It has all come down to this. Two women have told the FBI, former employees, and reporters that Uber may have covered up a widespread sexual harassment problem, including rampant “deeply unpleasant behavior.” The San Francisco car company’s reputation has been left in tatters, leading to an increase in shareholder lawsuits and fundraising difficulties.
The case against Uber has now reached a boil—and the steamy spring, and summer of 2019, will determine whether it blows over or turns into a big, full-blown crisis. Investors want someone to put their neck on the line and promise to make the company great again, especially since Uber’s troubles continue to grip San Francisco like so many politicians. But as one source close to the company suggested, “if the SEC [Securities and Exchange Commission] decides to start investigating and the call for an independent investigations panel for the CEO has grow louder, [independent CEO candidate Meg Whitman], despite her name being mud, could actually make it past the next board meeting and further be considered.”
Should the SEC move forward with a formal investigation, a number of other inquiries may follow—it’s been demonstrated before that the world of capital markets is no place for high-profile public corruption.
The investigation will likely prove exhaustive and costly. Ex-investigators have estimated that the Uber story could run into the hundreds of millions of dollars.
Uber’s founder and CEO, Travis Kalanick, has also lost his job. The board's decision to fire him last week set the stage for a critical shareholder meeting that is currently scheduled for March 14. The meeting could produce a showdown over Kalanick’s ouster and potentially his return, though the board seems happy with his replacement, Dara Khosrowshahi. For his part, Kalanick is asking the board to rescind the firing and replace it with a more seasoned board member. That board would then have to interview the other rumored candidates for the job—Whitman, Jeff Immelt, and Delphi CEO Kevin Clark—and decide who they will pick. Whoever is chosen, they’ll have a rough road ahead of them. It is unclear what a litany of federal and state inquiries will do to the company’s business and reputation.
As it stands now, Kalanick remains in charge, but if the company hires an experienced outsider—like Whitman, a former CEO of eBay, or Immelt, the former CEO of General Electric—they’ll try to do damage control and find a way to move forward. If they succeed, it would be a coup—and it would fix this mess.
Should the SEC move forward with a formal investigation, a number of other inquiries may follow—it’s been demonstrated before that the world of capital markets is no place for high-profile public corruption. According to a source close to the company, “many of the smaller ongoing inquiries are working to get to the facts quickly.” Among those is an informal probe by the SEC into Kalanick’s behavior. Other, more mainstream federal inquiries include a U.S. Attorney’s office in Manhattan that’s looking into whether Uber committed federal securities law violations. Several investigations are also looking into whether the company improperly withheld information from employees.
While the Uber scandal threatens to destroy a company that has a bright future ahead of it, it will likely do much more damage to female staffers, who have long felt that they were a disempowered third-class citizen. If Kalanick can’t be trusted to keep the Uber workforce safe, then who can?
This article is reproduced with permission from Quartz. The original story can be found here.