Uber founder and CEO, Travis Kalanick, today resigned amidst intense investor pressure. The development comes even as the ride-hailing giant is on a war footing to limit damages owing to a worrying work culture. Mr. Kalanick was the co-founder of the service in 2009. Well placed sources state that a shareholder revolt was what led to his resignation.
Kalanick had earlier lost his mother in a tragic boating accident last month. This is being cited by sources close to him as the reason behind his resignation. However, Uber has increasingly faced criticism after its brash, largely male-dominated, workplace culture. There were allegations of sexual harassment from a former Uber engineer to add to existing woes as well. The matter was taken seriously, so much so that a 13-page list of recommendations were released by Uber after an investigation into sexual harassment and other wrongdoing was conducted by former US attorney general Eric H. Holder Jr. and his law firm, Covington & Burling. The list of recommendations included a significant point: to review and reallocate the responsibilities of Travis Kalanick. This was, in fact, the first point mentioned.
Uber’s List of Woes
There were allegations of rampant sexism as well after board member Arianna Huffington referred to what David Bonderman, a fellow board member as well as a founding partner of the private equity firm TPG said on the inclusion of more female board members. Bonderman had said that it would lead to more “talking”, a seemingly off-hand remark which prompted ridicule on Twitter.
Bonderman later resigned from the board of members.
There have also been other issues at Uber to add to its list of misfortunes on what was the poster boy of tech startups. There was a video which documented Kalanicks’s heated brawl with a driver. Then there was a huge lawsuit slapped by Google’s Waymo self-driving car. Despite this, Uber still had a few trick up its sleeve, including a concept of a flying taxi.
What has added to shareholder worries even more is the perception that the fate of Uber is inextricably linked to the fate of Kalanick himself. For instance, reports have suggested that Uber’s main rival in the US, Lyft, has been receiving more driver applications than Uber itself, due to the firm’s tipping facility.
The Nee York Times also reported that,“Mr. Kalanick’s exit came under pressure after hours of drama involving Uber’s investors, according to two people with knowledge of the situation, who asked to remain anonymous because the details are confidential”.
Kalanick himself said,“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”.
Uber has raised more than $14 billion from investors since 2009, including such well-known firms like TPG Capital, the Public Investment Fund of Saudi Arabia, and mutual fund giants like BlackRock. Also on the list were clients of firms like Morgan Stanley and Goldman Sachs.
With such powerful investors objecting to his staying on, it was only a matter of time before Kalanick was forced out. Now he has resigned.