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Uber CEO finally resigns after pressure from investors

by David Gilbert
Jun 21 2017, 6:13am

In the end, it was the money men who made the decision. Following several allegations of sexual harassment and workplace discrimination, alongside lawsuits, disputes with drivers, and regulatory headaches, Uber’s investors took control Tuesday and effectively forced CEO Travis Kalanick to resign.

The surprise decision comes just over a week after the controversial co-founder of the world’s biggest ride-hailing app announced he’d be taking an indefinite “leave of absence,” following a damning report on the company’s behavior by former U.S. Attorney General Eric Holder.

In a statement Tuesday, Kalanick said he loved 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.”

Kalanick’s departure only increases the power vacuum at the company. A spate of resignations in recent months has left Uber without a COO, CFO, CMO, or SVP of engineering — and now it has no CEO. No indication yet from the company on who might replace Kalanick.

In a statement sent to VICE News, Uber said Kalanick would remain on the company’s board of directors. “Travis has always put Uber first. This is a bold decision and a sign of his devotion and love for Uber. 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. We look forward to continuing to serve with him on the board.”

The five investors who pushed for Kalanick’s resignation — Benchmark Capital, First Round Capital, Lowercase Capital, Menlo Ventures, and Fidelity Investments — were all early investors in the startup – which is now valued at close to $70 billion – and together they own more than a quarter of the company’s stock.

The investors informed Kalanick of their demands in a letter titled “Moving Uber Forward.” In the missive, obtained by the New York Times, the investors demanded Kalanick leave immediately and suggested the company needed a change in leadership. After consulting with at least one Uber board member, and following long discussions with some of the investors, the 40-year-old agreed to step down.

Kalanick’s downfall has been almost as rapid as his ascent. Since Uber launched in 2011, the ride-hailing service has expanded into 662 cities around the globe and is valued at close to $70 billion.

But both Kalanick and Uber have faced a string of controversies in the past 12 months, significantly tarnishing the reputation of the company and its founder.

In February, former Uber engineer Susan Fowler Rigetti detailed her experience of sexual harassment and gender discrimination at the company. Uber responded by engaging Holder’s law firm, Covington & Burling, to carry out an investigation into company culture and practices.

The result has seen more than 20 employees fired for various infractions, including harassment, retaliation, discrimination, and bullying. Almost 60 other employees have been disciplined, while dozens more remain under investigation.

Despite the damning nature of the report, Rigetti tweeted that there has been no apology, and that the report’s publication is just “all optics.”

Besides internal issues, the company is also under pressure from a high-profile lawsuit with Waymo, the self-driving car outfit owned by Alphabet. Waymo alleges Uber stole its intellectual property, with Kalanick claiming the lawsuit poses an “existential” threat to Uber’s future. The head of Uber’s self-driving program, Anthony Lewandowski, who was a former Waymo employee, has already lost his job as a result of the lawsuit.