Any serious business man or woman will advise you never to underestimate the significance of keeping your investors happy. Chief among these reasons is the fact that they are your firm’s or company’s life line. Without this category of people, your business may soon meet its demise. One good way of keeping your investors in a good mood is by ensuring they get a great return on their cash. Before this happens there are plenty of other things you can do to ensure that your investors stay happy. These things include: reporting to them regularly, being honest in your business operations, and treating all shareholders in the same respect. The above mentioned are just but a few things companies and businesses do to keep the confidence of their shareholders. By doing these things, you send a message of accountability, equality and fairness to your investors.
Uber Technologies Inc., is a transport network company located in San Francisco, California. It offers a wide variety of services including: food delivery, peer-to-peer ride sharing, service hailing and bicycle sharing services. Uber has been hailed internationally for changing how people view public transport. They have made public transport more convenient and cheaper to the masses. However, in the recent past; the company has been plagued by many controversies. As any business oriented person would tell you, controversies are bad for business. They cause both customers and investors to lose faith with the scandalized company. Uber’s troubles began in the United States when president Trump banned refuges from coming to the United States. There are many other controversies that have plagued this company ever since. In this article, I will highlight some of the pertinent issues that have been facing Uber as they prepare to go public. Some of these issues may have reduced the esteem upon which the company was regarded in. they include but are not limited to:
20. Uber subscribers delete the Application in protest
When Kalanick Travis, the CEO of the company was accused of breaking down a strike conducted by taxi drivers who were protesting President’s Trump’s ban of refugees, over 200, 000 Uber subscribers deleted the application. This will have a negative impact on business and the revenue earned. Losing 200,000 customers is not something to be taken lightly. These kinds of issues usually have a lasting effect on the wellness of business. They are bound to make the company’s investors nervous.
19. Sexual harassment cases
There have been numerous sexual offences cases against women across the world. The women who have made sexual harassment accusations against the company have been both clients and employees of the company. In 2017, one of the company’s engineers, a lady, known as Susan Fowler accused the company of encouraging sexism. The company’s CEO who has also been criticized for his leadership style, described Susan’s experience as against the establishments values and abhorrent. Harassment cases such as the one mentioned may cause some subscribers and shareholders to take their business elsewhere in protest. This is, obviously, not good for business.
18. Harassment of employees
A short while ago, the former CEO for Uber Travis Kalanick was caught on camera abusing one of the company’s taxi drivers. Mr. Kalanick did this in the course of an argument with the driver. The heated debate between him and Fawzi Kamel, the driver, caused a massive stir on social media. Such blatant disrespect for employees may cause the employees to lose morale or abandon their jobs altogether. When any of this happens, business comes to a standstill. Such kinds of reports cannot be good for investors.
17. The closure of business in Taiwan
Uber has grown into one of the biggest companies in the world. It has bases in over 672 cities around the world. Losing a base does not reflect well on the company. In the recent past Uber closed shop in Taiwan due to disagreements with the Taiwanese Authorities. According to reports, Taiwan Authorities accuse Uber of running a transport company with a license required for tech companies. The company was also accused of failing to pay taxes, and avoiding paying insurance cover for its riders. Such accusations indicate that the company may be lacking in integrity and accountability. This may affect the manner which the company runs its operations and may in the end cause its investors loss.
16. The Argentinian crisis
A judge in Argentina gave orders to the effect that Uber should be blocked. The court ordered local credit card companies and mobile phone companies to block Uber. This is a major blow to the company since studies have shown that the company’s greatest growth emanated from Argentina regardless of the fact that its economy is, at the moment, depressed. While there are reports that the company is still operating, the fact that there is a direct order from court banning the company from operating cannot have any positive value for the business and the investors.
15. Cultural shortcomings
In February 2017, the company was accused by its investors of failing to appreciate the need to adopt a positive company culture. This was after some of the company’s officers accused it of sabotaging their efforts to influence the company’s culture in a positive manner. These accusations were made through an open letter to the company’s board and investors.
14. Waymo accuses Uber of theft of property
Waymo was Google’s self-driving car division before it went out on its own. The company has in the recent past accused Uber of stealing technology in order to advance its autonomous car project. Luckily, for this matter the two companies agreed to settle the matter out of court. Legal suits and settlements can be expensive to the company. This may affect the returns that shareholders get in the end. They also hinder the growth of the company. All these things combined make investors uneasy.
13. The Grey ball scandal
In 20017, the company, Uber, Was put on the spot light by New York Times for using a tool referred to as Grey ball. According to investigations, the company used this tool in cities that had banned or resisted Uber. Additionally, it was also discovered that the company utilized this tool when city regulators tried to block the ride-hailing company. The tool was also used to collect data that helped Uber identify and evade city officials in cities like Las Vegas, Boston, and Paris.
