Uber Boss Practices Brinksmanship With Apple

Uber CEO Travis Kalanick has a reputation of playing fast and loose with rules, but it appears that a maneuver his company performed on iPhones took his ride-hailing outfit to the brink of ruin a couple of years ago.

When Apple discovered Uber was planting code on iPhones that persisted on the devices even after the ride-hailing app was removed, Apple CEO Tim Cook warned Kalanick in a face-to-face meeting to stop the practice or the Uber app would be kicked out of Apple’s App store, The New York Times reported Sunday.

Uber cooked up the code in 2014 to fight fraud, according to the Times. Some drivers were buying black market iPhones, creating multiple email addresses on them, and using the addresses to establish Uber accounts. The drivers then hailed rides to themselves from the bogus accounts in order to collect incentives Uber was handing out to drivers who were taking on more riders.

The code added to the iPhone helped Uber “fingerprint” the mobile device and foil the multiple account scammers. The only problem was the practice violated an Apple rule requiring that nothing belonging to a previous owner should be left on an iPhone after an app was wiped.

Kalanick knew the rules, so he devised a way to hide the app’s fingerprinting feature from Apple’s engineers — a ruse that was eventually discovered by Apple, the NYTreported.

New Breed of CEOs

Kalanick, 40, isn’t alone in his damn-the-rules management style, noted Jim McGregor, principal analyst at Tirias Research.

“There’s a new batch of CEOs we’re seeing, especially in the tech industry, that think they can do whatever they want to do,” he told the E-Commerce Times. “They’re pushing the boundaries of technology — and in some cases, the boundaries of what’s legal.”

In the past, two checks on CEOs who behave badly have been Wall Street — through stock dips — and Washington — through regulation. Neither seems bothered by cheeky behavior at the moment.

“The market has rewarded this new batch of brash CEOs,” McGregor said, “and now we have a president that is unlikely to hold them accountable for not paying attention to rules and regulations.”

No Stranger to Controversy

The Times‘ story about Uber’s subterfuge with Apple is just the latest in a string of negative stories about the company and its volatile CEO.

The company recently has undertaken an investigation of its internal management practices, following allegations that managers routinely abuse employees verbally, physically and sexually.

Because Uber isn’t always welcome in the jurisdictions roamed by its drivers, some of them were using an app called “Greyball” to hide Uber activity from law enforcement. After The New York Times exposed the app earlier this year, Uber prohibited the software from being used against law enforcement.

Although Uber has had a measure of success in Europe — 7.5 million people hailed rides in 21 countries last year, the company said — a case pending before the European Union’s top court could result in the company’s recategorization as a transportation concern and not a digital service, which would make things more difficult.

And, of course, there is that viral video of Kalanick going ballistic on one of his Uber drivers who’d just given him a ride.

Disregard for Stakeholders

However, there’s a fine line between stretching the rules and systematically ignoring or breaking them, or believing they don’t apply to you, cautioned Charles King, principal analyst at Pund-IT.

“The details that have come to light about Kalanick’s personal behavior and his management of Uber suggest that he has little if any respect for his employees, investors, partners and customers,” he told the E-Commerce Times.

“I find that reprehensible,” King said.

“Evidence suggesting that a senior leader is a consistently bad actor can impact a company’s reputation and its bottom line. It can also can lead to customers, partners and employees heading for the exits, and the talent needed for future growth and progress avoiding the company like the plague,” he added. “That’s the situation Uber appears to be facing today.”

Not Tracking Individuals

The article has raised concerns that Uber may have tracked people’s movements, unbeknownst to them.

“We absolutely do not track individual users or their location if they’ve deleted the app,” Uber said in a statement provided to the E-Commerce Times by spokesperson MoMo Zhou.

The fingerprinting technique used by the company is a typical way to prevent fraudsters from loading Uber onto a stolen phone, putting in a stolen credit card, taking an expensive ride and then wiping the phone — over and over again, according to the company.

Similar techniques are used for detecting and blocking suspicious logins to protect Uber users’ accounts, the Uber noted.

“Being able to recognize known bad actors when they try to get back onto our network is an important security measure for both Uber and our users,” the company added.

Uber’s assessment of its fingerprinting code is correct, said Benjamin Mayo, an iOS developer in the UK.