Uber Continuing CaseChapter 1: The Exceptional Manager

This part of the Uber continuing case focuses on Chapter 1 and provides an introduction to the challenges the organization is facing. This cumulative cases real-world application of management knowledge and skills is designed to help you develop critical thinking ability and realize the practical power of sound managerial skills for solving problems in your job and career.

Read the cumulative case and respond to the questions that follow.

Getting Started

Legend has it that the idea for Uber arose when tech entrepreneur pals Garrett Camp and Travis Kalanick couldnt get a cab on a snowy Paris night in 2008. In reality, the two had been discussing the notion of smartphone-based technology to summon a town car (luxury car or black car) on demand with the touch of a button for some time. Both men were in their early 30s but had plenty of experience with startups. Camp had recently sold the discovery and recommendation search engine he cofoundedStumbleUponfor $75 million. Kalanick (pronounced cal-a-nick) had launched his first business, an SAT-prep tutoring service, when he was 18. His second venture, a file sharing and service business called Scour, had failed despite Kalanicks great effort and persistence, but in 2007 he sold his streaming-video startup Red Swoosh for around $19 million. UberCab was born in March 2009 when Campalong with former fellow graduate students from Calgary, Oscar Salazar and Conrad Whelan, with Kalanick serving as a mega advisertook the lead in experimenting with the new town car idea.

The company first tested the mobile-app concept in New York, then officially launched in San Francisco in 2011 as a service allowing users to push a button or send a text on their iPhone to request a black luxury car (limo), for only 1.5 times the price of a conventional taxi. UberCab was different from taxicab companies at the time because riders could request service via mobile app or website, track the location of the driver (through GPS on their phone), and know exactly when the car would arrivea concept that would come to be called a transportation network company. The startup was a big hit. In 2011 UberCab changed its name to Uber, meaning super (from the German word ber, for above) after city and state regulators insisted it didnt meet the licensing requirements of a town car or taxicab firm. It also underwent an identity changefrom a company offering luxury rides to a technology company that matched drivers and riders of all sorts.

Seven years later Uber was still headquartered in San Francisco, had over 12,000 full-time (nondriver) employees and about 2 million active drivers globally, was operating in more than 81 countries and 600 cities, and was reportedly worth about $48 billionan astonishing figure for a company that owns few visible assets. It is miles ahead of second-place competitor Lyft, valued at $11.5 billion and now in 300 U.S. cities. Uber, called the most valuable tech company in the world by Business Insider magazine, has raised more capital and grown faster than any startup in history. But the company continues to lose prodigious sums of moneyabout $2 billion a yearand has suffered a damaged reputation after a slew of recent scandals and massive turnover in its executive ranks.

Challenges for Uber

Uber has faced a steep learning curve during its breakneck rise. Challenges ranged from dealing with local city regulations and hiring reliable drivers, says journalist Samantha Kelly, to developing a loyal rider base and scaling [increasing the work activity] at an astronomical rate. Ubers managers have had to meetand are still having to meeta great many other challenges.

In Chapter 1 you learned of Seven Challenges to Being an Exceptional Manager. Many of Ubers difficulties that we will discuss throughout this case can be traced to these challenges. Heres a list of the seven challenges, along with a preview of the issues we will discuss in the coming chapters:

• Challenge 1: Managing for competitive advantage. Uber has historically had little trouble outperforming its competitors, but since 2017 the company has lost substantial market share to Lyft, its primary competitor, and has seen its valuation drop from $70 billion to $48 billion. We will explore what Uber is doing to remain competitive, including how it is working to attract and retain top talent, innovate new technologies, and repair its reputation.

• Challenge 2: Managing for information technology (IT). Technology was the foundation of Ubers differentiation as a company and, thus, its success. We will discuss how the company is using IT to make decisions, motivate its drivers, and innovate. We will also explore the challenges that Uber has faced in its use of IT including its controversial use of geofencing and other customer-targeted technologies.

• Challenge 3: Managing for diversity. Companies should work to capitalize on the opportunities inherent in todays incredibly diverse workforce. But recent news indicates that Uber, much like many other tech companies, has very little diversity in its full-time workforce. Moreover, workers have spoken out about an alleged hostile and sexist work environment at Uber. We will explore these issues along with what Ubers new executives are doing to change the companys diversity profile. We will also discuss major changes to Ubers diversity- and inclusion-related HR practices, including interviewing, training, and performance reviews.

• Challenge 4: Managing for globalization. Globalization presents many opportunities but also many challenges. Uber has worked furiously to compete internationally and has encountered successes and troubles along the way. We will discuss the regulatory, legal, and cultural issues Uber has faced as it has expanded into international markets and what the forecast is looking like for Ubers global market share.

• Challenge 5: Managing for ethical standards. Dealing effectively with ethical challenges is difficult for any company. For Uber this is especially challenging given its size, speed of growth, international presence, and a regulatory environment that struggles to keep up with dynamic business and technological innovations. We will explore many of the ethical dilemmas that Uber has faced, including self-driving cars, the Alphabet lawsuit, and Greyball software.

• Challenge 6: Managing for sustainability. Being green is no longer a choice for organizationsits a necessity if a company wants to be competitive. Some recent data suggest that transportation network companies like Uber have actually put more cars on the road rather than decreasing the number of vehicles, and therefore, emissions. Furthermore, competitor Lyft may be winning the reputational race for the title of the more socially responsible company. But Uber has interesting ideas in play, including a partnership with NASA to develop flying electric cars. We will explore these things in detail throughout the case.

• Challenge 7: Managing for happiness and meaning. Todays workers have seen the lines between personal life and work life almost completely blurred. With so much of our lives spent working, or attached to work via technology, we demand more meaning and fulfillment from our jobs. Many of Ubers employees find the fast-paced, almost frenetic environment to be energizing and rewarding, but others have claimed they experience a tremendous lack of work-life balance in the company. We will discuss how Uber is managing the challenge of creating work that is meaningful for its employees. We will also discuss the efforts of Ubers new leadership to improve the companys culture.

In future parts of the cumulative case you will learn that Uber ousted its founder, Travis Kalanick, as CEO and replaced him with a new leader. What impact does this have on the company based on the Seven Challenges to Being an Exceptional Leader?