6 Sleazy Tactics Tech Companies Use To Get Ahead
It's no secret that tech companies use unethical schemes to get ahead. For instance, the infamous blood testing company Theranos was just guessing results based on your star sign while selling your blood to hot dog manufacturers. But while they collapsed in infamy and shame, plenty of tech giants were punished for their bizarre and cruel scams by, uh, getting even richer. Look at how ...
Uber's "Safe Rides Fee" Was A Lie For More Profit
In 2014, Uber faced bad publicity over drivers assaulting passengers. So they rolled out a new $1 safe rides fee on every trip, pledging to use "industry leading" driver screening to ease anyone's fears of getting into a stranger's car. Your cab driver might spend the whole ride snorting lines off a flensing knife, and your Lyft driver might pull up with a necklace of human toes and a running chainsaw, but with Uber, you were safe. The safety fee was right there on the receipt!
The new fee was a huge selling point that brought in an estimated $500 million over the next two years. It was even higher in some markets, costing $1.35 in San Francisco, presumably to fund anti-Zodiac screening, and a whopping $1.65 in Los Angeles, where each car had to be equipped with a turret gunner in case they drove past Harvey Weinstein's house. We're just kidding, of course. What Uber actually did with that $500 million was ... absolutely nothing.
Uber never planned to roll out new safety features, and its driver screening remained a joke. The whole program boiled down to a few instructional videos, which were unlikely to stop the Mazda Mangler from striking again. An Uber insider later said the fee was "devised primarily to add $1 of pure margin to each trip. It was obscene." It does take a certain kind of depravity to read passenger safety horror stories and only hear cartoon cash register noises.
In 2016, Uber was sued and paid a settlement of $25.8 million to passengers. That's about 0.82 cents per passenger, and as any math teachers in the audience may know, $28.5 million is substantially smaller than $500 million. But don't worry, Uber was also required to rename the "Safe Rides" fee to a "Booking" fee -- a brutal punishment which we're sure will dissuade corporations from ever trying something like this again.
GrubHub Uses Fake Contact Info To Stop You From Ordering Directly From Restaurants
The world of food delivery technology is run by cutthroat maniacs born 300 years too late to be actual pirates, and GrubHub is the best proof. They charge a hefty marketing commission on orders, even if the restaurant itself delivers the food. But of course, if you order directly from the restaurant, they get nothing. So GrubHub is running scams to ensure the horror story of "local restaurant makes money" doesn't unfold.
Let's say you're browsing for a new fried goat testicle joint on Yelp and find one that looks good. You click on the listed number in the app, speak to someone at the restaurant, and get your six-pack with ranch from one of their in-house drivers. That all seems straightforward, right? Except surprise, that wasn't the restaurant's number at all! GrubHub sets up fake phone numbers and promotes them online. They redirect you to the restaurant's actual number, but GrubHub records the call and charges a marketing commission, while their "partnership" with Yelp enforces the scam.
You can order through the restaurant's own site, but that might be fake too. GrubHub, without telling restaurant owners, registered over 23,000 domains based on the names of real restaurants. GrubHub uses those domains to compete with real sites. So if Dave's Clam Jam is at clamjam.com, GrubHub will set up clamjam.net, promote it over the real site, and charge a commission on orders placed through it.
GrubHub says they'll take down a site and hand over a domain if the relevant restaurant asks, but they're also not telling restaurants when those URLs are set up. Which is like your roommate grumpily insisting that they wouldn't have snuck into your room and worn your clothes in the middle of the night if you were going to get all uppity about it. Oh, and those fake phone numbers? GrubHub is currently facing lawsuits for secretly charging restaurants whenever someone called them, even if no order was placed. You could walk into a restaurant with a nail-studded baseball bat and not be able to shake them down as effectively.
Facebook Secretly Enabled Kids To Run Up Huge Bills On Their Parents' Credit Cards
Thousands of parents have stuck their kids in front of a mindless game, only to come back to hundreds of dollars in charges for digital tiaras. If you offer a preschooler a sparkly emerald that helps them defeat the evil goblin queen, they're going to click on the button that gets them that gem. And Facebook deliberately facilitated that exact scenario, reasoning that any attempt to reduce the problem would also reduce their bottom line.
Unlike competitors, Facebook automatically stored credit card info after one use, then required no confirmation for each subsequent purchase. It also refused to provide refunds, even when it was clear that huge volumes of in-game purchases were made by kids. When a Facebook researcher suggested some simple tweaks to reduce the problem, she was informed that nothing would be done, since this would deprive them of all that sweet toddler revenue.
Instead Facebook continued to make in-game purchases remarkably easy, to the point that game companies themselves began reporting that virtually all of their customer service complaints involved child spending sprees. Even the soulless Angry Birds empire begged Facebook to do something. Facebook refused, and later circulated an internal memo stating that "company policy was to tell game developers to let children spend money without their parents' permission." In other words, Facebook is totally fine with stealing your money as long as your seven-year-old does the dirty work for them.
