Are Uber's Tactics "Fare" Game?
TAPPER: Welcome back to THE LEAD. Now it's time for the "Money Lead." The taxi business is not usually thought of a cut-throat or savvy one, unless this guy turns out to be your cabby.</s>UNIDENTIFIED MALE: Are you talking to me? Are you talking to me? Well, who the hell are you talking to? Are you talking to me?</s>TAPPER: Still terrifying. Short of a run-in like that with Robert Deniro's character, Travis Bickle, from "Gutsy Driver." It's turns out things can get pretty down and dirty in the competitive cab industry and it's apparently getting nastier with upstarts like Uber. It's the app that connects taxi drivers with customers at the click of a few buttons on your smartphone. Uber has grown into a huge power player over the last couple of years expanding into 26 countries and it turns out they have not been exactly coloring inside the lines to attract all of that new business. As CNN's Laurie Segall reports even the company admits its latest strategy may have gone a little overboard.</s>LAURIE SEGALL, CNN CORRESPONDENT (voice-over): Uber, the app that let's you order a car on demand. (on camera): Open up the app and here you can see it's locating me. We have a driver who is going to arrive in 5 minutes. Uber?</s>UNIDENTIFIED MALE: Yes.</s>SEGALL: Awesome.</s>SEGALL (voice-over): It's quickly becoming an essential tool for urbanites and darling of the tech world. The company which was started by a couple of grads five years ago is now valued at more than $3 billion. But our investigation found that Uber success might be coming at the cost of playing dirty.</s>UNIDENTIFIED FEMALE: To me it's very unethical.</s>SEGALL: Jing Herman is CEO of Gett, one of many competitors that have sprung up in the wake of Uber's winning strategy. She says their company started to notice something strange, a pattern of abruptly cancelled cars.</s>JING WANG HERMAN, CEO, GETT: We started looking into, you know, the accounts of these people that had very cancellations, abusive behavior. Our system is sophisticated and we quickly blocked many of them.</s>SEGALL: But the cancellation frustrated drivers. We rode with one of them who didn't want to say her name.</s>UNIDENTIFIED FEMALE: A customer orders a car and you're right there and then after you're there, they cancel you, you lose time. You waste your time.</s>SEGALL: She says a couple days after the cancellation, she got a text message from an Uber employee encouraging her to drive for Uber instead. She wasn't the only one.</s>HERMAN: Many of my drivers got at the exact same time the same message from Uber inviting them to leave us and join Uber.</s>SEGALL: Herman did a little digging and found something interesting. The cancelled cars and the invitations to join Uber were not sent by random riders.</s>HERMAN: It turned when we investigated that the online profiles of these people on LinkedIn, Twitter, based on the names that they used were Uber employees in New York.</s>SEGALL (on camera): Uber has a $3 billion valuation. You would think that this is a tactic that they wouldn't need to do. It seems a little scrappy.</s>HERMAN: You would think so. The way it was coordinated was not exactly like the A-team, but for us we really believe that within a short amount of time, we've proven that we are, for the first time, real competition for Uber at least in New York City.</s>SEGALL (voice-over): Uber in a statement to CNN said while they are ambitious in their ground tactics, this went too far. Our local teams can be pretty determined when spreading the word about Uber and how our platform opens up new economic opportunities for drivers. We will make sure they tone down their sales tactics. It's not the first time Uber faced heat over the business practices. The company braved onslaught of consumer outrage over its surge pricing particularly on New Year's Eve, which sent some fare skyrocketing to more than quadruple the usual price. Josh Groban tweeted that sometimes Uber's prices fall on the, did I fly there category? Despite the bumps in the road, Uber seems to be an over drive. The company recently announced that they are quadrupling their staff and expanding to 500 cities in the United States and around the world.</s>SEGALL: And jake, you look at this company, valued at over $3 billion, they are growing so quickly. They are a tech darling in Silicon Valley and they seem childish but beyond that there's a gray area of legality. Are they preventing competition and when you prevent competition you look and see that surge pricing. So it's an important issue. I'll tell you this, Jake, I've spoken with a couple of my resources who have competing startups and they say they are really not surprised and they say this isn't going to be the last we hear about it.</s>TAPPER: It's really interesting. I mean, I love Uber. I use Uber all the time, but it doesn't sound like -- they described this behavior as too ambitious. It's not ambitious. It's dirty. It doesn't sound like they take it very seriously.</s>SEGALL: Absolutely. You've got to think there are a lot of young folks working at this company, but this isn't, as you said, calling in and ordering pizzas at someone's home when they are not there. This is affecting the business of another company so there is obviously a lot of outrage because of this.</s>TAPPER: It's going to be bad publicity for them. Laurie Segall, thank you so much for the report. Coming up next, will Bruno Mars be locked out of heaven on Grammy night or is it Taylor Swift that will see red? Well, we've got the scoop on the shoe in and long shots for the music industry's biggest night of the year. Plus, brace yourself, Mork and Mindy fans for an out of this world reunion.