UBER: KALANICKS TUMULTUOUS ERA
Case Study Analysis Govind Ram Purushothaman (April 2019)
This case study is about the company Uber and its management by its co-founder and CEO Travis Kalanick, it gives a description about him and how he managed the company. Other issues discussed are Ubers questionable business practices and its handling of various issues including sexual harassment allegations.
Travis Kalanick is portrayed as a confident, highly driven natural salesman/entrepreneur who didnt mind upsetting others to get what he wanted. His first venture was an academy for SAT preparation, next he worked for a collegemates company Scour which was later sued for copyright infringement which it lost and closed down after filling bankruptcy, he then immediately started Red Swoosh which faced several issues including fall out between the founders, financial problems and a turbulent growth, until he finally sold it in 2007. Now a millionaire, Kalanick travelled for a period and then started Uber with 3 other co-founders quickly becoming its CEO. Kalanick was hardworking and effective but was also reckless, brash, pompous and made enemies quickly without caring if they were important to his business, like regulators, the taxi industry and even customers who were critical of the companys service which was known to the world when a video of him arguing indecently with a driver was made public.
These qualities influenced his employees, those who followed his style of work were called uberettos which was not considered a compliment. The companys culture was also influenced by his personality and unethical behavior became common as they used questionable actions against Lyft a rival company by abusing their service and convincing its employees to switch to Uber. It also flouted many laws, used its app to gather personal information of users without consent, used software tools to avoid getting caught in government investigations and didnt value its female employees equally with men along with rampant sexual harassment. Another example of such practices is when it used behavioral science and other techniques to manipulate its driver and make them work longer hours.
– Ubers bad reputation.
The companys public image must be rebuilt to gain trust and respect from customers and drivers about the company and its practices
– Replacing lost leadership.
– Increase revenue.
– Bad reputation caused by Travis Kalanicks actions and influence on organizational culture.
– The controversies and business practices has led to loss of customers and drivers to work for uber, which also affects it revenue.
Plan of Action
– Problems caused by Kalanick and his actions have been largely taken care of by making him resign as CEO reducing his influence on companys decisions1 and hiring Khosrowshahi, who has made it clear that these practices will no longer be entertained and fired more executives who still believed in the old form of running the company. He has assumed a stance of humility and putting the past behind and moving forward which has helped to bring back faith in the company2.
– As most managers have now been fired for their misconduct or illegal actions, the company needs to hire new personnel carefully and make sure their personality and characters are also vetted before hiring them to help with molding the new company image. Conducting regular public image surveys and investing more in re-branding its image will help the company get back on its feet.
– Uber needs to cut down costs and increase revenue, Its R&D into autonomously driving cars and Artificial intelligence has made a huge dent in its wallet, companies like Google are way ahead in its AI and self-driving car research and uber cannot compete with them and instead try to partner with them3. It needs to focus on increasing its number of drivers and their job satisfaction as they are its strength. Also, its hiring of a Chief Financial Officer4 to help with the company going public is a commendable decision.
Uber as a company continues to grow, even if sometimes slower than usual, this is because of its innovative and disruptive idea in a sector that has been dormant for very long time, transparent billing and genuine need for ease of access for cabs for common people. These are the main reasons why uber as a company has been able to survive all these controversies. Uber has been a company which has been winning continuously and after the streak was ended due to these troubles .In todays competitive and often shifting business environment it now needs to start winning again to stay in its position of number one ridesharing company in the world5.