I represented Chaim Zeev Rozen in a portion of his formal DOT complaint against Virgin Atlantic. Mr. Rozen had transferred points from a credit card to Virgin’s frequent flyer program in order to redeem travel for relatives who shared his last name. Inexplicably, Virgin cancelled the tickets — without telling him or the passengers.
I filed a Reply on Mr. Rozen’s behalf. I pointed out that, contrary to Virgin’s repeated claim and even its Answer, nothing about his conduct was “fraudulent.” I criticized Virgin’s “fraud detection tools” which supposedly “flagged the booking”. I pointed out that Virgin’s Answer was oddly silent on whether any human even attempted to check whether those tools were correct. I argued that Virgin did not act reasonably in the penalty it imposed and its handling of Mr. Rozen’s complaint and correspondence alleging error. I identified a DOT regulation and Virgin contract provision that were implicated.
The parties subsequently filed a Notice of Withdrawal of Complaint and Joint Motion to Dismiss, indicating that they reached an amicable resolution of the matter. A footnote in that filing explains specific improvements Virgin made: new tools to better identify actual fraud, a new process for customer complaints and appeals, and new communications to passengers indicating that bookings have been canceled. Kudos to Mr. Rozen for his role in bringing about these benefits for the traveling public.
Aviation enthusiast Mike Borsetti last month alerted the US Department of Transportation to Qatar Airways adding bogus fees contrary to prior representations: Their online check-in allowed him to select a seat free of charge, but at the airport, both check-in staff and a manager said he’d have to pay to keep that seat. In response, Qatar tried to trivialize Borsetti’s problem — as if this overcharge doesn’t matter or isn’t important enough for DOT to investigate. In a public comment filed today, I explained why Borsetti is absolutely right:
First, having already complained to both line staff and a manager at the airport, Borsetti had put Qatar amply on notice of the dispute. Qatar says he should have complained again, after travel, so they could refund him then. But two unsuccessful discussions with airline staff is more than enough to justify Borsetti’s decision to bring this matter to a regulator.
Second, by all indications the problem stretches well beyond Borsetti alone, and is bigger than Qatar admits. Online comments already revealed four other customers with substantially the same problem — online check-in seating dishonored unless customers pay more at the airport. Of customers affected, only a tiny fraction would both realize they were overcharged and then happen to see the one blog discussing Borsetti’s complaint. So the problem must be substantial. And that’s as you’d expect: If there’s a defect in Qatar’s software or process, such as airport systems mistakenly saying a seat fee is due even though online check-in already authorized a seat without charge, that problem would occur for a broad swath of passengers since software ordinarily operates predictably and consistently.
On some level Borsetti’s complaint is unusually simple. He was overcharged, he wants a refund, and he wants Qatar Airways to stop charging passengers for seats it had said would be free. Will DOT act to make sure all the other affected passengers — who didn’t realize they were overcharged, or didn’t take the time to complain — are also fully refunded? And will DOT act to make sure that Qatar Airways finally fixes its systems so this problem doesn’t recur?
Congratulations to Mirel Baumgarten, who in 2020 used my formal DOT complaint template to report Turkish Airlines delivering bags 31 hours late and arbitrarily withholding compensation in violation of US law and international treaty. DOT today cited Mirel in a Consent Order with Turkish, which had to admit its wrongful acts and pay a total of $1.3m (both for delaying refunds after COVID-19 schedule changes and cancellations, and for arbitrarily limiting mishandled bag reimbursements).
DOT summarizes the violation: Turkish Airlines “arbitrarily limited reimbursement for delayed or lost baggage to a maximum amount of $50 USD payment per day for a maximum of six days regardless of the content consumers submitted in their claims.” But, DOT explains, under the Montreal Convention, an airline may not limit its liability for expenses related to delayed baggage to any amount lower than 1,288 SDRs (currently about $1,670). See Consent Order page 5.
