Pando

Humoring Uber: How will we know if the company is serious about getting better?

By Sarah Lacy , written on February 23, 2017

From The Travis Shrugged Desk

"...my parents always told me 'actions speak louder than words.'"

-- Travis Kalanick defending his reputation to Marc Benioff in 2015

Uber was just starting to turn the narrative on this whole sexism thing.

The incredibly clever whisper campaign-- we’re bad but so is the rest of Silicon Valley! -- was working. Because, yes, sexism is prevalent, and as I wrote a few weeks ago studies show most white men in tech DGAF about diversity. And everyone likely to be pissed at Uber right now wants this to be a broader story about broader inequity.

The unfortunate consequence is this reasoning lets Uber off the hook. It makes them “the norm.” A victim even of the tech world. They are no better, but also no worse.

And just as that narrative was starting to take hold, Mike Isaac of the New York Times threw a sledgehammer through it with his article that details just how grubby the culture of Uber is. It re-upped us on outrage. Cocaine, groping. Go read it all for yourself here.

His piece details something we’ve been talking about for two years: A deeply embedded culture of sexism and misogyny at Uber.  

The revelations come a day after, Uber CEO Travis Kalanick was so desperate to convince those inside and outside the company that it can change he wept at an “all hands meeting,” industry jargon that will never have the same innocent resonance where Uber is concerned again after Isaac’s story.

Once again, we are highly skeptical.

The biggest reason why: A professed shock at how sexist the culture of Uber is. Isaac pretended this culture was only “whispered” about until now. This shit was out there for anyone who wanted to see it for years. This was a CEO who described this company as “Boober” because it helped him bed more women. This was a company that alluded to female drivers as prostitutes in Lyon and waved that scandal away as simply creative marketing. This was a company that abused rider data privacy in the name of intimidating a female journalist, tracking one night stands or “rides of glory.” (Again, no one fired.) This was a company whose team answered concerns about women getting attacked or sexual assaulted in cars by saying those women were dressed provocatively or had had a lot to drink. The implication being, “What did they expect?” This from a CEO who even Seth Meyers described as Axe body spray sprayed “into a suit until it became sentient.”

How on earth can you be shocked?

There are only two possibilities: Executives and board members are so ignorant of what sexism and a hostile work environment is that none of the things we’ve seen this company do--listed above, and not disputed-- that Travis Kalanick has himself uttered, seems sexist to them. Or they are starting this whole process of bringing the truth out into the light of day with with a lie.

Neither bode well for the company changing.

But contrarians that we are in Silicon Valley, let’s give Uber the benefit of the doubt for a moment. There are still a lot of people-- presumably including a lot of employees with equity-- who want to believe that the tears and the words are real this time.

Which raises the question: How would we know what that looked like given how many times Uber has claimed it has changed? How would we know if Uber really means any of this?

I spoke with several people close to Uber in thinking through this list, and almost to a one, people did not expect the company to change. People in the Valley believe that culture is set within the early days of the company, the first few dozen people it hires. At Uber, many of those people are the problem, starting with Axe Body Spray suit himself.

The same qualities that make Uber unable to change-- a combative “us against them” culture, a war-like vibe within the company, a knee-jerk reaction of lashing out at competitors rather than listening to them, a “bro” baller brand-- are the same qualities that investors have long lauded about the company, they were viewed as the key to the company’s success to date.

How would you begin to pull them apart?

If I worked at Uber and was looking for a shred of hope, I would look for the following to prove the company is serious. That this time is different. Not that they’ll change, but that they at least believe they should and are trying to:

Appoint an actual independent review committee. One thing I’ve heard loud and clear from people close to Uber this week is that this review committee as currently constructed isn’t going to get to the bottom of anything. An independent review that includes the current internal counsel, the head of HR, a man who has already been paid to do advocacy work for Uber and a board member who was at the dinner where a journalist was threatened and apparently did not object simply isn’t independent. There is no assurance that Uber itself won’t get to edit and sanitize the report.

Mitch and Freada Kapor make a similar point in their Medium post today-- the first time I've seen an Uber investor publicly criticize the company. 

Arianna Huffington leading the charge is particularly uninspiring. Her stated goal for joining the Uber board was to take on the scourge of “drowsy driving.” Uber incentivizes drivers to drive long hours; Lyft’s app actually forces them to take a break. If Huffington is going to take on Uber’s sexism like she’s taken on Uber’s drowsy driving… it may get worse under her watch.

These kinds of half-ass measures are one of the reasons people tell me Uber is in this mess. In the past, the company did “anonymous surveys” to asses how things were going internally, but those surveys could still identify your department and group. In the “Game of Thrones” culture Susan Fowler describes, where divisions are pitted against divisions that obviously is a breeding ground for retaliation and so no one really tells the truth.

