Reference no: EM132180361

The Uber Case:

Background Summary / Business Conditions

Rarely does a technological innovation come along to disrupt daily existence for so many so fast. Ride hailing, and the application behind it, driven by Uber literally created a “revolution” in urban transportation. Controversial, yet so helpful for consumers, Uber clearly filled a major unmet need - legally or illegally perhaps.

Customers flock to the platform in droves, making it one of the most widely used applications. Meanwhile, traditional taxi and limo drivers aren’t exactly fans. They often petition to have Uber stopped. Dissent grows.

All hasn’t exactly been smooth sailing at Uber, with concerns raised about demand pricing, driver qualification, safety, insurance, and most recently just plain bad behavior. Believers shrug this off as critics always decry a good thing when it becomes top dog. Others, however, have brought forward quite serious allegations of blatant sexual harassment, abusive management and “aggressive, unrestrained workplace culture.”1 ,2

The troubles at Uber may be endemic of the Silicon Valley approach though, in highly competitive markets. Even tech giants like Amazon with similar CEOs like Jeff Bezos have come under scrutiny for tough, demanding work environments. Whether diversity lags at these kind of institutions due to lack of access, interest, skill sets, or willingness to put up with certain behavior, remains to be clarified. But from the outside looking in, many claim business climate isn’t good, and staff take the brunt of the trauma in forcing forward revolutionary gains.

This assertive culture of disruption at Uber specifically, however, emboldened some to act outside norms. Going above and beyond to compete might be one thing, but there are also lines for managers never to cross. Uber took action after an inquiry led by the Board, and at least 20 employees were let go.3

Employee Values / Vision / and Loyalty Adjustment

Every business may have disgruntled employees, and former staff “naysayers.” “Sour grapes” are not unusual. Yet, rumors of reported mistreatment surfaced at Uber in ways nobody expected. Could it be that “the good old boy’s club” morphed into the brazen start-up environment?

As accusations came forward, execs scoffed. Reports say HR didn’t take action. Perhaps they looked the other way too often, if claims prove true. Or HR was simply too busy to notice the growing tide and manage down to the details. Suddenly, the CEO was caught off guard, and had to take “extended” time off. This sent shock waves across investors, customers, and staff alike.4

Leadership and Management Reorientation

Given the negative publicity, Uber needed to bring in some other voices and approaches. New leadership and ideology have tentatively been sought to “change the tires while going 90 miles an hour.” Uber must continue to be relentless to ward off competition, and address growing waves of legislative initiatives by cities and municipalities limiting access. Changes continue to occur to enhance the Uber service value proposition.

The founder of Uber, and driving force, Travis Kalanick (called TK), is yet another case of a rising star with a compelling vision and appetite for risk for reward. Lauded by some as a “tech world rock star” TK played the line on ethics in many cases to get success. His personal bravado lives through his guiding principles for Uber including “always be hustlin’ and super pumped” as cornerstones of his business philosophy.6

In order for workers to believe new leadership really has a vested stake in improvement, staff must see behaviors expected, and connect to the implicit assumptions that it is essential for both the business and staff to thrive. Yet, TK remains a huge presence and force as the largest shareholder potentially seeking to return (a.k.a. Steve Jobs).

Driverless cars may be on the horizon, but for the foreseeable future drivers are Uber’s competitive advantage. Those people are not staff technically, but rather contractors. Uber must turn around the perception that management is self-absorbed and out of touch, drivers will have to feel connection, and high turnover must dissipate.

Working Conditions and Employee Morale

Overall, Uber has so many good things going. Demand continues. Scandal hasn’t devastated business so far. They aren’t going out of business anytime soon. But competitors like Lyft are gaining market share. Investors have pulled out. Some customers have even left, boycotting, reporting to friends and family that they can get around just fine (without variable demand pricing).

Potential recruits are wary of working at a firm where allegations of mistreatment and abuse characterize the day-to-day environment. Many of the “founding few” are still among the hierarchy. Worries exist that Uber may not be the amazing place to work it once had been heralded. Or at least the future and draw has become less clear.

You are asked to intervene to assist Uber to figure out what to do, when, and how to rebuild. Devise a strategy and implementation plan moving forward to resolve the most salient issues, and get Uber back on a growth track. Your plan should primarily focus around the challenges facing the human capital concerns and consequences.

What ways might the issues parallel those for other high tech competitors under scrutiny vs. spring uniquely from this specific situation, leadership, and originating staff at Uber?