The Atlanta Journal-Constitution
Experts: Uber must change at top to cure culture woes
Board considering leave of absence for controversial CEO.
DETROIT — Uber must get rid of leaders who tolerate bad behavior and hire people who don’t — including up to the chief executive — experts say, as the ride-hailing company gets ready to announce significant changes to its culture and management.
Uber’s board has adopted the recommendations of former Attorney General Eric Holder, who investigated its toxic culture of harassment and bullying. Those will be revealed to employees and made public today.
Experts interviewed by The Associated Press say CEO Travis Kalanick should step aside or, at minimum, change his behavior for the company to make progress. Uber’s board is discussing a leave of absence for Kalanick, the combative co-founder who has already acknowledged he needs to grow up and get management help. No decision has yet been made, according to a person briefed on the matter who didn’t want to be identified because board discussions aren’t normally made public.
A CEO’s behavior sets the tone for the rest of the company, says Cindy Schipani, a business law professor at the University of Michigan who has taken part in investigations of corporate conduct. She said Kalanick should resign and save the board from having to oust him.
“That’s where the culture comes from. It has to change at the top, and he has to recognize what he does, his actions, speak louder than anything put on paper,” she says.
It’s unlikely the board could remove Kalanick because of Uber’s stock ownership structure.
Uber Technologies Inc. has been rocked by accusations that it has fostered a workplace environment that condones harassment, discrimination and bullying. A female engineer who left the company has alleged she was propositioned by her manager on her first day of work and her complaints were ignored. In addition, Uber is the target of lawsuits, boycott threats and a federal investigation into claims that it has used a fake version of its app to thwart authorities. It has also been accused of corporate espionage by Waymo, formerly Google’s autonomous vehicle arm.
Amid the turmoil at the world’s largest ride-hailing company, competitors such as Lyft are trying to take advantage, growing ridership and inking technology deals and investments. On Monday, Lyft announced a $25 million investment from Jaguar-Land Rover, which includes providing vehicles for autonomous car testing.
Kalanick has contributed to Uber’s recent woes, acknowledging that he needed a strong No. 2 after losing his temper earlier this year in a profanity-laced argument with an Uber driver over pay. The website Recode.net reported that Kalanick put out a memo in 2013 advising employees attending a company party about having sex with each other. Kalanick also has been facing personal difficulties. His mother was killed and his father hurt last month in a boating accident near Los Angeles.
Experts say Uber’s renegade culture of fighting regulators and skirting laws might contribute to its problems.
“Companies need to evolve and grow through different stages,” said Lisa Klerman, a USC law professor and employment law mediator. “We do see sometimes a startup mentality in the early years of a company’s growth, where they have difficulty adjusting to being a huge enterprise.”
On Monday, Uber said its chief business officer, Emil Michael, is leaving the company. No reason was given for his departure.