Ten days after we reported that “Uber was imploding“, when the company’s Chief Business Officer resigned at the same time as the CEO announced a leave of absence, the “Uber collapse” was complete when Uber CEO Travis Kalanick, co-founder of the world’s most valuable private company, announced his resignation on Tuesday following an “investor revolt” over his catastrophic leadership.
“I love Uber more than anything in the world and at this difficult moment in my personal life I have accepted the investors’ request to step aside so that Uber can go back to building rather than be distracted with another fight,” Kalanick said in a statement first reported by the New York Times. His departure caps a tumultuous period for the world’s largest ride-services company, which revolutionized the taxi industry and transportation regulations globally with Kalanick at the helm.
While Kalanick, 40, had faced increased scrutiny in recent weeks following an investigation into the culture and workplace practices at a company he helped start in 2009, it was a chorus of demands for changes at the top from some of Uber’s biggest investors that ultimately forced Kalanick out, according to the NYT which first reported his resignation.
Venture capital firm Benchmark, whose partner Bill Gurley is one of Uber’s largest shareholders and sits on its board, as well as investors First Round Capital, Lowercase Capital, Menlo Ventures and Fidelity Investments, had all pressed Kalanick to quit. The VCs banded together in a bid to oust him, according to the WSJ. They sent a letter to Mr. Kalanick expressing their doubt about his ability to implement changes to the company as recommended by the law firm of former U.S. Attorney General Eric Holder following an investigation into workplace culture. The firm’s list of nearly 50 recommendations was endorsed by the board.
“This is a bold decision and a sign of his devotion and love for Uber,” said members of Uber’s board in a statement Tuesday. “By stepping away, he’s taking the time to heal from his personal tragedy while giving the company room to fully embrace this new chapter in Uber’s history.”
A second Uber spokesman said that Kalanick’s decision “was a surprise to everyone” according to Reuters, and comes after a lengthy investigation led by former U.S. Attorney General Eric Holder. Several months ago, Uber hired Holder to look into its culture and workplace practices after a female former employee publicly accused the company of what she described as brazen sexual harassment.
His departure exposes Uber’s leadership shortcomings and raises the question of who can lead a company whose defiantly competitive startup culture and leadership style reflected the pugnacious chief executive.
Privately held Uber has been valued at $ 68 billion, the highest private company valuation on record, and the company “embodied many of Kalanick’s aggressive and pugnacious personality traits.”
After the release of recommendations stemming from the Holder investigation, which called for increased controls and oversight at the company, Kalanick said last week he would take a leave of absence for an undetermined period. He said he needed space to grieve the death of his mother, who died recently in a boating accident in which his father was also seriously injured, and to work on his leadership skills.
Gurley, one of Kalanick’s closest confidants, praised the CEO on Twitter, after calling for his resignation.
“There will be many pages in the history books devoted to @travisk – very few entrepreneurs have had such a lasting impact on the world,” Gurley wrote.
Just over a week later, he forced him to resign.
As the WSJ notes, the next CEO will face a nearly unprecedented set of challenges, including restoring rattled employees’ faith in the company, as well a business that lost at least $ 2.8 billion last year and another $ 708 million in this year’s first quarter, due in large part to cash incentives necessary to keep drivers driving. Uber is also tasked with a tremendous shift in culture from ?the ?one ?crafted? under Mr. Kalanick that often operated in a legal gray area, including pushing in cities where its service was barred, and ?rewarding high performers despite misbehavior.
An incomplete list of te various scandals that plagued Uber over the past 6 months is shown below.
- Another tale of sexism and unacceptable workplace behavior in Silicon Valley company has emerged. This time it’s at Uber, according to an explosive blog post published on Sunday by a former company engineer named Susan Fowler Riggetti.
- Uber’s newly-hired VP of engineering Amit Singhal was asked to, and did, resign on Monday after the company learned from Recode that he was accused of sexual harassment shortly before leaving Google a year ago. Here’s more on the difficult position of former employers in this case.
- A video showing Uber CEO Travis Kalanick rudely arguing with a long-time driver at the end of his ride was published by Bloomberg. “I need leadership help,” Kalanick said in an apology he issued shortly after.
- Susan Fowler Rigetti, the former Uber engineer who wrote of discrimination, said she’s hired attorneys after a new law firm began to investigate her claims. Uber confirmed it has hired Perkins Coie, which reports to former A.G. Eric Holder, who’s leading the investigation.
- Uber said on Thursday that it will finally apply for a DMV permit to test self-driving cars in California after its cars’ registrations were revoked in December because it refused to get the permit.
- Charlie Miller, one of the two famous car hackers who joined Uber’s Advanced Technology Center in August 2015, announced he’s leaving the company.
- The New York Times uncovered a secret Uber program called Greyball, through which the company uses software and data to evade law enforcement in cities.
- Keala Lusk, a former Uber engineer, published a blog post detailing how her female manager mistreated her, signaling that the company’s problematic culture isn’t limited to the men who work there.
- Ed Baker, Uber’s head of product and growth, resigned. Though the reason is unclear, he was allegedly seen kissing another employee three years ago, which was anonymously communicated to board member Arianna Huffington, according to Recode.
- A report outlines a trip by a group of Uber employees to a Seoul karaoke-escort bar in 2014, which included company CEO Travis Kalanick and his girlfriend, Gabi Holzwarth. After arriving, several male employees picked escorts to sit with, and went to sing karaoke. Uncomfortable, a female marketing manager, who was part of the group, left after a couple of minutes, while Holzwarth and Kalanick left after an hour.
- California regulators have recommended that Uber be fined $ 1.13 million for failing to investigate and/or suspend drivers who are reported by a passenger to be intoxicated. The state requires ride-hailing companies to have a zero-tolerance policy for driving under the influence of alcohol or drugs.
- A new report says Uber used a secret program dubbed “Hell’ to track Lyft drivers to see if they were driving for both ride-hailing services and otherwise stifle competition. Only a small group of Uber employees, including CEO Travis Kalanick, knew about the program, according to a story in The Information, which was based on an anonymous source who was not authorized to speak publicly.
- Waymo sued Uber in civil court, claiming that Uber was using trade secrets stolen from Google to develop Uber’s self-driving vehicles.
- Uber fires Anthony Levandowski, a star engineer brought in to lead the company’s self-driving automobile efforts who was accused of stealing trade secrets when he left a job at Google.
- Uber said Tuesday that it had made a mistake in the way it calculated its commissions, at a cost of tens of millions of dollars to its New York drivers, and the company vowed to correct the practice and make the drivers whole for the lost earnings.
- Uber fires over 20 staff following the release of a report about sexual harrassment in the workplace.
- Reports emerge that Uber CEO Travis Kalanick fired off a bizarre email in 2013 to hundreds of employees where he listed the conditions under which they could have sex with each other at a company outing in Miami
It was not initially clear whether Kalanick’s departure will boost or depress Uber’s valuation.
source http://capitalisthq.com/uber-ceo-kalanick-quits-following-investor-revolt/
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