Silicon Valley grapples with departure of Uber CEO
SAN FRANCISCO — As word spread Wednesday of Travis Kalanick’s sudden departure from the helm at troubled ride-hailing startup Uber, Silicon Valley analysts all tried to make sense of what is viewed as one of the most startling developments to come out of the tech world in recent years.
“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,” Mr. Kalanick said in a statement as the company he cofounded eight years ago tries to clean up its act.
Now Uber is seeking a strong manager who can repair a broken image, juggle multiple lawsuits and government investigations, develop and nurture a new corporate culture and lead a successful IPO.
Mr. Kalanick’s resignation comes at a tumultuous time for the San Franciscobased company. A week ago, amid internal investigations into a corporate culture that critics say was laced with incidents of sexual harassment and bullying, the CEO said he’d be taking a leave of absence from the $70 billion company he founded. Now, after his surprising response to a letter signed by several of Uber’s shareholders, Mr. Kalanick is out — or almost out, since he’ll remain as a member of the board and one of the company’s largest shareholders.
Mr. Kalanick also continues to mourn the sudden death of his mother, who was killed in a boating accident last month that also injured his father.
In a statement, the board of directors praised Mr. Kalanick’s decision.
“Travis has always put Uber first. This is a bold decision and a sign of his devotion and love for Uber,” the board said. “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.”
Mr. Kalanick’s resignation was met with cant division among employees and shareholders of Uber,which through private fundraising has been valued at near $70 billion. Some fear that without a co-founder as CEO, a role which Mr. Kalanick assumed about a year in, that the company will struggle to generate the crucial two-moves-ahead insights needed to ward off competition.
Investors who supported the resignation are betting that a new hire’s increased expertise in finance and organization will offset the loss of Mr. Kalanick’s intimate knowledge of the company and industry.
Mr. Kalanick’s departure is “long overdue,” Steve Vassallo, general partner at Uber investor Foundation Capital, told CNBC. “There’s a strong gravitational pull in the Valley to support founders as long as you possibly can. But the one thing you can’t overcome is when you’ve lost the team. And I think it was clear Travis lost the team. ”
The news is sure to have an impact far beyond the executive offices at Uber’s headquarters on Market Street in downtown San Francisco: The company has been reportedly planning to go public, perhaps as early as this year, and those plans could be impacted either positively or negatively by Mr. Kalanick’s departure. And in the larger context of the sharing economy Uber became the poster child for, the shakeup at the top levels raises questions about the health and sustainability of younger, smaller startups as well.