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Uber Technology Inc Leadership and Organizational Behavior

Uber Technology Inc  Leadership and Organizational Behavior

Executive Summary

Uber Technology Inc. is currently facing a number of challenges. They major challenges concerns numerous lawsuits and scandals. The numerous lawsuits emerge from unethical conduct by senior-level executives at the company. Uber seems to have developed a culture of unethical practice in its quest for profitability and dominance in the market. The numerous lawsuits have serious future implications for the company’s operations. The major lawsuits facing the company touch on various issues such as gender and ethnic discrimination, sexual harassment, intellectual property rights, malfeasance, and other unethical practices. A weak corporate culture at Uber is the major driving force for most of the unethical practices witnessed by the company. This report recommends the introduction of a new corporate culture as the most important way of dealing with the current issues facing the company.  Other recommendations include the need to conduct employee training and development as well as considering internal promotions to give the employees a chance for growth and development.

Uber Technology Inc. is a leading multinational taxi company with its headquarters in San Francisco, California. Uber commenced operations in 2009 (Uber Technologies Inc., 2018). The company operates in several cities across the world. Uber mainly operates as a taxi company through its Uber application. In the recent period, the company has expanded operations to include Uber Eats, which is a new way of delivering food in a quick and affordable manner, and self-driving cars. The major aim in venturing into self-driving cars is to make transportation safer (Uber Technologies Inc., 2018). Despite gaining popularity across the world, Uber Technology Inc. has been embroiled in a spate of scandals and public relation blunders (Levin, 2017). The scandals, as well as public relation issues, have led to a near-collapse of the company and a negative public image. This paper is an analysis of hindrances to organizational efficiency at Uber Technologies Inc. and a proposal of the appropriate strategic solutions.

The Organization and the Issue to Resolve

Uber Technology Inc. has been a pioneer in the transport industry. The company developed a mobile application that enables customers to hail cabs with ease from their mobile phones. Uber has significantly revolutionized the transportation industry by incorporating modern technologies in the taxi business. In the recent period, Uber Technologies Inc. has moved a notch higher by integrating self-driving technology. The company has been in the forefront in ensuring the introduction of autonomous cars into the transport industry (Levin, 2017a). Uber has invested up to $70 billion in developing its autonomous technology. Nonetheless, the company has faced litigation from Alphabet Inc. over its car radar technology. The litigation concerns intellectual property rights, with claims that Uber illegally acquired radar technology from Alphabet Inc. (Levin, 2017a). Uber has also diversified its transport business to include food transportation through UberEats. UberEats is a revolutionary way of ordering food online and having it delivered at a cheaper cost.

A number of organizational issues had adverse effects on productivity at Uber Technology Inc. The major issue relates to the numerous lawsuits and scandals. Uber has been involved in numerous lawsuits resulting in a bad negative image. One of the major lawsuits concerns radar technology development as earlier mentioned (Levin, 2017a). The lawsuit concerns Uber’s infringement on Alphabet Inc.’s intellectual property rights. Another lawsuit concerns the company’s efforts to engage in illicit business tactics (Mehrota, 2017). This was during the former Chief Executive Officer’s (CEO’s) tenor, Travis Kalanick. The CEO engaged in malfeasance and provided wrongful information to private investors who ended up pumping billions of dollars into the firm. In another lawsuit, the company faces accusations of engaging in foreign federal bribery and other acts of corruption.

Uber Technologies Inc.’s executives have also been accused of sexual harassment and engaging in gender discrimination. According to Mehrota (2017), the company’s corporate culture promotes sexual discrimination against women. A report filed by the company’s former software engineer, Susan Fowler, highlighted the issue of sexual harassment in the company (Newcomer, 2017). Following the claims of sexual harassment by Fowler, other complaints emerged regarding sexual discrimination of women and including incidences of sexual harassment. Uber is facing another lawsuit concerning attempts to cover up serious incidents involving data loss through hacking. According to Novak (2017), hackers gained access to 57 million accounts belonging to customers. The company made deliberate efforts to cover up the incidence by paying the hackers $100,000.

