Uber data breach collides with SoftBank deal

TORONTO/SAN FRANCISCO: A newspaper advertisement for an Uber Technologies Inc stock sale was juxtaposed on Wednesday with a report that the ride-service provider had covered up a data hack — something of a metaphor for Uber, a company with boundless investor interest, but whose penchant for rulebreaking has led to a series of scandals.

The stock sale advertised in the New York Times will enable Uber investors to sell their shares to SoftBank Group Corp, a critical deal for the company whose problems included building software to spy on competitors and to evade regulators and being investigated in Asia for paying bribes.

Uber on Tuesday said it had paid hackers US$100,000 (RM411,600) to destroy data on more than 57 million customers and drivers that was stolen from the company and decided under the previous chief executive officer (CEO) Travis Kalanick not to report the matter to victims or authorities. Uber was first hacked in October last year and discovered the data breach the following month.

New CEO Dara Khosrowshahi, acknowledged in a blog that Uber had erred in its handling of the breach.

The timing of the disclosure could hardly have been worse.

The company is trying to complete a deal with SoftBank in which the Japanese firm would invest as much as US$10 billion in at least 14 per cent of the company, mostly by buying out existing shareholders. SoftBank is advertising to find shareholders who want to sell.

Uber last month announced a preliminary deal for the SoftBank investment.

One question is whether SoftBank will now try to alter the price of the deal. One source familiar with the matter said SoftBank is planning to stick to its agreement to invest in Uber but may seek better terms. SoftBank has not yet made a final decision on whether to renegotiate, the source said.

The scope of the repercussions Uber will face for the data breach began to take shape on Wednesday with governments opening investigations. Authorities in Britain, Australia and the Philippines said they would investigate Uber’s response to the data breach. Reuters