Technology

Since Dara Khosrowshahi came to Uber as CEO about a year ago, there has certainly been less drama, but drama remains. Over the last few months, there were reports of Uber COO Barney Harford making insensitive comments about women and racial minorities, as well as Ubernow-former Chief People Officer Liane Hornsey making denigrating comments toward Uberglobal diversity and inclusion lead Bernard Coleman and Bozoma Saint John, the chief brand officer who left in June.

At TechCrunch Disrupt SF earlier this month, I sat down with both Khosrowshahi and Ubernew, first-ever Chief Diversity Officer Bo Young Lee, who joined in March. Believe it or not, there are still bad actors at the company, so Uber still has work to do. What surprised me, however, was Khosrowshahidefense of Harford, not only saying that he&an incredible person& but that healso &one of the good people& as it relates to diversity and inclusion.

&This is an issue that everyone is fighting, and I will tell you Barney takes it personally,& Khosrowshahi told me. &And he is a champion and he will be a champion as it relates to these matters. Heone of the good people.&

Lee, when I asked her if she agreed with Khosrowshahi, said at Disrupt, &absolutely, 100 percent.& Lee, on a call ahead of Disrupt, described the importance of internal diversity champions who find ways to bake diversity and inclusion into their everyday workflow.Onstage, Lee described how she had been aware of the allegations against Harford and had already been working with him around inclusion. In fact, she said, Harford had reached out to her, admitting that he knew therea lot to learn and that he&d like for her to help him.

Harford also wrote, in Khosrowshahiwords, &a really heartfelt apology letter to the company,& but itstill hard for me to get on board with the idea that Harford is one of the &good& ones. This is not to say people can&t be imperfect and can&t change — an idea Khosrowshahi made quite clear, and one that I generally believe as well — but I would just hope that there are some better &good& ones out there.

&I don&t think that a comment that might have been taken as insensitive and happened to report by large news organizations should mark a person,& Khosrowshahi said. &I don&t think that&s fair. And I&m sure I&ve said things that have been insensitive and you take that as a learning moment. And the question is, does a person want to change, does a person wants to improve Does a person understand when they did something wrong, and then change behaviorsAnd I&ve known Barney for years and that&s why I stand 100 percentbehindhim.&

Khosrowshahi described how healso made mistakes, and how that doesn&t mean he should be marked by those mistakes. He went on to describe how at his last job, Expedia, he would usually grab a beer with &one of the guys and, because I was comfortable because it was you know, a person who looked like me, a person with whom I could be more casual and I could have a conversation.&

He added how these people got &access to me that was not fair, and that could have shown up in a New York Times article and that could have marked me,& he said. &Thatnot who I am. You know, I learned, I corrected, I&m aware. And the question is, what do you do&

A new chief in town

During my conversation with Khosrowshahi, we also chatted about the hiring of Lee as CDO, as opposed to promoting Coleman, and the fact that she doesn&t report directly to the CEO — despite the suggestions of former Attorney General Eric Holder. Though, itworth noting those suggestions were directed toward now-former Uber CEO Travis Kalanick.

Khosrowshahi said Lee is the right person for the job and he thinks it&ll become clear that she is the right person for the job. Regarding why Lee doesn&t report directly to Khosrowshahi and instead, to a yet-to-be-hired new chief people officer, he said, &diversity and inclusion have to be a core part of everything that the company does, has to be a core part of your people strategy.&

&And I want Bo and my chief people officer working together fundamentally not just on the diversity of the company, but also on the core culture,& he added. &Like, we&re really trying to shift the culture of the company going forward. So Bo is going to report into our chief people officer. And she and I more than monthly, are constantly having exchanges on how things are going. And I think thatthe optimal structure, which is open — open communication with me working directly with the CEO but part of the core strategy of the company because I do think that this is one of the things that we have to execute on.&

In conversation with Lee, she spoke about the task she has at hand, as well as some strategies she has implemented, and plans to implement in order to get Uber to where it needs to be. One of those initiatives involves creating a pipeline around Uber drivers, which consists of a couple million people around the world. Lee described to me how it would be &amazing to create a pipeline to hire some of those driver partners,& whether into customer service, community operations or &maybe theregreat tech talent in there that we don&t even know about.&

Thatan area where Lee is working with recruiters to better identify ways to source that talent. Lee is also working on ensuring Ubernew cultural norms actually get baked into the company. Last November, Khosrowshahi introduced Ubernew cultural norms, which includevalues like &We build globally, we live locally& and &We do the right thing. Period.& Before, Ubervalues were indisputably much more aggressive.

