The beginning of the week was marked by impossibly shameful video starring with Travis Kalanick, CEO of Uber, acting like a jerk with one of his drivers. Ended the week with an explosive news a secret and legally questionable program called Greyball. For any other company this concentration of bad news would be a disaster. For Uber it was just another February week.
Over the last months service without stopping was embroiled in new scandals almost every week and continues to wallow in them every day for the last two weeks. The company is accused of many things: from acute misogyny and ending with the exposure of their faulty unmanned vehicles, control technology, which, besides, could be stolen.
It is worth to dot the “i”: the problems Uber struck like thunder from a clear sky in January or February of this year. Since its founding six years ago, the company started burning the capital, the irritation of the drivers repulsion customers and the carrying of chaos.
Militant pressure needed for Uber in the beginning, when the company aimed to reshape the shipping industry in a taxi and fight your way across the globe, while trying to become the only and indispensable method of transportation for virtually everyone. But it’s time to reap the rewards, and, apparently, Uber has no idea how to cope with such fruit.
“They dug for themselves too deep a hole,” says Freada Kapor Klein, partner at venture Fund, Kapor Capital. She and her husband, entrepreneur Mitch Kapor, are investors in Uber. “Now the company has to recognize that they are in the pit, while desperately trying to get out of it. No matter how many it may take time and how it can be difficult. In any case, it is feasible”.
Today Uber is waging battles on several fronts, which greatly complicates the development of a single adequate strategy. At the same time, each new day reveals more and more unseemly secrets related to the conduct of Affairs in Uber.
How can a company increase the already critically low level of morality among the employees when Susan Fowler, a former engineer of a company whose blog post became the basis for the investigation of sexism, complaining that the company has hired a separate law firm to investigate her? The leadership of Uber, in turn, argues that taking into account only the statements of Fowler and not her private life. However, such events correspond to the template on which the company hires third-party legal entities for the conduct of investigation against his opponents. It is too dubious even for a business with a dubious reputation.
January 28: the company is accused (wrongly, as it turned out) in the failure of the strike of taxi drivers in new York during anti-immigration protest at the International airport of a name of John Kennedy.
January 28-29: the solution to Travis Kalanick, CEO of Uber, on the participation in the economic Advisory Committee of President Donald trump leads to a mass Exodus of users, creating the hashtag #DeleteUber.
30 Jan: Lyft, Uber’s main competitor, for the first time ahead of Uber in the app stores for iOS and Android in the U.S. about 200,000 new downloads. The company Lyft also announces the intention to expand to 100 new markets in 2017.
February 2: Kalanick refuses to participate in the Committee and trump promises $ 3 million. to help stranded abroad drivers. This happens only after 200,000 users and remove their accounts to the Uber app. Kalanick promises are not taken seriously.
16 Feb: presumably, Jeff Jones, President of distribution of trips in Uber, Facebook holds a conference to consider complaints from taxi drivers. The conference is interrupted after 30 minute and 12 questions due to extremely escalate the situation.
20-21 February: former Uber engineer Susan Fowler makes a revealing post on his blog, details talking about sexist attitudes and harassment at the company’s headquarters in San Francisco, and also about the failure of the HR to solve these problems. The post becomes viral.
20-21 February: Kalanick promises quick investigation involving former attorney General Eric holder and Board member of Uber Arianna Huffington. He also holds a meeting for all employees of the company, bringing a dry apology for a toxic atmosphere in the firm.
February 23: two previously invested in Uber, Mitch Kapor and Fred, publish an essay, expressing his “deep disappointment” regarding the decision of Kalanick to entrust the investigation to insiders and supporters of the company.
Feb 23: Waymo, a manufacturer of unmanned vehicles by Google, is suing Uber, accusing the Vice President of the Anthony Lewandowski in the theft of a huge amount of documents while working at Google as an engineer. Uber calls the accusations “baseless”.
February 24-March 3: several employees of Uber say about the sexism and harassment (some openly and some anonymously). Meanwhile, The New York Times publishes an article about the “outrage” going on in Uber, including jokes, common among managers-men employees-women, information about drug use, homophobic abuse and the facts of the attack with a baseball bat.
