Scan­dal-hit Uber fac­ing ex­o­dus of tal­ent as 2 more ex­ec­u­tives quit

Pres­i­dent cites dif­fer­ences over cor­po­rate cul­ture in de­ci­sion to step down

Financial Times Middle East - - Companies - TIM BRAD­SHAW — SAN FRAN­CISCO

Uber has lost two more top ex­ec­u­tives amid a se­ries of scan­dals at the car-hail­ing com­pany, with its head of ride-shar­ing and a key ar­chi­tect of its au­ton­o­mous driv­ing ef­forts the lat­est to depart.

Jeff Jones joined Uber as pres­i­dent of ride-shar­ing in Septem­ber last year from re­tailer Tar­get, where he was chief mar­ket­ing of­fi­cer. He was charged with im­prov­ing Uber’s brand and rep­u­ta­tion, en­com­pass­ing broad re­spon­si­bil­ity for op­er­a­tions, mar­ket­ing and cus­tomer sup­port.

That pe­riod has seen a string of con­tro­ver­sies for Uber in­clud­ing al­le­ga­tions of sex­ual ha­rass­ment, rows with reg­u­la­tors over test­ing of self-driv­ing cars, and a lawsuit from Google’s au­ton­o­mous car unit, Waymo, al­leg­ing theft of in­tel­lec­tual prop­erty.

At the weekend Uber con­firmed his de­par­ture.“We­want­tothankJ­eff­forhis six months at the com­pany and wish him all the best,” a spokesper­son said, af­terthe­move­was­firstre­port­ed­bytech news site Re­code on Sun­day.

Mr Jones told Re­code: “It is now clear . . . that the be­liefs and ap­proach to lead­er­ship that have guided my ca­reer are in­con­sis­tent with what I saw and ex­pe­ri­enced at Uber, and I can no longer con­tinue as pres­i­dent of the rideshar­ing busi­ness.”

LateronSun­day,ite­mergedthatUber was also los­ing a key engi­neer in­volved in its au­ton­o­mous driv­ing ef­forts. Brian McClen­don joined from Google two years ago as Uber’s vice-pres­i­dent of map­sand­busi­ness­plat­form.

In a state­ment, he said his de­par­ture to go into pol­i­tics had been in the works for months and was un­re­lated to Mr Jones’s exit. “Af­ter 30 years away, I’ve de­cided to move back to my home­town of Lawrence, Kansas,” he said. “I be­lieve in Uber’s mis­sion and the many tal­ented people work­ing there to make it a re­al­ity and that’s why I have agreed to stay on as an ad­viser.”

Though his de­par­ture may be more am­i­ca­ble than Mr Jones’s, it will come as a blow to Uber’s am­bi­tions in self-driv­ing cars, which rely heav­ily on high-def­i­ni­tion maps. As a cre­ator of Google Earth af­ter co-found­ing Key­hole, the geospa­tial com­pany ac­quired by the search en­gine in 2004, Mr McClen­don is high­lyre­specte­d­in­his­fiel­dan­dover­saw Uber’s Ad­vanced Tech­nolo­gies Cen­ter in Pitts­burgh, where it first pi­loted its self-driv­ing cars.

The res­ig­na­tions come as Uber searches for a new chief op­er­at­ing of­fi­cer who will re­port di­rectly to Travis Kalan­ick, the com­pany’s co-founder and chief ex­ec­u­tive. Ear­lier this month, Mr Kalan­ick said he was look­ing for a “peer who can part­ner with me”, af­ter fac­ing crit­i­cism for his han­dling of the crises fac­ing the $70bn com­pany.

Re­cruiters and ri­val firms have re­ported an uptick in job ap­pli­ca­tions from Uber em­ploy­ees in re­cent weeks, with some say­ing that work­ers are los­ing­faithinthe­lead­er­shipteam.

In Fe­bru­ary, a blog post by for­mer Uber em­ployee Su­san Fowler al­leg­ing sex­ual ha­rass­ment at the com­pany trig­gered sim­i­lar claims, prompt­ing one engi­neer to tell Mr Kalan­ick the is­sue had be­come a “sys­temic prob­lem”. Two other se­nior ex­ec­u­tives have since left the com­pany amid al­le­ga­tions of in­ap­pro­pri­ate be­hav­iour.

