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Uber Settles Federal Investigation Into Workplace Culture

SAN FRANCISCO — In 2017, a former Uber employee wrote a public essay describing how the ride-hailing company had permitted sexual harassment to fester at the workplace.

The revelations led to an outcry over Uber’s toxic culture. Federal authorities and others began investigations into the company. More than 20 employees were later fired over their part in the behavior. And the disclosures raised questions about Uber’s growth-at-all-costs mentality, resulting in the ouster of Travis Kalanick, a co-founder and then the chief executive.

On Wednesday, Uber resolved one investigation into its workplace culture. The Equal Employment Opportunity Commission, which has been examining the company since 2017, said it had “found reasonable cause to believe that Uber permitted a culture of sexual harassment and retaliation against individuals who complained about such harassment.”

Uber said it had agreed to a settlement with the agency by establishing a $4.4 million fund to pay current and former employees who were sexually harassed at work. It also agreed to three years of monitoring by a former agency commissioner to ensure that it changes its practices.

“This agreement will hopefully empower women in technology to speak up against sexism in the workplace knowing that their voices can yield meaningful change,” ƒe said in a statement.

Tony West, Uber’s chief legal officer, said the company had “worked hard to ensure that all employees can thrive at Uber by putting fairness and accountability at the heart of who we are and what we do” and was working with the commission to improve those efforts.

The settlement showed how Uber was addressing the repercussions of its internal conduct more than two years after the envelope-pushing behavior of its executives and employees first came to light.

The company remains under investigation by the Justice Department over a tool it created to help it evade scrutiny by law enforcement authorities. It is also the subject of a consent decree with the Federal Trade Commission over its privacy practices until 2038. Last month, the authorities in London said they would not extend the company’s license to operate there because Uber did not meet the “fit and proper” standard needed to hold a taxi license.

Dara Khosrowshahi, the chief executive, pledged to turn around Uber when he joined the company in late 2017, saying that his motto was “do the right thing.” He then replaced much of the senior leadership, eliminated a mandatory arbitration provision for sexual assault and harassment claims against the company, and said that executive compensation would be tied to whether or not Uber reached its goals for hiring a more diverse staff.

Uber has also tried to be more transparent about its track record on safety and harassment. This month, it released its first report documenting the number of sexual assaults that occurred in the United States during Uber rides. Uber said it had counted 3,045 sexual assaults in 2018, which it said represented a small fraction of its rides.

Uber’s workplace culture first became an issue in February 2017 when a former engineer, Susan Fowler, detailed how her complaints about sexual harassment at the company were brushed aside because the man who had harassed her was considered a high performer. Ms. Fowler now works as an editor at The New York Times.

“The tech industry, among others, has often ignored allegations of sexual harassment when an accused harasser is seen as more valuable to the company than the accuser,” said William Tamayo, the San Francisco district director of the employment commission.

In the aftermath, Mr. Kalanick faced scrutiny for putting growth ahead of how Uber’s employees were treated. Uber was also found to have engaged in other dubious tactics to protect its business, including using data collected from its app and other techniques to identify and sidestep law enforcement, a scheme known as “Greyball.”

As part of the settlement announced on Wednesday, Uber employees who worked at the company after January 2014 will be eligible to submit claims to the commission.

Uber said it would also develop tools to help it respond proactively to harassment accusations. The company said it would begin identifying employees who have been the subject of more than one harassment complaint, and identify managers who don’t respond quickly when their employees raise complaints of harassment.

A spokeswoman for the commission said it was pleased with the $4.4 million settlement, which is a tiny amount for Uber. The company’s revenue totaled $3.8 billion in its most recent quarter. In October, Intel paid $5 million as part of a settlement with the Labor Department over allegations of pay discrimination.

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Uber in Talks to Sell Its Food-Delivery Business in India

SAN FRANCISCO — Uber is in advanced discussions to sell its food-delivery business in India, according to two people with knowledge of the plans, as the company moves to stem its losses.

The ride-hailing company is nearing a deal to sell its Uber Eats service in India to Zomato, an Indian food-delivery service, said the people, who spoke on condition of anonymity because they were not authorized to do so publicly. The sale could be announced as early as this week, they said.

A spokesman for Uber declined to comment. The talks were earlier reported by TechCrunch, which said a deal would value the India business of Uber Eats at $400 million.

Dara Khosrowshahi, Uber’s chief executive, has been trying to pare back money-losing businesses to prove to investors that the company can turn a profit. Investors have agitated both in public and behind the scenes for Uber to clean up its balance sheet since it went public earlier this year.

Uber’s initial public offering in May was a disappointment, with the company’s shares immediately plunging as investors questioned how much money the ride-hailing service loses. That event marked a turn in sentiment around high-profile-but-unprofitable tech start-ups, many of which had burned cash for years in the pursuit of growth. WeWork, another highly valued start-up, later shelved its plans for an I.P.O. as private investors cut the company’s valuation to a fraction of its former worth.

Investors have recently homed in on several issues at Uber, according to two people briefed on the conversations. Those include continued regulatory challenges around the world — most recently, transportation authorities said they would not extend Uber’s taxi license in London, one of its biggest markets — and ballooning expenditures.

Some investors have privately grumbled that Uber also paid too much for Careem, a Dubai-based ride-hailing and delivery company that Uber announced this spring it would acquire for $3.1 billion.

According to two people familiar with the matter, investors have also privately complained to Mr. Khosrowshahi about the expense of its Advanced Technologies Group, which develops self-driving vehicles. No decisions have been made about the unit, these people said, which has more than 1,000 full-time employees.

While Uber Eats has been a bright spot for revenue growth, the company has offered subsidies and free promotional offerings to gain new users, which has been expensive. In a conference call with investors last month, Mr. Khosrowshahi said his plan for Uber Eats was to take first or second place in every city it operates.

“If we can’t make it to that level, we’ll look to dispose or we’ll get out of the market,” he said at the time.

In India particularly, Uber Eats has struggled to sign up restaurants, diners and delivery agents in a brutally competitive market where Zomato and other delivery start-ups like Swiggy are well established. Uber has had to offer heavy incentives to lure customers there.

In September, Uber also announced that it was pulling its Eats business out of South Korea, where the company faced stiff competition from local start-ups.

Mr. Khosrowshahi has previously retreated in ride-hailing in Southeast Asia, where the company faces difficulties competing. In 2017, under then-chief executive Travis Kalanick, Uber pulled out of China, where the company was burning billions of dollars. That same year, Uber largely withdrew from Russia.

Mike Isaac reported from San Francisco and Katie Benner from Washington. Vindu Goel contributed reporting from India.