In the Fight Against Sexual Harassment, Money Trumps Morals
Late Tuesday, Travis Kalanick announced that he is stepping down as Uber’s CEO. While no single factor can be credited with (or blamed for) his departure, a blog post in which Susan Fowler, a former Uber engineer, chronicled her experiences with discrimination and sexual harassment at the company certainly pulled one of the main threads that unraveled Kalanick’s hold on the company.
Her story helped prompt a full-blown investigation that revealed a troubled workplace culture, and one that seems particularly toxic for women. Among the more grotesque anecdotes that emerged described a senior executive acquiring and sharing the medical records of female passenger—after suggesting that her claims were fabricated by a competing ride-hailing service. The victim is now suing the company for violating her privacy and defaming her character.
In the wake of such reveals, as well as a series of high-profile firings and hirings, Uber investors Benchmark, First Round Capital, Lowercase Capital, Menlo Ventures, and Fidelity Investments—whose combined voting rights are worth 40%—demanded that Kalanick step down. He acquiesced, writing in an employee email that he “accepted the investors request to step aside so that Uber can go back to building rather than be distracted with another fight.”
Kalanick’s words say it all. This is not the story of a company’s investors deciding to take charges of sexual harassment and discrimination—and the culpability of executives who enable such behaviors—seriously. It’s the story of investors taking a potential threat to their investment seriously.
The motivating factor behind Kalanick’s ouster isn’t morals; it’s money. Uber is one of the most highly-valued private companies in the world. If the company were to be marked down in valuation—which is currently nearly $70 billion—its investors could lose billions of dollars.
A recent study found that the recent negative press around Uber has customers thinking about abandoning the service: 26% of those surveyed were actively exploring alternatives and 4% had already switched services. More than half said they did so “because of the negative news that brought poor business practices and ethics to light.” Another survey used anonymized credit card purchase data to show that Uber’s U.S. market share fell from 84% to 77% at the beginning of the year.
While the blowback doesn’t seem to have negatively impacted Uber’s bottom line so far, investors are well aware that, ultimately, the service the company provides is a commodity and switching to a competitor like Lyft, Via, or Juno can be done with the touch of a screen.
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It’s not just Uber where we’ve seen culturally significant decisions made based on the bottom line. Consider Fox News. Allegations of sexual harassment by Roger Ailes swirled for years before the top dogs at network parent 21st Century Fox decided that he was bad for business. He was only let go after a very public lawsuit brought by former anchor Gretchen Carlson and the following wave of female anchors who came forward alleging that he had, among other things, offered them jobs in exchange for sex.
Similarly, it was only when advertisers started pulling out of The O’Reilly Factor that Fox News host Bill O’Reilly, who was also accused of harassment, was forced out.
Like Uber, Fox News is not a case study of the corporate world suddenly becoming more conscientious; the larger share of the credit goes to the Susan Fowlers and Gretchen Carlsons of the world, as well as a public that is increasingly closing its wallet to companies that turn a blind eye to the struggles of their female employees.
If there’s anything to be learned from Uber, it’s not that we can count on the invisible hand of capitalism to right corporate wrongs. It’s that we need to keep bringing home the ways in which the mistreatment of women is bad for business. With American women holding sway over 85% of all consumer purchase decisions, that shouldn’t be such a difficult point to make.