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Uber lobbied Netanyahu, envoys, drafted bills in bid to operate in Israel

Huge document leak details how ride-hailing giant used ‘stealth’ tech to block scrutiny, flouted laws in many countries where it sought expansion

An Uber sign is displayed inside a car in Palatine, Illinois, February 10, 2022.  (AP/Nam Y. Huh)
An Uber sign is displayed inside a car in Palatine, Illinois, February 10, 2022. (AP/Nam Y. Huh)

Ride-hailing giant Uber sought the help of former ambassadors to Israel and the US, and lobbied then-prime minister Benjamin Netanyahu, during an ongoing Transportation Ministry investigation into its practices in Israel in 2017, a newly released major leak of documents on Sunday showed.

The ride-sharing company also drafted its own proposed legislation for Knesset approval in its efforts to operate freely in the country amid tough local regulations, according to the trove of leaked documents obtained by British newspaper The Guardian and shared with the International Consortium of Investigative Journalists (ICIJ).

The so-called Uber Files were shared with 180 journalists from 44 media outlets worldwide, including the Washington Post, Le Monde, and the BBC, and Israel’s Shomrim non-profit news organization. The documents detail the ride-sharing giant’s behind-the-scenes operations worldwide in its efforts to gain a foothold in countries including France, Russia, and India.

Globally, according to the Guardian, Uber “flouted laws, duped police, exploited violence against drivers and secretly lobbied governments during its aggressive global expansion.” Its report said the leak of over 124,000 documents “lays bare the ethically questionable practices that fuelled the company’s transformation into one of Silicon Valley’s most famous exports.”

The ride-sharing service lobbied political leaders to relax labor and taxi laws, used a “kill switch” to thwart regulators and law enforcement, channeled money through Bermuda and other tax havens, and considered portraying violence against its drivers as a way to gain public sympathy, according to the documents, which cover the 2013-17 period when Uber was run by co-founder Travis Kalanick.

The then-CEO used “brute force” in his efforts to expand the cab-hailing service worldwide, the Guardian wrote, “even if that meant breaching laws and taxi regulations.”

A traveler gets in an Uber vehicle at Los Angeles International Airport in Los Angeles, November 13, 2020. (AP Photo/Damian Dovarganes)

Founded in 2009, Uber sought to skirt taxi regulations and offer inexpensive transportation via a ride-sharing app. The consortium’s Uber Files revealed the extraordinary lengths that the company undertook to establish itself in nearly 30 countries.

The documents, made available ahead of publication to Israel’s Shomrim and its investigative reporter Uri Blau, lay out how, in Israel, the company reached as high up as Netanyahu, who promised to “break the resistance” of his then-transportation minister Israel Katz.

Eli Groner, who was at the time the director-general of the Prime Minister’s Office, helped the company tailor its message to the Israeli public and to local media outlets.

According to the documents, Uber began its campaign to enter the Israeli market in 2014 and ran into trouble with the transportation ministry, headed at the time by Katz, a senior Likud member with reported close ties to Israel’s powerful taxi union. The union strongly opposed the entry of Uber, as did taxi unions in other countries.

Israeli Minister of Finance Yisrael Katz holds a press conference at the Ministry of Finance in Jerusalem on July 01, 2020 (Olivier Fitoussi/Flash90)

Senior Uber officials decided to bypass the ministry and appeal directly to the Prime Minister’s Office, then occupied by Netanyahu, and lobby for a meeting between the premier and Uber’s Kalanick, according to Blau’s reporting based on the documents. The two met at the World Economic Forum Annual Meeting in Davos in early 2016, a sit-down considered a success by Uber.

A few days after that meeting, Netanyahu and Katz had a tense conversation during a cabinet meeting when the then-transportaton minister pushed back on the premier’s call for more competition in the road transportation sector.

Uber executives leveraged the company’s relationship with the Prime Minister’s Office and kept in touch with Groner, who coached the company on media messaging including that “ridesharing is a proven model for reducing the cost of living, and it works just fine on a global level; that it is the perfect model for Israel and will lower transportation costs; [and] that Uber believes that the regulator must decide which model is best suited to Israel,” according to Blau’s reporting.