Another set of lawsuits involves claims of racial discrimination. According to Balakrishnan and Salinas (2017), the lawsuits claim that Uber favors Whites compared to people of color. Uber is facing lawsuits concerning retaliatory actions against employees who act as whistleblowers on various issues affecting the company. For instance, in 2017 Uber had 13 ongoing cases involving retaliation. Lastly, Uber is facing lawsuits concerning driver classification. In 2017, a British court ruled that Uber drivers were entitled to a minimum wage just like other employees (Balakrishnan & Salinas, 2017). These lawsuits pose a serious threat to the operations and profitability of the company. Some of the ongoing lawsuits may cost the company millions in terms of compensation.

Current Corporate Culture at Uber

The current corporate culture has significantly facilitated the multiple lawsuits facing the company. Uber Technologies Inc. lacks an effective corporate culture that may guide employees in complex decision-making. When the corporate culture and organizational policy framework are not strong enough to support decision-making, the workforce is likely to take wrong decisions. The company’s corporate culture is weak as evidenced by its mission statement. According to the company’s official website, Uber Technologies Inc. (2018), “Uber’s mission is to bring transportation – for everyone, everywhere.” The mission statement does not outline how the employees should treat customers nor emphasize on any company core values or principles.

Uber’s management focused more on growth and profitability of the company at the expense of instilling ethical values among employees. In 2017, Uber made significant changes in the executive structure, including ousting of the then CEO and replacing him with Dara Khosrowshahi (Mehrota, 2017). In a recent news release, the current CEO noted that it is time for Uber to “move from an era of growth at all costs to one of responsible growth” (Khosrowshahi, 2017). This means that the previous leadership overlooked ethical leadership in order to achieve growth and profitability. This explains the higher number of lawsuits currently facing the company.

Uber Technologies Inc. seems to have supported the development of an amoral culture across the entire organizational leadership, from the CEO Kalanick down to mid-level managers. According to Chafkin (2017), both the former CEO, Kalanick, and the mid-level managers engaged in illegal conduct. The involvement of senior executives in unethical practices fostered the development and prevalence of an unethical conduct across the entire organizational structure. Reports indicate that the company had also developed a culture of disparaging its drivers (Chafkin, 2017). This resulted in low morale among the Uber drivers who are critical to the success of the company. Uber’s core values do not explicitly address the issue of unethical practices. The core value concerning ethical practices only claims, “We do the right thing” (Khosrowshahi, 2017, p. 1). This may not be enough to create a culture of high ethical practice in the organization.

Areas of Weakness

From this report, it is clear that Uber Technologies Inc. has three major areas of weaknesses: corporate culture, diversity, and motivational strategies. Corporate culture is the most visible area of weakness facing Uber. Bogomolov, Belimova, and Kushekbaev (2017) assert that companies that have developed sound corporate cultures are more successful compared to those without one. Further, weak corporate culture leads to a crisis within organizations. This true in light of the weak corporate culture at Uber and the subsequent string of litigations the company is currently facing. A strong corporate culture creates unity among the workforce in their efforts to achieve a common goal (Bogomolov et al., 2017). In such organizations, the employees share similar corporate values. This leads to the emergence of a dominant culture, which is a key determinant of the behavior of employees.

Another key area of weakness is in ensuring there is diversity among the workforce. Diversity in the workplace encompasses various issues including the issues of gender, race, background, education, ethnicity, and among others. The major diversity issues at Uber identified in this report are gender-based discrimination and ethnicity. According to Vijayasiri (2008), the organizational culture plays a critical role in determining whether employees report incidences relating to diversity such as gender discrimination at the workplace. In organizations where the management takes retaliatory actions against employees, the employees may feel discouraged to file complaints. This leads to the propagation of such negative cultures. Uber has been reluctant to investigate incidences of alleged sexual harassment and gender discrimination at the workplace. In the case of Susan Fowler, the management was reluctant to investigate the incidence of sexual harassment claiming that it involved a senior-level manager (Rosenfeld, 2017).

The company is also having issues to do with staff motivation. There are several reports of employees, mainly drivers, voicing their concerns over how the management handles employee rights. Uber drivers around the world have been fighting for better remuneration and the need for the company to observe minimum wage standards. For instance, a British court ruled in favor of Uber drivers on the issue on minimum wage and vacation time (Balakrishnan & Salinas, 2017). Poor remuneration and working conditions can significantly contribute towards low employee morale. As such, the Uber management needs to reevaluate how it interacts with employees and ways of raising their work morale.

