Uber CEO’s Time-Out Is a Wake-Up Call to Us All

The HBO sitcom Silicon Valley merged with reality as Dan Lyons, a longtime journalist who has written the show for two seasons, recently said about Uber:

There’s a general sense in Silicon Valley, and there has been for five to 10 years, that it’s all about growth…. Not just reasonable growth, but hypergrowth. Do anything you can to get that growth. That in itself causes a lot of problems.

Which leads me to the state of Uber today.

As Farhood Manjoo wrote in The New York Times:

You gasp with each new report on Uber’s toxicity.…

Yet if you’re like many people, in a day or two you’ll shrug, pull out your phone and call up an Uber anyway….

Don’t do it — at least not without considering the full weight of your decision, and the many alternatives you might turn to instead.

This admonition comes on the heels of a mass action against Uber from February of this year.

Business Insider reports, “Over 200,000 people deleted Uber after the company operated its service at JFK airport during the Trump strike”:

Furious Uber riders had deleted the app after the company continued operating its service at John F. Kennedy International Airport on Saturday, creating the perception that it was undermining a taxi strike in protest of President Trump’s immigration ban….

The company was seen as both profiting off the taxi strike and supporting the executive order since its CEO, Travis Kalanick, served on an economic council for the president.

And Uber has previously been berated for initiating surge pricing during the crisis, at the critical time that people needed transportation the most. Both Australia and the UK during terror incidents come to mind.

Let’s face it, Uber was just doing what Uber was celebrated and admired for while investors kept pouring in money, making it the most highly valued company of all the high-tech sector, and it is still private:

The New York Times reports “How Uber’s Brash Approach Is Beginning to Backfire”:

Uber is known for its brash, aggressive approach to business. It’s what helped propel it to nearly a $70 billion valuation and get it into the more than 70 countries where it now operates.

However, as the article continues:

That approach is beginning to backfire, as executives leave the company and employees buck leadership.

While way back in November and December of 2014, I posted and posited in the Weekly Ramble that “Uber is at the nexus of the ethical model and the business model, and they do intersect.”

And on LinkedIn:

But the complaints — from safety to their corporate snark — fall in two buckets. One is their culture, the way they behave and perceptions of how they behave. The other is their business model. Either one could tank the business, but together it’s a perfect storm of potential self-destruction.

And, so, while some have belatedly discovered the vileness of their corporate culture, you can only wonder when they will awaken to the problems in their business model. According to Vanity Fair:

Silicon Valley remains bullish. Investors have poured $8 billion in funding into Uber in hopes that it will be the next Amazon, eventually turning a profit from its massive, globe-spanning business. And while some investors have spoken out about Uber’s allegedly sexist, discriminatory corporate culture, none are yet complaining about the company’s finances.

Because, the article argues, “Uber Is Losing an Absolutely Insane Amount of Money”:

For all the turbulence that Uber has experienced in the past year—allegations of sexism, an executive exodus, a lawsuit that could throw a wrench in the company’s plans to develop self-driving cars—one thing has remained constant: Uber, the world’s most valuable tech company at $68 billion, is still losing a startling amount of money. In an attempt to showcase how much its revenues have grown, the embattled ride-hailing company opened its books to Bloomberg in an interview published Friday, revealing explosive sales growth over the past four years. In 2016, Uber customers spent $20 billion—more than doubling how much they spent the year before. Of that $20 billion, Uber says $6.5 billion is net revenue, excluding its costs in China.

Of course, in its attempt to rapidly scale its global business, Uber is also burning through cash at an incredible rate, with losses of about $2.8 billion in the last year.

All of which is leading to…excuse the expression I hate…another disruption in the market by a smaller upstart with a different global view.

“Lyft has been quietly catching up to Uber,” according to Market Watch.

In 2017, Uber has been plagued by an anti-immigration protest leading to a #deleteuber campaign from consumers, reports of sexual harassment at the company levied by a former engineer, a lawsuit from Alphabet Inc. over self-driving car technology and a criminal investigation into Greyball, Uber’s software program that helped drivers evade government officials.

During that time period, Lyft has been closing the gap with Uber in terms of app downloads. Now, with an investigation that called for a revamp of Uber’s culture and led to Uber Chief Executive Travis Kalanick taking a leave of absence shown to be harming Uber’s brand, the lead could narrow even more….

Lyft is still the smaller player to Uber, with a valuation of $7.5 billion compared with Uber’s $68 billion. Lyft also has less of a footprint, with drivers in 350 U.S. cities, while Uber is in more than 70 countries and 460 cities.

