What’s Uber’s future? Consider these three principles:
- If you frequently and publicly behave like an asshole, people think that’s who you are.
- If you behave like an asshole with employees, contractors, regulators, competitors, and reporters, then you’ll be seen as an asshole, regardless of how nice you are to customers.
- It’s very hard to recover from principles 1 and 2.
Uber has fallen victim to these principles. It also lacks profit or even a path to profit. When you’re in that situation, you need friends — but friends are hard to come by when you behave like an asshole.
To get an overview of Uber’s situation, read Ryan Felton’s comprehensive and heavily sourced article in Jalopnik, “Uber is Doomed.” In addition to putting all the accusations against Uber in one place, Felton delves into the company’s financial situation and claims that customer payments only cover about 41% of the cost of every ride; investors pay for the rest. Since there is no magical source of business scale that will solve Uber’s cost problem (and autonomous cars won’t arrive nearly fast enough to get rid of the need for drivers), this is a bit of a problem: it’s hard to run a company that’s losing $2 billion a year and shows no sign of becoming profitable.
Uber sits at the confluence of investors, drivers, regulators, customers, and a welter of widely varied local and international regulations and market conditions. When you have this many stakeholders, you need a culture that’s grounded in an ideal to hold everything together. The Jalopnik article reveals what that ideal is:
If there is one quote that sums up the ethos of Uber, it might be this cut from the company’s firebrand CEO Travis Kalanick: “Stand by your principles and be comfortable with confrontation. So few people are, so when the people with the red tape come, it becomes a negotiation.”
So the uber principle of Uber is “don’t back down.” There’s another way to put that, though, and it goes like this: “Feel free to behave like an asshole to get your way.”
Behaving like an asshole has destroyed Uber’s brand
Let’s review some of what we’ve found out about Uber over the last few years:
- A senior VP suggested digging up dirt on journalists as a way to fight image problems. Only assholes get personal with journalists (remind you of anyone else lately)? This was the first time that I noticed that Uber was behaving like an asshole.
- As protestors gathered at JFK airport in the wake of Trump’s travel ban, New York taxi drivers boycotted the airport, but Uber didn’t. Trump haters took this, along with CEO Travis Kalanick’s position at the time on Trump’s economic advisory board, as a reason to boycott Uber. The JFK taxi boycott was a no-win situation for Uber: should it have served customers or taken a political stand? But when you have already behaved like an asshole, your customers don’t give you the benefit of the doubt. Over 200,000 customers deleted the app in protest.
- A former female engineer at Uber alleged and documented a culture of misogyny. She offered a lot of evidence that Uber not only condones sexual harassment, but behaves like an asshole to its employees. Uber admitted it had problems, but this incident confirmed that the asshole behavior is part of a pattern.
- Alphabet subsidiary Waymo sued Uber for stealing secrets. It described how an engineer deliberately downloaded key technology and then inserted it into Uber’s self-driving car project. We believed it because it’s just the kind of thing a company that behaves like an asshole would do.
- Kalanick told a driver that it was his own fault he’d lost $97,000 as an Uber driver. I’ve watched the video and Kalanick’s behavior is pretty mild. But in the wake of all the other misbehavior, you’re ready to perceive him as an arrogant asshole.
Apologies are not going to cut it here
In the wake of the harassment accusation, Uber held a company meeting that The Verge described as “honest, raw, and emotional” and Kalanick tweeted “What’s described here is abhorrent & against everything we believe in. Anyone who behaves this way or thinks this is OK will be fired.” Then, after his incident with the driver, he wrote this apology and sent it to all of his staff:
By now I’m sure you’ve seen the video where I treated an Uber driver disrespectfully. To say that I am ashamed is an extreme understatement. My job as your leader is to lead…and that starts with behaving in a way that makes us all proud. That is not what I did, and it cannot be explained away.
It’s clear this video is a reflection of me—and the criticism we’ve received is a stark reminder that I must fundamentally change as a leader and grow up. This is the first time I’ve been willing to admit that I need leadership help and I intend to get it.
I want to profoundly apologize to Fawzi [the driver in the video], as well as the driver and rider community, and to the Uber team.
While this apology is sincere, it’s doesn’t matter. Because it takes more than an apology when you’ve regularly and consistently behaved like an asshole.
Experienced PR hand Gerard Corbett suggested on Quora that “Uber could start by being honest, open, authentic and take action” and suggested some specific actions to take.
I don’t think it would work. The narrative is too clear to undo.
Remaking a reputation is the ultimate challenge
Here’s the problem.
Uber needs to challenge local regulations, drive employees mercilessly, cut driver pay, and replace drivers with autonomous cars to survive and eventually become a profitable company. Look at how the company has done this so far: it’s behaved like an asshole to employees, drivers, and regulators. Confrontation is Uber’s acknowledged strategy.
At this point, it needs those same employees, drivers, and regulators to believe in and work with the company. In that situation, a reputation for behaving like an asshole gets in the way.
Changing a culture while trying to save a billon-dollar startup is like replacing all four tires while your car is going 200 miles an hour. It’s not possible. And when you try to do that, the wreck is going to be spectacular.