Unprincipled confrontation

[Bloomberg] [Fully Charged]( From [Bloomberg](   [FOLLOW US [Facebook Share]]([Twitter Share]( [SUBSCRIBE [Subscribe]](  Hi all, it’s Eric. “Leaders start with the customer and work backwards. They work vigorously to earn and keep customer trust. Although leaders pay attention to competitors, they obsess over customers.” —[Amazon's leadership principles]( In contrast, Uber Technologies Inc. was built on competitor obsession. The startup created tools to scrape data from other ride-hailing companies; Uber employees went slogging to recruit away drivers; when Uber weighed which laws to bypass, it looked to which ones competitors were breaking. Travis Kalanick, Uber’s former chief executive officer, has exhibited [deep paranoia](—even his closest advisers have acknowledged as much privately. This is a man who is said to have believed that Uber’s India competitor, Ola, might have framed an Uber driver for rape, a crime for which the driver was convicted. Kalanick admired Jeff Bezos and even crafted a list of corporate culture values for Uber in the model of Amazon.com Inc. But Kalanick had a slightly different order of priorities. He put “champion’s mindset” higher on the list than “obsession with the customer.” While Kalanick’s competitive streak got out of control, it wasn’t totally misplaced. Uber had to tear down taxi cartels. It had to break through regulators. Taxi drivers staged violent protests against Uber drivers. The U.S. startup had to compete against foreign companies in Asia that could play by a different set of rules. It’s illegal for Uber to pay bribes no matter what the local custom is. Of course, that doesn’t mean it didn’t happen: Uber is [facing a federal criminal probe]( over potential Foreign Corrupt Practices Act violations. In order to respond to perceived competitive threats, Uber built up its own intelligence agency in the ilk of the [FSB](. That effort was called the Strategic Services Group, or SSG. I’m told the group surveilled competitors and employees. There’s a lot I still don’t know about what it did. ([DM me]( if you know more.) Meanwhile, Kalanick and the operations team held regular meetings, called the North American Championship Series, which were mainly focused on finding ways to crush Lyft. Attendees examined data that showed how the business was doing in each market relative to its main competitor. Those regular meetings, where the guest list was heavily restricted, helped center top operations’ officials thinking around competitors. Rachel Holt, the head of the U.S. and Canada, often led the discussions, according to people familiar with the events. Over the years, Uber’s lawyers tried to limit the extent to which employees communicated in a way that belied their obsession with competitors. The company needed to avoid the perception that it was trying to run anyone out of business—a potentially illegal, monopolistic action. But, even as the company learned to change its vocabulary, its mentality has been relatively fixed. Many of Uber’s mounting legal troubles—[which I documented in a story this week that you should definitely read](, if I may say so—stemmed from this competitive obsession. Uber bought a startup called Otto despite knowledge of allegations that co-founder Anthony Levandowski had taken proprietary information from Alphabet Inc.’s Waymo. The deal was driven, in part, by fear of the threat from Alphabet’s self-driving cars. Two pieces of software, Hell and Greyball, which are each the subject of federal criminal probes, were born out of competitor obsession. Both were used against Lyft. And I found in the course of my reporting that Uber had a similar program to Hell in Southeast Asia called Surfcam to monitor the rival there, Grab. In retrospect, I bet Kalanick probably realizes he should have hued more closely to Bezos’s customer-centric maxim. But Uber was a company born to fight—first, with regulators and taxis, and later, with a new breed of well-funded competitors. Kalanick has long preached “principled confrontation.” He [once said](—in reference to regulators, though the quote really seems to be a summation of his philosophy—“You can either do what they say, or you can fight for what you believe.” —[Eric Newcomer](mailto:enewcomer@bloomberg.net)  And here’s what you need to know in global technology news Amazon’s search for a second headquarters set off a “sadistic” frenzy. Cities are spending time and money [vying for the e-commerce’s giant attention](, even though many acknowledge it’s a longshot.  Facebook said it’s up to the U.S. Congress to decide when to release details of Russian political influence on the social network. Sheryl Sandberg, the chief operating officer, said she [“absolutely” supports the public release]( of all ads purchased by Russian government-linked accounts.  The producer of a popular Amazon TV show went public with harassment claims against a top executive. Isa Hackett, a producer on the Man in the High Castle and daughter of Philip K. Dick, alleged that Amazon’s Roy Price [repeatedly propositioned her](, according to the Hollywood Reporter.  Want to see the guts of every iPhone? View the [evolution of Apple’s flagship product]( from the inside with this Bloomberg Technology interactive graphic.  Airbnb-branded apartment buildings are coming to the U.S. The startup is working with a Miami-based real estate developer to [open an apartment building]( where guests will be encouraged to sublet their spaces online for up to half the year.  A heavily funded startup in the health-care industry misled advertisers, the Wall Street Journal reported. Outcome Health, which installs video screens in doctors’ offices, [overcharged for ad placements]( by promising more screens than the startup had actually installed, the report said.    You received this message because you are subscribed to the Bloomberg Technology newsletter Fully Charged. You can tell your friends to [sign up here](.  [Unsubscribe]( | [Bloomberg.com]( | [Contact Us]( Bloomberg L.P. 731 Lexington, New York, NY, 10022