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2017-06-22 09:36:02
News Analysis: Tough Task for Next Uber Leader: Mending Fences With Drivers

The huge, headline-grabbing news out of Uber this week was the resignation of its chief executive, Travis Kalanick, under pressure from the company’s board, a stunning move that capped a monthslong crisis involving sexual harassment, executive misbehavior and Uber’s hard-nosed culture.

But amid the drama leading up to Mr. Kalanick’s forced departure, Uber made a quieter change that could represent another momentous shift for the company. On Tuesday, the company announced that passengers would soon be able to tip their drivers through the Uber app.

The change, which Uber plans to roll out nationwide next month, is a sudden reversal of longstanding company policy, and a move Uber fiercely resisted for years.

Under Mr. Kalanick, the company argued that giving riders the ability to tip drivers would create “friction” in an otherwise seamless transaction and lead to awkward interactions between riders and drivers. The company even cited a 2008 Cornell University study that found that consumers tipped black employees less generously than white employees, and suggested that adding in-app tipping would lead to racial discrimination.

The relationship between Mr. Kalanick and Uber’s global network of more than two million drivers has always been strained, to put it mildly. Drivers, who are not technically Uber employees but whose income depends largely on Uber’s policies and pricing structures, balked at Mr. Kalanick’s seeming indifference to their needs. At times, Mr. Kalanick sounded openly hostile to his company’s labor pool, musing in onstage interviews about how long it would take to replace them with self-driving cars.

“There are a lot of things about Uber that tip the balance to the passenger side,” said Harry Campbell, a Los Angeles-based Uber driver and founder of TheRideshareGuy, a resource site for drivers. “A lot of that seemed, rightly or wrongly, to stem from Travis, and a lot of drivers blamed him for that.”

Tipping was among the hottest flash points. Uber drivers argued that they were missing out on thousands of dollars in potential earnings by not being able to receive tips inside the app. (Riders could give Uber drivers tips in cash, but few did.) Earlier this year, the Independent Drivers Guild, a group representing Uber drivers in New York City, collected more than 11,000 signatures on a petition calling for an in-app tip jar.

Then there was the video. In February, a dashboard clip of Mr. Kalanick arguing with an Uber driver was seen widely on the internet. In the video, Mr. Kalanick’s driver accused him of dropping prices on Uber rides and told the chief executive that “I’m bankrupt because of you.” Mr. Kalanick disputed the driver’s accusations and told him curtly that some people “blame everything in their life on somebody else.” Mr. Kalanick later apologized for his conduct in a staff memo, saying that it was proof that “I must fundamentally change as a leader and grow up.”

Lyft, Uber’s biggest rival in the United States, has taken full advantage of the acrimony between Uber and its drivers. The company makes a point of emphasizing that in-app tipping has been available to Lyft drivers since 2012, and the company has made aggressive attempts to paint itself as the more driver-friendly alternative to Uber, while trying to lure Uber’s drivers to its own platform.

In recent weeks, Uber has taken steps to repair its relationship with drivers. The company started an initiative called “180 Days of Change,” which included changes that drivers had been requesting for years, such as a per-minute waiting fee and the ability to accept rides heading only in a certain direction. It also seeded a $3 million legal defense fund to assist immigrant drivers who were affected by President Trump’s announced travel restrictions.

Aaron Schildkrout, Uber’s head of driver product, characterized these changes as part of a genuine effort to mend fences with drivers. “Drivers are by far our most important partners,” Mr. Schildkrout said. “Historically, as we’ve been racing to keep pace with our tremendous growth, we haven’t done the best job of honoring that partnership. That’s about to change.”

These benefits struck some drivers as too little, too late, but others may be willing to give the company a second chance. Jim Conigliaro Jr., the founder of the Independent Drivers Guild, said that he was happy with the changes the company had announced and that Mr. Kalanick’s departure would give Uber a chance to “refocus attention on the people who actually make the company money: drivers.”

Ultimately, conflict between Uber and its drivers may be unavoidable. No matter who runs it, Uber is still marching toward a driverless future, and the company still needs to balance driver wishes against rider demands for cheap fares and instant availability. The company is also reportedly preparing for an initial public offering and faces pressure to show investors that it can turn a profit and keep its costs under control.

Mr. Kalanick’s successor at Uber will have many messes to clean up, including bruised staff morale, a toxic company culture and a short-staffed executive team. But high on the new chief executive’s list of priorities should be improving the company’s relationship with the people who take its passengers from Point A to Point B. Without happy drivers, Uber 2.0 will be just as flawed as the original.