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What Problems Does Uber Face? What Should Be Done to Avoid Them?
In the past few years, Uber has been experiencing severe reputational problems that are directly related to a number of scandals that are mainly attributed to the former management of the company, in particular to former CEO Travis Kalanick, who was forced to leave his position after allegations of sexual harassment. This is not the only case that tells us that the reason for the company’s problems is not the former leadership, but the way of thinking and setting the priorities that they left behind. Thus, the task of the new administration is to manage the scandals that periodically appear in the media correctly, and radically change the company’s consciousness.
Uber Technologies Inc is an American international company that developed the eponymous mobile application for finding, calling and paying a taxi. The main advantage of this application is that drivers can use their cars, because of which the fare is much lower than that of an ordinary taxi. The company was founded in 2009 by Travis Kalanick and Garrett Camp, headquartered in San Francisco, California (Bacon). Uber operates in more than 630 cities around the world and until 2015 was an example for many businesses, but later they began to experience serious problems related to how they conduct business. The new management of the company accused former CEO Travis Kalanick of all the issues Uber faced for the last three years, but despite the fact that he left his post almost six months ago, the situation inside the company has not changed.
On November 29th, 2017, the Associated Press, citing former global intelligence manager Richard Jacobs, said that Uber hired former spies in order to monitor the company’s competitors, and to steal secret developments (“Uber Accused Of Using Ex-CIA Agents As Spies”). According to Richard Jacobs, the company hired former CIA agents through special intermediary companies. After the spies had completed the operation, they concealed all traces of theft “using computers and other devices designed to leave no digital trails” (“Uber Accused Of Using Ex-CIA Agents As Spies”). Richard Jacobs reported espionage during the trial of the Waymo vs. Uber case in San Francisco. The investigation believes that Anthony Lewandowski, a former Google employee who founded Otto, stole the technology of unmanned vehicles from his previous place of work (Levine). Waymo insists that Uber should compensate it with 1.9 billion dollars and stop developing unmanned cars using the technologies of other companies.
On December 14, 2017, The Verge reported that the Department of Justice had launched an investigation into Uber because it was accused of stealing and using technological developments of other companies without permission (Hawkins). An Uber spokesperson said in a statement that these problems are related to the company’s previous management, and the new administration will do everything to conduct a transparent and honest business. This statement is feeble and shows the lack of professionalism of public relations specialists that work for the company since it does not say anything about Uber’s real intentions and how they are going to improve the situation. This suggests that the problems of the company are in fact related not only to the previous management but also to the way the company conducts its business.
Moreover, a few days before the accusations of the theft of technology, on November 27, 2017, the Tel Aviv court banned Uber’s work in Israel. The claim against the company was filed by the local Ministry of Transport, as its representatives claimed that most of the company’s services were provided by drivers who did not have a corresponding license (“Uber Banned From Operating Car-Pooling In Israel”). Such a decision would have a significant impact on the company’s profits since Israel was a fairly large market for the company. It must be said that it is not the first time when the authorities of different countries restrict activities of the company due to the lack of licenses, insurance and for other reasons. For the first time, the company faced a ban in 2015, when the French Constitutional Court banned Uber. Before this decision was taken, the French taxi drivers held a protest against the American company, insisting that the service illegally made official taxis in France uncompetitive (Moh). In April 2017, The Guardian reported that the Italian court banned the company’s activities in the country (“Italy Court Bans Uber Over Unfair Competition For Taxis”). As in previous cases, the case against the company was brought in response to a complaint from the taxi drivers’ union that insisted that the drivers of the company did not have the necessary license and insurance, which means that they offered services illegally.
In addition to the fact that some countries prohibit the company every year, Uber also faces problems related to business ethics. For example, in November 2017 Bloomberg reported that the company concealed a massive data leak in 2016, paying hackers $100,000 for not using these data (Newcomer). As a result of the leak, hackers received data about more than 50 million users around the world, as well as over 7 million drivers. According to company representatives, payment data of customers and drivers were not known to hackers, but despite this, the company is condemned for trying to leave the incident without publicity, instead of contacting law enforcement.
The company faces many challenges every year, and it is essential for management to find solutions in order to remain competitive in the global market. The problem of the company was characterized by the Mayor of London Sadiq Khan, who argued that “Uber’s approach and conduct demonstrate a lack of corporate responsibility” (Butler and Gwyn). At the moment, the new management of the company insists that all problems of the company are related to the previous management, but instead, they must accept the existence of the issues and begin to solve them. First of all, Uber’s management should develop a new plan for changes in the company’s internal culture, which will describe the tasks of each level of the employees. Moreover, Uber should be more transparent, and not hide the leakage of data from the public, trying to maintain its reputation. Uber should be prepared for criticism to develop and become better, but instead, they lie to the public to avoid it. The management of the company needs to reconsider how it treats itself towards its clients and its employees. The company must publish various reports, confirming its honesty and transparency, because at the moment they do not believe that they should do this, so they face severe problems and scandals.
Summarizing, it should be said that in recent years, Uber faces many serious problems, which are mainly related to how the company’s management conducts business. Despite the fact that former CEO Travis Kalanick was forced to leave his positions after allegations of sexual harassment, the situation in the company has not changed significantly since the new leadership cannot accept the problems and start to solve them gradually. In order to restore its reputation and regain customer loyalty, the company must develop a new plan for changes in the company’s internal culture, and become transparent and do not try to hide information from the public.
Bacon, James A. “Innovation Uber Alles.” The Washington Times, 2012, https://www.washingtontimes.com/news/2012/feb/2/innovation-uber-alles/.
Butler, Sarah, and Gwyn Topham. “Uber Stripped Of London Licence Due To Lack Of Corporate Responsibility.” The Guardian, 2017, https://www.theguardian.com/technology/2017/sep/22/uber-licence-transport-for-london-tfl.
Hawkins, Andrew J. “Uber Is Being Investigated For Criminal Behavior, Justice Department Confirms.” The Verge, 2017, https://www.theverge.com/2017/12/14/16778064/uber-criminal-investigation-confirm-doj-waymo.
“Italy Court Bans Uber Over Unfair Competition For Taxis.” The Guardian, 2017, https://www.theguardian.com/technology/2017/apr/07/uber-app-ban-italy-taxi-unions.
Levine, Dan. “Alphabet’s Waymo Demanded $1 Billion In Settlement Talks Wi.” U.S., 2017, https://www.reuters.com/article/us-alphabet-uber-lawsuit/exclusive-alphabets-waymo-demanded-1-billion-in-settlement-talks-with-uber-sources-idUSKBN1CH0QC.
Moh, Catharina. “France Orders Uber Taxi Ban.” BBC News, 2015, http://www.bbc.com/news/av/world-europe-33281896/french-government-orders-uber-taxi-ban-after-protests.
Newcomer, Eric. “Uber Paid Hackers To Delete Stolen Data On 57 Million People.” Bloomberg.сom, 2017, https://www.bloomberg.com/news/articles/2017-11-21/uber-concealed-cyberattack-that-exposed-57-million-people-s-data.
“Uber Accused Of Using Ex-CIA Agents As Spies.” AP News, 2017, https://apnews.com/1a4fc8ba092a4280b2bedd6708c6de11/The-Latest:-Uber-accused-of-using-ex-CIA-agents-as-spies.
“Uber Banned From Operating Car-Pooling In Israel.” Haaretz.сom, 2017, https://www.haaretz.com/israel-news/1.825188.