Uber has been on an incredible run since it hit the streets five years ago. Uber was unstoppable. Black cars were expensive and Uber introduced UberX, an affordable alternative where drivers used their own cars. Groups started requesting multiple Ubers at a time; Uber introduced UberXL. City regulators and Taxi Cabs worked hard to block their progress and Uber quickly mobilized its riders. As it innovated its product to meet the needs of its customers, its valuation skyrocketed. Uber soon became one of the most in-demand employers. Uber’s business model—on demand services and monetizing idle assets of the shared economy—spawned many imitations that fell short. L2 Inc. even named Uber as a top contender to be the fifth horsemen behind the big four—Amazon, Apple, Facebook, and Google. Uber was truly a unicorn.
Alas, what goes up must come down.
Amid its success, Uber developed a few blind spots. Drivers were slowly becoming more disgruntled with a rapidly changing business model. Casualties of Uber’s bro culture started to reach critical mass; and by virtue of merit and association, Uber became a target for diversity and inclusion activists in the tech space.
The bubble finally popped. The 2016 election created the perfect storm that began to lift the veil over Uber’s vulnerabilities. It started when CEO Travis Kalanick, a longstanding critic of the new president during the 2016 election accepted a seat on his Economic Advisory Council. This went over quietly until the president issued an immigration ban on seven countries that included refugees, visa holders, and even some current green card holders. The announcement led to waves of protests at airports across the country. JFK airport saw some of the largest protests in the country. That night, NYC taxi drivers went on strike in protest of the executive order.
Under normal conditions, with a low supply of drivers or transportation options and high demand, a surcharge would have applied. To avoid profiting from the situation and to ensure that its many users didn’t have to pay high fares, Uber suspended surge pricing at JFK. Despite Uber’s best intentions, this caused an outrage online. People saw it as an opportunistic move on Uber’s part and an interruption of the taxi driver’s protest. Kalanick drafted a Facebook post expressing his stance against the ban, the efforts Uber was taking to aid affected drivers, and a promise to raise this issue as a member of the Economic Advisory Council. However, the trending topic on Twitter was still #DeleteUber. The next Sunday, Lyft announced a million-dollar donation to the ACLU, instantly winning over many disgruntled Uber riders. After several apologies in statements that fell on deaf on ears, rather than defend his decision, Kalanick dropped out of the Presidential Economic Advisory Council just before its first meeting.
Following this, in February a former engineer at Uber, Susan Fowler, published a revealing blog post where she spoke of her experiences with sexual harassment and subsequent inaction during her time at Uber. This caused outrage and further confirmed prior allegations of Uber’s bro culture that is less than welcoming to women and underrepresented minorities.
Finally, when we thought he heard the worst from Uber, this video of CEO Travis Kalanick arguing with a driver, Fawzi Kamel, surfaced online. The video captures Kalanick easily losing his cool while receiving uncomfortable feedback from Kamel who has been with Uber since 2010. The video ends with Kalanick using profanity, a lecture on responsibility, and him storming out of the driver’s car. Travis’ response was a blog post in which he said it was time for him to grow up (he is 40 years old) and get help.
Uber’s credibility in several areas has eroded. Once an admired unicorn of Silicon Valley that was presumed to be on the road to IPO Uber now has bigger fish to fry: regain the trust of its users, its drivers, and the public. Kalanick has a tough job ahead of him. Here’s our take on how Uber should move forward.
Improve Relationship with Drivers
Uber’s first step in this journey is long overdue — improve its relationship with the heartbeat of the organization, its drivers.
Driver’s concerns have been very public over the past few months and Kamel was speaking for many other drivers who feel that Uber takes them for granted. Uber has done an excellent job prioritizing customers, listening to their needs, and adapting their product to meet their needs at times at the driver’s expense. Uber needs to be equally responsive to its drivers. Aside from the app, drivers are the closest touchpoint of Uber’s brand that customers interact with. If drivers are not happy, it has a direct impact on the user’s experience. It’s not uncommon for drivers to vent their frustrations to riders. To improve relations with its drivers Uber should take a few steps.
The first is increased communication. It’s clear that divers do not feel as though they have a seat at the table, their concerns are falling on deaf ears. Uber needs to find ways to bring its driving partners to the table. Uber’s drivers may not have the storied resumes or programming skills of its corporate staff, but as the company’s most important touch point, and such they hold valuable insight.
Uber must regularly engage their driver community, listen to their concerns and be as responsive to them as they are to customers.
Uber’s drivers may be its most underutilized asset. Offering drivers a career path beyond driving would help break down the class barrier that exists between drivers and corporate. Drivers serve as an untapped focus group of sorts given that they are the eyes and ears of the operation. They have a constant pulse on the market. There should be a way for the driver community to impact operations and strategy that reflects their value. Bridging this gap would give Uber a wider pool of ideas and talents to draw from. This brings me to my next point.
Make D&I a Business Objective
Companies can no longer afford to treat diversity and inclusion as a corporate social responsibility initiative. It should be a natural part of a company’s culture.
