Uber's Culture: From "Always be hustlin'" to "We do the right thing. Period."

Serial entrepreneurs Travis Kalanick and Garrett Camp founded Uber, a transportation sector start-up, in 2009. Since then, the company has become an exemplar of the modern-day sharing economy. At the outset, Camp served on the company's board while Kalanick assumed its CEO position shortly after founding. In 2015, Kalanick introduced Uber's 14 cultural values, developed in conjunction with the company's Chief Product Officer, Jeff Holden, at a corporate retreat in Las Vegas. They were as follows1 : Customer obsession (Start with what is best for the customer) Make magic (Seek breakthroughs that will stand the test of time) Big bold bets (Take risks and plant seeds that are five to ten years old) Inside out (Find the gap between popular perception and reality) Champion's mind-set (Put everything you have on the field to overcome adversity and get Uber over the finish line) Optimistic leadership (Be inspiring) Celebrate cities (Everything we do is to make cities better) Superpumped (The world is a puzzle to be solved with enthusiasm) Be an owner, not a renter (Revolutions are won by true believers) Meritocracy and toe-stepping (The best idea always wins. Don't sacrifice truth for social cohesion and don't hesitate to challenge the boss) Let builders build (People must be empowered to build things) Always be hustlin' (Get more done with less, working longer, harder, and smarter, not just two out of three) Be yourself (Each of us should be authentic) Principled confrontation (Sometimes the world and institutions need to change in order for the future to be ushered in) As the company thrived, new employees learned the Uber way at "Uberversity," the company's multi-day orientation program. Newcomers discussed scenarios such as "a competitor is introducing an equivalent service in four weeks. We can't beat them to market with a functional and reliable service. What should we do?" The "correct answer" was to "develop an incomplete solution and beat the competitor to market," which aligned with the value of "Always be hustlin'" and taking using a little more time to develop a better offering was "not the Uber way." 2 As Kalanick noted, "If we are not tied for first then the person who is in first, or the enemy that's in first, then rolls out service that is far cheaper or far higher quality" than ours and we are "no longer a thing." 3 Uber's aggressive approach, its "take-no-prisoners, win-at-any cost" way of doing business was regarded "for better or worse, as one of the key drivers of its rapid growth." 4 In terms of the day-to-day operations, a former Uber employee blogged, "In the background, there was a Game of Thrones political war raging within the ranks of upper management in the infrastructure engineering organization. It seemed like every manager was fighting their peers and attempting to undermine their direct 1 Staley (2017) - https://qz.com/work/1123038/uber-has-replaced-travis-kalanicks-values-with-eight-new-cultural-norms/ 2 Wong, Julia Carrie. "Uber's 'Hustle-Oriented' Culture Becomes a Black Mark on Employees' Rsums." The Guardian . March 7, 2017. Accessed November 11, 2018. https://www.theguardian.com/technology/2017/mar/07/uber-workculture-travis-kalanick-susan-fowler-controversy 3 Kokalitcheva, Kia. "Here's Why Uber Is So Aggressive and in a Hurry." Fortune . August 19, 2016. Accessed October 15, 2018. http://fortune.com/2016/08/18/uber-must-be-fi rst/. 4 Zipkin, Nina. "Uber Needs to Recreate Its Company Culture. Here's What You Can Learn from Its Mistakes." Entrepreneur . June 15, 2017. Accessed October 15, 2018. https://www.entrepreneur.com/article/295844 2 supervisor so that they could have their direct supervisor's job."5Other former employees referenced "malicious fights for power, interns repeatedly putting in over 100 hours a week but only getting paid for 40, discrimination against women, and prejudice against the transgender community."6 Upon joining the company, Uber's HR Chief said that it "definitely had the reputation for being hard-charging, disruptive and rather bold" and her initial impression was that employees were "anxious and overworked" with "no sense of trust, no sense of 'We're building this together." 