Uber CEO Travis Kalanick resigned after mounting pressure from investors. But the company’s controversial co-founder will remain on the board of directors.
Kalanick’s departure comes not long after announcing a leave of absence for an undetermined length of time.
Investors wrote a letter to Kalanick titled “Moving Uber Forward,” according to the New York Times, which obtained a copy of the message. According to the Times, “the investors wrote to Mr. Kalanick that he must immediately leave and that the company needed a change in leadership.” He ultimately agreed to step down “after long discussions with some of the investors.”
Company grapples with several sexual harassment/assault allegations, executive exits. Continues to refuse diversity data requests.
In a statement provided to TechCrunch the company’s board stated, “By stepping away, [Kalanick is] taking thetime to heal from his personal tragedy while giving the company roomto fully embrace this new chapter in Uber’s history. We look forwardto continuing to serve with him on the board.”
Kalanick’s continued presence on the board poses the question of whether or not Uber will in fact “fully embrace” a new company culture.
The investors reportedly stated in their letter that they want “truly independent” people to occupy two of the company’s three empty board seats. But they also, according to the Times, “demanded that Mr. Kalanick support a board-led search committee for a new chief executive.”
While demanding Kalanick’s ouster so that the company can rebuild, shareholders are simultaneously asking for him to continue influencing the company’s leadership.
Uber’s board of directors has not been the greatest under Kalanick’s reign. The board did not have a single female member for seven years until just last year when Ariana Huffington, former executive editor and co-founder of The Huffington Post, joined.
Travis Kalanick wrote a memo to employees that included the “do’s and don’ts” of having sex with colleagues at company gatherings.
Perhaps incorporating diversity into the board came too little, too late. Just last week former board member David Bonderman made a sexist remark to Huffington.
According to a recording obtained by Yahoo! Finance, Huffington said, “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 was speaking about the company’s decision to add a second woman, Wan Martello, to the board.
“Actually what it shows is it’s much likely to be more talking,” Bonderman responded. Bonderman resigned that same day.
In actuality, DiversityInc Top 50 survey data found a correlation between women representation on boards and diversity-management performance.TheDiversityInc Top 50has ahigher percentage of womenon its boards than all other participating companies. Uber has never applied to compete in the Top 50 competition.
Incidentally, the meeting at which Bonderman made the remark was one when the board was discussing 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.”
Incidentally, reallocating Travis Kalanick’s responsibilities was the first recommendation from a report by former U.S. Attorney General Eric Holder.
If the company continues operating under Kalanick’s values, a transformation is unlikely. 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 beenidentifiedas redundant oras havingbeenused to justify poorbehavior,includingLetBuildersBuild,AlwaysBe Hustlin’, Meritocracy and Toe-Stepping, andPrincipled Confrontation.”
A 2013 email Kalanick sent to employees ahead of a company trip to Miami was recently obtained by Recode. The subject line called the email “URGENT, URGENT.”
In fact, the email contained the “do’s and don’ts” of sexual relationships with coworkers:
“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.”
Kalanick’s assistance in selecting his replacement raises red flags as well, as he has previously shown poor judgment in those in power close to him.
“Rape denial is just another form of the toxic gender discrimination that is endemic at Uber and ingrained in its culture,” said a lawyer for Jane Doe.
This month 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.”
Also this month 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.
The rape victim, identified only as Jane Doe, has filed a lawsuit against the company, Kalanick, Michael and Alexander for intrusion into private affairs, public disclosure of private facts and defamation of her character.
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 board member 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,” Recodereported.
The investigation into Uber’s practices and culture began in February, when a former engineer published a blog post detailing the sexist culture engrained within the company and her experience with sexual harassment while working there.
According to the woman, Susan J. 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.”