Uber hires ex-AG Eric Holder to probe sex harassment claims

SAN FRANCISCO — Uber's latest conflagration may be bad optics, but it remains to be seen if it will damage the ride-hailing company's business and market value.

Company CEO Travis Kalanick's call on Sunday for an internal investigation into a sexual harassment claim by a female engineer is the latest in a litany of controversies that have dogged the largest of unicorns, one with a market value of nearly $70 billion and climbing. Late Monday, Kalanick issued a memo to employees announcing that former U.S. Attorney General Eric Holder will help lead an independent review.

Uber remains the dominant player in the U.S. market, with more than 80% of share, according to Bloomberg and other reports, but it threatens to undercut its lead with bad corporate behavior, say business and branding experts.

"It's starting to add up after the fourth or fifth faux pas," says Gerard Francis Corbett, a branding instructor at University of California-Berkeley Extension. "Management and investors turned a blind eye, and they need to take the latest charges seriously. If they don't, they risk losing business, credibility and reputation."

Uber CEO calls for investigation of sexual harassment claims

In a lengthy blog post Sunday, former Uber employee Susan Fowler recounted systematic sexual harassment at Uber in which she and other female co-workers were openly propositioned for sex and other “inappropriate behavior” by a supervisor. The manager wasn’t punished, she said, because superiors rated him a “high performer" and insisted it was his "first offense."

She described a "game-of-thrones political war raging within the ranks of upper management in the infrastructure engineering organization."

Kalanick quickly fired off a statement Sunday, vowing to resolve the issue. "What (Fowler) describes is abhorrent and against everything Uber stands for and believes in," he said. "It's the first time this has come to my attention so I have instructed Liane Hornsey our new Chief Human Resources Officer to conduct an urgent investigation into these allegations. We seek to make Uber a just workplace FOR EVERYONE and there can be absolutely no place for this kind of behavior at Uber — and anyone who behaves this way or thinks this is OK will be fired."

For Kalanick, it was his second act of damage control in recent weeks. He abruptly quit President Trump's economic advisory council this month after Uber's alleged violation of a taxi drivers' strike during an immigration ban protest at JFK International Airport led to the #DeleteUber campaign. The hashtag prompted many people to permanently delete their Uber app.

That consumer revolt underscored what Uber and other businesses face in a "polarizing time," when people are sensitive to the "political leanings" of companies' actions and are willing to boycott their products and services, says Evan Rawley, an associate business professor at Columbia Business School.

The imbroglio has further sharpened the notion that Uber plays by its own rules, analysts say.

"(Its) MO is to destroy competitors and legacy businesses, which is also many tech start-ups' attitudes," says Patrick Moorhead, principal analyst at Moor Insights & Strategy. "But Uber hasn't managed to control the recoil of that approach. 

Jesse Jackson to Uber: Release diversity data

Adding to its headaches, Uber is being pressured by civil rights leader Jesse Jackson to report its diversity data after resisting calls to do so. Apple, Google, Facebook, Airbnb and Pinterest, among others, have made employee demographics available to the public.

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