"The greatness and the genuine trait of your thought and writings lie on the fact that you positively and interestingly make use of philosophical thoughts and thoughtfulness in order to deeply and concretely cogitate about America's social issues. . . . This does not mean that your thought is reducible to your era: your thought, being inspired by issues characterizing your era . . . , overcomes your era and will still likely be up to date even after your era, for future generations." Bruno Valentin

Friday, March 3, 2017

Uber Tricking Law Enforcement: An Unethical Corporate Culture Externalized

A company with a culture in which in-fighting andheavy-handed treatment of subordinates are not only tolerated, but also constitute the norm can have good financials. With operations in more than 70 countries and a valuation of close to $70 billion in 2017, Uber could be said to be a tough, but successful company. Yet the psychological boundary-problems that lie behind such an organizational culture can easily be projected externally to infect bilateral relations with stakeholders. In the case of Uber, those stakeholders include municipal law enforcement. Even more than as manifested within the company, the external foray demonstrates just how presumptuous “boundary issues” are. Such presumption can blind even upper-level managers to just how much their company has overstep. In reading this essay on Uber’s program to evade law enforcement, you may be struck by the sheer denial in the company.

“Uber has long flouted laws and regulations to gain an edge against entrenched transportation providers.”[1] This statement alone suggests a rather sordid mentality—a sense of entitlement. The evasion included “a worldwide program to deceive authorities in markets where its low-cost ride-hailing service was being resisted by law enforcement, or in some instances, had been outright banned.”[2] In particular, the company began using its Greyball (think “blackball”) app as early as 2014 as part of a broader program called VTOS “to identify and sidestep authorities in places where regulators said the company was breaking the law goes further in skirting ethical lines—and potentially legal ones, too.”[3] One method involved drawing a digital perimeter around city officials’ offices on a digital map of the city that Uber monitored. “The company watched which people frequently opened and closed the app . . . around that location, which signified that the user might be associated with city agencies.”[4] Another technique involved looking at the user’s credit card information and whether that card was tied directly to an institution such as a police credit-union. Uber would also search social media profiles. Once a user was tagged, fake digital cars would show up on the app used to hail a car.

In a statement, Uber states, “This program denies ride requests to users who are violating our terms of service—whether that’s people aiming to physically harm drivers, competitors looking to disrupt our operations, or opponents who collude with officials on secret ‘stings’ meant to entrap drivers.”[5] The stings were not meant to entrap drivers; instead, the aim was to catch Uber breaking the law. The company’s emphasis on “opponents” reflects the contentious atmosphere within the company rather than any actual collusion externally. In actuality, Uber’s program was designed to evade law enforcement. To an overreaching mentality, such enforcement is bound to be dismissed rather than accepted.

Put another way, a company that views local law enforcement in such terms (i.e., in collusion with opponents) and goes to such lengths in investigating and tricking city officials is not going to be very tolerant of employees who claim that using the Greyball app “to identify and sidestep authorities in places where regulators said the company was breaking the law” skirts “ethical lines—and potentially legal ones, too.”[6] In other words, the aggressive internal culture not only mirrors, but also protects the external ethical over-reaches. “Inside Uber, some [employees] who knew about the VTOS program and how the Greyball tool was being used were troubled by it.”[7] Yet they feared retaliation. The culture in which in-fighting and the heavy use of power have been the norm could not have been irrelevant in this regard. It is not surprising that some of those employees provided documents to The New York Times rather than trying to navigate through the sordid organizational culture. Hence we have a glimpse of how an unethical organizational culture characterized by aggression can be associated with the unethical treatment of stakeholders, which in turn can not bode well in terms of long-term financial performance.





[1] Mike Isaac, “How Uber Used Secret Greyball Tool to Deceive Authorities Worldwide,” The New York Times, March 3, 2017.
[2] Ibid.
[3] Ibid.
[4] Ibid.
[5] Ibid.
[6] Ibid.
[7] Ibid.