Uber turns to damage control following scandals

Beset by charges of sexual harassment and other employee complaints, Uber, the fast-growing ride-hailing service, is making some course adjustments. It will revamp its culture, but its controversial chief executive will stay in place, three high-ranking women associated with the company indicated Tuesday.

Uber board member Arianna Huffington, founder of news site Huffington Post, told reporters that CEO Travis Kalanick, has “the confidence” of its board of directors. She appeared with two female executives who outlined steps to improve the treatment of woman at Uber and also to better the drivers’ lot. 

“I will be holding its feet to the fire,” said Huffington, who joined the Uber board a year ago, referring to the San Francisco-based company, which critics say has a toxic culture. “We will be creating a great culture that has zero tolerance for disrespectful behavior.” 

The company has hired former U.S. Attorney General Eric Holder to evaluate sexual harassment claims. Huffington said she expects his report by late April and that it will be made public. Asked if the board would seek Kalanick’s ouster if the inquiry finds he had knowledge of the harassment, Huffington said “this hasn’t come up, and we don’t expect it to come up.”

Kalanick, she said, “started as a scrappy entrepreneur and now must change.” She added that “he must be allowed to evolve.” 

Asked why the company had trotted out three women and no men to meet with reporters, Huffington said it was because they were closest to efforts to overhaul the company’s culture. Kalanick couldn’t make it to the press event because he was busy interviewing candidates to become chief operating officer, they said.

They described the past few weeks of horrible publicity as instrumental in improving the CEO’s sometimes rambunctious behavior. “Almost week by week I have seen him change,” said Liane Hornsey, the new head of human resources. She’s a former Google HR chief who joined Uber in January. The company will install training to improve the culture, she said.

Rachel Holt, who oversees North American operations and marketing, admitted that Uber had “underinvested in the driver experience,” so it was taking steps like paying them when they drive to a pickup point and no customer appears.   

The biggest flashpoint for the company came last month when a former Uber engineer, Susan Fowler, detailed in a blog post a number of instances of sexual harassment and gender bias at the company. She said she saw her prospects at the company were in doubt after she complained to HR.

Looming over attempts to repair damage to its reputation is a much-expected public stock offering. The unprofitable and now privately held firm is worth $69 billion, according to Bloomberg News. Although Uber sales are growing rapidly, estimated to hit $5.5 billion in 2016, it still is deep in the red. In last year’s first nine months, it lost $2.2 billion on revenue of $3.8 billion. 

Another tech darling that’s similarly profit-challenged, Snap (SNAP), the parent of disappearing message platform Snapchat, also went public recently. But its stock price quickly wilted -- though it’s still valued at almost $26 billion.  

Amid all the woes, Uber has suffered a host of recent executive departures. Most prominent was that of its president for only six months, Jeff Jones, who said in a statement that his “beliefs and approach to leadership” did not match those he found at Uber. 

The company has been beset by numerous other controversies. A recent dashcam video showed Kalanick profanely berating a driver who complained about reductions in Uber’s rates. The firm also admitted it has employed a program to thwart authorities seeking to diminish or end its business in several cities, such as Paris, Las Vegas and Boston. 

Meanwhile, Waymo, a self-driving car company that was once a division of Google parent Alphabet (GOOG), last month sued Uber, alleging betrayal and high-tech espionage. The complaint accuses Anthony Levandowski, a former top manager for Google’s self-driving car project, of stealing technology that’s key to Uber’s effort to create an autonomous vehicle fleet.

Uber denied Waymo’s charges.

  • Larry Light

    Larry Light is a veteran financial editor and reporter who has worked for the Wall Street Journal, Forbes, Business Week, Money, AdviceIQ and Newsday.