Uber’s Travis Kalanick Takes a Dive – Vanity Fair
As Uber reels from a series of scandals that have triggered an executive exodus and two investigations into allegations of sexism and sexual harassment, C.E.O. Travis Kalanick will be leaving the company to take an indefinite leave of absence. “I need to take some time off of the day-to-day to grieve my mother, whom I buried on Friday, to reflect, to work on myself, and to focus on building out a world-class leadership team,” Kalanick wrote in a company-wide e-mail to employees Tuesday morning. Bloomberg reports that his role will be diminished upon his return, with an independent chair appointed to limit Kalanick’s influence at the ride-hailing company he built into a globe-spanning, $70 billion behemoth.
“The ultimate responsibility, for where we’ve gotten and how we’ve gotten here, rests on my shoulders,” Kalanick wrote. “For Uber 2.0 to succeed, there is nothing more important than dedicating my time to building out the leadership team. 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.”
The e-mail to Uber’s employees preceded an all-hands meeting for Uber employees, during which Uber finally revealed the results of an external investigation launched several months ago by former U.S. attorney general Eric Holder and his law firm, Covington & Burling. (Perkins Coie conducted a separate investigation into more than 200 claims filed with Uber’s human-resources department.) Among the 47 recommendations in the report, which Uber’s board has already unanimously approved, are plans to limit alcohol provided at corporate events; to create a board oversight committee; to scale back the C.E.O.’s responsibilities by appointing a C.O.O.; and to provide mandatory human-resources and leadership training. Holder’s report also recommends banning intimate or romantic relations between employees and their managers, renaming Uber’s War Room the “Peace Room,” and reviewing and reassessing Uber’s compensation practices to ensure they are in compliance with state and local law.
The all-hands meeting, which capped months of controversy at the world’s most valuable private tech company, also featured several odd moments of levity. Uber board member Arianna Huffington opened the event “addressing the elephant in the room,” according to The New York Times‘ Mike Isaac: “Where is Travis?” Company values like “toe-stepping,” she said, were being changed. “The War Room is no more. It has been renamed the Peace Room.” By way of explaining how to build a more diverse board, Huffington also said, “There’s a lot of data that shows when there’s one woman on a board, it’s much more likely that there will be a second woman on the board,” according to Yahoo Finance, which obtained audio of the meeting. She was interrupted by Uber board member David Bonderman, who, in a perfect display of Uber’s problems with sexism, said: “Actually, what it shows is that it’s much more likely to be more talking.”
Human-resources chief Liane Hornsey asked everyone in the room to give each other hugs, which seemed vaguely inappropriate given the subject of the meeting. She also thanked Susan Fowler, the former Uber engineer whose explosive blog post alleging instances of sexism and sexual harassment (and retaliation when she reported the alleged harassment) was the catalyst for the company-wide shakeup.
Fowler, who reportedly received a round of applause in absentia, later retweeted a Google employee who wrote online that Uber should thank her “by apologizing and by paying her reparations, not by paying her lip service and using her name to whitewash.” In another tweet responding to somebody who noted that Holder’s 13-page report didn’t include an apology, she wrote that Uber will “never apologize” for how she was treated. “I’ve gotten nothing but aggressive hostility from them. It’s all optics.”
Kalanick’s leave of absence is also good optics. After months of controversy, insiders say they are seeing lots of investors trying to unload Uber stock, and not nearly as many buyers. While Uber’s valuation at its last round of funding was about $70 billion, its value on secondary markets following its string of controversies puts it at about $50 billion. Perhaps more important, Uber is under incredible pressure to boost employee morale and stanch an executive exodus that has left the company’s leadership ranks dangerously depleted.
At the end of the day, however, Kalanick would be exceedingly difficult to dislodge. Even as he steps away from the company, Kalanick continues to amass more voting power. Uber’s corporate structure leaves Kalanick and just two other stakeholders with majority control over the company. And Uber’s business doesn’t appear to have taken a hit from the bad news surrounding the company, which includes allegations of misconduct and workplace-inappropriate behavior as well as an intellectual property suit: in the first quarter of 2017, Uber’s revenue increased to $3.4 billion, while its considerable losses shrank.