
How Uber secretly investigated its legal foes and got caught - kmfrk
http://www.theverge.com/2016/7/10/12127638/uber-ergo-investigation-lawsuit-fraud-travis-kalanick
======
fencepost
I'm frankly astonished at how bad Uber is at setting an image - or if they're
not bad at it then they're _terrible_ at deciding what image to set.

I've never used them* but based on their reputation and depending on
circumstances I think my preference order would be Lyft, taxi, public
transportation, livery service, call friends to ask a favor, Uber, walk - and
"walk" might move up the list depending on the weather and distance.

* The one time I tried to actually _use_ Uber they locked my account because the card on file was declined - it'd been replaced after the Home Depot breach. Their unlock policy appeared to be something like "send us a picture of the card," which wasn't going to happen since it had been shredded months before. The early press about their business practices had already started, so I wasn't that interested in pursuing unlocking either.

~~~
fennecfoxen
> I've never used them

I have, I continue to use them (anyone has better service and is less corrupt
than the taxi cartels), and I _still_ generally agree.

~~~
uola
I don't really get the "taxi cartel" thing. Taxis aren't exactly brilliant
everywhere so I buy the better service argument, but if you're concerned about
corruption and cartels I don't see how a global company largely operating
outside the law is better.

~~~
seanmcdirmid
It is more about a better deal and/or not getting ripped off (which the cartel
is against) than about it being a cartel. It is amazing what Uber can do in a
city like Manila.

Taxis also never bothered upping their convenience game, because they thought
they didn't have to.

~~~
akshatpradhan
Its about not getting ripped off. With Lyft/Uber you can escalate if you feel
ripped off. With Taxi Cartel's, there's nobody to take your complaints. We
feel ripped off whenever we've had to ask this of ourselves, "Gosh, we seem to
have gone a longer route" or "Did he start the meter before I got into the
car?"

Side story: In Baltimore this happened to me. I got into a taxi and the driver
starts asking me tons of questions. I'm politely answering and having
conversation but I'm clearly not paying attention to the meter. We drove for
7-10 mins, 2-3 miles or so, and upon arriving to my destination is when I
realized the cost was $30.

~~~
seanmcdirmid
> Its about not getting ripped off.

I did mention Manila. And much of Thailand, and...well, Bali is pretty honest.
Uber is a huge stress reliever in those places, where taxis can be outright
dangerous! Forget about the US, I've been stuck at MNL at 2 AM in the morning
and would kill for an Uber app (if it existed at the time).

But I totally agree with your point. A convenient feedback mechanism is quite
nice, along with a GPS based meter that shows the route taken.

~~~
akshatpradhan
At the end of the day, Uber did go too far, "Schmidt and his client were being
investigated by a secretive research firm, staffed by veterans from the CIA
and the National Security Council, conducting an investigation on behalf of
Uber’s top executives. As soon as the lawsuit was filed, those executives took
an interest in Schmidt and his client, sending out operatives to dig up what
they could find on Uber’s new antagonists."

------
pfarnsworth
TLDR: "In a filing last night, Uber pushed back against the allegations of
fraud, arguing its contract with Ergo had specified that the investigation be
both lawful and professional, and neither Kalanick nor Uber had any idea an
investigator might stray beyond that. "Uber took reasonable steps to ensure
that Ergo complied with the law," the filing reads. "It is undisputed that
Uber and Mr. Kalanick were unaware that Ergo would use misrepresentations
during its investigation.""

According to the article, it's common to do due diligence on plaintiffs,
especially when they do something weird like name the CEO personally in the
lawsuit. But it's obvious the research firm Uber contracted did more than they
asked.

~~~
peterbonney
Alternatively...

TLDR: 'Uber communicated with Ergo largely over encrypted channels. Henley
[the Uber executive that hired Ergo] explained in one email that this was
necessary to "avoid potential discovery issues."'

Any reasonable person with knowledge of litigation knows that the only reason
you attempt to hide things from discovery is that they are incriminating,
aggravating (in the legal sense) and/or damning. "Common" due diligence on
plaintiffs would never need to be hidden from discovery. In fact, quite the
opposite: negative information turned up in due diligence would be paraded in
front of the opposing side as a negotiating tactic, and you (almost always)
can't selectively disclose which information you turn over in discovery.

Furthermore, if you intend information to remain confidential in litigation,
you have your attorney do it so it can be classified as privileged attorney-
client work product. But the inconvenient limitation is that lawyers are bound
by legal ethics, so the fact that this investigation wasn't conducted by the
firm's attorneys (and was, apparently, hidden from them) suggests it was known
to cross ethical lines.

And naming CEO's in lawsuits isn't "weird" \- it's an extremely vanilla legal
tactic. You name anyone and everyone and let the opposing counsel argue for
more limited scope. Leaning on that as an excuse is transparently absurd.

It's obvious to any reasonable third party that Uber _intended_ to go beyond
normal legal due diligence, and got caught.

