How Uber, and its CEO, can grow up fast

Uber is facing an avalanche of crises. To fix its reputation, experts say it has to grow up fast--and so does its leadership.

How Uber, and its CEO, can grow up fast

Uber CEO Travis Kalanick let it be known at an all-hands meeting this week that he is seeking a number-two executive. Crisis communications experts say the choice could be a make-or-break moment for the embattled ride-hailing company.

Communications veterans say Uber could take a big step towards recovering from a series of crises by naming a woman second-in-command. The company is facing intense scrutiny over its alleged mistreatment of women employees after the issue was thrust into the spotlight last month when engineer Susan Fowler blogged that she was sexually harassed by her manager on her first day on the job at Uber. When she reported the incident to human resources, she says it did nothing. Fowler also claims she heard similar stories from other female engineers at the company.

A few days after Fowler’s post went live, current and former Uber employees painted a picture of a workplace that tolerates and even condones sexist, homophobic, and aggressive behavior in interviews with The New York Times.

The allegations had #DeleteUber widely trending on social media for the second time in two months. The hashtag emerged in January after Uber users accused the company of trying to profit from a protest by New York City taxi drivers against the first version of President Donald Trump’s executive order limiting travel from seven Muslim-majority countries. About 200,000 customers deleted their Uber accounts, according to reports.

Experts say the reputational damage is hurting the company’s growth, status as an employer, and its work with local governments. The company tried to deal with the issue proactively, calling for an investigation and scheduling its CEO for a meeting with 100 female engineers. However, an audio recording of the meeting leaked to BuzzFeed, including a female employee sounding exasperated as she urged Kalanick to acknowledge the routine mistreatment of women at Uber.

"Can we stop saying if there's a systemic problem here. I think it's really important that we get there," says the female employee.  

Crisis experts say a COO is exactly what the company needs to recover from the crisis, particularly someone like Facebook’s Sheryl Sandberg. A woman in the number-two role would be good for the company optically, steer cultural change, and take some attention off Kalanick.

"I think at this point, whoever it is, it has to be a woman. It seems to me only a woman would help the company overcome this, both functionally but also emotionally," says Kristin Brown, SVP at Racepoint Global. "Uber could, of course, find a male COO who is wonderful to women, but I think we’re at this public impression point where that hiring decision would be a hard thing to defend."

Sean Smith, EVP at Porter Novelli, agrees.

"Hiring a woman could be a very good start, particularly if she is empowered to be the public face of the company and she becomes the individual who leads a series of reforms," he explains.

Uber should not stop there. In addition to putting a woman into the second-highest leadership position, crisis experts say Uber should become a force of positive change in the tech industry. One suggests it should create an education endowment fund and encourage more girls to pursue a career in engineering.

Levick CEO Richard Levick says many tech companies have a problem with discrimination against women engineers—or a complete lack thereof in their organizations, but now that problem has a face: Uber.

"Once they have the best recruitment, offer great training for female engineers, and have industry leadership, that is when people will really believe what happened is in the past," he says. "The face of their company will go from Delta House in Animal House to a much more serious, mature, and idealistic pre-IPO business."

Compounding crises
Uber’s frat-boy image isn’t just the result of one black eye. The company has been on the defensive about other behavior, largely from its 40-year-old billionaire founder.

Kalanick was on Trump’s economic advisory council, before dropping out as the #DeleteUber hashtag gained momentum. Users saw his participation as approval of Trump’s immigration ban. The company subsequently vowed to set up a $3 million legal defense fund for drivers affected by the executive order.

Kalanick’s brash behavior was caught on tape in conversation with a driver who accused the company’s policies of putting him $97,000 in the red.

After the video became public, Kalanick told employees in an email, "I must fundamentally change and grow up."

Additionally, The New York Times last Friday exposed the company’s efforts to evade law-enforcement authorities in areas where the service is banned using a technology called "Greyball."

Experts say Kalanick will likely get a pass for his indiscretions given that he has been highly critical of his own recent behavior and is willing to bring on someone to right the ship—not to mention that tech executives often get a unique benefit of the doubt.

"We afford these entrepreneurs and geniuses who had these great ideas that we wish we had thought of with certain liberties in their personality, as long as the company is being run well," notes Brown.

However, the snowballing negative news stories are working against Uber in a cumulative way, Smith notes, giving customers doubts about what kind of company it actually is.

"It is not any one individual issue they have to deal with, but an accumulation of incidents. It has led to an overall impression among some of their customer base that they are not progressive in nature," he says.

With consumers increasingly aligning themselves and their purchasing power with a likeminded political tribe, "that’s a real problem," says Smith.

"Uber operates in big urban centers where progressives live," he explains. "Uber is on the verge of losing favor from that progressive tribe."

The response
Pros note Uber has taken a page out of the classic crisis playbook, hiring a third party to investigate the allegations, as well as the company’s track record on diversity and inclusion. The company appointed former Attorney General Eric Holder as lead investigator after Fowler made her accusations public.

Experts also applaud Uber making itself publicly accountable to people with name recognition, such as Huffington Post cofounder Arianna Huffington, who is an independent board member of the company.

"I also view it as my responsibility to hold the leadership team’s feet to the fire on this issue," she said in a statement.

Uber has a star-studded communications team led by former Google PR head Rachel Whetstone in the role of SVP of communications and policy. Former Target CMO Jeff Jones is also the company’s president of ride sharing. Whetstone could not be reached for comment.

Ultimately, customers and the media want to see the company—and not just its CEO—grow up, according to Doug Hesney, EVP at Makovsky.

"Uber has obviously built an amazing business, and one of the reasons it has become valued at $26 billion is a testament to the convenience of the service. Its users and the media don’t want to see Uber lose its disruptive edge or change its model, but I think they want to see some maturation within the company," he says. "I think Uber will need to turn the way Facebook did with Sheryl Sandberg and Google did with Eric Schmidt to someone with more leadership experience to help it grow into a more mature company."

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