Case $5-1$ Travis Kalanick and UberOne dramatic incident occurred in India, where Uber was banned in the Delhi region after a driverwas accused of sexually assaulting a female passenger. Uber issued a statement expressingsympathy for the victim; Kalanick vowed to work more closely with the Indian government toimprove procedures for conducting background checks of prospective drivers. Even so$,$ it turnedout that company executives had allegedly mishandled some of the victims medical records.From the start, Kalanick seemed to relish locking horns with lawmakers. As he told The Wall StreetJournal in $2013,$ We dont have to beg for forgiveness because we are legal. But theres been somuch corruption and so much cronyism in the taxi industry and so much regulatory capture that ifyou ask permission for something thats already legal, youll never get it$.$ Theres no upside tothem.By $2017,$ Uber was valued at $$68$ billionbut the companys rapid growth had been accompaniedby considerable negative publicity. These included the companys use of so$-$called Greyballsoftware that allowed drivers to deny rides to passengers who worked for legal authorities. Anumber of top executives left the company. In addition, during a taxi strike at New Yorks John F$.$Kennedy airport, the companys surge pricing kicked in$,$ and unhappy customers launched a#DeleteUber social media firestorm against the ride$-$sharing pioneer for price gouging.Perhaps most troubling were allegations of sexism and sexual harassment at the company. Theserevelations came to light in February $2017$ when a software engineer named Susan Fowlerpublished a blog post in which she described the sexual harassment that she had endured at Uber.By the end of $2017,$ the #MeToo social media campaign by silence breakers had gainedconsiderable momentum and ended the careers of several powerful figures from politics, media,and the entertainment industry.More broadly, Ms$.$ Fowlers act of speaking out was just one facet of growing public andgovernment concern over the power of Big Tech companies such as Amazon and Google. Someobservers noted that the fourteen values that guided the Uber organizationfor example, letbuilders build, always be hustling, and principled confrontationhad created a toxiccorporate culture.To help address these issues at Uber, the company hired Frances Frei, a professor of servicemanagement at the Harvard Business School. Her title: Senior Vice President for Leadership andStrategy. Frei was tasked with overhauling Ubers corporate culture. To do so$,$ she began teachingmanagement skills that she says had been lacking as the company pursued ambitious growth goals.In her view, one of Ubers problems was that it underinvested in its people.Another key figure is Chief Brand Officer Bozoma Saint John. Hired by Kalanick in the summerof $2017,$ Saint John had an outstanding track record as a marketer at Pepsi, Beats Audio, and AppleMusic. At Uber, she moved quickly to create local advertising tie$-$ins with the National FootballLeague featuring Uber drivers who are sports fans driving friends to the stadium on game day. Asecond tie$-$in$,$ with the National Basketball League, launched nationally. In Saint Johns view, thecampaign, dubbed Rolling with the Champion and featuring ESPN SportsCenter co$-$anchor CariChampion, positioned the Uber brand as the official ride of pop culture.A New Leader Steps InIn June $2017,$ founder Travis Kalanick stepped down as Ubers CEO. A $14-$person executive team,including Professor Frei, ran the company until a new boss could be recruited. The new CEO, DaraKhosrowshahi, came on board in September $2017.$ He immediately set about the task of rebuildingtrust in the brand among the general public as well as with government authorities. Khosrowshahiacknowledged that the companys notoriety had damaged its reputation and came at a cost. In anopen letter, he wrote, On behalf of everyone at Uber globally, I apologize for the mistakes wevemade.Transport for London Cracks DownAfter just a few weeks on the job, Khosrowshahi was confronted by a new challenge: In fall $2017,$Transport for London $($TfL$),$ the British regulatory authority, announced that it would not renewUbers license. The agency had issued Uber its first permit to operate in London in $2012$; the cityquickly became one of Ubers most important markets. In $2013,$ Uber launched UberX, a lower$-$cost ride$-$hailing service, which TfL classified as a minicab service that used private$-$hirevehicles. Thus, in London, Uber was competing with the citys iconic black cabs as well asswelling the numbers