by Tim Bradshaw and Hannah Kuchler

Uber has moved to head off further criticism about how it handles the huge trove of personal data that it holds on its customers’ locations and trips, after facing questions over how its employees access individuals’ information.
Emil Michael, Uber’s senior vice-president of business, sparked controversy this week after he was quoted as saying that the company should consider hiring private investigators to launch a smear campaign against critical journalists.

The comments were first reported by Buzzfeed, which also alleged that an Uber manager had accessed one of its journalist’s customer profiles on the car-hailing service, without her permission.

Other reporters have also voiced concerns that they could be targeted based on their usage of the app.

“Several Uber employees have warned me that Uber execs might look into my travel logs,” said Ellen Cushing, a reporter for San Francisco magazine, who wrote a recent profile of Uber.

In a blogpost, Uber played down those allegations, which could see the company – recently valued at $17bn and currently in talks to raise more than $1bn in new funding – run foul of data protection laws.

“Uber has a strict policy prohibiting all employees at every level from accessing a rider or driver’s data,” the company said on Tuesday afternoon. “The only exception to this policy is for a limited set of legitimate business purposes. Our policy has been communicated to all employees and contractors.”

Some examples of “legitimate” uses include responding to customer service inquiries, fraud monitoring and troubleshooting technical bugs, Uber’s blogpost said.

Uber’s privacy policy states that the company “may use your personal information or usage information that we collect about you” for unspecified “internal business purposes” and “inclusion in our data analytics”.

Even after a customer cancels their account, their location and trip history data can be stored “as needed” for legal, security or operational purposes, Uber’s privacy policy says.

Two months ago, attention was drawn to Uber’s ability to zoom in on individual customers’ activity by Peter Sims, a San Francisco-based author and former venture capitalist, who discovered that his Uber ride across Manhattan had been watched simultaneously on a map at a company launch event in Chicago.

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November 19, 2014 2:05 am
Uber tries to head off privacy criticism
Tim Bradshaw in San Francisco and Hannah Kuchler in New York

Uber Technologies Inc. signage stands inside the company’s office©Bloomberg
Uber has moved to head off further criticism about how it handles the huge trove of personal data that it holds on its customers’ locations and trips, after facing questions over how its employees access individuals’ information.
Emil Michael, Uber’s senior vice-president of business, sparked controversy this week after he was quoted as saying that the company should consider hiring private investigators to launch a smear campaign against critical journalists.
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The comments were first reported by Buzzfeed, which also alleged that an Uber manager had accessed one of its journalist’s customer profiles on the car-hailing service, without her permission.
Other reporters have also voiced concerns that they could be targeted based on their usage of the app.
“Several Uber employees have warned me that Uber execs might look into my travel logs,” said Ellen Cushing, a reporter for San Francisco magazine, who wrote a recent profile of Uber.
In a blogpost, Uber played down those allegations, which could see the company – recently valued at $17bn and currently in talks to raise more than $1bn in new funding – run foul of data protection laws.
“Uber has a strict policy prohibiting all employees at every level from accessing a rider or driver’s data,” the company said on Tuesday afternoon. “The only exception to this policy is for a limited set of legitimate business purposes. Our policy has been communicated to all employees and contractors.”
Some examples of “legitimate” uses include responding to customer service inquiries, fraud monitoring and troubleshooting technical bugs, Uber’s blogpost said.
Uber’s privacy policy states that the company “may use your personal information or usage information that we collect about you” for unspecified “internal business purposes” and “inclusion in our data analytics”.
Even after a customer cancels their account, their location and trip history data can be stored “as needed” for legal, security or operational purposes, Uber’s privacy policy says.
Two months ago, attention was drawn to Uber’s ability to zoom in on individual customers’ activity by Peter Sims, a San Francisco-based author and former venture capitalist, who discovered that his Uber ride across Manhattan had been watched simultaneously on a map at a company launch event in Chicago.

“I’ve given up on being able to trust the company,” Mr Sims wrote in a widely circulated blogpost this September about the alleged incident, which he said happened in 2011.

Uber has tried to quell growing discontent among some reporters and customers in the aftermath of Mr Michael’s comments, which are just the latest in a string of incidents that has prompted criticism of its corporate ethics.

In an interview with the Financial Times on Tuesday, David Plouffe, Uber’s senior vice-president of policy and strategy, said the company had a “great story to tell” about creating jobs, reducing drink driving and improving cities’ transportation.

“That’s where we need our focus to be in terms of talking about our company,” he said. “The less we get in our own way, the better off we’ll be.”

Nonetheless, some security analysts remain concerned about how Uber stores and uses information on its millions of customers, many of whom use the app several times a month to travel to or from their homes.