7 Post-departure, Susan Fowler, a former Uber engineer (joined November 2015, left December 2016) blogged that the work was exciting, she was proud of her accomplishments and its impact, and that she was thankful to work with highly talented colleagues.8 However, she was very concerned about how the company responded to her being sexually harassed at work. Her direct supervisor told her that "he's in an open relationship . . . he's trying really hard not to get in trouble at work, but he's really looking for a woman to have sex with."9 Upon reporting him, HR told her, "It was this man's first offense, and that they wouldn't feel comfortable giving him anything other than a warning and a stern talking-to." 10Upper management also told Fowler that he "was a high performer" and that they were uncomfortable for punishing him for "what was probably just an innocent mistake on his part."9 Instead, she was given two options:11 1 - join another team and not interact with this supervisor again, or 2 - remain on his team with the understanding that, "he would most likely give me a poor performance review when review time came around, and there was nothing they could do about that." A negative review would not be regarded as retaliation because she had been "given an option." Fowler left the team. Later, she met other female employees with similar accounts of harassment that sometimes involved the same supervisor. In all cases, HR and management told the complainants that this was the man's first offense. HR refused their request for a joint meeting and each was told individually that the manager had "only committed one offense, and that none of the other women they met with had anything bad to say about him, so no further action would be taken."12Another former employee wrote that the practically all male staff were "routinely and openly hostile to female employees, from instances of verbal abuse and belittlement . . . extensive sexual harassment including . . . creating sexually explicit narratives about female peers and superiors."13 Besides harassment, there were accounts of discrimination and pay inequities, which led to a class action lawsuit on behalf of 420 Uber engineers (285 women and 135 ethnic minorities) in California's 5 Wong, Julia Carrie. "Uber's 'Hustle-Oriented' Culture Becomes a Black Mark on Employees' Rsums." The Guardian . March 7, 2017. Accessed November 11, 2018. https://www.theguardian.com/technology/2017/mar/07/uber-workculture-travis-kalanick-susan-fowler-controversy 6 Wong, Julia Carrie. "Uber's 'Hustle-Oriented' Culture Becomes a Black Mark on Employees' Rsums." The Guardian . March 7, 2017. Accessed November 11, 2018. https://www.theguardian.com/technology/2017/mar/07/uber-workculture-travis-kalanick-susan-fowler-controversy 7 Associated Press. "Insider Q&A: Uber Human Resources Chief Liane Hornsey." Financial Post . October 2, 2017. Accessed January 1, 2019. https://business.fi nancialpost.com/pmn/business-pmn/insider-qa-uber-human-resourceschief liane-hornsey 8 Fowler, Susan. "Reflecting on One Very, Very Strange Year at Uber." Susan Fowler. February 19, 2017. Accessed January 1, 2019. https://www.susanjfowler.com/blog/2017/2/19/reflecting-on-one-very-strange-year-at-uber 9 Fowler, Susan. "Reflecting on One Very, Very Strange Year at Uber." Susan Fowler. February 19, 2017. Accessed January 1, 2019. https://www.susanjfowler.com/blog/2017/2/19/reflecting-on-one-very-strange-year-at-uber 10 Fowler, Susan. "Reflecting on One Very, Very Strange Year at Uber." Susan Fowler. February 19, 2017. Accessed January 1, 2019. https://www.susanjfowler.com/blog/2017/2/19/reflecting-on-one-very-strange-year-at-uber 11 Fowler, Susan. "Reflecting on One Very, Very Strange Year at Uber." Susan Fowler. February 19, 2017. Accessed January 1, 2019. https://www.susanjfowler.com/blog/2017/2/19/reflecting-on-one-very-strange-year-at-uber 12 Fowler, Susan. "Reflecting on One Very, Very Strange Year at Uber." Susan Fowler. February 19, 2017. Accessed January 1, 2019. https://www.susanjfowler.com/blog/2017/2/19/reflecting-on-one-very-strange-year-at-uber 13 Burns, Janet. "Uber Facing New Claims of Systemic Harassment after Anonymous Essay." Forbes . February 28, 2017. Accessed January 1, 2019. https://www.forbes.com/sites/janetwburns/2017/02/27/uber-facing-new-claims-of-systemicsexual-harassment-after-anonymous-essay/#7a9ca2728b0c 