of minicabs.The TfL revoked Ubers permit on the grounds that the company was not fit and proper to operatein London. In doing so$,$ the regulatory authority identified four concerns relating to corporateresponsibility and governance. One focused on passenger safety; the TfL faulted Uber for laxreporting of crimes committed by drivers. The TfL also alleged that Uber did not follow the correctprocedures for obtaining medical certificates for drivers and for conducting criminal backgroundchecks. Finally, the agency raised the issue of use of the Greyball software. Uber responded to allfour issues. It noted, for example, that it was the TfLs responsibility to ensure that backgroundchecks had been performed before it issued licenses to drivers.In November $2017,$ Uber suffered another setback. A judge at an employment tribunal in Londonruled that Ubers $50,000$ U$.$K$.$ drivers were, in fact, employees rather than independent contractors.If the ruling stands, it will have far$-$reaching implications for a variety of technology apps that areintegral to the so$-$called gig economy. In Ubers case, it would lead to higher costs by requiring thecompany to pay drivers the minimum wage as well as make provisions for holiday pay, nationalinsurance contributions, and additional taxes.Trade Secrets and Data BreachesMeanwhile, back in the United States, Uber faced a trial to defend itself against charges of stealingtrade secrets$.$ The suit had been brought by Waymo, the autonomous vehicle unit of Google parentAlphabet. Lawyers for Waymo alleged that a former employee, Anthony Levandowski,downloaded thousands of confidential documents prior to leaving to start Otto, a self$-$driving truckventure.Some of the documents included details about Waymos proprietary work on LiDAR, a laser$-$based sensor technology that is integral to autonomous mobility. In August $2016,$ Uber acquiredOtto. The suit was settled in early $2018,$ with Uber agreeing to give Waymo stock worth $$245$million. Uber also agreed to use only its own technology in its autonomous vehicles program.Another revelation during the trade secrets trial concerned a shadowy marketplace analyticsteam at Uber whose role was to gather information, including trade secrets$,$ about foreigncompetitors. According to the evidence presented at the trial, the team had used self$-$deletingmessages to avoid creating a paper trail.There was still more bad news to come. Near the end of November $2017,$ Khosrowshahi announcedthat one year previously Uber had suffered a data breach in which hackers stole the names, e$-$mailaddresses, and telephone numbers of $50$ million Uber passengers and $7$ million drivers. At the time,the company did not report the breach to authorities, opting instead to pay the hackers $$100,000$on the condition that they delete the stolen data. Data privacy authorities in the United States andelsewhere launched investigations into Ubers handling of the situation. Critics noted that Ubersresponse to the cyber hack was yet another example of the companys self$-$defeating corporateculture.Lyft Gets a LiftThe turmoil surrounding Uber has provided an opportunity for Lyft$,$ the rival U$.$S$.-$based ride$-$sharing company. Cofounders John Zimmer and Logan Green are confident that their companyhas the necessary controls in place to ensure good corporate governance and enable it to avoid thetype of pitfalls Uber created for itself.Even as Lyfts driver$-$friendly corporate culture enabled it to take market share from Uber in theUnited States, it was targeting key cities for international expansion. For example, Lyft launchedoperations in Toronto, and top management held a series of meetings with TfL regulatorsconcerning expanding in London.Sources: Sarah OConner, Aliya Ram, and Leslie Hook, Uber Workers Ruling Deals Blow to GigEconomy, Financial Times $($November $1112,2017),$ p$.18$; Leslie Hook, Fixing Uber: The ProfessorDismantling a Rotten Culture, Financial Times $($September $11,2017),$ p$.12$; Newly Purnell, Uber HitsResistance as It Expands in Asia, The Wall Street Journal $($December $4,2014),$ p$.$ B$7$; Julie Weed, InTurnabout, Some Companies Are Rating Their Customers, The New York Times $($December $2,2014),$ p$.$B$7$; John Aglioby and Sally Davies, Taxis Protest against Hailing Apps, Financial Times $($June $12,2014),$ p$.4$; L$.$ Gordon Crovitz, Uber Shocks the Regulators, The Wall Street Journal $($June $16,2014),$p$.$ A$13$; Kara Swisher, Man and Uber Man, Vanity Fair $($December $2014),$ pp$.146,148,150$; AndyKessler, Travis Kalanick: The Transportation Trustbuster, The Wall St