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A Driverless Company: Uber Board To Diminish CEO Travis Kalanick’s Role Post His Return

A Driverless Company: Uber Board To Diminish CEO Travis Kalanick’s Role Post His Return

After Six Months Of Scandal, Uber CEO Travis Kalanick To Take A Diminished Role Post Interim Leave Of Absence

After a year rocked with scandals and downward news spirals, Uber CEO Travis Kalanick has stated that he will take an indefinite leave of absence to grieve for his mother – who died last month – as well as to become a better leader.

In a letter to employees, Travis Kalanick stated, “During this interim period, the leadership team, my directs, will be running the company. I will be available as needed for the most strategic decisions, but I will be empowering them to be bold and decisive in order to move the company forward swiftly.”

The Uber founder also took responsibility for what the company has gone through saying, “The ultimate responsibility, for where we’ve gotten and how we’ve gotten here rests on my shoulders. There is, of course, much to be proud of but there is much to improve. For Uber 2.0 to succeed there is nothing more important than dedicating my time to building out the leadership team. But if we are going to work on Uber 2.0, I also need to work on Travis 2.0 to become the leader that this company needs and that you deserve.”

The full text of the letter goes as follows-

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Uber 2.0: The Covington Recommendations

After months of issues and scandals, while Travis Kalanick signs off the letter with “see you soon”, however, he might have a diminished role when he comes back. Yesterday, the Uber board has accepted all recommendations given by the Former Attorney General Eric Holder and his law partner Tammy Albarrán, who undertook an investigation of the company’s workplace practices and offer remedies. Holder, an attorney at law firm Covington & Burling LLP, interviewed employees as part of a 14-week probe he conducted with his colleague Tammy Albarran. The investigation team conducted over 200 interviews with current and former employees of Uber who shared a broad range of perspectives while a separate examination by Perkins Coie LLP is reviewing 215 HR claims. The 13-page report can be accessed here.

One of the major recommendations includes “reallocating the responsibilities” of Uber CEO Travis Kalanick and increasing the profile of Uber’s head of diversity Bernard Coleman. The board will move to diminish Kalanick’s role once he comes back by giving some of the CEO’s job responsibilities to a chief operating officer – a position Uber has been actively recruiting for but has yet to fill.

The report states -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. The search for a Chief Operating Officer should address this concern to some extent.

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The Holder-Albarrán report also recommends that the company consider eliminating its official “core values” like “Always Be Hustlin’,” “Principled Confrontation” and “Let Builders Build,” principles that “have been used to justify poor behavior.” The report suggests that Uber should reformulate its written cultural values.

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Other important changes will be to increase Uber’s board independence from the company, to create a separate ethics and culture committee or similar committees, to use compensation to hold senior leaders accountable.

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On the cultural side, recommendations include reducing alcohol use at work events and prohibiting intimate relationships between employees and their bosses. It states, “Uber should develop specific and clear guidance concerning appropriate workplace relationships, including making clear that any type of romantic or intimate relationship between individuals in a reporting relationship (either direct or indirect) is prohibited.”

The report also urged the company to enforce strict guidelines on alcohol consumption and use of controlled substances.

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The report also urges to set up a robust and effective complaint process to address harassment, discrimination, and retaliation in the workplace.

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The law firm’s recommendations touches nearly every aspect of the company to revamp it and lays out in detail the kind of internal change needed to make it a more inclusive workplace. Though it is evident that the entire culture mess at Uber is a direct doing of Travis’s own misplaced set of cultural values which contributed to misogynistic and bro culture at the startup, yet the hasn’t laid blame on him squarely. It left him off lightly, recommending only that a chief operating officer be appointed to take on some of his responsibilities.

While Travis has stated his intention to come back with Travis 2.0 as Uber works to become Uber 2.0, only time will tell if he will be able to resume his position back in entirety.

