Nowadays more and more startups and original ideas appear every month. Not all companies become successful, and not all startups can earn millions. But sometimes an original and socially useful idea becomes extremely popular. One of such enterprises is Uber – the most expensive startup in the world.
The Uber brand is known worldwide as a convenient online brand for renting cars or providing service, which can be used through a special application or website. In addition, the company provides other services, such as the delivery of products or other goods. The company is presented in 65 countries and more than 600 cities worldwide. Each day 15 million trips are completed. There are over 16,000 employees at Uber as of 2017.
In 2008, two friends in Paris were discussing business plans and ideas when they were forced to go on a journey. They spent more than an hour searching for a free taxi, being almost in the center of the city. At that moment the idea of an original startup, that would help tourists and citizens to get a taxi, was born. Another entrepreneur, Oscar Salazar, joined the team. Just a year later, UberCab was officially registered in San Francisco, and in 2010 the name was modified to Uber, and the prototype of the project was ready. The management of the company first decided to test the program themselves, so they registered themselves as the first taxi drivers.
Even though Uber is one of the most profitable and successful companies known worldwide, there have been quite a lot of scandals and issues lately with this enterprise. Uber is an example of the so-called participatory economy, when resources, in this case, road transport, are shared. The new model of services caused and continues to cause controversy and dissatisfaction.
Unlike most of the companies, the founders of Uber did not seek to develop the project entirely on their own funds. Almost from the beginning of the creation of the company, they actively took investments from outside companies and entrepreneurs. Jeff Bezos, Menlo Ventures, Goldman Sachs, and many other business projects were invested there. After this, the investment stops because Travis Kalanick and Garrett Camp take the lead. They decided to receive funding in several rounds, each of them was determined by themselves. But as soon as Uber was again allowed to make investments, amounts were worth billions of dollars. Founders actively expanded through foreign investments in order to open a company in other countries. So, Uber for several years captured almost the entire taxi market in the world. Despite this, on June 20, 2017, there was news that the founder and CEO of Uber company Travis Kalanick resigned from his post. According to experts, his departure eloquently indicates that even the most successful business will have problems in the absence of a coherent corporate culture. Over the past months, the company, one after another, has been plagued by scandals that cost both top managers and ordinary employees.
In recent times, Uber has been involved in several scandals. One of the most notorious was caused by the publication of an ex-employee of the company Susan Fowler. In February 2017 she posted about corporate culture in Uber. Ex-employee spoke about the discrimination, harassment, and sexism that flourished in Uber. The company commissioned former US Attorney General Eric Holder to conduct an independent review of these complaints. According to Fowler, she received an obscene offer from a senior employee on the very first day of work, after which she turned to the personnel department with a complaint. However, she was refused in the personnel department, explaining that, although the proposals of the superior person are obvious sexual harassment, the employee is a good worker, and this is his first violation, so the move will not be given. She was offered a choice – to remain at the current position and face the inevitability of ‘retribution’ or leave the team. According to Fowler, she went to work in another team and soon learned that other women employees of the company faced sexual harassment and sexism at work as well. As a result of the investigation, wrote WSJ (Bensinger,2018), Uber fired more than 20 people. More than 12 thousand people work in Uber worldwide. About 36% of employees are women, according to their own company data.
In June of 2018, billionaire David Bonderman left the company’s board of directors after a sexist remark. At a meeting on the fight against sexism in the company, to the proposal of another member of the board of directors Arianna Huffington to increase the number of women in the council, he replied that such an increase would provoke ‘more talk’. Later he apologized for his comment, calling it ‘reckless, inappropriate and unforgivable,’ and hurriedly left Uber.
Another issue that Uber was claimed for was a deception of authorities. In March 2017, The New Times reported about Uber’s development and usage of special Greyball programs, where the company could track orders in countries where service activities are prohibited. In case the order came from a police officer or official, Greyball changed up real cars on the map for non-existent, canceled the order, or hid the available cars. According to the publication, the program has been used since 2014 in Paris, Las Vegas, Australia, and South Korea, as well as in Oregon and Portland.
In February 2017, the New York Times published an investigation into Uber’s internal culture based on interviews with 30 former and current employees of the company. It spoke not only about the harassment of some employees to others but also attempts to harm each other. In March of that year, President Jeff Jones, who had not worked there for half a year, quit Uber. A source in the company then told the BBC that Jones’s resignation was a complete surprise. According to BBC (Lee, 2017) correspondent in San Francisco, Dave Lee, Jeff Jones resigned after he was not offered the post of chief operating officer. This is a new post that Uber decided to create in an attempt to stabilize the situation in the company after a series of scandals.
Also, in 2018, in the San Francisco Federal Court, Uber filed a lawsuit by unmanned vehicles, part of the Alphabet holding company. The plaintiff claimed that the former Waymo employee Anthony Levandowski copied more than 14,000 confidential files in December 2015 and transferred them to Uber. Uber denied this, claiming that they did not use any commercial secrets when working on the drones. However, the court ordered the company to return all documents to the plaintiff and remove the lead engineer from work. Levandowski was fired later. He himself was silent during the trial, using the Fifth Amendment of the US Constitution (FindLaw, 2019), which allows him not to testify against himself.