RUNNING HEAD: UBER CASE ANALYSIS 1

Uber Case Analysis

Christopher Lynch
William Paterson University
2 April 2017

Introduction:
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In March 2009, Ubercab was founded by business partners Garret

Camp and Travis Kalanick. They created the company with the intention of

providing an on-demand car service that was affordable to a wider client

base than the expensive black car services that they had used in the past.

Camp and Kalanick sought to do this through giving riders the option to split

their costs by sharing the driver that they use with other people, thus

making it more affordable for themselves while not affecting the bottom line

of the driver. Both Camp and Kalanick had found success in previous

endeavors, with Camp having been one of the founders of the popular

website and application StumbleUpon, and Kalanick having been a co-

founder of a file sharing website called Red Swoosh that was sold for $19

million in 2007. (McAlone, 2016)

The company was able to launch their product in San Francisco in July

2010 with a small fleet of drivers and a smartphone application that gave

users the ability to call the drivers to their location with a simple click of a

button. Within a year of this launch date, the company changed its name to

Uber and was able to expand their services to other major American cities

including New York City. By 2015, leaked financial documents showed that

Uber was increasing their ridership rapidly and had generated $1.5 billion in

revenue. (McAlone, 2016)

Ubers rapid growth from tiny startup to trailblazing industry creator

and leader is often attributed to the competitive style of management that is

prevalent throughout the management structure of the company. Rather

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than resting on the laurels of pioneering the most popular ride-sharing

application in the world, Kalanick, now the Chief Executive Officer of the

company, has pushed to keep the company expanding at this same

exponential rate. In the past three years, Uber has expanded beyond basic

ride sharing to attempt to build itself into a logistics conglomerate that offers

services that include prepared meal delivery, cargo transportation and GPS

services. In addition to branching out into new services, they have also

expanded their customer base by offering some combination of their services

in 81 countries as of 2017. (Ting, 2017)

I chose this case because Uber appears to be more than just a

successful car service. They are already the highest-valued start-up company

in history, and are pushing to maintain their rapid growth. With this

ambitious outlook, there has to be a great deal of pressure on those who are

tasked with reaching these goals. I wanted to analyze the culture that this

kind of pressure would cultivate.

The Issue

When looking at the quick growth of Uber, it would be misleading to

only focus on the positives that this rapid pace has brought for the company.

In a pace that can only be matched by its growth, Uber has been attached to

a bevy of scandals in the past few years. Early in the development of the

company, the main concern that people that I spoke to had about Uber was

that the drivers were potential sexual predators who could pose a threat to
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unsuspecting users of the app. While there have been reported cases of

drivers committing crimes while working for Uber, it has not been one of the

focal points of arguments against allowing them to operate where they do.

Their issue seems to have manifested in a form that wasnt initially

considered due to the fact that many did not think that Uber would grow into

the $70 billion valued company that a December 2016 Reuters article

described them as. This isnt to say that there havent been cases where

passengers have accused drivers of misconduct, but up to this point, there

have been other reasons why Uber has had negative headlines written about

it.

After researching all of the communication issues that Uber seems to

be having, it looks like their main issue is that they do not have a positive

organizational culture. There have been many incidents over the past three

years that seem to point towards Uber as a whole breeding a culture that

promotes actions that many classify as predatory and overly-aggressive.

When Susan Fowler, a former site reliability engineer with Uber, wrote

a blog post about her experience working for the company on the technical

end of their operation, it was filled with anecdotes describing this kind of

atmosphere. In short, Fowler lamented about how her complaints of sexual

harassment from a superior were brushed off by the human resources

department because the employee in question had a strong history of

performing well. She was also told that this was the first complaint about the

manager, which she later found out was not true. (Fowler, 2017)
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In addition to these negative interactions, Fowler also described how

her department went from being about 25% female at her time of

employment to only 3% female when she left after a year. Towards the end of

her blog post, she described another experience in which a manager

informed her that she could be fired if she attempted to report another

superior to human resources in the future. Although Fowler attempted to

reason that this was not a legal business practice, she claims to have been

spoken over and told that it was the law of the land. All of these experiences

point to more than just a couple of rogue members of the management team

who were not following protocol.

Something else that Susan Fowler described in her blog post was the

excessively competitive relationship between the managers in her

department. At one point, she claims, In the background, there was a game-

of-thrones political war raging within the ranks of upper management in the

infrastructure engineering organization. It seemed like every manager was

fighting their peers and attempting to undermine their direct supervisor so

that they could have their direct supervisor's job. (Fowler, 2017) Although

she doesnt claim to speak for any section of the organization past the

section that she worked in, her description of this segment shows the

furthest thing from the familial atmosphere that many large companies

attempt to portray. One could argue that competition is positive and spurs

innovation, but when it escalates to the point of human resources

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departments blatantly disregarding sexual harassment claims, I dont think

that anyone would argue against it being an issue.

