If you believe there’s no such thing as bad press, invest in Uber. The ridesharing giant has spent its young life honing a bad-boy reputation without going so far that it drives away investors, drivers, or riders. Despite scandal after scandal, the company’s valuation sits north of $60 billion.
But recent weeks seem to have cranked up the dial, snapped it off, and thrown it away to melt in a furnace—and Uber feels the heat from all directions. Employees leaking damaging information. Investors openly criticizing the company. Unhappy riders #deletingUber. All while well-paid lawyers representing an arch-rival assemble a case that could cripple Uber’s future.
“When you’re on thin ice, you don’t know how quite far you can walk,” says Ben Edelman, an economist at Harvard Business School.
In other words, Uber has always skated past trouble with a grin and a twirl, seemingly untouchable. But now, an unprecedented blast of bad news on all fronts seems to have at long last put Kalanick and Ko. on the defensive—a posture with which it has little practice.
In January, CEO Travis Kalanick resigned from President Trump’s economic advisory council after facing a viral hashtag campaign. Less than a month later, Uber engineer Susan Fowler announced she had left the company and accused management of fostering a misogynistic culture. Four days later, Uber investors Mitch and Fraeda Kapor publicly chastised Uber’s leadership.
OK, no problem—shake it off, nothing Uber hasn’t fielded before. Except the problems didn’t stop there. The afternoon the Kapors published their admonishing letter, Google’s self-driving car outfit, Waymo, filed a lawsuit accusing Uber of using stolen technical know-how to fuel its own autonomous research. Five days after that, a video surfaced showing Kalanick yelling at one of his own drivers. After a weekend break, Kalanick demanded the resignation of newly hired executive Amit Singhal, who had failed to disclose he was accused of sexual harassment while working for Google. And today, product chief Ed Baker left the company, amid suggestions of questionable sexual conduct.
And that was just a few hours after The New York Times revealed “Greyball,” a tool Uber has used for years to identify various undesirables and keep them out of its cars—including public and law enforcement officials trying to prove the company was running cars in areas that didn’t allow the service. It’s unclear whether the program is legal, if anyone will mount a case against Uber, or what consequences the company might face.
A Gargantuan Pile
If you didn’t catch all that, don’t worry. Because the direct repercussions of this latest scandal—or any other one on the list—may not matter as much as what they add up to: a gargantuan pile of problems. And the question is, has that pile developed its own gravitational force, pulling more and more problems into the light?
“Is this set of challenges different than the previous ones? Absolutely yes, it’s much more risky,” says Robert Siegel, who studies strategy and innovation at Stanford Business School. “Nobody likes a sexist organization that abuses its employees.”
The Times reports four former and current Uber employees detailed how the program works. (An Uber spokesperson confirmed the program wards off “opponents who collude with officials on secret ‘stings’ means to entrap drivers.”)
In recent weeks, Silicon Valley engineers—the prized talent that makes these companies work—have shown they have the clout to impose their politics on their employers. The fact that people working for the company—ostensibly invested in its success–are publicly airing dirty laundry indicates at least some Uber workers are so unhappy with Uber, they’re willing to actively work against it.
Riders—the folks paying the fares—aren’t thrilled, either. The #DeleteUber campaign quieted when Kalanick fled Trump’s council, but data from polling firm Morning Consult shows Uber’s favorability numbers dropped below 50 percent in early February, rose at the end of the month, and have since dropped again.
Here, ease of use—just a few clicks and you’re off—works against Uber. “Things can unravel extremely quickly because of the nature of the market and the lack of stickiness,” says Martin Kenney, who edited the 2000 book Understanding Silicon Valley: The Anatomy of an Entrepreneurial Region. Riders angered by Uber’s politics, or its corporate culture, or its legal attitude, or its CEO’s belittling of drivers, or anything else, don’t even have to #DeleteUber. They can just tap the Lyft icon instead.
“Uber is very close to the edge,” Kenney says. “I think they may be destroying the brand.”
Say Uber weathers this storm. Its riders come back (or never leave), Kalanick manages to behave (at least in public), employees get back to grumbling among themselves instead of to reporters. There’s another terror looming: Google. Wayne’s lawsuit could cost Uber billions of dollars. It could put executives in prison.
More frightening, it could devastate Uber’s self-driving car program, a potentially existential threat. If someone else—Waymo, Ford, GM, or any other player—wins the race to deploy fully autonomous cars, they could offer a robot-fueled service that undercuts Uber’s future. And battening the hatches to get through a storm doesn’t do much good if somebody has scuttled your ship.