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The UBER episode : Is Monoculturalism the real problem and gender and ethnic diversity the solution ?

Source | Linkedin.com  |  BY:Prabal Basu Roy, Diptish Investments and Fund Advisors Inc

The spate of articles post Travis Kalanick’s unceremonious sacking in a Chicago hotel room reflect the “bandwagon effect” amongst analysts in post facto rationalisations of such events, where much of what should have been obvious in the first place, are repeatedly repeated post the event.

Whilst deeply ingrained issues such as the “tech bro culture” and the affinity to cross the ethical and legal boundaries in the conduct of business are indeed relevant, this article would attempt to look beyond and delve deeper into the fundamental malaise of which the UBER episode is merely a symptom. To my mind, the core issues are two fold : (a) the alpha white male monoculture which dominates the PE/VC industry in the US (b) the lack of genuine intent in driving true governance given the cozy nexus in the boards as long as profits are generated by the company and its founders.

Kalanick’s behavioral traits in terms of risk taking have been eulogised by many- mainly led by hard nosed PE investors and gullible employees- as it generated unimaginable valuation multiples in less than a decade. Whilst such traits are a necessary ingredient for those seeking to disrupt on a large scale, these can be counter productive if based on hubris accentuated by over confidence and excessive optimism….a heady cocktail of traits which pave the way for judgmental biases and systemic flaws in an established pattern of decision making bordering on being reckless whilst acting with impunity. This was evident in Uber’s actions across geographies in many areas : the illegal tagging of iPhones, using the secret Greyball tool to trick law enforcement agencies and break privacy laws, sharing medical records of the raped Indian woman, the Waymo legal suit for alleged trade secret theft filed by Alphabet, etc. In fact, in one of his early start ups in 2000, Red Swoosh, Kalanick used employee deductions towards TDS, which the company was legally obliged to deposit with the IRS, for business purposes. The multi faceted controversies which Uber faced over the last many years were symptomatic of this primary trait……….which was just fine with the investors as long as the company met its growth objectives. The Board chose to ignore the fundamentals of their governance role and failed to provide guidance in correcting a trait which would ultimately endanger the company in many more ways than one. It is worth recollecting that for all the talk of governance and ethical behavior, investors backed Kalanick despite past investors and advisors calling him a “serial prevaricator” and “delusional”.

Readon….

 

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