Another example of the win at all costs mentality that permeates the

company was brought to light in March 2017. According to a report by the

New York Times, Uber has employed a tactic called gray balling in which

they would use data compiled to avoid detection by law enforcement

agencies in areas where Uber was not allowed to operate. The tactics used

by the company include making those who have been identified as

attempting to stop the service from operating trackable and displaying false

images of available drivers in their vicinity. The article also described how

the collected information was used to develop strategies for drivers to

operate illegally in a more successful way. It was suspected by many that

Uber had made attempts to operate in some areas without permission from

local authorities, but this detailed account shows that there was an

organizational intent on expanding the companys market share regardless

of the legality of their tactics. (Issac, 2017)

Other evidence of this type of culture can be seen in the actions of the

CEO, Travis Kalanick. In an interview with a reporter from GQ, Kalanick

regarded that he has found more success in his personal life since the

company took off by saying, Yeah, we call that Boob-er. Some may take

this as an innocuous comment made in jest, but Kalanick is the most visible

employee for the massive company. While he may not have made this

comment with the intention of influencing others within the organization, as

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the leader, he is the one that sets the tone for the way that business is to be

done for the company as a whole. (Carr, 2014)

Outside of this incident, Kalanick has also drawn the ire of the public

when a video leaked that showed him in a heated argument with an Uber

driver. In a video posted by Bloomberg.com, the CEO can be seen belittling a

driver after he was questioned about why the amount of money that the

drivers make has been shrinking in recent months. If this had been a first

incident for Kalanick, I do not think that it would have been as impactful of a

story as it has grown into. When looking at this negative encounter in front of

the backdrop of recent events that have befallen the suddenly successful

company, it is difficult to not recognize it as an issue with the culture that is

present throughout Uber. It seems as though there are issues with an over-

aggressive and reckless culture that permeate all of the sections of the

company. (Newcomer, 2017)

Case Analysis

When studying the distinct aspects of organizational culture, I found

that there are a few generally accepted pieces that make up the culture of

an organization. In his 1992 published work on organizational culture,

management scholar Edgar Schein outlines three main layers to a culture:

artifacts, espoused values and basic assumptions. When looking at Uber

through the lens of Scheins model, it becomes clear that the issues that

were described in the previous section were directly influenced and likely
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caused by the culture that has been created within this workplace. (Miller,

2015)

The first level of Scheins model looks at the artifacts that exist within

an organization. This layer of the culture is characterized by being the most

visible part of an organization that the members can look to in order to

develop an understanding of how the organization works. In the case of

Uber, the oft-mentioned CEO, Travis Kalanick, best fits these criteria. Before

his recent string of negative publicity, the image of Kalanick has been

portrayed as a hero within the organization. His hard-working attitude and

visible image as the company pushed to new heights helped the company by

giving employees a positive role-model. As of late, this highly visible image

has begun to work against both Uber and Kalanick, as the once faultless

leader has not been able to escape the spotlight as his image has tarnished.

In the same way that this artifact can have a positive impact on the

rest of the organization, it can also have a negative one. Although it was

most likely not the CEOs intention, Scheins model would indicate that

Kalanick and his publicized negative actions have had an impact on the

thoughts and actions of other members of his organization. In earlier

interactions with employees, Kalanick tried to come across as being in favor

of workers rights while also providing a low-cost service to users of Uber. His

recent tirade against a driver is a clear public example of his actions not

working in conjunction with his proclaimed beliefs. In shifting the blame away

from himself and other members of upper-management, and on to the

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drivers for not doing well enough to maintain their pay levels, he is

reinforcing the idea that those who are the most competitive are the ones

who will succeed in the company. (Newcomer, 2017)

When looking past the most visible portion of an organizational culture,

Scheins model describes a level known as espoused values. These values

are the ideals that give form to what those within the organization ought to

be doing. When attempting to understand what the most important values

are at Uber, it seems as though competing and winning top the list. When

referring back to Susan Fowlers account of her time at Uber, it is clear that

there is no expected amount of selflessness for the good of the company

when it comes to the values of management. Her detailed explanation of

how managers were constantly trying to undermine their superiors is not

something that I would think is unique to Uber. I understand that many

people who succeed to the highest levels of management within a company

are often able to do so by putting their needs above others, but this seems to

go further. Fowler mentions that when she was in meetings, there was often

a manager who was openly bragging about how they were trying to take

someones job at any cost. Through examples like this, it is clear that being

competitive without regard for anyone else is the most commonly shared

value that is present within Uber.

The combination of these artifacts and espoused values affect the

culture of the organization by cultivating a common feeling of hostility

between the employees. Scheins model refers to these feelings as basic

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assumptions. While the employees of Uber may not be consciously thinking

about trying to undermine other employees on a constant basis, their actions

show that they understand that the best way to progress within the

organization is to act accordingly.