Davi Ottenheimer, senior director of trust at EMC, the IT firm, and an expert in encryption, said Uber had a “huge metadata issue” as it could see who moved where and when.

“You don’t realise when you step into that car that they are looking at everything – I mean everything, building profiles of you,” he said. Even though the data are officially “anonymous”, if an Uber user frequently goes to the same address, such as their home or office, they could be identified based on that information, he added.

“I don’t think anybody realises that we’re far away from an app that gives you privacy in a way that taxis give you your privacy,” he said.

Describing the Uber screens that show cars moving around a live map, he said: “They call it the ‘God view’ . . . They think they are God.”

Jean-Claude Juncker has not had an easy start as European Commission president. When he was nominated five months ago, a handful of EU leaders raised questions about the ability of the former Luxembourg prime minister to meet the demand of many Europeans that the EU must change. Now he is being forced to fend off criticism over the way the Grand Duchy became a tax haven for leading multinationals during his long tenure as its premier and finance minister.
Luxembourg’s status as a tax shelter may not be news. But Mr Juncker’s role in the Grand Duchy’s tax dealings has been thrust into the spotlight following the leaking of a trove of documents revealing special tax arrangements between Luxembourg and 340 multinationals, including Pepsi, Ikea and JPMorgan. The files show how secret deals with Luxembourg between 2002 and 2010 saved these companies from paying billions of dollars in tax in countries where they do business.

These disclosures come at an embarrassing time for Mr Juncker. Across the EU, there is public indignation at the way multinationals have shuffled profits across borders to avoid paying tax. In the year before he took office, the commission responded by launching probes into companies suspected of benefiting from such arrangements – including at least two in Luxembourg, Amazon and Fiat’s financial arm.
Last weekend’s G20 summit highlighted the awkwardness of the situation. In Brisbane, Mr Juncker endorsed plans to crack down on multinational tax avoidance – including the introduction of transparency measures that he spent years blocking within the EU while running Luxembourg. The incongruity led one NGO to quip that putting him in charge of efforts to combat tax avoidance was like placing Dracula in charge of a blood bank.
Mr Juncker has been damaged by the scale of tax avoidance on his watch. These wounds need not be mortal. The commission president acknowledges that he was “politically responsible for what happened in each and every corner” of Luxembourg when premier. But he also insists that the tax authorities in the Grand Duchy were “autonomous.” No “smoking gun” has yet been produced showing he broke EU law.
Still, Mr Juncker must act to restore public confidence. As commission president, he oversees the officials investigating the tax incentives that Luxembourg offered to Amazon and Fiat. Their inquiries are examining whether those companies effectively received a form of illegal state aid.
Although Mr Juncker says he will allow these inquests to continue without hindrance under the new competition commissioner, Margrethe Vestager, he has so far refused to recuse himself formally from participating in the commission’s final judgments. Mr Juncker should think again. He should make a clean break and officially hand over all oversight for the probes to Frans Timmermans, his deputy.
Mr Juncker should also step back from involving himself as far as possible in policy discussions on tax transparency. The commissioner in charge of these matters is France’s Pierre Moscovici. Mr Juncker should let him take the lead on all matters relating to tax, including in forums such as the G20.
Mr Juncker has more than enough to do. He is leading a vital initiative to boost investment in the EU’s struggling economy. He needs time to settle into the job. Nonetheless, he should acknowledge Luxembourg’s increasingly toxic reputation within the EU for tax avoidance. Mr Juncker would enhance his authority if he were to put himself at arm’s length from the commission’s activities in this field.

by Tim Bradshaw

Uber’s combative chief Travis Kalanick has had to defend his company’s culture and ethics, after a senior executive at the driver-hailing service said it should consider hiring investigators to probe the “personal lives” of critical journalists.
The comments were made by Emil Michael, Uber’s senior vice-president of business, at a private dinner in New York and reported on Monday by a BuzzFeed journalist who attended the event.

Mr Kalanick called the remarks “terrible” and a “departure from our values” in a series of tweets on Tuesday, saying they did not represent the company.

The incident follows persistent criticism of Uber’s aggressive competitive tactics and use of “surge pricing” to raise fares during periods of high demand.

The latest controversy comes at a crucial time for the San Francisco-based company, as it embarks on its second round of fundraising in six months.

Uber hopes to raise more than $1bn at a valuation likely to exceed the $17bn achieved in its previous fundraising, people familiar with the deal have told the Financial Times.

Mr Michael did not deny the report in BuzzFeed, in which he was quoted as suggesting that Uber might spend “a million dollars” on opposition researchers to find information that might be used to discredit reporters who have criticised its corporate behaviour.

