Many thought Uber’s best days were ahead of it once former CEO Travis Kalanick left and was replaced by current chief executive Dara Khosrowshahi.
However, the ride-hailing giant is fighting for its economic life while a slew of documents leaked to the media show just how depraved and soulless former boss Kalanick could be — and forcing Khosrowshahi to find a way to keep “old” Uber more than arms length from “new” Uber.
“We have not and will not make excuses for past behavior that is clearly not in line with our present values. Instead, we ask the public to judge us by what we’ve done over the last five years and what we will do in the years to come,” Uber Senior Vice President of Marketing & Public Affairs Jill Hazelbaker wrote in a lengthy statement on the ride-hailing platform’s website.
The statement comes in the wake of hundreds of thousands — more than 124,000 — documents covering the five-year period between 2013 and 2017 were leaked by Mark Mark MacGann, Uber’s one-time chief lobbyist for Europe, the Middle East and Africa. MacGann said it was his “duty to speak up” to help “right some fundamental wrongs.”
Kalanick pushes hard — and back
McGann’s documents, according to Britain’s The Guardian newspaper, include more than 83,000 emails, iMessages and WhatsApp messages between Kalanick and top executives. The missives include discussions of sending Uber drivers to a protest by angry taxi drivers in France that could have put the drivers in harms way.
“I think it’s worth it,” Kalanick replied, sweeping aside concerns expressed by other executives. “Violence guarantee(s) success.”
Kalanick, through a spokesperson, denied he was responsible for what the released documents suggest he either tacitly approved or suggested himself.
“Travis Kalanick never authorised any actions or programs that would obstruct justice in any country,” the statement to The Guardian read, adding later, “And Mr. Kalanick never suggested that Uber should take advantage of violence at the expense of driver safety. Any accusation that Mr. Kalanick directed, engaged in, or was involved in any of these activities is completely false.
“The reality was that Uber’s expansion initiatives were led by over a hundred leaders in dozens of countries around the world and at all times under the direct oversight and with the full approval of Uber’s robust legal, policy, and compliance groups.”
The lengthy statement further claims there is a group of journalists, the International Consortium of Investigative Journalists, reporting falsely or overexaggerating his role in many of Uber’s difficult and trying times and efforts.
Manipulating the system
When Kalanick and his Uber executives found the law of the land stood in the way of the company’s objectives, they looked to politicians at all levels to try to break or revise rules to get what they needed.
France’s current president, Emmanuel Macron, helped the ride-hailing giant often during his time as the country’s economy minister, including giving Uber executives extensive access to him and his staff, according to The Guardian. Those efforts included brokering a “secret deal” with French cabinet members opposed to Uber.
They were just as dismissive of public servants who declined to help or weren’t as helpful as Kalanick and his team wanted them to be, insulting current German Chancellor Olaf Scholz, who was mayor of Hamburg when dealing with Uber, and current U.S. President Joe Biden, who was vice president at the time.
Other politicians Uber executives met with included: Irish Prime Minister Enda Kenny, then-Israeli Prime Minister Benjamin Netanyahu, and then U.K. Chancellor George Osborne, who was described in a note from a meeting as a “strong advocate.” The company managed to secure the support of top politicians in Russia, Italy and Germany with stakes in Uber.
A strategy of opposition and chaos
Uber’s corporate strategy to was to meet opposing forces head on. Typically this meant criticizing taxis and the rules and regulations about driving for money, calling the old system antiquated and incapable of meeting the needs of modern society.
When the company launched in India, Kalanick’s top executive in Asia urged managers to focus on driving growth, even when “fires start to burn. Know this is a normal part of Uber’s business,” he said. “Embrace the chaos. It means you’re doing something meaningful.”
This strategy continued in places like Belgium, Spain, Italy and France, causing taxi drivers concerned about losing their livelihoods to engage in angry, potentially violent, protests and strikes. Unfazed by the prospect of violence in Paris, he demanded his French executives twist the arms of drivers there to stage their own counter protest.
Told “extreme right thugs” were part of the taxi protesters and they were “spoiling for a fight,” Kalanick urged them to do it anywhere, writing the previously revealed “I think it’s worth it. Violence guarantee(s) success. And these guys must be resisted, no? Agreed that right place and time must be thought out.”
Drivers went into those areas not just in Paris, but also in similarly dangerous parts of Italy, Belgium, Spain, Switzerland and the Netherlands. In Amsterdam, when protesters attacked Uber drivers, the company gained concessions from the Dutch government.
New leadership, new problems
Ultimately, Kalanick’s aggressive nature and lack of vision got him ousted from the company he founded. It teetered at the precipice of bankruptcy, faced several high-profile lawsuits involving sexual harassment and other forms of discrimination and a severely dented reputation with investors and the public — and it had never turned a profit.
After dalliances with big names like Immelt and Whitson, Uber selected a surprise candidate — Expedia CEO Dara Khosrowshahi — to replace departed Kalanick.
The ride-hailing company appeared to be reviewing better-known candidates, such as GE chairman Jeffrey Immelt and HP CEO Meg Whitman, according to media reports, before snagging the lesser-known Khosrowshahi in August 2017.
Since his arrival, he’s guided the company through a slew of litigation from former employees as well as competitors, sold off the company’s unnecessary autonomous driving technology development program, losing a lengthy court battle in London, which made the drivers employees with benefits as well as a later protracted battle in the U.S. with drivers in California about the same issue.
However, he also secured $1 billion in new investment that got the company over the IPO hump, which didn’t go as well as expected, but did give the company new cash to invest in other areas. Also it secured $500 million in investment cash from Toyota as well, that the Japanese automaker only sold half of a few weeks ago even though it was designed further self-driving technology efforts.
Finally a profit — then a massive loss
All of Khosrowshahi’s efforts, including moves into food and grocery delivery business finally netted the company its first adjusted EBITDA profit of $8 million. This is despite taking a bit hit prior that due to the Coronavirus pandemic making it difficult to attract and retain drivers.
“Our need to increase the number of drivers on the platform is nothing new nor is it a surprise … there’s a lot of work ahead of us, but this is a machine that is rolling,” Khosrowshahi recently said on a conference call with investors, CNBC reported. The company expects that to continue without “significant incremental incentive investments.”
The bad news that followed the good? A $5.9 billion first quarter loss, which it attributed to equity investments in other companies, like Aurora and China’s Didi.
For the second quarter, Uber expects gross bookings between $28.5 billion and $29.5 billion. In addition, it forecasts adjusted EBITDA between $240 million and $270 million. The company believes it will generate “meaningful positive cash flows” for full-year 2022, which would mark a first for the company.