Will Uber manage to change its toxic culture? (1/2) Scandals

Uber is a giant multinational company built on quite a controversial business model: a network of drivers who are willing to earn extra money by providing a transport service similar to taxi ride. The trust of the employees, investors and customers is now gone. The company's founder and CEO Travis Kalanick has just resigned under pressure from investors.

What happened? There were other problems, but the last straw was a former employee who complained about sexual harassment publicly in a blog post. 

Uber consequently fired 20 employees because of their harassment, discrimination and inappropriate behavior. Travis Kalanick wasn’t paying attention to mentioned issues.

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For Uber, this is a year full of troubles

Travis Kalanick's decision to step down for some time was praised by John Paul MacDuffie, a professor at the Wharton business school. According to an article on this business school's website, it's a strong message that Uber is aware of the necessity to become a different company.

Uber is also facing a lawsuit (Google claims it stole trade secrets – technology for driverless vehicles). It's also being investigated because it allegedly used software to help its drivers evade government officials in areas where Uber was not yet approved to conduct business.

This strategy of aggressive growth meant that Uber didn’t care much about regulatory barriers. In the end, in many instances, new laws were passed to enable Uber to operate legally after many municipalities in the US questioned the legality of the way it conducts business.

There have to be a lot of changes to get rid of these doubtful practices

Customers may start to prefer their competitors. Uber should now adapt a zero-tolerance policy for discrimination and harassment. Also, set up performance reviews and pay more attention to diversity among the staff, to name just a few recommendations. The company needs to change how it treats its employees. There are some issues regarding its business ethics as well.

-jk-

Article source Knowledge@Wharton - the online business analysis journal of the Wharton School of the University of Pennsylvania
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