Uber flaw let anyone track scooter trips in US cities
The data leak has now been fixed, but it underscores the privacy risks of sharing location data for new modes of transportation.
Photo: Glenn Chapman/AFP via Getty Images
The data leak has now been fixed, but it underscores the privacy risks of sharing location data for new modes of transportation.
Uber has been inadvertently publishing information that would have allowed anyone to track in real time the start and end points of trips on its Jump electric bikes or scooters — and therefore, the location of the people riding them. As recently as Tuesday, this data was shared publicly on government websites in the U.S. cities where Jump operates.
Uber has since fixed the flaw, and there's no indication it was ever exploited. But the issue cuts to the heart of a growing debate about how tech companies share data with local governments, what rules should govern that data sharing, and whether it's even possible to do it in a way that protects people's privacy.
The Uber issue stems from the way the company shares data about its bikes and scooters with cities. Across the country, as government officials grapple with the proliferation of so-called micromobility companies, they've required companies like Uber, Lyft, Bird, Lime and others to share information about their traffic patterns. (For more background on that, check out David Pierce's deep dive into the battle around these requirements.)
To respond to those demands, the industry developed a set of standards called the General Bikeshare Feed Specifications to help these companies share data about where and when scooters and bikes are traveling. In lots of cities, that real-time data is made public through APIs on government websites.
The problem is, Uber was sharing one data point that's not required in those specifications: the unique name of every bike and scooter in its fleet.
Here's why that's an issue: If an Uber user in, say, Baltimore, opened up the app and tapped on a nearby scooter to reserve it, Uber would show the user that scooter's name — something like "JUMP Scooter XPC664." That way, you'd know you were getting on the right scooter. But Uber was also accidentally sharing that same name through its public API, along with the real-time latitude and longitude of where that particular scooter started and ended a trip.
With a little technical knowhow, a savvy stalker could, in other words, follow a neighbor or ex to the site of a Jump scooter, and either log the scooter's ID by reading it off the side of the scooter or by opening the Uber app and reading the ID of whichever scooter the person picked. It would have been easy then for the stalker to mine the API on Baltimore's department of transportation website to see where the rider hopped off.
Clearly this is not the sort of flaw that's ripe for abuse at a mass scale, but it does allow for a significant privacy invasion at the individual level.
The privacy flaw was discovered by John Myers, co-founder and chief technology officer of Gretel.ai, a startup that's working on ways to help developers access and share large datasets without compromising people's privacy. He discovered the data coming from 17 cities and posted about the issue on Github on Tuesday. A fellow Githubber who identified himself as a representative of Uber's Jump team responded moments later saying he'd fix the issue right away.
"You hit the privacy implications on the head here," the Jump team member said in his Github response.
Uber's head of security, privacy and engineering communications, Melanie Ensign, confirmed that by Tuesday afternoon, the company revoked public access to vehicle names, but said that they may have been exposed since late 2019.
Uber's inadvertent disclosure of vehicle information just reveals precisely why we're so concerned about the aggregation of location information, both in the hands of the private sector, as well as the hands of cities that desperately want this information. — Mohammad Tajsar
According to Ensign, Uber was sharing vehicle names in order to comply with a specific requirement from Miami. Miami is one of several cities that uses a different type of data-sharing framework called the Mobile Data Specifications, which were developed by the Los Angeles Department of Transportation. Uber has been embroiled in an ongoing battle with LA over the MDS framework. The company argues MDS is overly invasive because it requires companies to share location data about trip routes, not just where a trip starts and ends. Miami's director of innovation and technology, Mike Sarasti, told Protocol that the city intentionally opts out of collecting this in-trip data.
"We only receive data about idle, inactive scooters for enforcement purposes to make sure that they are not being dropped off in disallowed areas," Sarasti says.
According to Ensign, Jump began sharing the vehicle name with Miami as part of this workaround. (Sarasti did not specifically answer Protocol's question about this). But after Uber acquired Jump and their internal infrastructure merged, the vehicle name began appearing in the API for every city.
"We offered them this as an alternative, but making it publicly available in all these markets was definitely not the intent," Ensign said. Now, only authorized city personnel can access vehicle names.
For Myers, who reported the flaw to Uber, this is the perfect use case for what his team is building. The company helps developers access and share data using an emerging technique known as differential privacy, where anonymous datasets are injected with noise to prevent any one data point from being matched to real people.