&You can put out new cultural norms, you can put out new cultural values but itnot until those values are built into our systems, our performance management, our organizational design — the way that we even think about product design, you&re not going to see the full manifestation of it,& Lee said. &And as an organization is going through culture change, that can be very unmooring for people and that can actually make people feel very psychologically unsafe. And what I find at Uber right now is a lot of people who are trying to — within this culture that is shifting, that is changing for the better — trying to find their footing somewhere along those lines.&

Part of whathard right now, she said, is getting Uber employees to the point where they &feel like they can trust that the system will work.& Regarding the allegations about Harford, Lee said that she was aware of them and looking into them, but didn&t resolve them by the time the NYT piece came out.

&But I would say that when the news did break in that public way, I was, more than anything, just really sad about this because what it told me was that we still have a culture where people aren&t sure they can trust that things are going to get fixed and things are going to get done,& she said. &And so they felt that they needed to go outside to find remediation for some of that.&

Lee also told me, ahead of Disrupt, that sheexploring the idea of what fewer levels of hierarchy at the company would look like.

&Ithard to speculate what the changes would look like,& she said. &I ideally would love to see the number of levels possibly changing. More importantly, what I would love to see beyond levels, is the power distance between those levels decline.&

If the whole map is red and ita short ride, maybe you&d prefer taking an Uber JUMP Bike instead of an UberX. Or at least if you do end up stuck bumper-to-bumper, the warning could make you less likely to get mad mid-ride and take it out on the driverrating.

This week TechCrunch spotted Uberoverlaying blue, yellow, and red traffic condition bars on your route map before you hail. Responding to TechCrunchinquiry, Uber confirmed that traffic estimates have been quietly testing for riders on Android over the past few months and the pilot program recently expanded to a subset of iOS users. Italready live for all drivers.

The congestion indicators are based on Uberown traffic information pulled from its historic trip data about 10 billion rides plus real-time data from its drivers& phones, rather than estimates from Google that already power Ubermaps.

If traffic estimates do roll out, they could make users more tolerant of longer ETAs and less likely to check a competing app since they&ll know their driver might take longer to pick them up because congestion is to blame rather thanUberalgorithm. During the ride they might be more patient amidst the clogged streets.

Uberresearch into traffic in India

But most interestingly, seeing traffic conditions could help users choose when ittime to take one of Ubernon-car choices. They could sail past traffic in one of Ubernew electric JUMP Bikes, or buy a public transportation ticket from inside Uber thanks to its new partnership with Masabi for access to New YorkMTA plus buses and trains in other cities. Cheaper and less labor intensive for Uber, these options make more sense to riders the more traffic there is. Itto the companyadvantage to steer users towards the most satisfying mode of transportation, and traffic info could point them in the right direction.

Through a program called Uber Movement, the company began sharing its traffic data with city governments early last year. The goal was to give urban planners the proof they need to make their streets more efficient. Uber has long claimed that it can help reduce traffic by getting people into shared rides and eliminating circling in search of parking. But a new study showed that for each mile of personal driving Uber and Lyft eliminated, they added 2.8 miles of professional driving for an 180 percent increase in total traffic.

Uber is still learning whether users find traffic estimates helpful before it considers rolling them out permanently to everyone. Right now they only appear on unshared UberX, Black, XL, SUV, and Taxi routes before you hail to a small percentage of users. But Uberspokesperson verified that the companylong-term goal is to be able to tell users that the cheapest way to get there is option X, the quickestis option Y, and the most comfortable is option Z. Traffic estimates are key to that. And now that ithad so many cars on the road for so long, it has the signals necessary to predict which streets will be smooth and which will be jammed at a given hour.

For years, Uber called itself a logistics company, not a ride sharing company. Most people gave it a knowing wink. Every Silicon Valley company tries to trump up its importance by claiming to conquer a higher level of abstraction. But with advent of personal transportation modes like on-demand bikes and scooters, Uber is poised to earn the title by getting us from point A to point B however we prefer.

In a world where thousands and thousands of startups are started in the Bay Area every year, becoming a name that everyone recognizes is no small feat.

Theranos reached that summit, and it all came crashing down.