“The remarks attributed to me at a private dinner, borne out of frustration during an informal debate over what I feel is sensationalistic media coverage of the company I am proud to work for, do not reflect my actual views and have no relation to the company’s views or approach,” Mr Michael said in a statement provided by Uber. “They were wrong no matter the circumstance and I regret them.”

Another attendee at the dinner, who asked not to be named, broadly confirmed to the Financial Times the exchange between Mr Michael and Ben Smith, BuzzFeed’s editor-in-chief, who had earlier put a provocative question to Travis Kalanick, Uber chief executive.

Nairi Hourdajian, Uber’s communications chief, added: “We have not, do not and will not investigate journalists. Those remarks have no basis in the reality of our approach.”

Mr Kalanick said on Twitter on Tuesday that the comments put the “burden” on Uber to show its “constituents” that the company and its employees were “principled and mean well”.

“His remarks showed a lack of leadership, a lack of humanity, and a departure from our values and ideals,” Mr Kalanick said. “We are up to the challenge to show that Uber is and will continue to be a positive member of the community.”

However, Mr Kalanick indicated that Mr Michael would not lose his job over the incident. “I believe that folks who make mistakes can learn from them – myself included,” he said. “And that also goes for Emil.”

Uber has also denied allegations that the company has monitored the journeys made by reporters and other individuals using its service. Such a move would be against its privacy policy, Uber said, and likely be in breach of data protection laws.

Mr Michael’s suggestion of smearing reporters was largely directed at Sarah Lacy, founder and editor-in-chief of tech news site Pando, according to BuzzFeed. Ms Lacy, who has been a prominent critic of Uber and its executives, called his remarks “horrifying”.

Uber is no stranger to controversy, thanks to its regular tussles with regulators and taxi unions, and recent criticism of its tactics for poaching drivers from its main US rival Lyft.

This summer, Mr Kalanick hired David Plouffe, former presidential campaign manager for President Barack Obama, to help him fight what he has styled as a political battle against the taxi industry.

In a recent interview with Vanity Fair magazine, Mr Kalanick admitted to trying to disrupt Lyft’s fundraising efforts earlier this year by warning prospective investors that it planned to raise millions more soon after.

Fred Wilson, tech investor at Union Square Ventures and backer of rival taxi apps Hailo and Sidecar, said the tactic was “unethical and unsavoury”.

Lyft succeeded in raising $250m in April, while Uber went on to raise $1.2bn in June and is now seeking further funds.
But in recent interviews with the FT, Mr Kalanick has said that he feels Uber’s reputation as an aggressive operator is undeserved.

“I don’t subscribe to the idea that the company has an image problem,” Mr Plouffe told Vanity Fair. “I actually think when you are a disrupter you are going to have a lot of people throwing arrows.”

By Stefan Wagstyl
Most Europeans think their societies are far less equal than they are, while Americans are unusual in believing that their country is somewhat more equal than it really is.
A German report sheds new light on the political challenges involved in tax, income distribution and social fairness and raises fresh questions in the equality debate recently revived by French economist Thomas Piketty.
“The results of the study suggest that, in the political debate on income distribution, it is often not the facts that count but [perceptions],” says Professor Michael Hüther, director of the Cologne-based IW economic institute, which carried out the research.
Judith Niehues is due to present her findings this week at Germany’s Lindau economic conference, attended by Nobel laureates. She compared actual and perceived income levels in the US and 23 EU countries, using economic data and an international social attitudes study based on polling about 1,000 people in each country.
She found that people in Europe underestimate the proportion of middle-income earners and overestimate the proportion of the poor, commonly defined as people on incomes of 60 per cent or less of the median.
Only the US has a more unequal income distribution than its citizens imagined, with many more poor people.

In Europe, people on middle incomes are far more numerous than those at the bottom or the top of the pay ladder. So a European income distribution chart resembles a barrel, with a bulge in the middle. But many people see it as a tower standing on a broad plinth, with a small elite, a modest middle-class and a big base of low earners.

This is particularly true in Germany and France, where people see income distribution as far more unequal than it really is. By contrast in Britain and Spain, where income distribution is somewhat less equal than in France and Germany, people’s perceptions are more accurate.
In the US, more than 30 per cent of Americans have incomes of 60 per cent or less of the median. But most people think that only 24 per cent of their fellow citizens are at this level. “The middle class is truly smaller in the USA and the lower income group considerably more numerous than its citizens suppose,” says a summary of the study.
The report suggests this might be partly linked to social mobility in the US – people may be less focused on inequality if they think they are climbing the income ladder. The relative lack of concern about inequality could explain why pressure for redistributive taxation is lower in the US than on the other side of the Atlantic.
In Europe, the gap between perception and reality is particularly wide in the former Communist states, with citizens convinced their countries are far less equal than they are.
In addition to perceptions of income distribution, the report also looks at levels of concern about inequality. This tends to be greater in countries with higher levels of perceived inequality – such as France and Germany – than in countries with higher levels of actual inequality – such as the UK and Spain. More than 50 per cent of Germans and 79 per cent of French think income differentials are too great, compared with around 30 per cent of Britons and Spaniards.
The report suggests that all this should matter to policymakers designing tax and social transfer systems because actual levels of inequality seem less important to voters than perceived levels of inequality.
But it does not address the core argument in Mr Piketty’s book, which focused on inequalities of wealth rather than income, and argued that wealth inequalities are more significant in driving overall social inequality.