"All types of data can be used to violate privacy," Myers said. "Keeping data safe and private, while still allowing developers to innovate, is one of the hardest problems out there, and that's what we're working to solve at Gretel."
This incident is also a prime example of why privacy groups have publicly opposed cities' demands for this data, said Mohammad Tajsar, a staff attorney at the ACLU of Southern California.
"Uber's inadvertent disclosure of vehicle information just reveals precisely why we're so concerned about the aggregation of location information, both in the hands of the private sector, as well as the hands of cities that desperately want this information," Tajsar said. "The location data of the type that scooter companies, and now cities, collect is incredibly revealing about people's lives in ways that should really force the city leaders and the public to think carefully about why they need this granular information and what risks they're putting their residents in when amassing this sensitive information."
The Electronic Frontier Foundation has also objected to these data-sharing agreements, particularly in Los Angeles. "Unfortunately de-identification is kind of a myth especially in the context of location data," said Bennett Cyphers, a staff technologist at the EFF. "It's extremely, extremely difficult, and often impossible, to sufficiently anonymize or de-identify data such that it can't be tied back to a specific person and reveal sensitive things about that person."
Uber isn't the only company in the bike- and scooter-sharing business that's faced these types of problems. Last year, Quartz was able to trace the journeys of 129 Bird scooters in Louisville, Kentucky, using scooter ID codes shared publicly by the city. According to Quartz, that code was later stripped out of the data. And Ensign herself found that Wheels, an e-bike company, is also sharing unique vehicle identification numbers in its API. Wheels did not immediately respond to Protocol's request for comment.
Because there's no central repository of these APIs (though Github has a fairly lengthy list) it's unclear how many more transportation companies have the same issue. What is clear is that in their push to better inform their citizens about the tech companies taking over their streets and sidewalks, local governments may be putting those same citizens at risk.
Issie Lapowsky ( @issielapowsky) is Protocol's chief correspondent, covering the intersection of technology, politics, and national affairs. She also oversees Protocol's fellowship program. Previously, she was a senior writer at Wired, where she covered the 2016 election and the Facebook beat in its aftermath. Prior to that, Issie worked as a staff writer for Inc. magazine, writing about small business and entrepreneurship. She has also worked as an on-air contributor for CBS News and taught a graduate-level course at New York University's Center for Publishing on how tech giants have affected publishing.
There's more to content moderation than deplatforming.
Yonatan Lupu is an associate professor of political science and international affairs at George Washington University. Nicolás Velasquez Hernandez is a lecturer at the Elliott School of International Affairs and a postdoctoral researcher at GW's Institute for Data, Democracy and Politics.
Florida Gov. Ron DeSantis' signing of a bill that penalizes social media companies for deplatforming politicians was yet another salvo in an escalating struggle over the growth and spread of digital disinformation, malicious content and extremist ideology. While Big Tech, world leaders and policymakers — along with many of us in the research community — all recognize the importance of mitigating online and offline harm, agreement on how best to do that is few and far between.
Big tech companies have approached the problem in different ways and with varying degrees of success. Facebook, for example, has had considerable success in containing malicious content by blocking links that lead to domains characterized by disinformation and hateful content, and by removing keywords from its search engine index that link to hate and supremacist movements. Additionally, Facebook and Twitter have both deplatformed producers and purveyors of malicious content and disinformation, including, famously, a former U.S. president.
But these "gatekeeper powers" often put Big Tech squarely in the crosshairs of U.S. politicians like DeSantis and other critics, who argue the platforms are censoring the American people. (Legal scholars have argued otherwise, noting that the right of private companies to remove malicious persons or content from their platforms is itself protected under the First Amendment.)
Although studies have shown that deplatforming, removing content and counter-messaging can effectively slow the spread of misinformation or extremist content, these tactics also come at a cost. Deplatforming is likely to continue raising the ire of critics accusing companies of censorship or political favoritism. Likewise, counter-messaging can be resource-intensive and even counterproductive: Conspiracy theorists, for example, often view counter-messaging as further evidence of their misguided beliefs. Moreover, these methods do not truly contain the growth and spread of malicious content or extremism.
To make matters worse, individuals and groups become increasingly savvy at subverting the moderation efforts of single platforms, and our research shows how malicious content can quickly and easily move between platforms. In fact, by mapping this network of hate communities across multiple platforms, our research team can see how groups exploit the multiverse of online hate. When a platform removes them, extremists often simply regroup on less-moderated platforms like Gab or Telegram and then find ways to reenter the platform from which they were initially removed. This points to a key challenge: Mainstream companies have made great strides in moderating the content on their own platforms, but they cannot control the spread of malicious content on unmoderated platforms, which often seeps back onto their own sites.