3 Superior Court.14 The lawsuit alleged gender and race-based discrimination resulting in the loss of earnings, promotions, and benefits. In March of 2018, Uber proposed a $10 million settlement in which 56 current and former employees, who detailed being discriminated and harassed, were to receive $33,900 each ($1.9 million in total), with 480 individuals in all receiving a share of another $5.1 million based on length of employment, title, and location essentially translating into $10, 700 per individual.15 14The company also agreed to improve its compensation and employee review systems, and report diversity data on a regular basis to Uber employees and the court. Uber's rideshare services are delivered by independent contractors, not employees. Unlike employees, these individuals do not receive benefits and protections under employment law (e.g., minimum wage, overtime, health insurance, workers' compensation, unemployment benefits, lower taxes, etc.). However, citing poor wages and employment insecurity, Uber drivers argued that the company behaves like an employer so they should be classified as employees. For example, Uber sets their compensation rates, they must abide by its code of performance to continue providing ride share services, and Uber also provides drivers with a list of acceptable topics to discuss with customers. Additionally, drivers claimed that in certain locales, Uber ran false advertisements about how much they could potentially earn by driving for Uber. For example, in San Francisco, the mid-range annual income advertised was $74, 000 but an investigation indicated that only 10% reached this level of income and that the mid-range annual income was $61, 000. 16 The media reported some accounts of customers being assaulted by Uber drivers, which led to the question of whether the company could do more to riders' safety. To this end, the Taxi, Limousine & Paratransit Association shared the following data that about Uber and Lyft drivers' transgressions (updated until August 22, 2018): Alleged assaults by Uber and Lyft drivers - 102 Alleged sexual assault and harassment incidents by Uber and Lyft drivers - 395 Alleged kidnappings by Uber drivers - 22 Deaths attributed to Uber and Lyft drivers - 52 Felons behind the wheel - 26 Imposters - 102 Other serious incidents - 129 CNN, based on a review of police reports, federal court records, and county court databases in 20 major U.S. cities, reported in April 2018 that at a minimum, 103 U.S.-based Uber drivers had allegedly sexually assaulted or abused their passengers since 2014.17 While Uber advertised using an "industry-leading background check process" to vet drivers, some like George Gascn, the district attorney (DA) for San Francisco county, disagreed. Gascn said, "you are not using an industry-leading background check process if you are not fingerprinting," 14 Bhuiyan, Johana. "Uber Has Agreed to Settle a Class Action Discrimination Suit for $10 Million." Recode. March 27, 2018. Accessed April 29, 2019. https://www.recode.net/2018/3/27/17170154/uber-discrimination-lawsuit-10-million 15 Bhuiyan, Johana. "Uber Has Agreed to Settle a Class Action Discrimination Suit for $10 Million." Recode. March 27, 2018. Accessed April 29, 2019. https://www.recode.net/2018/3/27/17170154/uber-discrimination-lawsuit-10-million 16 Associated Press in San Francisco. "Uber to Pay $20m over Claims It Misled Drivers over How Much They Would Earn." The Guardian . January 20, 2017. Accessed March 25, 2019. https://www.theguardian.com/technology/2017/jan/19/uber-settlement-ftc-driver-earnings-car-leases 17 O'Brien, Sara Ashley, Nelli Black, Curt Devine, and Drew Griffin. "CNN Investigation: 103 Uber Drivers Accused of Sexual Assault or Abuse." CNNMoney. April 30, 2018. Accessed January 1, 2019. https://money.cnn.com/2018/04/30/ technology/uber-driver-sexual-assault/index.html. 4 which makes Uber's background checks "completely worthless." 