25 Feb: it turns out that one of the unmanned Uber cars caught on camera in December 2016 in San Francisco at the red light, was conducted in Autonomous and not in manual mode, as stated in Uber earlier. Correspondence with the Department of motor vehicles of the state of California shows that Uber have prior knowledge of such infringements of work of the machines.
February 27: the Executive Director, Uber has offered to resign for failing to remove allegations of harassment while working in Google.
28 Feb: Bloomberg publishes the video of Kalanick, arguing over prices with one of the Uber drivers. Kalanick accused the driver instead of taking responsibility for the reduction of tariffs of the service. After the video literally infects the network, Kalanick gives a public promise to seek help regarding the management of the company.
3 March: The Times reveals the real purpose of the program Greyball.
March 3: dismissed the Vice-President of product and growth ed Baker about the rumors on sexual intimacy with one of his colleagues, reports Recode.
March 20: President of Uber Jeff Jones leaves the company.
As Uber can only think about the return of the frustrated drivers, while driving the litigation with the city of Seattle for the abolition of a law permitting drivers to unionize? More recently, the company called 2017 the “year of the driver”, but still keeps wages low and resists attempts to add in-app option to tip. The perniciousness of the impact of Uber on the American market is still being assessed. It is worth noting that the available data are rather contradictory. With confidence we can say only one thing: Uber is not committed to improving the conditions offered to its employees (the company doesn’t even consider their own employees). The Federal trade Commission in 20 cities found that Uber lied to employed drivers of income and car maintenance. Some drivers forced to sleep in their cars to istexas and continuously replacing each other, to survive.
Like Uber to convince investors that it can become profitable again, while subsidizing the cost of travel? Recent reports show that users to cover only about 40% of each travel, while the company is forced to cover the rest. “It is important to consider, because we are talking about a charity case,” last year wrote Izabella Kaminski in the Financial Times. Currently, Uber is estimated at $ 70 billion. Travis Kalanick waits this amount will reach an unprecedented $ 100 billion. According to venture capitalists, the struggle for the increase of capital may deter talented people that ultimately will only hurt Uber.
And how did Uber manage to win the trust of customers after so many a stain, which from the beginning has carried out such a brutal fight? No matter how many times the President of the company will apologize and promise to change their behavior, will still be difficult to make people forget about all the occasions when he acted like a complete asshole. Kalanick is the face of your company, and although he’s not the only one in Silicon valley who built his multibillion-dollar Empire on the ideas of Ayn Rand (envy, selfishness, win at any cost — all in the name of changing society), it remains the most public face in that Valley.
Rumor has it that Ryan graves, Uber’s first employee and current Director, global operations will be forced to give up their powers in favour of those who are demanding punishment for the charges Fowler. Reporter Joanna Buyana of Recode also notes that the head of human resources Renee Atwood was directly subordinate to the graves. and, accordingly, reported to him.
Atwood and some other managers felt that “the graves were not sufficiently experienced in matters relating to the employees,” says Bhuyan. The graves were also involved in the use of Greyball, illegal program to hide the car from law enforcement.
Some current and former employees believe that the withdrawal of graves. will not solve the problem. They say that he was not involved in the everyday life of the company for the last 6 months. Moreover, his dismissal is unlikely to be able to correct the toxic atmosphere. On the other hand, the resignation of Kalanick could lead to real change. “Steve jobs left Apple, and the Apple continues to exist,” says one of the former employees of the company.
Of course, Uber outlet on the world market is a merit of Kalanick. He fought hard for that Uber got to where he is now. The nature of combat has served him well in battles with the taxi industry and public services. But it is because of such militancy is more noticeable in recent times the soft side of Kalanick with her apologies and promises to take the help and become a better leader seems hard acceptable.
“Try to spend all my time in the fight. Surely your character will become stiff and hardened,” says Jason Calacanis, founder of Inside. com and the Uber investor, to CNBC.
According to The Information, Kalanick looking for a second Executive Director to share with him his authority. But how powerful will be this partner, will be carefully considered and discussed with investors, who sincerely hope for change.
Bradley Tusk, a consultant, called “a political genius Uber”, sees the error in produce hypotheses the title of this article (“Can the Uber to escape..?”). “That name is nothing but shilling, “clickable” title”, — Tusk said in an interview. “Our company has work to do as there is work to do and many other technology firms. Innovation is what most concerns investors, so, despite the decrepit cabs, trucks, leased and own car our startup by far is ahead of all them for its innovativeness”.