Likewise, when we investigate how extremist groups operate online, we see hidden, mathematical patterns in how they grow and evolve. The growth patterns of early online support for the U.S.-based extremist group known as the Boogaloos, for example, mirrored those for the terrorist organization ISIS; both movements' growth over time can be explained by a single shockwave mathematical equation. Though ideologically, culturally and geographically distinct, these two groups nevertheless show remarkable likeness in their digital evolution and "collective chemistry." By understanding how these groups assemble and combine into communities, we can effectively nudge that chemistry in ways that slow their growth or even prevent them from forming in the first place.
These types of system-level insights provide a deeper level of understanding as to how malicious online content spreads, persists and grows. They also point the way forward for social media companies to identify new strategies beyond content removal and counter-messaging to better slow the spread of malicious content, especially during high-stakes moments like a pandemic or social unrest.
For example, our research suggests that platforms could slow the growth of hate communities by intentionally introducing non-malicious, mainstream content onto their pages and crowding out malicious users. They could also modify their platforms to lengthen the paths malicious content would need to travel between hate communities (including those on other platforms) and mainstream groups, thereby slowing its spread and increasing the chance of detection by moderators. Even simple tactics like capping the number of users on extremist pages could be highly effective. One advantage of tactics like these is that their subtlety makes them less likely to draw backlash.
Although companies hoping to protect their secret sauce of success from competitors might be resistant to work together, it's clear that treating their individual platforms like semi-fortified islands is a limited solution. For example, when individual platforms remove malicious content, they understandably are reluctant to disclose details about what they removed, but finding ways to confidentially share such information with each other could greatly reduce time and resources spent on duplicate efforts. This could also prevent reemergence of malicious content elsewhere. Along similar lines, if mainstream platforms can find ways to share information with each other about users and content migrating to them from unmoderated platforms, this could help more quickly sever the connections between mainstream social media and the dark web.
It is asking a lot of huge, profit-driven corporations to cooperate with their direct competitors, but the need to do so is vital. Examples of interplatform coordination to reduce malicious content — such as the Global Alliance for Responsible Media — are encouraging. Through the Alliance, platforms like Facebook and YouTube are working to harmonize best practices and share data to clamp down on hate speech. Another example is the information-sharing platform run by the Global Internet Forum to Counter Terrorism, which allows platforms to identify certain types of malicious content.
In addition to interplatform collaboration, big tech companies would also benefit from greater collaboration with academic researchers, government agencies or other private entities. New perspectives and ways of thinking will ultimately lead to more effective strategies.
Given the sheer effort they expend to connect all of us, Big Tech should remember that they don't have to go it alone.
As President of Alibaba Group, I am often asked, "What is Alibaba doing in the U.S.?"
In fact, most people are not aware we have a business in the U.S. because we are not a U.S. consumer-facing service that people use every day – nor do we want to be. Our consumers – nearly 900 million of them – are located in China.
People are often surprised to learn we have thousands of customers here in America, made up of U.S. brands, retailers, small businesses and even farmers.
Last year, thousands of these U.S. companies sold more than $54 billion worth of their high-quality products directly to Chinese consumers on our e-commerce platforms. These companies include large multinationals like P&G and Estée Lauder, family-owned businesses like BISSELL and Emily's Chocolates, small businesses like Antica Farmacista and Radha Beauty and agriculture-based companies like Sun-Maid and Califia Farms.
How does it work? Think of Alibaba as a massive digital mall. When a U.S. business opens a digital storefront on our platform in China, they gain access to our almost 900 million active Chinese consumers. But we do much more than provide traffic. We provide all the tools to help U.S. businesses build their brands in China to serve local Chinese consumers. This includes fully customizable online storefronts, marketing tools, inventory and management services, as well as translation and logistics.
We also offer innovations like livestream commerce, AR shopping and gamification to help businesses connect with consumers in highly engaging ways. One of our strengths is the deep insights we have into the Chinese consumer, which can be very valuable to U.S. businesses as they tailor and market their products to fit the demands of new Chinese consumers.
