Uber have finally confirmed that they have chosen a new CEO. Dara Khosrowshahi will barely have had time to step into his new office before a crisis was thrown on his desk. In another hangover from Kalanick’s risk taking tenure the Department of Justice is looking into allegations that the Uber bribed foreign officials, in breach of US law.
Kalanick’s risk taking tendencies will continue to haunt Uber for some time
The last two years have been marked by an endless parade of scandals for the ride-sharing giant. They have had a number of high profile resignations. Including that of their president, Jeff Jones, who resigned after just 6 months. They also lost their Vice President of global vehicle programs.
On top of these resignations Uber has also found itself in tricky legal situations on more than a few occasions this past year. The so called “Hell App” used to track Lyft drivers resulted in a costly court case. On top of this the ride-sharing behemoth has lost a number of high profile court cases. Including high profile cases in Italy and the UK. In Britain it was ruled that Uber drivers are employees rather than contractors. This ruling in particular was a major blow to Uber’s business model that relies upon the fact that drivers are considered to be self employed.
To top it all off, Uber has been embroiled in a long term sexual harassment scandal. Many female employees have alleged that the sexism at Uber was endemic and that attempts to report it were repeatedly ignored. This has led to the resignation and firing of a number of high profile Uber employes. External lawyers estimate that there may have been as many as 215 separate cases of sexual harassment in the company.
Uber’s choice of Khorowshahi as their new CEO has coincided with other attempts to detoxify their brand. They have recently made moves to end the controversial tracking of users phones even while the app is not running. The company will hope that Khorowshahi will show a break with the past. Unfortunately Kalanick’s tendancy to take risks will mean that the new CEO will spend much of his time dealing with the fallout of his predecessors tenure.
The allegations of foreign bribery could eclipse Uber’s past scandals
The allegations that Uber bribed foreign officials could be the most serious challenge that the ride-sharing giant has faced. The Wall Street Journal has reported that that the department of justice it taking preliminary steps to determine whether or not Uber managers broke American laws barring foreign bribery. These are just the first steps. If the DoJ believes that there is sufficient evidence it could result in a full investigation into Uber’s activities.
The Department of Justice has not revealed any specifics regarding the investigation. It is currently unclear whether this investigation is into a single instance or in regards to Uber’s foreign operations as a whole. That said Uber has admitted that they are “cooperating fully” with the preliminary investigation.
If there is enough evidence for a full investigation this would cause no end of problems for the embattled tech giant. The ride sharing behemoth already has a reputation for shady business practices. If it is true that Uber bribed foreign officials it could well be the last nail in a coffin built by Kalanick’s risk it all management style.
Uber will just have to hope that their new CEO is capable of proving to the World that Uber’s questionable business strategies are a thing of the past.