Wheels come off for CEO as Uber lays down arms
UBER Technologies CEO Travis Kalanick plans a leave of absence — without setting a return date. The company will be run by a management committee as it tries to navigate a wave of scandals.
On Kalanick’s return, Uber will strip him of some duties and appoint an independent chair to limit his influence, according to an advance copy of a report prepared for the board.
At a staff meeting on Tuesday, the company revealed the results of a probe by Eric Holder, the former US attorney-general whom Uber hired to investigate allegations of harassment, discrimination and an aggressive culture.
The 47 recommendations include creating a board oversight committee, reducing alcohol use at work events, and prohibiting intimate relationships between employees and their bosses.
The board will diminish Kalanick’s role once he returns by giving some of the CEO’s responsibilities to a chief operating officer — a position Uber has been recruiting for but has yet to fill. This person would “focus on day-to-day operations, culture and institutions within Uber”, the report said.
In an e-mail to staff, Kalanick wrote: “The ultimate responsibility, for where we’ve gotten and how we’ve gotten here, rests on my shoulders. For Uber 2.0 to succeed, there is nothing more important than dedicating my time to building out the leadership team. But . . . I also need to work on Travis 2.0 to become the leader that this company needs and that you deserve.”
Uber, which has a workforce of more than 140 000 people, recently lost or removed much of its management team as scandal after scandal emerged. Last week, however, it hired two women to fill senior positions, including Wan Ling Martello of Nestle.
Despite the turmoil, Uber’s business is growing. First-quarter revenue increased to $3.4billion (about R43.7-billion), while losses narrowed — though they remain substantial at $708million.
But Uber’s internal strife could help its competitors.
Holder interviewed current and former employees as part of a 14-week probe. A separate examination by law firm Perkins Coie is reviewing 215 human-resources claims. More than 20 people have been fired as a result of that inquiry. WEAPONISER: Uber CEO Travis Kalanick at the Indian Institute of Technology in Mumbai in January 2016
Cindy Schipani, a professor at the University of Michigan’s business school, said: “What it really comes down to in my mind is having people in charge who have integrity. This is not rocket science to avoid sexual harassment — that’s about just treating people with respect.”
The crisis was sparked by a February 19 blog post by former Uber software engineer Susan Fowler. She alleged that her former manager propositioned her for sex and Uber’s HR department told her it wouldn’t punish him because he was a top performer. Fowler also chronicled the daily indignities women faced at the start-up.
Only 15% of tech workers at Uber are women.
Her blog ignited an uproar throughout the tech industry. Many women shared their own horror stories, and companies throughout Silicon Valley reexamined their diversity practices. But at Uber, Kalanick resisted attempts to prioritise diversity hiring initiatives.
The board-approved changes could offer a path to make Uber more hospitable for women and minorities.
The company intends to raise the profile of the head of diversity, adjust executive compensation to incentivise good behaviour, institute mandatory leadership training and establish an employee diversity advisory board.
Holder also investigated a trip to a Korean karaoke bar in 2014 that was the subject of an HR complaint and the mishandling of a 2014 rape case in India.
Several of Uber’s planned changes are symbolic. For example, a conference room known as the War Room will be renamed the Peace Room.
The company also plans to scrap many of its cultural values, notably: “Always Be Hustlin’, Meritocracy and Toe-Stepping, and Principled Confrontation,” which the Holder report said was “used to justify poor behaviour”.
Arianna Huffington, an Uber board member, said: “Many of Uber’s 14 cultural values, while well-intended, had been allowed to be weaponised.”
Uber is looking to improve its HR practices and life for employees, including flexible hours, clearer guidelines for attaining promotions, a revised performance review process and earlier on-site dinners to take into account employees who have families.
Uber will also get stricter guidelines for what’s acceptable in the office. One recommendation is: “Uber should consider limiting the budget available to managers for alcohol purchases.”
While on leave, Kalanick will also cope with the death of his mother which, he said, had made him realise “that people are more important than work”.
Uber has a long road ahead. The CEO is tied to some of the company’s biggest scandals and is central to the company’s culture.
As co-founder, Kalanick moulded the place in his image. He also helped craft the values the company now plans to excise. — Bloomberg
Kalanick helped craft the values the company now plans to excise