The year 2017 was a tough one for Uber Technologies Inc. An Uber engineer posted a blog called “Reflecting on One Very, Very Strange Year in Uber,” in which she detailed, among other things, a culture of harassment at Uber. Almost at once, Uber values that symbolized its “win at any cost” way of doing things (values like “builders build, always be hustlin’,” and “meritocracy and toe stepping”) were called into question. In the following months, scandals seemed to haunt both the company and its CEO, Travis Kalanick. Letters were released to the press which confirmed unpleasant attitudes came from the top down—including from Kalanick himself. Kalanick was also caught on video arguing with an Uber driver about lowering fares, which did not strengthen his image in the public eye. So in 2017, not only was Uber’s core employee turnover too high, but six top executives stepped down, including the president, finance head, senior vice president of engineering, and CEO Travis Kalanick.

His resignation comes after a chaotic few months at the firm, including a series of scandals about harassment, macho culture and the departure of senior executives. Mr Kalanick's reputation for ruthlessness and machismo has led to some deeply uncomfortable reports about the culture inside Uber: with persistent stories about organizational sexism and disputes with drivers over their terms and with local authorities and taxi companies.

Uber's relationship with drivers takes a hit, and news reports investigate "dangerously long shifts" to take advantage of fleeting incentives and bonuses. Dropping fares and profitable incentives lure the drivers to keep driving past safe limits because Uber does not set a cap on how many hours its drivers can work at a time. Uber also admitted it had been underpaying drivers in the NYC area for two years and promised to pay drivers $900 each in compensation. It’s a problem compounded by the fact that Uber offsets its operation costs by making drivers pay for them, which often makes it hard for Uber’s drivers to make money at all because the company calculated its commission on the gross fare, resulting in more money for Uber and less for drivers.

Uber’s Board of Directors retained former attorney general Eric Holder, Jr. to conduct an analysis of Uber’s culture. Holder’s recommendations provide insight into the problems Uber needed to address. The lawyers recommended, for instance, that Uber: prohibit romantic relationships among employees where one person reports to the other; institute guidelines on using alcohol and controlled substances at work; adopt a zero tolerance policy with respect to harassment, discrimination, and retaliation; broaden its recruitment practices to include sources of minority job candidates; and that the Board of Directors create a special ethics and culture committee.

Even after all those efforts, the company’s image was badly tarnished in recent years by revelations of an abusive office culture, active deception of the authorities around the world, accusations of theft involving a rival’s technology and open defiance of regulations governing ride-hailing operations. The scandals have had real financial impact, with Uber losing significant market share in the United States to Lyft, the No. 2 player there. Uber, which is based in San Francisco, is also facing the consequences of its past behavior in overseas markets like London, its most profitable city. In September 2018, regulators refused to renew Uber’s license to operate in the city, saying the company was not “fit and proper” to run a passenger transport service.

Uber was much less accommodating in Southeast Asia. The Competition and Consumer Commission of Singapore says Uber and Grab reneged on a promise to brief it fully on the details of the transaction before the deal was announced. (Uber says its lawyers provided an informal briefing a few days earlier.) The commission forced Uber to keep its app going until May 7, several weeks after the app was set to shut down, and barred Grab from raising prices for consumers or cutting payments to drivers while it considered whether to reverse or modify the transaction.

When antitrust regulators in the Philippines ordered the companies to maintain independent operations while they reviewed the deal, a top Uber executive in the region, Brooks Entwistle, responded at a public hearing: “Uber exited eight markets, including the Philippines, as of Monday. Now, I look after 10 markets, instead of 18. Our funding is gone. Our people are gone. We don’t intend to come back to these markets.”

Go-Jek, the leading ride-hailing company in Indonesia, said last week that it would invest $500 million to expand in other Southeast Asian countries. Upstarts like Ryde and Hype have also announced plans to enter some of the markets abandoned by Uber. Grab and Uber both point to that emerging competition as a sign that their combination does not violate antitrust laws.

“While it wasn’t an easy call, ultimately it was the right thing to do for Uber and our shareholders,” the company said in a statement. “We are absolutely committed to being true partners to cities for the long term, and this deal doesn’t indicate otherwise.”

Mr. Kulkarni, who heads research at SharesPost, a San Francisco marketplace for trading shares in private companies, said that although Uber’s culture was changing, the very nature of its business meant that it would keep upsetting the authorities.

QUESTION

a) To encourage Uber drivers, who are not employees but partners, to be productive, set up the right incentive system. Explain whether the scheme is different from the incentive scheme for non-driver permanent employees at the Uber office?

b) To encourage Uber drivers, who are not employees but work partners, set up appropriate benefits. Explain whether the scheme is different from the benefit scheme for non-driver permanent workers at the Uber office!

Answer rating: 100% (QA)

aYes the incentive scheme for Uber drivers is different from the incentive scheme fo... View the full answer