Uber is totally dysfunctional. Oh, wait. That’s slant.
Photo by AP Images

Uber is totally dysfunctional. Oh, wait. That’s slant.

August 31, 2017

The Raw Data

Unspun and unbiased. These are the facts.

Uber appoints Khosrowshahi as new CEO

Dara Khosrowshahi, who was selected as ride-sharing company Uber’s new CEO, spoke publicly about the decision on Tuesday, saying he’d accepted the position but that the contract wasn’t yet finalized.

Khosrowshahi, who is currently CEO of online travel company Expedia Inc., gave an interview to The Wall Street Journal from Expedia’s headquarters outside Seattle. He said the position was a “once in a lifetime” opportunity, adding he had been “really happy at Expedia.”

Uber’s eight-member board voted unanimously on Sunday to offer the CEO position to Khosrowshahi, the Journal reported. Expedia’s board sent a note to its employees about the decision. On Tuesday night, Uber posted a message on its website officially announcing the appointment.

Uber is the largest privately-held tech company, with an estimated valuation of $69 billion, according to Business Insider. Uber has about 14,000 employees and around 1 million independent contractor drivers.

The company began the search for a new CEO about nine weeks ago. Former CEO and co-founder Travis Kalanick resigned in June after investors wrote a letter asking for his resignation.

Benchmark Capital, one of Uber’s largest investors, has also filed a lawsuit against Kalanick accusing him of fraud and breach of fiduciary duty to stockholders.  

In his interview Tuesday, Khosrowshahi said Kalanick “will be involved” in the company, describing him as a “visionary,” and saying that his involvement would be “up to Travis and the board.”

Khosrowshahi, 48, emigrated from Iran to the U.S. in 1978. He has an engineering degree from Brown University, and has been the Expedia CEO since 2005.  

Distortion Highlights

  • The media coverage gives the impression that Uber is dysfunctional and unstable.  
  • Uber does have challenges, but the coverage leaves out other important parts of the story.
  • The one-sided and spun accounts make for an entertaining story, but they don’t inform objectively.

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The Numbers

See how the articles rate in spin, slant and logic when held against objective standards.

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The Distortion

The Knife’s analysis of how news outlets distort information. (This section may contain opinion)

Top Spin Words

  • Bitter Public War

    The legal battle has spiraled into a bitter public war that has pitted shareholders against each other, and raised questions about whether Mr. Kalanick will want to maintain a grip on the company. (The Wall Street Journal)

  • Pugnacious

    Unlike Uber’s pugnacious and volatile former CEO, Mr. Khosrowshahi has a reputation for being gregarious and even-keeled, according to executives who have worked with him. (The Wall Street Journal)

  • Embattled

    In his first public comments since being selected to lead the embattled ride-hailing giant, Khosrowshahi told the Wall Street Journal that he would leave his current post as CEO of online travel service Expedia in order to seize a “once in a lifetime” opportunity. (Business Insider)

  • Incredibly Tough

    From Day One, he will have an incredibly tough job steering the ride-hailing company back to stability, after months of turmoil, executive departures and bitter infighting at the board level. (Business Insider)

  • Dysfunctional

    For a surprise choice, Expedia CEO Dara Khosrowshahi appears to check the boxes needed to tackle the massive job of leading Uber from a rapidly growing but dysfunctional money-loser to a company that can turn a consistent profit. (AP)

    But for a bitterly divided board of directors at a dysfunctional yet highly innovative company, compromise may be what Uber needs. (Reuters)

  • Acrimonious

    Khosrowshahi became accustomed to boardroom tensions at Expedia, where two of its directors — media moguls Barry Diller and John Malone — have had an acrimonious relationship at times. (AP)

  • Toxic

    Khosrowshahi’s outsider status – he is not part of the circle of celebrity tech executives, nor does he work in Silicon Valley – may bode well for helping Uber rebuild its culture, which has been described as toxic and sexist. (Reuters)

  • Fierce

    Khosrowshahi’s success in acquisitions and partnerships at Expedia will potentially benefit Uber in Asia especially, where the company is locked in a fierce price war that shows no sign of ending. (Reuters)

The outlets we analyzed for this story, like much of the recent media coverage of Uber, give the impression that the company is dysfunctional and unstable. They portray incoming CEO Khosrowshahi positively, yet depicting him as a savior further reinforces the idea that Uber needs saving.

Take a look at this sampling of the coverage:

  • Uber is “embattled”2 and “dysfunctional”1
  • it’s coming off a “wave of scandals”2 or a “series of scandals”4
  • it’s dealing with “months of turmoil,”2 or a “multitude of problems”1
  • the board is “bickering,”1 has “infighting,”4 “bitter infighting,”2 or is “bitterly divided”3
  • the company needs to “shore up”4 its finances
  • the company has “unusual dynamics”3
  • the new CEO will have “an incredibly tough job steering [Uber] back to stability”2

1. AP, 2. Business Insider, 3. Reuters, 4. The Wall Street Journal

Certainly, Uber is facing some challenges. A number of lawsuits have been filed, including one by Google’s parent company and another by one of Uber’s biggest investors (see the Context section for more details on the lawsuits). There are a number of vacant leadership positions, and the company reportedly lost more than $3 billion last year, according to The Wall Street Journal.

