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Chaos at Uber: The New CEOs Challenge (2018)
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Final Case Assignment
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Frederick Redding- B00638237

MGMT4002 – Strategy Implementation
Professor Florence Tarrant
August 21, 2020

https://www.coursehero.com/file/66927035/Frederick-Redding-Uber-Tech-Final-Case-Assignmentpdf/
 Table of Contents

Introduction: .......................................................................................................................... 1

Analysis of Corporate Culture: ................................................................................................ 1

Identification of Key Issues: …....…………………………………………………………………………………………….2

Analysis of Governance Restructuring (thus far): ……………………………………………….………………… 2

Recommendations and Conclusion: ……………………….…………………………………………………………….. 3

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 Introduction:
Uber Technologies Inc. has seen a lucrative and successful run in recent years. Since its
inception in 2009 to 2017, the organization grew to a capacity that can provide revolutionary
ride-sharing services to 724 cities in over 84 countries worldwide. This drastically altered the
landscape of the transportation industry. However, in light of sexual harassment claims,
corporate theft lawsuits, discrimination allegations, and a toxic corporate culture; the company
faced scrutiny on a global scale which hindered the public image of the organization, and in turn,
affected the market share and overall success of the organization. Former-CEO and co-founder
Travis Kalanick was forced to step down on June 21, 2017, for Dara Khosrowshahi to succeed
Kalanick in early 2018. Kalanick remains on Uber’s Board of Directors with an appointment power
of two seats.

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There are many obstacles which obstruct the path of reaching Uber's IPO objectives for
2019. The primary focus is to fix Uber’s culture, to help prosper growth within the organization.

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In turn, this results in a reaffirmed installation of trust with stakeholders and strengthens investor
relations. There are also concerns upon whether or not Khosrowshahi possesses the right type

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of leadership, necessary to govern the splintered board -- ushering corporate governance in the
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confidence of Uber’s investors, employees, and its consumers. This brief report will uncover the
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underlying problems facing the governance of the organization, prior to January 2018, and what
Khosrowshahi has done thus far upon his arrival, in addition to three recommendations from our
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consultancy to reinvigorate Uber's current organizational culture.

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Analysis of Corporate Culture (prior to Khosrowshahi):

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Uber Technologies has seen its proven success climb to such heights under the leadership
of former CEO and co-founder, Travis Kalanick. Key stakeholders were concerned about the
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company’s best interests during Kalanick’s oversight.

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The company’s public reputation began to crumble amidst sexual harassment allegations in
February 2017 when Susan Fowler, a former software engineer at Uber went public with her
accounts of discrimination and extensive sexism within the company. Fowler had also claimed
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that upon reaching out to Human Resources that she was disregarded and told that the manager
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was a “high performer” and that he would not be disciplined for his actions. In the same month,
Google’s self-driving arm Waymo filed a lawsuit against Uber for theft of trade secrets and
intellectual property. As it turned out Anthony Levandowski, a former executive at Waymo left
the company with 14,000 confidential files related to self-driving cars and then later opened up
his own self-driving truck company, Otto, which was acquired by Uber in August of 2016. Upon
acquisition, Levandowski was appointed as the head of Uber’s self-driving car program, which
Waymo claimed included the stolen intellectual property of their self-driving technology. In an
effort to save face, Uber fired Levandowski in May of 2017.

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 Since the start of 2017 Uber has lost 13 members of its management team including CFO,
COO, president, general counsel, and senior vice-president of engineering. This recent loss of
management staff spoke to the divide and clash within the corporate culture and governance of
the organization under Travis Kalanick. Kalanick finally was convinced to step down as CEO of
Uber Technologies on June 21, 2017, for the betterment of the organization and to re-instil
confidence in stakeholders. Before Khosrowshahi’s term in January of 2018, Uber’s corporate
culture and governance structure were highly contentious.

Identification of Key Issues (prioritized):

The corporate structure of Uber ensured that the founders held super-voting shares and
ultimately had disproportionate control over the company. Kalanick instilled a competitive
corporate culture that promoted a “company where there has been no line that you wouldn’t
cross if it got in the way of success”. Some analysts argue that it is this competitive corporate

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culture that is the driving force of Uber’s success, however, others will claim that it was this type
of culture which led to the disregard of corporate ethics and toxicity within the organization that

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ultimately resulted in lawsuits and the departure of key executives within the organization. When
it comes to the necessary re-structure, the underlying internal issues point to a similar and

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recurring problem:
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1. Governance and Auditing of Executives: Due to super-voting shares, Kalanick, Camp, and
Graves controlled a majority of influence, decision-making power, and shareholder votes
- resulting in an abuse of power.
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2. Maltreatment of Employees: A former software engineer publicly scrutinized Uber’s

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culture, and neglect of sexual harassment and discrimination reports to the HR

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department - leading to an eventual 200 additional cases against the company. After
further investigation, disciplinary action has been taken upon several former employees
guilty of offences and neglect.
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3. Cybersecurity & Customer Privacy: A data breach compromised the personal information
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of over 57-million riders and drivers. A breach, after which point, Uber attempted to
publicly conceal by paying $100,000 hackers to delete the stolen data. As a result, there
is a dramatic loss in consumer and employee trust.
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Analysis of Governance Restructure:

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Since the beginning of his term in January 2018, Khosrowshahi has increased Uber’s
bookings by 17% from the previous quarter to $8.7 billion -- a year-over-year increase of 102%.
Within the same year, the company managed to curb losses by 9%.

SoftBank Group Corporation acquired a 17.5% stake in the company and became a major
investor upon the surprise appointment of new CEO Khosrowshahi, in January of 2018. This
provided a much-needed cash boost, provided liquidity in the company, and enhanced its overall
economic growth. SoftBank became Uber's largest investor and, because of the boost in cash
flows, Benchmark Capital agreed to drop its lawsuit against Kalanick; provided that Uber expands

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 its board from 11 to 17 members. Uber’s trajectory is on track to hit its expected IPO evaluation
in 2018.

Recommendations and Conclusion:

1. Top-down Tone: With its new implementation of Uber’s 14 Cultural Norms, the company
- especially its executive-level management - and its affiliates will adopt an overhauled
culture that nurtures an environment of growth and respect and keeps individuals
accountable for one’s actions. The company will maintain the best practices which have
been proven to deliver results - while recognizing the necessary adaptations to the
principles that will improve contributions to growth in both individual and professional
development.
2. Diversify Staff & Board: Board appointments of directors, and Chief Executive Officer
role, will be subject to board/shareholder approval notwithstanding Kalanick’s controlled

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seats. It is necessary to reallocate the CEO’s responsibilities across several executives and

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the addition of third-party directors outside of Kalanick’s appointments -- to ensure a

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better balance in leadership and decision-making.

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3. Monetary Incentives CSR for Employees and Stakeholders: To catalyze efforts in

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implementing the company’s 14 Cultural Norms, staff and stakeholders will have
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monetary incentives, the potential for bonuses based upon consumer recommendations
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and satisfaction, and employee-advised recognition.
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Citations:
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Qumer, S. M., & Purkayastha, D. (2018). Chaos at Uber: The New CEO’s Challenge.
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