By Ayushi Gupta
The prestigious Silicon based cab aggregating company, Uber, has been in the news lately for all the wrong reasons. Unflattering accounts of toxic work culture, the hedonistic behaviour of its senior managers, and instances of sexism in the company have emerged. These cases have lead to the firing of senior executives and the forced resignation of CEO and founder, Travis Kalanick. He will, however, remain on the board of directors.
What goes around comes around
Travis Kalanick championed an aggressive and unrestrained workplace culture and took Uber to new heights with an eye-popping valuation by steamrolling competitors and ignoring regulations. However, the company has encountered trouble with local and central governments, labour unions and its own drivers. This reckless attitude has led to the loss of customers, corporate talent and money. Furthermore, the investors have been rooting for an IPO that the ex-CEO had been reluctant to give.
With the stepping down of Kalanick, Ariana Huffington has been put forward as the interim face of Uber 2.0. The change in leadership arises out of the need for a new work culture. With many employees losing trust in the organisation and opting to quit, the company needs to develop new employee retention policies and a more balanced environment. Toxic work culture seems to be on its way out and ethics might be triumphing.
Singing a new tune?
The crisis at the top management has happened at a time when Uber desperately needs a decisive leader. Uber was already struggling in its hunt for a number of top brass roles. Finding someone of the right calibre and vision whos willing to take on the difficult job of repairing the companys image is a herculean task. The new CEO will have to be a diplomat, power-sharer and defender of the internal controls long neglected at the worlds most valuable start-up. Its a tall order. Uber, until now, was a cash burning machine but what it requires are independent directors and a more cautious CEO for its sustainable growth.
With a change in the top management, the investors may rethink their motives and direct their funds elsewhere. The stakes are high for the company as the strong valuation of Uber has always ensured big profits for the investors so far. Usually, international level transformations in policies do not happen in the initial three to six months. Instead, the decisions are at a more local level. When a company is in stabilising mode, its competitors try to take advantage of the situation. Given that there is uncertainty in the future actions of the biggest cab provider, its rivals can benefit.
One’s loss is another’s gain
Both Uber and Ola claim market leadership in India, running neck and neck with each other. The resignation could force Uber to cut its aggressive spending aimed at gaining market share. If Uber reduces spending on driver incentives and customer discounts in a market like India’s, it could hinder its growth and boost Olas chances of retaining market leadership. Hence, in the short term, Uber may lose some business.
In a broader sense, this holds a valuable lesson for all entrepreneurs: simply founding a company does not mean that one will be deemed necessary for its subsequent growth. We must appreciate Kalanick for recognising that his continued presence at Ubers helm would be a liability for the company. However, his stubborn persistence and vision made the company what it is and Kalanick could one day make a return if Uber falters again, just as Steve Jobs took back control of Apple Inc. after being ousted.
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