Importantly, what makes us different from other e-commerce platforms is that we are a marketplace, not a retailer. This distinction is critical because it means we connect U.S. businesses and their products directly to the Chinese consumer. The business owns the relationships and consumer insights, and has total control over pricing, marketing and merchandising decisions. It also means we are always a partner, and never a competitor to the businesses on our platforms. We will only succeed if the businesses we work with succeed.
These are the important reasons why so many U.S. brands trust us and work with us in the China consumer market. Even direct-to-consumer brands based in the U.S. like Allbirds, Rothy's, Everlane and Senreve partner with us in China. We give them all the advantages of going direct to consumers – control over branding, consumer relationships and all the data and insights – in addition to access to the nearly 900 million consumers on our marketplaces.
According to the
U.S-China Business Council, one million jobs in the U.S. are consistently sustained by helping U.S. businesses sell to China. We are proud to be an important part of that U.S. job creation opportunity.
Until recently, the China consumer opportunity would have been out of reach for most U.S. small businesses. That is why we have invested heavily in our Tmall Global platform, which was specifically designed for businesses without a local presence in China to be able to sell cross-border to the Chinese consumer. Over the past several months, Alibaba has seen a continuing flow of American brands starting to sell to China for the first time. More than 100 U.S. businesses have launched on Tmall Global since January 2021.
Take New Jersey skincare brand
Nuria Beauty as an example. Josh Ghaim founded Nuria Beauty just two years ago before the pandemic hit. Because of his prior experience at Johnson & Johnson, Ghaim was familiar with Alibaba and knew it could be a great solution for Nuria. In just three months, Nuria had a Tmall Global storefront up and running, and was enjoying steady sales growth. Ghaim expects the China market to grow and become his largest market.
This year, more than 50 percent of all retail sales in China are predicted to take place online—the first time this milestone has been reached globally. The digital economy and massive consumer market in China present big opportunities for Alibaba's U.S. customers.
So when people ask me what Alibaba is doing in America, my answer is simple: We give great American brands, retailers, small businesses and farmers direct access to the Chinese consumer opportunity that can power their growth and success for the long term.
Randy Kern, a Salesforce and Microsoft veteran, is taking a plunge into the payments world.
Benjamin Pimentel ( @benpimentel) covers fintech from San Francisco. He has reported on many of the biggest tech stories over the past 20 years for the San Francisco Chronicle, Dow Jones MarketWatch and Business Insider, from the dot-com crash, the rise of cloud computing, social networking and AI to the impact of the Great Recession and the COVID crisis on Silicon Valley and beyond. He can be reached at firstname.lastname@example.org or via Signal at (510)731-8429.
Marqeta has just named a new chief technology officer. And it's an eyebrow-raising choice for a critical post as the payments powerhouse faces new challenges as a public company.
Randy Kern, who joined Marqeta last month, is a tech veteran with decades of engineering and leadership experience, mainly in enterprise software. He worked on Microsoft's Azure and Bing technologies, and then went on to Salesforce where he last served as chief customer technology officer.
Kern is new to payments, though he described it as a realm that he's excited to explore.
"It's something I've been kind of fascinated by for a very long time," he told Protocol. "Payments are such a key critical aspect of every business of nearly every individual."
Marqeta CEO Jason Gardner cited Kern's "engineering skillset and engineering experience required for us to continue to outpace the competition" in a statement about the hire.
Marqeta, which was founded in 2010, went public last month. It's a dominant player in card-issuing and banking services. Its main competitor, Galileo, older than it by a decade, was acquired by fintech giant SoFi last year, although it remains a standalone business.
The two rivals are riding a wave of demand for digital banking and card-issuing capabilities, both from traditional financial institutions and fintech startups. Logan Allin, managing general partner of Fin Venture Capital, a SoFi investor, told Protocol that the two companies "have a significant future in the picks and shovels of fintech."
Allin acknowledged that "from a feature-set perspective," Marqeta has the edge with "a richer set of functionality."
In an apparent bid to catch up, Galileo has also been beefing up its leadership bench. The company recently hired Archie Puri, who's considered a legend in the payments world and recently served as general manager of PayPal's Braintree, as Galileo's first chief product officer.
Last month, Clay Wilkes, Galileo's founder who led the company for 21 years, announced that he was stepping down. He was replaced by Derek White, a banking veteran who helped lead Google Cloud's financial services business.
