November 22, 2017 / 6:06 PM / 22 days ago

Breakingviews - Uber cover-up makes new boss's job even harder

By Richard Beales

The chief executive of Uber Technologies Inc, Dara Khosrowshahi attends a meeting with Brazilian Finance Minister Henrique Meirelles (not pictured) in Brasilia, Brazil October 31, 2017. REUTERS/Adriano Machado

LONDON (Reuters Breakingviews) - Travis Kalanick has a lot to answer for at Uber Technologies. Sure, he founded the revolutionary ride-hailing service and built it into a global business. But the legacy of irresponsibility while he served as chief executive has cast a shadow over the company’s future.

The latest example of many is Tuesday’s news that Uber covered up a hack late last year that could have exposed 57 million people’s data. Rather than tell the individuals affected – or regulators – about it, the company paid the perpetrators $100,000 to keep the breach secret.

New boss Dara Khosrowshahi only started in August, but his job is already getting harder. He can argue that what happened shouldn’t have, and that he is making big changes. But he can’t erase what was done on Kalanick’s watch. Regulators, now inevitably starting up investigations around the world, will require reassurance on both fronts.

That’s a problem, for example in the company’s effort to reverse a decision by Transport for London not to renew Uber’s licence for the UK capital. Khosrowshahi needs to persuade everyone that anything cavalier about his company’s old approach to regulations and procedures will change under his stewardship.

The more new concerns pop up – even if they pre-date his arrival – the harder that is. The latest revelation, for instance, invites any regulators or lawmakers to open new lines of enquiry. Uber’s cover-up of the hack “raises huge concerns around its data protection policies and ethics,” the UK Information Commissioner’s Office said on Wednesday.

Meanwhile, Uber is negotiating the details of an investment from Japan’s SoftBank, one of which is price. The private company’s last funding round pegged its worth at nearly $70 billion, but negative publicity and boardroom squabbles – recently resolved – suggest any buyer should be expecting a lower figure by now.

Khosrowshahi needs to juggle it all. Moreover, he needs to convince skeptics that corporate cultures as dysfunctional as Uber’s can change almost as quickly as their chief executives.

Breakingviews

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