When corporate culture becomes a source of problems
Uber’s list of recent problems are no longer limited to — as if it weren’t enough — accusations of a sexist culture that openly allows harassment and even legitimizes it, or allegations of the theft of confidential information from Waymo’s autonomous vehicle project.
It now turns out one of its test vehicles was involved in an accident Saturday in Tempe, Arizona, which seems related to the problems that emerged when another of its cars driving in autonomous mode jumped a red traffic light in San Francisco and that this had happened on five other occasions.
Obviously, Uber has a major leadership problem, already recognized by its founder, Travis Kalanick. His markedly aggressive personality has given rise to an anything goes corporate culture where virtually all the rules can be bent or broken if the circumstances seem to require it.
When your company proposes solutions that demonstrate the need to adapt the law to the new environment, as well as meeting strong resistance from different levels of government, combined with an aggressiveness and willingness to bend the rules, users will tend to identify with a company willing to risk sanctions or even to have its managers arrested in order to offer transport solutions that are perceived as logical and reasonable.
For quite some time, Uber’s willingness to break rules seen as unfair and from another age has been seen as positive, for example, the company’s willingness to litigate and to push its proposals. The approach was that there was a common enemy: a licensing system of benefit solely to taxi drivers who wanted to maintain their monopoly in the face of a common good that demanded more versatile and more varied transport solutions to persuade people to leave their cars at home, or not to bother purchasing one. That common enemy, the taxi-drive has been referred to by Kalanick in the following terms:
“We’re in a political campaign, and the candidate is Uber and the opponent is an asshole named Taxi. Nobody likes him, he’s not a nice character, but he’s so woven into the political machinery and fabric that a lot of people owe him favors (…) We have to bring out the truth about how dark and dangerous and evil the taxi side is. “
That aggressiveness in fighting tradition, has been seen for a long time as a positive feature of Kalanick and his company and a fundamental element in seeking disruption. However, alarms started to sound when it became clear that this culture of aggressiveness that allowed it to ignore or break the rules not only applied to “the bad guys”, but also to competitors: in August 2014, the company was found to have waged a sabotage campaign after it emerged a series of so-called Uber brand ambassadors were using burner phones to book journeys on Lyft, only to cancel them, in addition to other things like to trying to recruit their drivers with more aggressive offers. Evidence that Lyft had done the same against Uber did nothing to dispel the fact that the company’s internal culture permitted aggressive attitudes and tactics such as the use of techniques to prevent regulators and authorities from investigating the company’s activity in cities, tracking journalists through a “God view” in the app that openly invaded the privacy of users, and finally, Waymo’s lawsuit, which is creating the perfect storm for a company in which all the signs are that it needs saving from itself.
Uber’s is undoubtedly an aggressive business model: launch a product, capture as many users as possible with a high level of satisfaction and wait for the profitability that will come when the key element that provides the service, the driver, is removed from the cost equation. The soon that moment of truth takes place, when autonomous driving technology replaces drivers, the sooner it can turn those negative results of several billions of dollars a year, currently covered by investors, into profits. And it is the race to obtain autonomous driving technology that has led to the search for shortcuts that involved a plan to hire a Waymo manager who had stolen a huge amount of information from his former employers.
The problem is that aggressiveness, which can play a key role in the fight against regulation, becomes more debatable when it comes to issues such as fighting competitors, where reasonable ethical standards should be applied, and is even more debatable when applied to research and development or safety standards. The evidence is clear: even with the advantage of unlawfully using Waymo’s technology, Uber’s autonomous vehicles are well below Waymo’s in terms of performance and could very possibly be introducing unacceptable risks. A lengthy piece by Recode entitled “Inside Uber’s self-driving car mess”, shows that the climate of civil war within the company is slowing down progress, so that vehicles still require driver action occasionally, that incidents involving erratic automobile behavior are very common and, in general, that the project is not only lagging behind Uber’s competitors, but is also being implemented unwisely. Saturday’s accident, which so far hasn’t been widely reported, could be a new proof of it.
Uber is valued at around $70 billion. That amounts to approximately thirty-five 16-wheelers loaded with two-meter-high pallets of hundred-euro bills. It’s a lot of money. The problem is that that money doesn’t really exist, and is simply a calculation based on a direct proportionality between the funds that its investors contribute and the percentage of ownership they get. In order to sustain its loss-making activity, the company needs those investors to keep the money flowing until that sweet moment in which driving ceases to be a profession.
If the company is punished by the courts, delaying that moment, it could face important problems. If a wave of scandals damages its reputation, attracting investors will be much more expensive and difficult. Which doesn’t mean that autonomous driving technology is in jeopardy: all the indications are that the timelines should be met. Autonomous driving as such has no problems… it is Uber who has the problems, and those problems are the result of its anything goes culture rooted in the personality of its founder. The aggressiveness that was a fundamental asset for the company when it had to muscle its way into a tightly regulated market has now become a source of problems of all kinds. And all because of its corporate culture.
(En español, aquí)