Despite its advantages over Galileo, Marqeta faces a key challenge: A major customer, Square, accounts for a whopping 70% of its total revenue. That edged higher to 73% in the first three months of 2021. Sutton Bank, the underlying issuer of the Square Debit Card for businesses and the Cash App card for consumers, accounts for an even bigger chunk of Marqeta's business — 94% as of the first quarter of 2021.
Kern demurred when asked for an opinion on these challenges: "I think this is literally my sixth week. I haven't come to the point of having a strong opinion on that yet. I'm not trying to be coy, I'm just too new to the space to have what I would consider an informed opinion. I'm reading and learning as fast as I can."
But while he may be new to the payments world, Allin said Kern could be a smart choice. He said Marqeta needs "to defend [its] concentrated customer base" from rivals led by Galileo and Stripe.
"Randy's background is ideal in providing leadership to develop software layers and capabilities," he said.
Helping lead a smaller organization also presents key advantages. Kern said he now has a sharper ability to focus on customer needs, which was more challenging at the tech behemoths where he spent much of his career.
"I can actually understand what everyone is trying to do," he said. "I certainly couldn't do that when I was working on Azure. I couldn't do that when I was working in Salesforce. I can actually have a conversation about our customer base and understand in a lot more detail what people are doing. And that level of connection is exciting."
Kern said joining Marqeta was a major long-term move that he considered carefully. After he was offered the job, he took a long solo drive in the wine country in Napa. "It didn't require alcohol to make the decision, but I just went out and found some sun and had a whole day to myself," he said.
"I was at Salesforce for seven years, which for me is a short stint," he said. "I want to be here at least 15, 20, 25 years and see this company grow and flourish beyond the amazing 11 years that we've had so far."
Biden's nominee to lead the DOJ's antitrust section may face calls to remove himself from issues as weighty as cracking down on Google and Apple.
Ben Brody (@ BenBrodyDC) is a senior reporter at Protocol focusing on how Congress, courts and agencies affect the online world we live in. He formerly covered tech policy and lobbying (including antitrust, Section 230 and privacy) at Bloomberg News, where he previously reported on the influence industry, government ethics and the 2016 presidential election. Before that, Ben covered business news at CNNMoney and AdAge, and all manner of stories in and around New York. He still loves appearing on the New York news radio he grew up with.
Jonathan Kanter, President Joe Biden's nominee to run the Justice Department's antitrust division, has been a favorite of progressives, competitors to Big Tech companies and even some Republicans due to his longtime criticism of companies like Google.
But his prior work as a corporate lawyer going after tech giants may require him to recuse himself from some of the DOJ's marquee investigations and cases, including those involving Google and Apple.
Requests for recusal have recently emerged as one of Big Tech's weapons as it fights rising antitrust scrutiny. Facebook and Amazon have already pushed for Federal Trade Commission chair Lina Khan to remove herself from matters involving their companies, citing her writing, her work with think tanks and her time as a congressional staffer.
Yet Kanter may have done even more to invite antitrust scrutiny on Big Tech — and the rules he faces at the DOJ may be tighter.
As a lawyer for Yelp, News Corp. and other companies that frequently criticize Big Tech, Kanter eagerly pushed government enforcers to file a range of competition lawsuits, especially against Google. He often argued that the company privileged its own properties over those of competitors like Yelp in search results and criticized Google's dominance in the online ad market. In a 2018 testimony before the Senate, he argued "that concentrated economic power could pose as great a threat to liberty as political power" and scolded courts and government enforcers who narrowed deliberately broad competition laws.
The Department of Justice's own lawsuit, filed last October, makes a slightly different case against Google, focusing on the company's alleged monopolization of online search. But the issue Yelp's describing — involving alleged search bias — did make it into a multistate complaint that was filed in December, and courts are now consolidating that case with the federal one.
Under federal regulations, government appointees who have worked on "a particular matter involving specific parties" under their official remit must recuse themselves for one year. On his first day in office, Biden also issued an ethics order requiring appointees to extend that cooling off period to two years. The rules already raised concerns among White House ethics officials about nominees like Kanter, according to an April report.
"If he was representing Yelp in the same or a substantially related complaint, then you wouldn't want it to appear that he was carrying water for any particular former client," said Virginia Canter, a former lawyer in the Clinton and Obama White Houses who is now chief ethics counsel of the transparency group Citizens for Responsibility and Ethics in Washington. "There should be no question about whether or not the public interest is being served."
