# Uber pays a $26 billion price for its toxic corporate culture



## Hugh G (Sep 22, 2016)

*Uber pays a $26 billion price for its toxic corporate culture *

· Elizabeth Knight

· July 1 2017

· http://www.smh.com.au/business/uber...-toxic-corporate-culture-20170630-gx1x3w.html​
Those who think corporate culture is just a soft issue should take a close look at Uber.

The Uber story stands as parable of the perils of poor governance and how it can spread to a secondary cancer - corporate culture. The company, which only a few months ago was worth US$70 billion ($91 billion), is now said to have lost as much as $US20 billion ($26 billion) of that value.

The extraordinary part is that there is no suggestion this plunge was the result of any short-term deterioration in revenue. It was a series of scandals, ranging from the alleged theft by an Uber engineer of Google's driverless car technology, to bullying, sexual harassment and accusations of passenger abuse by drivers.

Poor governance allows a toxic culture to fester, and Uber provides clear evidence of how a good business model and value can be undermined.

This is no regular instance of 'a few bad apples' or even one that's confined to a single department.

Nor does the Uber tale appear to involve financial misdeeds, serious breaches of accounting or theft.

This is a cultural disease and it appears to be riddled throughout the organisation. Left unchecked, it is threatening to become existential.










Not so happy: Uber's shareholders realised its culture problem started at the very top, with founder and chief executive Travis Kalanick. He had to go. _Photo: Marlene Awaad_

Poor corporate culture has traditionally been an issue difficult to quantify or regulate. But that doesn't mean it doesn't come at a cost to organisations.

The problematic culture in Australia's banking sector, which has been beset with scandals in the areas of financial advice, insurance and foreign exchange, gave the federal government the excuse to to hit the major banks with a $6.2 billion tax.

This was a far bigger than expected fine for the banks, which previously thought that the financial penalties would be confined to compensating customers that had been victims.

Uber, meanwhile, fired more than 20 employees after a company investigation into sexual harassment claims and workplace culture.

This was the result for a former Uber engineer, Susan Fowler, going public with allegations of sexual harassment and discrimination, which in turn prompted the company to hire former US attorney general Eric Holder to investigate the claims.

The story sparked plenty of debate about sexism and misconduct across Silicon Valley startups and was a salutary tale for other entrepreneurial companies whose governance structures had not keep pace with their corporate growth.

*Rot starting from the top*

In Uber's case, there was clearly a belief from its major investors that the rot started at the top of the organisation and with its founder, Travis Kalanick. He resigned in mid-June, having earlier announced he would take an indefinite leave of absence. Shareholders didn't think that had gone far enough.

And it was difficult to ignore Kalanick's contribution to Uber's culture rot when he was caught on video yelling at an Uber driver who had been complaining about falling rates.

"Some people don't like to take responsibility for their own shit.," he railed. "They blame everything in their life on somebody else. Good luck!"

An avalanche of senior executives, including the chief financial officer, have departed the company over recent weeks and months in the wake of the various scandals, leaving a business scrambling to fill various vital management positions.

Whether Kalanick's departure is significant enough to sever his influence on management remains to be seen. He is still on the board and says he will be available to help.

*Assault allegations*

Meanwhile, the lack of governance can also blamed for another major problem that has besieged Uber - the behaviour of its drivers.

Apart from the accusations of rape of which there are many (The Independent newspaper reported that there were 32 cases of sexual assaults by Uber drivers in the UK last year), there are many other assault claims.

While not all complaints will be valid, the rising tide of negative publicity is clearly scaring off investors.

Because Uber is not sharemarket listed, its valuation is set when shares are privately traded or fresh capital is raised.

The markets have been waiting for Uber to float on the US stock exchange this year in what was previously billed to be a major IPO. They may need to wait a bit longer.


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## fields (Jul 11, 2016)

You have got to be thick as two bricks to believe the drivel in this article.

No one but the extreme left or extreme feminists would find any of these events earth shattering.

The reason why Uber is valued less than in the past? It's because it was overvalued to begin with.

What is far more concerning is this allegation: *Apart from the accusations of rape of which there are many (The Independent newspaper reported that there were 32 cases of sexual assaults by Uber drivers in the UK last year), there are many other assault claims.*

Really? What is it with Sydney Morning Herald and their crusade against Uber?


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## Icecool (Feb 8, 2016)

Hugh G said:


> *Uber pays a $26 billion price for its toxic corporate culture *
> 
> · Elizabeth Knight
> 
> ...


Just how do you do valuation uber when uber is not even floated yet . Who is to say that uber is worth this and this . The valuation for public company is done by supply and demand . On the stock exchange market . It goes up and down for every company . Tell you what now is a good time to buy uber share.


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## UberDriverAU (Nov 4, 2015)

Icecool said:


> Just how do you do valuation uber when uber is not even floated yet . Who is to say that uber is worth this and this . The valuation for public company is done by supply and demand . On the stock exchange market . It goes up and down for every company . Tell you what now is a good time to buy uber share.


"Because Uber is not sharemarket listed, its valuation is set when shares are privately traded or fresh capital is raised."


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