Uber co-founder and CEO Travis Kalanick resigned late Tuesday after receiving a letter from five major investors — “a shareholder revolt,” as the Washington Post puts it — demanding that he do so.
“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 that Uber can go back to building rather than be distracted with another fight,” Kalanick said in a statement to the New York Times’ Mike Isaac, who broke the story.
“Kalanick’s exit came under pressure after hours of drama involving Uber’s investors, according to two people with knowledge of the situation,” Isaac reports.
The letter titled “moving Uber Forward” was signed by “some of the technology industry’s most prestigious venture capital firms, which invested in Uber at an early stage of the company’s life, as well as a mutual fund firm,” Isaac writes. They were Benchmark, First Round Capital, Lowercase Capital, Menlo Ventures and Fidelity Investments. Together they own about 25% of the ride-sharing company but control about 40% of its votes.
The 40-year-old Kalanick, who said he was taking a leave of absence after the release of a critical report last week to “work on myself” and to grieve the death of his mother in a boating accident in May, will remain as a director. Uber has more than 12,000 employees in more than 600 cities worldwide and last year made $6.5 billion in sales while losing nearly $3 billion.
Uber’s missteps and misogynic culture have been the stuff of headlines for what seems longer than months. The BBC’s Zoe Kleinman recaps the “scandals that drove Travis Kalanick out” here. Quartz has a timeline of events that led to his downfall here.
“It’s about time,” assert Kara Swisher and Johana Bhuiyan for Recode. “Kalanick had become a giant liability to the car-hailing company for a growing number of reasons, from sketchy business practices to troubling lawsuits to a basic management situation that was akin to really toxic goat rodeo.
“Thus, he had to go, even though some sources said he had the voting power to stay,” they conclude.
But even granting that Uber was more rife with mismanagement than most companies and that the extremes of its sexism was endemic, there’s a larger message to be taken away.
“We live in an era dominated by the unyielding influence of social feeds. Every new Uber revelation ignited a massive campaign against the company on Twitter and Facebook. A swirl of negative branding took on a life of its own — and ultimately could not be ignored,” observes the NYT’s Farhad Manjoo.
“The story is bigger than Uber. Online campaigns against brands have become one of the most powerful forces in business, giving customers a huge megaphone with which to shape corporate ethics and practices, and imperiling some of the most towering figures of media and industry,” Manjoo writes.
The voice of the peeps online have increasingly been echoed by the mainstream media. On Monday, Chicago Tribune business columnist Robert Reed wrote: “After suffering nearly six months of self-inflicted damage, missteps and public relations snafus, Uber vows it's on the road to recovery. That's good to hear, but it's going to be a tough journey — one that can't afford any more detours into the bad or boorish behavior that's giving the company a reputation as a well-funded social pariah.
As inevitable as Kalanick’s fall may seem in retrospect, few would have predicted it a short while ago.
“Kalanick had modeled Uber on his own brash and hyper-competitive leadership style and, because of the company’s soaring valuation and growth, he was long seen by insiders and outsiders alike as being untouchable,” write Tracey Lien and Paresh Dave for the Los Angeles Times.
“Investors had long gushed about Kalanick. When Menlo Ventures led a $32-million financing into Uber five years ago, the venture capital firm’s Shervin Pishevar described Kalanick as an inspiration and a visionary. ‘He is one of the most gnarly, passionate and obsessed entrepreneurs you will ever meet,’ Pishevar wrote.”
He attracted a likeminded crew — as well as some executives who were repelled and resigned — with the result that the executive ranks have thinned considerably.
“The exit also comes amid the company’s search for a chief operating officer, a second in command who could take the reins from Kalanick. The COO role is one of many executive positions that remain unfilled, leaving questions about who will run Uber in Kalanick’s absence,” writes Elizabeth Dwoskin for the Washington Post.
Someday soon, there will be an app for that.