Why Uber Is in Its Internal Crisis

Why Uber is in its internal crisis

Milton Friedman’s famous quote states “There is one and only one social responsibility of business – to maximize profits”. However, corporates have more extensive duties to key stakeholder groups like employees, communities, customers and suppliers and so on. Any business, if its wants to be sustained over time, must maximize its profits but do so in a manner that meets the needs of the stakeholders that allow it to remain viable. When those needs change, businesses have a responsibility to adapt their behaviors accordingly if it wishes to survive. In this essay, I’m going to talk about Theme 1.2.

2017 is definitely not Uber’s year. Since the beginning of the year, Uber has been surrounding with lawsuits and scandals. From February 20, 2017, former Uber engineer Susan J Fowler stated that she was sexually harassed by a manager and threatened with termination by another if she continued to report the incident. To June 20, 2017, Kalanick resigned as CEO, after multiple shareholders reported demanded his resignation. The company has been hit with complaints of female harassment and discrimination, deceiving authorities on many levels (e.g. “greyballing”), drivers complaining of low pay (this has been ameliorated recently with a new tip option), and other practices that have caused shakeups at top management, and the displacement of founder Travis Kalanick.

President Jeff Jones, stepped back down after on the job only six months, stated “the beliefs and approached to leadership that have guided my career are inconsistent with what I saw and experienced at Uber, and I can no longer continue as president of the ride-sharing business.” As Patrick Hanlon Stated in Forbes’s journal “Uber’s external brand community is not in crisis, we love riding Uber. But the company’s internal values are an accident waiting to happen.” Externally, we can no longer imagine existing in San Francisco, Manhattan or other cities around the world today without Uber. But internally, what happened to Uber?

The breakdown of the internal governance

The sexual harassment pulled the trigger of the whole serious of scandals. Since February 27, 2017, Uber has lost its CEO and other executives and fired over 20 other employees as it’s been rocked by scandal after scandal. Most of the departures stem from the allegations and investigations surrounding a toxic company culture.

The fact that Uber suffers from poor management, the price-driven policy, which made the protests gathered at the John F. Kennedy airport. The company rushed to make a declaration without stopping to consider the possibility of misinterpretation by the public. It’s then that the company suffered in the hands of the calamitous #DeleteUber campaign, where thousands of protesters across social media urged others to switch to Lyft as a show of dissent towards Uber’s profiteering policies. A lot has happened since the incident, including Travis Kalanick offering a formal explanation and an apology and even stepping down from President Trump’s advisory committee. However, the damage was already done.

Eventually, the incident was followed by the step-down of a bunch of high-end Uber executives, including its head of self-driving cars, who was accused of corporate espionage, its senior vice-president, who resigned voluntarily after being accused of leaving his previous job at Google after accusations of sexual harassment, and Jeff Jones, the president of Uber, after he decided that it was too much of a bad reputation to continue working for the organization.

Uber was lack of Corporate social responsibility and acted poorly to Stakeholder Groups

Uber, as a global business, it really matters what people think of it. It’ critical that the company acts with integrity in everything they do.  Uber should not just an application but a great company that is meaningfully contributing to society, beyond its business and its bottom line.

Uber has been stripped of its London licence. The firm’s application for a new licence in London was rejected by Transport for London on the basis that the company is not a fit and proper private car hire operator. The new Uber’s chief executive, Bara Knosrowshahi, stated that he disagreed with the decision but it was based on past behavior. Transportation for London had rejected Uber’s application to renew its licence because Uber’s approach and conduct demonstrate a lack of corporate responsibility in relation to reporting serious criminal offences, obtaining medical certificates and driver background checks. And also the concern by Uber’s use of Greyball, software that can be used to block regulatory bodies from gaining full access to its app and undertaking regulatory or law enforcement duties.