The US Justice Department has begun taking preliminary steps in investigating whether Uber broke a US law against foreign bribery.
Uber, an American technology company, that offers ride sharing services, is also one of the most successful companies in the world.
However, a series of controversies that have plagued the company in 2017. This includes claims by former employees about the working conditions within the company. A blog by a former employee Susan Fowler about the sexual harassment rampant at Uber went viral. This led to Uber firing more than 20 members of its staff and taking action against others following a review of more than 200 HR complaints that included harassment and bullying.
According to media reports, its value has dropped from $60 billion at the beginning of this year to around $50 billion by April 2017.
Travis Kalanick is one of the co-founders and the former CEO of Uber was forced to step down after pressure from the company’s investors.
According to a report from the Wall Street Journal, America’s Justice Department has taken preliminary steps to investigate whether Uber violated a U.S. law against foreign bribery. A spokesperson for the company has since confirmed the investigation. The company is said to be cooperating with the authorities in Justice Department.
Details are scarce on whether the Justice Department is focusing on Uber’s actions in one country or in multiple nations. Uber is being sued over allegations that its executives had wrongfully obtained medical records of woman who had been raped by a driver in India. Uber has hired a law firm to investigate how these executives (and some former employees) were able to get those records. There has been an accusation that bribes were offered.
Uber has been without a CEO for multiple weeks this year. In August 2017, it made an offer to Dara Khosrowshahi to become the company’s next Chief Executive Officer. He has served as the CEO of Expedia since 2005. Under his leadership, the travel company has expanded its operations to over 60 countries through multiple brands.
Khosrowshahi has accepted the position and will have to address these problems as well. In an interview to Bloomberg he said, “Are there difficulties? Are there complexities? Are there challenges? Absolutely, but that’s also what makes it fun.”
Our assessment is that this development is likely to tarnish Uber’s brand even further in 2017. According to a report in Washington Post, such investigations on bribery are considered more common when it comes to large multinationals, such as Walmart and Halliburton. However, Silicon Valley start-ups are usually not the focus. Dara Khosrowshahi certainly has his work cut out for him in the near future.