Part C Case Application : Bad Ride, Bumpy Ride

You could say the beginning of the end for Uber founder and CEO Travis Kalanick was the February 2017 blog post by former Uber engineer Susan Fowler that outlined a toxic work culture hostile to women and filled with managers (from top down) willing to turn a blind eye to abuses of employees, competitors, customers, laws, law enforcement officials...you name it.

According to the companys website, Uber started (like many entrepreneurial businesses) because of an annoying problem.49 Travis Kalanick and a friend were having trouble hailing a cab on a snowy Paris evening in 2008. Their solution (although it didnt help them with their immediate problem): Wouldnt it be great to just tap a button and get a ride. Thus, the Uber app was conceived. And it totally disrupted an industry! Today, Uber is the worlds biggest ride-hailing company, a global service with more than 14,000 employees in more than 600 cities. And it became the most highly valued startup in history (to the tune of some $70 billion).50 But the founders aggressive style and approach to doing business was fraught with danger, especially as seen in the values that shaped Ubers culture.

Kalanick, a tech entrepreneur who had already sold one startup for almost $19 million, shaped Ubers mission around certain foundational beliefs: pursue hypergrowth at all costs; win at all costs; be confrontational, but be principled; and mottos such as Always Be Hustlin and Toe-Stepping.51 And quite interestingly, nowhere was there any indication that collaboration and teamwork were valued. After the Fowler blog post, others came forward to describe a baller work environment where achievements were celebrated by chest bumps and where males would engage in push-up contests. Although that type of atmosphere is not criminal, it likely alienated female employees and other employees who didnt want to get caught up in that type of behavior.

As if these corporate values and culture werent enough, there were the decisions and actions by Kalanick and other managers. Here are just a few examples:

A dashcam video went viral of Kalanick heatedly arguing over fares with an Uber driver.

A New York Times report was released on a secret Uber technology, called Greyball, that the company developed to identify and deny service to riders who had violated Ubers contractual terms.

After a horrific rape of a 26-year-old passenger by a Uber driver in India, the companys president for the Asia-Pacific region somehow obtained and shared the confidential medical record. Executives proposed an outrageous theory that the rape might have been a setup by an Indian rival.

The company, which had a reputation for ignoring local labor laws and taxi rules, had become a favorite target for law enforcement officials. So, the company routinely used a remote system to lock down office equipment to shield files from police raids.

Key executives, drivers, and employees at rival ride-hailing companies were secretly spied upon for the express purpose of acquiring trade secrets.

A data breach was hidden for over a year.

Unsafe cars were knowingly leased to drivers in Singapore.

After months of trying to cope with all of the issues and not getting anywhere, some of the firms biggest investors eventually forced out Kalanick. It was felt that a change in leadership would provide Uber with the opportunity to refocus and recreate a new culture.58 The boards new choice for a CEO was Dara Khosrowshahi, Expedias CEO. Khosrowshahi faces a host of challenges, including replenishing Ubers depleted executive ranks and implementing changes mandated by the board to address allegations of ignored complaints of sexism and sexual harassment. Khosrowshahi also needs to focus on Ubers finances. Internal sources say that the new CEO is 180 degrees different from Kalanick: humble, a good listener, and a diplomat.59 Maybe the ride will be smoother now!

Discussion Questions

1 What roles does a CEO play in an organizations culture? What role do other leaders/managers play?

2 Describe Ubers culture under its founder.

3 Which view of management do you see played out here? The omnipotent or the symbolic? Explain.

4 What advice about organizational culture would you give the new CEO?