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Uber criticized over price gouging and aggressive recruiting techniques

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September 8, 2014

Travis Kalanick, the CEO of controversial taxi ride-sharing service Uber, said it's not the company's fault that everyone has an issue with his company.

Kalanick says the service is just misunderstood by most people. "When users start to perceive you as the big guy, you're not allowed to be scrappy fierce," he said at the TechCrunch Disrupt conference in San Francisco today.

What Kalanick describes as "scrappy" is the company's history of aggressive expansion tactics. The on-demand car service, which lets users order a car through a smartphone app, is constantly the enter of a lot of controversy, but it's most recent claim to fame is public mud-slinging with its archrival competitor Lyft.

The two companies repeatedly accused each other of purposely clogging up their networks by ordering and canceling thousands of rides.

Additionally, Uber has admitted to having overly aggressive driver recruiting tactics in the past.

To be clear, Uber has long been a thorn in the side of the taxi industry. Launching with a black car service in 2010, Uber expanded to offering many types of on-demand services, including taxis and UberX, its peer-to-peer service that rivals Lyft.

Often criticized for extreme price gouging, in some cases charging hundreds of dollars for a single ride, Uber has still managed to grow swiftly, reaching 200 cities worldwide in August.

Kalanick added he's receiving a lot of bad press tis year because people simply don't understand where he comes from.

Kalanick started his first company, a networking software company in 2001, and didn't make a salary for four years.

"I don't want to say destitute, but you don't have anything going on, you don't have a lot of money," he said.

That isn't an issue for Uber. The company recently raised an additional $350 million in funding, giving it an incredible valuation of $3.5 billion.

Kalanick tried to stay away from the idea that Uber is "the man," with a lot of money. Instead, he returned to a familiar message-- his David and Goliath story with the taxi industry playing the giant.

The company, which recently hired former White House strategist David Plouffe to spearhead its political agenda, is gearing up for a larger fight with legislators over car-sharing service regulations.

In the United States, there are several markets still dominated by the taxi industry. Now Uber wants to get into it at any cost, and has said so repeatedly in the past few months.

"The true nature of this business is that it's so disruptive, so insanely disruptive that we've got a lot of incumbents and a lot of people to sway from the other side," he said.

In other mobile news

Microsoft this morning has announced its new flagship Nokia phone, the Lumia 830, as well as updates to the company's latest mobile operating system.

The Lumia 830 comes with a rear-facing 10-megapixel PureView camera, a 5-inch ClearBlack IPS-LCD and a 1.2 GHz quad-core Qualcomm Snapdragon 400 processor.

The phone also features a 2200 mAh removable battery and 16 GB of internal storage.

Microsoft is also throwing in up to 15 GB of free storage on OneDrive. The Lumia 830, which is very close to the Lumia Icon that sells for $499 off contract at Verizon Wireless, will come in green, orange, grey and white.

The new Lumia 830 will ship for $430 off contract. Microsoft also took the wraps off its latest update to its Windows 8.1 OS, which is now dubbed Denim.

The new software expands the company's Cortana virtual assistant to more markets. It also includes updates that will allow users to store their tiles in folders, and a new security feature for when the phone is connected to public WiFi hotspots, a constant and ever-growing threat to user security and peace of mind.

According to IDC's most recent numbers, Microsoft shipped 7.4 million Windows phones in the second quarter, accounting for about 2.5 percent of the global smartphone market.

That was down from 8.2 million in the same quarter last year, when Windows accounted for 3.4 percent of the global smartphone market.

In other mobile news

Open WebOS, the open-source mobile operating system of the former Hewlett-Packard and current LG platform, is rebranding itself.

OpenWebOS is now called LuneOS, the team behind the platform announced today. The full name was previously "WebOS Ports Open webOS" -- something that the group behind the mobile operating system said, "wasn't very catchy, and for the most part, very confusing."

OpenWebOS was an offshoot of WebOS, the mobile operating system initially developed by Palm and transferred to HP when that company acquired Palm in 2011.

Although both HP and Palm attempted to get WebOS off the ground, both companies failed, and HP eventually open-sourced the operating system.

It was at that point that the team behind Open WebOS got to work on developing an alternative mobile operating system.

It was also after that that LG acquired the rights to WebOS. The company is currently exploring its usage in television sets and other consumer electronics devices.

With LuneOS comes some improvements to the platform. The first release is being called "Affogato" and its stability has been improved for use on smartphones and tablets.

The group behind LuneOS says that while its platform can work on the Google Nexus 4 and HP TouchPad, as well as the Galaxy Nexus and 2012 Nexus 7, its goal is to make it easy to port to other devices as well.

"Overall, our main focus is not to add new devices as they appear on the market but instead to provide a stable, easy to use and easy to port software base," the group said.

It's also worth noting that LuneOS isn't designed to take on iOS and Android. Indeed, the backers say that they're "not trying to reach feature comparison with Android or iOS."

Looking ahead, the team behind LuneOS is hoping to improve the project and bring more people into the fold. The group said that it's "small" and working on "a large project."

"We have a lot of parts on the service side in place but the app user's interfaces need a lot of work from creative people," the group wrote in an announcement on Monday.

"If you like webOS, know how to develop on the web and enjoy working with an enthusiastic team on a new community built mobile operating system, don't hesitate to contact us through the available communication channels."

In other mobile news

ZTE and Boost Mobile said they have introduced their newest prepaid handset, known as the Warp Sync.

The unusually-named mobile device features a competitive price and is available for $179.99 prepaid, and sports mid-level specifications.

It features a 5-inch display with a 1,280 by 720-pixel resolution and Gorilla Glass 2 screen. The new smartphone also runs Android 4.4.2 (code named KitKat) and comes with signature software features from Boost Mobile.

