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Business Impact

It’s Time for Uber to Grow Up

Sexual discrimination, explosive lawsuits, and an aggressive CEO all need to be tamed if the company wants to maintain its success.

Uber CEO, Travis Kalanick, says he needs to "change as a leader."

February couldn’t end soon enough for Uber—a month in which business practices at the ride-hailing behemoth spectacularly failed to keep pace with its runaway success.

Rounding out a terrible four weeks for the company was a video showing CEO Travis Kalanick entangled in an argument with one of Uber's drivers, Fawzi Kamel. Ultimately, a discussion about the company’s fare structures—and, therefore, driver payment—resulted in a flare of Kalanick’s temper that saw him yell that “some people don't like to take responsibility for their own shit” at Kamel.

Kalanick has since apologized, sending an e-mail to Uber staff in which he explained that he “must fundamentally change as a leader and grow up,” adding that he is in need of leadership help and intends to seek it. The assistance will need to be wide-ranging, because recently there’s been no shortage of news revealing that many facets of Uber could do with some help.

Earlier this month, ex-Uber engineer Susan Fowler wrote about a "very, very strange" year working at the company, describing scenes brimming with sexual discrimination. Since then, other similar stories have emerged, and a senior engineer departed over sexual harassment claims. Its “aggressive, unrestrained” workplace culture has been widely criticized, and now the company is conducting an investigation into the problem.

Elsewhere, Uber’s autonomous vehicle efforts have also come under fire, as Waymo, the self-driving car division of Alphabet, has filed a lawsuit against it over allegations of intellectual property misappropriation. It claimed that one of Waymo’s former superstar engineers, Anthony Levandowski, covertly downloaded files before he left the company, then used them to design and build new hardware at Uber.

Uber's rush to ready autonomous cars is causing other headaches, too. Its trials of the technology in San Francisco were quickly canceled last year when experiments were started without a permit, but a report this week from the Verge reveals that the city’s Department of Motor Vehicles repeatedly warned it that paperwork was required before it started. (In the week that it operated, one car ran a red light, which Uber claimed was a human driver error—but the New York Times last week reported the car was actually driving itself at the time.)

And back at the start of the month, Kalanick stood down from Trump’s advisory council over the #DeleteUber debacle, in which swaths of the public decided to boycott the ride-hailer when it continued to operate during a taxi strike at JFK Airport. The trouble stemmed from an ill-informed attempt to curry favor by not hiking prices as demand rose, but it clearly backfired.

All told, it's a long list of troubles to hit the headlines during the shortest month of the year. And they’ll be chalked up alongside an ongoing stream of criticism targeted at the company, including, safety concerns, racial discrimination issues, and questionable labor practices.

A generous explanation of the situation might be that Uber is suffering from growing pains. As Bloomberg suggested earlier this week, many Silicon Valley startups are too focused on the task of building a product to notice problems elsewhere in their organization. That doesn't make such issues acceptable, even if it does explain them.

But Uber is eight years old, valued at $69 billion, and operates in 528 cities around the world. It is no longer a scrappy startup, but a global player in the transport industry. During its rise, it has singularly failed to cast off its cocksure “brogrammer” mentality and graduate into a serious company, and instead harbored the kind of gung-ho, product-first mentality that seemingly gives rise to the covering up of sexual discrimination, flouting of regulations, and lack of sensitivity in strategic decision-making.

The results are now, more than ever, playing out in the headlines, and the stories won't disappear unless the company changes. And Uber really does need them to dry up: the #DelteUber campaign saw a resurgence after Fowler published her sexual discrimination claims, and when that happens, customers head for its ride-hailing rival, Lyft. For riders, there's little difference between using either one of the services apart from availability—and if negative coverage continues, drivers, like riders, could simply switch sides.

Kalanick is right to want to grow up: both he and his company need to if it's to be taken seriously in the future.

(Read more: Bloomberg, New York Times, Verge, Guardian, “Alphabet-Uber Rivalry Intensifies Over Autonomous Car Cribbing,” “Uber’s Robotic Taxis Are Headed to San Francisco,” “Ride-Hailing Apps Have a Racism Problem”)

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