In this Feb. 7, 2018, file photo, former Uber CEO Travis Kalanick leaves federal court in San Francisco. (AP/Jeff Chiu)

Uber did begin operating in Israel in early 2017 with a pilot program called Uber Night service, which allowed private car owners registered with Uber to drive other passengers during night hours when public transit was not available, as The Times of Israel reported. The pilot ran in Tel Aviv on weekends.

Instead of the typical charge app users were required to pay, the fee was referred to as a “reimbursement” and covered drivers’ expenses, such as gas. Uber charged drivers a 25% commission.

It was the company’s way of getting around Israeli law, which does not allow drivers who lack an appropriate license to pick up passengers and charge for rides, as many Uber drivers do in more than 10,000 cities around the world (as of 2020). Uber collects fees from each booking.

By May 2017, a Tel Aviv court handed down an order for Uber to stop, partly amid pressure from taxi unions and licensed companies who filed a complaint with the Transportation Ministry, prompting it to launch a covert investigation into Uber’s practices.

During the investigation, members of the Transportation Ministry pretended to be typical passengers ordering rides with the app. The ministry eventually handed down an indictment against Uber Israel for operating without a license.

In this September 22, 2017 photo, an Uber App is displayed on a phone in London. (AP Photo/Kirsty Wigglesworth)

In the documents unveiled Sunday, Uber officials acknowledged that their operations in Israel fell in “a gray area,” according to Blau.

As they learned of the investigation, one email drafted by an Uber official read: “We need somebody to make a fairly high-level phone call (think Minister of Transport or higher) to urge folks to calm the f*ck down.”

They enlisted the help of the then-US ambassador to Israel, Dan Shapiro, and Israeli ambassador to the US, Ron Dermer, according to the documents. Both expressed “sympathy,” according to Blau’s reporting, but it was unclear if any material help was delivered.

Dermer told Blau in response that “at no stage, during my tenure as ambassador to the United States, did I work on behalf of Uber or any other company.”

Separately, Uber started to promote legislation that the company itself drafted just months after opening an office in Israel in mid-2014, according to Blau. The bill failed to advance and was submitted again in 2016 with few changes. Despite wider support among right, left and centrist parties, it failed to advance once again.

The bill was last re-submitted in late 2021, according to Blau, whose access to emails and documents he said showed “the prevalent view within Uber that politics would decide the company’s future in Israel.”

Last week, Uber said it expected to relaunch operations in Israel, bringing back its booking platform to hire licensed taxi drivers only.

In other countries too, the Uber Files showed that the company’s lobbyists — including former aides to President Barack Obama — pressed government officials to drop their investigations, rewrite labor and taxi laws and relax background checks on drivers.

In Russia, Uber allegedly made deals with oligarchs associated with Russian President Vladimir Putin to get operations off the ground.

The investigation also found that Uber used “stealth technology” to fend off government investigations.

The company, for example, used a “kill switch” that cut access to Uber servers and blocked authorities from grabbing evidence during raids in at least six countries. During a police raid in Amsterdam, the Uber Files reported, Kalanick personally issued an order: “Please hit the kill switch ASAP … Access must be shut down in AMS (Amsterdam).”

Illustrative – the Uber app on a phone in New York. (AP/Richard Drew, File)

The consortium also reported that Kalanick saw the threat of violence against Uber drivers in France by aggrieved taxi drivers as a way to gain public support. “Violence guarantee(s) success,” Kalanick texted colleagues.

Kalanick stepped down as Uber CEO in 2017 amid privacy scandals and allegations of sexual harassment and sexism leveled at the company. He stepped down from the company’s board in 2019.

The Uber Files say the company cut its tax bill by millions of dollars by sending profits through Bermuda and other tax havens, then “sought to deflect attention from its tax liabilities by helping authorities collect taxes from its drivers.”

In response to the reports, Jill Hazelbaker, a spokeswoman for Uber, acknowledged “mistakes” and “missteps” that she says culminated five years ago in “one of the most infamous reckonings in the history of corporate America.”

Uber has since “completely changed how it operates,” she said, noting that Kalanick and other top executives were ousted.

She added: “We have not and will not make excuses for past behavior that is clearly not in line with our present values.”

TOI staff contributed to this report

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