If you enjoy this sort of thing, Mirel’s complaint shows the kind of nonsense airlines all too often inflict on passengers. Mirel reported bags delivered 31 hours late (complaint page 12) and provides proof with timestamps, yet Turkish oddly categorized the baggage delay as less than 24 hours (not that that would eliminate or even reduce reimbursement under governing treaty and law). Mirel was traveling for a wedding, had to buy expensive replacement clothes to attend, and had receipts documenting the expenditure. (See complaint page 11.) Turkish refused to consider Mirel’s evidence, saying the only relevant factor was “the framework of the rules” which purportedly say the Turkish rep “cannot re-evaluate your case” (page 10). When Mirel cited the specific treaty that required reimbursement of all reasonable expenses subject to the treaty’s cap, disallowing the limitation Turkish proposed, the Turkish rep remarked that no further discussion was possible, “we do not have phone service”, and the specified amount was “our final offer.” Most consumers would give up. Kudos to Mirel for sticking with it, telling the DOT, and thereby causing DOT to include this matter in its broader investigation of Turkish.
The DOT’s $1.3m settlement with Turkish is substantial, but that entire amount goes to the US Treasury. Not a penny flows to the passengers who received arbitrarily reduced reimbursements from Turkish. Both DOT and Turkish know the names and contact information of affected passengers. I’d like to see Turkish affirmatively provide every affected passenger with the full amount shown in receipts previously submitted, plus interest.
Other affected Turkish customers should be emboldened by this consent order to demand their full documented loss, no matter any prior protestation by Turkish that its policies called for paying less. I don’t know if Turkish customer service representatives are trained to honor and pay those claims. If not, Turkish customers could contact the attorneys who represented Turkish in this matter, David Endersbee and Barbara Marrin of KMA Zuckert, who should be in a position to press Turkish staff to pay claims consistent with the consent order.
Honey claims affiliate commission if a user presses “Got it” to acknowledge no deal found
Honey takes payments that would otherwise go to influencers who recommended products users buy. (video at 2:50) MegaLag shows Honey claiming payments in four scenarios: i) if a user activates a function to search for coupons (even if none are found), ii) if a user activates a function to claim Honey Gold (no matter how meager the rebate), iii) if the user gets the message “We searched for you but didn’t find any deals” and merely presses the button “Got it”, and iv) If Honey shows the message “Get Rewarded with PayPal” “Shop eligible items to earn cash off future purchases” and the user presses “checkout”.
Honey doesn’t actually get the best deals for users. If a merchant joins Honey (and begins to pay Honey affiliate commissions), Honey allows the merchant to limit which coupons Honey shows to users. MegaLag points out that letting merchants remove discounts from Honey is squarely contrary to Honey’s promise to users that it will find “the Internet’s best discount codes” and “find every working promo code on the Internet.” (video at 16:20)
I’m a big fan of MegaLag. I watched most of his other videos, and they’re both informative and useful—for example, testing Apple AirTags by intentionally leaving items to be taken; exploring false claims by DHL about both package status and their supposed investigations. Meanwhile, nothing in MegaLag’s online profile indicates prior experience in affiliate marketing. But for a first investigation on this subject, he gets most things right, and he uses many appropriate methods including browser dev tools and screen-capture video. Based on its size and its practice, Honey absolutely deserves the scrutiny it’s now getting. Kudos to MegaLag.
Nonetheless there’s a lot MegaLag doesn’t say. Most notably, he doesn’t mention contracts—the legal infrastructure that both authorizes Honey to get paid and sets constraints on when and how it may operate. Furthermore, he doesn’t even consider whether merchants get good value for the fees they pay Honey. In this piece, I explore where I see Honey most vulnerable—both under contract and for merchants looking to spend their marketing funds optimally.