~~~
mcherm
You write:

> Any reasonable person with knowledge of litigation knows that the only
> reason you attempt to hide things from discovery is that they are
> incriminating, aggravating (in the legal sense) and/or damning.

I disagree with that. As a general rule of thumb, "only people who have done
something wrong would care about privacy" is a frequently used truism which is
actually quite false. In this particular case, reasonable people with
knowledge of litigation know that there are many, many reasons to hide things
from discovery. The most common is because "the lawyers haven't reviewed this
and so we don't know whether it would be problematic or not -- 99% chance it
isn't a problem, but we shouldn't take any chances". This is the main reason
(at least in the US) why companies have data destruction policies that require
all emails and documents past a certain age be automatically deleted (unless
an explicit step is taken to retain them).

~~~
peterbonney
'"only people who have done something wrong would care about privacy" is a
frequently used truism which is actually quite false.'

I agree with this. Strongly.

However, there are two important counterpoints here that don't apply in normal
circumstances:

1\. They were _actively_ involved in litigation, which means normal
information retention procedures were already out the window (or should have
been). E.g. you can certainly do things like routinely delete business emails
older than some specified age, but if you know those emails contain subject
matter that is pertinent to active litigation you likely should not.

2\. The encryption/destruction that occurred here weren't a "normal course of
business" thing, but a _response_ to the litigation. That gives a strong
impression that it was willful and intended to evade laws and rules related to
discovery.

~~~
pfarnsworth
> I agree with this. Strongly.

This is an ignorant statement. Things you say can easily be taken out of
context and manipulated. This is a common occurrence, which is why privacy
matters.

~~~
peterbonney
I was trying to say that I agree that privacy matters.

------
vinceguidry
Is Uber really "one of the most powerful and litigious companies in the
world"?? Journalists sure like their hyperbole.

~~~
sverige
Is it hyperbole when a taxi company has someone with the title "Global Threat
Intelligence"? I can picture Danny DeVito yelling at Judd Hirsch and Tony
Danza now. "Find out about this lawyer!"

~~~
CamperBob2
A company isn't paranoid if other companies really are out to get them.

~~~
sundvor
"Just because you're paranoid doesn't mean they aren't after you".

Joseph Heller, Catch-22

------
cm2187
I have mixed feelings about Uber. On one side it takes a thick skin to go
against the various taxi cartels (some of which are close to an organised
mafia, like in Paris, where taxi drivers will not hesitate to physically
assault competitors). And they do provide a better service.

On the other side I am not keen to see a mafia replaced by another mafia.
There has been multiple stories about Uber bullying competitors. And this. And
Uber also seems to be very much minded to milk the customer to the last penny.
Introduction of peak pricing, Uber charging a cancellation fee when the driver
cancels the ride, etc.

------
joering2
No shady tactics will surprise me when it comes to Uber.

I still receive spammy emails they continue to send. And Sendgrid is fully in
bed with them.

Forwarded spam to Sendgrid and they said they will follow up with Uber (so
apparently they are Uber's customer support at this point - great!) The
spamming practice never changed or stopped despite Sendgrid telling me they
will send my email to them (!!) to unsubscribe me from their list, when I
didn't even subscribe in the first place.