But Lyft has taken a route of partnering to expand its global footprint while also teaming up with auto manufacturers, including Alphabet’s self-driving car unit Waymo, which is odds with Uber. The partnerships include a $25 million investment from Jaguar Land Rover, which Lyft announced Monday.

Yet, the board, forced, by the way, to dismiss one of its own members who felt empowered enough to make his own sexist remarks, is still focused mostly on the issues of inclusion, language and behavior believing that celebrating “hustlin’” or having a “War Room” is the problem and that it can be rectified by a language change and a softer approach.

“Travis Kalanick leaves Uber to Work on ‘Travis 2.0,’” reports VICE.

Eric Holder’s investigation into Uber’s corporate culture starts with an action item that has been staring the $50 billion startup in the face for months: “Review and Reallocate the Responsibilities of Travis Kalanick.”

That’s the first of 47 recommendations the former U.S. attorney general made Tuesday for how to clean up a toxic workplace culture at the ride-hailing behemoth. In response, Uber CEO Kalanick announced he’ll be taking an indefinite “leave of absence,” and all decision-making at the company distributed to his management team….

The recommendations issued by the Holder’s law firm Covington & Burling report are far-reaching, and involve substantial changes to Uber’s management structure. They include:

  • using the company’s ongoing search for a COO to find someone who can focus on implementing these recommendations

  • creating an “oversight committee” at the board of directors-level that would “oversee Uber’s efforts and enhance a culture of ethical business practices, diversity, and inclusion within the organization.”

  • expanding the powers of Uber’s board of directors, adding members to it, and naming an official board chairperson.

Some of the planned fixes are more granular, according to Bloomberg. They include renaming the so-called “War Room” conference room the “Peace Room,” and scrapping some of the company’s infamous 14 core values, such as “Always Be Hustlin’.”

Frankly, my philosophy has always been to hire people with “Fire in Their Belly,” “Do It Big or Stay in Bed” is my motto known to all who know me and “War Rooms” are critical elements in focusing myself and our teams on the combat of competition.

So, bottom line, I have no issue with Uber’s articulation of competitiveness. Nor do I believe  changing words will make any difference at all to their problem…although I do admire that at least they have acknowledged the need for “ethical business practices,” as I wrote about almost three years ago.

No…the problem is the market. The investors, the analysts, the media…US. The people who continue to use the word Disruption in celebration of business that is not held to the standards of ethics, morality, profit, business practice – human interactions that most of us are judged by and try to live with.

This is not about breaking the rules – as in archaic thinking or siloed concepts…I imagine the inventors/discoverers of fire and the wheel broke a rule or two in their day, and we should all be encouraged to question and break rules that hinder and silo and tie us down, keeping us from achieving a Do It Big outcome.

But success at any cost – justifying and rationalizing any behavior as necessary to progress –  smacks of evil…and, sadly, our world has seen too much of it over the last century.

Which is why the kind of thinking outlined in the following article scares and concerns me to no end:

TIME reports: “Uber Fail: Upheaval at the World’s Most Valuable Startup is a Wake-Up Call For Silicon Valley”:

The reality is that, somewhere between Xerox Parc and Uber, Silicon Valley achieved escape velocity. Technology is advancing so rapidly that, at this point, it is always going to outpace the law, the government or the public’s capacity to fully understand its ramifications. The genie is never going back into its flip phone. How else could history’s most valuable startup, however troubled, emerge from nothing in eight years? Future startups are going to make decisions that will impact the lives of millions, defining the world the way religions and empires used to. iPhones and tweets and more convenient taxis were one thing. But the wave on the horizon now–artificial intelligence, genetic engineering, nanotechnology–will be something else entirely.

I for one have a more optimistic view of the world and, despite some recent setbacks, believe…and hope and pray to be sure…that decency will win out. People First will become the mantra and if it takes ten years instead of eight to get a taxi quicker, so be it…because, as the article points out, that pales in light of what might be coming.

Progress demands disruption and together they drive change and our world and our lives evolve because of it…and that’s good and right and necessary…and BTW, it happens and always will.

Let me share with you the thoughts of two great disruptors who created ripples of change that will be felt…maybe forever…and at the very least their names will be revered long after Uber’s will be forgotten…listen:

Technological progress is like an axe in the hands of a pathological criminal.” Albert Einstein

Clearly he didn’t mean for us to take the thought literally…it was a warning…an admonition, and study his life it becomes clear….

But then I read the next disruptor’s thought and it all came together for me, as I hope it does for you…and maybe even for Uber…listen:

“Maybe the preoccupation with technological progress has overshadowed our concern with human progress.” Wynton Marsalis

Think about it. We call every application we create technology. We conflate Uber with curing cancer and the result of that is clear.

Human progress will drive the most important and positively disruptive technological progress.

What do you think?

Related posts: