Uber CEO Travis Kalanick resigns following investor pressure
UBER’s embattled chief executive Travis Kalanick has stepped down from the company, following demands from several shareholders for a leadership change in one of the world’s biggest ride-sharing services.
BREAKING: Uber CEO and co-founder Travis Kalanick tells The New York Times that he has resigned.
— The Associated Press (@AP) June 21, 2017
Kalanick told The New York Times five major shareholders pressed for his resignation early on Tuesday, making it obvious him remaining at the helm of the company would not be tolerated. His departure marks the latest development in Uber’s pockmarked history and follows a series of self-made crises, ranging from former board member David Bonderman’s sexist quip to Arianna Huffington to a rape case in India.
Two anonymous sources speaking to the NYT said details of the ouster remained confidential, however some of the investors who demanded Kalanick’s resignation include venture capital firm Benchmark, who is represented by Bill Gurley on the board. Kalanick was made aware of the board’s decision via a letter delivered to him in Chicago.
NYT managed to obtain the letter – entitled “Moving Uber Forward” – which told a narrative of dissatisfaction from Uber’s investors. After consulting with at least one board member, Kalanick agreed to resign.
Other significant shareholders who called for Kalanick’s resignation include some of Silicon Valley’s most prestigious venture capital firms, such as First Round Capital, Lowercase Capital, Fidelity Investments and Menlo Ventures.
“I love 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 Uber can go back to building rather than be distracted with another fight,” Kalanick said in a statement, as reported by the NYT.
— TechCrunch (@TechCrunch) June 21, 2017
While his resignation does not remove him from Uber’s board of directors, it is unclear exactly how much influence Kalanick will be able to exert in the company from now on. Kalanick still has substantial control, as he retains many of his founders shares, which have 10 times the voting rights of ordinary shares in Uber’s dual-stock class structure.
Furthermore, Kalanick has reportedly been gaining more voting power by purchasing employee shares, according to the NYT. Under the company’s’ repurchase program, Uber staffers who resell their stocks back to the company must return voting rights to Kalanick. According to a document obtained by the NYT, Kalanick could stand to gain control of nearly eight percent of voting rights of Class A stocks, and two percent of Class B stocks.
Some in certain corners have also called out Uber’s board for condoning much of Kalanick’s behavior. In an op-ed in the NYT, Randall Stross said the company’s board was Kalanick’s “chief enabler” and was “endlessly forgiving” of his behavior. The blame rests equally on both shoulders, and can be ascribed to the “bro culture” that has proliferated throughout the Valley, and has resulted in a growth-before-all mentality.
“The supine board has left untouched its bedrock conviction: As long as the company keeps growing, the founder can be forgiven for almost anything,” Stross wrote.
This isn't just Travis. It's about a group of people with money who let Travis be Travis. Here's that story. https://t.co/dQGCwDGv6M
— Joshua Topolsky (@joshuatopolsky) June 21, 2017
It is unclear what lies ahead in Uber’s path, as the company’s reputation has been so closely tied to Kalanick’s abrasive personality.
For now though, charting a path through the company’s various PR problems and legal cases will present the most prominent challenge yet. Currently, Uber is facing an intellectual property dispute with autonomous car developer Waymo, claims of sexual harassment and encroachments from rival Lyft.
In particular, what Kalanick’s case could signal is a subtle change in attitude to founders in Silicon Valley. Traditionally, founders are largely revered by the boards of the companies, with many falling over themselves to present friendly fronts to would-be tech entrepreneurs. Kalanick is a rare example of tech officials being punished for bad behaviour and the aggression that has largely come to characterise the industry.
Much chatter has emerged to address the “bro culture” of the tech industry, and with Kalanick’s ousting, we might be seeing the beginnings of real action.