Uber Strives to Institute New Changes as it Faces Global Regulatory Issues

American car-hailing company Uber seems to keep getting caught in a quagmire, battling an assortment of issues in various countries where it set up operations. Recently, the ride-hailing app company was adjudged unfit to hold a London private hire operator license on grounds of public safety and security issues.

Uber has met opposition from both key city officials and the public transport network regulator of London, who noted the manner with which Uber reported serious offenses, obtained medical certificates and conducted background checks on drivers. They cited the implications on Londoners’ public safety.

In light of this recent development, new Uber CEO Dara Khosrowshahi underscored that what people think about the firm certainly matters. Uber, after all, is a global business, and actions in one part of the world can have serious repercussions in another.

Impact of London ban

Uber drivers had been required to comply with the same safety checks as the black cab and minicab drivers in London. Uber critics also referred to how the company lacked action in regulating its drivers. On the other hand, Uber customers in London have cited the ease and speed, not to mention pickup accuracy the ride-hailing firm has offered.

With the Uber ban, around 40,000 drivers stand to be deprived of work.

Global issues

Late last month, Uber had turned to social media to call on its loyal customers to help ensure more transport options for Londoners by signing a petition. Dara Khosrowshahi also tweeted that the company is far from perfect, but that there were 40,000 licensed drivers and 3.5 million Londoners depending on Uber. He then enjoined people to work with the ride-hailing firm to make things right.

It can be noted that Uber has had a history of colliding with regulators in other countries. In some places, though, it has successfully negotiated its return.

A case in point was Austin, Texas. In May 2106, Uber pulled out of Austin when stricter regulations were proposed by the liberal city council requiring ride-sharing drivers to pass fingerprint-based security checks. The move led to 10,000 drivers losing their jobs.

With new policy pronouncements (state emerging as the regulator of the ride-hailing industry, requiring local, state and national criminal background checks but doing away with fingerprint checks), Uber was allowed to resume operations and a year later.

Pullouts in other markets – such as Denmark – and suspension of operations in countries that include Hungary and Italy, likewise occurred. In Italy, taxi associations recently filed complaints and held protest strikes against Uber, but the Uber ban was lifted by an appeal court last May.

Surprise announcement

Besides run-ins with authorities and problems in adhering to new laws designed to curb its activities, Uber has lately been rocked by a boardroom power struggle. Travis Kalanick, the former CEO of the controversial ride-sharing firm, unilaterally named two new directors to sit at Uber’s Board, triggering surprised reactions from current officers.

The move came even as Kalanick had stepped down as CEO a few months ago. Kalanick maintained that he was exercising his right since he controls three of Uber’s 11 Board seats, and had acted following a Board proposal for restructuring.

Appointed to the Board, without bringing it up with Dara Khosrowshahi, were former Merrill Lynch CEO John Thain and former Xerox CEO Ursula Burns. Beforehand, Benchmark had asked Kalanick to relinquish control of board positions. Though Kalanick had openly expressed support for Khosrowshahi, the latter found the recent appointments highly unusual.

Uber has stepped up the process of instituting a new governance structure. In light of the recent development, Khosrowshahi stressed in an internal correspondence to the Uber employee force that the management team is putting in place world-class governance. Uber has been reeling from a string of scandals and labor unrest the past several months.

Continuing reforms will ensure that Uber is transformed into a company that shareholders and employees will take pride in. Khosrowshahi underscored the value of hard work on everybody’s part and urged employees to stay focused, unified, and to keep going. In several instances, the new CEO has also stressed that Uber is striving to be a better partner to cities where it operates.

In several instances, the new CEO has also stressed that Uber is striving to be a better partner to cities where it operates.
Since Kalanick was forced to step down as the man at the helm of Uber mainly due to investor pressure, new management has been overseeing a new crop of changes. These changes have ranged from better compensation schemes that give drivers flexibility, to bolstering checks and balances on the company’s key managers/officers.

Ironically, Uber’s ranking officers had earlier recommended limiting Kalanick’s responsibilities through reallocation of some of his duties, Appointing an independent chairman and creating an oversight committee on the board were also endorsed.

There are tons of work to be done, as Uber’s business operations head and other key executives have acknowledged to media, and the company is exerting huge efforts to get back on track.