One such app is Mobile ID, which enables users to download pre-packaged apps and wallpapers onto their device.

Powering the phone is a 1.2 GHz quad-core Snapdragon processor and a 2,300 mAh battery. For all your shutterbug needs, the Warp Sync has an 8-megapixel rear-facing camera and a 1.6-megapixel shooter in the front.

Additional features include expandable memory up to 64 GB, 2 GB of RAM, and 8 GB of internal storage.

Compared to its predecessor the Warp 4G, the Warp Sync has made notable gains. Specifically, it has a larger display, a more powerful processor, and a higher-capacity battery.

And at just $180, it's gotten cheaper as well compared to the Warp 4G's $199 launch price.

In other mobile news

The wireless industry is getting extremely competitive in the United States, and now Sprint is making sure it stays that way. If anything, Sprint wants to undercut just about anybody when it comes to unlimited data plans.

Proof in point-- the wireless carrier announced a new unlimited data plan for smartphone users that costs just $60 a month.

It's part of Sprint's new CEO Marcelo Claure's effort to reverse the fortunes of the ailing company.

Competitor T-Mobile offers an unlimited data plan for $80 a month, while industry leaders Verizon and AT&T don't offer unlimited plans at all. But there's a chance that that could change soon, and we'll probably find out soon.

"People know Sprint for unlimited," Claure said in a statement. "We have long been the leader in offering mobile subscribers unlimited data and that leadership continues today."

However, the new plan isn't available with discounted phones, and current Sprint customers can't switch to the $60 per month rate until they're eligible for an upgrade.

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Sprint also said that it just finished overhauling its family pricing earlier this week. Under its newly revised plans, a family with four phone lines would pay $160 per month to share 20 GB of data.

Four lines with the same amount of data are advertised online by Sprint and AT&T at $310 per month. At T-Mobile, the plan would cost $180.

Sprint has also followed T-Mobile's lead in offering to reimburse customers for the costs of switching from other wireless carriers, and waiving the requirement that customers sign a long-term service contract.

Sprint brought in Claure earlier this month to lead its turnaround effort after reportedly abandoning plans to merge with Sprint because of the difficulty in getting the deal approved by antitrust regulators.

That merger would have created a combined entity with a subscriber count to rival that of Sprint and AT&T.

Claure, who formerly headed wireless equipment and service company Brightstar, pledged following his hiring to make Sprint more aggressive in the marketplace, and he's wasted little time in following through.

But Sprint faces a very difficult road ahead, however. Though its speeds are improving, it still has by far the slowest 4G network of its rivals, and user complaints are still coming in.

It was rated the worst cell phone service in the U.S. by Consumer Reports in 2013, and also came up in fourth in a new ranking this week from market research firm RootMetrics.

On top of all that, Sprint also continues to hemorrhage money and lose customers. T-Mobile took another jab at Sprint earlier this week with a new promotion, offering free upgrades to unlimited data plans for existing T-Mobile customers who sign up their friends.

T-Mobile CEO John Legere mocked Sprint's plan on Twitter. "If your friend is on Train S going 2 MPH and you are on Train T going 2000 MPH, tell your friend to f'in transfer!" Legere wrote.

In other mobile news

AT&T said today that it's offering a $200 discount on Apple iPads for anyone buying a full price iPhone 5S or iPhone 5C, ahead of next month's expected announcement of the *new* iPhone.

If you have the feeling that AT&T wants to liquidate its old inventory of iPhones, you'd be right. We don't know how many iPhones the wireless carrier has in stock but it's probably a whole lot more than we would have guessed.

With a new iPhone 6 expected to be announced on September 9 and in stores by the end of September, it looks like the new promotion, which is available only in AT&T owned and operated stores, is designed to sell off inventory of the older model devices.

To be sure, the promotion could also be used to move older iPads as well, as Apple is also expected to announce a new full-sized and mini-version of the popular tablet in time for the holidays.

Additionally, the new promotion may also have another motive as well-- to boost the company's overall data subscriptions.

As more and more consumers already own smartphones, AT&T and other wireless providers are trying to encourage customers to add other Internet-connected devices to their own data plans in order to increase revenue.

AT&T's and Verizon's data sharing plans are all designed to make adding such devices easy and affordable, while generating more revenue for the carriers.

Adding a tablet to a share plan on AT&T costs an additional $10 a month. Of course, with an additional device connected to the data plan, subscribers may have to boost their overall data plan.

For example, two subscribers sharing a 4 GB plan for $70 a month, plus device connection fees, may need to boost their plan to 6 GB and pay $80 per month, plus the additional $10 fee to connect a tablet to the plan.

In all, a typical AT&T subscriber would likely be paying an additional $20 a month to AT&T, in such a scenario.

While the deal does offer a nice discount for most consumers, interested shoppers should be aware of the fine print...

For instance, the promotion is only available to customers buying a new iPhone 5S or iPhone 5C through the company's early upgrade program.

That means that customers will have to pay full price for the device or finance it over 24 months. At full price, the iPhone 5S starts at $650 for a 16 GB version and the iPhone 5C starts at $550 for the 16 GB version.

Financing the iPhone 5S with the option to upgrade after eighteen months will cost $27.09 per month for 24 months.

And financing an iPhone 5C with the 18 month upgrade option will cost $22.92 per month for 24 months.

The other condition is that the offer is for iPads that include AT&T cellular access. The basic cost of the cellular enabled iPads generally run $100 more than iPads that only include a Wi-Fi radio. As the old saying goes, there's no free lunch.

Don't forget that AT&T is also requiring that subscribers sign up for a two-year data plan with the purchased iPad on top of that.

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Source: Uber.

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