UBER IN CRISIS: How a string of high-profile problems led to Uber’s worst possible start to 2017

Sam Shead
travis kalanick uber ceo

Lovekin/Getty Images for OurTime.org

Morale at Uber's head office in San Francisco could well be at its lowest level this week after two more executives announced plans over the weekend to leave the taxi-hailing giant.

Uber's president, Jeff Jones, and vice president of maps and business platform, Brian McClendon, became the latest high-profile executives to abandon CEO Travis Kalanick's company, which has been making headlines for all the wrong reasons this year.

January: Thousands of users deleted the app

More than 200,000 Uber customers deleted Uber's app during the last weekend in January as part of the #DeleteUber movement.

The movement came about after drivers tried to do business at John F. Kennedy International Airport in New York City during a taxi strike organised by the New York Taxi Workers Alliance.

Drivers were protesting against President Donald Trump's executive order that barred travellers from seven majority-Muslim countries from entering the US.

Kalanick initially seemed reluctant to criticise the executive order. In an email to Uber's staff that he shared on Facebook on January 28, Kalanick wrote: "This ban will impact many innocent people — an issue that I will raise this coming Friday when I go to Washington for President Trump's first business advisory group meeting."

But Kalanick then came under intense criticism over his close ties to Trump, and he ultimately left Trump’s economic advisory council.

February 21: Scathing blog post alleges sexism and gender bias inside Uber

On February 21, the company announced it had launched an internal investigation into its workplace culture after a former Uber engineer named Susan Fowler wrote a blog post describing gender bias and sexual harassment at the company.

In her post, the Stanford computer-science graduate said:

  • Her manager propositioned her and other female Uber workers for sex — "On my first official day rotating on the team, my new manager sent me a string of messages over company chat. He was in an open relationship, he said, and his girlfriend was having an easy time finding new partners but he wasn't."
  • HR said the manager in question would not be punished because it was his first offence and he was a high performer — "When I reported the situation, I was told by both HR and upper management that even though this was clearly sexual harassment and he was propositioning me, 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."
  • HR ignored some of her other complaints and lied to her about it being his first offence — "It became obvious that both HR and management had been lying about this being 'his first offense,' and it certainly wasn't his last."
  • Uber bought leather jackets for more than 120 men but not six women — "The director replied back" to Fowler's email asking where the jackets were, she said, "saying that if we women really wanted equality, then we should realize we were getting equality by not getting the leather jackets ... We were told that if we wanted leather jackets, we women needed to find jackets that were the same price as the bulk-order price of the men's jackets."
  • Her manager threatened to fire her for reporting things to HR — "I told him that was illegal, and he replied that he had been a manager for a long time, he knew what was illegal, and threatening to fire me for reporting things to HR was not illegal."

Following the blog post, Kalanick said: "I have just read Susan Fowler's blog. What she describes is abhorrent and against everything Uber stands for and believes in. It's the first time this has come to my attention so I have instructed Liane Hornsey our new chief human resources officer to conduct an urgent investigation into these allegations. We seek to make Uber a just workplace and there can be absolutely no place for this kind of behavior at Uber — and anyone who behaves this way or thinks this is OK will be fired."

February 22: New York Times article 'Inside Uber's Aggressive, Unrestrained Workplace Culture' published

On February 22, The New York Times published a bombshell report titled "Inside Uber's Aggressive, Unrestrained Workplace Culture" that suggested Fowler's claims were not isolated. Employees did cocaine during a company retreat and a manager was fired after groping multiple women, according to the report. Former employees said they had notified Uber's leadership, including Kalanick and the chief technology officer, Thuan Pham, of the workplace harassment.

Following Fowler's blog post, former Google designer and Uber developer Chris Messina tweeted that his experience at Uber was "similarly callous & unsupportive."

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This is outrageous and awful. My experience with Uber HR was similarly callous & unsupportive; in Susan's case, it was reprehensible. 😡👎🏻 https://t.co/eSiOuHSMjU

Kalanick subsequently recruited former US Attorney General Eric Holder, who served under President Barack Obama, to conduct a review of the sexual-harassment claims.

Holder and Tammy Albarran, who are partners at the law firm Covington & Burling, were hired to look into complaints about one particular manager at Uber.

February 23: Uber finds itself in a bitter legal fight with investor Google

On February 23, Uber was sued by Google, one of its investors. The lawsuit — detailed in this Bloomberg Businessweek cover story — has been filed by Waymo, Google's self-driving-car group. The suit claims that a team of former Google engineers stole the company's design for the lidar laser sensor that allows self-driving cars to map the environment around them.

Waymo's lawsuit says Anthony Levandowski, who became Uber's self-driving-car boss after working at Waymo, downloaded 9.7 gigabytes of files containing information about Waymo's self-driving technology to his laptop and then transferred those files to another external storage device. Levandowski has said he downloaded those files to his computer so he could work from home.

February 28: Dashcam video shows Kalanick in a heated argument with an Uber driver

On February 28, a video published by Bloomberg showed Kalanick arguing with an Uber driver over falling fares.

"You know what? Some people don't like to take responsibility for their own s---," Kalanick told the driver. "They blame everything in their life on somebody else."

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March 3: Report reveals details of Uber's 'Greyball' tool

On March 3, details of a tool Uber is thought to have used to fool government authorities were published. The tool, known as Greyball, reportedly collected data from Uber's app to identify and evade officials in cities including Boston, Paris, and Las Vegas. The New York Times reported that the tool was deployed in markets where Uber was outright banned or being resisted by law enforcement.

Uber did not deny the existence of the tool in a statement it provided to Business Insider. The company said the tool was an important measure to protect drivers by flagging dangerous individuals who might try to harm its drivers.

"This program denies ride requests to fraudulent users who are violating our terms of service — whether that's people aiming to physically harm drivers, competitors looking to disrupt our operations, or opponents who collude with officials on secret 'stings' meant to entrap drivers," the company said.

March 17: Leaked data shows Uber's self-driving cars still rely heavily on humans

To make matters worse, data leaked last week suggested that Uber's self-driving-car project was a long way from becoming a reality.

One particularly jarring statistic was that in the week that ended March 8, the cars travelled only 0.8 miles on average between each time a human driver had to take control, overriding the self-driving tech in a process known as disengagement.

By comparison, Google's self-driving cars seem to be streets ahead. Waymo cars last year were being disengaged at a rate of just once per 5,000 miles, according to data released in February.

Uber mapping car


Executives to have left the company in the past few weeks include:

  • Jeff Jones, Uber's president
  • Brian Mclendon, Uber's VP of maps and business platform
  • Gary Marcus, head of Uber AI Labs
  • Raffi Krikorian, senior director of engineering at Uber's Advanced Technologies Centre
  • Charlie Miller, a key member of Uber's self-driving car team
  • Amit Singhal, SVP of engineering
  • Ed Baker, Uber's VP of product and growth

Rumours suggest Kalanick could soon step down as CEO

Two "well-placed" sources reportedly told the BBC that Kalanick could step down after Uber appoints a new chief operating officer. Another source, however, told the BBC there was "zero chance" of this happening.

Wired published an opinion piece on March 9 titled "Travis Kalanick doesn't need a new COO. He needs a new CEO," while an anonymous Uber shareholder told the Financial Times that it was time for Kalanick to "step back."

"It is time for him to step back and continue to be innovator-in-chief and problem-solver-in-chief," the anonymous investor said, adding that it was also time to "let a grown-up be CEO."

Uber did not immediately respond to Business Insider's request for comment.

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