Uber: Khosrowshahi Attempts to Shift Company Gears

Photo Credits: fortune.com

Although Uber appears to be a forward-thinking company, its corporate culture is stuck in reverse.

In February of this year, the transportation service faced more than 30 accusations detailing unethical practices in the workplace. Employees have reported sexual harassment, discrimination and verbal abuse. Subordinates have alleged numerous infractions by executives. Its hypocritical, “unrestrained” culture does not uphold the 14 core company values (which the company fails to principally disclose on its site). Uber abandoned principles eight years ago.

The demanding culture of Uber is counterproductive to the company’s mission.  In fact, the company’s “hustle mindset” is the cause of its employees’ increasingly aggressive behavior. The office environment is cut-throat. Workers are pinned against one another. Managers threaten their subordinates. There is lack of cooperation and more importantly, respect.

The internal crisis has escalated into a political and legal dilemma. In an effort to address the corruption, former Chief Executive Travis Kalanick began a full disclosure process. He attempted to reverse the bad name through press releases and diversity reports. However, as of his resignation in August 2017, the company remains at a standstill.

The company has lost its license to operate in peak cities such as London, its largest European market. Uber has also been removed from the streets of Delhi, India and Austin, Texas over the course of the last few years.

In an effort to fill Kalanick’s shoes and address the present circumstances, Uber’s appointment of Dara Khosrowshahi as chief executive has shifted the power dynamic of the company’s executive board. Khosrowshahi is chief of renowned travel site Expedia.

Khosrowshahi and the current board members of Uber and Goldman Sachs have set forth an action plan in an attempt to rectify the governing practices of Kalanick. If adopted, the proposal would effectively reduce the control Kalanick has over the company and potentially rewire the core values formerly put forth.

At its core, the proposal grants Khosrowshahi more internal control. He gains the right to nominate directors, should they vacate their positions/be forcibly removed from them. However, he is also required to incorporate the input of the board.

The plan promotes the minimization of voting power and the number of votes per year. It also lists 2019 as the year by when the company must go public. In its final three bullets, the plan enforces several restrictions on Kalanick. It requires that in order to return as chief executive, he would need the approval of two-thirds of the board. However, to retain his current board seat, he must gain the wholehearted approval of Khosrowshahi.

In a statement to his employees, Khosrowshahi explained:

“Just know that the most important work here is the hard work you’re doing on behalf of our company. Keep focused, keep together, and keep going.” 

However, to sincerely regain the trust of employees and customers, Khosrowshahi must do more to steer his company in the right direction. He must reframe this corporate dynamic, apply and publicize a list of proposals, and instill a new corporate culture.

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