The question that really cares about customers, is it not becoming harder and harder to trust Uber, Task instantly finds the answer: “Uber has work to do, no doubt. But when we are talking about moving from point A to point b, customers choose speed, not politics.” In other words, Uber will lead to until will remain faster than their competitors.
If nothing else it will shake company, putting her in a bad light, then Uber will be able to survive this bad patch, and to stay afloat. However, there is a theory that all the ills of the company lies in the inability to find and maintain talent, and to grow and develop as a firm.
“If they are not able to organize the process of work comparable to Facebook or Google, there is nothing to think about the promises made to investors”, — shares his thoughts one of the former engineers Uber. “The customers are too picky and fickle. There are numerous examples of companies that allowed in the past and silly mistakes, it would seem that reprehensible. But people realize that bad things come to an end, and, certainly, they are not the only thing you can describe the company”.
Despite the revenue growth, Uber continues to lose money. According to Bloomberg, in 2016, the company lost $ 3 billion. On paper Uber is worth more than General Motors and Twitter combined, but if things go on like this, investors assume that Uber will have to take a greater percentage of the fare for each trip and reduce the bonuses to the drivers. Both these measures reduce the cost for drivers. As the driver notes-blogger Harry Campbell, it’s already starting to happen. “Too controversial for 2017, “informed the driver,” he said.
According to the published financial documents, the transition to driverless cars will not improve the situation. Accountants Uber calculated that full removal of the drivers will increase the net profit of only 5%. It is assumed that the city authorities will try to establish a fixed cost Autonomous travel. Uber will also have to change your profile from technology company to company fleet management, with all the extra costs of maintenance and insurance that go along with it. It will be expensive.
Of course, all of the above shows that Uber has a future. Currently company has Autonomous vehicles picking up passengers in Pittsburgh and Phoenix (and maybe soon in San Francisco). The charges in court Waymo, Google-manufacturer of Autonomous cars, might represent the biggest threat to the long term survival of Uber. In Waymo claim that Vice President, engineering Anthony Lewandowski conspired to steal and to use Google’s technology to unmanned vehicle control. Uber calls the accusations “unfounded.”
“Uber is losing money, experiencing a lack of fundraising and fighting serious accusations that the internal culture has gone astray,” says Raj Rajkumar, Professor of engineering at Carnegie-Mellon, which has partnered with General Motors. “And now will face a lawsuit from the company with great credibility and much bigger pockets.”
The Rajkumar adds: “a Big problem related to the current business model of subsidizing drivers and customers, soon overtaken by the company. Discussion about the aggressive culture, where, apparently, the emphasis on performance and deadlines, and not enough on mutual respect, integrity and diversity will continue to increase. In the end, the main question will be, whether the Board and the investors of any action”.
Waymo sues, citing the Law on protection of commercial secrets, which gives plaintiffs the right to demand immediate publication of a temporary restraining order against experiments with robots and trucks, Uber, and to withdraw the products of trade secret theft. In other words, Google can become the owner of the Park-driving cars Uber.
Both companies are equally disadvantageous to a long investigation and litigation, entitling the authorities to carry out endless research and development experiments. However, former prosecutors and experts in the trade secret tells Wired that Waymo may refer the matter to the FBI, which will lead to huge fines and possible imprisonment of Anthony Lewandowski. A photo of one of the Directors of the company Uber in handcuffs can put the entire firm in the world.
How did it come to such a state? In many ways, Uber is its worst enemy, says Brishen Rogers, a law Professor at temple University who writes about the cost of the trip. “We are seeing another example of a company that ignores the basic rules concerning the recruitment of workers and fair competition in the market. It hurts to see how the company continues to have his way. But Uber services are truly innovative,” says the Professor.
Hard to imagine what will turn to Uber all these charges in the long term, especially given the fact that the company entered the world market and the norms governing sexual harassment differ in many countries. However, the public tend to view allegations of sexual harassment and discrimination more negatively than allegations of non-payment of wages or the theft of trade secrets, which explains the rather quick response of the Uber to the situation.
“There are enough clever people, said a former engineer of the company. — Is it really what we should be doing? We seem to have enough problems. So why do we still continue to fight with ourselves, becoming the cause of all their problems?”