The story of the fraudulent rise and precipitous fall of the company and its entrepreneur, Elizabeth Holmes, is also the singular story of the journalist who chronicled the company. John Carreyroutenacious and intrepid reporting at the Wall Street Journal would ultimately expose one of the largest frauds ever perpetrated in Silicon Valley.

Bad Blood is the culmination of that investigative reporting. The swift decline of Theranos and its protective legal apparatus has done this story a lot of good: many of the anonymous sources that underpinned CarreyrouWSJ coverage are now public and visible, allowing the author to weave together the various articles he published into a holistic and complete story.

And yet, what I found in the book was not all that thrilling or shocking, but rather astonishingly pedestrian.

Part of the challenge is Carreyroulaconic WSJ tone, with its &just the facts& attitude that is punctuated only occasionally by brief interludes on the motivations and psychology of its characters. That style is appreciated by this subscriber of the paper daily, but the book-length treatment suffers a bit from a lack of charisma.

The real challenge though is that the raw story — for all of its fraud — lacks the sort of verve that makes business thrillers like Barbarians at the Gate or Red Notice so engaging. The characters that Carreyrou has to work with just aren&t all that interesting. One could argue that perhaps the book is too early — with criminal charges filed and court trials coming, we may well learn much more about the conspiracy and its participants. But I don&t think so, mostly because the fraud seems so simple in its premise.

At the heart of this story is the use of heuristics by investors and customers to make their largest decisions. Theranos is a story of the snowball effect blown up to an avalanche: a retired and successful venture capitalist seeds the company, leading to other investors to see that name and invest, and onwards and upwards for more than a decade, eventually collecting a cast of characters around the table that includes James Mattis, the current Secretary of Defense, and Henry Kissinger.

Take Rupert Murdoch, the billionaire owner of News Corporation (and by extension the Wall Street Journal), who invested $125 million into Theranos near the end of the companystory. He met Holmes at a dinner in Silicon Valley:

During the dinner, Holmes came over to Murdochtable, introduced herself, and chatted him up. The strong first impression she made on him was bolstered by [Yuri] Milner, who sang her praises when Murdoch later asked him what he thought of the young woman.

….

But unlike the big venture capital firms, he did no due diligence to speak of. The eighty-four-year-old mogul tended to just follow his gut, an approach that had served him well …

He made one call before investing $125 million.

To some readers, that might be a breathtaking sum, but it really is something of a pittance for Murdoch, whose reported net worth today is roughly $17 billion. In the denouement of the Theranos story, Carreyrou notes that, &The media mogul sold his stock back to Theranos for one dollar so he could claim a big tax write-off on his other earnings. With a fortune estimated at $12 billion, Murdoch could afford to lose more than $100 million on a bad investment.&

For Murdoch, a bad heuristic around the company cost him roughly 1% of his net wealth, and with the tax loss, may not have cost him much of anything at all.

Thatthe challenge of the book: for all the fraud committed by Theranos and its founder, its financial losses were ultimately borne by the ultra-rich. This is not the 2008 Financial Crisis, where millions of people are thrown out of their homes due to the chicanery of Wall Street fat cats.

If there is a lesson in all of this, it is that the right heuristics would have helped these investors to an extraordinarily degree. Take for example the rapid turnover of Theranos& workforce, which could have been checked on LinkedIn in minutes and would have signaled something deeply wrong with the companyculture and leadership. It doesn&t take many questions to discover the fraud here if they are the right questions.

Beyond the investors and workers though, the harm is even hard to track to patients. There are perhaps no more serious consequences around Theranos& fraud than for patients, who took tests on the companyproprietary Edison machines and received inaccurate and at times faked results. Yet, Carreyrou strangely hasn&t compiled a compelling set of patients for whom Theranos caused morbidity. If any industry comes out positively in this book, it is the doctors of patients who reorder tests and ask additional questions when results didn&t make sense.

Ultimately, Bad Blood is a complete book about an important story. I&m reminded a bit of the 2012 documentary The Act of Killing, in which the filmmakers travel to Indonesia to have the killers of the 1965 communist genocide recreate the murders they perpetrated. The directorcut is long and at times remarkably tedious, and yet, that is in many ways precisely the point. As a viewer, you become inured to the murder, bereft of emotion while waiting for the ending credits to roll.

Bad Blood is the same: its direct, to the point, and relatively sparing in any deep thrills. And that is its point. The book gives us a pinprick in our belief that Silicon Valleyvaunted investors and founders are immune to stupidity. If you didn&t already know that before, you certainly now have a one-word household name of a startup to reference.