Implement a serious board of directors. Uber has had serious people on its board, but my understanding is they haven’t been empowered to do much. I’ve heard second hand that Travis Kalanick used to brag about how quick his board meetings are. Beyond investors like Bill Gurley and outsiders like Arianna Huffington there’s been a revolving door of “observers” granted token board rights mostly to solve Uber’s ongoing capital and business challenges, like Didi Chuxing’s founder Chéng Wéi, David Plouffe, and representatives of the Saudi government.

No matter what the private details are, this board is clearly not working as any sort of oversight on the company. On its watch Uber has become embroiled in user privacy scandals, engaged in “possibly criminal” behavior against critics, threatened journalists, and been fined for false advertising related to driver pay. This is before the #DeleteUber chaos and Susan Fowler exposed a top-to-bottom rotten corporate culture of manipulation, sexism, and bro-protection no matter the cost.

The financials aren't perfect either. Last year concerns started to mount about whether Uber's business model even works. The company gambled billions on China and lost, meantime, it’s refusal to go public, raising private money at higher and higher prices from more and more dubious investors. It’s burning billions in capital a year, building a business based entirely on brand.

And it’s brand is getting its ass kicked. It hired a number two executive (for God knows what price) whose job was to turn the narrative around. He’s either not be allowed to do his job or is horrible at it. In addition to recent scandals, Jeff Jones conducted an embarrassing Facebook chat with drivers in recent weeks.

This company is a mess. And the latest scandal only seems to be a “shock” to those in management.

Huffington’s statement about how she intends to hold management’s feet to the fire would be less laughable if she hadn’t said “change cannot happen without a catalyst.” What company has she been serving on the board of? We wrote this was a company with sexism problems from head to toe years ago. The UN Women’s group dropped them like a hot potato because of their record with women. And Fowler noted that she and other women had documented their complaints-- repeatedly.

There are only two options: Management and the board are totally disingenuous in their shock or they are in no way in control of this company.

So the board-- at a minimum-- needs change. And Kalanick needs to empower the board to have some level of oversight.

The bros gotta go. This isn’t the first time we’ve heard Kalanick express extreme contrition over his company’s culture. It isn’t even the first time he’s been emotional. It’s not the first time he’s vowed they would do better.

There have been half a dozen attempts at re-booting Kalanick and Uber’s brand in magazine cover after magazine cover over the last few years. It’s clear none of that was true.

Indeed, after Kalanick and Emil Michael insisted they would never carry out the things they threatened to do against journalists like me-- that that wasn’t what Uber stood for-- it was found in court that they did  against a plaintiff and attorney suing them.

They have just been caught in too many lies, this very routine has been played out too many times to get the benefit of the doubt.

So Uber will have to act. It will have to do something it has never done before: Fire Kalanick’s inner circle of bros, the so-called “A Team.” From the New York Times yesterday:

One group appeared immune to internal scrutiny, the current and former employees said. Called the A-Team and composed of a small group of executives who were personally close to Mr. Kalanick, its members were shielded from much accountability over their actions.

One member of the A-Team was Emil Michael, senior vice president for business, who was caught up in a public scandal over comments he made in 2014 about digging into the private lives of journalists who opposed the company. Mr. Kalanick defended Mr. Michael, saying he believed Mr. Michael could learn from his mistakes.

In scandal after scandal, Kalanick has never been willing to fire any of the bros responsible for the misdeeds. There will have to be a major bloodletting of the senior management who encouraged the culture that Johnson describes in her post. Low-level or even mid-level departures won’t cut it.

Many people won’t be satisfied until Kalanick himself is gone. And -- by the way-- another scandal or two and we could be having a serious discussion about that. Zynga's Mark Pincus and Groupon's Andrew Mason both seemed protected, and both were out. The only hope he has of saving his skin and convincing anyone this company has changed is to gut the management team just under him.

What specifically does Kalanick feel his “mistakes” are? In her post, Huffington said “Travis spoke very honestly about the mistakes he’s made — and about how he wants to take the events of the last 48 hours to build a better Uber. It was great to see employees holding managers accountable. I also view it as my responsibility to hold the leadership team’s feet to the fire on this issue.”

I would like to understand exactly what Kalanick feels his mistakes are. Because he says he was shocked about Johnson’s allegations. And in the past, he’s seemingly been proud of a lot of things that have horrified people like me: Lying to journalists, threatening opponents with oppo research and then trying to bury the evidence in encryption, referring to his company as “boober”, just to name a few issues of the “mistakes” by my tally.

But Kalanick has never expressed any remorse about any of these in the past, and says he was stunned about Johnson’s allegations now. This despite this from the New York Times:

Uber’s aggressive workplace culture spilled out at a global all-hands meeting in late 2015 in Las Vegas, where the company hired Beyoncé to perform at the rooftop bar of the Palms Hotel. Between bouts of drinking and gambling, Uber employees used cocaine in the bathrooms at private parties, said three attendees, and a manager groped several female employees. (The manager was terminated within 12 hours.) One employee hijacked a private shuttle bus, filled it with friends and took it for a joy ride, the attendees said.

So for me to believe there’s been any Road to Damascus conversion, I’d like to know specifically what Kalanick is acknowledging he’s done that is wrong.