Uber, the fast-growing ride-sharing service, has apologized for a senior executive's suggestion that it consider digging up dirt on journalists who are critical of the company.
BuzzFeed reported that Uber senior vice president Emil Michael made the remarks, in which he spoke about the merits of hiring researchers to investigate reporters, at a private dinner in Manhattan last week attended by some members of the press.
In a statement, Michael late Monday said his remarks were "borne out of frustration during an informal debate over what I feel is sensationalistic media coverage of the company I am proud to work for." He added that the comments didn't reflect his "actual views" and that he regretted making them.
Media columnist Michael Wolff of USA Today, who organized the event, failed to inform BuzzFeed editor Ben Smith that the dinner was "off the record," according to BuzzFeed. The site noted Michael was particularly incensed about journalist Sarah Lacy, editor of PandoDaily, who has been highly critical of what she views as Uber's sexism. Lacy has suggested that passengers are more to likely to face potential sexual assault from an Uber driver than a taxi driver, a claim Uber vehemently denies.
Despite Michael's apology, his comments are a "damning indictment of the corporate culture that they have at Uber," said Patrick Pannett, a crisis communications expert at Levick, a public relations firm. "The fact that anyone would even say this whether or not there was journalists in the room is mind-blowing for me."
Lacy said she found Michael's comments disturbing, writing in a column that "these new attacks threatened to hit at my only vulnerability. The only part of my life that I'd do anything to protect: my family and my children."
This isn't Uber's first public relations crisis. Hoping to tamp down the controversy around the company, Uber recently hired President Obama's former campaign manager, David Plouffe, as senior vice president for policy and strategy.
CEO Travis Kalanick, for one, joked in a GQ profile that his company should be called "Boober" because of his success with women. He regularly rails against his rivals in the taxi industry in blunt, and sometimes profane, terms, noting recently that what he called the "Big Taxi cartel... has used decades of political contributions and influence to restrict competition, reduce choice for consumers and put a stranglehold on economic opportunity for its drivers."
The taxi industry waged its own campaign, accusing Uber of operating without regulatory scrutiny designed to protect passenger safety. Uber also has been accused of using underhanded tactics against rival Lyft and of gouging customers by charging more during times of peak demand.
What there is no denying is Uber's surging popularity, with the service now operating in 170 cities around the world. In June, it raised $1.2 billion from a consortium of investors lead by Fidelity Investments, giving it an eye-popping valuation of $18.2 billion, about the same size as car rental giants Hertz Holdings (HTZ) and Avis Budget Group (CAR). The company also is pushing into new markets such as Philadelphia and new businesses such as deliveries. Another funding round that values Uber at $25 billion is also reportedly in the works.
But bad publicity could dampen investor enthusiasm if it starts to affect Uber's business.
"Money is going to walk if these PR issues are starting to affect the company's growth," said Anand Sanwal, the chief executive of CB Insights, a research firm.
But "If Uber continues to grow and continue to hit the numbers that investors expect them to hit, funding will continue to be there," he added.