Uber: The past lives on
The appointment of Dara Khosrowshahi as Uber’s new CEO earlier this year was hailed as a new beginning for Uber and a chance to re-shape the company that had seemingly fallen far off-track. However, charting the first months of Khosrowshahi’s tenure reveals that the troubles of Uber’s past are persisting.
In the last week it has emerged that in October 2016 Uber suffered a security breach, with hackers stealing personal data – names, email addresses and phone numbers – of Uber’s customers and over 600,000 drivers. The hack itself was not hugely unique, and had it been reported immediately to external authorities, it may well have been a quickly resolved issue. However, Uber’s decision to cover up the hack and pay $100,000 in ransom to the hackers in exchange for the deletion of stolen data and their silence has left many pointing again to the negative and profit obsessed culture at the firm.
Though Khosrowshahi has continually spoken of his determination to reshape the company and the ways in which it operates, his first months in the role have been dominated by issues relating to his predecessor’s time at the helm. As such, investors and the media cannot yet see or judge the changes Khosrowshahi intends to make because he is continually apologising and acknowledging Uber’s previous failings.
These failings stretch across the company at every level. In January 2017 the hashtag #DeleteUber went viral as customers reacted to the company’s turning off of its ‘surge pricing’ at JFK airport while Yellow Taxi drivers were on strike to protest Trump’s Travel Ban on majority-Muslim countries, something many saw as an attempt to break the strike. In February 2017 Susan Fowler released a blog charting her experience of sexism and harassment during her time at Uber as one of its only female engineers. This sparked the exposure of a widespread sexism issue within the firm, with even the CEO at the time Travis Kalanick being implicated.
In 2017 Uber has also faced legal trouble relating to its evasion of government systems through a programme called ‘Greyball’ in jurisdictions in which it was not permitted to operate. It was also accused of spying by rival Lyft through a software called Hell and more recently are going through court proceedings related to accusations by Waymo (the self-driving technology arm of Google) that Uber obtained data stolen from a former employee. Then, to add further to the woes of Uber, in September TFL (Transport for London) announced that it would not be renewing Uber’s operating license in the capital, something Uber are now challenging in the courts.
The revealed data hack is therefore a further problem from the Kalanick era for Khosrowshahi to contend with and as such the grand turning point many hoped and expected to see with his appointment as CEO is being overshadowed by Uber’s past. The company has announced this week that it has fired Joe Sullivan, head of the security team, and a member of its legal department in relation to the hack and Uber’s transparency - though these actions were delayed, they received some positive response from investors. However, the hack could still have repercussions for Uber’s planned 2019 IPO and the price that investors are willing to pay for Uber shares.
The first months of Dara Khosrowshahi’s time at the helm of Uber, therefore, have been embroiled with the continued aftershocks of Uber’s past actions. Though the attempt to clear-up and revamp the image and culture of Uber remains at the forefront of Khosrowshahi’s agenda, it is clear that this must be done by firstly addressing and facing the consequences for Uber’s previous actions. As such the next few months will likely see Uber continue to attract negative headlines surrounding their numerous court cases and allegations. It is only once such accusations and issues within Uber have been properly addressed publicly, as Khosrowshahi is doing, that external attention will turn to his efforts to rebuild the company’s reputation.