Running out of road?
It’s high noon for Uber this week as the ride-hailing firm navigates (corny, I know) the way forward after the release of the Holder report. One path leads to an initial public offering, the other to the likely implosion of the Us$69bn super start-up.
Let me explain. Former US attorney-general Eric Holder has led a probe into the San Francisco-based company centring on sexism, harassment and, plainly put, “bro” culture. This is separate to the inquiry by Perkins Coie LLP, which looks at human resources issues and has already led to the sacking of more than 20 employees.
In recent months, a further 11 highranking Uber execs have exited the company. Crisis, then.
The investigation was prompted by a former employee’s allegations of workplace sexual harassment and discrimination.
Now, it’s no secret that Silicon Valley battles with diversity and inclusion. Details, though, are everything, so here we go: one-time Uber engineer Susan Fowler blogged about how her manager had allegedly propositioned her for sex. She went on to describe the male-dominated culture at the company. For example, on one occasion, all the men on Fowler’s team got leather jackets; the team’s women didn’t get any.
Then began a torrent of unsavoury revelations from other Uber workers. Groping, cocaine during a company retreat and an escort-karaoke bar in Seoul. And it turns out boss Travis Kalanick’s 2IC, Emil Michael, was one of the execs alleged to have the medical records of a person raped in an Uber car in India — while pushing the theory that local rival Ola had planted the story to damage Uber’s reputation.
In a seven-hour meeting on Sunday, Uber’s board unanimously voted to adopt all the recommendations in the Holder report, a summary of which was due to be released earlier this week.
One scenario is that Kalanick (you may have seen a video of him in an altercation with an Uber driver about falling fares) takes a three-month leave of absence. He’s already been on bereavement leave after a boating accident killed his mother and left his father in hospital. Michael has been ousted from the firm, and it is feared that if Kalanick steps aside (even briefly) it could destabilise Uber irreparably.
Fighting fires
The scandal-plagued start-up has other worries: its rivals are forming fresh alliances to capitalise on its woes; a lawsuit over self-driving car technology; and a federal probe into Greyball, a software tool used to trick regulators in cities where the authorities were trying to shut Uber down.
It is Kalanick’s drive/aggression that has propelled Uber to become the world’s most valuable venture-backed company. Consider this nugget from a New York Times profile on him: “One friend recalled a night out with a group of married couples at the Gold Club, a San Francisco strip club, a few years ago. Kalanick, who was single, pulled out a laptop to work on a spreadsheet, crunching Uber’s numbers while friends watched the dancers onstage.”
Whether Kalanick has an Eat, Pray Love moment or not, he’s firmly ensconced at Uber, as he and two allies on the board have voting control of the company. Uber (like many other tech companies) has a “founderfriendly” governance structure, so some board seats have more voting power than others.
One of Uber’s 14 core values is after all: “Always be hustlin’.”