What’s next for Uber?

Hint: The solution still involves founder and ex-CEO Travis Kalanick.

Exterior view of the headquarters of Uber in San Francisco. CREDIT: AP Photo/Eric Risberg
Exterior view of the headquarters of Uber in San Francisco. CREDIT: AP Photo/Eric Risberg

Uber is a hot mess. But it didn’t just get that way.

For a company that’s just six years old, Uber has already racked up quite a strong list of contenders for “Worst Year Ever.” There was 2014, when an executive was overheard threatening to stalk and harass a journalist who had written a critical story, and a litany of attacks committed by drivers against their passengers, which CEO Travis Kalanick flippantly dismissed in an infamous GQ profile. Or 2016, when the company lost several legal fights brought by drivers, regulators, and labor boards. But the world’s largest ride-sharing company has truly begun to crumble in 2017, the culmination of years of reporting on the company’s brash and fraternity-esque work culture.

In a 2014 Vanity Fair piece, investors characterized Kalanick’s personality and leadership style almost fondly, crediting him for using “douche as a tactic, not a strategy” and dismissing critics by arguing that “it’s hard to be a disrupter and not be an asshole.” Kalanick likened himself to “fire and brimstone,” saying he was a “passionate entrepreneur.”

For any organization, workplace culture is usually dictated by leadership from the top down. But when that culture is toxic, a company rots like a diseased tree — crumbling from the inside and then collapsing altogether.

The Uber we’ve come to know fully collapsed late Tuesday when Kalanick resigned as CEO, under pressure from five of the company’s biggest investors. He still controls a majority of the company’s voting shares and maintains his seat on the board of directors.

The great Uber scandal of 2017—former engineer Susan Fowler’s scathing indictment of the company’s pervasive sexism combined with an executive exodus—was the catalyst for that collapse, triggering a harassment probe that led to more than 20 firings, two executive and board member resignations, and now the resignation of the company’s CEO.

But there were other signs that Uber’s do-what-you-want-and-win-at-all costs culture was harmful to its employees. Thirty-three year old Joseph Thomas killed himself in April after working just five months at Uber. In less than half a year, the father and husband who taught himself to code felt beaten down by Uber’s culture, his wife Zecole Thomas told USA Today. It was a culture where Thomas discouraged his wife from visiting him at lunch because it wasn’t “that kind of environment” and, in the lead up to his suicide, he began questioning his own skills that he honed at LinkedIn. He had no history of mental health issues, nor did he display any difficulty in handling stress. But he was black — and, like Fowler, a minority at a company that seemed to facilitate marginalization on every level of management.

Uber’s exclusion of women and people of color, while not atypical for Silicon Valley, was likely a byproduct of the company’s “always be hustling” ethos that rewarded high-performers regardless of how inappropriate their behavior. And as is often the case, those excluded groups can often be barometers for a company’s culture — leaving companies with toxic environments at a higher rate than their white male counterparts.

“Values are hot air. They don’t mean anything. If you go work in an organization, they say ‘we value integrity’ or ‘we value team work’ — God knows what it really means.”

Armed with 47 recommendations from an investigation led by former U.S. Attorney General Eric Holder, a newly appointed COO to oversee business changes, and Kalanick’s resignation from CEO, there’s an opportunity for change at the ride-sharing company.

But what does it mean for a company to change its culture? Is it even possible for Uber — a multi-billion dollar company that derived its success from bending and breaking the rules — to survive such catastrophic events?

Charles O’Reilly, an organizational business management professor at Stanford University, says it is, but there are a lot of variables.

“Often what happens when people talk about culture, they talk about values,” he said. “Values are hot air. They don’t mean anything. If you go work in an organization, they say ‘we value integrity’ or ‘we value team work’ — God knows what it really means.”

Real values, O’Reilly said, are “the pattern of behavior that’s reinforced by people on systems.” The people in this equation are senior management, middle management, and then your peers. The system is how those people are rewarded. That is how duties and tasks are measured, what behavior is rewarded and approved of, and what gets employees high status.

“When there is great agreement about what the pattern of behavior is that you have to engage in to succeed, that is a social control system,” he said.

Every organization — non-profits, government, startups, and major corporations — has a system. And for employees to be deemed successful, they have two choices: assimilate to the culture or risk being outcast.

“What you’re trying to drive out is behaviors that are associated with not being respectful and inclusive of others…You want to be very clear with people that that’s not going to tolerated in the future.”

At Uber, boorish behavior—even crossing ethical or moral lines—was not only tolerated, but expected in the pursuit of getting results.

“You’ve got to push the boundaries, you’ve got to constantly do whatever it takes to perform. That’s who Kalanick is,” O’Reilly said. “What that ultimately legitimizes is behavior where people can be aggressive, people can cross ethical or moral boundary lines. And part of the problem is, they’ve succeeded in part because of that.”

