Barely seven days after Uber CEO Travis Kalanick announced that he will take an indefinite leave of absence to become a better leader, he has stepped down from his position yesterday. As per the New York Times, Kalanick’s exit came under pressure after hours of drama involving Uber’s investors as per two undisclosed sources with knowledge of the situation.
The CEO of the ride-hailing service had announced last week his intention “to work on Travis 2.0 to become the leader that this company needs and that you deserve.” But it seems Uber’s major investors were not appeased, given the fact they have pumped millions of dollars into Uber whose current valuation swell hovers around $70 Bn.
The investors which include venture capital firm Benchmark, First Round Capital, Lowercase Capital, Menlo Ventures, and Fidelity Investments, together own more than a quarter of Uber’s stock. In total, they have about 40% of Uber’s voting power. The investors demanded Kalanick’s resignation in a letter delivered to him while he was in Chicago.
In the letter, titled “Moving Uber Forward,” the investors wrote to him that he must immediately leave and that the company needed a change in leadership. Kalanick, after consultation with at least one Uber Board member and after hours of discussions with some of the investors, agreed to step down. However, he will remain on Uber’s Board of directors.
In the letter, in addition to his immediate resignation, the five shareholders also asked for improved oversight of the company’s board by filling two of three empty Board seats with “truly independent directors.” They also demanded that Kalanick support a Board-led search committee for a new Chief Executive and that Uber immediately hire an experienced Chief Financial Officer.
In his statement, Travis said, “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.”
Uber, Travis Kalanick, And The Controversy Juggernaut
The move comes after a year filled with scandals for Uber and questions over its leadership. While CEOs in Silicon Valley are not taken to task so publicly as investors back aggressive leaders, but not if that same brashness puts the startup in a precarious position. In Uber’s case, all its scandals – starting from Susan Fowler’s revelations of its sexist culture, to an intellectual property lawsuit with Waymo, the self-driving car business that operates under Google’s parent company and an enquiry into Uber’s controversial Greyball technology, had made the company a perfect example of a startup culture gone wrong. And this could potentially endanger billions of dollars of investor money if it resulted in valuation markdowns.
Read here the complete list of scandals which Uber has been embroiled in 2017.
Uber has raised more than $11 Bn in funding since its founding in 2009. Its list of investors includes TPG Capital, the Public Investment Fund of Saudi Arabia, mutual fund BlackRock, and wealthy clients of firms like Morgan Stanley and Goldman Sachs.
However, with this move, the fate of Uber’s culture, its leadership, and its future direction remains a question mark given the company had been so molded in the image of CEO Travis Kalanick.