Uber CEO Travis Kalanick May Have Had A Worse Week Than Donald Trump
This past week has not been kind to Uber, and I argue that its CEO, Travis Kalanick, had a worse week than POTUS. Keep in mind, the latter is a sentient Cheez Doodle who faced blowback for undoing federal protections on transgendered kids on grounds that it’s a states’ rights issue while also vowing to crack down on another states’ rights issue: legalized cannabis. One can’t forget the administration’s unprecedented decision to exclude members of the press from briefings and that pesky Russia problem. Sure, Agent Orange had a bad week, but given the baseline, it was about average. Uber and its CEO, however, had, ahem, an über-bad week.
Kalanick was revealed to be personally embroiled in an intellectual property scandal right out of a bad spy novel while also, simultaneously, having his company revealed as the incarnation of Silicon Valley’s problem with sexual discrimination and harassment.
An IP Scandal Out of A Bad Spy Novel
Let’s start with the IP issue, which, somehow, ended up being the small potato of bad Uber news this past week.
ReCode broke the story that Alphabet’s newly-renamed self-driving car outfit, Waymo, filed a lawsuit against Uber for allegedly using stolen intellectual property. According to Section 1 of the lawsuit [PDF], Anthony Levandowski, a former manager at Waymo downloaded “more than 14,000 highly confidential and proprietary files shortly before his resignation,” some 9.7 GB of data in total These files included Waymo’s LiDAR circuit board designs, among other proprietary information. The lawsuit further alleges that Levandowski had installed special software on his company-issued computer to extract this information and, in an effort to cover his tracks, did a clean re-install of the operating system on it after the deed was done.
But wait, there’s more. Levandowski set up a competing company, Otto, prior to leaving Waymo in January 2016. Otto poached many key people from Waymo and, again allegedly, they downloaded additional Waymo trade secrets prior to departing that company for Otto.
Now, longtime subscribers might recall from #16 a brief mention of Uber’s acquisition of Otto in late August 2016, which installed Levandowski as the head of Uber’s self-driving car development efforts. The Waymo lawsuit alleges that “As of August 2016, Uber had no in-house solution for LiDAR — despite 18 months with their faltering Carnegie Mellon University effort — and they acquired Otto to get it.” By September 2016, “Uber represented to regulatory authorities in Nevada that it was no longer using an off-the-shelf, or third-party, LiDAR technology, but rather using an ‘[i]n-house custom built’ LiDAR system.”
So where does the “bad spy novel” bit come in? According to coverage of the Uber-Otto acquisition published in BloombergBusinessweek, we get the following. Kalanick met Levandowski at a TED conference in 2012, where Levandowski was showing off early prototypes of Google’s self-driving cars. (Remember, this is what would become Waymo.)
After Levandowski founded Otto in January, it didn’t take long for Kalanick to come a’calling. The Bloomberg article says, “Kalanick began courting Levandowski this spring, broaching the possibility of an acquisition during a series of 10-mile night walks from the Soma neighborhood where Uber is also headquartered to the Golden Gate Bridge. The two men would leave their offices separately — to avoid being seen by employees, the press, or competitors. They’d grab takeout food, then rendezvous near the city’s Ferry Building.”
One wonders what the two discussed during their clandestine nighttime wandering around the streets of SF. Surely, the core hardware Otto was developing was part of it. The question is, what did Kalanick know about the provenance of that intellectual property? Chances are, that’s for lawyers to figure out, but it isn’t a totally clear-cut case.
After all, Levandowski was the founder of 510 Systems, one of Google’s earliest acquisitions in its efforts to develop self-driving car technology. Levandowski directly competed against Sebastian Thrun, “the godfather of self-driving cars,” in the 2005 DARPA Grand Challenge, submitting a self-balancing, autonomous motorcycle, one of the only two-wheeled vehicles in that competition. So Levandowski is no slouch in the engineering department. (It’s not like I, a guy who just writes stuff on the internet, started a self-driving car company shortly after departing a self-driving car company.) But, still, if even part of the allegations are true, he’s toast and Uber is potentially liable for serious damages. Companies just can’t unlearn stuff from stolen IP.
Tech’s Sex Problem Incarnate
Now, on to the more serious bits. To me, this is the much more damaging story to Uber, and it’s the one that makes me feel the most antipathy toward that company. I’ll be short in this section because it lacks the tasty, intriguing details of the Waymo lawsuit, and there isn’t much I can add to the story by way of opinion or analysis.
Unless you’ve been living under a rock, you’ve probably heard about the blog post by Susan J. Fowler, a software engineer and author formerly under the employ of Uber.
On Fowler’s first day on a site reliability engineering team, after training, she was propositioned by her manager for sex. She went to HR with the issue, and they told her that there’s nothing they can do because it was a “first time offense” for that particular manager, who just so happened to be a “high performer.” As Fowler tells it, HR gave her a choice: “(i) I could either go and find another team and then never have to interact with this man again, or (ii) I could stay on the team, but I would have to understand that he would most likely give me a poor performance review when review time came around, and there was nothing they could do about that.”
To make a very long and complicated story short to a fault, Fowler ended up interacting with other female engineers at Uber who also had negative experiences with this particular manager and faced non-response from HR. Meaning: this was no “first offense” for that manager.
There were plenty of other incidents that Fowler recounted in that post which point to severe incompetence on the part of Uber HR at best, and a textbook of institutionalized sexism at worst (and for the record, it’s looking like the worst). But what got to me was the whole “first offense” argument.
I was listening to the Accidental Tech Podcast’s most recent episode, in which they discuss the Uber issue. I think it was John Siracusa who framed the absurdity of the Uber HR person’s response the best. Paraphrasing: If you noticed on your paycheck that you were shorted $100 for the month, you’d go to the people who could address and correct the problem. In a well-functioning organization, you’d go to the payroll people and they’d find a way to make up for the $100 difference. It’s a simple, black and white issue that should be fixed immediately. But if instead they said “oh, it’s a first-time offense,” or “don’t make a big deal about $100,” then there’d be a serious issue.
That, oftentimes, sexual harassment wasn’t taken as such a cut-and-dry issue as a payroll error is, to me, indicative of a serious, systemic problem at Uber. I could link to the follow-up articles published by the tech and traditional press alike, which include stories of female employees being groped at company retreats, threats of violence for poor performance (like, being threatened with a baseball bat), etc., etc..
(For all those interested, the New York Times did some excellent reporting on these and other severe incidents at the company.)
These are not shades-of-grey type issues here. They, like a missing $100 from one’s paycheck, is black and white, and given how the company seems to be handling the situation the mark left is likely to be a big, dark one.
The Cure May Be Worse Than The Disease Here
What to make of all of this? Recent events suggest that this is going to be a long and intractable problem for the company. In this, like all cases, culture matters, and like a titanic ocean liner, turning the ship after it’s hit the iceberg is both a case of too-little-too-late and a much slower process than one might like it to be.
With scale comes inertia. Even if a small fraction of the stories current and former Uber employees have told to the media or published online themselves are 100% unembellished truth, they all point to the fact that Uber has some profoundly toxic culture issues that, like cancer, will likely only be treatable with some serious cutting. And even at that point, someone’s going to be losing a lot of hair.