Uber going the wrong route
Even for a company steeped in stretching the legal limits, Uber’s admission of a major data breach is stunning. The ride-hailing giant hid the hack of 57 million accounts, paid off the cyberthieves and ignored laws requiring public notice. One more thing: It hid the problem for a year.
That defiant conduct adds to a heaping record of corporate irresponsibility. It underscores how far Uber is from reforming the arrogant business practices that have drawn criticism, lawsuits and legal crackdowns to tame its behavior. An executive-level housecleaning has a long way to go to reform a wayward company culture.
The data hack cover-up amounts to a case study of evasion and misconduct. A house security team spotted the break-in but didn’t notify public agencies as required by law. Instead, Uber paid a pair of hackers $100,000 to retrieve the data and bottle up the problem. If higherups knew of the incident, they did nothing until word of the incident surfaced when an outside forensics team, brought in recently by the new management team, learned the details.
Uber says the material from the October 2016 attack includes names, emails and phone numbers, though not credit card information or Social Security numbers, which would have been more damaging. Still, the breach and its cover-up are a serious lapse by the company.
Since the break-in occurred, Uber has gone through a board-level war to shed co-founder Travis Kalanick, who knew of the breach and kept silent. His successor, Dara Khosrowshahi, discovered the problem and revealed it this week while the company is nearing a final agreement on a $10 billion outside investment.
Uber could be a prized example of a precedent-shattering startup. Its perch at the top of a newly created market makes it one of the highest valued private companies in the world, with a price tag of more than $60 billion. In less than a decade, ride-hailing has become a transit staple in cities around the world, with Uber becoming a verb for quick travel.
That glittering worth can’t disguise the litter of problems it’s created. Way before revelations of Harvey Weinstein’s conduct set off a wave of harassment claims, Uber was known for a workplace culture that demeaned women. The company has fought off efforts to screen drivers and abide by regulations. Uber is embroiled in a court fight over stealing trade secrets about self-driving cars.
The company’s new leadership needs to prove itself, not hide like the prior crew. The full extent of the data breach should be explained fully. Just as important is the need for effective privacy laws that make clear what Uber and other firms must do when personal information is stolen.