It also raises another good question: how big of a fool would you have to be to take the job Gurley and the board are trying to fill? How do you rein in a CEO who has total, unchallengeable control of the company?
(Maybe if they offer enough money, it's worth it even if it's a suicide mission? Though "just cash the checks and wait for your inevitable dismissal" doesn't seem like an attractive offer for anyone who's good enough to have alternatives.)
There's practically a limitless supply of people that would do it for $10 million.
The problem is finding someone worth paying that much (and the pretense that whether someone is worth paying that much can be determined ahead of time).
In situations like this, in which an executive is hired to reform a company and is set against entrenched management and culture, golden parachutes seem entirely justified to me.
I'm not so sure. Wouldn't it be better for society overall if these companies were condemned to die by their own hand, instead of being able to be saved by an outsider? If they're saved, then all the people who participated in creating this toxic culture are rewarded. If the company goes belly-up, then any valuable assets can be bought by other firms for pennies on the dollar, and those and other competing, and hopefully better-run firms will have a shot at success, with this toxic company cleared out of the market and leaving a void.
I'm not following. Are you proposing that companies should not be allowed to hire someone from the outside to fix severe culture issues? The problem with such a policy is the mechanism through which we'd determine which companies are condemned.
From your comment, I gather that if it were up to you, you'd sentence Uber to death instead of giving them a shot at redemption. You wouldn't be alone in this perspective, but I think you're overlooking the thousands of GOOD people that would be adversely affected and punished by such a decision. All to punish a couple people you believe to be evil.
>Are you proposing that companies should not be allowed to hire someone from the outside to fix severe culture issues?
Not exactly, just that they shouldn't be able to offer them generous golden parachutes.
Of course, I'm not so sure about the legality of this, but perhaps within corporate law a law could be made that companies aren't allowed to promise enormous sums of money to people when they fail to fix the problem, and the company is now in dire financial straits. When the company is having severe financial difficulty, the first dibs should go to anyone it owes money to, not someone they promised a big golden parachute to in case he couldn't turn it around.
>I gather that if it were up to you, you'd sentence Uber to death instead of giving them a shot at redemption.
Absolutely. The good people should have found new jobs by now; all accounts now show this company to be truly toxic, at many levels (not just "a couple people"). They should not be rewarded with a shot at redemption. Now, if they can find someone willing to take on this challenge of turning the company around, who is willing to assume a great deal of risk in doing so (at least risk not getting paid much for it), then that's fine. I just don't think they should be allowed to offer a golden parachute if that person fails. Then, such people can evaluate such offers based on the true risk of the situation, instead of knowing they'll be safely off with their golden parachute if they can't make it work.
The negative impact of such a decision wouldn't just be on Uber employees, but also the 500,000 drivers actively using their app; on average making $30K per year. A large fraction of these people are probably depending solely on this income to make ends meet.
In an ideal world, there'd be an immediate replacement for Uber for all these drivers to switch over. However, we all know that's wishful thinking. At best, capacity would only be halved, which still means you'd effectively be letting go of 250K people tomorrow.
Imo, even if your goal is to enact maximum punishment on Travis and Co, doing so THROUGH punishing the company is a really destructive way to accomplish said task.
You think Uber drivers can't just switch to the competition at the drop of a hat? Lots of them already work for both Uber and Lyft at the same time! They're the absolute last people I'm worried about hurting here. There are other "ride-sharing" companies out there, you know. And when Uber is clearly going down the drain, more competitors will pop up in anticipation of taking advantage of the situation.
What percentage of customers/drivers do YOU think would switch over to Lyft et al?
From my experience in growth/marketing, I would bet there would be around 50% drop off, but I could definitely be wrong! These things are hard to guess. (Customers need to switch as well as drivers)
Even a 1% drop off leads to 5000 people let go. Anything substantial would lead me to strongly considering other avenues of redemption.
To be sure, I'd want to better understand the magnitude of effect here before saying that sentencing Uber to death is "absolutely" the right thing to do.
>What percentage of customers/drivers do YOU think would switch over to Lyft et al?
Um, all of them? If Uber went under, what choice would they have? Why would customers give up on Uber/Lyft and go back to cabs, when there's at least one company that does almost the exact same thing and is a direct competitor? Why would they refuse to install the Lyft app, when they've already shown they're willing to install the Uber app? And why would drivers not go to work for the competition, esp. with a giant void left by Uber in the market?