In addition, last year, Kanter left as co-chair of the antitrust practice at Paul, Weiss, Rifkind, Wharton & Garrison. The firm is now representing Apple in a lawsuit by Epic Games, among other matters. The two-year restriction in Biden's ethics order also extend to clients of recent former employers, and the Justice Department is indeed investigating Apple. As if that weren't complicated enough, Kanter himself has represented Apple complainants like Spotify.
Progressives who supported Kanter cheered his long-term antagonism of Big Tech and support of smaller competitors like Yelp. Yet Kanter's former firm has also represented Mastercard, Cigna and other big companies in competition matters. Nearly a decade ago, at a prior firm, Kanter even won an award for his work helping Microsoft navigate its acquisition of Skype.
His work for complainants against Big Tech doesn't automatically require recusal. Canter and others said the administration will probably weigh how closely his own advocacy mirrored the DOJ's cases, as well as other variables, like whether his former clients are witnesses, various bar rules, appearances of conflict and whether he's really switching sides or merely switching roles on the same side.
"You really have to look at all the particulars," Canter said. "You don't want to knock somebody out if you don't have to."
Biden's order also allows for waivers when "the literal application of the restriction is inconsistent with the purposes of the restriction." That, some say, could cover someone like Kanter transitioning from helping the government as a private lawyer to overseeing the government's work. Waivers also need to be in the public interest, including "exigent circumstances relating to ... the economy."
Recusals from matters involving Big Tech, however, would not be unprecedented: The head of the antitrust division under Trump, Makan Delrahim, eventually recused himself from the Google investigation. He'd lobbied for the company's acquisition of DoubleClick more than a decade earlier.
Asked whether recusals or a waiver were necessary, a White House official would say only that the administration is "confident moving forward with Kanter for the position given his track record and expertise." Google declined to say whether it planned to seek Kanter's recusal.
Some defenders of competition enforcement have said that Facebook and Amazon's calls for Khan's recusal at the FTC are really just efforts to escape legal scrutiny. Big Tech critics argue that rather than citing any actual conflict of interest, like switching from the plaintiff's side to the defense's in a case, these companies are more or less complaining about the very traits that make Khan qualified for the job.
Some have said the same about Kanter, particularly following a POLITICO story on potential administration concerns about nominees with histories like his. Jeff Hauser, a former Justice Department antitrust lawyer who tracks corporate officials in government, tweeted at the time that Kanter will help the Justice Department, as his private sector experience makes him a better choice for the job and is "very different from defending corporations accused of violating antitrust law."
Some Kanter defenders acknowledged tech companies could raise concerns as well, although certain issues may be moot. The U.S. case against Google has already launched, for instance, and the two-year ban could expire before a trial, which is scheduled for late 2023.
Even if Kanter does have to recuse himself, "DOJ can still do aggressive work against these companies," said Alex Harman, competition policy advocate at the liberal group Public Citizen, which has backed Kanter.
Unlike the FTC, an independent agency where partisan commissioners vote, the Justice Department is supposed to follow the president's vision of expanded competition enforcement, Harman noted. Even if Kanter didn't participate in litigation strategy or potential settlement negotiations, he could still point the division toward a harder line on concessions, more aggressive merger challenges, expanded theories of harm and more plaintiff-friendly trends in market definition. Whatever department lawyer would oversee the case in the meantime would likely be well aware of the new course that the division chief had set.
"It's a lot of nothing when somebody has to recuse at an agency," Harman said, although he added it might well be necessary. "He's there because of his experience and his viewpoint, and if he hadn't been working, he wouldn't have this experience."
The company has to prove it can beat larger rivals like MongoDB, as well as fast-growing competitors like Redis Labs, not to mention the big cloud companies.
Joe Williams is a senior reporter at Protocol covering enterprise software, including industry giants like Salesforce, Microsoft, IBM and Oracle. He previously covered emerging technology for Business Insider. Joe can be reached at JWilliams@Protocol.com. To share information confidentially, he can also be contacted on a non-work device via Signal (+1-309-265-6120) or JPW53189@protonmail.com.
At first glance, Couchbase appears to be stuck in the middle of the cloud database market, flanked by competitors with more traction and buzz. But fresh off a $200 million IPO Thursday, CEO Matt Cain relished the opportunity ahead to prove why his company can beat out rivals the market considers more valuable.
The NoSQL database provider's public offering helped propel Couchbase to a $1.2 billion valuation. But unlike one of the last big data-related IPOs, market leader Snowflake's historic debut on the public markets last December, Couchbase has some work to do to differentiate itself.
