With a Single, Insulting Tweet, Uber's CEO Just Destroyed Months of Hard Work

I’m a fan of Uber CEO Dara Khosrowshahi. In a few months, he’s worked hard to transform Uber’s image from a company known for bad behavior to one that is eager to learn from its mistakes and play nice with others.

But a recent tweet from Khosrowshahi threatens to destroy the image he’s worked so hard to establish. In response to a critical study by MIT’s Center for Energy and Environmental Policy Research (CEEPR), Khosrowshahi mocked the famed research university, tweeting that: “MIT = Mathematically Incompetent Theories (at least as it pertains to ride-sharing).”

Ouch.

The fact is, Khosrowshahi may be correct in his assertion that the study is basically flawed. But the mocking tone of this tweet demonstrates a lack of emotional intelligence. Before I explain why, let’s take a closer look at the context.

The (potential) problem with MIT’s study

It all began when MIT recently published a study that shared some alarming numbers in the ridesharing industry.

The study, entitled The Economics of Ride-Hailing: Driver Revenue, Expenses and Taxes, was carried out by the MIT Center for Energy and Environmental Policy Research. The team paired survey data of more than 1,100 drivers working for Uber and Lyft with information regarding the current costs of operating a vehicle (e.g., fuel, insurance, maintenance, and repairs) to help determine driver wages per hour.

Initially, researchers found that:

  • median profit from driving is $3.37/hour before taxes;
  • 74% of drivers earn less than the minimum wage in their state; and, 
  • 30% of drivers are actually losing money once vehicle expenses are included.

Uber was quick to respond to these claims.

Jonathan Hall, the company’s chief economist, published a lengthy and thoughtful criticism of the study on Medium. Hall believes that drivers’ hourly earnings should be listed as much higher. He estimates the problem comes down to the authors’ methodology, which he believes demonstrates inconsistent logic and a possible misinterpretation of the data. According to Hall, this error led to findings that “[differ] markedly from previous academic studies on the topic of driver earnings.”

Actually, Hall makes some good points. In fact, the MIT study’s lead author, Stephen Zoepf, admitted as much in a statement he made to Reuters via email. “I can see how the question on revenue might have been interpreted differently by respondents,” wrote Zoepf. “I’m re-running the analysis this weekend using Uber’s more optimistic assumptions and should have new results and a public response acknowledging the discrepancy by Monday.”

What emotional intelligence has to do with it

I praise Hall’s rebuttal as not only thoughtful, but also respectful. Hall strikes a conciliatory tone when he shares that his team has “reached out to the paper’s authors to share [their] concerns and to suggest ways we might work together to refine their approach.” Hall also acknowledges he has no issue with how the MIT researchers estimate the costs of operating a car; in doing so, he implies there may be problems that need to be addressed.

In contrast, Khosrowshahi’s sarcastic, attacking tweet is not only disrespectful, it shows a lack of ability to benefit from criticism. It brings back memories of “the old Uber,” which was marked by hubris and a “fight-picking” mentality.

To be clear, the researchers only released a brief on the study; the full results haven’t yet been published. But the questions being risen are by no means new. For example, are ridesharing drivers grossly underestimating their profits, failing to factor in costs for additional fuel, maintenance, and repairs for their cars? How will tax and insurance laws need to change to accommodate the ridesharing economy? These are questions that Uber will eventually be forced to answer.

Of course, nobody’s perfect, and Khosrowshahi will continue to make his share of mistakes. But while I continue to applaud his efforts to improve Uber’s culture and image, this tweet reminds us that there is still a long, difficult road ahead.

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Paul Rosen