Uber CEO on Gender Discrimination Investigation: ‘I Take Sole Responsibility’

Dara Khosrowshahi spent his first months as Uber’s new CEO apologizing — a lot. He apologized to London for Uber’s “mistakes” involving its aggressive expansion there; he apologized to the public after revealing that Uber hadn’t disclosed a 2016 hack; and more broadly, he apologized for his predecessor’s missteps.

Now, Khosrowshahi is nearly one year into one of the most high-profile turnaround efforts in tech. Some things have changed, but the lingering cultural problems remain.

Today, it was revealed that Uber is facing a federal investigation over alleged gender discrimination. During an all-hands employee meeting this morning, he had planned to complain about such leaks, but he ultimately decided against it.

“Sometimes it takes a punch in the face to see things clearly,” he said at Fortune’s Brainstorm Tech Conference in Aspen, Colo., on Monday. “This was one of the moments for me. This was a rough week, but it was incredibly motivating.”

Below is a roundup of the comments he made at Fortune’s conference:

On fixing Uber’s culture:

Shortly after taking charge at Uber, Khosrowshahi asked employees to submit ideas for a new set of corporate values. The crowdsourcing effort resulted in the company’s eight “cultural norms,” including one that states: “We do the right thing. Period.”

But changing culture is easier said than done. Uber is being investigated by the U.S. Equal Employment Opportunity Commission following a complaint about gender discrimination. That followed last week’s exit of Uber’s HR chief, Liane Hornsey, who resigned after claims that she ignored allegations of racial discrimination. Adding to the fire, on Friday, it was reported that Uber’s chief operating officer, Barney Harford, had made allegedly insensitive comments about women and minorities.

Khosrowshahi responded to the steady drip of bad news on Monday by saying: “We take very seriously anything having to do with anyone, but especially with our senior officers. We’re not going to run a process through the press, we’re going to run a process the right way.”

When asked if Harford’s job is safe, Khosrowshahi was non-committal, saying “it’s too soon” to tell.

On the planned IPO:

Khosrowshahi has been vocal about plans to take Uber public in 2019, saying that the company is in a “good position” in terms of its profitability, excluding certain expenses, and margins. However, Uber hasn’t had a chief financial officer since 2015—a glaring hole for a company planning an IPO—and a loss of nearly $4.5 billion last year.

At Brainstorm Tech on Monday, Khosrowshahi said he doesn’t think Uber needs to be profitable before going public, but that there should be a very clear path to profitability.

“I don’t want to be dependent private, public, or any markets to fund the business expansion in front of us, so I look at cash before profits,” he said, referring to being cash-flow positive, a popular measure that indicates a company’s liquid assets are increasing, allowing it to settle debts and pay expenses. “But over a period of time, it is absolutely important for the business to be profitable.”

On self-driving cars:

Last week, Uber laid off nearly 100 of its self-driving car safety operators in Pittsburgh following a fatal crash in Tempe, Az., in March. The company is re-evaluating its autonomous car strategy, and it reportedly has plans to create 55 new positions called “mission specialists,” which will require more technical expertise than the eliminated positions, for autonomous vehicle testing.

At the conference on Monday, Khosrowshahi spoke about the importance of building autonomous vehicle technology in-house while also partnering with third-party companies. “I believe in the early days of development of self-driving technology, it’s important for us to guarantee access to that tech,” he said. “We will be completely open, however, to working with other self-driving tech partners.”

On e-bikes and scooters:

Uber recently acquired dockless e-bike service Jump Bikes (formerly known as Social Bicycles) for a reported $200 million. The purchase lets Uber expand into an urban mobility company, a catch-all phrase for many kinds of transportation.

Khosrowshahi re-emphasized that commitment on Monday, saying that travel within cities will change radically in the next five to 10 years. “It’s a huge opportunity,” he said about e-bikes and scooters.

On Uber’s global expansion:

It’s no secret that Uber has exited from some international markets. It sold its Russian, China and Southeast Asia businesses to local rivals while doubling down on its core markets. Earlier this year, Uber’s largest shareholder, Softbank, said the company should focus on regaining market share in the U.S. and growing in key European markets rather than putting resources into emerging markets.

Khosrowshahi has denied that Uber may exit Southeast Asia and India. And at Brainstorm Tech, he added more context about that strategy.

“We wanted to be in the geographies that we thought we could win in,” he said, adding that India, the Middle East, and Africa are key markets for Uber. “I don’t think, at this point, we’re spread too thin. We can not only win those markets, but we can also make bets on technologies like scooters and e-bikes.”

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Ex-Apple employee pleads not guilty in trade secret case

(Reuters) – A former Apple Inc employee pleaded not guilty on Monday after federal prosecutors filed an indictment accusing him of stealing trade secrets.

Federal officials on July 12 indicted Xiaolang Zhang on a single count of trade secret theft, alleging that Zhang had stolen a 25-page blueprint for a circuit board designed to be used in an autonomous vehicle, according to the indictment filed in U.S. District Court for the Northern District of California.

The formal indictment followed a filing by a Federal Bureau of Investigation agent on July 10 describing the charge and Zhang’s arrest at a Silicon Valley airport before boarding a flight to China.

Zhang pleaded not guilty at a hearing on Monday in San Jose. He had been provisionally appointed a public defender, but has retained his own lawyer, Daniel Olmos.

Olmos declined to comment on the case. A spokesman for the U.S. Attorney for the Northern District of California declined to comment beyond the indictment.

Reporting by Stephen Nellis

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