On this episode of Too Embarrassed to Ask, Recode’s Kara Swisher and The Verge’s Lauren Goode invite former Recoder Mike Isaac, now of the New York Times, to talk about Uber. The ride-hailing company has had a bumpy 2017, what with the lawsuit against its self-driving division and the charges of sexual harassment. The three discuss all this and more, then take questions from listeners.
You can read some of the highlights from their discussion at that link, or listen to it in the audio player above. Below, we’ve posted a lightly edited complete transcript of their conversation.
Kara Swisher: Hi, I’m Kara Swisher executive editor of Recode.
Lauren Goode: I’m Lauren Goode, senior tech editor at The Verge.
You’re listening to Too Embarrassed to Ask, coming to you from the Vox Media Podcast Network. This is a show where we answer all of your embarrassing questions about consumer tech.
I don’t think I’ve ever heard you be so excited.
Do you like that?
You just said Vox Media Podcast Network.
Jim Bankoff is in D.C. and he’s standing above me making me do this, so anyway, go ahead. Keep going.
Send us your questions. It could be anything, like, “Is Larry Page’s electric seaplane the future of transport?” Or, “Will Amazon spy on me with its new Echo Look wardrobe camera?” Or, “When will Kara get a Peloton bike so Casey Newton and I can use it?”
We go to SoulCycle together. That’s what we do because we like to hang. I like to be part of the SoulCycle support system.
All right, we’ll see about that. Anyways, so send us your questions. We do read them all. Find us on Twitter and tweet them to us @recode to myself or to Lauren with a #tooembarrassed.
We also have an email address. It’s firstname.lastname@example.org. If I may remind us, embarrassed has two Rs and two Ss. While you’re at it, you can have a listen to our previous episodes too, which you can find at iTunes at iTunes.com/tooembarrassedtoask. Kara, I was thinking for this week maybe we should rebrand this The Mike and Farhad Show.
Oh, that’s a great idea. No, I don’t know. I’ve heard it’s a podcast, but I’ve heard it’s super annoying. I don’t know. People probably find us annoying.
I just thought, mix it up a little bit. There aren’t enough guys in tech.
What do we do about that? Who do we bring in here?
Well, what if we just brought one of them on our show?
Maybe. Farhad, I think, lives not too far from me. I think we’re neighbors in the same town. I think when we’re both working from home, we’re probably both introverts who are scared to go out of our homes.
Mike Isaac: Kara, you’re in Silicon Valley which is miles if not like a whole universe away from me in San Francisco.
KS: Absolutely. I live in San Francisco. Mike, welcome to this show. This is Mike Isaac.
LG: Farhad. Anyway.
It’s not Farhad. We left Farhad at home. You got the better one.
KS: We got the better one. We’re never going to invite Farhad to this, let’s just be clear on that one. In any case, we’re having Mike Isaac of the New York Times, previously of Recode, where he was made a star. Mike, do you miss us?
I do miss you. I’m very glad to be back with you and do some radio journalism.
KS: Radio journalism, and our topic that you know best. How badly did you miss me? Just exactly.
On a scale of one to 10, you’re probably a 15. I miss you and your leadership. I mean every word.
LG: Mike, what about me?
KS: You can just say yes.
I love Lauren. I miss you too, so much. I’m going to go down south and we’ll have dinner some time.
KS: That sounds good. Anyway, we’re here to talk about Mike who’s doing the New York Times which has a print publication, which you young people might or might not have heard of. They also have online. You can read his stories online. The latest one ... he and also I have been writing a lot about Uber. My cut, I really blockbuster story this week about Uber. There’s been so many all around, and there’s been some really great journalism in general.
Why don’t we start talking about the latest about what you wrote about this week. We’ve obviously ... Let me just preface this for people, we’ve been writing about the sexual harassment issues, the sexism issues, their lawsuit with Alphabet, Waymo, behavioral problems, regulatory problems and now this. Go ahead, Mike, explain what has happened.
Let me just preface this with Kara, your reporting is making me sweat this whole time, so I have to step up my game. Which I think is probably good for all of us, right? To do a lot better reporting. My goal in going into this piece was to write a profile of Travis Kalanick, the CEO of Uber. The conceit going into it early after I started doing some original reporting is, this company is kind of modeled in the image of this man who for the past 40 or so years has been really driven at most everything he does. Whether that’s doing startups and sort of doing some creative math with the finances there, or competing against friends or family and other people’s family in video games.
Or in the case of Uber, breaking or sort of flouting regulations and laws and then Apple’s app store regulations or whatever you want to call it — the word of Apple and their law of the land. I spent the last three months reporting this out, and we did this big ... It’s hard to get 4,000 words into print. I had to really lobby for every last word, and that’s a new thing for me too, but we finally got it out this week and it’s been good. It’s been pretty good. Kind of crazy.
LG: There was some controversy, not just because it’s Uber and everything that’s been going on. There’s this question around how the company was fingerprinting iPhones. Just tell people what that means.
Yeah, sure. The lead of the story starts with this anecdote where Travis Kalanick is called down to Apple’s headquarters in 2015. He goes in a room with Tim Cook and there’s some other people in there too. Essentially Travis is nervous leading up to it. Tim in his calm southern manner says, you’re breaking some of our rules. What Uber had been doing is this technique, like you said, called fingerprinting. It’s a technical term for essentially identifying iPhones, and a number of companies have done this over the years in order to keep tabs on which ones … It’s a way to identify iPhones if you’ve uninstalled the app and reinstalled it at a later date.
This is against Apple’s rules because of privacy concerns. Essentially the idea at Apple is, if you want to delete your iPhone and wipe your device completely, you shouldn’t have any trace of your identity. Or at least, a way to continue remembering what phone that is and this company should not be able to keep track of that over time. There were some quibbles initially with how we worded that, and we can get into that too. Uber’s issue was they had very massive wide-scale fraud on their platform, in a number of places including China where they spent billions of dollars trying to get the service off the ground.
