Uber is now valued by investors at more than $40 billion after the most recent round of financing, largely on the promise of rapid growth. (Reuters Photo)
Travis Kalanick did not build Uber into a global force by playing nice.
Kalanick, the chief executive of Uber, a ride-hailing service, aggressively pushed the startup into new markets, taking combative stances toward regulators and the powerful taxi industry - and the news media.
But Kalanick and his team have begun to trade the art of Sun Tzu for a full-throated charm offensive.
In January, Kalanick delivered a speech in Munich, Germany, filled with talk about compromising with regulators he once sparred with, wanting to "make 2015 the year where we establish partnerships with new European cities." The company also released two rosy, data-heavy reports about the service's advantages on cities, drivers and communities. And on Friday, in an uncommon display of humility, Uber pledged to strengthen its user data privacy practices, acknowledging that "we haven't always gotten it right."
The striking reversal in tone comes at a crucial time for Uber, which once somewhat prided itself on its antagonistic attitude. The company is now valued by investors at more than $40 billion after the most recent round of financing, largely on the promise of rapid growth. To build a business worthy of that valuation, though, the company must prove to investors that it can continue its breakneck pace of expansion in markets abroad at the same rate it has domestically.
And to reach those targets, the company will almost certainly need better relations with governments around the world.
"A company like Uber, whose culture is defined by its willingness to go up against the established regulatory regime, is going to run into this problem of perception sooner or later," said Derek van Bever, a director of the Forum for Growth and Innovation at Harvard Business School.
One large part of Uber's new strategy is to let the data do the talking.
In August, the company hired David Plouffe, the longtime confidant of President Barack Obama, as Uber's senior vice president for policy and strategy. Plouffe leaned heavily on data to aim messages at voters during Obama's campaign, and has already begun to use much the same strategy at Uber.
Uber's research team approached Professor Alan B. Krueger, a Princeton economist who previously served as Obama's chief economic adviser, to conduct a joint survey of more than 600 of the company's drivers.
"I told Uber that I would take this on as long as I had full discretion over the content of the report," Krueger said. "They agreed."
The study found that of the 20 markets surveyed, the average driver wages were higher than taxi and limousine driver wage estimates from the Bureau of Labor Statistics. Uber added close to 40,000 drivers to its ranks in the United States in December, the report said, and nearly 80 percent of its drivers were happy driving for the company.
Plouffe was eager to trumpet the study's claims.
"Uber is growing every month, and is becoming a bigger part of not just cities and transportation systems, but of the whole economy," he said in a recent interview. "We're likely to be one of the biggest job-producing companies for the economy over the coming years."
In another joint study, with Mothers Against Drunk Driving, an advocacy group otherwise known as MADD, Plouffe promoted Uber's potential influence on drunken driving in states in which it operates. The study found that about 4 in 5 respondents said they were less likely to drive themselves home after a night of drinking because of ride-hailing applications like Uber.
"When David came on, he was very passionate and deep in this issue and wants to dig into this even more," said Amy George, senior vice president for marketing at MADD. She said Plouffe wanted to examine Uber's impact on rural markets as well, where there are often higher incidences of drunken driving than in urban markets.
It will most likely take more than a couple of reports, though, to change the company's overall reputation.
Inside the company, some employees say, morale was low late last year, after BuzzFeed News reported that a senior Uber executive had suggested that the company commission "opposition research" on reporters. Competitors like Lyft seized on the news, and Uber was left publicly playing defense.
As scrutiny intensified, even Capitol Hill piled on. Sen. Al Franken, D-Minn., questioned Uber's privacy practices after it was reported that an Uber employee had gained access to the ride history of a BuzzFeed journalist.
Uber followed up with a privacy audit, conducted by an outside law firm, and a commitment to improve its practices.
Employees inside Uber, and several people with ties to Uber, all of whom spoke only on the condition of anonymity to protect their connection to the company, expressed concern that the negative attention could hurt employee recruiting and retention.
"It's not fun for Uber's employees, who are bright and mostly wonderful, to have to keep explaining to their friends why they work for" an organization that would act that way, one person close to the company said.
Some also noted that Uber had partnerships with image-conscious companies like Spotify, United Airlines and Starbucks, and that future partnerships could be at risk if its reputation did not improve.
Kalanick seems to be getting the message. As he indicated in Munich, by working with, instead of against, regulators in Europe and the Asia Pacific region, the company stands a much better chance of sustaining its rapid expansion.
"Unless they examine the costs as well as the rewards of this kind of reflexive pugnacious stance, they run the risk of having the carpet pulled out from underneath them, regardless of the quality of their service," van Bever, the Harvard Business School professor, said.