​Uber investors demand change in company culture

Early backers of the ride-hailing company say they're "disappointed" by a culture plagued by disrespect, lack of diversity and a tolerance for harassment.

Dara Kerr Former senior reporter
Dara Kerr was a senior reporter for CNET covering the on-demand economy and tech culture. She grew up in Colorado, went to school in New York City and can never remember how to pronounce gif.
Dara Kerr
3 min read

Uber investors Mitch and Freada Kapor say the company needs to do more to combat discrimination in the workplace.


In typical Silicon Valley fashion, venture capital investors have kept relatively quiet about Uber's latest scandal. But that appears to be changing.

Two Uber backers criticized the ride-hailing company on Thursday, saying it needs to fix its company culture and do more to combat sexual harassment and gender discrimination.

"Uber's outsize success in terms of growth of market share, revenues and valuation are impressive, but can never excuse a culture plagued by disrespect, exclusionary cliques, lack of diversity, and tolerance for bullying and harassment of every form," investors Mitch and Freada Kapor wrote in an open letter to Uber's board and investors.

The criticism comes on the heels of a long week for Uber. On Sunday, former engineer Susan Fowler wrote a blog post alleging she and other female employees at the company were sexually harassed. She also detailed a chaotic companywide culture of sexism and unprofessional business practices.

Uber CEO Travis Kalanick apologized and promised to conduct an internal investigation into the matter, supervised by board member Arianna Huffington and company advisor former US attorney general Eric Holder. The company also pledged to release its diversity statistics for the first time.

Uber is the world's highest valued venture-backed company. Analysts say it could be worth as much as $68 billion. Its premise is simple: As a ride-hailing service, it pairs drivers with passengers via a phone app. Since its founding in 2009, Uber has grown to become one of the biggest ride-hailing services on the planet, with more than 40 million monthly active riders and operations in more than 450 cities in more than 70 countries.

The company is known for its competitive tactics and regularly combating regulators and rivals. For the most part, Uber has emerged from past controversies relatively unscathed, but this latest scandal could be different.

Sexual harassment and a lack of gender diversity in Silicon Valley have become key concerns for many tech companies. Women make up about 30 percent of the workforce at major tech companies but fill only 15 percent of technical roles. In a 2016 survey of 200 women who had worked in Silicon Valley for over 10 years, 60 percent of respondents said they'd received unwanted sexual advances, 65 percent said those advances came from a superior and one of three said they were in fear for their personal safety.

In their open letter to Uber's board, the Kapors (who are spouses and investing partners at Kapor Capital) said they've seen two patterns with Uber. In one, the company goes about "apologizing and vowing to change, only to quickly return to aggressive business as usual," and a second, in which investors "rarely, if ever, call out inexcusable behavior from founders."

"Both of these patterns need to change," the Kapors wrote.

The Kapors say they invested in Uber in 2010 and worked for years behind the scenes to try to influence company culture and increase employee diversity, but to no avail.

"We are speaking up now because we are disappointed and frustrated," they wrote. "We feel we have hit a dead end in trying to influence the company quietly from the inside."

The Kapors said it's not too late for Uber if the company does more to be open and transparent. Instead of hiring "insiders," like Huffington and Holder, to conduct the investigation into Fowler's allegations, the Kapors said Uber should hire independent investigators.

"As investors, we certainly want to see Uber succeed, but success must be measured in more than just returns," the Kapors wrote. "Uber's response to this particular crisis will be defining for the company, so the stakes are high to get it right."

Uber appears to be sticking with Huffington and Holder for now, however. The company responded to request for comment with a statement from Holder and his law firm partner Tammy Albarran.

"We will leave no stone unturned in our work and all voices will be heard," Holder and Albarran said. "We will be thorough, impartial and objective, and we are conducting this review with the highest degree of integrity and professionalism."

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