The idea was, fingerprinting would be a way to recognize which devices were bought on the platform. Started doing fraud at a massive scale. Then once Uber caught on, these fraudsters would wipe the phone and try to get on there again, but with a fingerprinted iPhone, Uber would be able to make some distinctions as to, okay, this is probably a fraudster, we can continue blocking them. It was a big game of cat and mouse.
LG: They were trying to do it for a good reason, which was fraud, especially in China. It’s largely in China. They were trying to do something that would protect them ... I guess protect them pretty much, not other users. There’s a lot of games going on in China that are over-charging and adding mystery rides and things like that. That’s been an issue for a long time.
We can argue it’s a totally justifiable practice.
KS: Absolutely. The way they did it, as usual, was questionable.
You go on Apple, breaking their rules and not telling them, and Apple doesn’t like that.
LG: Yeah. I thought that was really interesting. The idea that the company once again ... it sounds like it was similar to what they did with the Greyball tool you wrote about. Where they could geofence an area and then prevent certain people from seeing things on the app. They did that with Apple too. Is that correct?
Yeah, that’s all right. Essentially, there were a number of ways that they used different builds of the app to hide things from folks in certain areas. For Apple, there were ... They used geofencing to sort of block — this a little technical — block IP addresses and get around the app store reviewers in a certain way. Greyball was another tool that you just mentioned that I reported about previously, which is a way to hide cars from folks who are trying to, in some cities, catch them or impound cars of drivers if Uber wasn’t legal there.
To your point, Kara, this is just how they do things. It’s not, “Okay, let’s find a way to make this okay and fix our problem.” It’s, “Let’s find a morally ambiguous way of getting around this issue we have. Then if we have our hands slapped later on, then we’ll deal with it.”
KS: What’s interesting about that, I’m curious, one thing that wasn’t answered in this story, and it sat out there for me is, did they ever talk to Apple about this issue and look for a solution together? Because I’m sure Apple has to be concerned with their phones being used fraudulently. There was no mention of that.
That’s a good point. I think they probably in that … Not probably. In that meeting, Travis laid out the reasoning or justification for why they were doing this. The issue, especially for Apple, there is a world in which Uber could have come to them beforehand and said, “Look, this is something that we want to do, need to do in order to protect our company,” and they didn’t do that. I don’t know if they ever came to a compromise. Or how they fixed that in future. There’ve been software updates to IOS, iPhone’s operating system, that have fixed some of the workarounds that Uber was using.
I don’t know the current state of their fraud detection in 2017. They might have found some other ways that were kosher after the fact. I think for Apple at least, they didn’t come to them first. That was annoying, at least for Tim Cook.
KS: When you think about that concept of what they were doing, one of the issues was how you guys describe it. Can you explain to us what happened with the wording on the story?
The initial story had the word essentially “tracking” iPhones up at the top of the story.
KS: Which scares people.
LG: I think people think GPS location or something like that, which this wasn’t, right?
That’s correct. I want to make clear, they were not tracking your GPS location after you wiped your phone after you deleted the app. I don’t think that’s ... To my knowledge, that’s not technically possible right now, and a lot of folks online have said that. I think the thing that was lost in the tech sphere, and this is my stance here, is that we were writing for a broader audience in sort of lay terms and I never used tracking users. I used the term tracking iPhones, and they were later able to figure out who was using the app. Or the apps and the phones for fraud, when they reinstalled the app later on.
My point was, it was a semantic issue that folks were taking out of context. Now, that being said, as you both know, things sort of circulate on Twitter and on Facebook and around the blogosphere in snippets and sound bites, and so a lot of folks were screenshotting the article which — this was in the second paragraph. Took tracking in that particular sense to be GPS location, and that started a cascade of, stories are taking us for granted. They’re taking us at that particular meaning. The problem was, we did have it in the story. I explained exactly what was going on and how this was not a location thing, but a fingerprint issue.
It was later on in the story for narrative purposes, and structure. It just became a problem. And my point at least, or our point, was to do service to readers if they think that it’s something that it’s not. We changed that and that turned into a whole thing. That’s a whole nother thing. The Times doesn’t ... if it’s not, and I don’t believe it was a correction, but if it’s not a correction we don’t really have a mechanism that I’m aware of in the CMS to show that we’re updating it, and public editors going against us for that for a while.
Anyway, I think it was ... I find it defensible. Some people disagree with me. I think it was a semantic issue but most importantly, taking my ego and that stuff out of it, most important is that people actually know what was happening and we try to make it clear at the top in the end.
KS: When we’re talking about this idea, what was interesting is it did start out as a profile of Travis but really it was about these behaviors. Let’s talk about the behaviors and why they’re like this. I also did a profile on Travis for Vanity Fair and I spent a lot of time with his family. It wasn’t great actually, it was cut a lot. It was great before they cut it. One of the things that came through loud and clear was his proclivity to fight. I think I started, “he has a face like a fist.” You know what I mean?
I know. I loved your lead.
KS: Yeah. What was interesting is I spent a lot of time with his mother and father. They‘re very lovely. They live up in ... north of Los Angeles. Is it because this company’s like this because he’s like this? Because that’s a typical thing to think about. How do you look ... Because a lot of these behaviors, there’s someone who doesn’t have any kind of impulse control, it feels like.
You can use the trope, or the writing trope as like, okay, Uber is Travis, but I really honestly do believe it’s in the model of Travis. I think people were rewarded for their creative and even sneaky behaviors of solving problems and Travis, I mean, as you said, he’s a fighter and he has been a fighter for a very long time. I think he’s willing to not have to dance to particular ... I don’t know. Or if you want to call it, legal or regular ways of doing things. I think the other greater point of that is that, that mentality or attitude is often celebrated amongst entrepreneurs and startups. It’s the idea of disruption, the idea of not necessarily adhering to norms, or rules that you would normally do.
