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How Uber secretly investigated its legal foes and got caught (theverge.com)
168 points by kmfrk on July 10, 2016 | hide | past | favorite | 67 comments



I'm frankly astonished at how bad Uber is at setting an image - or if they're not bad at it then they're terrible at deciding what image to set.

I've never used them* but based on their reputation and depending on circumstances I think my preference order would be Lyft, taxi, public transportation, livery service, call friends to ask a favor, Uber, walk - and "walk" might move up the list depending on the weather and distance.

* The one time I tried to actually use Uber they locked my account because the card on file was declined - it'd been replaced after the Home Depot breach. Their unlock policy appeared to be something like "send us a picture of the card," which wasn't going to happen since it had been shredded months before. The early press about their business practices had already started, so I wasn't that interested in pursuing unlocking either.


> I've never used them

I have, I continue to use them (anyone has better service and is less corrupt than the taxi cartels), and I still generally agree.


I don't really get the "taxi cartel" thing. Taxis aren't exactly brilliant everywhere so I buy the better service argument, but if you're concerned about corruption and cartels I don't see how a global company largely operating outside the law is better.


It is more about a better deal and/or not getting ripped off (which the cartel is against) than about it being a cartel. It is amazing what Uber can do in a city like Manila.

Taxis also never bothered upping their convenience game, because they thought they didn't have to.


Its about not getting ripped off. With Lyft/Uber you can escalate if you feel ripped off. With Taxi Cartel's, there's nobody to take your complaints. We feel ripped off whenever we've had to ask this of ourselves, "Gosh, we seem to have gone a longer route" or "Did he start the meter before I got into the car?"

Side story: In Baltimore this happened to me. I got into a taxi and the driver starts asking me tons of questions. I'm politely answering and having conversation but I'm clearly not paying attention to the meter. We drove for 7-10 mins, 2-3 miles or so, and upon arriving to my destination is when I realized the cost was $30.


> Its about not getting ripped off.

I did mention Manila. And much of Thailand, and...well, Bali is pretty honest. Uber is a huge stress reliever in those places, where taxis can be outright dangerous! Forget about the US, I've been stuck at MNL at 2 AM in the morning and would kill for an Uber app (if it existed at the time).

But I totally agree with your point. A convenient feedback mechanism is quite nice, along with a GPS based meter that shows the route taken.


At the end of the day, Uber did go too far, "Schmidt and his client were being investigated by a secretive research firm, staffed by veterans from the CIA and the National Security Council, conducting an investigation on behalf of Uber’s top executives. As soon as the lawsuit was filed, those executives took an interest in Schmidt and his client, sending out operatives to dig up what they could find on Uber’s new antagonists."


TLDR: "In a filing last night, Uber pushed back against the allegations of fraud, arguing its contract with Ergo had specified that the investigation be both lawful and professional, and neither Kalanick nor Uber had any idea an investigator might stray beyond that. "Uber took reasonable steps to ensure that Ergo complied with the law," the filing reads. "It is undisputed that Uber and Mr. Kalanick were unaware that Ergo would use misrepresentations during its investigation.""

According to the article, it's common to do due diligence on plaintiffs, especially when they do something weird like name the CEO personally in the lawsuit. But it's obvious the research firm Uber contracted did more than they asked.


Alternatively...

TLDR: 'Uber communicated with Ergo largely over encrypted channels. Henley [the Uber executive that hired Ergo] explained in one email that this was necessary to "avoid potential discovery issues."'

Any reasonable person with knowledge of litigation knows that the only reason you attempt to hide things from discovery is that they are incriminating, aggravating (in the legal sense) and/or damning. "Common" due diligence on plaintiffs would never need to be hidden from discovery. In fact, quite the opposite: negative information turned up in due diligence would be paraded in front of the opposing side as a negotiating tactic, and you (almost always) can't selectively disclose which information you turn over in discovery.

Furthermore, if you intend information to remain confidential in litigation, you have your attorney do it so it can be classified as privileged attorney-client work product. But the inconvenient limitation is that lawyers are bound by legal ethics, so the fact that this investigation wasn't conducted by the firm's attorneys (and was, apparently, hidden from them) suggests it was known to cross ethical lines.

And naming CEO's in lawsuits isn't "weird" - it's an extremely vanilla legal tactic. You name anyone and everyone and let the opposing counsel argue for more limited scope. Leaning on that as an excuse is transparently absurd.

