On Tuesday, Travis Kalanick, the chief executive officer of ride-hailing giant Uber Technologies Inc., announced that he will be taking a leave of absence. He did not reveal a date in which he would return to the controversy-ridden company.
This announcement comes a day after Uber’s senior vice president of business Emil Michael left the company. According to the Los Angeles Times, Michael sent an email to his employees detailing his decision to leave Uber, though it is unclear if he was fired or resigned. Michael’s departure was part of a series of recommendations voted on by Uber’s board of directors on Sunday; these suggestions were drafted by former U.S. Attorney General Eric H. Holder as part of an investigation into complaints of rampant harassment, notes the Times.
One of the other recommendations was ordering Kalanick to take a leave of absence. And when the CEO returns to Uber, the company will take away some of his management duties and give them to other executives.
"The ultimate responsibility, for where we’ve gotten and how we’ve gotten here rests on my shoulders," Kalanick wrote in an e-mail to employees. "There is of course much to be proud of but there is much to improve. 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."
More suggestions from the meeting include mandatory leadership training for senior managers; Uber’s current Head of Diversity will be renamed as the Chief Diversity and Inclusion Officer, and will report directly to the CEO or COO; and at least one woman and one minority candidate must be interviewed during the hiring process for a key job.
Kalanick’s and Michael’s departure aren’t the only shakeups to Uber’s corporate structure recently, in addition to the decision to fire 20 employees as part of the ongoing internal harrassment investigation. Uber, however, has been trying to build up its executive team. Last week, the company hired Harvard Business School’s Frances Frei as senior vice president of leadership and strategy, and on Monday, they added Nestle executive Wan Ling Martello to its board.
"During this interim period, the leadership team, my directs, will be running the company," Kalanick continued. "I will be available as needed for the most strategic decisions, but I will be empowering them to be bold and decisive in order to move the company forward swiftly."
When Did the Tide Turn?
One can look back to Kalanick’s decision to join an advisory board for President Trump that the public perception of Uber really began to change. And when the ride-hailing company appeared to undermine a New York taxi strike during the president’s first controversial travel ban effort, the #DeleteUber hashtag moved quickly and furiously across Twitter (TWTR - Free Report) , Facebook (FB - Free Report) , and Snapchat (SNAP - Free Report) .
To add fuel to the fire—and why Kalanick and many of Uber’s executives are gone or taking a leave from the company—came the blog post of the century. Former Uber software engineer Susan Fowler alleged that her former manager had propositioned her for sex, and that Uber’s HR department told her it wouldn’t punish him because he was a top performer. She also described the many adversities female employees faced on a day-to-day basis at the company.
We can’t forget Kalanick’s argument with a driver of his own company caught on camera, and its messy legal battle with Alphabet’s (GOOGL - Free Report) Waymo division over self-driving car technology. Waymo accused Uber of stealing patents and trade secrets, specifically laser-sensing technology that allows driverless vehicles to see their surroundings. Both companies are betting big on the future of self-driving cars, and the eventual court ruling will have a profound effect either way.
But despite all of this, Uber is still the biggest privately-held company in the world, with a valuation of $68 billion. Revenue grew to $3.4 billion in the first quarter this year, and losses have narrowed slightly, though they are still substantial.
Kalanick helped build a crazy big company crazy fast, and it’s a company that has become part of our daily lives. The steps Uber is taking are promising, but there’s no denying the long, tough road ahead of it.
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