But here’s another perspective:

  • Uber is the most valuable venture-funded startup company in the world.
  • It has a valuation of $68 billion, higher than long-established companies such as Ford and General Motors.
  • In eight years, the company has expanded to operate in 633 cities in more than 75 countries.
  • It employs 14,000 people and has over 1 million independent-contractor drivers who use their own vehicles and choose when to work and which rides to accept.
  • More than 2 billion rides have been taken with the Uber service.
  • The Knife spoke with an investor in the company who is confident in its finances regardless of the lawsuits.

Did your impression of the company change after reading this last information? Few of these details were included in the coverage. This is a clear example of slant—that is, the media’s tendency to emphasize certain information (in this case, negative info) and de-emphasize or completely omit other data (in this case, more positive info). That doesn’t mean the negative should be excluded, but ideally it’s presented in a balanced manner.

And then there’s the spin described above. The outlets mix the data with words like “turmoil” and “embattled,” which don’t actually tell us what the problems are at Uber. These vague and sensational words make it hard to keep track of the actual facts.

People who work for, use, invest in, or are otherwise linked to Uber likely want to stay updated on company news, whether it’s positive or negative. Yet if they read this week’s media coverage, they’ll probably get a one-sided and spun picture that makes for a dramatic and entertaining story, but doesn’t inform objectively. They’re better off reading our Raw Data.

Is it fact or fiction? Which outlet presents the most spin?

  • 35% Spun

  • 51% Spun

  • 75% Spun

  • 84% Spun

Fact Comparison

  • Facts in only 1 source
  • Facts in 2 sources
  • Facts in 3 sources
  • Facts in all sources

Kalanick’s resignation followed an internal investigation into allegations of sexual harassment. (The Wall Street Journal, AP)

The ousted CEO faces a lawsuit from Uber shareholder and board member Benchmark Capital, accusing him of getting involved in in the CEO search to regain power. (The Wall Street Journal, Reuters)

Uber has been described as toxic and sexist. (Reuters)

There have been allegations of [trade-secret] theft. (Reuters, AP)


Business Insider describes Uber as “embattled,” and says there’s “infighting” between board members. Yet it doesn’t actually explain what the issues are. For example, it doesn’t mention the sexism and sexual harassment allegations against the company, or the internal investigation into those claims. The outlet also doesn’t mention the lawsuit against the former CEO or the patent lawsuit, which Reuters notes was filed against Uber by Alphabet Inc.

Balance

Get the full picture! Don’t buy into cherry-picked information.

The media’s slant:
  • Dara Khosrowshahi is a great choice to help fix Uber’s problems, because he’s done well at Expedia and is “calm” compared to the former Uber CEO.
  • Uber is currently “dysfunctional” without proper leadership and board unity, and it’s “embattled” with problems.
  • Fixing Uber will be a tough job for Khosrowshahi.
What the media doesn’t explore:
  • Khosrowshahi may do very well in the position, or he may have challenges — we won’t know until he gets there. Khosrowshahi’s previous work experience may be an indicator of his ability, but Uber is a different company.
  • Uber provides a widely-used and growing service to the public. Many companies have problems, board disagreements, and lawsuits to deal with; this doesn’t necessarily mean they are “dysfunctional” or “embattled.” (See more in The Distortion section.)
  • Focusing on the difficulties that Khosrowshahi may face could dramatize the management change at Uber. Being the CEO of any major company is a big job, with or without ongoing lawsuits.

Context

Access information and historical data that provides a more comprehensive understanding of the story.

Here is a list of lawsuits, claims and investigations related to Uber:

1. Investor group Benchmark Capital is suing the former Uber CEO, Travis Kalanick, over allegations of fraud and concealing information from investors.

2. Uber has been accused of having a discriminatory workplace culture, after former Uber engineer Susan Fowler posted an article in February. It has investigated 215 claims (including claims of discrimination, sexual harassment, other harassment, unprofessional behavior, retaliation, three claims of physical security and one of wrongful termination). It recently fired 20 employees as a result of the investigations.

3. An executive, who has since been fired, allegedly obtained the medical records of a woman in India who accused her Uber driver of raping her. She then filed a lawsuit against the company.

4. A judge in New York ruled in June that Uber treats some drivers more like employees than independent contractors, and that they are eligible for employee benefits. Uber may have to change its practices as a result.

5. Google’s parent company Alphabet Inc. filed a patent lawsuit with Uber, claiming it is infringing on technology patents for its self-driving car program Waymo. The case is scheduled to go to court in October.

6. The U.S. Justice Department is investigating Uber for allegedly using software to avoid local transportation authorities, according to Reuters.