Arianna Huffington, an Uber board member stated, “The process was longer than we thought and more painful than we thought, but this chapter comes to an end today.  Our task now is to learn, rebuild and move forward together to write Uber’s next chapter.”

Will the driverless company at the moment be able to drive itself away from the web of scandals it has gotten itself into towards a better culture? Only time will tell.

Meanwhile, here’s a look at the Uber’s timeline of scandals this year.

Uber And Travis Kalanick: A Year Of Issues And Scandals

January

In January this year, Uber came under a negative spotlight after it suspended surge pricing during strikes at JFK Airport in New York City. This resulted in a public outrage and initiated a new movement: #DeleteUber, a social media campaign encouraging people to delete the Uber app and their accounts with the company.

February

  • CEO Travis Kalanick quits President Trump’s council of business leaders amid mounting pressure from employees and customers over the immigration order.
  • Former Uber engineer, Susan Fowler, discloses sexual harassment and sexism claims in a blog post about her year at Uber.
  • Waymo, a self-driving car company spun off from Google, sues Uber alleging that Anthony Levandowski – a former top manager for Google’s self-driving car project – stole pivotal technology from Google before leaving to run Uber’s self-driving car division.
  • Amit Singhal, former Google Search Head, is forced to leave Uber for non-disclosure of prior sexual harassment allegations.

March

  • A video of Travis Kalanick arguing with an Uber driver berating him and getting into a heated argument over Uber’s fares goes viral. Following the incident, as per the same report, Travis apologised to Kamel for treating him disrespectfully. As per an official statement, he says, “It’s clear this video is a reflection of me—and the criticism we’ve received is a stark reminder that I must fundamentally change as a leader and grow up. This is the first time I’ve been willing to admit that I need leadership help and I intend to get it.”
  • In a detailed report, The New York Times reveals that, for years, Uber used a tool called Greyball to systematically deceive law enforcement officials in cities where its service violated regulations. What it meant was that  officials attempting to hail an Uber during a sting operation were “greyballed” – they would see icons of cars within the app navigating nearby, but no one would come pick them up.
  • Uber’s President, Jeff Jones, resigns less than a year after joining the company. He tells the tech blog Recode that his approach to leadership is at odds with what he experienced at Uber.

April

  • Sherif Marakby, a global vice president who leads Uber’s self-driving car program, leaves the company.
  • A federal judge in San Francisco rejects Uber’s request for arbitration and refers Waymo’s case to the US Attorney’s office for a possible criminal investigation. While the judge banned Uber from using the allegedly stolen technology but doesn’t order to halt its self-driving vehicle program.

June

  • Uber fires 20 people after law firm, Perkins Coie, investigates complaints of harassment, bullying and retaliation.
  • Uber fires APAC head Eric Alexander for accessing Delhi rape victim’s records.
  • Emil Michael, Uber’s senior vice president for business and a close ally of Kalanick, leaves the company.
  • US Attorney General Eric Holder releases his investigation report over allegations of a hostile work environment at Uber, including allegations of unchecked sexual harassment and gender bias.
  • Board member David Bonderman, who spurred outrage after making a sexist remark at a staff meeting resigns from the board.
  • Travis Kalanick tells Uber employees that he’s taking a leave for an unspecified period. The Board approves all recommendations given in Eric Holder’s report.

While Uber’s hyper aggressive and insensitive image in the media started around the time reports poured in that Emil Michael had suggested that the company should consider hiring a team of opposition researchers to dig up dirt on its media critics, subsequent years have revealed that it was all an outcome of the brash bro culture set up by Travis. Hopefully, after all these expulsions and implementing the desired recommendations, Travis Kalanick and Uber can indeed come out with stronger 2.0 version.

Author

Shweta Modgil

Inc42 Staff

Passion for writing and interest in the start-up space brings Shweta to Inc.42. She has prior experience as a Research Analyst in the venture capital/ private equity space and the auto industry. Fiction writing is her other forte and her first book titled One Hundred Days published by Tara Press debuted in 2014.

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