This is not to say that this idea of fostering a competitive environment

does not have its benefits. When attempting to understand why it is that

Uber has been able to grow from launching in 2010 to being valued at $70

billion less than seven years later, it is undeniable that this competitive

atmosphere has helped the company succeed. It is not illogical to speculate

that without the competitive drive that pushed the company to use the

controversial gray balling techniques to avoid law enforcement, Uber

would not have as wide reaching of an impact as it does today. By refusing to

comply with law enforcement in cities that had not approved the service yet,

Uber was able to lay the groundwork that would help it take hold once the

approval process turned in their favor.

At the risk of coming across as too allegorical, it seems as though Uber

has fallen into the trap of its greatest strength also being its biggest

weakness. While the competitive nature that is fostered within Uber was vital

to helping the company grow and succeed, it is now contributing to scandal

after scandal. Outside of the controversial remarks and accounts that have

come out of Uber, there have also been issues with some of their recent

expansion endeavors. Uber is currently being sued by Google for intellectual

property theft over work that they are doing to develop a self-driving car.
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This is not the only issue that the push for automated services has

experienced, as a recently leaked report showed that Uber is not nearly as

close to being able to implement this service as they previously implied.

While these examples could be explained by reasons other than the

downside of being overly-competitive, it is difficult to hear about them and

not attribute it to an organization-wide problem with their culture. It seems

likely that the leaked documents showing poor progress could have been

exposed by a manager who was attempting to overtake their boss by

showing that they cannot lead properly. (McGauley, 2017)

When it comes to a solution for the issues that Uber is fighting, it is not

a simple fix. It is difficult for an organization to make a fundamental shift in

their culture in general, as the culture is something that is held by every

member of the organization. Trying to make a large-scale change in the way

that an entire organization thinks and acts seems to be as difficult as trying

to get a river to change the direction that it flows in. Something that makes

shifting this even more difficult is that by reducing the intensity of the

competitiveness within the organization, they would be changing the

mentality that helped Uber expand in the first place.

In order to change the culture at Uber, and in turn, have a chance at

salvaging the positive image the company once held, there would have to be

widespread changes to the three levels of the organizational culture. First

and foremost, there would have to be a new person installed as the most

visible figure for the company. Due to his leadership being credited with a
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large amount of the success of the company, I would not recommend Travis

Kalanick be removed from Uber entirely. This being said, I would suggest

bringing in someone from the outside who doesnt have the stain of the

recent negative events on them to serve as the new CEO. In order to commit

to reshaping the image, Uber would do well to change how the everyone

views them in order to begin this shift.

On a value level, I would change the way that employees are

incentivized. It is clear that the organization is fostering this competitive

environment by many of the employees working in their own best interest. If

the organization were to change their reward structure so that the success of

the parts contributes to the success of the whole, it would likely change the

values that the employees hold as important. By changing the look and feel

of the company, Uber could begin to change the culture that exists within its

walls.

At the end of the day, I dont think that anyone would try to make the

argument that the competitive culture at Uber did not contribute to its early

success. On the other hand, it does not appear that maintaining these values

as essential would be conducive to building a long term and stable company.

Although stability is not something that may be of the utmost importance to

those in charge of the company, it appears that this current culture is

causing more negative than positive in recent years, and this current model

does not appear to be sustainable.

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References
Carr, P. B. (2014, February 27). "We call that Boob-er:" The four most awful
things Travis Kalanick said in his GQ profile. Retrieved April 2, 2017,
from https://pando.com/2014/02/27/we-call-that-boob-er-the-four-most-
awful-things-travis-kalanick-said-in-his-gq-profile/
Fowler, S. J. (2017, February 19). Reflecting on one very, very strange year at
Uber. Retrieved April 2, 2017, from
https://www.susanjfowler.com/blog/2017/2/19/reflecting-on-one-very-
strange-year-at-uber
Issac, M. (2017, March 3). How Uber Deceives the Authorities Worldwide. The
New York Times. Retrieved April 2, 2017, from
https://www.nytimes.com/2017/03/03/technology/uber-greyball-
program-evade-authorities.html
McAlone, A. H. (2016, August 01). The story of how Travis Kalanick built Uber
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it-to-operate-the-move-followed-months-of-protests-by-taxi-drivers-36
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McGauley, J. (2017, March 07). Here's All the Shady Stuff Uber's Been
Accused of So Far. Retrieved April 2, 2017, from
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Miller, K. (2015). Organizational communication: Approaches and processes.
Stamford, CT: Cengage Learning.
Newcomer, E. (2017, February 28). In Video, Uber CEO Argues With Driver
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ceo-argues-with-driver-over-falling-fares
Ting, E. (2017, April 01). Recent incidents continue to plague Uber's public
image. Retrieved April 2, 2017, from
http://www.sfgate.com/business/article/Recent-public-incidents-plauge-
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