The sexual harassment, inappropriate company outings, and the exclusion of women and people of color all became permissible — and rewarded. But whether or not that changes with any permanence will likely still hinge on Kalanick, who remains integral to Uber’s business as a founding board member. Kalanick also still has control of the board through super-voting powers and strong allies. According to an email obtained by Buzzfeed, Uber managers are urging employees to sign a petition to reinstate Kalanick that reads: “Uber is T.K. and T.K. is Uber. I don’t see another leader doing as good a job as him, external or internal.”

To change, Uber will need to rebuild from the root, implementing new behaviors and examples for employees to emulate.

That usually doesn’t happen without a change in leadership. Even with Kalanick’s role reduced, that change could be undermined if he’s still viewed by employees as a de facto leader — and if his behavior doesn’t change.

Uber will have to navigate from one end of the spectrum of Silicon Valley’s sexist and discriminatory corporate culture, to the other, adopting a zero-tolerance workplace where derogatory comments, retaliation, harassment, and exclusion are punished without exception. It must also become a place where leadership proactively seeks diverse applicants, and models an environment where everyone feels listened to and comfortable speaking up.

“People aren’t diverse, the environment is homogenous.”

Joelle Emerson, founder and CEO at Paradigm in San Francisco, has helped shape diversity programs for tech companies throughout Silicon Valley, including Uber’s biggest competitor Lyft. For her, Uber’s problems are in a sense everyone’s, because diversity and inclusion issues are often subtle in workplaces.

“I’ve been kind of worried that other tech companies would distance themselves from Uber because it’s very extreme,” Emerson said.

Companies and their products influence daily life. But “given our political climate, we’re going to have to rely on companies to drive social change,” she said.

There are three types of companies, she said: those that mimic the systemic inequalities that exist in broader society; those that amplify inequities, such as Uber; and those that aspire to be a workplace that tries to correct them.

Emerson said most of the recommendations given to Uber were pretty good, but added that there’s cause for concern with how diversity was discussed without the necessary caveats.

For example, the report recommended anonymizing resumes as a new policy to get a better applicant pool. But that doesn’t always work and can sometimes encourage more homogeneity.

The Rooney rule, which mandates an organization have one representative of a marginalized group in the management tier, was another example. It’s a good goal, Emerson said, but also doesn’t always work in practice. It could lead to tokenism rather than inclusion and stagnate employees’ growth.

Setting goals, not quotas, for representation is important, she said, but there has to be a strategy there to support it.

The workforces at Uber and other tech companies need to focus on demanding accountability on inclusion and diversity initiatives rather than reactive apologies after bad behavior, Emerson said.

In the months and years ahead, Uber employees can expect to feel some discomfort as the culture shifts, Holder’s recommendations are implemented, and new faces give marching orders. After all, change is hard even when everyone agrees it needs to happen.

“If inequality felt normal to you, then equality feels like discrimination.”

There might even be strong pushback from some employees or members of management, Emerson said, as people who are part of the company’s predominantly white and male majority may feel threatened as other groups are elevated to an equal level.

“If inequality felt normal to you, then equality feels like discrimination,” she said.

Once faced with unhappy workers who bristle at the changes, it will be even more important for Uber’s new leadership to hold fast to the recommendations and explain why the company is committed to these changes.

“Clarity of vision and mission are very important. Clear, consistent leadership are key,” Emerson said, which means Uber may have to slow hiring in favor of casting wider nets to get better quality candidates.

If Uber is committed to making changes, it could change its culture in 12 to 24 months, according to O’Reilly.

“What you’re trying to drive out is behaviors that are associated with not being respectful and inclusive of others, and sort of being aggressive to the point where you cross ethical boundaries. You want to be very clear with people that that’s not going to tolerated in the future,” said O’Reilly.

The company’s hiring of Harvard Business School’s Frances Frei will be integral to accomplishing these goals, O’Reilly noted.

“Francis Frei, she understands this stuff. She’s written about companies that have very positive cultures. My guess would be is she’ll be very sophisticated. The real question for me is, what’ll they do with Kalanick?”

O’Reilly and Emerson strongly believe that Kalanick can change and, ultimately, that the future of the company will rest on how he adapts and if he’s still seen as a leader internally. He’s still a founder, will remain on the board and retains voting control.

“His perspective is really going to matter,” Emerson said.

Perhaps the outlook of Uber’s impending metamorphosis looks a little better now that Kalanick has stepped down as CEO. But what’s certain is that Uber still has a hard road ahead: the company is still grappling with labor disputes from drivers, its ongoing self-driving car lawsuit with Google, driver assault victims, and criminal investigations pertaining to its evasion of law enforcement. The company is also being sued by an Indian rape victim for the mishandling of her medical records by Uber executives.

It’ll be some time before we know for sure whether Uber’s changes are here to stay, and consumers can feel better about hailing a ride with the app. But here’s to hoping the company can take turn its controversies into triumphs.

As Emerson said: “You want to see any company that affects our society do well.”