Shortly after taking over Uber Technologies Inc. in September, Dara Khosrowshahi told employees to brace for a painful six months.
US officials are looking into possible bribes, illicit software, questionable pricing schemes and theft of a competitor’s intellectual property. The very attributes that, for years, set the company on a rocket-ship trajectory—a tendency to ignore rules, to compete with a mix of ferocity and paranoia—have unleashed forces that are now dragging Uber back to down to earth.
Uber faces at least five criminal probes from the Justice Department—two more than previously reported. Bloomberg has learned that authorities are asking questions about whether Uber violated price-transparency laws, and officials are separately looking into the company’s role in the alleged theft of schematics and other documents outlining Alphabet Inc.’s autonomous-driving technology.
Uber is also defending itself against dozens of civil suits, including one brought by Alphabet that’s scheduled to go to trial in December.
Some governments, sensing weakness, are moving toward possible bans of the ride-hailing app. London, one of Uber’s most profitable cities, took steps to outlaw the service, citing “a lack of corporate responsibility” and specifically, company software known as Greyball, which is the subject of yet another US probe. (Uber said it didn’t use the programme to target officials in London, as it had elsewhere, and will continue to operate there while it appeals a ban.) Brazil is weighing legislation that could make the service illegal—or at least treat it more like a taxi company, which is nearly as offensive in the eyes of Uber.
Interviews with more than a dozen current and former employees, including several senior executives, describe a widely held view inside the company of the law as something to be tested.
Travis Kalanick, the co-founder and former CEO, set up a legal department with that mandate early in his tenure.
The approach created a spirit of rule-breaking that has now swamped
the company in litigation and federal inquisition, said the people, who asked not to be identified discussing sensitive matters. Kalanick took pride in his skills as a micromanager. When he was dissatisfied with performance in one of the hundreds of cities where Uber operates, Kalanick would dive in by texting local managers to up their game, set extraordinary growth targets.
His interventions sometimes put Uber at greater legal risk, a group of major investors claimed when they ousted him as CEO in June. Khosrowshahi has been on an apology tour on behalf of his predecessor since starting. Spokespeople for Kalanick, Uber and the Justice Department declined to comment.