The contracts that bind Honey
Affiliate marketing comprises a web of contracts. Most affiliate merchants hire a network to track which affiliate sent which traffic, to provide reports to both merchant and publishers, and to handle payments. For a single affiliate-merchant relationship, an affiliate ends up subject to at least two separate contracts: the network’s standard rules, and any merchant-specific rules. Of course there are tens of thousands of affiliate merchants, and multiple big networks. So it’s impossible to make a blanket statement about how all contracts treat Honey’s conduct. Nonetheless, we can look at some big ones. Numbering added for subsequent reference.
C1 “You must promote Advertisers such that You do not mislead the Visitor”
C2 “the Links deliver bona fide Transactions by the Visitor to Advertiser from the Link”
C3 “You must accurately, clearly and completely describe all promotional methods by selecting the appropriate descriptions and providing additional information when necessary.”
C4 “You agree to: (i) use ethical and legal business practices”
C5 “Software-based activity must honor the CJ Affiliate Software Publishers Policy requirements (as such requirements may be modified from time to time), including but not limited to: (i) installation requirements, (ii) enduser agreement requirements, (iii) afsrc=1 requirements, (iv) requirements prohibiting usurpation of a Transaction that might otherwise result in a Payout to another Publisher (e.g. by purposefully detecting and forcing a subsequent click-through on a link of the same Advertiser) and (v) non-interference with competing advertiser/ publisher referrals.”
R1 “Your DSA should become inactive on the sites of any advertisers who opt-out or stand down on those that do not want you to redirect their traffic. Publishers who fail to comply with this rule will jeopardize their relationship with advertisers as well as with Rakuten Advertising.”
R2 “[W]e expect your DSA to: Stand down when it recognizes any publisher links”
R3 “[A]ll software must recognize Supplier domains and the linksynergy tracking links. When a Supplier domain or the linksynergy code is detected, the software may not operate or redirect the consumer to the advertiser site using the Software Publisher tracking ID (also known as Supplier Affiliate ID or Encrypted ID). We do not allow any DSA software that interferes with or deters from any Publisher or Advertiser website.”
R4 “The DSA must stand-down and not display any forms of sliders or pop-ups to prompt activation if another publisher has already referred an end user.”
R5 “The DSA must not force clicks or “cookie stuff”. The DSA must not insert a cookie onto the user’s computer without the user knowingly taking an action that results in the cookie being placed.”
R6 “The end user must click through the offer that is presented. Placing the mouse over an offer, only viewing it or viewing all offers is not a click through.”
R7 “The DSA must not automatically drop a cookie when the end user is only viewing offers. The cookie should only be dropped once the end user clicks on a specific offer.”
A1 “’Click’ means the intentional and voluntary following of a Link by a Visitor as part of marketing services as reported by the Tracking Code only;”
A2 “Publishers only initiate tracking via a tracking link used for click tracking if the user voluntarily and intentionally interacted with the Ad Media or Tracking link.”
A3 Publishers only initiate tracking for a specific advertiser if the consumer interacted directly with ad media for this advertiser.”
A4 ”do not mislead consumers”
A5 “transparency about traffic sources and the environment that ads are displayed in”
In addition, all networks indicate that publishers must disclose their practices to both networks and merchants. Awin Code of Conduct is representative: “Publishers proactively disclose all promotional activities and obtain advertiser approval for their activities.” Rakuten’s Testing Process is even more prescriptive, requiring an affiliate both to submit a first version and to notify Rakuten about any changes so it can retest; plus requiring publishers to answer 16 questions about their software including technical details such as DOM ID and Xpath of key functions.
Honey violates network policies
MegaLag’s video show violations of these network policies. I see three clusters of violations.