I'm sorry, I think your argument is ridiculous. Right now, I'm eating some spaghetti for dinner that I just made. It's made with Brand X spaghettin and Brand A of sauce. Now if either of these brands suddenly went under and disappeared from the supermarket aisles, do you think I'm going to just stop eating spaghetti altogether? That's insane. And even that would make more sense than this Uber scenario. Uber is just a way to get you from point A to point B, and has succeeded so far because it's both cheaper and more convenient, in most cases, than the incumbent services. People aren't going to suddenly stop needing to get transported places without Uber around, nor are those incumbents improving enough to get them back, at least in many places (if they were, Uber would have a large loss of ridership there already). And Lyft is already there (in many markets at least), offering the exact same service as Uber, frequently with many of the same drivers. Why wouldn't people switch? There's only two reasons: 1) ignorace (easily countered with some advertising, plus word-of-mouth from drivers during Uber's last days), and 2) lack of availability of Lyft or other competitors in certain locations (I believe Toronto does not have Lyft for some odd reason). At least with my spaghetti example someone might say they love sauce brand C so much that they just wouldn't bother making much spaghetti without it and would eat other stuff.
I agree with the reasons you ended your last comment on. Ignorance and lack of availability (or rather a mismatch in supply and demand) would surely lead to drop-off. In addition, laziness will lead to drop-off i.e. "Uber was marginally better than taking the next best alternative for me. I'll just go back to that now because I'm too lazy to figure out this Lyft thing".
I'd guess the difference in our conclusions is based on your belief that these are "easily countered with some advertising".
Most of my background is in paid advertising, and reactivation on defunct company contacts is never close to 100% -- not even close.
I still don't see the problem. In this case, the people too stupid to figure out the Lyft app (seriously, if you can figure out the Uber app, then the Lyft app isn't any harder) can just go back to using cabs. So the cab drivers now are making more money, and the cab companies will need to hire more people, who could be former Uber drivers. What's the problem?
Keeping around rotten management because you don't want to disrupt the people below them is always the wrong thing to do, because then you're not fixing the problem, you're letting it fester.
If people go back to cabs then all is fine from an employment standpoint, but the problem is the section of customers whose best alternative is public transit, walking, cycling. (I'm in this group)
After thinking more about this, I think I actually agree with your argument that we should sentence Uber to death just because it's the 'right' thing to do even if it indirectly leads to unemployment of a lot of people.
However, we started this thread under a shared premise of utilitarianism. If we treat these 'death sentence' decisions on on a case-by-case (i.e. no future precedent set), it's hard for me to believe punishing the 'corrupt management' (which probably only amounts to a dozen individuals) is worth screwing with peoples' livelihoods. At Uber's scale, it just seems like a given that there will be hundreds of people whose lives will be SERIOUSLY screwed, albeit indirectly.
I think it's more than a dozen individuals; from what we're seeing with Uber, and what I know about corporate culture from experience, bad corporate culture permeates the entire company, from the top down. In Uber's case, this means not only their executives, but also their HR department (which backs up harassers), and also their engineering (which is very large for a company like that). The drivers are a different thing because they don't work directly with the corporate HQ people and are really just part-time contractors anyway. So I really don't have a problem with those hundreds of people at Uber HQ getting seriously screwed. Most of them will probably get jobs elsewhere anyway, though they'll now have the Uber resume stain, but these people aren't poor people living paycheck-to-paycheck, they're relatively wealthy Silicon Valley office workers (engineers, managers, etc.).
For everyone else, drivers, customers, etc., I really do think they'll just move on to other things and it won't be a big deal. Lyft seems to be doing fine, though it'd be nice if they eliminated the tipping.
Yeah, it sounds like nearly a nearly textbook definition of one of the problems capitalism (and a "free market" with low barriers to entry) are supposed to solve. You don't challenge someone's control of their company, you just challenge the company. "Good" employees and customers who object to their culture jump ship to yours; "bad" employees go down with the ship.
Of course, because of the innumerable real-world confounds to the model (not least of which is the artificial-or-otherwise high barrier to entry that most industries seek to ensconce themselves in), this doesn't happen anywhere else, but at least here with novel companies competing in their early stages, I don't see why anyone would bother "saving" a company that will be dragging against you every step of the way you can just invest in one of its competitors and let that dragging force drag your competition down, to your advantage.
If the "capitalism will save us" model can't succeed here of all places, I don't know why people still bother with it anymore.
(Maybe if they offer enough money, it's worth it even if it's a suicide mission? Though "just cash the checks and wait for your inevitable dismissal" doesn't seem like an attractive offer for anyone who's good enough to have alternatives.)