Because that’s the whole point of creating a disruptive startup. Once you put a personality like that in an environment like that, with add tens of millions and ultimately billions of dollars, I think that’s just encouraged over time. He creates this environment in Uber where that behavior is rewarded and then you can sweep under the rag any side effects that might have upon the culture internally. Or the other satellite offices they have around the world.
KS: Is it side effects or really the way they are? One of the things they like to do is, “Oh he’s such a fighter, he’s such a fighter,” and I’m thinking that maybe he’s just an asshole. You know what I mean? It’s an interesting thing and of course because the money is so high and there’s so much at stake, it’s interesting. Where do you think it comes from in him? His history, he had a lot of failed startups or bad experiences before Uber. Can you talk a little bit about that? Because you discuss it in the story a bit.
Yeah, totally. I think the really interesting thing that I found out when he was young is this bullying thing when he was in middle school essentially. Towards the end of middle school. He wasn’t necessarily a tough kid, he was kind of wiry and got picked on for whatever. It was literally just like randomly targeted. Then I think something ... To my understanding, I think something clicked in his head that he wasn’t just going to take it anymore, and he had to fight back. Not even fight back, fight first before people took advantage of him. He carried that for some time. Imagine that in the context of Scour, where it was an early file-sharing startup along the lines of Napster and that sort of thing.
KS: It was before Napster. Scour was before.
Imagine that in that context where you’re essentially dealing with copyright infringement and doing stuff that ultimately got him sued for I think it was like $250 million. Something like that, before he got put out of business. I think it was just deeply ingrained in that. He has to strike first before others catch on and figure that out. His parents were pretty ... I don’t know what you had talked to them about early on, but his parents were very supportive and pretty doting on him in certain ways. I don’t think he ... He was reinforced, and that can be a positive thing. A lot of his behavior was reinforced growing up. Once you figure out that these stuff works, I think you just have a history of repeating over time.
LG: Mike, do you have a sense of how Travis is reacting to all of the criticism that has been lobbed his way lately? I think we all know from covering Silicon Valley, you can sometimes encounter surprisingly thin-skinned entrepreneurs who think that tech press is going to be glowing, and then whether or not they react in a certain way. Do you have any idea what is going on with Travis right now?
Yeah. It seems kind of delusional because one of the perceptions as well — and this is probably not uncommon among other entrepreneurs — one of the perceptions is A) well the press is slanted against us in some way. B) why aren’t they appreciating how awesome we are? And like all these other things and how awful some of the other interests are. To be fair, they have really changed the nature of a lot of parts of transportation and the taxi industry was obviously very broad into how infrastructure works. They have done a lot to change that.
I think a number of companies, including and especially Uber, get really upset when you don’t recognize the gravitas of their genius and the scope of how much they have changed.
KS: You know, it’s ridiculous. Jonas Salk wasn’t going around being an asshole when he solved all kinds of things. Polio. “I solved polio, I can run you over with a car.” It’s ridiculous.
LG: Right. I think we’ve all been criticized, right? There are moments we get criticized and you get really defensive and you say, “Screw you, I’m the best thing in the world, or the best thing that’s ever happened to tech.” Right? Then there are introspective moments where people say, “Okay, everyone’s criticizing me for this thing. Maybe I should change.” Do you get any sense there’s introspection happening?
That’s a great point. I think he’s just ... Oh man. Let’s look at the ... if you guys remember the example of the car when he was being videotaped in the driver incident. He got into a fight with a driver. They got into a yelling match and he just said some people have to take responsibility for their own shit, and then he got out of the car. There’s a world in which you can diffuse that situation by being empathetic with the driver and saying, “Yeah, I know. I hear your concerns, man. I’ll give you this number, you can talk to someone.” He just doesn’t seem to have that.
KS: That’s what Mike Isaac would do.
Maybe I’m just too sensitive. Maybe I need to fight more. Imagine a CEO who can listen to other folks and meet them in the middle. Or even if they disagree, you don’t have to just go to the mattresses right away and start fighting with someone. I think he thinks it’s a perception issue, and if people would just understand Uber in the correct light and weren’t so slanted against him, then everything would be fine.
KS: The important part of the prognosis is said by feeling that he’s under siege. It’s a little Donald Trump-y, if you think about it. You know what I mean? It’s the same thing. I’m under siege. I’m the only one that’s right. I shall prevail. I need to fight. I need to hit first. It’s ridiculously juvenile from the president and from Travis Kalanick.
I want you to rank all the problems and go through them. Which you think is the most serious in a second, but one of the things that’s important to understand is that one, apparently he’s very upset about leaving and everything else.
Someone was like, “Oh, he’s very upset Kara,” and I’m like, “I don’t care.” I don’t care that it’s too bad, he created the situation. A lot of them, they don’t think they created the situation and then they go back. What I would love to know is of all these things, because there’s a lot of them now. There’s a lot of issues. It’s not just these issues that you brought up. It’s not just the sexism and sexual harassment, which is massive. Can you rank the issues because at some point, something has to happen. Either he’s got to learn pretty quick how to act like a real CEO and grow up or he’s got to go, right? I don’t know. Rank the issues and explain them very briefly and then we’ll get to readers’ questions.
Totally. I think — and you can agree or disagree with this — I think the No. 1 problem is this problem with HR and the reward system inside Uber and company culture in that sense. The whole mantra was growth at all costs. Growth, growth, growth. If you’re hitting your numbers, that is the metric you are judged by as a manager, or as a team in a city. That’s how you move up the ladder. That creates a culture of cutthroat kill or be killed inside the company, and that’s not sustainable especially if you have 10, 12,000 people.
I think they have to figure that out and mold the HR operation. Johana did a really good piece on how messed up their HR operation is. The new head of HR has to clean that out and make it a whole lot better. That’s systemic and I think that’s going to be really difficult.
KS: The sexism and sexual harassment. They need to weed people out.
