Uber's Culture Led One Tech Company to Boycott It on Moral Grounds

  • Basecamp initiated ban in February: ‘We want less of Uber’
  • Rival Lyft outpaced Uber in growth among business travelers

Uber CEO to Take Leave After Workplace Scandals

With everything else that’s going on at Uber Technologies Inc. this week, there’s another sign of trouble brewing. A small project management firm has stopped reimbursing its employees for Uber rides, becoming possibly the first company to boycott the app on ethical concerns.

For Jason Fried, chief executive officer and founder of Chicago-based Basecamp, deleting Uber was an easy decision, and he didn’t need to wait for the results of an investigation by former U.S. Attorney General Eric Holder to do it.

“We’re just not going to support them,” Fried said in a phone interview. “As a company, we’re big believers in basically every dollar is a vote. If you spend a dollar with someone, you’re basically saying, ‘I want more of that in the world.’ And we want less of Uber.”

The world’s most valuable startup announced Tuesday that CEO Travis Kalanick will be taking a leave of absence and return with a diminished role, following the publication of the results of a probe into allegations of harassment, discrimination and an aggressive culture. The board approved all of the report’s 47 recommendations, including rewriting Uber’s cultural values, reducing alcohol use at work events, and prohibiting intimate relationships between employees and their bosses.

Fried banned the ride-sharing app the day after former Uber engineer Susan Fowler’s Feb. 19 blog post alleging gender discrimination and sexual harassment at the company. Her allegations came just after Uber became the subject of a campaign on Twitter -- #DeleteUber -- over Kalanick’s association with President Donald Trump on a policy forum, leading the CEO to ultimately resign from the panel.

To see a Bloomberg TV report on Kalanick’s leave, click here

Uber’s practices may have already cost it momentum among business travelers. For the first time, rival Lyft Inc. outpaced Uber’s growth among those who traveled on their company’s dime. In the first quarter, Uber grew just 1 percent in this group, its slowest pace on record. Lyft grew 2 percent in the same time period, according to data from Certify Inc., an expense report management software.

In its report on the data, Certify highlighted one Uber review from a corporate traveler: “Service is absolutely fine and convenient. But Uber has terrible business practices.” A review for Lyft said it treated its drivers better than its competitor.

Bob Neveu, Certify’s CEO, said Uber has a lot to lose if corporate clients sour on the firm.

“In the business category, companies felt comfortable with Uber as a preferred vendor. Should Uber do something to jeopardize that or take that status away, they could be quickly, quickly hammered and see a marked decline in business travel market share," he said. "It’s not gonna take but a couple large companies to make a statement and it could quickly spiral."

To be sure, Uber still has a grip on business travelers. Among those riders, it has more than half of all ground transportation market share in large cities across the U.S. It’s also the most-expensed brand of any kind, according to Certify, ahead of Starbucks Corp. and Delta Air Lines Inc.

The trouble for Uber would come if other companies took the same stand as Basecamp, which will review its Uber policy for its 53 employees in August.

“I think a lot of people in general pay lip service to outrage and they don’t do a lot about it,” said Basecamp’s Fried. “So a lot of people are upset at Uber. I’m sure a lot of people are still taking Uber. And as far as companies go, companies are sort of worse than people in that regard. They don’t want to take a stand. They’re afraid to show they believe in anything.”

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