Uber shifts into damage control mode

Uber shifts into damage control mode
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Uber is scrambling to correct course after a rocky stretch of missteps in recent months.

Criticism of how the ride-hailing giant handled President Trump's travel ban sparked a "delete Uber" campaign last month. The company is also now battling a lawsuit from Google, sexual harassment claims and a secretly recorded and unflattering video of its CEO arguing with a driver.

Uber has tried to sharpen their public relations strategy, swiftly acknowledging mistakes and outlining actions to remedy them. And the company hired former Attorney General Eric HolderEric H. HolderOvernight Tech: Uber CEO resigns | Trump's Iowa tech trip | Dems push Sessions to block AT&T-Time Warner deal | Lawmakers warned on threat to election systems | Uber CEO Travis Kalanick resigns Holder mulling 2020 bid MORE to probe the sexual harassment allegations by female workers.

But whether the damage control will be enough to contain the fallout - and keep its competitor Lyft at bay - remains to be seen.

“I think they’re doing the right things with Eric Holder coming in and their personnel positions,” noted Peter Mirijanian, a media and crisis consultant who runs his own firm in Washington, D.C. “The short answer is that only time will tell though.”

The company’s woes began in December after a months-long fight with the California Department of Motor Vehicles came to a head.

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Uber had argued that it did not need to purchase a $150 permit to test self-driving cars in the state because someone would be at the wheel at all times, ready to take over if there was a malfunction. The California DMV countered that as long as new technology was being tested, Uber needed the permits. Uber was forced to relocate its self-driving car project to Arizona where they could test without a permit.  

Uber's public relations were tested again after President Trump signed an executive order barring foreign nationals from seven primarily Muslim countries from entering the U.S.

The company dropped surge pricing during a taxi strike at New York’s John F. Kennedy International airport in the wake of the travel ban, prompting many to accuse Uber of undermining the efforts of protesters.

The allegations sparked the #DeleteUber hashtag, which got a boost when Uber competitor Lyft announced that it would donate $1 million to the ACLU in response to Trump’s travel ban. Downloads of the Uber app dropped significantly as Lyft surged in the following week.  

After several days of mounting public pressure, CEO Travis Kalanick announced that he would step down from Trump’s Strategic and Policy Forum, an advisory group of business leaders, writing that “joining the group was not meant to be an endorsement of the president or his agenda but unfortunately it has been misinterpreted to be exactly that,” in a memo employees.

Uber signed onto an amicus brief in support of a lawsuit against the travel ban, along with many other tech companies including Lyft.

Despite Kalanick’s move, the bad news for Uber didn’t stop.

Former Uber employee Susan Fowler wrote a blog post on Feb. 18 detailing how her reports of sexual harassment to Uber human resources were not only dismissed, but in many cases led to threats of retaliation.  

The New York Times published a report suggesting the problems were more widespread, and over 100 female Uber engineers brought their concerns to Kalanick in a meeting.

Last week, Google’s self-driving car subsidiary Waymo said that it was suing Uber for patent infringement and stealing trade secrets. The company alleged that a former employee stole Waymo’s sensor technologies, which he incorporated at his own startup, Otto, before it was purchased by Uber.

While trying to recover from the controversies, Kalanick himself created a new one. On Tuesday, Bloomberg published a video of Kalanick getting into an argument with an Uber driver who blamed the Uber CEO for bankrupting him.

Kalanick finished the exchange by accusing the rider of not taking “responsibility for [his] own s—t.”

The bombshells kept coming Friday.

Another former female Uber employee leveled a new set of complaints against the firm in a scathing Medium post.

The New York Times reported that Uber used a secret software tool to evade authorities in cities where they did not have permission to operate - a practice that the company defended, but that has raised legal and ethical questions.

“This program denies ride requests to fraudulent users who are violating our terms of service—whether that’s people aiming to physically harm drivers, competitors looking to disrupt our operations, or opponents who collude with officials on secret ‘stings’ meant to entrap drivers,” a spokesperson said.

And the company lost two senior executives in a week, one who resigned after it was learned he did not disclose sexual harassment allegations at a prior job.

Eric Webber, who does public relations at the Texas-based firm Mcgarrah Jessee and teaches the University of Texas at Austin’s advertising and public relations school, said that some of the problems were made worse by Kalanick’s management style.

“Part of the problem is in the very structure where you have a CEO who does everything,” Webber said. “I know he has people who work for him, but from the outside it seems like he’s trying to do too much.”

“A brand or company wants to be in control of the message, but that doesn’t mean one person should be in control of the message.”

Uber and Kalanick have sprung into crisis mode.

In an apology on Tuesday, the Uber CEO expressed shame over the video recording of himself and vowed to “fundamentally change” as a leader.

“This is the first time I’ve been willing to admit that I need leadership help and I intend to get it,” he wrote in a note to staff. 

Two days later, Uber decided to back down on their battle with California state regulators permits for testing self-driving cars.

Uber said it would finish the application process, though it did not say when self-driving cars would return to the streets.

And Uber has tapped Holder to conduct an independent review of the sexual harassment allegations.

Tammy Albarran, a partner from the law firm Covington & Burling, will be spearheading the investigation along with Holder. The company looped in Arianna Huffington, who sits on Uber’s board, and Liane Hornsey, head of human resources, on the review. Uber also brought on a second firm, Perkins Coie, to independently probe the allegations and report to Holder.

Kalanick addressed the explosive accusations in an internal memo to staff, which was provided by Uber to The Hill.

“It’s been a tough 24 hours. I know the company is hurting, and understand everyone has been waiting for more information on where things stand and what actions we are going to take,” he wrote.

“I believe in creating a workplace where a deep sense of justice underpins everything we do. What is driving me through all this is a determination that we take what’s happened as an opportunity to heal wounds of the past and set a new standard for justice in the workplace.”

Uber also released diversity information about its workforce for the first time ever, announcing that 15 percent of their engineering, product management and scientists are women. Those numbers are in line with other tech firms.

But the controversies are raising eyebrows in Congress, even among some of its allies.

“The claims of a pattern of discrimination at Uber are disturbing and must remedied, but sadly, this isn’t unique to the sharing economy or even to the tech sector in general,” said Rep. Eric Swalwell (D-Calif.), co-chairman of the Sharing Economy Caucus.

Uber is used to playing defense. In the company’s early days, Uber often moved into markets first and dealt with regulators later.

The company has also built strong relationships on Capitol Hill by ramping up its lobbying and educational outreach in recent years.

Mirijanian said its on the ridesharing company to step it those efforts.

“You’re not gonna know the fallout for another few months, to see if it’s going to have an impact on their ridership,” he continued. “What I recommend is going beyond this and talking to women’s groups. Uber needs to think more external and less internal.”

Only time will tell whether Uber’s recent mishaps inflict long-term damage on the company.

“What they’re doing in the short term is that their taking the right steps, but the proof is the pudding,” Mirijanian said.