Here are a few excerpts from a lengthy New York Times article.
Uber’s C.E.O. Plays With Fire
Travis Kalanick’s drive to win in life has led to a pattern of risk-taking
that has at times put his ride-hailing company on the brink of implosion.
By MIKE ISAACAPRIL 23, 2017
...the previously unreported encounter with Mr. Cook (Appleshowed how Mr. Kalanick was also responsible for risk-taking that pushed Uber beyond the pale, sometimes to the very brink of implosion.
Travis Kalanick, the chief executive of Uber, visited Apple’s headquarters in early 2015 to meet with Timothy D. Cook, who runs the iPhone maker. It was a session that Mr. Kalanick was dreading.
For months, Mr. Kalanick had pulled a fast one on Apple by directing his employees to help camouflage the ride-hailing app from Apple’s engineers. The reason? So Apple would not find out that Uber had secretly been tracking iPhones even after its app had been deleted from the devices, violating Apple’s privacy guidelines.
But Apple was on to the deception, and when Mr. Kalanick arrived at the midafternoon meeting sporting his favorite pair of bright red sneakers and hot-pink socks, Mr. Cook was prepared. “So, I’ve heard you’ve been breaking some of our rules,” Mr. Cook said in his calm, Southern tone. Stop the trickery, Mr. Cook then demanded, or Uber’s app would be kicked out of Apple’s App Store.
For Mr. Kalanick, the moment was fraught with tension. If Uber’s app was yanked from the App Store, it would lose access to millions of iPhone customers — essentially destroying the ride-hailing company’s business. So Mr. Kalanick acceded.
With Red Swoosh, Mr. Kalanick started exhibiting his hallmark aggressiveness. When the company struggled, Mr. Kalanick and a partner took the tax dollars from employee paychecks — which are supposed to be withheld and sent to the Internal Revenue Service — and reinvested the money into the start-up, even as friends and advisers warned him the action was potentially illegal.
With Mr. Kalanick desperate to keep Red Swoosh afloat, he moved back into his parents’ house. He staved off bankruptcy for a second time by raising another round of funding. The wayward tax dollars eventually went to the I.R.S.
The idea of fooling Apple, the main distributor of Uber’s app, began in 2014.
At the time, Uber was dealing with widespread account fraud in places like China, where tricksters bought stolen iPhones that were erased of their memory and resold. Some Uber drivers there would then create dozens of fake email addresses to sign up for new Uber rider accounts attached to each phone, and request rides from those phones, which they would then accept. Since Uber was handing out incentives to drivers to take more rides, the drivers could earn more money this way.
To halt the activity, Uber engineers assigned a persistent identity to iPhones with a small piece of code, a practice called “fingerprinting.” Uber could then identify an iPhone and prevent itself from being fooled even after the device was erased of its contents.
There was one problem: Fingerprinting iPhones broke Apple’s rules. Mr. Cook believed that wiping an iPhone should ensure customers that no trace of the owner’s identity remained on the device.
So Mr. Kalanick told his engineers to “geofence” Apple’s headquarters in Cupertino, Calif., a way to digitally identify people reviewing Uber’s software in a specific location. Uber would then obfuscate its code from people within that geofenced area, essentially drawing a digital lasso around those it wanted to keep in the dark. Apple employees at its headquarters were unable to see Uber’s fingerprinting.
The ruse did not last. Apple engineers outside of Cupertino caught on to Uber’s methods, prompting Mr. Cook to call Mr. Kalanick to his office.
Mr. Kalanick was shaken by Mr. Cook’s scolding, according to a person who saw him after the meeting.
But only momentarily. After all, Mr. Kalanick had faced off against Apple, and Uber had survived. He had lived to fight another day