Uber CEO Takes Leave of Absence, Board Member Out after Sexist Remark
Incidentally, reallocating Travis Kalanick's responsibilities was the first recommendation from a report by former U.S. Attorney General Eric Holder.
Uber CEO Travis Kalanick announced Tuesday he will be taking a leave of absence for an undetermined length of time.
What his role will be is unclear. Kalanick's responsibilities will be left to his direct reports, according to a letter received by Uber staff, but Kalanick "will be available as needed for the most strategic decisions." A source told Reuters that Kalanick is free to return to the company anytime.
Kalanick stated he is taking time off to grieve his mother, who recently passed away in a boating accident, in which his father was injured.
But Kalanick's decision also comes at a time when Uber has been under intense scrutiny for its sexist workplace culture. On Sunday the company agreed to adopt a list of recommendations made by former U.S. Attorney General Eric Holder following a sprawling, multi-month investigation into the company's cultures and practices.
The first item on Holder's list of recommendations is: "Review and Reallocate the Responsibilities of Travis Kalanick."
"The Board should evaluate the extent to which some of the responsibilities that Mr. Kalanick has historically possessed should be shared or given outright to other members of senior management," according to the report.
Meanwhile, some members of the Uber team still appear to see no problem with the sexist environment.
The company on Tuesday had a meeting to share with staff members Holder's recommendations. At this very meeting, board member David Bonderman made a sexist remark to fellow board member Arianna Huffington.
According to a recording obtained by Yahoo! Finance, Huffington shared with the staff that Uber is adding another woman to its board, Wan Ling Martello.
"There's a lot of data that shows when there's one woman on the board, it's much more likely that there will be a second woman on the board," Huffington said.
"Actually what it shows is it's much likely to be more talking," Bonderman responded.
Bonderman resigned from the board later that day, calling the remark "careless, inappropriate and inexcusable."
But given Uber's "boy's club" culture, reflected in its current board of directors, Bonderman's comment may not have seemed out of place to him.
Last year Huffington, former executive editor and co-founder of The Huffington Post, was the first woman to join Uber's board since it was founded in 2009. For seven years, the company did not have a woman on its board.
Huffington's assertion about a positive correlation between having women on boards is correct. DiversityInc Top 50 survey data found a correlation between women representation on boards and diversity-management performance. The DiversityInc Top 50 has a higher percentage of women on its boards than all other participating companies. Uber has never applied to compete in the Top 50 competition.
Travis Kalanick wrote a memo to employees that included the "do's and don'ts" of having sex with colleagues at company gatherings.
Last week Recode obtained an email that Kalanick sent to staff members in 2013 about the "do's and don'ts" of employee sex rules on a company trip to Miami to celebrate the company expanding to its 50th global city.
Kalanick told employees to "Have a great f**king time" and also cautioned:
"Do not have sex with another employee UNLESS a) you have asked that person for that privilege and they have responded with an emphatic 'YES! I will have sex with you' AND b) the two (or more) of you do not work in the same chain of command. Yes, that means that Travis will be celibate on this trip. #CEOLife #FML."
According to Recode, some people voiced concern over the tone of the email and advised Kalanick he not send it at all.
"But sources said Kalanick was proud of his letter to the team and spoke about it often," Recode reported.
Uber was founded in 2009 by Kalanick and Garrett Camp, who serves as the company's chairman. Kalanick became CEO in 2011.
Perhaps the company could have been given some more leniency if it was still a startup with a few workers. But Uber is now a global company reportedly worth over $60 billion with over 6,000 employees worldwide.
According to Holder's report, Uber's poor workplace culture remains reflected in its 14 Cultural Values, which Holder recommends be reformulated. According to Holder, some of Uber's currently stated values "have been identified as redundant or as having been used to justify poor behavior, including Let Builders Build, Always Be Hustlin', Meritocracy and Toe-Stepping, and Principled Confrontation."
Uber's problems with its sexist culture go beyond the United States. Last week the company's top executive in Asia, Eric Alexander, was fired after he suspiciously obtained a medical report of a woman who was raped by an Uber driver in India. According to Recode, "Alexander spent months carrying the documents around in his briefcase before others at the company finally demanded that he turn them over."
Lack of diversity was always at the core of Uber's problems.
Also this week Emil Michael, SVP of business and reportedly a very close confidante of Kalanick, left the company. Michael was rumored to have known about the medical report as well (as did Kalanick, who reportedly questioned whether or not the rape took place at all or was a setup by a rival ridesharing company, Recode reported). Alexander reported directly to Michael.
"Rather than an exception, the actions of Alexander are more typical of a company in desperate need of adult supervision, despite the fact that many of its leaders are, in fact, adults.
"If that sounds perplexing, so too does the circumstances around the firing of Alexander, which only took place this past week when reporters began asking about his unusual involvement in obtaining the files. Before that, despite what appears to be a questionable act which many top execs knew about, he had never been disciplined.
"The reasons why are complex, according to numerous sources, including what many describe as a close relationship between Alexander and Kalanick and Michael."
Company grapples with several sexual harassment/assault allegations, executive exits. Continues to refuse diversity data requests.
In addition to the tight-knit boy's club being disbanded, as none of the men are with the company anymore (albeit the nature of Kalanick's departure is still unclear), others have also left under, to say the least, poor circumstances.
In March, Ed Baker, the company's vice president of product and growth, announced his resignation. Possibly "questionable behavior" on Baker's part came to light when Uber board member Ariana Huffington received an email claiming Baker engaged sexually with another employee.
Amit Singhal, former SVP of engineering, was asked to step down in February after it was discovered that he did not report a sexual harassment allegation made against him while he was working at Google. An internal investigation into the claim found it to be "credible," Recode reported.
Also in Februrary Susan J. Fowler, a former Uber site reliability engineer, revealed in a blog post that her manager sexually harassed her when she worked at the company.
According to Fowler, when she reported the offense to human resources officials and management, they declined to punish the alleged offender because he "was a high performer" and this was his "first offense." After speaking with other female employees, though, she realized that both HR and management had been lying about this being the manager's "first offense."
The investigation into Uber began as a result of Fowler's complaint.
Frederick Gaston told authorities sex is a "perk" of the job.
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