(1) Honey invokes its affiliate links although users did not fairly request any such thing. Consider “We searched for you but didn’t find any deals” with button labeled “Got it” (MegaLag scenario iii above). “Got it” doesn’t indicate that the user wants, expects, or agrees that Honey will invoke its affiliate link. That’s certainly misleading (contrary to rule C1). Nor can Honey claim that a user who clicks “Got it” is “knowingly taking an action that results in the cookie being placed” (R5) because clicking “Got it” isn’t the kind of action that rule contemplates. Rakuten rules R6 and R7 are equally on point, disallowing invoking an affiliate link based on an activity that doesn’t indicate intent (such as a mouseover), and requiring that an affiliate link only be invoked “once the end user clicks on a specific offer.” “Got it” isn’t an offer, so under R7, that’s not grounds for invoking a Rakuten link. So too for Awin, where A1 defines “click” to include only links that are “part of marketing services” (but “Got it” is not marketing service). See also A2 and A3 (allowing links only as part of “ad media”, but “Got it” is not ad media); and of course A4 (“do not mislead consumers”).
Honey’s invocation of affiliate links upon a “Get rewarded with PayPal” message (MegaLag scenario iv above) is on similarly shaky ground. For example, responding to a PayPal offer is not “knowingly taking an action that results in the cookie being placed” (R5) – the user knows only that he’s closing the message, not that he’s requesting an affiliate referral back to the merchant. Similarly, a PayPal offer is not “marketing services” or “ad media” for an Awin merchant (rules A1-A3).
The rule to invoke affiliate links only when a user so requests is no mere technicality. In affiliate marketing, an affiliate may be paid if 1) the user sees a link, 2) the user clicks the link, and 3) the user buys from the specified merchant. Skipping step 2 sharply increases the circumstances in which a merchant has to pay commission—not a term a merchant would agree to. When an affiliate skips step 2, it’s cookie-stuffing. Publishers have gone to jail for this (and had to pay back commissions received). Honey didn’t quite stuff cookies as that term is usually used—the user did click something. But when nothing on the button (not its label, not the surrounding message, not any principle of logic or engineering) indicates or even suggests the button will activate an affiliate link—that’s terrible value for the merchant.
(2) Honey presents its affiliate links although a user recently clicked through another publisher’s offer. (MegaLag at 2:50) But networks’ rules require Honey to stand down if another publisher has made a referral. See rule C5.v (“non-interference with competing advertiser/ publisher referrals”) and R2 (“Stand down when it recognizes any publisher links”). Rakuten even makes explicit that the stand-down obligation applies not just to automatic clicks (which, uh, aren’t permitted in any event) but also to sliders and popups: “The DSA must stand-down and not display any forms of sliders or pop-ups to prompt activation if another publisher has already referred an end user.” (R4)
Here too, this is no technical violation. Other publishers need “stand down” rules so they have a fair chance to earn commission for their work promoting a given merchant. Standing down from another affiliate’s click is the most fundamental affiliate network rule for downloadable software and browser plug-ins.
(3) Honey falls short of disclosure obligations. “You must accurately, clearly and completely describe all promotional methods by selecting the appropriate descriptions and providing additional information when necessary” (C3). Publishers must provide “transparency about traffic sources and the environment that ads are displayed in” (A5). I’m open to being convinced that Honey told networks and merchants it would invoke affiliate links with buttons as weakly labeled as “Got it.” I don’t buy it. Merchants have a clear contractual basis to expect complete and forthright disclosures—it is literally their money being paid out. And merchants authorized networks to collect and evaluate these disclosures for them. No shortcuts.
One might object that networks can waive rules or create exceptions for key partners. Not so fast! Merchants and publishers rely on networks to enforce their published rules exactly as promised. In fact, in 2007, both merchants and publishers sued ValueClick to allege that it had been less than diligent in enforcing its rules. ValueClick’s Motion to Dismiss argued that it could do what it wanted, that it had disclaimed all warranties, and that it made no promises that merchants or publishers were entitled to rely on. But the court denied ValueClick’s motion, eventually yielding a settlement requiring both improved efforts to detect affiliate fraud as well as certain refunds to merchants and payments to publishers. There’s room to disagree about how much benefit the settlement delivered. (Maybe the settlement promised changes that ValueClick was going to do anyway. Maybe the monetary payments were a small fraction of the amount lost by merchants and publishers.) But the fundamental principle was clear: Networks must follow their contractual representations including policies about prohibited behaviors. And while networks may try to disavow quality responsibilities, for example via disclaimers in contracts, courts are skeptical of the unfettered discretion these provisions purport to create. A network that promises to track affiliate transactions ultimately ought to do so accurately, and should neither grant arbitrary waivers nor look the other way about serious misconduct.
