Uber has had its share of public relations problems lately, and is now known as yet another company having to deal with current business ethics issues. From the taxi-alternative start-up’s drivers claiming they don’t make nearly as much money as they originally promised to none-the-wiser customers getting stuck with hefty price surges at the ends of rides. As if this weren’t enough to land Uber an F rating from the Better Business Bureau (in fact, this and a few other Uber business practices were), Senior Vice President Emil Michael’s comments at a recent dinner have pushed this company into a full-on PR disaster.
Creating Culture One (Wrong) Word at a Time
The nutshell: At a dinner attended by a Buzzfeed reporter, Michael suggested Uber would embark on a smear campaign against journalists who criticized the company. In this conversation, Michael said Uber could spend millions of dollars to hire investigators to dig into the journalists’ personal data and use the information they found about their critics to threaten and/or publicly embarrass them. Although Michael claims he thought the conversation was off the record, according to the Buzzfeed reporter, it wasn’t. And he ran with the story.
Not surprisingly, a media storm ensued, leaving Uber CEO Travis Kalanick no other choice but to respond. But Kalanick’s “apology” appeared less than sincere. Rather than fire Michael for insinuating Uber would engage in such unethical business practices, he posted 14 tweets on his personal Twitter account, essentially saying his senior executive’s comments were “terrible.” Uber’s latest situation clearly speaks to what some see as the end of the old tech genre that was focused on changing the world and the move to self-enrichment.
Textbook Case for the Need for Strong “Tone at the Top”
It’s safe to say that Uber is in hot PR water, and it may be very difficult for the company to climb out. Why is that? Because the laundry list of reputation-damaging unethical business practices at Uber has experienced in the past several months may be indicative of a deeper, more critical issue: poor tone at the top, a broken organizational culture and possibly bad business ethics.
What do we mean when we talk about tone from the top? A successful ethics and compliance program must be built on a solid foundation of business ethics that are fully and openly endorsed by senior management. Otherwise, the program may amount to little more than a hollow set of internal rules and regulations. There should be an unambiguous, visible and active commitment to compliance.
For start-ups and some companies in the tech sector, culture-related wrongdoing isn’t new. In fact, it was a journalist's report against Uber for what she believed were unethical business practices that prompted Michael's comments at that dinner. Rather than take steps to investigate or address the bad behavior it was being accused of, Uber resorted to threats against the reporter and other critics of the company. This response underscores how problematic its culture seems to be.
A Broken Corporate Culture Will Come Back to Bite You—and Not Just Through Bad Press
While Uber may think this issue will disappear with time, it won’t. If there is an underlying issue with the company’s culture, or if it is truly one of the many companies with ethical issues, it will rear its head again in the future—it’s only a matter of time.
The same may be true for other companies in the tech space if The Wall Street Journal reporter Christopher Mims' concerns play out. In his recent article, "Uber and a Fraught New Era for Tech" he writes, "The emphasis of the tech companies being built now is much more zero-sum. Whom do we need to destroy in an effort to enrich ourselves and our investors, and what is the best vehicle for creating a consumer need that will facilitate that quest?"
Uber is at a critical crossroads and their next steps could ultimately determine their long-term success. If the company doesn’t take the time needed now to establish a strong culture, it runs the risk of losing key partnerships, employees and drivers, and so much more.
If they are nurturing an environment that prohibits or discourages employees or others from speaking up, business risks alone (i.e., safety, etc.) could significantly hamper this thriving, innovative organization.
If that happens, we all lose.