5 Key CSR Learnings from the Woes of the World’s Most Valuable Startup — Uber
Corporate Social Responsibility (CSR) is business as a good corporate citizen in its everyday activities. This responsibility manifests in various forms such as compliance to local and international standards, ethical conducts, and accounting for impact on society and environment. In recent times, there have been increasing demands from employees, customers and government bodies for businesses to act responsibly in the conduct of their operations. And some forward-thinking organisations have leveraged on good CSR practices to increase competitive advantage, protect and raise brand awareness and build trust with employees and other external stakeholders. As the concept has become more widespread, it has led to the making and collapse of several organisations globally.
Uber Technologies Incorporation, the rapidly expanding ride-hailing application, which allows its users to book and pay for taxis by using their smartphone has come under serious attack in many parts of the world including the United States, much of Europe, Asia and Nigeria. In these destinations, Uber has faced sanctions, criticisms and protests, such as the once trending social media campaign #DeleteUber, in which users were encouraged to stop using the Uber app. Most recently, a ban on Uber has resulted in the stripping off of its operating license in London. The regulator, Transport for London, said “Uber’s approach and conduct demonstrate a lack of corporate responsibility in relation to a number of issues which have potential public safety and security implications”.
In its short-term existence, Uber has been accused of various bad CSR-related issues such as non-reporting of serious criminal offences, improper background checks on drivers, hiring of unprofessional drivers, espionage, customer privacy issues and others. The company has also had to combat its internal stakeholders.
Below are 5 key CSR learnings from Uber’s woes
1. Management plays a vital role in corporate responsibility
If a business will succeed in its efforts to be responsible, there must be strong commitment from the top that will trickle down to the bottom. Top management have a vital role in the setting of standards and the enforcing of policies that members of staff will adhere to. At Uber, there definitely were issues of leadership commitment to corporate responsibility. On March 19, Jeff Jones, the company’s president, stepped down after six months, declaring that “The beliefs and approach to leadership that have guided my career are inconsistent with what I saw and experienced at Uber.” However, the new Chief Executive, Dara Khosrowshahi, has been responding appropriately to the London sanction and has promised the general public and regulators of more responsible conduct going forward, thus, setting the responsibility tone from the top.
2. It is important to align with global best practices
There are organisations that were formed before the advent of guidelines such as the ILO (International Labour Organisation) declaration, the Human Rights Charter, ISO Standards and many other globally recognised standards. As a result of these standards, organisations that existed at the time had to alter their modus operandi in order to conform to the standards and become responsible corporate citizens. But it is year 2017, most of these laws are already in existence so Uber needs little or no catching up to do. Hence, if Uber is going to be global player for the long-term, it has to comply with both local and global guidelines, standards and policies. Whether it is in the area of health, safety, environment, ethics and corporate governance, risk management, labour rights and others, the tone for compliance must be set from the very beginning.
3. Engage your stakeholders proactively
In Uber’s short existence, it has had to battle both internal and external stakeholders. A former employee wrote a blog post on the failure of Uber’s human resources department to act on her sexual-harassment complaint. Another Uber driver filmed and uploaded a material of Mr Travis Kalanick, Uber’s co-founder, using swear words while arguing with him about fare cuts. In some other places like the United States and London, Uber drivers have sued Uber for issues such as unionisation, payment of minimum wage, and rights to paid holidays. Externally, Uber has been sanctioned in a number of places such as London and France for non-compliance and tax evasion, and is also facing a patent suit and several other sanctions. Uber has also lost its operating license in a few European countries. What all these imply is that the company lacks a structured and effective stakeholder management system. Fred Jones, an executive at Uber’s UK operation, said: “Sitting down with Transport for London (TfL) representatives as soon as possible would be the most helpful thing to really understand their concerns, to work out what they are. It is just not clear to us what those concerns are.” Therefore, the next step for Uber is to properly map and engage all the stakeholders across its value chain and properly identify their need and concerns, as well as factor these needs into their own decision-making process.
4. Build the right reputation and benefit in the long run
While it is not unusual for a brand like Uber to have a PR company that manages it reputation, reactive and counter PR tactics are not ideal ways for building the right reputation. Forward-thinking organisations typically stand for some value, and their value system is what drives their business code of conduct, that then helps them to build and sustain the right reputation. This type of organic reputation-building is what the PR teams of big brands like Uber should leverage on to propagate their brands. Sadiq Khan, the London mayor and chair of TfL, said that Uber had brought “unfair pressure” on TfL, employing an “army” of PR experts and lawyers.” Even with its army of PR experts, Uber still got sanctioned, have lost their license in London and are on the verge of being permanently red carded.
5. Accept criticism and/or sanctions and respond appropriately
Most companies get to face criticism and/or sanction at some point of their existence. While the criticism typically comes from the general public, regulators (government), or civil society organisations, sanctions come from the government. Whatever the case, if an organization has proactively strategized to avoid this, it is an organisation’s response to such criticisms and sanctions that matters. In the light of the London development for Uber, Dara Khosrowshahi has responded positively to the criticisms and sanctions at Uber. Here are a few of his responses:
“Dear London: we r far from perfect but we have 40k licensed drivers and 3.5mm Londoners depending on us. Pls work w/us to make things right,”
“It really matters what people think of us,” and “actions in one part of the world can have serious consequences in another.”
“It’s equally true that we’ve got things wrong along the way. On behalf of everyone at Uber globally, I apologise for the mistakes we’ve made.”
“We will appeal [against] the decision on behalf of millions of Londoners, but we do so with the knowledge that we must also change.”
Mr Khosrowshahi accepted the London sanctions and responded in a timely way that came in less than 4 days. He apologised for the mistakes and appealed for pardon. Finally, his response was comprehensive and balanced, and it communicated the needs and expectations of its stakeholders.
Therefore, Uber can either learn from its mistakes and begin to act responsibly or continue on the irresponsible path and face many more sanctions in several other geographic locations. The choice is absolutely theirs to make.