It's obvious to any reasonable third party that Uber intended to go beyond normal legal due diligence, and got caught.


You write:

> Any reasonable person with knowledge of litigation knows that the only reason you attempt to hide things from discovery is that they are incriminating, aggravating (in the legal sense) and/or damning.

I disagree with that. As a general rule of thumb, "only people who have done something wrong would care about privacy" is a frequently used truism which is actually quite false. In this particular case, reasonable people with knowledge of litigation know that there are many, many reasons to hide things from discovery. The most common is because "the lawyers haven't reviewed this and so we don't know whether it would be problematic or not -- 99% chance it isn't a problem, but we shouldn't take any chances". This is the main reason (at least in the US) why companies have data destruction policies that require all emails and documents past a certain age be automatically deleted (unless an explicit step is taken to retain them).


'"only people who have done something wrong would care about privacy" is a frequently used truism which is actually quite false.'

I agree with this. Strongly.

However, there are two important counterpoints here that don't apply in normal circumstances:

1. They were actively involved in litigation, which means normal information retention procedures were already out the window (or should have been). E.g. you can certainly do things like routinely delete business emails older than some specified age, but if you know those emails contain subject matter that is pertinent to active litigation you likely should not.

2. The encryption/destruction that occurred here weren't a "normal course of business" thing, but a response to the litigation. That gives a strong impression that it was willful and intended to evade laws and rules related to discovery.


> I agree with this. Strongly.

This is an ignorant statement. Things you say can easily be taken out of context and manipulated. This is a common occurrence, which is why privacy matters.


I was trying to say that I agree that privacy matters.


Encryption is completely orthogonal to discovery.

Using non-written, non-permanent, non-recorded means of communication is something you don't have to submit in discovery. (Because it cannot be.)

That said, yes, it's just trivial to assume that Uber wanted more, however, it's also quite standard operating procedure that in these cases all the legal responsibility is on the contractor, unless someone can somehow produce evidence that points to someone at Uber expressly requesting this "extralegal" investigation. (Though that does not mean the contractor is off the hook, unless they cut a deal with the DA, yaddayadda.)


"Using non-written, non-permanent, non-recorded means of communication is something you don't have to submit in discovery. (Because it cannot be.)"

Yes. But taking action to evade discovery after litigation has become active is quite a bit different from choosing not to retain information that may or may not ever become subject to litigation.

I guess I should have said "the chat app ate my homework" is a valid excuse if you always use the homework-eating chat app. But if you start using the homework-eating chat app because you're intending to discuss active litigation, that's just getting too cute.

Let's be clear here: you don't have to delete or encrypt communications to protect it from discovery. Privileged attorney-client work product is always protected from discovery, whether it's in plain text, encrypted, written on paper, or whatever. But for some reason (I speculated on one) they chose not to do this work as attorney-client work product.


Is Uber really "one of the most powerful and litigious companies in the world"?? Journalists sure like their hyperbole.


While that might not be the right choice of words, there definitely is some sort of legal force behind Uber - they operate a service that is basically illegal in a fair deal of cities around there world and manage to come out on top most of the time.


Being incredibly popular with consumers and the public will do that for you.


So does paying top dollar to hire multiple people at the absolute highest levels of the world's political power structure, such as David Plouffe and others.


Piracy is incredible popular, and yet I can't see it being some sort of legal force...


It's hard to pay lawyers from the proceeds of piracy.


Thus refuting the original point about it being about popularity.

Simply put - using money to create legal power and abuse it in turn is how uber works.

The fact that their service is popular just helps in PR - people will rationalize egregiously shady behavior instead of condemning it.

As I see it the message from the article is "don't get caught". A sharp contrast from a few decades ago when "don't be evil" was considered a basic standard.


It's incredibly common. When dealing with failing political systems, the proceeds can go straight to judges, police or politician, too.

http://www.worldbank.org/en/news/feature/2013/04/11/ending-s...


Kim Dotcom managed it pretty well.



Hahahah! Tell that to Ross Ulbricht.


News flash: if you polled the average American about Silk Road and the illicit things sold there, they'd be in favor of shutting it down.


okay if you polled average American and you know this as fact then I stand corrected.


You were implicitly asserting that Ross Ulbricht is popular with the public, as well. I was pointing out how ridiculous that is.


Not following regulations and undercutting competition (and providing a better service, taxis are awful) lets them build up a big user base quickly.

At that point they can just strongarm governments because it becomes politically expensive to ban them.


