New documents show Uber’s response to legal raids 7/11/22 Transcript

Speaker 1: (00:01)
Welcome back to Squawk Box this morning. We got a new media report that’s showing an inside look at how Uber responded to authorities around the world. This is as they investigated the company’s practices. This is internal documents obtained by The Guardian and shared with an independent panel of journalists that showed how Uber used what they called a “kill switch” to cut off regulators from its data. It was part of a dawn raid manual that instructed employees on how to respond to regulators. It included moving the authorities into a room that doesn’t contain files or IT access and never leaving them alone. Emails show that former CEO, Travis Kalanick, ordered employees to, “Hit the kill switch in Amsterdam.” This would’ve cut off the company’s office from other Uber’s internal network, effectively preventing them from seeing it making data inaccessible to authorities as they raided their European headquarters. Cutting access to internal data in such a way is in a legal gray area in many countries, but it’s generally not considered obstruction of justice if exercised before requests for specific documents are delivered. Kalanick was ousted, as we all know, by the board in 2017, so we’re talking about a media report of stuff that happened more than five years ago.

Speaker 1: (01:12)
A statement from his spokesman said he never authorized any actions or programs that would obstruct justice in any country, but it just adds to the narrative around Travis and how he approached doing business.

Speaker 2: (01:26)
Right. It’s aggressive.

Speaker 1: (01:27)
And the evasiveness that the company approached regulation. Of course, there’s a separate question about whether, if they hadn’t done these things, and I’m not saying they should have at all, but the whole creation of the company was to outmaneuver regulators to get to a escape velocity to the point where regulators almost just had to deal with them.

Speaker 2: (01:48)
Right.

Speaker 1: (01:48)
Because it’s possible the company would’ve been killed at infancy, in some ways, by the regulatory community, given both the approach that they were taking and just the power of the taxi cab industry in certain cities.

Speaker 2: (02:00)
That’s what I mean.

Speaker 1: (02:03)
And the driver community, in some places.

Speaker 2: (02:04)
They would probably, at the time, think they were fighting the good fight to get this through the entrenched legacy taxi business. That has regulators… You never know who’s rubbing whose back in terms of those things, and it’s definitely-

Speaker 1: (02:20)
Oh, no. The corruption in so many different cities around the world that were-

Speaker 2: (02:24)
Right. Think of it. Right.

Speaker 1: (02:25)
Around the driving community was-

Speaker 2: (02:27)
Very difficult. You just said that, in some countries, it’s a gray area what is construed obstruction of justice. So for him to say he never did anything that would be obstruction of justice is probably a true statement based on the wiggle room that you have from what you’re allowed to do in those other- I don’t know. It’s aggressive, but sometimes startup companies like that, that are facing a very different… Who knows? Is Uber going to ever be able to charge enough money, really, to be a profitable company, if it didn’t have all the other stuff? If it was just the taxi cab business?

Speaker 1: (03:02)
Well, I think in certain cities where they’re already entrenched, one of the reasons they’re losing money is because they’re continuing to invest in building Uber Eats and all these other businesses.

Speaker 2: (03:10)
They’re also subsidizing. They’re not charging $60 to go a 20 minute ride.

Speaker 1: (03:16)
No, no, no. I think, in many cities, it’s a profitable enterprise. The reason it looks unprofitable is because they’re taking that money and they’re investing it in growing Uber Eats or they’re investing in growing in other parts of the world. Yeah, if they shut down any kind of growth prospect, it probably would be a profitable business.