Uber boss forced to re­sign

In­vestors ex­erted pres­sure at a crit­i­cal stage for the com­pany

The Star Early Edition - - BUSINESS REPORT - Tom Kr­isher

TRAVIS Kalan­ick, the com­bat­ive and troubled chief ex­ec­u­tive of ride-hail­ing giant Uber, has re­signed under pres­sure from in­vestors at a piv­otal time for the com­pany.

Uber’s board con­firmed the move early yes­ter­day, say­ing that Kalan­ick is tak­ing time to heal from the death of his mother in a boat­ing ac­ci­dent, “while giv­ing the com­pany room to fully em­brace this new chap­ter in Uber’s history”. He will re­main on the Uber Tech­nolo­gies board.

The move comes as Uber, the world’s largest ride-hail­ing com­pany, was hav­ing trou­ble mor­ph­ing from a free-wheel­ing start-up into a ma­ture com­pany that can staunch losses and post con­sis­tent prof­its. Af­ter eight years of phe­nom­e­nal growth by up­end­ing the taxi busi­ness, Uber had reached a point where the cul­ture that cre­ated the com­pany had be­come an al­ba­tross that threat­ened to kill it.

In a state­ment, the 40-year-old co­founder said his res­ig­na­tion would help Uber go back to build­ing “rather than be dis­tracted with an­other fight”, an ap­par­ent ref­er­ence to ef­forts on the board to oust him.

It was un­clear who would re­place Kalan­ick.

His res­ig­na­tion came af­ter a se­ries of costly mis­steps under Kalan­ick that dam­aged Uber’s rep­u­ta­tion, in­clud­ing rev­e­la­tions of sex­ual ha­rass­ment in its of­fices, al­le­ga­tions of trade se­crets theft and a fed­eral in­ves­ti­ga­tion into ef­forts to mis­lead lo­cal gov­ern­ment reg­u­la­tors.

On Tues­day, the com­pany em­barked on a 180-day pro­gramme to change its im­age by al­low­ing riders to give driv­ers tips through the Uber app, some­thing Kalan­ick had re­sisted. Driv­ers have said that Kalan­ick didn’t value their labour, even though it was the heart of the San Fran­cisco-based com­pany.

Uber’s board said that Kalan­ick had “al­ways put Uber first.”

But under Kalan­ick, the com­pany de­vel­oped a rep­u­ta­tion for ruth­less tac­tics that have oc­ca­sion­ally ou­traged gov­ern­ment reg­u­la­tors, driv­ers, riders and em­ploy­ees. The com­pany of­ten flouted city reg­u­la­tions for taxi com­pa­nies with a cul­ture that en­cour­aged “prin­ci­pled con­fronta­tion”.

The com­pany’s hard-charg­ing style has led to le­gal trou­ble. The US Jus­tice De­part­ment is in­ves­ti­gat­ing Uber’s past us­age of fraud­u­lent soft­ware de­signed to thwart lo­cal gov­ern­ment reg­u­la­tors who wanted to check on whether Uber was car­ry­ing pas­sen­gers with­out per­mis­sion.

A key step to­wards Kalan­ick’s down­fall came in Fe­bru­ary, when for­mer Uber en­gi­neer Su­san Fowler’s post caught the board’s at­ten­tion and brought out­side in­ves­ti­ga­tions that led to the fir­ing of 20 peo­ple, in­clud­ing some man­agers. For­mer at­tor­ney-gen­eral Eric Holder con­ducted one of the probes, find­ing that the male-dom­i­nated Uber didn’t have the most ba­sic poli­cies to pro­tect work­ers from ha­rass­ment.

Vi­cious tem­per

Also, Kalan­ick lost his tem­per in an ar­gu­ment with an Uber driver who was com­plain­ing about pay. The pro­fan­ity-laced con­fronta­tion was caught on a video that sur­faced in Fe­bru­ary. Af­ter­wards, Kalan­ick said he needed man­age­ment help and had to grow up. The com­pany be­gan search­ing for a chief op­er­at­ing of­fi­cer.

In March, board mem­ber Ari­anna Huff­in­g­ton ex­pressed con­fi­dence that Kalan­ick would evolve into a bet­ter leader. But Huff­in­g­ton, a founder of Huff­in­g­ton Post, sug­gested time might be run­ning out.

He’s a “scrappy en­tre­pre­neur”, she said dur­ing the call, but one who needed to bring “changes in him­self and in the way he leads”.

Dur­ing the past year, sev­eral se­nior man­agers left the com­pany, in­clud­ing the pres­i­dent and chief fi­nan­cial of­fi­cer. Out­side ex­perts said the only way to change Uber’s cul­ture was for Kalan­ick to step aside. But Uber’s own­er­ship and vot­ing struc­ture made it dif­fi­cult to oust him.

PHOTO: EPA

Travis Kalan­ick, founder and chief ex­ec­u­tive of Uber, de­liv­ers a speech at the In­sti­tute of Direc­tors Con­ven­tion at the Royal Al­bert Hall in cen­tral Lon­don. He has re­signed under pres­sure from in­vestors.

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