Is it hyperbole when a taxi company has someone with the title "Global Threat Intelligence"? I can picture Danny DeVito yelling at Judd Hirsch and Tony Danza now. "Find out about this lawyer!"


That's actually a pretty common title for any medium or big company. Companies that sell potato chips or windows also likely have something akin to a head of Global Threat Intelligence, sometimes with that exact title.

It generally covers detecting and mitigating fraud, cybercrime, hacktivists, espionage, and rogue insiders.

However, I don't think it's typical (or appropriate) that this person or their team would research lawsuit plaintiffs or conduct such an "offensive" action.


It's funny how different the reaction is in forums like HN when you see a similar story focused on Walmart.


A company isn't paranoid if other companies really are out to get them.


"Just because you're paranoid doesn't mean they aren't after you".

Joseph Heller, Catch-22


I have mixed feelings about Uber. On one side it takes a thick skin to go against the various taxi cartels (some of which are close to an organised mafia, like in Paris, where taxi drivers will not hesitate to physically assault competitors). And they do provide a better service.

On the other side I am not keen to see a mafia replaced by another mafia. There has been multiple stories about Uber bullying competitors. And this. And Uber also seems to be very much minded to milk the customer to the last penny. Introduction of peak pricing, Uber charging a cancellation fee when the driver cancels the ride, etc.


No shady tactics will surprise me when it comes to Uber.

I still receive spammy emails they continue to send. And Sendgrid is fully in bed with them.

Forwarded spam to Sendgrid and they said they will follow up with Uber (so apparently they are Uber's customer support at this point - great!) The spamming practice never changed or stopped despite Sendgrid telling me they will send my email to them (!!) to unsubscribe me from their list, when I didn't even subscribe in the first place.

As I received more Uber spam I kept updating Sendgrid ticked (zendesk). Eventually some 2 weeks later they closed it as "resolved" and never replied to my emails again. I still get Uber Spam from Sendgrid. Stay away from that piece of shit as long as you can!! (both Uber and Sendgrid)

PS. As of Uber, I copied all my emails and forwarded them to FCC. In short telephone conversation I was told I'm not the only one and as they have reached over 1,000 complaints in short period of time, they will be investigating both into Uber practices and also Sendgrid as an accomplice to their alleged crime.

https://en.wikipedia.org/wiki/CAN-SPAM_Act_of_2003


I've experienced the same thing. As far as I can tell, Uber's policy is when you sign up you don't have to opt in and don't get to opt out of their marketing mailing list, and when you close your account you don't get removed either, because fuck you.


I just got personal email from someone at Uber.

They explained to me that they comply with Can Spam by... providing unsubscribe link. Nothing mentioned how I got on their list in the first place, on what their practice are. Clearly my email must have been scrapped from public sites, since I never did sign with them in the first place.

So yeah if they don't even know the rules of Can Spam, how the heck you expect them to follow the law?

I will have a short call with Attorney General in my State end of this week to see if I am a separate incident.


This is the result of what happens when you have a massive intelligence community and workers decide to go into private industry.

"Threat intelligence" has always been a bit shady and of questionable security value. CEOs just like to get handed an "intelligence portfolio" to feel big and powerful, regardless if it practically improves their security.


My eyes lit up when I saw "Judge Rakoff"[1] mentioned in the article. He's not someone who suffers fools gladly. Uber better hope that they succeed in their motion to compel arbitration, otherwise things could get very "interesting" for them.

[1] https://en.wikipedia.org/wiki/Jed_S._Rakoff


Do not taunt super happy fun federal judge.

It doesn't end well (see also: Prenda Law)


This is backfiring for Uber the way having Ralph Nader followed did for General Motors back in 1966.[1]

[1] http://www.pophistorydig.com/topics/g-m-ralph-nader1965-1971...


Strikes me as being very in line with Uber's overall outlook. They think that laws and regulations don't apply to them.


One issue unexplored in the article: was Uber under a document preservation order related to the litigation when it (allegedly) used Wickr to communicate with Ergo about the investigation? If so... I don't think the court will take kindly to either "the chat app ate my homework" or "no really, we agreed to us Wickr and exchanged screen names, and then stopped emailing, but I swear we never actually used it" as defenses.


Uber sure gets a lot of bad press, but if the movie Wolf on Wall Street is any indicator, there's no such thing as bad press (unless you're Theranos). The press seems to be helping Uber a lot in name recognition. It's becoming the Kleenex of on-demand car services.


