Uber, it seems, knows a lot about launching a wildly successful ride-hailing service but almost nothing about how to run it honestly. The company is a problem child and, given that it is about to start doing business in upstate, one that New York State should plan to monitor carefully.
Hardly a week goes by without some new cringe-worthy revelation about Uber and its corporate deficiencies. The most recent was its $98,000 fine for failing to report $6.3 million in lobbying costs in this state. And that was among the least troubling of its transgressions.
Those other matters include rape, sexual harassment, use of technology to evade police and allegations that it cheats both customers and drivers by manipulating route calculations. The self-driving vehicle company Waymo has accused Uber of stealing its technology. These are not the behaviors of a company that plans to be around for the long haul.
Without serious changes in the company’s culture, it could, in fact fade. There a lot of ways to fail and it’s not always true that the first one through the door is the most successful. Remember Napster? Or MySpace?
It’s hard to understand what is driving this conduct, beyond an intense desire to succeed at all costs. But those costs can become high and reputations can suffer. If Uber expects to be around 10 years from now and to succeed in upstate New York, it needs to respond to its manifold deficiencies.
It began to take action recently. Earlier this month it fired an executive over a rape investigation in India, and over the past few months, fired another 20 employees for harassment, discrimination and other inappropriate behaviors.
Last week the pressure on Uber CEO Travis C. Kalanick got too great, and he announced that he is taking a leave of absence.
With the company under fire from all directions, Uber’s board a week ago accepted sweeping recommendations for changes made by former U.S. Attorney General Eric H. Holder Jr., who was hired as criticism of the company continued to build. He recommended changes designed to increase diversity and guard against inappropriate sexual behavior.
According to the Washington Post, Uber will add new members to the board and appoint an independent chairman. Senior managers will undergo mandatory leadership training, a new process for handling employee complaints is spelled out and employee benefits will be upgraded, including equal family leave time for both male and female workers.
These changes are a healthy start, but it will take months – and for some people, years – of good behavior before anyone should be willing to conclude that Uber has accomplished the infamously difficult task of changing an organization’s fundamental culture.
Competition will help. New York State opened upstate to all ride-hailing services that comply with its regulations. So, in addition to Uber, New Yorkers around the state will also be able to use services including Lyft and other, lesser-known companies.
It’s true that competition hasn’t thus far constrained Uber to good behavior, but as its reputation suffers, other companies will look to take advantage. That is likely to have the welcome effect of further chastening Uber.
It is undeniably a good thing that Albany finally acted to permit ride-hailing services to operate outside of New York City, where they were already legal. They are creatures of internet technology and, in that, are the unavoidable future. They are convenient and seem so far to be generally safe for both drivers and riders.
But that doesn’t give any of these companies free rein to flout laws, harass women or cheat their drivers and customers. Uber is now in the sights of regulators and critics, and they will be watching.