How did we get here?
Honey’s one-sentence response to MegaLag was “Honey follows industry rules and practices, including last-click attribution.” It’s no surprise that Honey claims compliance. But I was surprised to see affiliate thought-leaders agree. For example, long-time affiliate expert Brook Schaaf remarked “Honey appears to be in compliance with network standards.” Awin CEO Adam Ross says MegaLag’s video “portray[s] performance marketing attribution as a form of theft or scam”—suggesting that he too thinks Honey did nothing wrong.
I’ll update this piece with when others dig into the contracts and compare Honey’s practices with the governing requirements. But after more than 20 years working on affiliate fraud—my first piece on this subject was, wow, 2004—let me offer four observations.
One, it’s easy to get complacent. Much of what Honey does is distressingly normal among browser extensions. Test the Rakuten Cashback app and you’ll find much the same thing. Above, I linked to litigation against Honey, but there’s also now similar litigation against Capital One, alleging that its Capital One Shopping browser extension is out of line the same way as Honey. Brook and Adam are right that Honey’s tactics aren’t a surprise to anyone who’s been in the industry for decades. Many people have come to accept behaviors that don’t follow the literal meaning of stated policies. Some would say the policy is out of date. I’d say, instead, that key decision-makers have been asleep at the switch.
Two, networks’ incentives are mixed. On one hand, networks want affiliate marketing to be seen as trusted and trustworthy, which requires eliminating practices widely seen as unfair. At the same time, affiliate networks typically charge a commission on every dollar of commission paid. As a result, networks directly benefit from anything that increases the number of dollars of commission paid—such as allowing browser plug-ins to change non-commissionable traffic into commissionable traffic. Merchants should be skeptical of networks too quickly declaring traffic compliant when networks literally get paid for that finding. With Rakuten operating both a cashback service (with browser plugin) and an affiliate network, their incentives are particularly muddy: If Rakuten Advertising declares a given browser plugin tactic to be permitted, Rakuten Cashback can then use that tactic, increasing both Cashback fees (the Cashback margin on each dollar of rebate) and Advertising fees (the network margin on each dollar of affiliate activity). I like and respect Rakuten and its leaders, but their complicated incentives mean serious people should give their pronouncements a second look.
Three, most people read the governing contracts hastily if at all. I’m proud to have pulled out the 17 rules above, and I encourage readers to follow my links to see these and other rules in the larger policy documents. Fact is, there’s lots of material to digest. I’ve found that networks’ compliance teams often build rules of thumb that diverge from what the rules actually say, and ignore rules that are in some way seen as inconvenient or overly restrictive. That’s a mistake. The rules may not be holy, but they have the force of contract, and there’s real money at issue. Importantly, networks are spending other people’s money—making sure normal publishers get every dollar they fairly earned; and making sure merchants pay the correct amount, but not a penny more. This calls for a high level of care. We’re two weeks into the response to MegaLag. How many people posted video-responses, blogs, or other remarks without finding, reading, and applying the governing policies?
Four, personalities and work styles invite even merchant staff to accept what Honey is doing. Representative short-hand: “Go along to get along.” Most marketers chose this line of work to make connections, not to play policeman. Attend an affiliate marketing conference and you’re a lot more likely to see DJs and beer (party!) than network sniffers and virtual machines (forensic tools). Meanwhile, it’s awfully easy for an affiliate manager to tell a boss “we’re working with Honey, the billion-dollar product from PayPal”—then head to the Honey gala at an industry conference. Conversely, consider the affiliate manager who has to explain “we wasted $50k on Honey last month.” People have been fired for less. Ultimately, online marketing plays a procurement function—trying to spend an employer or client’s money as skillfully as possible, to get as much benefit as possible for as little expense as possible. That’s hard work, and I don’t fault those who want an easier path. I also don’t fault those who prefer the networking and gala side of marketing over the software forensics. Nonetheless, collective focus on the fun stuff goes a long way towards explaining how problems can linger (and grow).
