Thursday, November 23, 2017

How is Uber still even in business at this point?


While no Silicon Valley company is without sin, Uber seems to have plumbed new depths of corporate depravity. There is so much fundamentally rotten at the company’s core that it’s nearly impossible to imagine that new-ish CEO Dara Khosrowshahi can disinfect and rehabilitate a culture gone horribly wrong.

Khosrowshahi’s tenure is already turning into an international apology tour. The latest mea culpa, of course, is that the company covered up a hack of 57 million user accounts in 2016. Hacks happen to the best of companies, alas. But failing to notify the affected account holders is grossly negligent. And paying the hackers $100,000 to keep quiet about it, according to Reuters, is simply unfathomable.

In his apology blog post, Khosrowshahi seems to have forgotten to mention the payment, which was also reported by Bloomberg.

“None of this should have happened, and I will not make excuses for it,” Khosrowshahi wrote. “While I can’t erase the past, I can commit on behalf of every Uber employee that we will learn from our mistakes. We are changing the way we do business, putting integrity at the core of every decision we make and working hard to earn the trust of our customers.”

Khosrowshahi fired the company’s chief security officer and a deputy. The Recorder reported that the deputy was in fact in-house lawyer Craig Clark. We wonder if new Uber general counsel Tony West has reported for duty yet? Welcome to the team, Tony! Otherwise, the executive suite remains a relatively empty place these days.

This latest scandal comes as Khosrowshahi is having to grovel before London authoritiesto get the company’s license restored there. Regulators there don’t seem to trust Uber after years of bad faith and bullying. Surprise! That lack of trust extends to countless other jurisdictions around the world that became fed up with the take-no-prisoners tactics of disgraced former CEO Travis Kalanick.

Kalanick, you’ll recall, was forced out of his own company following a massive internal investigation regarding the company’s culture of sexual harassment. And that investigation came as the company was being sued for allegedly stealing autonomous vehicle intellectual property from Google’s Waymo unit.

Oh, gee, what else? Is it unfair to dredge up things like an executive threatening a journalist? The Uber driver that raped a passenger in India? The Greyball technology the company used to dupe regulators? Booking fake rides to disrupt its competitor Lyft? Spying on passengers using its “God View” technology?

Uber can expect a colonoscopy from regulators over the latest scandal. But why should the company get any more chances at this point? The fact that investors have pumped billions of venture capital into this morality swamp isn’t really a justification for its existence. And neither is our addiction to heavily subsidized cab rides.

I’m sure the new CEO is sincere about being sorry. At this point, I think we’re all a bit sorry for anything we did to support Uber along the way. But now the rest of us have a duty to vote with our feet and wallets by walking away from Uber and leaving it to wither and fade away

Source : Venturebeat.com


TAXI LEAKS EXTRA BIT :

In about 15 months, if the timetable holds, Uber will ask public investors to buy its shares. Dara Khosrowshahi, the car-booking company's new chief executive, appears to be taking a kitchen sink approach to getting bad news out well in advance.

Yet the latest admission — that Uber covered up the theft by hackers of data from 50m passengers and 7m drivers — is so bad it is increasingly hard to see an unimpaired initial public offering in that timeframe.

Financial effects already exist from Uber's serial moral failings: it has bled market share, especially in its home city of San Francisco, to rival Lyft. But the inexplicable handling of the data breach puts it in another tier of jeopardy.

From May next year, a tough European Union rule called the General Data Protection Regulation will allow officials to levy fines of up to 4 per cent of turnover if data are leaked. If Uber maintains its current growth rate of 17 per cent, its annual net revenues should be $US9bn and the potential fine $US360m. Gross bookings would make it five times higher. That is real money even to the largest private tech company.

That is hypothetical, given the timing for implementation of the EU rule. But the severity of the punishments reflects the vengeful public mood. Very real liabilities exist in the US from the breach, which will play out in probes from the Federal Trade Commission, state attorneys-general and in lawsuits.

The bigger problem is that estimating the scope of Uber's myriad wrongdoing and the scale of potential punishments is impossible. Even the known unknowns are frightening enough.

Bear in mind that the full Holder report into sexual harassment has never been published. It doubtless contains more reputational blows to the company, if and when it emerges. Consider also that Uber is under criminal investigation over possible violation of the US Foreign Corrupt Practices Act.

The biggest fines there, such as last year's action against Swedish telecoms operator Telia, have reached $US1bn.

If Uber had adopted the controls of a good public company two or three years ago, it might have prevented some of the problems that developed since. To reveal them, settle them and soothe potential investors in the next 15 months is a tall order



Source :Financial Review
https://is.gd/zlrvT1 


1 comment:

Anonymous said...

About time we encouraged victims of sexual assaults, fraud through misuse of accounts, victims of road traffic accidents involving Uber to sue the regulator with all the negative publicity we could garner. I’m sure the powers that be would get in a flap if they had to explain themselves in a court. Food for thought?