An Uber Mess: Can It Be Fixed?

When we last checked in on the entrepreneurial car service Uber here at Liberty Nation, they had just lost their president, and the beleaguered executive was facing a media firestorm criticizing his leadership.  In the two months since then, how has Mr. Kalanick fared?  Not well, but the Titanic does appear to be stabilizing. For Uber users, this comes as somewhat of a relief.

In spite of himself, Kalanick may finally be at a turning point.  This comes not a moment too soon, as pressure to succeed mounts after a reported $708 million loss in the first quarter of this year, a looming internal investigation into sexual harassment, and a lawsuit by a former Google company (Waymo) that looks like it is wading into some very rough seas.

To reform the company’s image, the senior leadership is making many personnel changes.  This week, human resources terminated twenty employees as a result of a harassment probe, in response to widespread allegations that the culture at Uber condoned and encouraged such behavior.  Additional firings are expected of the coming days, as outside investigators finalize their inquiries into over two hundred internal complaints.  Meanwhile, former U.S. Attorney General Eric Holder is continuing a separate investigation into Uber on behalf of the company.  When the final results of these inquiries are released, expect a bombshell.

Not all staffing changes are the result of attrition.  To bolster its image as a boy’s club, Uber has hired two prominent women for executive positions.  Bozoma Saint John, the former head of consumer marketing at Apple, will assume the role of chief brand officer.  Her mission?  “Turning Uber into a brand that people love as much as Apple,” according to a profile by Business Insider.  Frances Frei, another hire, hails from Harvard Business School where she was a professor.  She will serve as Uber’s senior vice present for leadership and strategy. Her past focus on gender and diversity problems in the workplace lends itself perfectly to the Uber environment. Her goal, according to Recode, “is to make this a world-class company that can be proud of itself in the end, rather than embarrassed.”

Assuming these new hires are empowered by Kalanick to act as real change agents, instead of merely serving as symbolic set pieces for company photos (Saint John is black, and Frei is a lesbian), brighter days may lay ahead for the struggling business.  However, there are still vacancies aplenty left to fill, including the president role, as well as that of chief financial officer – the latest C-suite executive to jump off the sinking ship.

So, the company itself has had some ups and downs, but what about personal development on the chief executive’s part?  It appears that his closet is much deeper than initially thought, with no shortage of skeletons adorning its walls.  In a bizarre story by Bloomberg, reporters have unearthed even more evidence of the character of the man leading the world’s largest ride-hailing company.  As recently as 2014, Kalanick was seen in a South Korean escort bar “where patrons could summon women wearing numbered tags to their tables.”  A female employee of Uber reported his behavior to human resources.  The company did nothing.

In a separate incident in 2014, an Uber driver in India raped his passenger, who sued Uber (successfully) for $3 million.  The lawsuit helped to launch safety-related changes for Uber’s operations in the country.  In response to this tragedy, Kalanick reportedly committed the cardinal sin against women – by questioning the story of the victim.  According to Bloomberg, “after the driver was convicted, Kalanick continued to express doubts to friends and colleagues about whether the woman had been raped.”  Someone get this guy on the phone with Hillary Clinton for some pointers in how to successfully shame an accuser into silence, or at the very least see if Ms. Clinton is available to defend the driver in an appeal.  This story comes out as the executive in charge of that division was recently fired for misconduct in his role during the investigation.

In all fairness, we should go easy on Kalanick.  He may finally be growing up.  The stories about his past indiscretions are fading into history, and his decisions today bode well for the future of the company.  It may not be a stretch to think he may end up stepping down altogether.  His personal life just experienced a massive dose of tragedy: as a result of a boating accident at the beginning of the month, his mother passed away, and his father is in critical condition.  Such personal tragedies often force change or growth or both.  As the broader Uber drama unfolds, it will be interesting to see the role that Kalanick plays.  If he can manage to turn the company’s image around and fill the vacancies on his staff with capable people, there may yet be a successful IPO in the future.