With his company facing an array of problems, including lawsuits, complaints about sexual harassment, and the exodus of key senior executives, Uber CEO Travis Kalanick has been forced to resign.
The news was announced early Wednesday, barely a week after the embattled Kalanick said he would take an indefinite leave of absence motivated, at least in part, by the death of his mother in a boating accident. The ride-sharing giant said Kalanick will remain on its board of directors.
For his part, the 40-year-old Kalanick appeared to recognize he had become not a leader but a polarizing distraction for Uber Technologies, Inc., in a statement noting that “rather than be distracted with another fight,” his departure will let Uber focus on building its business.
Even before the latest announcement it was unclear who would step in to replace Kalanick during his planned leave of absence. But there are a number of other holes in the top tier of Uber management. The company’s chief financial officer left following the announcement of disappointing quarterly earnings. An only recently hired president departed earlier this year when Kalanick announced plans to reach outside for a new chief operating officer.
(Uber CEO Kalanick taking indefinite leave. For the story, Click Here.)
That move followed one of numerous embarrassing incidents involving Kalanick. In this case, a video surfaced showing him berating an Uber driver who had complained about cuts in pay. At that time, Kalanick admitted he had an anger issue and needed to improve his management style.
But Kalanick and Uber have wound up in an unflattering spotlight on a growing number of occasions in recent months.
The CEO was faulted by many for joining President Donald Trump’s economic advisory panel and ultimately quit after Uber was the target of a boycott.
The company was forced to launch an internal probe – header by former U.S. Attorney General Eric Holder – after a former engineer, Susan Fowler, described a culture of sexual intimidation and harassment inside the company. Holder’s report, and the recommendations it made, were approved unanimously by the board earlier this month, the same weekend that Kalanick announced his leave of absence.
(Uber fires 20 employees ahead of release of sex harassment study. Click Here for details.)
Uber has also been tied up in court, facing claims by Waymo, the Google spin-off, that it stole trade secrets used in its own autonomous vehicle program. Kalanick had made self-driving vehicles a key goal, asserting that they would lower the cost of an Uber ride to the point it would be cheaper to use the service day-to-day than to own a private vehicle.
The ride-sharing service also was forced to pull out of China after a costly battle with local company Didi Chuxing.
Uber has continued to operate deeply in the red under Kalanick, posting a $708 million loss for the first quarter of this year, on $3.4 billion in revenue – though that was an improvement over the $991 million it lost the year earlier.
The San Francisco-based Uber also has watched key U.S. rival Lyft take advantage of its problems. Uber has signed on a number of new investors, including automakers General Motors and, more recently, Jaguar Land Rover. Lyft has also gained market share at Uber’s expense as the bigger company’s troubles have been in the headlines.
(Kalanick’s leave of absence wasn’t a surprise. Click Here to see why.)
But while Uber did have its setbacks, it remains the country’s largest equity capital-funded company, currently estimated by various analysts to be worth as much as $70 billion. There has been talk about taking the company public, or at least offering some of its assets on the stock exchange. But investors would clearly be nervous about buying into a company facing so much trouble, and Kalanick’s ouster could be just one of the steps Uber’s board will take to try to calm things down before considering its options.