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Last week, Scale AI’s bombshell deal for Meta to take a 49% stake in the company sent shockwaves throughout the industry: In its wake, prominent clients like OpenAI have pulled back on working with Scale, which the ChatGPT maker had already been doing for months. Google is also planning its split. And a host of data-labeling rivals has been emboldened to step in to fill the void……..Continue reading….
Source: Forbes
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Critics:
Uber classifies its drivers as gig workers or independent contractors, which has drawn criticism and legal challenges because it allows the company to withhold worker protections that it would have been required to provide to employees. This figure has disrupted taxicab businesses, and has become the subject of legal action in several jurisdictions.
Ridesharing companies are regulated in many jurisdictions and the Uber platform is not available in several countries where the company is not able or willing to comply with local regulations. In addition, studies have shown that, especially in cities where it competes with public transport, Uber contributes to an increase in traffic congestion, reduces public transport use, has no substantial impact on vehicle ownership, and increases automobile dependency.
Other controversies involving Uber include various unethical practices such as aggressive lobbying and ignoring/evading local regulations. Some of these conducts were revealed by a leak of documents showing controversial activity between 2013 and 2017 under the leadership of Travis Kalanick. Uber has been criticized for its strategy of generally commencing operations in a city without regard for local regulations.
If faced with regulatory opposition, Uber called for public support for its service and mounted a political campaign, supported by lobbying, to change regulations. Uber argued that it is “a technology company” and not a taxi company, and therefore it was not subject to regulations affecting taxi companies. Uber’s strategy was generally to “seek forgiveness rather than permission”.
In 2014, with regards to airport pickups without a permit in California, drivers were actually told to ignore local regulations and that the company would pay for any citations. Uber’s response to California Assembly Bill 5 (2019), whereby it announced that it would not comply with the law, then engaged lobbyists and mounted an expensive public opinion campaign to overturn it via a ballot, was cited as an example of this policy.
More than 124,000 Uber documents covering the five-year period from 2012 to 2017 when Uber was run by its co-founder Travis Kalanick were leaked by Mark MacGann, a lobbyist who “led Uber’s efforts to win over governments across Europe, the Middle East and Africa”, to The Guardian newspaper and first printed on 10 July 2022 by its Sunday sister The Observer.
The documents revealed attempts to lobby Joe Biden, Olaf Scholz and George Osborne; how Emmanuel Macron secretly aided Uber lobbying in France, and use of a kill switch during police raids to conceal data. Travis Kalanick dismissed concerns from other executives that sending Uber drivers to a protest in France put them at risk of violence from angry opponents in the taxi industry, saying “I think it’s worth it, violence guarantees success”.
Taxi companies sued Uber in numerous American cities, alleging that Uber’s policy of violating taxi regulations was a form of unfair competition or a violation of antitrust law. Although some courts did find that Uber intentionally violated the taxi rules, Uber prevailed in every case, including the only case to proceed to trial.
In March 2017, an investigation by The New York Times revealed that Uber developed a software tool called “Greyball” to avoid giving rides to known law enforcement officers in areas where its service was illegal such as in Portland, Oregon, Australia, South Korea, and China. The tool identified government officials using geofencing, mining credit card databases, identifying devices, and searches of social media.
While at first, Uber stated that it only used the tool to identify riders that violated its terms of service, after investigations by Portland, Oregon, and the United States Department of Justice, Uber admitted to using the tool to skirt local regulations and promised not to use the tool for that purpose. The use of Greyball in London was cited by Transport for London as one of the reasons for its decision not to renew Uber’s private hire operator licence in September 2017.
A January 2018 report by Bloomberg News stated that Uber routinely used a “panic button” system, codenamed “Ripley”, that locked, powered off and changed passwords on staff computers when those offices were subjected to government raids. Uber allegedly used this button at least 24 times, from spring 2015 until late 2016. Studies have shown that especially in cities where it competes with public transport, ridesharing contributes to traffic congestion, reduces public transport use, has no substantial impact on vehicle ownership, and increases automobile dependency.
Dead mileage specifically causes unnecessary carbon emissions and traffic congestion. A study published in September 2019 found that taxis had lower rider waiting time and vehicle empty driving time, and thus contribute less to congestion and pollution in downtown areas. However, a 2018 report noted that ridesharing complements public transit. A study published in July 2018 found that Uber and Lyft are creating more traffic and congestion.
A study published in March 2016 found that in Los Angeles and Seattle the passenger occupancy for Uber services is higher than that of taxi services, and concluded that Uber rides reduce congestion on the premise that they replace taxi rides. Studies citing data from 2010 to 2019 found that Uber rides are made in addition to taxi rides, and replace walking, bike rides, and bus rides, in addition to the Uber vehicles having a low average occupancy rate, all of which increases congestion.
A 2021 study found that shifting private vehicle travel to ridehailing services can reduce air pollution costs, on average, but the increased costs from crash risk, congestion, climate change and noise outweigh these benefits. This increase in congestion has led some cities to levy taxes on rides taken with ridesharing companies. Another study shows that the surge factor pricing mechanism used for ridehailing services are informative for predicting taxi bookings as well, and that taxis incorporating this relative price can improve allocative efficiency and demand prediction.
A study published in July 2017 indicated that the increase in traffic caused by Uber generates collective costs in lost time in congestion, increased pollution, and increased accident risks that can exceed the economy and revenue generated by the service, indicating that, in certain conditions, Uber might have a social cost that is greater than its benefits.
n July 2017, Uber received a five-star privacy rating from the Electronic Frontier Foundation, but was harshly criticized by the group in September 2017 for a controversial policy of tracking customers’ locations even after a ride ended, forcing the company to reverse its policy. In January 2024, Uber was fined 10 million euros ($11 million) by the Dutch Data Protection Authority for violating privacy regulations pertaining to the personal data of its drivers.
The authority determined that Uber had failed to provide clear information in its terms and conditions regarding the duration for which it retained drivers’ personal data, as well as the measures taken to secure this data when transmitting it to undisclosed entities outside the European Economic Area. In August 2024, Uber was fined €290m euros ($324 million) by the Dutch Data Protection Authority for transferring the personal data of European drivers to US servers in breach of the GDPR.
In March 2024, The Wall Street Journal reported a trend of popular service apps like Uber emphasizing higher margin advertising to increase profits. The reporting mentioned Uber personalizing content based on user data and maintain the balance between increasing ad revenue and annoying and turning away customers. It noted that Uber was showing customers one ad per trip and how it tried to implement push alerts before moving away from them given the response from customers.
In February 2024, a multidistrict litigation (MDL) was established in the Northern District of California against Uber Technologies, Inc., consolidating numerous claims from among the more than 3,000 sexual assault lawsuits filed against the company in state and federal courts. These lawsuits allege Uber prioritized growth over safety by using inadequate background checks, skipping in-person driver vetting, and failing to invest in preventive measures such as cameras or monitoring systems.
It also claims Uber knowingly put vulnerable passengers, such as intoxicated women, at risk through its marketing and business practices. The litigation seeks injunctive relief, damages and changes to Uber’s safety policies. Some survivors have chosen to pursue justice in state courts outside of the MDL, seeking faster resolutions and a more individualized approach.
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