While Mr Jones’s res­ig­na­tion has not been linked to any such al­le­ga­tions, his man­date to im­prove Uber’s rep­u­ta­tion has fal­tered amid these crises. In ad­di­tion, the ap­point­ment of a new op­er­at­ingchiefthreat­ened­toside­line­his­role.

At­tempts on Sun­day to reach Mr Jones for com­ment were un­suc­cess­ful.

Uber’s search for a chief op­er­at­ing of­fi­cer has been com­pared to the roles played by Sh­eryl Sand­berg at Face­book or Eric Sch­midt at Google, where vet­er­anex­ec­u­tiveswere­brought­in­toas­sist less ex­pe­ri­enced founders as their com­pa­nies­gre­wa­trapid­speed.

Af­ter a video emerged last month of Mr Kalan­ick be­rat­ing an Uber driver, he was forced to con­cede: “I must fun­da­men­tally change as a leader and grow up . . . I need lead­er­ship help and I in­tend to get it.”

Engi­neer Brian McClen­don’s exit will be a blow to Uber’s am­bi­tions in self-driv­ing cars

Last week the Shang­hai city govern­ment is­sued draft guide­lines for the bike-shar­ing econ­omy fol­low­ing con­cerns about the pile-up of ma­chines, in­clud­ing sug­ges­tions on how bi­cy­cles should be parked.

Ac­cord­ing to state me­dia, the lo­cal trans­port author­ity or­dered six bike­shar­ing groups to stop adding bi­cy­cles, although two, Mo­bike and ofo, de­nied thatthe­setalk­soc­curred.

Small won­der Shang­hai of­fi­cials worry about the pile-up of bi­cy­cles on streets: the city leads the world with 450,000 shared ma­chines, nearly all of themap­pearinginthep­ast­six­months.

The brightly coloured bi­cy­cles sup­plied by com­pa­nies such as Mo­bike and Ofo can be un­locked us­ing mo­bile apps. Mo­bike’smod­el­sareGPS-tracked.

Un­like other shar­ing schemes, China’s bi­cy­cles can be picked up and left any­where, mak­ing them con­ve­nient for users but frus­trat­ing for city au­thor­i­ties.

The bi­cy­cles are locked by the user af­ter rid­ing, then un­locked by the next rider by us­ing the app and scan­ning a QR code on­the­frame.

Com­pe­ti­tion be­tween start-ups has been cut-throat: each has been producing more bi­cy­cles to gain the up­per hand in a bat­tle for share that looks like fol­low­ing the tus­sle be­tween ride-hail­ing apps Uber and Didi Chux­ing, be­fore theUS­group­con­ceded­de­feat. China’s rapid adop­tion of bike-shar­ing high­lights the adapt­abil­ity of the coun­try’s con­sumers and groups. The top two bi­cy­cle-rental apps added 9m monthly ac­tive users in the fi­nal four months of 2016. The boom in bike-shar­ing has been sup­ported by for­eign as well as lo­cal in­vestors. Ofo be­came the first bike-rental uni­corn af­ter reach­ing a $1bn val­u­a­tion af­ter a fundrais­ing round this month, ac­cord­ing to the com­pany.

Mo­bike costs Rmb1-Rmb2 ($0.14-$0.28) per hour, while ofo — so­called be­cause the name re­sem­bles a cy­clist from the side — costs Rmb0.5 per hour.

Both com­pa­nies of­fer gen­er­ous sub­si­dies so that many rides are vir­tu­ally free.

Nei­ther Mo­bike nor ofo has re­leased pro­jec­tions of prof­itabil­ity.

How­ever, Chen Lin, as­sis­tant pro­fes­sor of mar­ket­ing at China Europe In­ter­na­tional Busi­ness School in Shang­hai, es­ti­mates that each Mo­bike re­quires 2.3 trips per day to break even, as­sum­ing the user pays Rmb1 per ride.

At least eight other China bik­erental start-ups have be­gun their first big fundrais­ing rounds, ac­cord­ing to Ms Chen.

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