As I received more Uber spam I kept updating Sendgrid ticked (zendesk).
Eventually some 2 weeks later they closed it as "resolved" and never replied
to my emails again. I still get Uber Spam from Sendgrid. Stay away from that
piece of shit as long as you can!! (both Uber and Sendgrid)

PS. As of Uber, I copied all my emails and forwarded them to FCC. In short
telephone conversation I was told I'm not the only one and as they have
reached over 1,000 complaints in short period of time, they will be
investigating both into Uber practices and also Sendgrid as an accomplice to
their alleged crime.

[https://en.wikipedia.org/wiki/CAN-
SPAM_Act_of_2003](https://en.wikipedia.org/wiki/CAN-SPAM_Act_of_2003)

~~~
michaelt
I've experienced the same thing. As far as I can tell, Uber's policy is when
you sign up you don't have to opt in and don't get to opt out of their
marketing mailing list, and when you close your account you don't get removed
either, because fuck you.

~~~
joering2
I just got personal email from someone at Uber.

They explained to me that they comply with Can Spam by... providing
unsubscribe link. Nothing mentioned how I got on their list in the first
place, on what their practice are. Clearly my email must have been scrapped
from public sites, since I never did sign with them in the first place.

So yeah if they don't even know the rules of Can Spam, how the heck you expect
them to follow the law?

I will have a short call with Attorney General in my State end of this week to
see if I am a separate incident.

------
dmix
This is the result of what happens when you have a massive intelligence
community and workers decide to go into private industry.

"Threat intelligence" has always been a bit shady and of questionable security
value. CEOs just like to get handed an "intelligence portfolio" to feel big
and powerful, regardless if it practically improves their security.

------
PhantomGremlin
My eyes lit up when I saw "Judge Rakoff"[1] mentioned in the article. He's not
someone who suffers fools gladly. Uber better hope that they succeed in their
motion to compel arbitration, otherwise things could get very "interesting"
for them.

[1]
[https://en.wikipedia.org/wiki/Jed_S._Rakoff](https://en.wikipedia.org/wiki/Jed_S._Rakoff)

~~~
wiredfool
Do not taunt super happy fun federal judge.

It doesn't end well (see also: Prenda Law)

------
Animats
This is backfiring for Uber the way having Ralph Nader followed did for
General Motors back in 1966.[1]

[1] [http://www.pophistorydig.com/topics/g-m-ralph-
nader1965-1971...](http://www.pophistorydig.com/topics/g-m-ralph-
nader1965-1971/)

------
ams6110
Strikes me as being very in line with Uber's overall outlook. They think that
laws and regulations don't apply to them.

------
peterbonney
One issue unexplored in the article: was Uber under a document preservation
order related to the litigation when it (allegedly) used Wickr to communicate
with Ergo about the investigation? If so... I don't think the court will take
kindly to either "the chat app ate my homework" or "no really, we agreed to us
Wickr and exchanged screen names, and then stopped emailing, but I swear we
never actually used it" as defenses.

------
chrischen
Uber sure gets a lot of bad press, but if the movie Wolf on Wall Street is any
indicator, there's no such thing as bad press (unless you're Theranos). The
press seems to be helping Uber a lot in name recognition. It's becoming the
Kleenex of on-demand car services.

~~~
jessaustin
One wouldn't have thought to describe the problem at Theranos as _" bad
press"_.

------
__a__
What is the real value proposition of Uber? The software?

Why didn't they just license the software to taxi companies?

What do HN readers think?

------
duncan_bayne
So someone doesn't like surge pricing and decides to wield the heaviest stick
they can (the State) against Uber, via antitrust (legislation which shouldn't
exist in a free country).

Then he has the gall to complain that the company he's trying to sue
investigates him in an aggressive and possibly illegal manner.

I don't see there's a good guy here. AFAICT, both he and Uber are behaving in
a fairly contemptible fashion.

For those here who support antitrust legislation (even in cases other than
this one), this is worthwhile reading:

[https://mises.org/library/antitrust-case-
repeal](https://mises.org/library/antitrust-case-repeal)

"Professor Armentano begins with the most rigorous and revealing account of
the Microsoft antitrust battle to appear in print. He further discusses other
recent cases, including Toys `R' Us, Staples, and Intel, as well as many
historical cases. He covers nearly every conceivable rationale for antitrust,
including price fixing, tie ins, vertical and horizontal mergers, and many
more."

It's a bit old, but still highly relevant.

