Brouhaha at Uber grows uglier as CEO hunt drags on
Lyft takes advantage of rival’s meltdown
Is this Uber, the ridehailing company — or Uber, the primetime melodrama?
Lawsuits, board infighting and an inability to land its next CEO have created a swirl of corporate intrigue rivaled in its intensity only by its former break- neck growth. Behind the bitter public spats over who will run and control the company lies this possibility: Investors and its pugilistic ex- CEO may be fighting over a shadow of its former self.
As Uber grapples with its many challenges, which started to spiral early this year with an ex- employee’s charges of a sexist and chaotic work environment, rival Lyft is making significant inroads in several U. S. cities, according to three separate surveys of consumers’ digital card receipts.
The value of its privately held shares has dropped. And Uber has relinquished ambitious plans to expand in one huge market— Russia — just as it wages a distracting legal fight over whether it stole rival Google’s ride- hailing technology.
“Every one of these are pretty profound dramas in and of themselves, ( but) the simultaneity of them is unparalleled,” says Jeffrey Sonnenfeld, senior associate dean for leadership studies at the Yale School of Management.
Combined, they indicate an initial public offering, an essential part of the next CEO’s to- do list, is unlikely to live up to the $ 70 billion valuation deeppocketed investors have assigned it.
“It’s been way overvalued and drinking its own Kool- Aid, and now there is just no leadership,” says Sonnenfeld.
Many anticipate that Uber will reveal its CEO choice in the coming weeks, closing the latest C- suite vacancy that already counted a missing CFO and chief operating officer. The new top executive would replace co- founder Travis Kalanick, who resigned in June under pressure from a group of investors including Benchmark Capital after a brand- bruising several months that resulted in a sweeping set of recommendations led by former attorney general Eric Holder.
Kalanick’s replacement is likely to possess the leadership chops that Kalanick admitted to lacking. Former General Electric CEO Jeff Immelt is a front- runner, reported tech website Recode, which cited unnamed sources. Uber and GE representatives declined to comment.
Hewlett Packard Enterprise CEOMeg Whitman, previously tipped as a possibility, has said she’s not interested.
Technically, the company now is being run by a 14- member leadership team. But that group is down a member after Uber’s first employee, one- time CEO Ryan Graves, said he would step down as senior vice president of global operations in September to focus on his role as a board director.
Complicating matters further is the role of Kalanick, who has retained a loyal following among some employees as well as control of some board seats. Cofounder Garrett Camp has knocked down the rumor Kalanick is still hoping to engineer a Steve Jobs- like comeback.
Benchmark, one of the company’s largest investors with a stake worth around $ 8 billion, is seeking to lessen his influence on the board.
In an unusual twist, the venture capital firm sued Kalanick, claiming he created additional seats on Uber’s board to “increase his power over Uber for his own selfish ends” and misled on a number of scandals that later became public, including the legal dispute with Google self- driving car unitWaymo.
Kalanick fired back last week with a court filing contending that Benchmark was executing “a public and personal attack” that launched mere weeks after a May boating accident killed his mother and injured his father.
In its core U. S. market, Uber still rings up the lion’s share of ride- hails and continues to siphon fresh business from would- be taxi riders. Yet smaller rival Lyft is making inroads.
Overall, Lyft’s market share was 22.9% in July, up from 15.2% a year ago, according to Second Measure, which sells anonymized data culled from about 3% of U. S. credit cards.