In terms of rivals, on one side it has open-source tool PostgreSQL and companies like MongoDB. MongoDB Atlas, its now-signature product, pulled in $93.5 million in revenue in the three months through April, a 73% year-over-year increase. Overall, the company reported subscription revenue of $174 million for the quarter, almost double the $96 million in subscription sales that Couchbase reported for all of FY 2021.
On the other side, there's a cadre of other startups like Redis Labs, which private investors value higher than Couchbase at $2 billion with revenue roughly in line with Couchbase's total. And then, of course, there's Oracle, as well as the cloud hyperscalers that are perennial rivals to almost every enterprise tech vendor selling today: Google, AWS and Microsoft.
None of that bothers Cain, who claims that Couchbase's competitors are unable to address the needs of the whole enterprise — both application developers and enterprise architects. It's that differentiation he believes will ultimately help the company break free from the middle of the pack.
"We are focused on building the next great enterprise software company and much more concerned about the technology we offer … than short-term valuations," Cain told Protocol in an interview Thursday. "We are much more focused on the relative value proposition that we offer. We will monetize that over time, but we have long-term views, long-term aspirations."
In reality, the area Couchbase is trying to tackle is not much different than its competitors'. Enterprises are building more applications that require data to move at speeds that can't be met by the architectures of the past. It's a trend that is spurring what Couchbase calls a "generational transition" and underscoring what some industry insiders say is the "golden age" of databases.
"Efforts to accommodate the limitations of legacy databases through ad-hoc temporary fixes and stopgap methods are no longer sufficient given the increasing impact and urgency of digital transformation initiatives," the company wrote in its S-1 filing. "A move to the next generation of modern operational databases is required to provide the performance, reliability, scalability and agility needed for enterprise applications."
Couchbase celebrates its IPOPhoto: Nasdaq
Couchbase is one of the lone independent holdouts from the NoSQL — which stands for "not only SQL" — movement that started around the late 2000s.
The tech is not based on rows and columns like traditional relational databases. Instead, all the data is stored in one entity, like a JSON document, for example. That non-tabular structure gives it the processing speed that NoSQL advocates say is necessary for modern applications.
Many of Couchbase's former rivals, like FoundationDB or Tokutek, were acquired several years ago. The consolidation within the sector was so swift that former CouchBase CEO Bob Wiederhold wrote a blog in 2015 assuring customers that it was "not bad for an industry."
"During the next stage, the leaders separate themselves from the rest of the pack. Their products are a better fit for the market and more users gravitate to them," he said at the time. "Couchbase, DataStax and MongoDB are the three NoSQL players that have clearly separated themselves from the rest of the pack."
Now, it's on Cain to separate Couchbase from the pack yet again. The company launched its managed service Couchbase Cloud in 2020, well behind MongoDB, which released Atlas in 2016. It's currently offered on AWS and Azure; Google Cloud is on the product roadmap, per Cain.
"There's a lot of attention in the market on the way in which companies are offering their customers the way to consume their technology and we couldn't be more excited about our managed cloud roadmap," he said. "We're going to study the success and failures of other companies … but we will do so through the lens of supporting our enterprise customers."
The differences that Cain claims exist between its own product and rival offerings are deeply technical. At a high level, Cain says Couchbase is superior because of its speed and scalability — a common talking point as well among rival database executives.
Among the other differentiators, according to Cain, are its hybrid cloud compatibility, ability to support multiple data models — something competitors like Redis Lab also say they offer — and "high-performance architecture that is memory-first, shared-nothing," an over 30-year-old setup that allows the database to scale faster while also reducing (or eliminating) downtimes. If you need to build a website like Amazon, for example, that has to handle millions of queries, you would build it on a shared-nothing system.
"If you look at legacy relational technologies, modern databases, there is no solution that brings all those capabilities together in a single platform," said Cain. "The modalities that a database chooses to support are important, but I would not underestimate the underlying architecture."
Database companies are in a fierce marketing battle at the moment as they all seek to capitalize on the very real needs of enterprise customers for help managing increasing demands on data. As companies begin to better understand what their modern architectures will look like to support a quickly evolving application suite, those claims are going to be put to the test.
"In terms of how often enterprises are thinking about this, it's a daily exercise. And that is driven by all things digital transformation," he said. "Good enough is not a viable strategy when it comes to databases in the enterprise. With our core architecture, we can find compelling opportunities to add value."