Unless you’ve been living under a rock this past year, then you know Uber has been hit by scandal after scandal. The question we have to ask is how one of the leading technology companies in the world, a company held up in awe by many analysts, became so damaged. What lessons can other technology companies learn from its mistakes?
To understand how Uber got into this situation, the startup founder, Chris Meyers, has a succinct way of putting it: “When a company is in hyper-growth mode, as Uber has been for several years, the excitement and irrational exuberance that takes hold often blind leaders to the problems buried deep inside of the organization.” With the company taking off the way it did, evidently it had problems, but as its business was doing well, it was much easier to turn a blind eye to the problems.
But each of Uber’s problems can be distilled into one aspect- its toxic culture. “Culture eats strategy for lunch”- is one of the first things you learn at business school. Yet, so many companies just don’t seem to get it. From Enron, Arthur Andersen, to now Uber, we see it time and time again. It’s company culture that leads to company success, or failure.
I want to take a look at each of the major issues Uber has faced, examine the role of culture in each of them, and finally identify what other technology companies can learn from them.
- Shameful treatment of female employees. On Sunday February 19th, Susan J. Fowler dropped the bomb in a blog post titled ‘Reflecting On One Very, Very Strange Year at Uber’, that she was sexually harassed and experienced gender bias during her time with the company. This was the post that brought this toxicity to light. Unfortunately for the tech industry and Silicon Valley, this was not an exception – the industry has been rocked by scandal after scandal. For any company, and particularly in male-dominated industries like technology, anti-harassment policies, plus effective enforcement of those policies, are the basic step that every organization needs to have in place from the get-go. This comment about enforcement is particularly important – it means taking a zero tolerance approach, a commitment to investigate reports of harassment, and measuring incidents and the responses taken. There are many tech organizations working hard to encourage women to take up technology focused careers – what Uber did was push all of these efforts back.
- Ignoring laws and regulations. It’s fine to be aggressive. And it was arguably necessary for Uber to push the bounds of what was acceptable in order to launch itself in some markets. However, its hyper-aggressive culture of going up against laws, regulations and individuals at the same time could never be a long-term successful strategy. Just look at how the London authorities recently removed its license (pending appeal) to operate in one of its largest and most successful markets, saying Uber is not a “fit and proper” car hire operator. Remember when The New York Times’ Mike Issac revealed that Uber had been deceiving authorities for years using a tool called “Greyball”. For tech start-ups, there is often a culture which rewards risk-taking and pushing the boundaries of what is possible. But you can learn from Uber’s mistake of simply ignoring rules and then expecting governments to change the rules afterwards. Bringing advisors on-board can provide guidance to help you get this balance right. Companies that have been successful going against existing laws have put together teams of experienced policy experts, which help them work with regulators and governments to change or modify existing laws, rather than simply ignoring them. And of course a part of this, is emphasizing the benefits to society and to ordinary individuals, from the laws or regulations that you are aiming to change.
- Being an unreliable partner. Uber’s business model relies on its partnerships with its drivers. However its willingness to change the conditions with its drivers, without conducting any form of expectation management, clearly reflects a company culture that treats its partners with disdain. And just in case its partners needed any more convincing of this, in February a driver’s dashcam video surfaced, showing CEO Travis Kalanick in a heated argument with the driver over prices. The attitude Kalanick displayed in this video, reflects the culture and esteem in which it held its drivers. For start-ups out there which also rely on partners to deliver its services, remember that these people are the face of your company and your brand. Treating these individuals as a core part of your business, paying a fair wage, and being transparent about changes to their employment conditions, makes not just good business sense, but will also help you avoid some of the legal problems companies such as Uber and Deliveroo are now facing.
I’m interested in hearing your opinions. Are there other lessons that we can learn from Uber? What should technology startups be doing differently?