Apple CEO Tim Cook reportedly threatened to ban Uber from app store over secret tracking

The New York Times reported that Uber had been using a program to thwart authorities trying to curtail or shut down the service. (April 24, 2017) (Sign up for our free video newsletter here http://bit.ly/2n6VKPR)

By Times staff and wire reports

March 21, 2017 2:11 PM PT

Apple Chief Executive Tim Cook threatened to kick Uber out of its app store after it discovered that the ride-hailing company was intentionally violating its privacy rules.

Losing access to millions of iPhone users through Apple’s app store had the potential to destroy Uber’s business, according to the New York Times, which detailed the confrontation between Cook and Uber Chief Executive Travis Kalanick.

Uber had been secretly identifying and tagging iPhones even after the app had been deleted, the New York Times reported.

Uber denied the tracking allegations in a statement to the Los Angeles Times.

“We absolutely do not track individual users or their location if they’ve deleted the app,” Uber said. “As the New York Times story notes toward the very end, this is a typical way to prevent fraudsters from loading Uber onto a stolen phone, putting in a stolen credit card, taking an expensive ride and then wiping the phone — over and over again. Similar techniques are also used for detecting and blocking suspicious logins to protect our users’ accounts. Being able to recognize known bad actors when they try to get back onto our network is an important security measure for both Uber and our users.”

The previously unreported encounter with Cook was part of a profile of Kalanick, who has been struggling the past few months to quell concerns about his leadership.

Secret ‘Hell’ tracker

A new report says Uber used a secret software program dubbed Hell to track Lyft drivers to see if they were driving for both ride-hailing services — information that could be used to stifle competition.

The tool allowed Uber to monitor its competitor’s rates and steer additional fares toward drivers who were using both platforms, which could have influenced drivers to commit to Uber alone, according to a story in the technology trade publication the Information.

Only a small group of Uber employees, including Kalanick, knew about the program, according to the Information, which cited an anonymous source it said wasn’t authorized to speak publicly.

The program was discontinued in early 2016, according to the report.

A representative for Uber did not respond to messages for comment Thursday. Lyft said in a statement to the publication that “if true, the allegations are very concerning.”

This has been a tumultuous year for Uber. In addition to the allegations of the Hell program, the San Francisco company’s troubles have included executive departures, backlash over Kalanick’s role as an advisor to President Trump, sexual harassment allegations, a video showing Kalanick lashing out at a driver, a lawsuit by Google spinoff Waymo, a potential fine from state authorities and the revelation of a secret program that mined user data in an effort to thwart regulators.

Intoxicated-driver complaints

California’s ride-hailing regulator is proposing a $1.1-million fine against Uber for allegedly failing to investigate or promptly suspend drivers accused in complaints of driving while drunk or drugged.

The California Public Utilities Commission said in a legal filing released Wednesday that Uber hadn’t taken appropriate action in 151 cases from August 2014 to August 2015, in violation of the state’s zero-tolerance regulations against intoxicated drivers. The agency also alleged that the company’s DUI policies are too lax and do not comply with state rules.

Uber’s policy, according to the agency, is to deactivate a driver who is the subject of three unconfirmed zero-tolerance complaints. The regulator said in its filing that the policy is too lenient and that the company doesn’t even adhere to it. In at least 25 cases, the agency alleges, Uber failed to suspend or investigate a driver after three or more complaints.

Waymo lawsuit

Google spinoff Waymo sued Uber in February, alleging theft of trade secrets. That’s a big deal, since Uber has pegged its future to self-driving vehicles.

The Waymo suit alleges that Levandowski — the former Waymo employee who now heads Uber’s self-driving car division — downloaded more than 14,000 highly confidential and proprietary files shortly before his resignation in January 2016. He went on to found self-driving truck start-up Otto, which was acquired by Uber in August for $680 million. Levandowski now heads Uber’s self-driving car division.

Waymo alleges Otto is using its proprietary technology. In addition to punitive damages, Waymo sought a preliminary injunction against Uber to stop the company from continuing development on self-driving cars.

Uber told a federal judge in early April that it didn’t use stolen trade secrets for its driverless car project, and that therefore the court shouldn’t force it to stop that work.

Diversity report

In a bid to show that it is serious about transparency and cultural turnaround, ride-hailing giant Uber released data March 28 on diversity in its workforce.

The numbers show that Uber, like other technology companies, has struggled to attract women, Latinos and African Americans to its workforce. Nearly two-thirds of Uber’s global workforce is male, and more than three-quarters of leadership roles at the company are held by men.

The company didn’t release data about the racial composition of its global workforce, but it said that in the U.S., black and Latino workers comprise just 15% of employees. (The data do not include Uber drivers, who are classified as independent contractors.)

Uber executives also introduced a pledge to spend $3 million over the next three years with organizations trying to help underrepresented groups break into the tech industry.

Self-driving car is hit in a crash

Uber suspended tests of its self-driving cars for a few days after one of its SUVs was struck in a high-impact collision in Arizona on March 24. Police in Tempe said that the Uber vehicle was obeying the law and that the driver of the other car, who was making a left turn at an intersection and didn’t yield, was cited for a moving violation.

There were two operators and no passengers in the Volvo SUV, Uber said in a statement. No one was seriously injured.

Uber leaders back the CEO

In a March 21 conference call with reporters, Uber board member Arianna Huffington reaffirmed the board’s support for Kalanick.

