Massive Data Breach Adds to Uber's Woes

In October 2016, hackers gained access to some of Uber's database. The massive breach saw names, email addresses and phone numbers of over 50 million Uber riders get obtained by the hackers, in addition to the personal information of over 7 million drivers.

Instead of publicizing the breach, Uber's former chief security officer and one of his "deputies" elected to pay $100,000 to the hackers in order to keep the breach quiet. The hackers reportedly agreed to delete the information after the payment was received (I'm sure you feel good about that if you were one of the 50 million+ who had their personal information exposed).

At the time, Uber was dealing with a number of headaches and news of a massive security breach certainly wouldn't have helped. Consumers, however, have the right to know if their information has been exposed, and Uber made a major misstep by attempting to cover it up. According to reports, Uber's former CEO, Travis Kalanick, learned of the breach one month after it had occurred.

The company, which now has a new CEO, has said that they have no excuses and that "none of this should have happened".

The result for Uber will likely be more customers turning away to competitors (namely Lyft). In addition, you can safely expect investigations and class action lawsuits as a result of this breach and subsequent cover-up.

-

Despite all of the company's missteps over the past couple of years, Uber still commands a valuation in the area of $50-$70 billion.

That being said, you can't help but think that early investors in the company are looking to get at least some of their money out.

After all, if Uber was a publicly traded company, would you want to invest in them at this point? I wouldn't. The company's brand has been severely tarnished over the past couple of years.

Keep reading