Uber CEO steps aside as ride-hail­ing gi­ant faces cri­sis.

Work­ers say sex as­saults not ad­dressed

The Washington Times Daily - - FRONT PAGE - BY NICOLE AULT

Uber founder and CEO Travis Kalan­ick is tak­ing a leave of ab­sence fol­low­ing a re­port is­sued to em­ploy­ees Tues­day that rec­om­mended, among other things, a thor­ough re­view of his record run­ning the com­pany.

The re­port is the re­sult of a high­pro­file, month­s­long in­ves­ti­ga­tion led in part by for­mer U.S. At­tor­ney Gen­eral Eric H. Holder Jr. on the ride-hail­ing gi­ant’s man­age­ment and prac­tices, which have been un­der fire.

The San Fran­cisco-based com­pany has faced a flurry of ac­cu­sa­tions that top ex­ec­u­tives mis­han­dled sex­ual as­sault cases, evaded law en­force­ment and used un­fair tac­tics to com­pete with its ri­vals.

The re­port’s 47 rec­om­men­da­tions in­clude in­creased board in­de­pen­dence, hold­ing ex­ec­u­tives ac­count­able with per­for­mance re­views, im­prov­ing the hu­man re­sources de­part­ment and cre­at­ing an over­sight com­mit­tee. The re­port also ex­horted the com­pany to “in­sti­tute and en­force clear guide­lines on al­co­hol con­sump­tion and the use of con­trolled sub­stances” and “pro­hibit ro­man­tic or in­ti­mate re­la­tions be­tween in­di­vid­u­als in a re­port­ing re­la­tion­ship.”

When Mr. Kalan­ick does re­turn — a date that was not an­nounced — his du­ties will also be re­duced and his au­thor­ity shared with a yet-to-be-named chief op­er­at­ing of­fi­cer.

Mr. Kalan­ick’s tem­po­rary re­moval is one of a se­ries of turnovers in the com­pany’s up­per ech­e­lons. On Mon­day Emil Michael, se­nior vice pres­i­dent for busi­ness, left the com­pany, and last week, Eric Alexan­der, an Asia ex­ec­u­tive for the com­pany, was fired for mis­han­dling a case in which an Uber driver raped a woman in In­dia. In March Uber Pres­i­dent Jeff Jones re­signed, cit­ing be­liefs “in­con­sis­tent” with those of the com­pany.

It’s a sharp come­down for a com­pany that be­came a leader in the in­dus­try and has been val­ued at more than $60 bil­lion. Af­ter its 2010 de­but in San Fran­cisco as a car ser­vice com­pany that al­lowed cus­tomers to hail cabs from their phones, Uber spread around the globe and ex­panded its ser­vices, of­fer­ing rides as well as meal de­liv­ery and mov­ing as­sis­tance.

But trou­ble has been mount­ing for the com­pany in the past year. In Fe­bru­ary for­mer Uber en­gi­neer Su­san Fowler pub­lished a blog post claim­ing she was sex­u­ally ha­rassed by an Uber man­ager and that per­son­nel of­fi­cials dis­missed her com­plaints. Ms. Fowler also re­vealed that just 3 per­cent of Uber’s em­ploy­ees are fe­male and that many have com­plained of sex­ual ha­rass­ment.

In re­sponse to Ms. Fowler’s ar­ti­cle, Uber hired law firm Perkins Coie to in­ves­ti­gate fe­male em­ploy­ees’ com­plaints. The firm gath­ered 215 in­ci­dent re­ports and fired 20 em­ploy­ees af­ter the in­ves­ti­ga­tion.

Uber is also un­der in­ves­ti­ga­tion by the De­part­ment of Jus­tice for al­legedly us­ing a soft­ware called “Grey­ball” to avoid po­lice de­tec­tion in re­gions where it wasn’t al­lowed to op­er­ate.

Mr. Kalan­ick said in an email to the com­pany’s more than 14,000 em­ploy­ees that “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,” he con­tin­ued, ac­cord­ing to Bloomberg News. “But if we are go­ing to work on Uber 2.0, I also need to work on Travis 2.0 to be­come the leader that this com­pany needs and that you de­serve.”

Uber in­vestor Mitchell Green, founder of Lead Edge Cap­i­tal, told CNBC on Tues­day that he thinks Mr. Kalan­ick should stay at Uber, not­ing that Mr. Kalan­ick also cited per­sonal trou­bles re­lated to the re­cent death of his mother.

“I don’t know if it should be in the CEO role,” Mr. Green said, “but he is a vi­sion­ary.”

But Eric Schif­fer, en­tre­pre­neur and CEO of the Pa­tri­arch Or­ga­ni­za­tion, a ven­ture man­age­ment com­pany, said he was less op­ti­mistic about Mr. Kalan­ick’s role in the com­pany.

“I think they have an in­cred­i­bly vi­sion­ary and tal­ented CEO whose big­gest ob­sta­cle is the mir­ror,” said Mr. Schif­fer. “Un­less he re-en­ters with the skill set and the ma­tu­rity, this is just go­ing to be an even big­ger com­bus­tion. The board has a duty to con­front this with him. They’ve been too timid.”

Mr. Schif­fer added that he thinks the Cov­ing­ton re­port’s rec­om­men­da­tions, par­tic­u­larly to hire women, will help change the cul­ture at Uber.

“I think the rec­om­men­da­tions will ben­e­fit and make the com­pany money,” Mr. Schif­fer said. “Hav­ing women in man­age­ment roles is smart busi­ness.”


Uber CEO Travis Kalan­ick is go­ing on leave as the com­pany deals with un­ad­dressed sex­ual ha­rass­ment claims.

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