One wouldn't have thought to describe the problem at Theranos as "bad press".


What is the real value proposition of Uber? The software?

Why didn't they just license the software to taxi companies?

What do HN readers think?


[flagged]


This article isn't about surge pricing, it's about a specific way that Uber investigated a plantiff pressing suit, possibly violating witness integrity.


The underlying suit was about surge pricing, however.


The problem is that it also is in conflict with many anti-price gouging laws on the books. But we're talking about Uber, so who really cares about laws.


> we're talking about Uber, so who really cares about laws

Conversely, we're talking about laws and lawmakers, so who really cares about what makes economic sense, what's good for people, or what people actually want?


Oh you mean like Austin, Vancouver and SF. Who needs the ability to make decisions when politicians will make them for you?


Uber can't operate under the laws there. Too bad. Fight to get them changed.


Getting screwed over on Uber price gouging is good for the people now?


Well, apparently it's better than taking a taxi or a bus or calling another auto service.


I've never found it a serious problem in most cities. Sometimes I have to wait longer.

The problem is with surge pricing, people can't choose to wait longer, than can only choose to pay an amount many people can't afford. That's what upsets people.


you sure can, just dont accept the ride and wait 20 minutes and try again. i imagine they dont give an option to reduce the price by giving them a specified extra time they would have to wait because models get complicated

... and a game between people choosing the 2nd option and drivers denying rides after the peek window erupts. uber has to have some sense of a guarantee the person can get the ride when uber says they will, so I too would shy away from an overly complicated model.

its my opinion that people are not upset about having an option to wait longer, but are in fact upset they have to pay more for the ride when they want it. they think they are being price gouged for more proffit


What? Of course they can wait longer. Wait until the surge is over.


A lot of people would honestly prefer to wait in a line (seems fair on the face of it, everyone treated the same, first-come-first-serve) then wait a less-transparent amount of time due to people willing to pay more to (effectively) jump them in line.

How do you think people would react to grocery stores saying "oh, the checkout lines are long right now, everyone gets hit with an extra 20%!" The underlying mechanics are different, but that's kinda the customer experience it gives off.


That is quite similar to "wait until the surge is over".

Without surge pricing, the Uber/Lyft model doesn't really work. It's mainly needed to bring out enough drivers to drive all riders. Without it, people can easily have to wait hours, and the service becomes useless.

I agree that the customer experience feels arbitrary and predatory. In part because people don't have any intuitive sense for dynamic pricing. And in part because we don't trust Uber/Lyft.

If/when they figure out a way to communicate or implement this better could be a game changer.


Around the messaging, to pull in idea from 'autokad's post, maybe just explicitly different peak/off-peak rates being advertised (like with energy) would make a big difference in feel.

Their experiments in not even mentioning it's in surge seem like an improvement themselves—I don't want to know that I could be paying a lot less—some higher level of predictability to make it feel like a mature market/commodity could close the gap even more.


people already pay surge pricing in their utility bill


Peak and off-peak are quite easy to predict when it comes to electricity bills. Night is off-peak.

A better analogy would be cellphone roaming, if when you placed the call, you were told exactly how much more you were going to pay per minute. Roaming is (and long distance charges used to be) even worse than Uber's surge pricing because you only see the charge afterwards.


Roaming is (and long distance charges used to be) even worse than Uber's surge pricing because you only see the charge afterwards.

Every time i roam from one country to the next I get a text message telling me exactly how much I will be charged for calls, texts and internet.


Or just take a taxi. Uber will never get my money. They're a terrible company.


So someone doesn't like surge pricing and decides to wield the heaviest stick they can (the State) against Uber, via antitrust (legislation which shouldn't exist in a free country).

Then he has the gall to complain that the company he's trying to sue investigates him in an aggressive and possibly illegal manner.

I don't see there's a good guy here. AFAICT, both he and Uber are behaving in a fairly contemptible fashion.

For those here who support antitrust legislation (even in cases other than this one), this is worthwhile reading:

https://mises.org/library/antitrust-case-repeal

"Professor Armentano begins with the most rigorous and revealing account of the Microsoft antitrust battle to appear in print. He further discusses other recent cases, including Toys `R' Us, Staples, and Intel, as well as many historical cases. He covers nearly every conceivable rationale for antitrust, including price fixing, tie ins, vertical and horizontal mergers, and many more."

It's a bit old, but still highly relevant.




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