When faced with a crisis, some companies came out better while others landed in hotter water. Corporate annals are thick with extreme examples of companies handling crises. While the public lauded some of them, they denounced the apparent apathy that others displayed. You have how Johnson & Johnson dealt with the Tylenol poisoning case on one end of the spectrum. On the other end, you have Uber landing themselves thicker swamps when #DeleteUber was trending.
This article is a logical continuation to the article on whether there really is no such thing as bad publicity
As business uncertainties and economy volatilities increase, the chances of being mired in crises increase. Here’s how Uber managed its Crises
Uber is infamous for the number of scandals in which it tangled itself. 2017 was not a good year for Uber because it had to deal with a new scandal or crisis almost every month. Right from 2012 until 2019, Uber endured several scandals. For example, in 2014, a driver accused of assault and racial discrimination had done time that it didn’t recognize despite claiming that its security checks were thorough. Let us take a month-by-month breakdown of what went wrong in 2017.
Check by month
January
February
March
April
May
June
July
August
September
October
November
January
Uber lost a legal battle entering 2017 because it misled drivers on how much they would earn by using the ridesharing app. The Federal Trade Commission found that the amount that Uber drivers earned was far less than the amounts that Uber declared that they would earn across 18 major cities in the USA.
In December 2016, Kalanick announced that he would be joining President Donald Trump’s economic advisory council with several other industry leaders. That move led to a severe backlash, and towards the end of January 2017, Kalanick announced that he would be stepping down from the council. The statement he released stated that his joining the council did not reflect his personal views or of Uber. He also stated that joining the council was in no way meant to endorse the president’s opinions or views.
However, the damage was done because #DeleteUber was born, and the backlash was severe.
February
Susan Fowler levelled sexual harassment claims against a manager. Uber immediately stated that it was investigating the claim. Many early investors questioned the efficacy of doing it internally because of the apparent conflicts of interest it posed.
To add to that, the NYT reported later that several employees had cocaine during a retreat, and a manager had to be fired for inappropriate behaviour in the USA.
In the same month, Waymo sued Uber and an ex-Google engineer over claims of proprietary information theft. Eventually, they lost the case, and Uber fired the employee. But, it set Uber behind on its self-driving ambitions.
Later in the month, the CEO, Kalanick, was caught fighting with an uber driver over reduced fares. Kalanick issued a ‘profound apology’ and promised to take leadership help. By the time he apologized, it was already too late, and everyone was not happy.
#DeleteUber made a comeback when Uber did not stand in solidarity with the taxi drivers who refused JFK airport pickups because of Trump’s anti-immigrant policy. In its defense, Uber claimed that it was turning off surge pricing to make sure more cabs were available for better rates. The backlash was swift because people saw that Uber was profiting off an amoral issue. As many as 500000 users had deleted their Uber account.
March
This was a terrible month because it was revealed that Uber was using ‘Greyball’ to evade authorities in New York, especially when talks of banning Uber were happening. The same tool was also used in Boston, Paris, and Las Vegas — cities where Uber app was either being banned or resisted.
Uber also suffered a leadership problem and image issues when Kalanick stated that he needed leadership help. So, Uber set out to find a new COO. Five executives stepped down after several sexual harassment claims have been levelled against them. Even though the executives denied any charges, they stepped down.
Later in the month, it was revealed that several executives went to an Escort bar in Seoul. That, in itself, wouldn’t have been a problem if a fellow female marketing manager had not complained to HR about how it made her feel awkward.
April
Uber included a small scrip in its app that would allow it to identify specific phones even when the phone’s data has been completely wiped. According to Uber, this was done to prevent fraudulent use of its promo codes and other coupons. However, that didn’t sit well with Apple, which threatened to completely pull the app from the iPhone store.
In addition to that, Uber launched a project internally titled “Hell”. It was used to spy on drivers working for both Lyft and Uber so that Uber can drive them away from the competition.
May
Uber released a communication statement that said there had been an accounting error that dated back several years. Uber stated that the accounting error underpaid drivers by a total sum of “tens of millions of dollars”. On average, the drivers in America were scheduled to get about 900 dollars from the payout due to the accounting error.
Uber ridesharing app had never been a profit-making app. In fact, until 2018, it was yet to make a profit. However, when Uber disclosed that it lost more than 700 million dollars in Q1, investors went berserk.
June
Uber’s history of workplace issues, including discrimination, sexual harassment, and inappropriate behaviours, is not new. When Kalanick released a mail guiding employees on matters of sex and drug indulgence in a mail infamously titled “Miami Letter”, it did not go well with the general public. In June 2017, Uber fired as many as 20 employees because of more than 215 complaints received during its investigation.
June was an especially bad month for Uber because it was revealed that the head of Asia Business, Eric Alexander, carried around medical reports of a rape victim in India and carried them around for almost a year. Uber’s top executives looked at those records and questioned whether a rape had even happened. They tried to politicize the issue by claiming that the incident had been concocted by Uber’s competitors to undermine Uber.
Kalanick finally resigned after heavy pressure from five of Uber’s largest investors.
July
Compared to the first half of the year, July was pretty uneventful. Just a month after Kalanick resigned as the CEO, he announced that he had plans to return as the CEO. In his own words, he planned to execute a return like Steve Jobs had when he was fired from Apple and returned later.
August
Initial emails showed that the Singapore managers knew about the recall of Honda Vezel SUV because of the fire hazard risk it posed. Even when Honda had recalled the SUV, Uber Singapore continued to rent the cars without fixing the defect in the car.
An early investor filed a case against Kalanick, stating that he was involved in a fraud in the company. The claim centred around the fact that Kalanick had created three additional board seats with the claim that this was being done so that his exit from the company could be slowed down.
Additionally, the department of justice started an investigation into whether Uber had violated foreign bribery laws. The report stated that Uber was looking into multiple payments in Indonesia, Malaysia, and other countries.
September
Uber loses its license to operate in London because of gross negligence in reporting misconducts, offenses, and its use of Greyball reportedly contributed to the decision.
October
News broke out that Apple had given Uber access to powerful features that allowed it to record users’ screens and access other personal information without the users’ approval. Apple usually refrains from giving users access to these powerful features to any third-party apps. However, the fact that it had access to this information had been completely omitted from the customer-facing information it usually presents users.
November
This month had one of the biggest scandals that it got embroiled in. Bloomberg reported that Uber had tried to cover up personal data breach of about 57 million users. It paid hackers about 100000 dollars to cover up all tracks of such data breach. Apparently, Uber knew about this about a year ago but chose to keep mum about it. This matter had only come out when Uber discussed this in a blog post.
“None of this should have happened,” the then CEO wrote. “We are changing the way we do business, putting integrity at the core of every decision we make and working hard to earn our customers’ trust.”
Conclusion
Ever major problem that Uber dealt with could be boiled down to improper management. Was Kalanick without redemption? No. When Kalanick left, several investors opined that the succeeding CEO wasn’t as efficient as the incumbent one. They wanted Kalanick back because they believed Uber flourished under him. They may be right. Under all rulers, Uber failed to display transparency and diplomacy. The fact that its brass was sexist, misogynistic, and apathetic to basic human rights further exacerbated the problem.
We do not want to question the management style or prescribe something else. What the brass did, they did out of years of experience. We can only wish they had been a little more considerate and transparent in addressing crises