Personally I think that’s really high up there. I think another thing too, I would be very curious to see what their take on regulations and laws is going to be, now that they’re a mature company. Like now that regulators ... In the beginning, it was shock and awe, Uber can come into these cities, regulators have no idea how to handle this ride-hailing company and they’re way behind them in terms of technology and pulling these drivers over in the first place.
What does that mean if you have rewarded engineers for so long to find ways around laws? What does that mean when you eventually become a public company? Or when you’re a mature company? Or when you’re trying to convince people that you’ve grown up outside of a massive PR push thing, that you’ve grown up, right? I think setting up those expectations around laws and regulations is going to be interesting and important. Not to say that you can’t lobby and fight against them. Which they definitely still will, but does that mean you’re going to break the rules? Continue to break the rules?
I’m also very curious on spending. If you remember a few weeks ago, they actually put their numbers out in public. I think the lost something like $2.8 billion last year? Something like that. It’s crazy. They have this whole theory, or this whole thesis that you need to kickstart a flywheel effect in order to get a city going. You got to dump a bunch of money into a city to get that up and running. Then once it’s there, demand skyrockets and all you have to do is to worry about supply, which is your drivers. Lyft is not going away, and Lyft is a significant headache for them. They have to spend money to subsidize rides whenever Lyft goes into a new city. Lyft keeps raising money. They’re fighting on other fronts. Ola in India is another annoyance for them. I think spending is still a big issue, and I wonder what’s going to happen there.
I think lastly — and this probably should have been higher up — Travis is in the midst of a COO search right now. Is that COO an actual No. 2? Or is Emil Michael, the SVP of business, going to continue being Travis’s No. 2 guy? Because that’s how it’s been since the beginning.
KS: Yeah, he’s the SVP of business and bad judgement, it seems. That seems to be his job.
They agree and enforce each other’s views. It would just be fighting and be nasty in a lot of ways. Does Travis just want a figurehead as their COO and then not actually listen to them and just do his thing with Emil? Or is he actually going to listen to this new person? I have no idea. A lot of people don’t know either.
KS: In that, the internal investigation is ongoing and both of us have been writing about it. I feel as if they don’t fire someone or if there aren’t significant changes, it’s over for him. I don’t know how it couldn’t be. If he doesn’t accept the fact and start ... Including possibly Emil and others, or Ryan Graves or whoever is in charge of HR, which is Ryan, I guess. If there aren’t some significant departures and significant systematic changes, it’s just going to be a lie. The whole thing’s going to be a lie, which I’m going to continue to point out over and over and I hope you will. What do you imagine is going to happen with this investigation?
Totally. It’s funny because I mean, you saw this email or whatever but they actually need an extra month to deal. It was supposed to be at the end of April where we’re fast approaching the end of April, so they need another month to deal with the volume of complaints. My read is that they have to have a head on the pike or something at the end of ... You have to fire at least one or two people to show that you are taking this seriously. If they don’t, I will be shocked.
KS: Near the top, you mean?
Yeah. That’s correct. Not just some offenders down at the bottom. It’s like, who at the top has been responsible for this part? As you said, Kara, Ryan Graves was the guy who’s head of HR — technically, HR fell under his preview, although I’m not fully clear what his job was later on. Then, I think there’s a lot of questions around Thuan Pham, who’s the CTO, chief technology officer. There’s email evidence that he seemed to ignore Susan Fowler’s complaints around her manager in HR and stuff like that, after they went directly to him. Thuan’s an interesting character because there’s a lot of people inside that actually loved him, but also there are a lot of folks that think he was just a terrible manager in doing what he’s doing.
I think they probably are going to have to fire some folks up at the top. I think those two are the ones everyone’s looking at. I don’t know if that’ll be enough. I still think everyone outside of the company is watching Travis and wondering what’s going to happen to him.
KS: Even as they’re firing people, a lot of people have gone either because of issues that we wrote about. Sexual harassment. There’s two of those. Head of product and head of engineering. Then, people have left. Jeff Jones and Rachel Whetstone. It’s getting thin up there in the management ranks at Uber.
You need folks that can ... I mean, Jeff, as you wrote in the story, Jeff Jones left in a very public and embarrassing way for Uber, saying that he didn’t agree with the company’s values anymore or ever. You’re going to need some people who are high up to say, “Look, this Uber needs to change but also I believe in this company. I believe that the leadership can change and this is why Travis is going to change.” I guess the one person that seems to be saying that is Arianna Huffington, who’s on their board. She’s saying that quite a bit. She’s been out there a lot.
Who else can we really look to that’s saying that? And who else is going to leave? I know a lot of the staff has left and a number of people who’ve just up and quit over certain things that have come up in the press, that they didn’t even know about. I haven’t seen really that many staunch defenders, especially up top, aside from Arianna over the past few months. They probably need a positive voice in there somewhere.
KS: They’re silent, right? Silent Bill Gurley who likes to lecture everybody else about their culture in Silicon Valley, and then when it comes to his own which he’s complicit in. Let’s be clear, he’s been there from the beginning, so it makes him complicit. It’s kind of ridiculous that there’s been no statement. They tend to use the excuse, it’s ongoing, it’s ongoing. But honestly, it’s a picture of Silicon Valley that’s quite unattractive I think in lots of ways. Why didn’t Apple just kick Uber out of the app store for violating the terms? Would it have done if it was a smaller, lesser-known app?
That’s a great question. I think Tim Cook has actually been put in a weird, difficult situation here. Because as you know, Apple is all about user experience and user delight and they want people to use things on their ... They embrace apps that people find indispensable on the iPhone. Whenever they think something is a real cool use of the iPhone, they’ll showcase that in a keynote presentation or something like that.
That’s the problem. Uber by early 2015 was starting to become almost indispensable in a lot of different markets and surely very popular in a number of markets, especially San Francisco and New York, a lot of big cities. You risk the problem of booting an app, an incredibly popular app, from the app store. Essentially tanking the business of this company and pissing off a bunch of your iPhone users and forcing them to go to another app, Lyft, that was not as popular. Or, giving Uber special treatment. The room did not have a lot of people in it and I imagine they didn’t think this would get out eventually. That’s maybe part of why you can justify, well, we’re going to give him a dressing down here and hopefully this will work.