Subjective Perceptions of Inequality and Redistributive Preferences: An International Comparison, by Judith Niehues, Cologne Institute for Economic Research

By Deirdre McCloskey

Making men and women all equal. That I take to be the gist of our political theory.”
This rejoinder to rightwingers who delight in rank and privilege is spoken by Lady Glencora Palliser, the free-spirited Liberal heroine of Anthony Trollope’s Phineas Finn. It encapsulates the cardinal error of much of the left.
Joshua Monk, one of the novel’s Radicals, sees through it. “Equality is an ugly word . . . and frightens,” he says. The aim of the true Liberal should not be equality but “lifting up those below him”. It is to be achieved not by redistribution but by free trade, compulsory education and women’s rights.
And so it came to pass. In the UK since 1800, or Italy since 1900, or Hong Kong since 1950, real income per head has increased by a factor of anywhere from 15 to 100, depending on how one allows for the improved quality of steel girders and plate glass, medicine and economics.
In relative terms, the poorest people have been the biggest beneficiaries. The rich became richer, true. But millions more have gas heating, cars, smallpox vaccinations, indoor plumbing, cheap travel, rights for women, lower child mortality, adequate nutrition, taller bodies, doubled life expectancy, schooling for their kids, newspapers, a vote, a shot at university and respect.
Never had anything similar happened, not in the glory of Greece or the grandeur of Rome, not in ancient Egypt or medieval China. What I call The Great Enrichment is the main fact and finding of economic history.
Yet you will have heard that our biggest problem is inequality, and that we must make men and women equal. No, we should not – at least, not if we want to lift up the poor.
Ethically speaking, the true liberal should care only about whether the poorest among us are moving closer to having enough to live with dignity and to participate in a democracy. They are. Even in already rich countries, such as the UK and the US, the real income of the poor has recently risen, not stagnated – if, that is, income is correctly measured to include better healthcare, better working conditions, more years of education, longer retirements and, above all, the rising quality of goods. Admittedly, it is rising at a slower pace than in the 1950s; but that era of rising prosperity followed the wretched setbacks of the Great Depression and the second world war.
It matters ethically, of course, how the rich obtained their wealth – whether from stealing or from choosing the right womb (as the billionaire investor Warren Buffett puts it); or from voluntary exchanges for the cheap cement or the cheap air travel the now-rich had the good sense to provide the once-poor. We should prosecute theft and reintroduce heavy inheritance taxes. But we should not kill the goose that laid the golden eggs.
What does not matter ethically are the routine historical ups and downs of the Gini coefficient, a measure of inequality, or the excesses of the 1 per cent of the 1 per cent, of a sort one could have seen three centuries ago in Versailles. There are not enough really rich people. If we seized the assets of the 85 wealthiest people in the world to make a fund to give annually to the poorest half, it would raise their spending power by less than 4p a day.
All the foreign aid to Africa or South and Central America, for example, is dwarfed by the amount that nations in these areas would gain if the rich world abandoned tariffs and other protections for their agriculture industries. There are ways to help the poor – let the Great Enrichment proceed, as it has in China and India – but charity or expropriation are not the ways.
The Great Enrichment came from innovation, not from accumulating capital or exploiting the working classes or lording it over the colonies. Capital had little to do with it, despite the unhappy fact that we call the system “capitalism”. Capital is necessary. But so are water, labour, oxygen and pencils. The path to prosperity involves betterment, not piling brick on brick.
Taxing the rich, or capital, does not help the poor. It can throw a spanner into the mightiest engine for lifting up those below us, arising from a new equality, not of material worth but of liberty and dignity. Gini coefficients are not what matter; the Great Enrichment is.

Review by Ferdinando Giugliano

Nearly five years on from the start of the eurozone crisis, even its most strenuous critics have to admit that things are looking better for the currency union. Bond yields in troubled countries have fallen sharply from the levels reached in 2011. True, public debt is still rising and unemployment, particularly among the under-30s, is still worryingly high. But as the recovery gathers pace, the hope is that the fiscal outlook will improve and companies will resume hiring.

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