Tough job for Uber: Changing its culture

SAN FRANCISCO >> The day after he became chief executive of Uber almost one year ago, Dara Khosrowshahi met with company employees. While he introduced himself and talked about what he hoped Uber could accomplish, he also didn’t mince words about the reality facing the ridesharing giant.

“We’re in a battle here, and I think everybody knows it,” Khosrowshahi said during the meeting. “And right now, Uber is in some trouble as far as public perception goes.”

Today that battle is taking on signs of a war of attrition.

In the 11 months since joining Uber, Khosrowshahi has made notable efforts to clean up the company’s reputation as a haven of bro culture, where reports of workplace harassment and discrimination were commonplace. But the “new” Uber also has taken some painful steps backwards, as embarrassing situations involving company executives continue to hamper its internal and public recovery.

As part of his efforts to put a new face on Uber, Khosrowshahi has appeared in television ads to empha-

size the company’s commitment to respect for its employees and customers.

But a series of incidents in July alone illustrates how much work Uber still faces to repair its public image.

Liane Hornsey, Uber’s head of human resources, stepped down this month after reports that she had dismissed looking into some cases of reported racial discrimination at the company.

At the time of Hornsey’s resignation, Khosrowshahi, in an internal Uber note acquired by this news organization, called Hornsey “incredibly talented, creative and hard-working” and noted her accomplishments, which, he said, included “revamping our recruiting and hiring processes to reduce bias; and greatly expanding our employee resource groups.”

There was no mention in Khosrowshahi’s note of Hornsey’s work on racial discrimination claims.

On the heels of Hornsey’s departure, Chief Operating Officer Barney Harford became the target of internal

company complaints after he made remarks about women and minorities, including his questioning of an Uber ad that featured a mixed-race couple. Harford is still with Uber.

In a statement, Khosrowshahi admitted that the company continues to stumble in attempts to revamp itself.

“Cultures are not built or rebuilt overnight. People learn, companies learn, CEOs learn,” he said. “We’ll make mistakes along the way, but one thing is certain: we will improve, substantially.”

And last week, The New York Times reported that Uber is under federal investigation for discriminating against women in hiring and pay levels.

“The work is never going to be done,” said Uber spokeswoman MoMo Zhou. “We want to be on an upward trajectory, and we want people to want to stay at Uber. But there are so many things we can be doing better.”

However, such matters grab the public eye and make it difficult for Uber to prove it is getting its house in order.

The spotlight on Uber was at its sharpest in February

2017, when Susan Fowler, a former company engineer, published a blog post on Medium.

In it, she outlined allegations of sexual harassment against an Uber manager who was protected by the company’s human resources team. Reports emerged of drug-fueled company parties and advice from then-CEO Travis Kalanick on how to approach co-workers for sex.

And Kalanick did himself no favors when, also in February 2017, a video surfaced showing him verbally berating an Uber driver who had asked him why the company had dropped some of its service fares.

Uber’s board then commissioned an investigation into the company’s internal operations and workplace environment.

That report, which was headed by former U.S. Attorney General Eric Holder, provided 47 recommendations for Uber, which included reallocating Kalanick’s responsibilities, increasing the profile and status of the company’s diversity head and regularly publishing statistics about Uber’s diversity makeup.

Uber acted on the Holder Report, as it is known.

Among the steps the company took was replacing Kalanick as CEO with Khosrowshahi and hiring Bo Young Lee as its first chief diversity and inclusion officer in January of this year.

And in April, Uber distributed its most recent diversity report, which showed mild gains for women in tech jobs over the past year.

“There were a lot of things that we weren’t focused on because we focused on growth,” Zhou said. “Our priorities always include building a culture where every person, regardless of race or gender, is respected. There’s still a lot of opportunity to work on that. Ultimately, we are not going to be a good company unless we do this.”

Adriana Gascoigne, CEO and founder of Girls In Tech, an organization specializing in engaging with young women and helping them develop skills to succeed in tech industries, said that over the past year, Uber has proven it can learn from its past mistakes. The recent slate of issues just shows how much work still needs to be done.

“They have done some things right,” Gascoigne

said. “Travis resigning was one thing, and hiring a new CEO was another. But Liane Hornsey is a black eye from the outside. Her leaving is a really deflating and demoralizing situation.”

In the opinion of some who watch Uber as a business case, the company could start showing that its culture is changing by no longer acting as if it’s still some kind of scrappy, underdog startup. While Uber remains privately held, it has an estimated valuation of $72 billion, according to documentation from the settlement of an autonomous-driving technology suit with Alphabet owned Waymo.

To put that valuation in some perspective, publicly held Tesla has a market capitalization of almost $55 billion.

“It would behoove them to think of themselves not as young anymore. They need to get over themselves if they think they are small,” said Kellie McElhaney, a professor and founder of the Center for Equity, Gender and Leadership at UC Berkeley Haas School of Business. “They have a global impact, and they need to clear their issues up significantly before going public. These culture issues might not be their No. 1 priority, but they have to be right up there.”

It also would help if those priorities were stabilized before Uber goes public. In May, Khosrowshahi told CNBC that the company is on track for an initial public stock offering in the second half of 2019.

Steve Blank, adjunct professor at Stanford University, said the problems that keep impacting issues such as Uber’s approach to diversity, discrimination and pay discrepancies shouldn’t be overlooked. He also noted they are not uncommon for a company that has upended and disrupted an entrenched transportation delivery industry that has been operating a certain way for more than a century.

“They are a company that grew way past its startup roots and didn’t put in place the means, tools and systems to deal with these issues properly,” Blank said. “But they are refactoring the business, and I think they are getting things together. But these things do take time.”