A pedestrian checks a mobile device in front of the Uber Technologies Inc. headquarters building in San Francisco, California, U.S. (Photographer: David Paul Morris/Bloomberg)

Indian Startups’ Uber Problem

Uber’s trailblazing rise has also left it battling a toxic work culture, which led to the exit of the ride-hailing app’s founder Travis Kalanick and other senior executives.

Yet, unhealthy work environment, human resource fiascos and sexism are not limited to Uber. Indian startups face similar issues as well. Only this month, Arunabh Kumar, chief executive officer at web entertainment channel The Viral Fever (TVF), stepped down over allegations of molestation.

While established companies too grapple with employee-related challenges, it’s the startups that are more at risk in their initial phase. When starting up, HR policies and work culture are not a priority and a lot of things go on the back-burner in pursuit of growth, said Anuj Roy, senior partner at executive search firm Transearch, which lists companies like Aditya Birla Group, PepsiCo and Microsoft Inc. as its clients. “In one of the Indian unicorns, the work culture is so aggressive that a lot of people move out because of that.”

Uber’s own employee woes could be partly blamed on its hunger for fast growth. In a little over seven years, it’s grown from a startup to the world most valued privately held tech company at $69 billion. It has raised $15 billion since its inception, expanded to more than 500 cities in the world, including India, earned $20 billion in bookings last year and has over 14,000 employees. Kalanick is said to have pushed aggressive corporate values like “Always Be Hustlin’,” “Meritocracy and Toe-Stepping” and “Principled Confrontation”, according to Bloomberg. So when the company courted one controversy after another – former engineer Susan Fowler’s allegations of sexual harassment against her manager to an executive who allegedly had discs of Google’s driverless car project – investors had had enough.

At Uber, “somewhere the message got out that it is okay to build a toxic culture”, said Sairee Chahal, founder and CEO of Sheroes, an online network for working women. Culture is at the heart of building a successful business and addressing issues like sexual harassment and discrimination cannot be ignored as founders build an institution, she said.

It is true that founders undergo a lot of pressure to make it big, but it’s important for them to take action before the law does.
Sairee Chahal, Founder and CEO, Sheroes

That’s what happened at ScoopWhoop. A former employee at the digital media startup recently filed a police complaint in New Delhi that she was subjected to inappropriate comments and lewd remarks by co-founder Suparn Pandey.

TVF and ScoopWhoop didn’t reply to BloombergQuint’s emails. Kumar and Pandey are yet to respond to queries. TVF had termed the allegations as false in an official statement, according to a Times of India report in April. ScoopWhoop’s chief executive officer Sattvik Mishra said in an internal mail to employees that the former woman executive never brought her complaints to the notice of the management, Business Standard had reported.

The Law

The government’s 2013 law on sexual harassment at the workplace mandates every company with a workforce of more than 10 to have a framework to deal with complaints of women employees. It ranges from educating staff on what amounts to sexual harassment to forming special committees to comply with the Supreme Court’s guidelines. Yet, implementation remains a check-box formality at most companies, said Vishal Kedia, founder of Complykaro Services, which helps companies comply with the top court’s guidelines.

In a survey of 600 companies including startups last October, Complykaro in association with The Institute of Company Secretaries of India, found that nearly three-quarters of the firms believe that they comply with the rules. In practice, less than 2 percent were fully compliant, the survey found.

“While the law is in place, awareness, employee sensitisation, and education is the biggest impediment to make it work to empower both men and women,” Kedia said.

The incidents at TVF and ScoopWhoop underscore what he says. In both the cases, the women employees went public with their allegations only after stepping down from these companies.

A month after Fowler came out with a blog alleging sexual harassment at Uber in February, the anonymous former employee of TVF too wrote a blog post, calling herself the “Indian Fowler”. She accused Kumar of “abuse and molestation” for nearly two years. More women followed with similar allegations.

And the problem is far more rampant than the two Indian cases would suggest. Such things happen across industries, but only issues specific to high-profile CEOs come to light, said Mohan Kumar, partner at investment firm Norwest Venture Partners. There are other small cases which never get addressed, he said.

Even at larger established startups, employees are not aware of what may be construed as sexual harassment and women do not know where to take their complaints or who are the members of internal committees. In several cases, even the committee members are not aware what their role entails, said Kedia adding that there have been zero awareness programmes.

Flipkart and PepperFry, in response to BloombergQuint’s emails, said they have set up panels and processes in accordance with the law. Flipkart said it will also launch an online training programme to be conducted twice a year to sensitise employees about sexual harassment or discrimination at the workplace. Online furniture retailer Pepperfry too organises regular meetings and workshops to educate employees and familiarise them with redressal process.

While startups realise the importance of setting up HR processes early on, Kumar of Norwest Venture Partners said that building a culture is the responsibility of the board. “The board has to read it to the CEO and the top management and make them accountable to set the culture right from the beginning.”

If such issues are ignored, they percolate down the system. Even at Uber, the board was late in putting an end to it.

“(But) if the issue has reached the board, the culture has already been spoilt,” according to Amit Kumar, co-founder of peer-to-peer and property listing portal NoBroker, which employees nearly 300 people. “It is important to notice the minute things and act from day one,” he said.

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