 177 Uber employees had ordered and canceled approximately 5,560 Lyft rides since October 2013, and that it had found links to Uber recruiters by cross-referencing the phone numbers involved. The report identified one Lyft passenger who canceled 300 rides from May 26 to June 10, 2014, and who was identified as an Uber recruiter by 7 different Lyft drivers. Uber did not apologize, but suggested that the recruitment attempts were possibly independent parties trying to make money.
Uber developed an internal software tool called Greyball, which uses data collected from the Uber mobile app other means, to avoid giving rides to certain individuals. The tool was used starting in 2014. By showing "ghost cars" driven by fake drivers to the targeted individuals in the Uber mobile app, and by giving real drivers a means to cancel rides requested by those individuals, Uber was able to avoid giving rides to known law enforcement officers in areas where its service is illegal. Investigative journalism by The New York Times and the resulting report, published on March 3, 2017, made public Uber's use of Greyball since 2014, describing it as a way to evade city code enforcement officials in Portland, Oregon, Australia, South Korea, and China. At first, in response to the report, Uber stated that Greyball was designed to deny rides to users who violate Uber's terms of service, including those involved in sting operations. According to Uber, Greyball can "hide the standard city app view for individual riders, enabling Uber to show that same rider a different version". Uber reportedly used Greyball to identify government officials through factors such as whether a user frequently opens the app near government offices, a review of social media profiles by Uber employees to identify law enforcement personnel, and the credit cards associated with the Uber account.
On March 6, 2017, the City of Portland, Oregon announced an investigation into whether Uber had used its Greyball software tool to obstruct the enforcement of city regulations. The investigation by the Portland Bureau of Transportation (PBOT) found that: "Uber used Greyball software to intentionally evade PBOT’s officers from December 5 to December 19, 2014 and deny 29 separate ride requests by PBOT enforcement officers."}} Following the release of the audit, Portland's commissioner of police suggested that the city subpoena Uber to force the company to turn over information on how Uber used software to evade regulatory officials.
On March 8, 2017, Uber admitted that it had used Greyball to thwart government regulators and pledged to stop using the service for that purpose.
After a police raid in Uber's Brussels office, a January 2018 report by Bloomberg News stated that "Uber routinely used Ripley to thwart police raids in foreign countries." Developed as a type of secret "panic button" system, initially called "unexpected visitor protocol", then nicknamed "Ripley", to disrupt government raids on Uber's offices by locking, shutting off, and changing passwords on staff computers upon a raid; Uber likely used this button at least 24 times, from spring 2015 until late 2016.
On November 19, 2014, then U.S. SenatorAl Franken, Chairman of the United States Senate Judiciary Subcommittee on Privacy, Technology and the Law, sent a letter to Kalanick regarding user privacy. Concerns were raised about internal misuse of the company's data, in particular the ability of Uber staff to track the movements of its customers, known as "God View". In 2011, a venture capitalist disclosed that Uber staff members were using the function to track journalists and politicians as well as using the feature recreationally. Staff members viewed being tracked by Uber as a positive reflection on the subject's character. An Uber job interviewee said that he was given unrestricted access to Uber's customer tracking function as part of the interview process, and that he retained that access for several hours after the interview ended.
On February 27, 2015, Uber admitted that it had suffered a data breach more than 9 months earlier. Names and license plate information of approximately 50,000 drivers were inadvertently disclosed. Uber discovered this leak in September 2014 but waited more than 5 months to notify the affected people.
An announcement in November 2017 revealed that in 2016, a separate data breach disclosed personal information on 600,000 drivers and 57 million customers—including names, email addresses, phone numbers, and driving license information. Using employees' usernames and passwords that had been compromised in previous breaches (a "credential stuffing" method), attackers gained access to a private Github repository used by Uber developers. The hackers subsequently located credentials for the company's Amazon Web Services datastore in the repository files, and were therefore able to obtain access to the account records of users and drivers, as well as other data contained in over 100 Amazon S3 buckets. Uber paid a $100,000 ransom to the hackers on the promise they would delete the stolen data. The company was subsequently criticized for concealing the loss of data. CEO Dara Khosrowshahi apologized. Uber's British divisions were fined £385,000 (reduced to £308,000) by the Information Commissioner's Office.
In September 2018, Uber settled with the Federal Trade Commission for $148 million and admitted that its claim that internal access to consumers' personal information was closely monitored on an ongoing basis was false. Uber also stated that it had failed to live up to its promise to provide reasonable security for consumer data. It was the largest multi-state settlement related to a data breach.
It is unclear if Uber is less or more safe than taxicabs, as major cities don't have much data on taxi-related incidents.
Allegations of inadequate background checks and vetting of drivers
Concerns regarding Uber's background checks were raised after reports of sexual abuse of passengers by Uber drivers.
In February 2016, Uber was criticized following the 2016 Kalamazoo shootings, a shooting spree in Kalamazoo, Michigan that left six people dead and two wounded. It was committed by Jason Dalton, who was driving for Uber while conducting the shooting. During the ensuing seven-hour manhunt, authorities believe that Dalton continued to drive and accept fares. Uber was aware of issues with Dalton's driving skills, having received multiple complaints, though critics agree that Dalton would not have raised any red flags since he did not have a criminal record.
In November 2017, The Colorado Public Utilities Commission fined Uber $8.9 million after discovering that 57 drivers in the state had violations in their background checks. The fine amount equaled $2,500 per day that an unqualified driver worked.
Sexual harassment allegations and management shakeup (2017)
CTO Thuan Pham was alleged to have had knowledge of and to ignore Susan Fowler's sexual harassment allegations; however, investigations by TheInformation and Buzzfeed showed this to not be the case, allowing Pham to keep his job.
On February 27, 2017, Amit Singhal, Uber's Senior Vice President of Engineering, was forced to resign after it came to light that he failed to disclose a sexual harassment claim against him that occurred while he was the Vice President of Google Search.
On June 6, 2017, Uber announced that it fired over 20 employees as a result of the investigation. On June 13, 2017, Kalanick took an indefinite leave of absence from Uber. On June 20, 2017, after multiple shareholders reportedly demanded his resignation, Kalanick resigned as CEO.
At a private dinner in November 2014, Emil Michael, senior vice president of Uber, suggested that Uber hire a team of opposition researchers and journalists, with a million-dollar budget, to "dig up dirt" on the personal lives and backgrounds of media figures who reported negatively about Uber. Specifically, he targeted Sarah Lacy, editor of PandoDaily, who, in an article published in October 2014, accused Uber of sexism and misogyny in its advertising. Michael issued a public apology and apologized to Lacy in a personal email, claiming that Uber would never actually undertake the plan. Several journalists deleted their Uber apps. After several additional scandals involving Emil Michael, including an escort-karaoke bar scandal in Seoul and the questioning of the medical records of a rape victim in India, he left the company in June 2017 when Kalanick, who reportedly was protecting Michael, resigned.
Laurell, Christofer; Sandström, Christian (June 28, 2016). "Analysing Uber in social media – disruptive technology or institutional disruption?". International Journal of Innovation Management. 20 (5): 1640013. doi:10.1142/S1363919616400132.
McGaughey, E. (2018). "Uber, the Taylor Review, mutuality, and the duty to not misrepresent employment status". Industrial Law Journal. SSRN3018516.
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