Uber is Under Fire from Google
Uber is facing a legal challenge from tech giant Google as the two companies fight to establish dominance in the developing field of self-driving cars. This is the latest challenge for Uber, following allegations that came out over the weekend of a rampant sexist culture. Additionally, the transportation innovator has been hit by court cases and legislation in several countries, including Taiwan, Denmark, and India. Will Uber be able to go around these difficulties and end up on top?
Google Accuses Uber of Intellectual Property Theft
The problems between Uber and Google began when an employee left the Google subsidiary Waymo with several pieces of sensitive information related to how the Google self-driving cars interact with their environment. The employee eventually started his own company Otto, which Uber purchased for hundreds of millions of dollars. Google argues that the research and development data acquired during the buyout were proprietary. Legal experts suggest that the prime driver behind Google’s lawsuit may be to discourage competitors from poaching employees.
Former Uber Employee Complains about Toxic Workplace
The announcement of the case comes on the heels of a public disclosure regarding Uber’s alleged sexist work culture. Last week, a former employee, Susan Fowler, complained that she had faced several months of harassment from her superior, which was ignored by management and the human resources department. Her blog post went viral and thousands of people deleted the company’s app from their phones. CEO Travis Kalanick issued an apology and hired Eric Holder, a former U.S. Attorney General, to review Uber’s policies. However, Kalanick has himself been quoted on record making sexist statements, lending credence to the allegations that the company’s toxic culture has hurt gender equality.
Uber Ignores Concerns about Driver Safety
The company also has a poor track record when it comes to vetting its drivers. In several jurisdictions, Uber does not require background checks for its contractors. Rape activists have pointed out that sexual predators could easily gain access to vulnerable clients, especially since many people choose to travel by Uber when they are intoxicated. Uber counters these claims by noting that there have been thousands of customer service tickets referencing the term “rape”, many of these incidents either refer to rape in a commercial sense, such as the driver “raped my wallet”, or were artifacts of when a client name or email address contained the letters R,A, P, and E consecutively.
Denmark Legislates Expensive Equipment for Uber Cars
Things are also looking down for Uber as it tries to grow into new markets. Denmark has just passed a law forcing cars which transport passengers for money to have a set of expensive security and monitoring features. A Denmark appeals court has also ruled that Uber drivers using personal cars need a taxi license. According to the Danish courts, Uber is not a carpooling service. The licensing issue is a general trend throughout Europe. The company has already stopped offering similar services in Germany, Sweden and France.
Taiwan Kills Off Uber with Heavy Fines
Earlier this month, Uber stopped service in Taiwan. The country accused Uber of operating illegally. Taiwan only gave Uber a license to provide technology services in the region. Uber has been ignoring this regulatory guidance, which has led Taiwan to levy millions of dollars in fines. Additionally, new laws went into effect at the beginning of the year which allowed Taiwan to charge over 7 million dollars in fines in January alone.
Indian Drivers Stand Up to Uber
Asia has been a difficult landing place for Uber. They have already left China, and their attempt to gain market share in India is facing significant challenges. Indian drivers are currently staging a massive strike. The drivers are asking Uber to reduce commission fees. This is to compensate for the cancellation of an incentive program that encouraged more drivers to work. The company is working to strike a balance between offering low fares to encourage ridership, and sufficient pay to keep up their fleet. At least in India, the government seems to be working with the company, and recently advised the striking drivers to go back behind the wheel.
How Will Uber’s Struggles Affect the Market?
Stock prices for Google will go down following the announcement of what is likely to be a long and costly legal battle with Uber. Given the dominance of Google on the Dow and S&P 500, both U.S. indices could see their meteoric rises capped significantly. Uber represented approximately five percent of trips in Europe. The regulatory ties which are hurting the company’s growth could keep the European economy from reaching its full potential. Look for the euro to fall compared to the dollar.