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Super Pumped: The Battle for Uber

Dylan Schleicher

September 06, 2019

You can fight city hall, and upend industries, and you can win. But then what? Mike Isaac’s new book about Uber provides many lessons for aspiring entrepreneurs, technologists and elected officials, and for society as a whole.

SuperPumped-web.jpgSuper Pumped: The Battle for Uber by Mike Isaac, W. W. Norton & Company

Mike Isaac’s Super Pumped begins with the tale of Uber entering the Portland market. It did so, like in most other cities it launched, illegally. Issac brings you inside the room as Mayor Charlie Hales and Portland’s transportation commissioner, Steve Novick, take a call from David Plouffe—the former Obama campaign manager hired by Uber in 2014 to handle its campaign of aggressive expansion—announcing the company’s plans to launch in their city the next day. Plouffe framed the move as a benevolent service to the citizens of the city. Transportation commissioner Novick was having none of it, responding: 

 

“Mr. Plouffe, announcing that you’re going to break the law is not civil … This is not about whether we should have a thoughtful conversation about changing taxi regulations. This is about one company thinking it is above the law.”

 

Even as they were announcing to city officials they would be breaking their laws, they had already developed and deployed technology to actively evade the regulators attempting to catch them doing so. By affixing code called Greyball to Uber accounts they identified as belonging to city officials, the company “served up a fake version of the Uber app, populated with ghost cars.” This made it impossible for those officials to find Uber’s real drivers and fine them for things like “lack of proper insurance, public safety violations, [and] required permits”—fines that would have likely slowed the company’s growth by scaring off drivers. Regulators had no idea what they were up against:

 

Behind the scenes, Uber was hardly innocent. Recruiting ex-CIA, NSA, and FBI employees, the company had amassed a high-functioning corporate espionage force. Uber security personnel spied on government officials, looked deep into their digital lives, and at times followed them to their houses.

 

Uber launched in Portland in 2014. It wasn’t until three years later, when Isaac himself broke the story of Greyball in The New York Times, that “Portland officials fully understood just how Uber had carried out its subterfuge.” Such blatant flouting of regulations was justified, in the company’s view, because… 

 

In the eyes of Travis Kalanick, Uber’s co-founder and chief executive, the entire system was rigged against startups like his.

 

Viewed generously, it could be seen as a corporate version of civil disobedience, breaking laws that he personally believed were fundamentally unjust. “He believed,” writes Isaac, “that politicians, when it came down to it, would always act the same way: they would protect the established order.” Uber was out to shake things up, to disrupt outdated and corrupt cabals, bring about greater urban efficiency, and rake in barrels of cash while doing so. 

The story of Uber has been told before, perhaps best in Adam Lashinsky’s Wild Ride, but Mike Isaac brings something new to the table. Reading Super Pumped is a little like watching a slow motion 20-car pileup, one that you know is coming but can’t turn away from. The tales of excess—like the $25 million dollars the company spent on an all-company Las Vegas bacchanal after hitting $10 billion in revenue, even booking Beyoncé for $6 million in restricted Uber stock for the event—are astonishing, even if no longer surprising. The tales of Uber's toxic workplace under Kalanic are now known and expected. But the level of detail Isaac brings to it, the way he weaves the cast of characters together, is impressive. It’s the history of Uber, yes, and of Kalanick for sure. But it’s more. Even though Kalanick always believed “It is in the VC’s nature to kill a founding CEO,” and did everything he could to protect his own power, he couldn’t expand as aggressively as was in his hopes (and perhaps nature) without that capital, so it is also the story of the venture capitalists who backed him. It is the story of the dot-com bubble in the late ‘90s, and what happened to the economy and to Kalanick personally when it went bust, when the fed raised interest rates, “closing the faucet in free-flowing capital.”

 

That, in turn, forced many startups to rely on actual revenues—not those artificially propped up by venture capital dollars—a feat that eluded many.

 

It’s the story of the convergence of Amazon Web Services, the iPhone and the App Store, and an economic crash that turned the faucet of finance back on again. It’s about the ethos of Silicon Valley, the absurd amounts of money swirling around it, and the cult of the founder. As Isaac writes… 

 

The saga of Uber—which is, essentially, the story of Travis Kalanick—is a tale of hubris and excess set against a technological revolution, with billions of dollars and the future of transportation at stake. It’s a story that touches on the major themes of Silicon Valley in the last decade: how rapid developments in technology can crash into long-entrenched labor systems, throw urban development into upheaval, and overturn an entire industry in a matter of years. It is the story of a deeply sexist industry, fueled by gender imbalance and a misguided belief in a tech-supported meritocracy, blind to its own biases. 

 

To my mind, it is also that of a business model built on quicksand, and that makes it about the damage Travis Kalanick has done in his pursuit of power. And it is about more than the damage he did to Uber itself. Backed by billions of dollars of venture capital, he built a company that not only broke the law, broke the backs of unions (though that tide may be turning as states like California consider laws that would legally reclassify gig workers like Uber’s drivers as employees), and undermined democratically elected and appointed civilian authority, he also built a company that is unprofitable and quite possibly unsustainable. The technology of ride-hailing itself is truly transformative, but the way in which Kalanick brought it to the world was destructive, bound up in… is tragedy too strong a word?

Uber has certainly helped usher in a new order. Uber is now a verb in the same way that Google is—one ushering us around the internet, the other ushering us around the city. But the system was and is, in fact, rigged in their favor. The power of venture capital and wishful thinking proved stronger than the power of entrenched interests and city hall. How else to explain a company going public at $82.4 billion when they have never turned a profit, and have in fact lost billions of dollars for years? As Steven McBride recently wrote for Forbes

 

[W]hile Uber is a disruptive company, it’s a terrible business… and its stock is a horrendous investment.

You don’t need a master’s degree in business to understand this…

Every business has to eventually make more money than it spends. Period.

Yes, you can sacrifice profit to win customers at the beginning… but eventually you have to make money to cover your expenses and reward investors.

The thing is, after 10 years, Uber is still highly unprofitable. Worse, its losses are growing at astronomical levels.

Last year, it lost $1.8 billion… while last quarter, it lost a whopping $5 billion.

 

You can fight city hall, and upend industries, and you can win. But then what? I would say you broke it, you buy it, but I don’t know if Uber can afford it. 

If there are any heroes in Isaac’s story, it’s those who have exposed Uber, people like Sarah Lacy, author of A Uterus Is a Feature, Not a Bug: The Working Woman's Guide to Overthrowing the Patriarchy, one of the first to turn the tide of Uber coverage from tech darling to toxic bro, even as the company came after her personally. It is people like Susan Fowler, ex-Uber employee whose “Reflections On One Very, Very Strange Year at Uber” rippled across the internet and across Uber itself. It is people like Isaac himself, who broke the Greyball story, and the story of Kalanick’s resignation, and was in part used by board members to air the company’s dirty laundry in public. I don’t know what will happen to Uber, but thanks to them, we know what has happened there, and that story provides many lessons for aspiring entrepreneurs, technologists, and elected officials, and for society as a whole.

About The Author

Dylan Schleicher has been a part of Porchlight since 2003. After beginning in shipping and receiving, he moved through customer service (with some accounting on the side) before entering into his current, highly elliptical orbit of duties overseeing the editorial and creative aspects of the company. Outside of work, you’ll find him volunteering or hanging out at his kids’ school, catching the weekly summer concert at the Washington Park Bandshell, or strolling through one of the many other parks or greenspaces around his home in Milwaukee (most likely in his garden). He lives with his wife and two children in the Washington Heights neighborhood on Milwaukee's West Side.

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