Why Uber is in hot water
A report on sexual shenanigans and managerial problems at the tech giant has led to an outcry – and a loss of jobs
IT’S ONE of the Silicon Valley start-ups where innovation is king, beating the competition is paramount and office employees have wine on tap and are allowed to bring their dogs to work. But behind the shiny tech veil things aren’t what they seem in the engine room of app-based taxi service Uber. The $70-billion (R910 billion) company found its dirty laundry aired in headlines across the world recently after a fourmonth investigation into the goings-on at the six-year-old company.
An explosive report on the probe led to 20 people losing their jobs – one of them Uber’s head of business, Emil Michael – and prompted Travis Kalanick, CEO and one of the original founders, to go on leave.
It all started with a blog post in February by former engineering employee Susan Fowler, who alleged she’d been sexually harassed by a manager.
She claimed he’d propositioned her for sex when she joined the company in 2015 and that another director explained the low numbers of women in the business by saying “the women of Uber just needed to step up and be better engineers”.
Fowler laid several complaints with human resources about these and other “comically absurd” incidents of discrimination – and was reportedly threatened with dismissal if she didn’t back off.
But with her scathing blog post a Pandora’s box was opened – allegations of harassment, discrimination and an aggressive work culture poured in from employees.
Law firm Perkins Cole LLP led an investigation into the 200-plus harassment claims, more than 50 of which are still being probed. Uber itself commissioned an investigation led by former US attorney general Eric Holder – and his findings were damning.
Holder urged the company to reformulate its “notorious cultural values” and eliminate “those values which have been identified as redundant or as having
been used to justify poor behaviour, including Let Builders Build, Always Be Hustlin’, Meritocracy And Toe-Stepping, and Principled Confrontation”.
He made 47 recommendations, including creating a board oversight committee, improving HR and managerial training, limiting alcohol at work events, and banning relationships between employees and their bosses.
Although Holder hadn’t recommended it, the scandals prompted Kalanick (40) to take leave.
“Recent events have brought home for me that people are more important than work and that I need to take some time off the day-to-day . . . to reflect, to work on myself and to focus on building out a world-class leadership team,” he said in an email to staff.
“The ultimate responsibility for where we’ve got and how we’ve got here rests on my shoulders. There’s of course much to be proud of but there’s much to improve.
“For Uber 2.0 to succeed there’s nothing more important than dedicating my time to building the leadership team. But if we’re going to work on Uber 2.0 I also need to work on Travis 2.0 to become the leader this company needs and that you deserve.”
IT’S not just the turmoil at his start-up the embattled CEO has had to contend with recently. In May his 71-year-old mother, Bonnie, died in a boating accident in California that also left his father, Donald, in a critical condition. A preliminary report indicates the boat struck a rock and the occupants suffered injuries from the collision, the Fresno county sheriff ’s office said in statement.
Kalanick had a special bond with his mom, a source close to the family told CNN. Just more than a week before the accident he shared a Facebook post for Mother’s Day with photos of them together. “I appreciate my mom, her infinite love and huge [heart] more and more,” he wrote.
So time off is clearly in order for the serial entrepreneur, who sold his peerto-peer file-sharing company Red Swoosh start-up for $19 million (then R123 million) in 2007.
But even in the wake of what an Uber statement referred to as Kalanick’s “unspeakable tragedy”, critics of the university dropout say the best thing for the tech giant would be for him to step down altogether.
“If I were on the board I’d find a way to get rid of him,” said Michael Barnett, a business and management professor at Rutgers University in New Jersey, USA.
British business magnate Richard Branson said recently that Kalanick should have stepped away from the dayto-day running of the company years ago.
“An entrepreneur isn’t a good manager of people and Travis Kalanick is definitely not a good manager of people,” the Virgin Group founder said at an AccelerateHer event in London for female start-up founders, where Uber’s sexism scandal was a hot topic. “He should have realised that long ago, and done what he was good at.”
His thoughts echo the sentiments of Time magazine’s Katy Steinmetz and Matt Vella, who point out that Uber didn’t take the route of other wildly successful tech firms such as Google or Facebook, “which famously brought in ‘adults’ Eric Schmidt and Sheryl Sandberg to help manage a growing enterprise”. Instead the “brazen and nakedly capitalistic” co-founder stayed at the helm.
Schmidt, CEO of Google parent company Alphabet, told Time what he thought of his Uber counterpart in 2015: “[Kalanick] is a fighter. He’s against institutional structures. He can be disagreeable in that sense that, well, he disagrees.”
MANAGERIAL issues aside, the idea of having the man who once referred to Uber as “Boober” – because of how often he’s propositioned by women due to his position – at the helm of a company embroiled in a scandal such as this has many hot under the collar.
Indeed, in an internally infamous “Miami Letter” email he sent in 2013, which was leaked this year before a company retreat in Miami, Kalanick dished out flippant guidelines on sex with colleagues.
“Don’t have sex with another employee UNLESS you’ve asked that person for that privilege and they’ve responded with an emphatic, ‘YES! I’ll have sex with you’,” he wrote.
Adding fuel to the raging fire is a video of an aggressive Kalanick arguing with one of his own Uber drivers over prices. He completely loses his temper and shouts at the driver, “Some people don’t like to take responsibility for their own s**t.”
At an “all-hands meeting” in the wake of the scandals, board member Ariana Huffington vowed the company would make another change. According to those present and a video of the meeting she declared there would no longer be hiring of “brilliant jerks”.
Take that, Travis.