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Uber CEO Travis Kalanick Steps Down, Will Uber Change?

Uber CEO Travis Kalanick Steps Down, Will Uber Change?

The start of Uber’s recent troubles was a blog post by a past female Uber engineer that highlighted Uber’s toxic work environment, which included sexual harassment and mistreatment of workers at the company. Public pressure forced Uber to investigate the Uber’s work environment and found many instances that the HR department ignored sexual harassment complaints and overall sexism within the company. This is not uncommon for tech companies, but the level of ignorance and sexism surprised many other tech firms in Silicon Valley. As of earlier this month, more than 20 employees were fired over the investigation of sexual harassment.

As Uber drew more attention, more stories about Kalanicks past and present behavior came to light. Here is a list of those incidents:

During much of this turmoil, multiple executives were either fired or left on their own, sensing that the worst is ahead of Uber. As of this post, there are still some key top executive positions still left open with no replacements in sight. Below is an article about the various executives that has left in the past four months:

After these incidents, Kalanick’s mother also tragically passed away in a boating accident in May. Shortly after in June, Kalanick decided to take an indefinite break from Uber to focus on himself and to work on his managerial skills. Meanwhile, top shareholders of Uber pressured Kalanick to step down as CEO of Uber since Kalanick still had enough voting rights to stay as CEO and the board, regardless of shareholder votes. Steve Jobs was famously kicked out of his own company (Apple) over 20 years ago so most subsequent founders structure companies in which they have enough votes to remain as CEO and on the board.

Uber CEO Travis Kalanick Steps Down

Luckily, Kalanick relented to Uber’s top shareholders and announced that he will step down as CEO of Uber effective immediately but he will still remain on the board of directors. Uber’s shareholders couldn’t force Kalanick out because Kalanick has enough votes to remain in power indefintely. This came after one of the most massive changes to Uber since its launch of UberX when Uber added a tipping feature to its passenger app. It is unclear at this point how much influence he has over the company, but from the addition of tipping on Uber, it would say Kalanick has lost some control over Uber.

Will Uber Change Post Kalanick?

With the departure of so many executives in the past four months, most drivers already started to see small changes within Uber. The first shock was that Uber did not lower fares earlier this year when they did massive price cuts in many markets two years in a row in the January timeframe. Uber calls it a seasonal pricing adjustment but I’ve shown that many cities never recovered from the price cuts, resulting in about 10% lower fares going into the fall.

Uber also silently added a 5 minute timer when you arrive at the pickup location, which is a great feature on the rival service Lyft in order to be able to get a cancellation fee for passengers who no-show. They have historically not shown this in order to get drivers to wait longer than 5 minutes for a customer. There are very few passengers now who come out right at the 5 minute mark and most no-shows I have don’t respond to calls or they are nowhere to be found. However, the 5 minute timer is another reassurance that driver will get the cancellation fee.

I believe that with Kalanick leaving Uber, it will remove much of the anti-driver attitude of Uber. However, Uber’s attitude towards driver going forward will depend on the CEO and other executives of the company. Uber’s relationship with its driver is mostly reflected in the features of the application. If they help drivers (eg shows surge pricing on the trip request), Uber can seem more friendly to drivers. If they try to hide information from drivers (eg keep fares hidden after completing the trip), then Uber can be seen as being against drivers.

180 Days of Change

Uber sent out an email two days ago highlighting major changes to Uber in the next 180 days and they started with improving driver earnings through various policies. This alone shows that Uber is willing to change. Here is the list of changes:

You can read more about these changes in this post:

If you see the list of changes, these changes have been in the works for a while. This wasn’t something Uber came up with last week. This shows at least a month worth of planning and work, which coincides with much of Uber’s turmoil in the last four months. This email shows everyone that Uber going in a new direction now that they are the incumbent rideshare company in many markets.

Will Uber Change for the Better?

This will be hard to predict. Uber right now needs to work on a few things:

Now that Uber is in a market dominant position, they can pass up their aggressive, hyper growth mode into improving their brand image and passenger/driver relationships. Their most recent marketing change didn’t help their brand image. Their new logos and color schemes made Uber look much more distant from their passengers and drivers, furthering their negative brand image.

If we are to extrapolate how Uber will change with the 180 days of Change email, I believe that Uber will change for the better mainly for drivers. It seems as if their most recent policies benefit their drivers at the small expense of their passengers. The shorter cancellation window may annoy some of their customers while paid wait times will increase fares slightly. Since Uber is in a market dominant position, they can afford to charge slightly higher prices to help appease their growing driver ranks who have become jaded and angry at Uber.

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