I don’t envy Tim Cook if your choices are, give Uber special treatment, or potentially tick off a lot of your customer base. I think that’s why he didn’t do it. I also think that’s a double standard.
KS: You know what he should have done? They should have just made it public. “This is what they did, this is what we’re doing,” and embarrass them publicly.
That would have been fun.
KS: Yeah, that would have been good. The old guys teach the young guys. I’m saying it’s just ... the fix is so in in Silicon Valley these days.
Anyway, Mike, we’re going to answer questions about Uber from our readers and listeners shortly, but first we’re going to take a quick break that you can hear us talking about our sponsors. I know you’ll really enjoy this and we have to say, Lauren, what’s the word we say now?
KS: Okay, thank you.
LG: We’re going to start a ride-sharing service called Ka-ching.
KS: We will make you say ka-ching, because the New York Times has standards.
I can’t say anything.
KS: Anyway, don’t say a word. Don’t say anything. Just be silently appalled by us.
KS: Okay. Well done Lauren. Well done, you’ve got a career in advertising. It’s very nice. Okay. You’ve been listening to the show, you know how it works. Every week we take tech questions from our readers and listeners. We try to answer everything we can. This week, we’re answering your questions about Uber and its CEO, Travis Kalanick. The person who’s answering it is an excellent reporter named Mike Isaac from the New York Times. Lauren, ask the first question, please.
LG: First question, we got a couple of emailed question from a listener called Cynthia. First one, “Why does the board continue to tolerate the ethical lapses of leadership? Are they concerned that they too will be tainted as unethical?” The second question is, “How could I trust Uber with my safety if I can’t trust them to be ethical?” Which I think is a lot of us. We just want to know about that.
KS: A lot of ethical issues. Mike?
That’s a good point.
LG: Talk about the board first. What’s going on there?
I think there’s a few problems and issues here. One, as you know, the board is essentially kind of stacked in Travis’s favor at this point.
KS: Yeah. Explain that, Mike. Explain how that works.
There’s at least seven or eight board members — that I can’t remember exactly or recall — with actual voting power. Essentially Travis is on the board. There’s a number of other folks. Ryan Graves, Garrett Camp, Bill Gurley, David Bonderman, Arianna Huffington. There are enough people on the board who ... And the board has to vote to remove Travis as CEO. There are enough people on the board in Travis’s camp that he has the advantage, that he doesn’t have to worry about that. He clearly has no interest in removing himself from the board.
The problem is, if you say he’s accountable to the board and he controls the board, he’s accountable to no one but himself. Outside of some serious accusations against Travis, which I have not found anything that damning in my reporting, I don’t see them giving up on him. Or I don’t see them voting him out.
KS: Yeah, and especially because Garrett Camp, let’s be clear. Garrett Camp was one of the creators of Uber. It was his idea to get Uber started. He’s an entrepreneur. He’s a good friend of Travis’s. He’s apparently, from what I’ve understood in this whole thing, quite belligerent about Uber being victimized. I’ve heard lots of stories about that. You’ve got him, you’ve got Ryan — who should probably not be voting on this because he’s the one running the division that has a problem — who’s behind Travis. You’ve got Arianna, who’s been a cheerleader of Travis’s. You’ve got silent Bill Gurley, and David Bonderman’s probably like, “oh Jesus Christ.”
“What have I gotten myself into?”
KS: This is a very famous investment guy, who’s quite a bit older and has had a long career and is quite wealthy. I think he’s probably like, “Urgh.” Obviously, Google’s no longer on the board, which was interesting. They’re looking for board members. New board members, but it’s really stacked in his favor. Yes, this is an unethical board.
LG: Kara Swisher for Uber’s board.
KS: Yeah. I’m going to be on the board. I’m the new board member.
That would be great.
KS: What about the safety issue? Just because there’s unethical practices on his board, does it have to go out to safety of users? That’s been an issue in the past.
In the early days, Uber had a system called God View which could essentially tell internal Uber employees where cars were at any given time. There was once an occasion where a GM in New York was meeting with Johana. On her way there, he looked up where her car was to track her, and that was location tracking. He just said, “Hey, I knew where you were when you were on your way here.” Johanna was disconcerted by that and then realized what is keeping anyone else in the company from doing that. That blew up and they had an investigation into that, and then I think Senator Al Franken actually called him out on that, and they did a whole audit.
The system — which is now called Heaven instead of God View, because Uber is excellent in making things creepier than they actually need to be. Now, access to Heaven is restricted internally to only employees who would require using it for their jobs.
KS: Many of whom don’t deserve to be in heaven.
Right. That’s right. So they say they’re not necessarily all allowed to see it. That’s the question of, how do we trust Uber to adhere to that? My best guess here is, the last thing they need is an FTC investigation into privacy practices and then having something like that blow up in their face. If something got out where they continued to be cavalier with user privacy, and say tracking, or things around the God View, that would be a large annoyance if not bigger than ... Now that said, under the Trump administration, who knows how much tooth these folks have going after any of these companies?
KS: What about user safety with drivers? How has that been addressed?
If you recall, this hasn’t really been in the news for a while, but if you recall, they’ve had some issues with drivers, sexual assaults against passengers ...
KS: Just basic assaults too.
Right, yeah. Literally physical assaults too, and early on, a few years ago they said they were looking into camera technology in the car, or some more sophisticated ways of tracking, again with that word. Sort of keeping tabs on what is going on inside of the car. To be fair to Uber, if you imagine the technology around, say, taxis and limousine services, it’s behind that of what Uber has done so far. Uber can actually, if they need to, go back and get information over to the police, they can give that to them. Who knows where they are in the progress of actually keeping their users safe.
KS: I think that is something we need to look into.
