Uber's PR challenges create opening for rivals

Uber CEO Travis Kalanick said something last week that was out of character for the Silicon Valley agitator: He admitted it was time to grow up.

“I must fundamentally change as a leader and grow up,” Kalanick, 40, wrote in a note to Uber employees Tuesday, Feb. 28. “This is the first time I’ve been willing to admit that I need leadership help and I intend to get it.”

This statement comes from an executive who has become notorious for expanding Uber by any means necessary, entering new regions first then dealing, not so politely, with regulators later.

Kalanick and Uber need to move fast to contain the public relations damage: Competitor Lyft is quietly looking to raise $ 500 million in funding to expand and wants to increase its valuation to $ 7 billion, according to The Wall Street Journal. And smaller ride-sharing companies such as Juno are looking to capitalize on worker dissatisfaction with Uber to poach one of the company’s main assets: its drivers.

“If you focus too much on growing, you lose track of what’s important and that’s the people that work there,” said Dave Sullivan, an analyst at AutoPacific. “The company won’t exist without those people.”

With a valuation of $ 66 billion and locations around the world, Uber isn’t a small startup anymore. Its aggressive growth — and aggressive leadership — has produced a bevy of public relations issues. These problems, which range from sexual harassment claims to an intellectual property theft lawsuit, are symptomatic of unstructured growth, experts say, and Uber’s future could depend on the company’s — and Kalanick’s — ability to address its internal issues.

“The catalyst for Travis to issue an apology so quickly was because Lyft is right there waiting in the weeds. If Lyft wasn’t there, Uber could do a little bit of ‘wait and see,’ but they don’t have that luxury.”

Justin Joseph
a public relations professor at Boston University

“The catalyst for Travis to issue an apology so quickly was because Lyft is right there waiting in the weeds,” said Justin Joseph, a public relations professor at Boston University. “If Lyft wasn’t there, Uber could do a little bit of ‘wait and see,’ but they don’t have that luxury.” 

On Feb. 19, former Uber engineer Susan Fowler published a blog detailing the sexism she experienced. What would normally be a public relations disaster on its own was just the beginning of a chaotic two weeks. 

On Feb. 23, Waymo, Google’s self-driving technology company, sued Uber for stealing its lidar sensor designs. The following day, a New York Times report revealed that in December, the company had falsely claimed that its autonomous car caught on camera running a red light in San Francisco was under human control. Internal emails show it was in self-driving mode.

On Feb. 27, Uber fired its head of engineering after the company learned of his history of sexual harassment at Google. To top off the month, a video of Kalanick surfaced the next day, showing him arguing with an Uber driver over lowering prices. 

“Some people don’t like to take responsibility,” Kalanick told the driver after he complained of losing $ 97,000 because of Uber. “They blame everything in their life on somebody else.” 

Kalanick came into March more lamb-like, publishing the Tuesday night note he sent to employees addressing the video and his need for leadership help. Uber did not respond to a request for comment on how the company has been handling the string of events. 

“Clearly he realizes that he was in the wrong for some of the things that have happened,” Sullivan said. “The apology wasn’t just directed to the Uber driver.” 

Kalanick’s apology didn’t end the chain of bad press. On Friday, The New York Times published a report on the company’s use of a tool called Greyball, which allowed it to continue operation in municipalities that had banned its ride-sharing service by identifying law enforcement officials and showing them a dummy version of the app if they tried to use it.

James Fenell, 22, is a part-time Uber driver in Pittsburgh and found the video of Kalanick “appalling.” He also didn’t buy the apology that followed. 

“The way he reacted shines light on how he really feels about drivers, the people who made him worth $ 6 billion,” Fenell said. 

Fenell said he and fellow drivers in the area have grown frustrated with Uber for cutting driver rates without warning and making communication between drivers and support staff more complicated. He added that some drivers are considering defecting to the new ride-hailing service Juno that has been planting roots in Pittsburgh and offering generous driver incentives. 

To avoid losing ground to opportunistic competitors, Uber needs to act fast. An immediate solution and one mentioned in Kalanick’s apology, is to bring in new leadership to assist the CEO, and help build an internal corporate structure that supports its employees and drivers. 

Because much of Uber’s growth can be tied to Kalanick’s efforts, Sullivan said, it’s unlikely he’ll be ousted from the head role, but bringing in an executive with a reputation of transparency and trustworthiness in a co-leadership position could help stabilize the company. 

Uber also needs to establish a culture of prevention rather than the reactionary strategy it has developed during its rapid growth, Joseph said. Such a policy requires dedicated teams monitoring employee concerns and established procedures to address issues rather than suppress them, Joseph said. Uber’s strategy seems to be purely reactive, rather than attempting to make sure bad things don’t happen in the first place, Joseph said. 

And most importantly, the company needs leadership that pays attention and cares about stopping bad behavior. 

“People expect you to know what’s going on and not allow a culture that permits bad things to happen,” Sullivan said. 

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