Is Honey profitable for merchants?
For a merchant evaluating Honey, the fundamental question is pretty simple: Does Honey bring the merchant incremental sales and positive ROI? Clearly Honey’s browser extension positions it to claim credit on purchases users were already going to make, but incremental sales are what matter to merchants—purchases made only thanks to Honey.
My hypothesis is that Honey is ROI negative for most merchants. If a user goes to (say) dell.com, the user is already interested in Dell. Why should Dell let Honey’s browser plug-in jump in and claim a commission on that user’s purchase? Maybe Honey will increase the user’s conversion rate from 5% to 5.1% (by proclaiming what a good deal the user has found, or by touting a Honey Gold sweetener). But with payment to Honey, Dell’s margin will drop from (say) 7% to 5%. Would Dell prefer 7% profit on 500 sales, or 5% profit on 510? That math is pretty easy.
Of course the numbers in the preceding paragraph are just hypotheticals. If users sufficiently trust Honey (whether correctly or otherwise), their conversion rate might increase enough to justify Honey’s fees to merchants. If Honey could somehow persuade users to spend more—“add one more item to your cart, and you can get this $10 coupon”—that could increase value to merchants too (though I’ve never seen Honey deliver such a message). Some merchant advisors think this is plausible. I have my doubts.
Alarmingly, many merchants decide to work with Honey (and other “loyalty” software) without rigorously measuring incrementality (or even trying). Most merchants take some steps to measure the ROI of search and display ads. For years, affiliate ROI has been more challenging. But I recently devised a rigorous method that’s doable for most merchants. I’d enjoy discussing with anyone interested. When I have findings from a few merchants, with their permission I’ll share aggregate results.
Looking ahead
It’s easy to watch MegaLag’s piece and come out sour on affiliate marketing. (“What a mess!”) For that matter, the affiliate marketing section of my site has 28 articles over 20+ years, almost all about some violation or abuse.
Yet I am fundamentally a fan of affiliate marketing. Incentives aren’t perfectly aligned between affiliate, network, and merchant, but they’re a whole lot closer than in other kinds of online advertising. One twist in affiliate is that when a rogue affiliate finds a loophole, they can often exploit it at scale—by some indications, even more so than in other kinds of online advertising. Hence the special importance of networks and merchants both providing fairness and being perceived as providing fairness. MegaLag’s critique of Honey shows there’s no shortage of work to do.
Uber this week emailed San Francisco users of Uber Teen (a service that transports kids ages 13-17) both to announce that it is suspending that service in California, and to blame new California Public Utilities Commission rules for that closure. Uber claims CPUC made “new and onerous changes” which left the company “no choice” except to suspend service. I emphatically disagree. The problem, such as it is, is of Uber’s own creation — and Uber had and has a viable path forward.
Narrowly: Nothing forces Uber to suspend service. Uber could comply with the CPUC’s requirement and continue service by implementing reasonable driver registration precautions, in fact the same precautions that competitor HopSkipDrive has used for years. The words “no choice” have literal meaning, and that’s just not the situation here. The real issue is that Uber disagrees with CPUC’s requirement that it check driver fingerprints, arguing that its background checks suffice. But that disagreement does not compel Uber to discontinue service. Many people and companies disagree with many laws and regulations. The normal process is to submit comments in a legislative or rulemaking process, to sue if you think the rule is so broken that (say) it’s unconstitutional, to invoke political remedies such as replacing whoever imposed the rule, and ultimately to honor the democratic process by complying. Win some, lose some, and hope to win more than you lose. In contrast, Uber’s approach is a threat: Either the regulation goes Uber’s way, or Uber will cease service.
