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.”

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