“It’s clear both Uber and the whole ride-sharing industry would not be where we are today without Travis,” Huffington said in response to a question about whether Uber’s board of directors would consider asking Kalanick to step down, given the bumpy road down which he has led the company.

“The board has complete confidence in Travis. He started as a scrappy entrepreneur and now he has to bring about changes in himself,” Huffington said. “I’m personally a big believer in leaders and companies being allowed to evolve.”

Uber’s chief human resources officer, Liane Hornsey, was also on the call and said the company would be launching unconscious bias training programs for employees, updating 1,500 job descriptions to ensure they are free of unconscious bias and continuing its search for a chief operating officer.

President quits

Uber’s president resigned in mid-March after just six months on the job.

The company didn’t provide public comment explaining Jeff Jones’ departure. But the tech blog Recode, which first reported his resignation, said Kalanick told employees that Jones decided to resign after Kalanick announced his intention to hire a chief operating officer earlier in the month.

Jones, a former chief marketing officer at Target Corp., told Recode that his values didn’t align with Uber’s.

“The beliefs and approach to leadership that have guided my career are inconsistent with what I saw and experienced at Uber, and I can no longer continue as president of the ride sharing business,” he said in a statement.

Executive search

In March, a week after saying he would seek leadership help, Kalanick announced he had begun the search for a chief operating officer — “a peer who can partner with me to write the next chapter in our journey.”

Secret ‘Greyball’ program

In early March it was revealed that Uber had been wielding a secret weapon to thwart authorities trying to curtail or shut down its ride-hailing service.

The program included a feature nicknamed “Greyball” that identified regulators who were posing as riders while trying to collect possible evidence that Uber’s service was breaking local laws governing taxis, the New York Times reported.

To stymie those efforts, Uber served up a fake version of its app to make it appear the undercover regulators were summoning a car, only to have the ride canceled. The company mined the data that it collects through its real app to pinpoint the undercover agents.

Uber acknowledged it has used Greyball to counter regulators working with the company’s opponents to entrap its drivers, saying Greyball was part of a broader program it developed to protect itself and its drivers from “fraudulent users who are violating our terms of service.”

Less than a week after Greyball was revealed, Uber announced that it would kill the feature.

CEO caught on video berating driver

A dashcam video, released by Bloomberg News in late February, showed Kalanick arguing with Uber driver Fawzi Kamel over Uber’s fares, which Kamel complained were too low.

Toward the end of their exchange, the video showed Kalanick losing his temper. “You know what? Some people don’t like to take responsibility for their own ...,” he says, using a vulgarity. “They blame everything in their life on somebody else. Good luck!”

After the video became public, Kalanick issued an apology to all employees, saying he was ashamed. “I must fundamentally change as a leader and grow up,” the 40-year-old executive said. “This is the first time I’ve been willing to admit that I need leadership help and I intend to get it.”

Uber CEO pledges to ‘grow up’ after video shows him lashing out at a driver »

Executive’s abrupt exit

Uber’s senior vice president of engineering reportedly was asked to leave in late February, just five weeks after Uber announced his hiring.

Kalanick sought Amit Singhal’s resignation after learning that Singhal had failed to disclose that there was a sexual harassment claim against him at his previous job at Google, Recode reported. Singhal said in a statement that he did not condone nor had he ever committed harassment and that the decision to leave Google was his own.

Sexual harassment allegation

Former Uber employee Susan J. Fowler sent ripples through the tech industry in February when she alleged on her personal blog that she had been sexually harassed while working for the company, that other female engineers had reported similar problems — some involving the same manager — and that Uber’s human resources department engaged in a systemic cover-up.

Kalanick said in a memo to employees that the blog post was the first he’d heard of the incident. The company called in former U.S. Atty. Gen. Eric Holder to conduct an independent investigation.

Trump-related backlash

Some 200,000 users deleted the Uber app in late January to protest Kalanick’s perceived cooperation with the Trump administration, shortly after Trump issued an executive order banning travelers and refugees from seven Muslim-majority countries from entering the United States. The boycott — along with the hashtag #DeleteUber — hit the company after it advertised that it was operating at New York’s Kennedy International Airport during a taxi strike protesting the executive order. Protesters also were upset that Kalanick was a member of a panel advising Trump on economic issues.

Kalanick soon promised that Uber would create a $3-million legal defense fund to help drivers affected by the travel ban. Within days, he quit the president’s advisory panel and slammed the travel ban in a memo to staffers.

Times staff writers Tracey Lien, Nina Agrawal, Paresh Dave, Russ Mitchell and Liam Dillon and the Associated Press contributed to this report.

UPDATES:

9:20 a.m.: This article was updated with a statement from Uber.

April 24, 8:05 a.m.: This article was updated with a report that Apple threatened to kick Uber out of its app store for violating privacy rules.

April 13: 2:55 p.m.: This article was updated with a report that Uber used a secret software program to monitor drivers.

April 13, 7:50 a.m.: This article was updated with the California Public Utilities Commission’s allegations surrounding intoxicated-driving complaints and proposed fine.

April 7, 6:40 p.m.: This article was updated with new information about the Waymo case.

March 29, 8 a.m.: This article was updated with information about Uber’s diversity report and about a crash involving a self-driving Uber vehicle.

March 21, 3:50 p.m.: This article was updated with information and quotes from a conference call.

This article was originally published March 20 at 11:30 a.m.