Uber’s dangerous routes in Russia

On a rainy evening in spring 2016, Russian tech moguls and politicians are seated at the Moscow City Golf Club, a popular meeting place near the Moskva, a tributary of the Volga. The star guest of the day is Travis Kalanick, co-founder and then boss of Uber. He talks with his guests about big data, artificial intelligence and other topics related to new technologies. He expects a lot from this evening. The boss of the American multinational hopes to develop the activities of his group in Russia. To prepare for this meeting, he mapped the existing links between billionaires and Russian political figures, including Vladimir Putin. Proof of his interest in this new market, Mark MacGann, then head of European public policy for Uber, wrote in an email sent to two executives of the company: “God save the Russians, where business and politics are so…intimate”.

>> Uber Files: revelations about the VTC giant’s lobbying practices

Today, the Uber Files, this leak of internal Uber documents obtained by the Guardian and shared with the International Consortium of Investigative Journalists (ICIJ) and its partners, including the investigation cell of Radio France, allow us to better understand how the multinational managed to establish itself in Russia.

A nine-page internal Uber briefing document first recommends “keep a low profile, given the current geopolitical climate”. One of the “key objectives” of the company consists in “becoming an active player in the legislative process” by identifying “key business and political stakeholders”. The document lists a series of oligarchs and billionaires whom it calls “allies” potentials, such as the powerful managing director of Sberbank, Herman Gref, or even Mikhail Fridman, the co-founder of Alfa-Group, a Russian financial and industrial conglomerate. The document specifies that the company could use these allies “to protect the company from attacks by competitors and invisible forces”.

In a 2014 email exchange about potential Russian investors, Emil Michael, then Uber’s chief commercial officer, drives the point home: “I think we want someone aligned with Putin.” He claims today that he does not remember his writings. “The company has reviewed all investor profiles”he explained to us.

The emails to which we have had access show that a rapprochement between Uber and Sberbank will then take place thanks to David Plouffe, a former adviser to Barack Obama in charge of Uber’s policy. He met Herman Gref during a summer trip to Russia in 2015. At that time, Sberbank was nevertheless under sanctions from the American and European governments, because of the annexation of Crimea by Russia. in 2014. But that did not prevent him from signing an agreement with Uber in September 2015. Herman Gref will then plead the cause of the American multinational with the mayor of Moscow, and promote Uber on his mobile application. It is also launching a vehicle financing program for its drivers. And, still according to the Uber Files, Sberbank customers receive loyalty points on their Uber trips, which would have brought the company nearly 20,000 new users in 2015 alone. make the Sberbank credit card the preferred means of payment for trips to Russia. In a memo aptly titled “tame the bear” it is written that with Mikhail Fridman and Herman Gref, Uber has “in theory, a direct line to the Kremlin”.

The Uber-Sberbank alliance will, however, infuriate Russian taxi drivers. One of their unions writes a letter to then-Prime Minister Dmitry Medvedev complaining that the partnership weakens competition, lowers workers’ wages by cutting prices, and violates taxi laws. They even accuse Uber of tax evasion and corruption. “Is it normal practice for the largest state bank in the Russian Federation to advertise potentially dangerous services for citizens?” ask the drivers. “Why does Sberbank offer expensive leases and loans to some, while granting particularly favorable terms to Uber?” Neither Herman Gref nor David Plouffe answered our questions. Uber spokeswoman Jill Hazelbaker told us, however, that Uber would no longer engage in a relationship with Sberbank or its boss Herman Gref today.

Another lesson from the Uber Files: discussions took place between Uber and the investment company LetterOne, close to Vladimir Putin. In January 2016, Uber boss Travis Kalanick met LetterOne CEO Alexey Reznikovich at the World Economic Forum in Davos, Switzerland. A “important meeting“, indicates a document. “It looks like we are close to an agreement.” This agreement will be found largely thanks to Peter Mandelson, a former British government minister, and Benjamin Wegg-Prosser, Prime Minister Tony Blair’s former communications director. Their strategic consulting firm, Global Counsel, provided Uber with information about Russian influencers who “close ties and loyalty to the Kremlin”. Wegg-Prosser will even ask LetterOne if he can arrange a meeting between Uber and Vladimir Putin’s chief of staff. In 2016, the contract for “Global Counsel” with Uber is paid $87,000 a month, a quarter of that compensation for his work in Russia.

Result: in February 2016, the Russian company LetterOne announced that it had taken a $200 million stake in Uber as part of a “strategic partnership”. Part of this transaction has remained confidential. But it looks like Uber has offered him $50 million in stock warrants. According to an email written by Mark MacGann, Uber’s then-head of public policy, the offer was to encourage LetterOne to help Uber gain a foothold in Russia and guarantee “the heavy daily tasks she would undertake in [son] name in the Duma and in the presidential administration”. Documents show that LetterOne executives did indeed help put Uber in touch with other influential Russians, including Vladimir Senin, the vice president of Alfa Bank, who is now a member of the Duma. According to an internal memo to Uber, the latter would have succeeded in having key provisions in favor of the American multinational incorporated into a federal bill devoted to taxis. Project which was ultimately not adopted. But according to a document written by Benjamin Wegg-Prosser, Vladimir Senin “had been paid properly for his support”. At least $300,000 for a “government relations work”.

Fraser Robinson, then Uber’s commercial director for Europe, the Middle East and Africa, soon became concerned about these new links with the Kremlin. Uber lawyers are concerned that hiring Vladimir Senin, in addition to granting stock warrants to LetterOne, could violate US law prohibiting bribery of foreign officials. Lawyers warn that these payments could be likened to bribes. Asked about this as part of our investigation, Mark MacGann told Radio France’s Investigation Unit that he did not approve of the payments made to Vladimir Senin at the time. Fraser Robinson declined to comment. And LetterOne told us that neither the company nor its co-founders ever lobbied on behalf of Uber. For his part, the oligarch Mikhail Fridman, denied to the Guardian having been “involved in Uber’s investment or in any lobbying”. Uber spokeswoman Jill Hazelbaker confirms that her company signed a contract with Vladimir Senin, but denies that Uber offered stock warrants in exchange for the promise of obtaining rules or laws favorable to his society. According to her, “the warrants were acquired based on the relative growth of Uber in Russia, and valued based on the number of trips made in the country”.

Uber also offered stock warrants to USM, a company owned by Uzbek-born oligarch Alisher Usmanov. An agreement, which according to a spokesman for Usmanov, would have no political connotation. “It is absurd to suggest that the holding company or its shareholders could act as ‘political lobbyists for Uber’,” he told Radio France’s Cellule investigation. Kalanick. He told us that Uber’s ambition to establish itself in Russia came down to a few trips there and a few meetings. According to him, Uber has always complied with the recommendations of its legal advisers. And “He has no knowledge that anyone on behalf of Uber has taken any action that violates Russian or US law.”

Anyway, Uber could not penetrate the Russian market sustainably. In 2017, the multinational agreed to merge with the Russian internet company Yandex, which operates a carpooling service. They create for this a joint venture controlled by Yandex, weighing 3.7 billion dollars. Uber has since sold most of its stake. And after the invasion of Ukraine, the American giant announced its intention to cut all financial ties with Russia. Uber assured the ICIJ and its partners that no one today has a relationship with oligarchs. According to Jill Hazelbaker, spokeswoman for Uber “the current management thinks that [le président russe Vladimir] Putin is blameworthy and she disavows any prior association with him or his relatives.”