The meaning of Uber’s latest debacle

Travis Kalanick, co-founder and CEO of Uber, in December 2016. (Photographer: Udit Kulshrestha/Bloomberg)

By Brad Stone

On Sunday, a former Uber infrastructure engineer named Susan J. Fowler dropped a bombshell on the ride-hailing company. In a measured but devastating blog post, Fowler recounted how her first boss at the company sexually propositioned her over the ride-hailing company’s internal messaging service and how the human resources department then seemed intent on protecting him rather then addressing his abhorrent behavior.

Fowler’s year-long tenure at the company did not improve from there. It was marked, she writes, by clueless behavior from her male colleagues and an array of confusing obstacles to her professional development within the company.

Twitter users piled on after Fowler’s post, with several calling for CEO Travis Kalanick’s ouster.

On Monday, Kalanick wrote to his employees, declaring his “determination that we take what’s happened as an opportunity to heal wounds of the past and set a new standard for justice in the workplace,” and announcing that former U.S. attorney general Eric Holder would lead an investigation into the matter, alongside board member Arianna Huffington.

Like many Silicon Valley startups, Uber was clearly late to professionalize its human resources department.

Fowler’s allegations are devastating for the company, particularly coming right on the heels of the #deleteuber movement, during which 200,000 users dumped their apps in protest over a perceived link between the company and the Trump administration. These are sensitive times for all high-tech firms, but Uber’s rapid rise, atmospheric valuation ($70 billion) and provocative attitude have kept it in the limelight.

So it’s probably important right now to assess what Fowler’s story really tells us about Uber — and what it does not.

Like many Silicon Valley startups, Uber was clearly late to professionalize its human resources department. Last fall, six years after the company launched, it hired Liane Hornsey, a veteran of Google and SoftBank, as a senior vice president of human resources. (The top HR job had been open for at least four months.) Like a lot of fast-moving tech companies with countless distractions, Uber seemed to believe that building a high-class HR group wasn’t a top priority. As a result, the company appears to have had pitifully inadequate employee safeguards in place as late as last year.

I also suspect that for too long, Uber executives fostered a culture that blurred the line between work and play for employees. For example, Kalanick was fond of treating the company to “workations” like a three-day offsite in Las Vegas over the summer of 2015. Employees went to nightclubs, lounged in hotel pools and drank. As well intentioned as it was, such situations are unlikely to breed professional interactions. As I recounted in my recent book about Uber, some female employees felt alienated by the dude-friendly party atmosphere in Vegas.

Still, though it might not be fashionable to say it in the current overwrought atmosphere that surrounds Uber, it’s also unfair to jump to broad, simplistic conclusions about its internal culture. Some critics accuse Uber of having a frat-boy atmosphere. That demeans the many accomplished women in high positions at the company. I also think it’s difficult to measure something as complex and dynamic as a corporate culture with anecdotes — particularly a single one, however dramatic.

Despite its reputation as a difficult place to work, Amazon has proven itself to be a strong performer and fierce innovator that consistently attracts top talent.

I learned that writing about Amazon, a company that tends to produce traumatized ex-employees about as frequently as cardboard boxes. Yet despite its reputation as a difficult place to work, Amazon has proven itself to be a strong performer and fierce innovator that consistently attracts top talent. There are always plenty of stories of satisfied, productive workers to counter the negative anecdotes.

Holder and his squad will have to study what they hear from the ranks at Uber and ask if the horror stories are anomalies, or representative of a deeper problem. He’ll also likely rely on data, a far more powerful tool than anecdotes, to assess the character of Uber’s corporate culture. Kalanick has finally pledged to release a comprehensive report on diversity at the company. That will be useful, as will watching its subsequent progress on achieving its diversity goals.

And let’s keep this in mind too, particularly as the Twitter mob lights its torches: Uber may be pursuing a monopoly on the roads, but it certainly doesn’t have one when it comes to boorish behavior in the workplace.


This originally appeared in Bloomberg Technology’s newsletter Fully Charged. Sign up here.


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