Uber CEO Travis Kalanick Caught In Crossfire From Negative Publicity

A wave of negative news coverage has put ride-hailing giant Uber in a squeeze to clean up its image that may open opportunities for competitors.

CEO Travis Kalanick apologized last week to employees for his indiscretions arguing with an Uber driver during a trip captured on video. He’d been labelled as “pugnacious” in media reports following the video.

That incident followed soon after a sexual harassment charge being made against the company by a female Uber management employee and an intellectual property theft lawsuit for self-driving car technology allegedly stolen from Alphabet’s Waymo subsidiary. Also, thousands of riders deleted their mobile app in January due to Uber providing trips to New York’s JFK airport while taxi drivers were stopping pickups to protest President Donald Trump’s immigration ban. Kalanick had angrily quit his position on Trump’s economic advisory panel over the immigration issue.

Kalanick has become notorious for his aggressive, competitive stance in building Uber’s network worldwide and jumping into new arenas such as autonomous vehicles, flying cars, food delivery, and fighting government regulations favorable to taxi and black car companies. That appears to have come back to bite him lately.

“I must fundamentally change as a leader and grow up,” Kalanick wrote in a note to Uber employees last week. “This is the first time I’ve been willing to admit that I need leadership help and I intend to get it.”

Chief competitor Lyft has been competing aggressively with Uber, expanding into several new markets across the U.S. and quietly looking for a half billion in funding. The Wall Street Journal reported Lyft is looking for backers to increase its market valuation to $7 billion.

Competitors in ride-hailing and ridesharing services are looking for opportunities to take business away from Uber in the U.S. and in overseas markets. Ridesharing startup Juno is tapping into driver dissatisfaction to poach Uber drivers and build its own network.

Lyft’s market valuation pales in comparison to Uber’s valuation and a long list of markets served around the world. Analysts have wondered for years if Uber will tap into that extremely high market value for an initial public offering.

Going public would put Kalanick and his Silicon Valley colleagues under even more pressure to perform well under greater scrutiny and expectations of better and more ethical leadership. Getting needed support from investors, customers, and drivers could face serious roadblocks unless Kalanick and the company can deal with internal issues behind the wave of negative publicity.

Keeping good employees is tough in Silicon Valley, as Tesla has been finding out. There’s also the issue of keeping good, safe drivers in the network since self-driving cars are likely years away.

“If you focus too much on growing, you lose track of what’s important and that’s the people that work there,” said Dave Sullivan, an analyst at AutoPacific. “The company won’t exist without those people.”

You can view the controversial video below, which Bloomberg made public after having it sent over by the Uber driver.

Kalanick’s Uber trip on Super Bowl Sunday with women riders became disrupted late in the trip when driver Fawzi Kamel challenged him over fare cuts Uber had enacted. Kalanick attempted to be diplomatic and explain why Uber was cutting fares for Uber rides to deal with market competition realities. Kamel made the case that drivers were making a lot less money than when he’d stared driving for the company in 2011, and it wasn’t fair to them.

Kalanick eventually blew up at Kamel, causing him to send out an apology after more negative media coverage and social media exposure.

Pressure had intensified on the company after a blog post last month by former Uber engineer Susan Fowler on claims of working for a sexist, male-dominated in-house culture. Later than month, Uber fired its head of engineering after learning of his history of sexual harassment while working for Google.

Uber soon took another hit over Waymo’s lawsuit over theft of Lidar sensor designs went public.

The next day, New York Times reported Uber had lied about a traffic citation in San Francisco for running a red light. Uber said the car had been under human control at that point, but internal emails said the opposite.

Another New York Times report from Friday brought even more pressure to the company. The article said that Uber has been using a tool called “Greyball,” that attempted to hide rides in municipal zones that had banned the company. Law enforcement officials had been shown an imitation mobile app that covered up Uber rides in the area if they tried to use it.

SEE ALSO:  Uber Frustrated With Musk’s Remaining Unscathed on Trump’s 

The company’s image has been tarnished and its CEO is feeling the brunt of it.

James Fennell, a part-time Uber driver in Pittsburgh interviewed by Automotive News, thought the Kalanick video from Super Bowl Sunday was “appalling.” He thought the apology issued after the negative publicity was unbelievable.

“The way he reacted shines light on how he really feels about drivers, the people who made him worth $6 billion,” Fenell said.

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