Travis Kalanick, the combative and troubled CEO of ride-hailing giant Uber, has resigned under pressure from investors at a pivotal time for the company.
Uber’s board confirmed the move early Wednesday, saying in a statement that Kalanick is taking time to heal from the death of his mother in a boating accident “while giving the company room to fully embrace this new chapter in Uber’s history.” He will remain on the Uber Technologies Inc. board.
The move comes as Uber, the world’s largest ride-hailing company, was having trouble morphing from a free-wheeling startup into a mature company that can stanch losses and post consistent profits. After eight years of phenomenal growth by upending the taxi business, Uber had reached a point where the culture that created the company had become an albatross that threatened to kill it.
- VIDEO: Watch the video of Uber’s former CEO arguing with a driv er at: https://www.youtube.com/watch?v=gTEDYCkNqns
In a statement, the 40-year-old co-founder said his resignation would help Uber go back to building “rather than be distracted with another fight,” an apparent reference to efforts on the board to oust him.
It was unclear who would replace Kalanick.
The resignation came after a series of costly missteps under Kalanick that damaged Uber’s reputation including revelations of sexual harassment in its offices, allegations of trade secrets theft and a federal investigation into efforts to mislead local government regulators.
On Tuesday, the company embarked on a 180-day program to change its image by allowing riders to give drivers tips through the Uber app, something Kalanick had resisted. Drivers have said that Kalanick didn’t value their labor even though it was the heart of the San Francisco-based company.
Uber’s board said in a statement that Kalanick had “always put Uber first.”
But under Kalanick, the company developed a reputation for ruthless tactics that have occasionally outraged government regulators, drivers, riders and employees. The company often flouted city regulations for taxi companies with a culture that encouraged “Principled Confrontation.”
The company’s hard-charging style has led to legal trouble. The U.S. Justice Department is investigating Uber’s past usage of phony software designed to thwart local government regulators who wanted to check on whether Uber was carrying passengers without permission.
A key step toward Kalanick’s downfall came in February, when former Uber engineer Susan Fowler posted a personal essay about the year she spent at Uber, writing that she was propositioned by her manager on her first day with an engineering team. She reported him to human resources, but was told he would get a lecture and no further punishment because he was a “high performer,” she wrote.
That caught the board’s attention and brought outside investigations that led to the firing of 20 people including some managers. Former Attorney General Eric Holder conducted one of the probes, finding that the male-dominated Uber didn’t have the most basic policies to protect workers from harassment. Holder’s report suggested procedures that most companies have had for years such as using performance reviews to hold leaders accountable.
Also, Kalanick lost his temper in an argument with an Uber driver who was complaining about pay. The profanity-laced confrontation was caught on a video that surfaced in February. Afterward, Kalanick said he needed management help and had to grow up. The company began searching for a chief operating officer.
In March, board member Arianna Huffington expressed confidence that Kalanick would evolve into a better leader. But Huffington, a founder of Huffington Post, suggested time might be running out.
He’s a “scrappy entrepreneur,” she said during the call, but one who needed to bring “changes in himself and in the way he leads.”
During the past year, several senior managers left the company including the president and chief financial officer.
Outside experts said the only way to change Uber’s culture was for Kalanick to step aside. But Uber’s ownership and voting structure made it difficult to oust him.
Kalanick took an indefinite leave of absence earlier this month, in part to deal with a personal tragedy. In May, his mother was killed and his father hurt in a boating accident on a California lake.
Uber was having trouble dealing with its success. It posted a $708 million first-quarter loss, unable to turn $3.4 billion in revenue into a profit. The loss narrowed from the $991 million it posted in the previous quarter.
Investors have talked about selling stock in Uber to the public. The company was valued at near $70 billion the last time it sought capital.
Timeline: Uber’s mounting woes in 2017
Here’s a timeline of Uber’s troubles so far this year.
- Jan. 28: After President Donald Trump releases his first executive order on immigration, New York taxi drivers protest by refusing to pick up passengers at Kennedy Airport for an hour. Some protesters say Uber tries to capitalize on the protest by picking up passengers anyway, prompting a Twitter protest urging people to delete Uber’s app from their smartphones.
- Feb. 2: Uber CEO Travis Kalanick quits President Trump’s council of business leaders amid mounting pressure from employees and customers over the immigration order.
- Feb. 19: A former Uber engineer, Susan Fowler, discloses sexual harassment and sexism claims in a blog post about her year at Uber. Fowler says her boss propositioned her and higher-ups ignored her complaints. Kalanick calls Fowler’s accusations “abhorrent” and hires former U.S. Attorney General Eric Holder to investigate.
- Feb. 23: Waymo, a self-driving car company spun off from Google, sues Uber. Waymo alleges 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.
- Feb. 28: A video emerges of Kalanick arguing with an Uber driver. It includes yelling and profanity and ends with a combative Kalanick dismissing the agitated driver’s claims that sharp reductions in fares forced him into bankruptcy. In an email to employees, Kalanick admits he needs leadership help. “I must fundamentally change as a leader and grow up,” he says. [Watch the video at https://www.youtube.com/watch?v=gTEDYCkNqns]
- March 3: The New York Times reveals that Uber used a phony version of its app to thwart authorities in cities where it was operating illegally. Uber’s so-called Greyball software identified regulators who were posing as riders and blocked access to them. The U.S. Justice Department is investigating Uber’s use of the Greyball software.
- March 19: 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 18: Sherif Marakby, a global vice president who leads Uber’s self-driving car program, leaves the company.
- April 27: Levandowski announces he is stepping aside while Uber defends itself against the allegations from Waymo.
- May 11: A federal judge in San Francisco rejects Uber’s request for arbitration and refers Waymo’s case to the U.S. Attorney’s office for a possible criminal investigation. Days later the judge bans Uber from using technology taken from Waymo, but doesn’t order Uber to halt its self-driving vehicle program, as Waymo requested. The case is set for trial in October.
- May 26: Kalanick’s mother dies in a boating accident. His father is seriously injured.
- May 30: Uber fires Levandowski.
- May 31: Uber’s finance chief Gautam Gupta says he plans to leave the company in July.
- June 6: Uber fires 20 people after a law firm, Perkins Coie, investigates complaints of harassment, bullying and retaliation. That investigation, which was separate from Holder’s, checked into 215 complaints; 57 are still under investigation.
- June 11: Uber’s board meets with Holder and adopts a series of recommendations based on his report.
- June 12: Emil Michael, Uber’s senior vice president for business and a close ally of Kalanick, leaves the company.
- June 13: Kalanick tells Uber employees that he’s taking a leave for an unspecified period, but will be available for “the most strategic decisions.” Uber’s board releases Holder’s recommendations, which include removing some of Kalanick’s responsibilities and replacing Uber’s chairman and founder, Garrett Camp, with an independent chairman. Holder also recommends many cultural and policy changes, from establishing an effective complaint process to recruiting more diverse applicants to prohibiting alcohol and drug use during core work hours.
- June 20: Uber embarks on “180 days of change,” seeking to persuade riders and investors that it is a company with a conscience and a heart. The first move was allowing riders the ability to give drivers tips through the Uber app, something that Kalanick had resisted. Details of the rest of the plan were not made public.
- June 21: CEO Travis Kalanick resigns under pressure from investors and the board. He will stay on as a board member.