Uber’s Bad-Boy Attitude Leaves It Prone to Ethical Lapses

Now is an exciting time for Uber Technologies, the app-based ride-sharing company that promises to transform the business of getting around by car. Executives at the Silicon Valley start-up are developing a bad-boy reputation just as swiftly as their company is becoming the hottest meal ticket in town, gathering investments from hedge funds, sovereign wealth funds and the ultrarich.

In early December the San Francisco–based outfit announced the completion of a new, $1.2 billion round of financing that valued it at as much as $41 billion. At the same time, however, Uber is dealing with criticism of the behavior and attitude of some of its executives and questions about user privacy. At a private dinner in New York in late November, senior vice president of business Emil Michael suggested that the company could hire researchers to dig up dirt on journalists who have been critical of it and harass them. Michael’s comments were quickly followed by reports of instances where Uber has used its so-called “God view” screen to track passengers, including some female reporters.

Worries about riders’ privacy prompted Senator Al Franken, chairman of the Subcommittee on Privacy, Technology and the Law, to write to Uber CEO Travis Kalanick. In his November 19 letter, Franken said he had serious concerns “about the scope, transparency, and enforceability of Uber’s [privacy] policies.” Kalanick is emblematic of Uber’s dilemma. An Ayn Rand fan, he has a reputation for being a jerk. Or, as one Uber employee was quoted in a December Vanity Fair profile of Kalanick as saying admiringly, “It’s hard to be a disrupter and not be an asshole.” But Kalanick’s attitude can make him appear dismissive of the riders and drivers who make Uber work. This is particularly true when it comes to women: His reputation for misogyny was enhanced when a March 2014 GQ article quoted him describing women who find Uber executives desirable as “Boob-ers.”

Kalanick has addressed Uber’s latest privacy issues. “The events of the recent weeks have shown us that we also need to invest in internal growth and change,” he wrote in a blog post announcing the new $1.2 billion in funding. “Acknowledging mistakes and learning from them are the first steps. We are collaborating across the company and seeking counsel from those who have gone through similar challenges to allow us to refine and change where needed.”

At the heart of Uber’s problems is concern that the attitude that helped the company rise to the top in tech — and take on the old guard in the cab and limo business — can leave it vulnerable to ethical breaches. Also, the dog-eat-dog ethos that Uber is so happy to embrace as an advantage when it enters new markets — gleefully undercutting competitors and disregarding laws it doesn’t like — sits uncomfortably against the egalitarian values that the new generation of sharing-economy start-ups promote.

The ride-sharing, house-sharing, wallet-sharing economy where Uber now ranks as the leading player is built on a notion, which eBay famously made into a successful business principle, that people are basically good — or at least they can be relied upon to behave well when subject to review and monitoring by their peers. But Uber’s success in building market share is based on the willingness of its leaders to, where necessary, shamelessly give the finger to anyone who gets in its way.

That Uber has been able to raise so much new cash — with more in the works — shows that investors aren’t too bothered by the privacy flap or jurisdictional dust-ups. In his December blog post, Kalanick said that “the new financing will allow Uber to make substantial investments, particularly in the Asia Pacific region.” Uber’s efforts in that part of the world are already well under way. Want a ride in Bangalore? Kalanick had you covered. Uber has aggressively expanded into India, slashing prices to undercut competition. But even there it has its problems: Just days after it revealed its latest capital infusion, Uber was banned from operating in New Delhi after an alleged rape by one of its drivers. The ban was subsequently extended across India.

Kalanick issued a statement calling what took place in New Delhi “horrific.” He pledged that Uber will work with the Indian government to establish clear background checks for drivers. “We will also partner closely with the groups who are leading the way on women’s safety here in New Delhi and around the country and invest in technology advances to help make New Delhi a safer city for women,” Kalanick said. If they wish to achieve universal success, the bad boys of Uber might have to become good guys, and that includes embracing women’s rights.

— Imogen Rose-Smith