Wednesday, May 30, 2018

Corporate Apology Tour: Wells Fargo, Facebook and Uber


Recent commercials for Wells Fargo, Facebook and Uber attempted to wipe egg off each company's corporate face.  Wells Fargo promised to get back to their roots.

Wells Fargo’s problems took root more than a decade ago, when the bank started pushing employees to sell as many products as possible to customers.  Since then, Wells Fargo has discovered other issues with auto loans, mortgages, frozen funds and improperly closed accounts and has faced a number of other regulatory probes and litigation. 
In PEU like fashion greedy management wanted more and more at Wells Fargo, Facebook and Uber. 

Facebook's issues, meanwhile, have also been well publicized, ranging from the spread of fake news within its walls, the mammoth Cambridge Analytica scandal and questions over how Russian bots used the platform to manipulate democracy. 
Facebook also made promises after monetizing customer information:

"Facebook will do more to keep you safe and protect your privacy." Spam, clickbait, fake news and "data misuse" are all cited specifically as things that are going to change.
Uber had problems of its own.

At the start of 2017, a scathing memo exposed a toxic workplace where sexual harassment and discrimination was openly ignored (leading to the abrupt exit of its former chief executive, Travis Kalanick, along with several other executives). It also attempted to cover up a massive data breach affecting over 50 million users.

In addition, the firm faced issues over its license in London, had an internal spy unit exposed, and has been the subject of government investigations on both sides of the Atlantic, as well as repeatedly fighting lawsuits to limit the rights of its drivers.
Uber's ads promise to do better.  Warren Buffett offered $3 billion for a stake in Uber but a deal could not be finalized.  Buffett's capital allocation focus has much in common with private equity underwriters. 

The three ethically dodgy companies have spent over $60 million to "earn back trust" from customers and the public.  Widespread mea culpas bodes ill for leadership.  The ethical version would prevent the intentional harm, financial or personal, of employees and customers.  Greed is pervasive in our world.