12. Executives constantly flee the company
This is usually a red flag. When top executives start fleeing a company, there is usually something to worry about. It is usually an indication that the executives have lost hope with the system of administration and they are fleeing in a bid to save face and their integrity. Over the past two years, over five top executives have fled the company. Some of the executives who fled include Amit Singhal, the former senior vice president, amidst claims of sexual harassment.
11. Threat from Apple to remove the Uber application from its App store
According to reports by New York Times, the CEO OF Apple threatened to remove the Uber application from Apple’s App store for violating some of its terms and conditions. According to reports, the company had incorporated into its application a piece of code that could identify the type of phone a subscriber was using. According to the company, the code had been put in place in order to avert fraud.
10. The loss of $891 million due to over spending
This is a massive loss for any business establishment. Investors may feel cheated if this happens and would, therefore, not be amused by the company. A part from slow growth in the second quarter of 2018, the company lost a huge sum of money. The money was lost due to increased spending of the company.
9. Loss of millions due to accounting mistakes
The company has revealed to its board, investors and public that an accounting mistake caused it to shortchange some of its drivers for years. The most affected drivers were those from the city of New York. As a result, the company is required to pay the drivers tens of millions in a bid to remedy the situation.
8. The loss of license to operate in the city of London
London Authorities said in a press statement that the company, Uber, was not fit and competent to hold a license to operate in the city. The Authorities claimed that Uber’s approach to reporting and handling matters related to safety checks, driver’s medical history, and the reporting of serious offences committed by its drivers was wanting. This coupled with the grey ball scandal led to the banning of Uber in the city of London.
7. Bribery claims by the Department of Justice
The company has been brought to the spotlight by the Department of Justice following investigations as to whether Uber has flouted foreign bribery laws. According to the foreign corrupt practices Act, business people and organizations are categorically forbidden from paying foreign government officials money for the purpose of retaining or obtaining business in their countries. The company is suspected of going against this Act in countries such as Indonesia and Malaysia.
6. Cyber-attack cover up
There have been rumors that in 2017, Uber paid a group of hackers to cover up a cyber-attack that caused personal data of more than 57 million people to be exposed. What makes this matter more disappointing is the fact that it had occurred the previous year, that is, 2016. The company did not bring the matter to the attention of its subscribers and shareholders until 2017. The then CEO of the company, Kalanick Travis, was aware of the breach when it happened.
5. Self-driving Pilot Failures
The state of California ordered to remove their self-driving cars of the road. This order has not been revoked to date. According to the regulators, the company had launched the program without obtaining the necessary permits. The autonomous vehicles were also recorded running red lights. This is dangerous for everyone if it is left unchecked. These cars can also cause other hazards on the roads. For example, they may be hazardous to people using bike lanes.
4. False advertising
The company has been accused of making false advertisements. In 2017, the company was ordered to pay 20 million dollars for duping drivers with false promises in regards to their remuneration. The Federal Trade Rates commission ruled that the company paid its workers far less than it had promised in its adverts.
3. Trump ties to the company
In 2017, the former CEO of Uber had to resign from the president’s advisory committee when users of the Uber application threatened to boycott it. Some of the users actually boycotted the application and took their business elsewhere.
2. Undermining competition
Since its inception in 2009, the company has constantly been involved in one scandal after the other. The company’s investors are not happy due to the fact that the company has been undermining its competition. According, to investors undermining the competition may cause the company to lose business and that would be injurious to their finances. The current CEO, has been working towards remedying this but it may take time before results are seen.
1. The mistreatment of drivers
For a long time the company has been insisting that its drivers are not its employees but rather independent contractors. This has been going across the world. This means since the drivers are not employees of the company, they are not protected by Labor and employment laws. The U.K, through court ruling recognized Uber drivers as employees of the company. In other countries this continues to be a bone of contention between the company and its drivers.
Invasion of privacy
The Uber application requires the user to always allow it to access his or her location data. This makes sense; but according to some reports, Uber employees have been accused of using this location tracking ability to spy on other people. This has been the cause of conflict between the company and its users for a long time.
Gross mismanagement of the company
The company’s corporate culture has been described to of next-level toxicity. The claims have been made by both former and current employees. Some of the people making scathing attacks on the company claim that the company’s HR department is utterly incompetent. There have been multiple reports of sexual harassment that have gone unanswered, and two very senior members of the administration have left following allegations that they are involved in sexual harassment. This and many other things should be a warning to any investor looking to join or continue investing in the company.