When an adult is being tasked to provide a service to a minor, the adult is placed in a position of trust, responsibility, and control over California’s most vulnerable citizenry—children. Not conducting a fingerprint-based background check to identify adults with disqualifying arrests or criminal records would place the unaccompanied minor in a potentially dangerous, if not life-threatening situation. That is why California Assembly Bill 506 … requir[es] that administrators, employees, or regular volunteers of youth service organizations undergo a background check that includes fingerprinting.
In response, Uber claims that its background checks work well and are sufficient. Who’s right? Consider the broader context. Uber’s background checks rightly deny accounts to drivers with bad driving records, prior ejections from Uber’s platform, or no documentation establishing right to work. But if a driver can’t pass those checks, the standard strategy is to “borrow” an account from someone who can. Many people tolerate a certain amount of this for ordinary adult rides. As the CPUC explains above, the stakes are higher when transporting minors unaccompanied. In that special context, higher standards are no surprise.
If fingerprinting drivers were massively costly, it might nonetheless be an unwise investment — a cost exceeding plausible benefits. For all its protestations to CPUC and to users, Uber never quite explains why it’s (supposedly) so difficult to do what CPUC specifies. If I had to implement CPUC’s requirement, I’d collect driver fingerprints through smartphones or at the inspection centers that check drivers’ vehicles. This sounds like software plus business operations — some work, but proportional to the business opportunity of the Uber Teen service. It feels particularly reasonable because fingerprint security is increasingly common. While an employee at Microsoft, I had to present my fingerprint to my phone’s Authenticator app to activate two-factor authentication to access company resources. CPUC similarly seeks fingerprint security for drivers transporting unaccompanied minors. Why should a minor’s safety get less protection than a company’s secrets?
In a filing before the CPUC, Uber argued that higher registration requirements for Uber Teen drivers would reduce the number of drivers, hence increasing prices to passengers. But if Uber Teen rides pay drivers materially more than regular rides, drivers have corresponding incentive to get registered. The only sustainable price gap is the result of the time or difficulty of registration, but by all indications that’s minimal. If a driver’s registration burden is small, as it should be, the price gap should also be small. Supply and demand.
The most charitable reading of Uber’s message to users is that Uber would like to comply with CPUC’s requirements, but had too little time. Yet here too, Uber’s position is in tension with the facts. Uber had long known CPUC took a dim view of its service to teens, including correspondence with CPUC staff as early as January 5, 2024. On March 14, 2024, Uber filed a motion seeking approval of its service for teens. CPUC’s rulemaking was published on October 30, 2024, giving Uber a further 30 days to come into compliance. And Uber says it intends to continue service for teens until December 23, 2024. That marks 353 days since Uber was on notice of the disagreement, and 54 days between CPUC’s rulemaking and Uber’s scheduled withdrawal of service. If Uber had used those 54 days effectively, not to mention those 353, there’s every indication it could have met CPUC’s requirements. If Uber needed additional time, it could have explained how long and why. Nothing about CPUC’s approach or timetable compelled Uber to withdraw its service for teens.
Any Uber complaint about too little time to comply is further undermined by CPUC’s 2016 guidance and Uber’s reply. In particular, CPUC specifically put Uber on notice that it would need an additional approval to launch service for minors, and Uber promised to discuss with CPUC before launching any such service. So any new urgency is of Uber’s creation.
Enlisting users in its fight against CPUC
Nothing could be more fundamental to the Democratic process than informed constituents making their views heard. And the CPUC did solicit comments, though for whatever reason none were received.