After Getting Fined For Anti-Competitive Behavior, Google Set Up Fake Competitors
With all the criticism of perpetual disasters like Facebook, Amazon, and Uber, Google has flown under the radar for a while. But don't go thinking that they're incapable of pulling absurd scams to protect their profits. Take Google Shopping, which started as a tool to compare prices between different retailers. It struggled to gain popularity in Europe, so Google secretly boosted Google Shopping to the top of its search results, wiping out other price comparison sites with a sudden 80-90% drop in business. Once Google Shopping dominated the market, Google announced that retailers would have to pay to be featured on it.
This was all very illegal, and in 2017, the EU fined Google 2.4 billion Euros, threatening more if they didn't knock it off. But Google didn't want to dabble in European socialist nonsense like "competing" with sites that could provide more choices to customers than their pay-to-play model. Besides, why should retailers fork over a bunch of money to Google when some other product might end up higher in the search rankings just because it's "better-reviewed" or "more popular" or "doesn't explode when exposed to sunlight"?
So Google said they would auction off the top spots in the search results, and that Google Shopping would compete with everyone else to bid. That sounded fair, unless you thought about it for two seconds. Competitors complained that Google Shopping could always outbid them for prime spots, because they were just moving money between different branches of the same company.
Google still needed to give the appearance of competition, so they got ad companies to set up fake sites. These looked like price comparison sites, but only promoted the ad company's clients. Google then offered huge auction rebates to these ad agencies, giving the illusion of competition without the troublesome bother of actually having to compete legitimately. And it was just complicated enough in its deceit that everyone ignored it to focus on whatever tech CEO was running nude through the streets with a knife that week.
Amazon Skirted Liquor Regulations By Running Fictional Liquor Stores From Their Warehouses
Amazon has been pushing its booze delivery business, because we all want to get blitzed without having to put on pants and stagger down the road to Crazy Jerry's Suspiciously Discounted Boxes of Wine. But there's a roadblock to that dream: liquor licenses. California, for example, will only give a license to a physical storefront. So Amazon registered a bunch of liquor stores at their California warehouses and claimed to run their booze orders through these imaginary locations.
A reporter from Wine Searcher drove out to one Los Angeles address intent on a kooky "I bought wine from Amazon's secret store" story, only to discover a huge Amazon Prime warehouse where no one knew what the hell he was talking about. He only got as close as he did by barging past "Authorized Personnel Only" signs, which is hardly standard liquor store behavior. Very few legitimate stores make you shimmy through an unsecured window and outrun guard dogs before they'll sell you a case of prosecco. An employee finally told him the store was "not open right now," which was technically true, in the sense that it clearly didn't exist.
With the state government threatening an investigation, Amazon was left scrambling to cover up the issue. When an LA Mag writer went out a couple weeks later, a manager wheeled out a small cart containing one bottle of wine, one bottle of vodka, and a single case of beer, then couldn't work out how to take card payments. The reporter left empty-handed. Wine Searcher found similar situations at Amazon warehouses throughout the state, which appeared to violate California's liquor laws and their requirement to have all deliverable alcohol be available in the physical store. Amazon somehow managed to get licenses authorizing them to offer a "curated selection" of their stock (it must have been a harsh and teetotaling curator).
This dumb ruse was clearly in response to the press attention. The Sacramento "store" had no booze on sale when Wine Searcher first asked, but was able to produce a solitary six-pack when the reporter showed up two days later. Another shopping trip for one bottle of wine took 31 minutes. So yes, Amazon runs totally legal liquor stores, assuming you only want Lagunitas and don't mind hammering a locked warehouse's "press here for assistance" button until you get it.
DoorDash, Amazon, And Instacart Stole Tips
DoorDash has become a multi-billion-dollar food delivery company thanks to aggressive tactics like not actually asking restaurants whether they want their food delivered by DoorDash. But their most innovative disruption was the decision to steal tips. Whenever you tipped through the app, DoorDash took the money and used it to subsidize driver pay. Say a driver was supposed to make $7 for a delivery. If you tipped nothing, DoorDash would pay the full $7. But if you added a $4 tip, they would only pay $3 and use the tip to reach the same $7 total. So the tip you thought was making up for a delivery guy's low pay made no difference at all. You were just tipping Tony Xu's vacation fund.
Amazon, which makes approximately nine squillion dollars a second, was also using tips to cover its drivers' base pay, as was grocery delivery giant Instacart. One customer gave a generous $10 tip, presumably thinking they were putting a smile on a driver's face. Instead Instacart paid him 80 cents for the delivery.
But tip theft is at its most problematic in food delivery, where tipping is ingrained and assumed to go to the driver. DoorDash's app explicitly promised to make that easier; no need to rummage around for cash, realize you're out, then awkwardly hand the pizza guy a jar of pennies and a stick of expired gum. But that was a blatant lie. If you offer a driver a slice for the road, they'd probably have it pumped out of his stomach and mailed to shareholders.
DoorDash and Amazon both announced changes to their tipping policy after facing criticism (read: getting caught). DoorDash didn't apologize, but regretted that the policy had made "some customers ... feel like their tips didn't matter" simply because their tips absolutely did not matter. Then they kept doing it for a month after they said they'd stopped. Instacart announced a similar move, but is allegedly still up to some tip-related shenanigans, and mostly responds to driver complaints with "Guards, seize them!" Because if there's anything Silicon Valley hates more than market inefficiencies, it's you.
For more, check out Why Credit Cards Are A Scam - Honest Ads:
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