Proposed Solutions

A number of organizational practices need modification. First, there is need to change the corporate culture at Uber. It is important to rewrite the ethical code of conduct at the organization and ensure that employee follows the new ethical guidelines. Another organizational practice that one may modify is the hiring practices of the organization. The hiring practices should encourage diversity in terms of race or ethnicity and gender. Another practice that needs change is the way the organization investigates and deals with issues concerning employee behavior. The organization seems adamant to investigate incidences involving senior management (Rosenfeld, 2017). Another practice that should change is how the organization recognizes and rewards employees.

Uber’s management should take into consideration a number of solutions. There is a need for training of all employees with regard to the proposed ethical guidelines. Training will ensure that employees adopt ethical conduct as they conduct various activities. In line with this, there is need to adopt a strong policy framework concerning employees who fail to observe the ethical guidelines. The management can ensure diversity in various ways. First, there is need to educate the senior leadership about the legal issues concerning gender and ethnic discrimination. Second, there is need of a proper policy framework to ensure gender balance during employee recruitment. Third, there is a need for a workplace relationship policy that may guide office romance and define what constitutes sexual harassment. Lastly, the management should consider conducting promotions from within the company. For instance, the company may promote drivers who have excellent records and qualifications.

The following are the suggestions that will be presented to the organization’s leadership:

  • Development of new ethical guidelines
  • Training of all employees on ethical guidelines
  • Adopt a policy framework to deal with employees who engage in unethical practices
  • Educate senior management on gender and ethnic discrimination
  • Conduct promotions from within

 

References

Balakrishnan, A., & Salinas, S. (2017, June 18). Uber hack flap is adding to its already daunting list of lawsuits — here’s a rundown. CNBC. Retrieved from            https://www.cnbc.com/2017/06/18/uber-faces-big-legal-threats–lawyers.html

Bogomolov, A. V., Belimova, E. A., & Kushekbaev, Y. B. (2017). Formation and importance of corporate culture in the system of management “[Abstract]”. Vestnik Voronežskogo   Gosudarstvennogo Universiteta Inženernyh Tehnologij, 79(1), 416-421.         doi:10.20914/2310-1202-2017-1-416-421

Chafkin, M. (2017, Aug. 29). Uber’s problems go way beyond its CEO. Bloomberg          Businessweek. Retrieved from https://www.bloomberg.com/news/articles/2017-08-            29/uber-s-problems-go-way-beyond-its-ceo

Khosrowshahi, D. (2017). Uber’s new cultural norms. Uber Newsroom. Retrieved from             https://www.uber.com/newsroom/ubers-new-cultural-norms/

Levin, S. (2017, June 28). Uber’s scandals, blunders and PR disasters: the full list. The     Guardian. Retrieved from https://www.theguardian.com/technology/2017/jun/18/uber-           travis-kalanick-scandal-pr-disaster-timeline

Levin, S. (2017a, May 15). Uber allowed to continue self-driving car project but must return files            to Waymo. The Guardian. Retrieved from         https://www.theguardian.com/technology/2017/may/15/uber-self-driving-cars-waymo-        google

Mehrota, K. (2017, Sept. 26). Uber, Kalanick sued by investors for scandal-related losses.            Bloomberg Technology. Retrieved from https://www.bloomberg.com/news/articles/2017-         09-26/uber-kalanick-sued-by-investors-for-misleading-over-scandals

Newcomer, E. (2017, June 13). Uber CEO to take leave, have diminished role after scandals.       Bloomberg Technology. Retrieved from https://www.bloomberg.com/news/articles/2017-         06-13/uber-ceo-to-take-leave-diminished-role-after-workplace-scandals

Novak, J. (2017). Why Uber’s hacking scandal is worse than all the others. CNBC. Retrieved       from https://www.cnbc.com/2017/11/22/ubers-hacking-scandal-worse-than-equifax-       commentary.html

Rosenfeld, E. (2017, Feb. 19). Uber CEO orders ‘urgent investigation’ after allegation of   harassment, gender bias at company. CNBC. Retrieved from       https://www.cnbc.com/2017/02/19/uber-ceo-travis-kalanick-says-orders-urgent-     investigation-after-allegation-of-harassment-gender-bias-at-company.html

Uber Technologies Inc. (2018). Company info. Retrieved from             https://www.uber.com/newsroom/company-info/

Vijayasiri, G. (2008). Reporting sexual harassment: The importance of organizational culture and             trust. Gender Issues, 25(1), 43-61. doi:10.1007/s12147-008-9049-5