Uber struggling with multifold scandals

By Yoon Sung-won

Uber faces the gravest crisis since its founding in 2009 amid a series of scandals involving top executives, according to the industry Monday.

CEO Travis Kalanick’s leadership has also been questioned as his visit to an escort bar in Seoul three years ago was exposed by his ex-girlfriend.

The world’s largest car-sharing service firm already faces multiple scandals involving its top executives, illegal taxi operation charges in Korea and an accident during its self-driving car demonstration in the United States. The exposure is expected to be another blow to the company’s brand image.

The Uber CEO’s ex-girlfriend Gabi Holzwarth revealed in an interview that Kalanick and a group of five high-ranking executives visited an escort bar during their visit to Seoul in 2014. Depicting the scene from the past, she said four male executives chose from female escorts with numbers attached to them like cattle at an auction.

A female Uber executive who was in Korea alongside the CEO told the company’s human resources division the visit to the escort bar made her uncomfortable, according to Holzwarth. In the interview, she cited the female executive saying, “It made me feel horrible as a girl (seeing those girls with number tags and being called out is really degrading).”

Holzwarth said a top executive at the company, who is a close friend of the Uber CEO, recently asked her to keep his visit to the escort bar a secret. She also said Uber Senior Vice President Emil Michael, who she said was one of the four executives at the escort bar, pushed her to say they just visited a karaoke bar and had a good time, if anyone asked about it.

Michael denied Holzwarth’s accusation. “Her recollection of this conversation was different from mine and I am very sorry if the purpose of my call was misunderstood,” he said in another interview.

Earlier last month, Kalanick joined the advising panel for the Trump administration on economic issues and left it amid heavy public criticisms. He also came under fire for yelling at his Uber driver who was black while arguing with him over fares.

On March 19, Susan Fowler who used to be an engineer at Uber until December last year exposed that her boss repeatedly harassed her sexually. She also revealed that the company did not take proper action even after she reported the harassment. Uber President Jeff Jones, who was considered the No. 2 in the company, quit his position on the same day, expressing disappointment in Uber’s management and leadership.

Uber has been suspected of using an illegal program called “Grey Ball” in the United States, France, Australia, China and Korea. The program can identify the police on the road and help the drivers avoid them.

The company also faces a lawsuit filed by Google’s self-driving car business subsidiary Waymo for stealing Google’s confidential files. On Sunday, Uber’s self-driving taxi crashed in Arizona, resulting in a suspension of service.

In Korea, where the company has already been involved in a dispute with the government, it was fined 10 million won last week for operating an illegal taxi business after a two-year-old trial. The court also summoned the Uber CEO. But Kalanick did not answer.

According to data by market researcher CB Insights, Uber’s corporate value is still estimated around $6.8 billion. But the company’s car-sharing service market share in the United States settled at 74 percent in March, down from 84 percent in January.