More gender diversity among its technical and non-technical teams would change Uber’s culture. Sexual harassment can’t thrive when women have an equal number of seats at the table and an equal share of voice. Ethnic diversity would have a direct impact on the bottom line. It is impossible to solve new problems by maintaining the status quo. Looking beyond typical sources for talent would allow help Uber solve some of its biggest challenges.
Just this week, Uber released its first diversity report. As Fortune writer, Ellen McGirt put it, their “first diversity report…will neither surprise nor delight you”. While this report shows a lot of room for growth, it’s a departure from Uber HR head, Liane Hornsey’s dismissive comments about diversity reports earlier this month. Despite its shortcomings, Uber actually fares better than other Silicon Valley giants like Facebook and Google when it comes to ethnic diversity. The report also announced a few initiatives such as employee resource groups and a financial commitment of $3 million to organizations that aim to bridge the gap in tech.
These are great first steps, however as they come amidst much controversy, one can’t help but wonder if this was a part of a rushed PR push to try and clean up its image. A true commitment to building an inclusive workforce requires a departure from lazy hiring practices and making difficult choices.
Take Leadership Seriously
In any organization, culture reflects leadership. Uber cannot move forward unless its leaders are willing to act and move forward. Positive press and financial success often cloud flawed leadership practices. The video of Kalanick arguing with one of his drivers put these flaws on display. The video also explained a lot of the events that have recently taken place at Uber.
Some of the most notable parts of the exchange between Kalanick and the driver, Kamel, are Kalanick’s excessive use of “I” over “we”, the constant interruptions of Kamel, and his visible frustration receiving uncomfortable feedback. These are 3 trademark leadership flaws: an emphasis on the individual over the team, inability to listen to your team, and not being receptive to feedback.
Check this transcript of the exchange:
Kalanick: “We have to; we have competitors; otherwise, we’d go out of business.”
Kamel: “Competitors? Man, you had the business model in your hands. You could have the prices you want, but you choose to buy everybody a ride.”
Kalanick: “No, no no. You misunderstand me. We started high-end. We didn’t go low-end because we wanted to. We went low-end because we had to because we’d be out of business.”
Kamel: “What? Lyft? It’s a piece of cake right there.”
Kalanick: “It seems like a piece of cake because I’ve beaten them. But if I didn’t do the things I did, we would have been beaten, I promise.”
When speaking of Uber’s challenges, Kalanick says “we”. When speaking of Uber’s successes, he says “I”. This is only one word, but it speaks volumes. It tells us that Kalanick sees himself as the cause for Uber’s success showing little value for the drivers who made the execution of this vision possible. Strong leaders know that they are nothing without their team. Strong leaders make it a point to credit their team with success and take personal accountability for failures.
Kalanick also needs to recognize that listening can be a leader’s biggest strength and that feedback is a gift. We could’ve seen a video where Kalanick took the time to listen to the driver’s concerns, reassure him that he would take them into consideration, and then offer a method for them to follow up. Instead, it turned into an argument that went viral. Kamel’s feedback wasn’t the usual praise that Uber is used to receiving from the business and technology media. However, it’s still an important voice for Uber to listen to. As previously mentioned, drivers are Uber’s most important touch point for its riders. At one point, Kamel tells Kalanick “the people don’t trust you”. Instead of using this as an opportunity to gain valuable information, the situation escalated and ended with a viral video of him publicly disrespecting his team.
Kalanick wasted an opportunity to build trust with his team. Had he handled this situation differently, the video that went viral could have been one about how good of a leader Kalanick is. This would which would have gone a long way in restoring confidence in Uber’s leadership.
Finally, Kalanick’s biggest lesson in leadership brings us back to the president’s Economic Advisory Council. Kalanick backed out of the council before its first meeting to appease consumers and the public despite his claims that his seat was not an endorsement, but a way for him to help influence policy for the better. However, Kalanick was not the only Trump opponent to join the council. Elon Musk (CEO of Tesla), Mary Barra (Chairwoman/CEO of General Motors), and Indra Nooyi (Chairwoman/CEO of Pepsi) are also council members and critics of the president. However, they defended their stance and their decision to advise the president.
The president has said and done many things that are incongruent with America’s values and aspirations. It behooves him and the public to have advisors who are willing to openly disagree with him. Many in the public may not understand or agree with this level of pragmatism, but making tough, unpopular decisions is part of leadership. While leaders need to listen to and consider the decisions of others, public perception should not be the north star that leaders use to guide their decisions. Often, leaders back away from making unpopular decisions to avoid stirring controversy. However, the indecisive attempts at neutrality often backfire. While there is merit in backing away from poor decisions before it’s too late, it is equally as important to defend unpopular ones that will eventually pay off in the long run.
Where Do We Go From Here?
If Uber is to change its culture for the better, Kalanick must be willing to disrupt the status quo of Uber corporate culture—something he’s had no trouble doing with his business.
For all its challenges, Uber has remarkable accomplishments under its belt. Challenges are a natural part of business, especially in high growth companies. This is a critical moment for Uber. The company has an opportunity to reboot its engine and build for its future. With an adjustment to its approach, an increased effort to bring drivers to the table, and a culture shift Uber will undoubtedly be able to get back on track.