18 Due to concerns that the company's statements gave customers a false sense of security, he and Jackie Lacey, the district attorney for Los Angeles county, filed a lawsuit against Uber for "fraudulent pricing practices and misleading public statements about driver safety, among other complaints" (cite) In 2016, Uber settled the lawsuit for $25 million.19 Uber was involved in privacy breaches. First, its God View tool, which allowed certain employees at Uber's corporate office to see all Uber vehicles as well as users that have requested rides in a given city, spawned controversy. While God View allowed seeing anonymized aggregate data, its "Creepy Stalker" option made it possible to track specific people. For instance, Peter Sims, an entrepreneur, wrote, "One night, a couple of years ago, I was in an Uber SUV in NYC, headed to Penn Station to catch the train to Washington DC when I got a text message from a tech socialite . . . someone I hardly know, asking me if I was in an Uber car at 33rd and 5th (or something like that). I replied that I was indeed, thinking that she must be in an adjacent car. Looking around, she continued to text with updates of my car's whereabouts, so much so that I asked the driver if others could see my Uber location profile? "No," he replied, "that's not possible."20 The woman told Sims that she was at Uber Chicago's launch party, which featured a screen showing where in NYC certain "known people" were currently riding in Uber cabs.21 Sims expressed outrage that the company breached his privacy and used his information without permission for self-promotion. Samuel Spangenberg, Uber's former forensic investigator said that employees used God View to monitor "high-profile politicians, celebrities and even personal acquaintances of Uber employees, including ex-boyfriends/girlfriends, and ex-spouses" in real time.22 Besides God View, Uber experienced two data breaches that infringed on the privacy of millions of independent contractors and customers. In both cases, the breaches were noticed after many months had passed and were reported to the authorities even later. In the larger breach, the hacker demanded $100, 000 to destroy the data. So, Uber paid the money, had the hacker sign a non-disclosure agreement and hid the payment as a "bug bounty" (tech industry of paying those who find software issues).23 The Federal Trade Commission (FTC), concerned by the privacy infringements, and Uber's handling of the breaches, launched an investigation. In 2017, Uber settled with the FTC and agreed to independent third-party audits of its privacy practices, which were to be conducted every two years, for two decades.24 Additionally, the company took various measures to strengthen its security and privacy practices, including hiring its first chief security officer.25 Uber was known for its aggressive expansion practices including wasting competitors' time, setting up operations without the necessary permits, and avoiding authorities. For example, Gett, a competing ride hailing company, alleged that Uber employees ordered and then cancelled over one hundred cars over a three-day 18 Isaac, Mike. "Uber's System for Screening Drivers Draws Scrutiny." The New York Times . December 10, 2014. Accessed March 24, 2019. https://www.nytimes.com/2014/12/10/technology/ubers-system-for-screening-drivers-comesunder scrutiny.html. 19 Lien, Tracey. "Uber Agrees to Settlement of up to $25 Million in Misleading-Advertising Suit." Los Angeles Times . April 7, 2016. Accessed March 24, 2019. https://www.latimes.com/business/technology/la-fi -tn-0408-uber-settlement-story.html. 20 Sims, Peter. "Can We Trust Uber?" Medium. Silicon Guild. October 6, 2014. Accessed March 25, 2019. https://thoughts.siliconguild.com/can-wetrustuber-c0e793deda36. 21 Sims, Peter. "Can We Trust Uber?" Medium. Silicon Guild. October 6, 2014. Accessed March 25, 2019. https://thoughts.siliconguild.com/can-wetrustuber-c0e793deda36. 22 Hern, Alex. "Uber Employees 'Spied on Ex-Partners, Politicians and Beyonc.' " The Guardian . December 13, 2016. Accessed March 25, 2019. https://www.theguardian.com/technology/2016/dec/13/uber-employees-spying-ex-partnerspoliticians-beyonce. 23 Brewster, Thomas. "FTC: Uber Failed to Protect 100,000 Drivers in2014 Hack." Forbes . August 15, 2017. Accessed March 25, 2019. https://www.forbes.com/sites/thomasbrewster/2017/08/15/uber-settles-ftc-complaint-oversecuirty and-privacy/#2bfab5c588da 24 Morgan, Richard. "Uber Settles Federal Probe over 'God View' Spy Software. "New York Post . August 15, 2017. Accessed March 25, 2019. https://nypost.com/2017/08/15/uber-settles-federal-probe-over-god-view-spy-software/. 