What’s going wrong at Uber?
It was launched barely seven years ago. In that time it has expanded explosively to be present in more than 570 cities in the world. It had revenue in 2016 of $6.5 billion, and its market valuation of $70 billion makes it the world’s most valuable tech startup. It has brought easy and cheap transportation to millions across the globe.
And yet Uber is in deep trouble.
I have been an enthusiastic Uber advocate on this page, even before it arrived here in Kenya. And there can be no doubt at all: Uber has revolutionized the taxi business everywhere it has landed. It conceived a marvellous mobile app that connected people seeking cabs with drivers willing to offer services. It brought convenient travel and income opportunities to vast numbers of people.
But now, the sheet of charges against the company is way, way, too long. It has always been a fractious enterprise, seeming to relish its many fights against regulators and traditional taxi drivers in market after market. But in those fights it knew its customers were on its side. Now, things have taken a different turn.
Uber is in court fighting charges of stealing a rival’s autonomous-driving technology. It often faces battles with its own drivers, not just rivals. It reportedly unearthed the private medical records of a passenger in India who had accused an Uber driver of rape in 2014. It is being investigated for allegedly deploying software to evade transport regulation.
If that litany of offences was not enough, the company’s toxic, sexist culture was recently outed by a former employee. The picture painted was of a company run more like a hard-drinking frat party than a serious corporation. An enquiry into sexual harassment was commissioned, and has just handed in a damning report pointing out gaping holes in governance and people practices.
Bizarrely, during the very event where the new recommendations about tackling sexism were being unveiled to staff, a board member made a dumb sexist remark – and had to resign immediately afterwards. You can’t make this up.
Most of the company’s senior officers have left, either to escape embarrassment, or following board pressure to clean up the act. And now, even founder CEO Travis Kalanick is gone, first announcing a leave of absence and then finally bowing to intense investor pressure to step down.
How did it come to this?
Frankly, I don’t think we have to look any further than Mr Kalanick himself. His values are the company’s values; the boozy, confrontational culture that has been created is exactly how the founder conducts himself. That boldness may have been what propelled Uber to dizzy heights so rapidly; but now it has landed the corporation in a morass of reputational damage. The fear is that more scandals lurk in the shadows. Market share in core markets is now declining; and top talent is staying away from the flailing company.
There’s a leadership lesson here. Insolent aggression and disdain for criticism may be forgiven when you are the founder and key shareholder in a startup; but they become serious liabilities when you head a major corporation with wider responsibilities. No matter how awesome your talent, being the CEO of a global firm will not be entrusted to a jerk. Even the late, great Steve Jobs needed a period in the wilderness to grow up and calm down.
Uber will still be used by its customers, of course it will. It is a great product and a whole new way of organizing private travel. But it needs to grow up rapidly. I wrote elsewhere recently that Uber looks too much like a bunch of lads playing with cars and gleefully annoying all the grownups. It should put all that behind it and address its global market-leader role with more maturity.
There is a another problem. Those great fares we all appreciate? They are heavily subsidized. Uber made losses of $2.8 billion last year. It will only really make money if it can make the transition to driverless vehicles. Will it get there?
In the meantime, is it really impossible for businesses that invent wonderful things and make the world better to also behave properly? Do they always have to skirt the edges of decency and legality? Do people who over-achieve need to be arrogant and obnoxious egomaniacs? Business should be a far bigger deal than some of us make it.
(Sunday Nation, 25 June 2017)
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