Beginning of the end for Uber?

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Ride services company Uber is thrust deeper into turmoil with the departure of company president Jeff Jones. Ryan Brooks reports.

Uber is embroiled in multiple crises at once. Picture: Seth Wenig/AP

TO PUT it mildly, Uber is going through a bit of a rough patch.

The global ride-sharing giant lost its president earlier this week, days after chief executive Travis Kalanick said he would hire a chief operating officer who could help write its “next chapter”.

Jeff Jones stepped down after just six months in the role. It came after senior vice president of engineering Amit Singhal resigned following revelations about allegations of sexual harassment in his prior role at Google.

And the company’s vice president of product and growth, Ed Baker, also resigned recently following allegations of inappropriate conduct with a female employee at a company event.

The senior exodus from Silicon Valley’s most valuable private company comes amid numerous controversies and scandals, both internal and external.

Former employees have accused the company of a toxic, male-dominated culture where sexual harassment is commonplace. Those claims began to surface after former engineer Susan Fowler revealed in an explosive blog post that her prospects at the company evaporated after she complained about sexual advances from her boss.

Following the publication of Ms Fowler’s blog, other former employees began to speak out. One journalist, writing for LinkedIn, said nearly a dozen former software engineers told similar stories of Uber’s “frat-like” culture. The stories prompted Uber to launch an independent investigation.

Not long after, Mr Kalanick, who is worth more than $8 billion, was caught on CCTV earlier this month verbally abusing a driver who complained to him about dropping prices and lower pay, prompting a public apology and promise to “grow up” and get “leadership help”.

Shortly after, it emerged that Uber had been using a secret tool dubbed “Greyball” to deceive authorities, steering drivers away from trouble, including sting operations in areas where the ride-sharing service operates illegally.

That came after a massive boycott saw hundreds of thousands of users delete the app, sparked by the company’s perceived support of US President Donald Trump. Uber came under fire for continuing to send drivers to JFK Airport during a taxi strike to support immigrants detained by the travel ban.

And late last year, Uber was forced to defend claims it was “staggeringly unprofitable” — Uber loses about $2.7 billion ($US2 billion) a year — in effect relying on billions of dollars in subsidies from investors to undercut taxi drivers with cheap fares, and would need to “quadruple” fares to become profitable.

Last month, the company lost a legal battle with the Australian Taxation Office, with the Federal Court in Sydney ruling that the country’s more than 50,000 Uber drivers must collect and pay GST to the government — bad news for many drivers who held off doing so following the initial ATO ruling in August 2015.

Perhaps most seriously, however, is a lawsuit launched by Waymo, the self-driving vehicle subsidiary of Google parent company Alphabet, which alleges Uber’s self-driving research head Anthony Levandowski stole proprietary secrets when he left Google in early 2016 to found self-driving truck start-up Otto, which Uber acquired last year.

Uber and Mr Levandowski deny the allegations. “We have reviewed Waymo’s claims and determined them to be a baseless attempt to slow down a competitor and we look forward to vigorously defending against them in court,” Uber said in response to the lawsuit. “In the meantime, we will continue our hard work to bring self-driving benefits to the world.”

Analysts have pointed out that the Waymo lawsuit poses the biggest threat because Uber is effectively pinning its hopes of profitability on self-driving technology. After all, the CEO won’t have to yell at his drivers if there aren’t any.

Indeed, last year Mr Kalanick admitted in an interview that if Uber can’t be among the first to market with a self-driving car, “then the future passes us by, basically, in a very expeditious and efficient way”.

On Tuesday, the company said it hadn’t finished its investigation into its workplace culture and sexual harassment, but acknowledged that “things fundamentally need to change”, detailing some of the changes in the pipeline.

They include releasing a “diversity report”, opening an anonymous tip line for employees to air complaints, holding more than 120 “listening sessions” with employees, and updating 1500 job descriptions to eliminate any so-called “unconscious bias”.

“Uber is disruptive — and disruption demands the confidence to be bold,” Uber’s chief human resources officer, Liane Hornsey, told Business Insider. “What I have seen though, is that this has translated internally to what I would call a cult of the individual. We now need to expend genuine effort ensuring the individual is never more important than the team — not ever.”

Also during the media call, Uber director Arianna Huffington, founder of The Huffington Post, said there was no room for “brilliant jerks” at the company.

Analyst John Rosevear, writing for Fox News, said that taken together, “the recent reports paint a picture of a company where sexual harassment is tolerated, laws are seen as inconveniences to be circumvented, and a showcase technology effort might be based on stolen secrets”.

“That’s all bad for obvious reasons, and for one reason that might be a little less obvious: Like all tech companies, Uber is in a constant battle to hire and retain top talent. These kinds of stories hurt,” he wrote.

Rosevear added that the growing list of scandals and challenges “called into question when — or whether”, Uber would be able to list on the stock market. “Long story short: Uber’s growth story could be in serious trouble.”

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