What are the Uber Files? The Uber Files are a leak of 182 gigabytes of data that were obtained by The Guardian newspaper from an anonymous source and shared with the International Consortium of Investigative Journalists (ICIJ) and its media partners from 30 countries, including The Indian Express. The dump comprises 124,000 records from the 2013-17 period — mainly internal company emails (83,000), and memos, presentations, and WhatsApp messages. The Uber Files show how the ride-hailing start-up begun by Travis Kalanick in San Francisco in 2010 became a global behemoth by harnessing technology, working around laws, and using aggressive lobbying tactics to curry favour with governments during the period of its dramatic expansion. Over the years, Uber has faced intense media scrutiny. In 2017, Uber’s investors forced Kalanick out amid a series of sexual harassment and privacy scandals, causing huge reputational damage to the company. What are the main findings with regard to Uber’s operations in India? The Uber Files show the cavalier manner in which the company’s top executives reacted to the allegation of rape by an Uber driver in New Delhi in December 2014. While officially expressing shock and empathy, the executives in internal communications tried to put the blame on faulty background checks on drivers carried out by Indian government officials. After Uber services were banned in the capital, the company’s managers tried to douse fires they feared might start in other countries. The data also reveal the manner in which Uber tackled tax and regulation issues that arose frequently in India, and used it as an example in other countries. India being a key market, Uber used its lobbying tactics to the hilt here. Among the steps the company took was to prepare a list of “stakeholders” from among the bureaucracy and political class to influence policy, and to sign around a dozen Memorandums of Understanding (MoUs) in different states — agreements that remained mostly on paper. How big is Uber in India? Uber launched in India on August 29, 2013 as a ride-hailing platform in Bengaluru. It had phenomenal success around the country, and on November 18, 2021, launched the service in India’s 100th city, Warangal in Telangana. According to the company, it had served nearly 9.5 crore Indian riders and drivers until then. As of now, Uber has nearly 6 lakh driver-partners; at a meeting with Finance Minister Nirmala Sitharaman in San Francisco in April, CEO Dara Khosrowshahi said the company was aiming to grow to 20 lakh driver-partners in the country. Uber offers a variety of services in India, including Rentals, UberConnect, Auto, and Moto. The company has reinvented itself several times in India. Its first Indian arm was incorporated as Cupolone Capital Advisors Private Limited in Mumbai in January 2011, which was renamed as Xchange Leasing India Private Limited in November 2015. On January 25, 2012, Meinstein Edumart Private Limited was incorporated in Delhi; it was renamed as Resourcexpert India Private Limited on December 27, 2013, then as Uber India Technology Private Limited (UITPL) on March 4, 2015. Uber India Systems Private Limited (UISPL) was incorporated on August 16, 2013 in Mumbai. Another firm, Uber India Research and Development Private Limited (UIRDPL), was incorporated on March 11, 2016 in Hyderabad as Uber India Support Centre Private Limited, and later renamed. Uber India Development Private Limited (UIDPL) was incorporated on April 13, 2016 in Bengaluru. Xchange Leasing is categorised as a “Passenger transport services” provider, and the description of its service is “Leasing of Vehicles”. Its total income in 2018-19, the latest balance sheet available with RoC, was Rs 103.61 crore. UISPL’s category as per its balance sheet is “Other Professional and business services”, and its total income in 2020-21 (latest available) was Rs 538.73 crore. UIDPL is in the business of “research and development”, and showed a loss of Rs 29,500 in 2019-20 (latest available). UIRDPL is categorised as “Other professional, technical and business services” as per the declaration to the RoC, and its turnover in 2018-19 (latest available) was Rs 335.60 crore. UITPL’s revenue for 2020-21 was Rs 6.97 crore, RoC records show. How has Uber managed its growth profile in India? Uber has diversified its riding from four wheelers to three and two wheelers as well. To get around labour laws, the company has said that drivers are not its employees. It has categorised itself as “tour operator” and later as “rent-a-cab” to reduce its service tax burden. Uber entered India through Europe. In 2012, a few months after it started services in France, Uber set up a Dutch company, Uber BV, to receive payments from customers in India and some other countries. Uber BV (Netherlands) holds 52% of UISPL’s shares. Except UIDPL, all the aforementioned companies are subsidiaries of Netherlands-based companies. In its declaration to the RoC for 2020-21, UISPL said, “The Company entered into an agreement with Uber BV for support services including accounting, treasury, finance, employee stock compensation administration, payroll, administrative services, human resources, legal, management support, and information technology support and such other general and administrative services that the Company may need from time to time to operate the Rides and Eats business. For these support services, the Company was required to pay Uber BV an arm’s length fee calculated on a cost-plus basis.” With regard to its payments towards Uber BV, the RoC declaration states that from October 1, 2019, “whereby the consideration for the rides service will be a fee based on i) an allocation of networking costs for the Fiscal Year based upon the number of trips and ii) a 30 % of net revenue earned and 80 % of commercial profit in excess of 1% net revenue whichever is less earned by the Company from Rides business”. What impact has Uber had on transport and employment generation in India? Before Uber entered India, engaging a taxi was often difficult and costly in many Indian cities. When it started out, Uber received generally positive feedback for its clean vehicles and affordable tariffs, and attracted many commuters who might otherwise have taken public transport such as buses. With approximately 6 lakh driver-partners and a presence in 100 cities and towns, Uber has created significant earning and employment opportunities for both owner-drivers and those who are contracted by owners to drive vehicles on the platform. After expanding its footprint to three wheelers and bikes, the company has offered options for faster and cheaper mobility to riders. What challenges does Uber face in India? Uber leads the cab aggregator business in India, and invested Rs 1,767 crore in it in November 2019. The company says its India journey is “only just beginning”. But Bloomberg reported last month that Uber Technologies Inc had explored options for its Indian ride-hailing business, including a sale, but suspended discussions after tech start-up valuations cratered. CEO Khosrowshahi had rejected the report in a tweet. In a letter written to employees in May, Khosrowshahi indicated cost cutting: “Some initiatives that require substantial capital will be slowed. We have to make sure our unit economics work before we go big. The least efficient marketing and incentive spend will be pulled back.” In the United Kingdom and France, Uber’s driver-partners have already been declared its “workers”. A similar PIL is pending before the Supreme Court in India, and its outcome is likely to determine the company’s future growth prospects and strategy. Uber’s surge pricing is seen by many as being predatory. Why have states not been able to control it? In November 2020, the Union Ministry of Road Transport and Highways issued Motor Vehicle Aggregators Guidelines “to provide a guiding framework to the State governments/UTs to consider for issuance of licenses as well as regulating the business being conducted by such Aggregators.” The guidelines gave a formula for surge pricing. However, in the absence of policies by state governments, no standard surge pricing formula is used by Uber. Karnataka is the only state that has notified a fare structure for aggregators. In Mumbai, the licensing process started after the High Court intervened this year on a PIL filed by advocate Savina R Castro, but the Supreme Court issued a stay after Uber challenged the Centre’s Motor Vehicle Aggregators Guidelines 2020. On surge pricing, Uber says: “Pricing for trips varies city by city for a number of reasons, including fare regulations, fuel prices, and general cost of living. Dynamic pricing helps ensure that there are enough drivers to handle all ride requests, so riders can get a driver quickly and drivers can earn more. We show riders the price of their ride before they accept it so they can make an informed choice.”