25 Brewster, Thomas. "FTC: Uber Failed to Protect 100,000 Drivers in 2014 Hack." Forbes . August 15, 2017. Accessed March 25, 2019. https://www.forbes.com/sites/thomasbrewster/2017/08/15/uber-settles-ftc-complaint-oversecuirty-and privacy/#2bfab5c588da. 5 period.26 In August of 2014, Lyft reported that since October of 2013, 177 Uber employees had ordered and then cancelled over 5,000 Lyft rides to waste Lyft drivers' time, gasoline, and decrease their income. As a result of these fake ride requests, Lyft claimed to have less cars showing as being available to real customers on their app (or system).27 Finally, Uber is also known for moving into new markets without the necessary permits. This "ask for forgiveness, not permission" approach sometimes entailed the use of Greyball, a software tool.28 As city officials sometimes posed as Uber customers for investigative purposes, Greyball allowed Uber to use location and other data to identify and tag those likely to be city officials.29 If they requested a ride, these individuals would be shown a fake version of the Uber app with non-existent cars or were told that no cars were available. If a driver accidentally accepted a customer tagged as a potential city official, Uber followed up to cancel the ride.30 The public airing of the scandals described above led to two investigations that were conducted by two law firms: Perkins Coie (investigation of 215 reports of discrimination, sexual harassment, unprofessional behavior, bullying, etc.) and Covington (broad cultural investigation).31 The Perkins Coie investigation resulted in 20 terminations (including senior executives),32 being directed to training or counseling, seven written warnings, 100 cases of no further action, and 57 cases open (no information available at the time of writing this case).33 The Covington investigation resulted in an extensive set of recommendations including reviewing and reallocating Kalanick's (CEO) responsibilities, using performance reviews to hold senior executives accountable, creating an oversight committee, fostering Board of Directors' independence, addressing internal controls through various means, mandatory training (in Human Resources, leadership, managerial skills, in interviewing etc.) for various groups and levels of employees.34 In addition, the report called for the company to reexamine its cultural values.33 Amidst all of this, Kalanick resigned as CEO in mid-2017 and Dara Khosrowshahi, the CEO of Expedia who is credited with that company's success, assumed Uber's top leadership role on August 30, 2017. He noted that, while Uber's "forward-leaning, fearless approach" has allowed it to succeed to date, "it's also clear that the culture and approach that got Uber where it is today is not what will get us to the next level."35 Thus, Uber's culture must evolve as it transitions from "an era of growth at all costs to one of responsible 26 Irwin, Neil. "Uber's Secret Agents: When Poaching Becomes Unethical." The New York Times . August 27, 2014. Accessed March 25, 2019. https://www.nytimes.com/2014/08/28/upshot/ubers-secret-agents-was-poachingfrom lyft-unethical.html. 27 Fink, Erica. "Uber Threatens Drivers: Do Not Work for Lyft." CNNMoney. August 5, 2014. Accessed March 25, 2019. https://money.cnn.com/2014/08/04/technology/uber lyft/ 28 Isaac, Mike. "How Uber Deceives the Authorities Worldwide." The New York Times . March 3, 2017. Accessed April 28, 2019. https://www.nytimes.com/2017/03/03/technology/uber-greyball-program-evade-authorities.html. 29 Isaac, Mike. "How Uber Deceives the Authorities Worldwide." The New York Times . March 3, 2017. Accessed April 28, 2019. https://www.nytimes.com/2017/03/03/technology/uber-greyball-program-evade-authorities.html. 30 Isaac, Mike. "How Uber Deceives the Authorities Worldwide." The New York Times . March 3, 2017. Accessed April 28, 2019. https://www.nytimes.com/2017/03/03/technology/uber-greyball-program-evade-authorities.html. 31 0 Ivanova, Irina. "Uber Fires More Than 20 amid Sexual Harassment Probe." CBS News. November 21, 2017. Accessed January 1, 2019. https://www.cbsnews.com/news/perkins-coie-uber-fi res-more-than-20-after-sexual-harassmentprobe reports/ 32 0 Ivanova, Irina. "Uber Fires More Than 20 amid Sexual Harassment Probe." CBS News. November 21, 2017. Accessed January 1, 2019. https://www.cbsnews.com/news/perkins-coie-uber-fi res-more-than-20-after-sexual-harassmentprobe reports/ 33 alakrishnan, Anita. "Here's the Full 13-Page Report of Recommendations for Uber." CNBC. June 13, 2017. Accessed April 14, 2019. https://www.cnbc.com/2017/06/13/eric holder-uber-report-full-text.html; Covington and Burling report. 