That’s a good idea, now that you bring it up, because it hasn’t been touched on in two or three years. They say they’re doing stuff, but who knows where that is. They probably are also putting out a zillion fires right now anyway. Who knows?
KS: Next question?
LG: Sure. Next question is from @MichaelVasile, who asks, “Should Uber be trusted to conduct and honest internal investigation into the sexual harassment allegations?” A lot of trust questions here.
KS: Well, Mike? I know my answer.
LG: Just imagine that Google’s next offsite is just going to be a series of thousands of employees doing trust falls with each other.
KS: Can they do this? A lot of people question the independence of this investigation and justifiably. Right?
Yeah. They should be questioning it. They say they have an independent board committee handling the COO’s search, is one part of that. That’s Bill Gurley, that’s Arianna and that’s Bonderman, so that’s obviously already compromised. Then Eric Holder, former U.S Attorney General, and his firm have been tapped to do this long internal audit over the past few months, and folks immediately and rightly pointed out that he’s been on retainer for the company in the past. They have paid him to do work for them, multiple times in the past. That came out and then Holder was like, “Of course I’m going to do my best,” and blah, blah, blah. There’s inherent conflict baked into it from the very beginning. They can swear up and down all day that they’re doing a big independent thing and that’s fine, and whether you believe that or not, it seems like a conflict right off the bat. Why not just go to another outside firm to actually ...
KS: That wasn’t helpful when Arianna said, “Everything will be fine with Travis.” Remember?
I don’t remember that.
KS: She did. She said ... Someone asked, “Do you think he’ll be fired?” She goes, “No, absolutely not.” Before an investigation’s over. It was interesting. Like, no, absolutely not.
You’ve already come to a conclusion?
KS: I called her and I said, “Hey, the investigation’s just beginning. How do you know you’re not going to find out he did something?” It’s something worse. I said something I can’t repeat right now. Like, what if he did this? She was, “No, he didn’t do that.” I was like, “No, that’s my point, you don’t know. How could you say this?” We had an argument about it. I said, “You should not be saying this is done before it’s done. It makes everyone think this is crap. This is bullshit.”
This is like a sham.
KS: I think it’ll be what’s in … Yeah sham, exactly. I say bullshit, but sham’s a nicer word.
The Times doesn’t like when I curse.
KS: They’ve taught you. Damn it, Mike. Damn.
It’s fucking awful.
KS: Oh, there you go. He did. Thank you, you’re back to Recode standards.
LG: I’m glad that we accomplished both Kara’s Arianna voice and Mike dropping an expletive in this broadcast. Yeah, I was waiting for this the whole time. There were like 45 minutes of suspense.
KS: He’s back, Lauren. He’s back.
Anyway, we’ll see. We’ll see what the investigation holds. If it’s a whitewash investigation, that’ll just be ...
It’ll be pretty obvious.
KS: Yeah, we’ll see. All right, next question is an email from Brian Hynes. “What do you think was Travis’s real lesson learned after his meeting with Tim Cook? That he better not break Apple’s rules again? Or, since he didn’t face any consequences once again, that Uber was already too big for Apple to throw out of their app store?” Yeah, and “Recode rocks,” which is completely true. What do you think about that? That’s right. Were there consequences? What did he learn from it?
It was funny. I talked to folks that saw him throughout, before, during and after the meeting. He was sweating. He was nervous when he was going to the meeting, that day. You get a call from Tim Cook who’s about to tell you off, I think anyone would start being nervous. He left, his business was fine. He didn’t get kicked out of the app store and after he left, he spoke to someone and had a sense of bravado. “I faced off against Tim Cook and I lived to fight another day.” The guy hasn’t really gotten recompense in a lot of his career. He had a few failed startups, or sort-of-failed startups. All of his behavior has essentially been rewarded at Uber.
He keeps getting massive amounts of investment and increasing valuations and the line now is that this crazy PR backlash has humbled him and made him wake up, and some people swear by that. Others are like, there’s no way. This is just a put-on. I don’t know. I can’t say either way for sure. I don’t think he’s really learned, at least at that point when he had the meeting with Cook. I don’t think he learned, “Okay I behaved badly and I needed to change my ways.” It’s, “I behaved ‘badly’ and got away with it and I’m going to keep doing it.”
KS: Yeah. I think that’s the problem. Okay, next question. Lauren?
LG: Next question is from Jack Gold. “Is a ‘win at any cost, rules are for other companies’ culture what made Uber? and now that it’s caught, will it be its downfall?” Hashtag — this is a great hashtag — #extremearrogance.
This is the argument that everybody makes at this point is that, a lot of this behavior worked for ... Uber even says it’s worked for a growing company before it was the size it was. You could argue that’s a good thing because it got Uber off the ground and they needed to do a lot of fighting and changing and “winning” in the early days. Now that they are mature and big and have to actually have processes in place, then you need to change. That’s their line, and I don’t know. Whether you believe it or not, I think a lot of folks ... The other interesting thing, too, is a lot of folks that I was talking to throughout reporting this — and I’m sure, Kara, you’ve heard this too — they just believe that Travis was the right CEO this whole time and that this company would have not necessarily been created the same way without him in the lead.
KS: I don’t know. I think that’s another ...
KS: Bill Gates was super ... Yes, now in hindsight, you know what I mean? There’s a point in companies where ... Bill Gates was a very aggressive CEO and he ultimately got them to the monopoly thing, which we could arguably say was the downfall of Microsoft. Now obviously it’s a big company, it’s still doing well but it’s not what it could have been. Because of their extreme aggression and extreme arrogance.
A lot of folks seem to justify ... Again, like you said, in hindsight, look, we needed to get there, we needed to do this, he needed to do this stuff in order to get where they are. Whether you think that’s bullshit or not, I don’t know. The other thing, too, is I’m skeptical as far as the word downfall, just because they have ... People aren’t boycotting Uber en mass. They had a number of app deletions after a few controversies of theirs. 500,000 people are deleting the app or deleting their accounts is nothing compared to the tens of millions that use it around the world and still use it. I have a lot of friends who are like, “Well, I deleted it but I reinstalled it.”