But what Uber envisions now is something quite different than informed public comments. Instead, Uber provides its users with, at most, a portion of the information they would need to evaluate the disagreement. Consider: Uber’s email to users claims “new rules requiring significant changes to Teen accounts” but doesn’t say a word about what those rules are or what changes would be required. (In fact by all indications the changes are only to driver verifications, not to user accounts.) While CPUC posted a detailed rulemaking with discussion of rationale and alternatives, Uber doesn’t mention any such document available — not a link, not even the title of the proceeding. Uber’s email asks users to “let the CPUC know” “if teen rides are important to your family”, but the question before CPUC isn’t whether teen rides are important, but rather what verifications are appropriate to provide sufficient safety for those rides.
When Uber delivers user comments to CPUC, will it deliver them all? Or just those that support its position? There’s reason to suspect shenanigans: In 2015, Uber delivered 8 boxes of supposed user petitions to regulators in St. Louis, but the boxes turned out to contain only water bottles.
Uber’s attempt to turn users against CPUC is reminiscent of the company’s infamous 2015 “De Blasio mode” which mobilized users against proposed New York regulations. There, as here, Uber treated users like pawns in an astroturf operation — giving users incomplete information designed to prompt an immediate forceful response. Uber plainly hopes to flood CPUC with complaints about regulation supposedly causing suspension of Uber Teen. But users might have second thoughts if they knew the full picture. Users surely value the low prices Uber emphasizes, but for transporting unaccompanied minors, safety is bound to be a priority too. Ultimately Uber gave users no way to judge whether its protections are sufficient or whether CPUC’s requirements would actually be useful. With the limited context Uber provides, what can a user usefully tell CPUC? At a minimum, Uber should have linked to the CPUC rules at issue, should have summarized what it saw as most objectionable, and should have offered a specific alternative. A better approach, to give users a full sense of the debate, would have summarized the rationale CPUC offered for its approach, fairly and evenhandedly, so users would be closer to deciding for themselves. Predictably, Uber did none of this.
These days, Uber seeks to portray itself as kinder and gentler, supposedly reformed from its scandalous peak of 2015-2017. Uber now sponsors NPR. Chief Legal Officer Tony West is Kamala Harris’s brother-in-law and campaign advisor. But has the leopard really changed its stripes? Tellingly, Uber’s terms of service still require users with disputes to file arbitrations (not lawsuits) before an arbiter Uber chooses, and ban users from filing class actions so a single set of lawyers can efficiently pursue the claim for everyone affected. Suppose Uber gets its way and returns to transporting unaccompanied minors without the fingerprints CPUC requires. If something terrible happens — a kidnapping, assault, or worse — Uber’s terms says passengers cannot even sue. This episode smacks of the Uber of a decade ago. I’ve added it to Uberscandals.org in lobbying, regulators, and safety.
Summary: In prominent marketing offers, including onboard napkins and large airport displays, AA promises “first checked bag free” if customers get certain AA-partner credit cards. But AA denies that benefit on itineraries that are completely or partially international — a restriction nowhere mentioned in initial marketing offers.
Summary: AA delayed an intercontinental flight by 27 hours, but in email notification didn’t say what flight was delayed or by how long. AA’s staff offered contradictory statements of passenger rights and rebooking options, including multiple supposed rules untethered to the Tariff.
Summary: Federal regulation favors private resolution of disputes between passengers and airlines. But Southwest’s “class waiver” disallows passengers from gathering together with a single set of lawyers and experts for efficient, cost-effective group resolution of their complaints.
Summary: Governing regulation requires an airline to provide the exact price for a passenger’s first and second checked bag within the text of an eticket confirmation email, but Alaska did not do so. Furthermore, the regulation requires bag allowance and price information in a booking summary page, but again Alaska did not. Meanwhile Alaska’s Manage Trip page provided an incorrect statement of baggage benefits and fees.
Summary: The American Airlines Business Extra site misrepresented carrier surcharges as “tax” in violation of governing regulation and prior DOT consent decrees. Furthermore, the site listed “approx” charges rather than the exact amount to be paid. And contrary to governing regulation, the site entirely omitted carrier surcharges from initial fare quotes.