34 alakrishnan, Anita. "Here's the Full 13-Page Report of Recommendations for Uber." CNBC. June 13, 2017. Accessed April 14, 2019. https://www.cnbc.com/2017/06/13/eric holder-uber-report-full-text.html; Covington and Burling report. 35 Khosrowshahi, Dara. "Uber's New Cultural Norms." LinkedIn. November 7, 2017. Accessed November 10, 2018. https://www.linkedin.com/pulse/ubersnew-cultural-norms dara-khosrowshahi/. 6 growth."36 With employees' input (suggestions and votes), Khosrowshahi introduced the company's new cultural norms, which are as follows:37 "We build globally, we live locally. We harness the power and scale of our global operations to deeply connect with the cities, communities, drivers and riders that we serve, every day" "We are customer obsessed. We work tirelessly to earn our customers' trust and business by solving their problems, maximizing their earnings or lowering their costs. We surprise and delight them. We make short-term sacrifices for a lifetime of loyalty" "We celebrate differences. We stand apart from the average. We ensure people of diverse backgrounds feel welcome. We encourage different opinions and approaches to be heard, and then we come together and build" "We do the right thing. Period" "We act like owners. We seek out problems and we solve them. We help each other and those who matter to us. We have a bias for action and accountability. We finish what we start and we build Uber to last. And when we make mistakes, we'll own up to them" "We persevere. We believe in the power of grit. We don't seek the easy path. We look for the toughest challenges and we push. Our collective resilience is our secret weapon" "We value ideas over hierarchy. We believe that the best ideas can come from anywhere, both inside and outside our company. Our job is to seek out those ideas, to shape and improve them through candid debate, and to take them from concept to action" "We make big bold bets. Sometimes we fail, but failure makes us smarter. We get back up, we make the next bet, and we go!" In addition to instituting new cultural norms, Khosrowshahi made multiple changes to the executive leadership team. At the time of writing, besides Khosrowshahi (CEO), the executive team comprised: 38 Nelson Chai (Chief Financial Officer) Tony West (Chief Legal Officer) Nikki Krishnamurthy (Chief People Officer - human resources) Andrew Macdonald (SVP, Mobility and Business Operations - oversees global ridesharing operations, partnerships with public transit, customer support, safety, insurance, and business development) Pierre-Dimitri Gore-Coty (VP, Delivery - oversees UberEats, grocery and other on-demand delivery offerings, and business strategy and operations across 65+ countries) Sundeep Jain (VP, Technology - responsible for global ridesharing products including the rider experience, driver experience, and marketplace; oversees product functions including data science, maps services, enterprise products, safety, and insurance for all product lines) Eric Meyhofer (Head of Advanced Technologies Group - focused on self-driving technologies) Jill Hazelbaker (SVP, Marketing and Public Affairs) Bo Lee Young (Chief Diversity and Inclusion Officer)

Question 3:

Based on the information available, assess Uber's leadership. What leadership style did Kalanick display? What leadership style does Khosrowshahi display? Use any leadership theories to support your assessment.(12 points)

Question 1:

Discuss the connection between Uber's 14 values and its culture. Describe how these values could have led to the decisions Uber made until mid-2017. (9 points)

Question 2:

Though there were concerns expressed internally, the public came to know of the company's cultural issues many years later. In retrospect, the perception is that the company's culture was perpetuated for several years. Drawing upon socialization, discuss how are unethical/ corrupt practices perpetuated in organizations? (12 points)