LG: Yeah. Johana pointed that out in one of her earlier shows, too. That even though I think the number of 200,000 deletions was really, possibly by BuzzFeed early on and the controversy and then. Johana was like, they also gained that many customers easily at any given time period. As much as you’d like to think of people working en mass to have some sort of impact on what might be going on, doesn’t seem to be the case here with the deletions.
KS: The big issues aren’t whether they can make money. Losing the billions is an issue. Then the lawsuit. I think the lawsuit is quite serious, a very serious issue that sits there. It also shows a lack of management capability that this happened. Also it’s the same problems: Did they know? Did they not know? It seems a little sketchy. It was always sketchy, as I joked on CNBC recently. If Travis saved a cat out of a tree, they’d say it was animal abuse. It might have been, who knows? Anyway, another couple of questions, similar questions.
LG: Yeah. Let’s go to the next question. Richard Anderson sent a question asking, “Why hasn’t the board kicked Travis’s ass out of the company?” Thanks, Richard, for your question. We already answered that a little earlier. Another question from Ehab, he’s @Ehab or she’s @ehab563utd on Twitter. “Since all this controversy has happened and he hasn’t stepped down, what do you think it would take for him to do so?”
As I said before, it’d have to be something very severe, criminal probably. Even for Uber, criminal means certain levels of severity. Because they’ve arguably done some other things that have been against the law. Or at least, up to the brink of the law. It would just have to be something really bad, and something that’s hard to really justify defending. I don’t know what that’d be and I don’t feel comfortable saying it has to be this or that. Just because it’s not right to accuse someone of something like that. It’s got to be pretty bad.
KS: Do you think they will or not? Unless they uncover something rather severe, correct?
Yeah. I think it has to be, again, something pretty severe against the law. Something like that. I don’t think the guy would embezzle ... He hasn’t sold any shares since ... To my knowledge, at least. Up until a few months ago, he hasn’t sold any shares since he founded the company. He has money from when he sold Red Swoosh. I mean, he’s not rich. He lives in a townhouse. He’s not “rich,” rich in the sense that he’s buying jets and yachts and stuff. Anyway, I don’t think he’s ... I think it would be just some really bad crime that would have to take him out. There’s no proof that he’s ever done that.
KS: What about his top executives? Do you feel like one of them is going to go?
Yeah. I do. I still don’t think Emil is going to be fired. Other than the situation that The Information reported on in South Korea, where if you recall he and Emil went to an escort bar and then Emil called Travis’s ex-girlfriend later on, and kind of intimated that she should be quiet about the whole thing.
KS: That’s why they call him the senior vice president of bad judgment. The year before he had said some really awful things about journalist Sarah Lacy, which was just ridiculous.
That was just stupid.
KS: Justr an amazing amount of stupidity. We’ll see what happens there.
All right, last question. Some tweeted questions from longtime listener Alex Hardy @canthardywait. I don’t know, it’s kind of funny. “How can we separate smoke from fire re: impact on Uber’s ability to hire top talent and raise money from VC sources? What percent of those issues are unique to Uber versus pervasive in tech, but can confirmation biased because Uber is under the microscope. Why don’t we talk about that first one.
LG: It’s a real question.
KS: Uber’s got all the bad in one place. What do you think, Mike?
One reason why it’s a particular focus is just because, if you have the bad behavior of Silicon Valley encapsulated in this one company, of course you’re going to use that as the lens in. Then you can step back and be like, “Well, this has been celebrated for a very long time,” and after Susan Fowler’s blog post a lot of women were like, “Yeah. This is what it takes to wake you all up. We’ve been saying this shit forever.” I don’t think it’s confirmation bias because they’re at the end of the microscope. I think it’s just like, okay, this is all going on here, and it’s a test case that can pull back the curtain on many other instances.
I honestly hope that this serves to be a force that gets people to look into other companies and perhaps a moment of self-reflection by some companies, on what they need to do to take stock and help their culture. Especially early on.
KS: All right. The last one. How can they maintain their ability to hire top talent? There is a lot of attrition going on at Uber. Raising money? They have a lot of money. What do you think about that? How do they deal with that? I think that’s another major issue that neither of us has written a lot about.
I agree. One really interesting thing I found when I was talking to folks is this ... employees call it the Uber tax. The cost of working there. Imagine you are at a cocktail party around San Francisco or something and folks are saying, “Where do you work?” One of them says, “I work at Uber.” At this point there’s a stigma around it. You have to explain yourself or say, I do this or that or you’re dubbed and asshole in the media.
I think that has taken a toll on folks and in those situations, folks either do one of two things. Either they get the hell out of there. Which many people have done, as you said. Or, they hunker down and do this sort of foxhole comradery with the other people inside of the company, and defend themselves at all costs. A lot of folks have really drunk this Kool-Aid and aren’t very open to hearing any sort of criticism.
A lot of employees started attacking me on Twitter after some of these stories have come out. Which is probably really stupid of them to do. You have two mentalities there: The super loyalists or the folks who are aghast and want to get out. Or, there’s another one, which is people who think they can still affect change from within. Which is a number of people. I think there are a lot of folks who still believe there are many good people inside who can get that to change. I just don’t know
KS: That was kind of Rachel Whetstone, but then she’s gone. Or, Jeff Jones or others. Then they’re gone. I know.
One thing that I just think that in my most cynical view, VCs just want return on their money. You look at the business and look at the health of the business. If you believe that Uber’s spending will one day be in control and this will be a profitable company at some point in the future, then ...
KS: The Amazon scenario.
Exactly. That’s the thing. Everyone likes to quote, well, Bezos did this for a long time and he was able to ... He can turn a profit when he wants. Don’t worry about it. I don’t know. I think that VCs are on their side at this point still.
