Uber had a problematic strategy in Australia – and it cost other ride-hailing startups their businesses.
International ridesharing giant Uber, used secret spyware to pirate drivers from Australian start-up GoCatch, eventually leading to the death of its competition.
The spyware-ware program named SurfCam was developed and used in Uber’s Australian branch and was deployed against another ride-hailing service. GoCatch, an Australian start-up, aims to compete in the growing industry of ride-sharing services. It was backed by high-profile investors including billionaire James Packer and hedge fund manager Alex Turnbull.
During the 2012 Australian launch of Uber, GoCatch immediately becomes one of its biggest competitors. At that time, both companies offer similar service – a new way to book cabs and hire cars using their own version of smartphone applications.
However, Uber developed Surfcam in its Australia head office around 2015. According to reports, the idea behind the use of the Surfcam spyware is to fetch data from competitors to leverage them in recruiting their drivers to transfer to Uber.
“Surfcam, when used in Australia, was able to put fledgling Australian competitors onto the ropes,” a former employee with direct knowledge of the program said on the condition of anonymity.
“Surfcam allowed Uber Australia to see in real time all of the competitor cars online and to scrape data such as the driver’s name, car registration, and so on.”
The data fetched from the spyware allowed the ride-hailing application giant to directly approach GoCatch drivers and lure them to work for Uber.
“GoCatch would lose customers due to poaching of its drivers draining their supply. With fewer and fewer drivers, GoCatch would eventually fold,” the former Uber employee said.
According to GoCatch’s co-founder and Chief Executive Officer Andrew Campbell, while the whole of his company survived the blows from Uber’s exploits, the strategy has immensely damaged their finances.
“The fact that Uber used hacking technologies to steal our data and our drivers is appalling,” he said.
“It had a massive impact on our business. It sets a really dangerous precedent for the Australian economy and Australian businesses as well. It tells every multinational company to come to Australia and follow the same practice…As an Australian small business, a technology start-up business based in Australia that’s improving efficiency and service levels in the taxi industry, having a company come to Australia and get away with that type of behavior is … it’s disgusting.”
He even mentioned that this kind of strategy is very “un-Australian” and it “shouldn’t be allowed in this country.”
“The damage that that has done to GoCatch and other businesses is significant, and frankly it should have been stopped.”
In 2017, Uber also used the said spyware in Singapore against its competitor, Grab, but was ultimately reported. However, this is the first time the Surfcam was revealed to have been used in Australia as well.
CHANGE IN CORPORATE CULTURE
According to reports, the use of Surfcam was part of an aggressive strategy employed by then Uber CEO and co-founder Travis Kalanic in order to infiltrate global markets and establish itself as the “new way people move.”
Since then, Kalanick was replaced by Dara Khosrowashahi, who announced that he wants a complete overhaul of Uber’s culture.
According to Campbell, the local authorities in Australia had failed to protect domestic companies with the existing laws when Uber entered the country.
“Australian authorities need to learn from this lesson and be a bit stronger in enforcing Australian laws. Because a weak government hurts the economy,” he said.
“Allowing companies to come to Australia, break transport laws, behave anti-competitively, does nothing good for Australian interests whatsoever. What Australian business and Australian industry want is a strong government framework that they can operate within and make a profit. Without that, we’re at a loss.”
Aside from this controversy, Uber faced legal roadblocks in Australia when it first launched its ridesharing service UberX in 2014. The service allows customers to book trips with non-professional and private car drivers using their app. However, during that time, Australian authorities deemed this business model as illegal and began fining Uber drivers.
But after Khosrowashahi’s takeover of the company, it was determined that the Surfcam spyware program was developed by a staff member in Sydney head office and did it under his authority. Since its discovery, Uber said that it had halted the strategy altogether.
“We have made significant changes to our leadership team, including our CEO, and to the fundamentals of how the company operates, putting integrity at the core of everything we do,” she said.
“We are on record consistently welcoming competition; we have robust policies and guidelines which define acceptable and ethical practices across our global operations for the use of non-confidential, publicly available and commercially available information in compliance with relevant Australian and international law.”