Gender Equality Affects Shareholder Value - Just Ask Uber
How a toxic, sexist, and chaotic work environment caused a startup giant to lose $10bn in value.
5 min read
This week, Uber made the headlines again. The CEO, Travis Kalanick; the co-founder who had been there from the beginning and had presided over Uber's meteoric rise; resigned. It may seem strange - certainly by looking at just the bare facts. But it was inevitable. Because Uber had issues with equality and sexual harassment. Travis had to go. But this article isn't about Travis. It isn't even really about Uber. It is about how gender equality affects shareholder values.
Since its founding in 2009, Uber has become a common alternative to the traditional Taxi service. With a few simple taps on your phone, you were well on your way to where you needed to go; it was all the convenience of a taxi without the inconvenience of hailing one down. The company was doing remarkably well (worth approximately $70 billion). That is, until Susan Fowler's blog went up, talking about the toxic culture at Uber. In addition to the workplace, Uber was hit with plenty of other bad press including engineers leaving over a lawsuit with Alphabet about stolen intellectual property. But what exactly are the elements which distinguished Uber’s culture from that of other tech companies and caused an investigation only after employees (particularly female engineers) started going public about what was going on?
Sexual Harassment Was the “Norm”
Within the first few days of Susan Fowler transferring to a new development group at Uber, her manager began making inappropriate remarks and suggestions; over the company chat nonetheless. Shocked and utterly disgusted, she screenshotted the messages and immediately sent them to Human Resources. What followed next was unbelievable.
Both HR and upper management told her that it was her manager’s first offense, and thus, they would only give him a warning and “a stern talking-to”, especially since he was a “high performer” in the company. Baffled, Susan was given two options: either transfer to a new group or stay in her current group and most likely receive a negative performance review (and there was nothing HR could do). She chose to stay on with the group since she had extensive experience in that area and the group wasn’t doing all that well. But she still tried escalating the situation with HR, and after many dead ends, she decided to leave that group.
As Susan met up with other female engineers she learned that her story was not unique. In fact, several other females had reported the same manager she had, multiple times! Enough was enough; they all decided to meet with HR to talk about what would be done. But when Susan met with her representative, they claimed that Susan’s complaint to HR was the manager’s first and only warning! Flabbergasted, Susan left the meeting. Eventually, the manager left the company.
Keala, another female engineer for Uber, also had to deal with sexist managers and unresponsive HR. The only difference? Her manager was female.
Keala was in the process of transferring to another group within the company. She was meeting with the head of the group to discuss the logistics of moving, but the group was in the middle of an issue and the leader was very busy, thus he didn’t have a lot of time to talk. So, Keala and her manager (who likes staying for all meetings) met with the leader of the other group for some time. After the meeting, Keala’s manager blatantly stated that the reason why the leader of the other group was distracted was because of Keala’s choice of clothes, particularly by the fact that she was wearing a tank top. Her manager outrageously suggested Keala cover up (i.e. wear long sleeves) and that “[the leader] doesn’t want that around his team”.
The Politics of Getting Ahead Was the Number One Priority
In the second half of her blog, Susan likened the work environment to Game of Thrones, where everyone is constantly trying to undermine their colleagues and direct supervisor in hopes of attaining the position of their direct supervisor. And surprisingly this wasn’t a hush-hush thing; people were boasting about it in meetings and to other colleagues! You can imagine that as a result of these extreme company politics, numerous projects were abandoned and no one really knew what was going on.
As expected, people started transferring to less chaotic engineering groups. However, when Susan put in a request to transfer, she was denied (despite her near perfect performance review record and the fact that other managers wanted her on their teams). After fighting and arguing about why her transfer was blocked (and her managers flip-flopping on reasons), she was eventually told that it might have something to do with her personal life. So Susan decided to wait for the next performance review.
After her next performance review was completed (which was perfect as usual), Susan once again put in a request to transfer. But the review was recalled and changed into a negative one. When asked about it, her manager claimed that it was because she didn’t show any “upward career trajectory” despite the fact that she was publishing a book, speaking at tech conferences, and doing other typical “upward career trajectory” things. When she asked for them to change it back, they claimed that it didn’t have any real-world implications, even though they were aware that it would prohibit her from attending the Stanford Graduate CS program she was yearning to complete. Susan soon overheard her manager boasting that even though other teams were losing women, he still had some on his team. Susan continued to report unbelievable incidents such as this to HR. Eventually, she met with a representative. This representative had to audacity to claim that since Susan was the common factor in all of these incidents, they were all her fault! The representative continued to go on that certain genders and ethnic backgrounds are better suited for roles, so Susan shouldn’t be distressed over the gender divide.
Needless to say, Susan soon left Uber and never looked back.
Ever since Susan published her blog in February, hundreds of other horror stories have emerged about Uber’s toxic environment. Kalanick soon promised that there would be an investigation as to sexual allegations and even appointed special people to follow through. But this prompted closer investigations as to how Uber is actually run and lead to numerous other bad press including the scandal over which Alphabet is suing Uber for stolen intellectual property. As of April 25, 2017, Uber’s value has plummeted by $10 billion. Only time will tell if the tech giant will be able to recover its social standing and value.
Travis Kalanick is out as CEO, but he remains on the board. Uber now needs a fresh start - a leader who can both unite its workforce and change its image to an open, tolerant and encouraging place to work for all its employees. Uber a great app, and could be one of the greatest firms to work for in the whole tech industry. For technologies sake, as well as for its staff, it needs to make the most of this opportunity.
Stephanie Almeida is a senior at a high school focused on engineering. She will study computer science at the Georgia Institute of Technology in the fall. When she isn't dancing and singing at the top of her lungs to the top hits or playing with her puppy Max, you can find her competing with other programmers at hackathons or teaching coding to students from impoverished districts. In her spare time, Stephanie enjoys trying exotic cuisines; food is her ultimate love! After college, Stephanie wants to found a startup which focuses on developing technology to help children with problems such as bullying.