KS: Yeah. They’re on anyone’s side they can make money on. Because there’s not enough money in the world, Mike. You know what I mean? They’re not quite rich enough even though they’re ridiculously wealthy. Last question from me: A year from now, Uber?
Oh, man that’s a good question.
KS: They can write a story on it. Perhaps a New York Times essay.
That’s a great ... I would love to do more essays. Maybe I’ll curse one day in the paper. Or use some euphemism for shit or something.
KS: Oh, good. Shit, you said shit. Yaay.
I know, I’m breaking.
KS: You say god damn I’ll be ...
I don’t know. It’s funny. I’m hesitant to make any grand pronouncements just because I thought they would have gone public like partway through the year by now. Now they seem to have no interest in going IPO.
KS: How about this? I’ll make it easy for you. Can they go public with this CEO?
Oh, man. That’s a great question too. He’s got to clean up his act. If he can clean up his act, yes. The other thing I was ...
KS: Like a baby and a dog and I’m like, what’s “clean up his act”?
I don’t know. Find God or something like that. Just prove that he’s changed. Again, I don’t know what that’s going to look like. Maybe just not as crazy. He’s very convincing when he’s on the road. That’s the other thing. He’s raised a lot of this money with ... he and Emil are excellent pitch men and have raised billions of dollars together. I could totally see them doing a roadshow together. It’s just more a perception issue among retail investors. Among consumers and us. Being able to see a change.
KS: One thing one should point out is, he’s not a young person. He’s young but not that young. He’s in his 40s. People think, “Oh, Evans Spiegel can change,” he was 23, now he’s 27 or whatever. Mark Zuckerberg ...
LG: Mark Zuckerberg has changed a lot. At least in, I don’t know about personally, but certainly in the way that he communicates things. Of course he’s had a fantastic COO to help steer him and his company. He’s young and Travis is not.
KS: Yeah, so what? He’s going to grow up at 50? That’s the big question.
Do people change? I don’t know. Are people capable of changing?
KS: No. He wouldn’t be the first man to do that. Well, we’ll see. We’ll see, won’t we? Anyway Mike, it was a great story. Are you doing follow ups and I hope we can see some follow ups ...
Yeah. They can’t get enough of this stuff.
KS: I need you to find out whether Apple and they worked together. That’s a good question. Your editor should ask you that. I want to find that out. Find out whether they had tried to work with Apple. Because Apple should have worked with them, but they didn’t ask. One or the other.
All right, I’ll go do it.
KS: Get on it. I’m still assigning you stories.
LG: Also find out if this is a problem with Android phones too.
Yeah, that was the other question.
LG: I have to say, Mike, when we put out on the Twitterverse that you were going to be joining us for the very first time on Too Embarrassed to Ask, people were really excited, and we started soliciting questions. People were like, “Is he going to talk about Radiohead? Is he going to talk about his dog Bruna? Mossberg, our favorite guy, asked if you were going to be talking about Charmin. Maybe at some point we’ll have to have you back on just to talk about toilet paper.
KS: Just about Mike Isaac. Well, the whole show about what’s it like to be Mike.
Talk about myself.
LG: What’s it like to be everyone’s tech reporter in Charmin? Yeah, exactly.
KS: All right. Enough with that now. He’s going to get a big head. He actually has a physically big head already.
A larger head.
KS: A larger head than most. Anyway, this has been a really great episode of Too Embarrassed to Ask. Mike, thank you for joining us.
Thank you for having me.
KS: Now you have to sit and listen to the end part. Be quiet please.
LG: If you all enjoyed this week’s episode as much as we did, be sure to tweet, like incessantly, do your favorite gifs. Really, be sure to subscribe to our show and leave us your reviews at iTunes.com/tooembarrassedtoask.
KS: Farhad, you can’t leave. We have you blocked. Anyway, seriously, subscribe. If you do, you’ll be the first to listen to the new episodes every Friday or catch up on previous episodes where we answer all the tech questions that our listeners have been too embarrassed to ask.
LG: If you’re not on iTunes you can also subscribe which I guess now is called Apple Podcast, but you can also subscribe on Google Play music, TuneIn, Stitcher or SoundCloud. Or, just go to the website recode.net/podcast and you can find them all there.
KS: While you’re there, you should check out our other podcasts like Recode Decode, Recode Replay and Recode Media with Peter Kafka, who is Mike’s mentor.
Oh my God. He’s my bro for life. Don’t tell him.
LG: Have this voice in your head around headlines and stuff.
Oh my God. I’m like so PTSD from Peter.
LG: I’ll have my dog do this headline.
KS: He’s already texted me six obnoxious texts over the course of this podcast. I don’t get rid of Peter Kafka ever.
I miss him.
KS: All right. Keep going.
LG: The Verge also has ... I have to plug The Verge here. They also have some great podcasts. We have some great podcasts for your listening pleasure. Walt Mossberg and you’ll like Control Walt Delete every week. We have the Vergecast, which is our flagship show.
KS: It’s only a few episodes. He’ll be leaving in June I think. Listen as much as you can. Don’t forget to tweet your questions ahead of time to @recode with the hashtag too embarrassed. Or email them to us at email@example.com.
LG: Something just occurred to me. Maybe Walt’s going to become Uber’s COO. I think that’s why he’s leaving.
KS: Can you imagine him and Travis together? That’s a reality show. Walt’s a leaker. That’s good for me and not good for you Mike.
I know. That would be ...
LG: Thank you everybody for listening. Thank you also to Digital Media, the company that distributes this show, including Beth O’Connell and Chris Basil our editor. Thank you especially to Eric Johnson our producer who’s here with me right now. He’s been dealing with my cat sniffing all over his laptop and phone. We’ll be back next week to answer more of the questions that you’ve all been too embarrassed to ask. Send us your questions on tune in then.
KS: Mike, you can curse one more time. Go ahead. Before you go back to the New York Times.
God damn, that was a good show.
KS: Thank you Mike. Listen to the fucking podcast.
Listen to the fucking podcast.
This article originally appeared on Recode.net.