The New York Times is reporting that the controversial CEO of Uber Technologies Inc., Travis Kalanick, has resigned.
According to the publication, which broke the news late Tuesday, Kalanick’s exit was the result of pressure from five key investors which collectively represent approximately 40 per cent of voting power on the company’s board.
The Times’ sources were a letter from the five investors titled “Moving Uber Forward,” which it did not republish, and “two people with knowledge of the situation,” who asked to remain anonymous.
The five investors were venture capital firm Benchmark, whose partner Bill Gurley sits on Uber’s board; First Round Capital; Lowercase Capital; Menlo Ventures; and Fidelity Investments. None responded to the Times’ requests for comment.
In addition to demanding Kalanick’s resignation, the investors’ letter asked for improved oversight of Uber’s board by requesting that two of its three empty seats be filled with “truly independent directors.” It also demanded Kalanick’s support for a board-led search committee for a new CEO and that Uber immediately hire an experienced CFO.
In a statement Kalanick, who reportedly received the letter while in Chicago, said that he agreed to step down after long discussions with some of the investors and consulting with at least one board member.
“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, who announced last week he would be taking indefinite leave, partly to grieve the death of his mother and partly to develop what he called “Travis 2.0,” said in the statement.
Despite his resignation, Kalanick possesses an outsized share of company votes and will remain on its board.
In a collective statement, Uber’s board told the Times that Kalanick had “always put Uber first,” and that his resignation would give the company “room to fully embrace this new chapter in Uber’s history.” A company spokesperson declined to comment further.
Kalanick’s exit is far from a surprise to anyone who follows the tech industry – or the news in general.
Since the beginning of February, when the #DeleteUber hashtag arose from a misconception that the company was supporting U.S. president Donald Trump’s travel ban – and resulted in an estimated 200,000 people deleting the app – the ride hailing giant’s public reputation has faced one setback after another, including a viral blog post by former engineer Susan Fowler describing a company culture that valued abusive high performers over sexual harassment complaints; a viral video of Kalanick harassing an Uber driver over declining fares; the public resignation of a president appointed to change course; and even a self-released report acknowledging that so far, Uber’s efforts to diversify its 64 per cent male (and more than 50 per cent white) workforce were falling short.
Last week’s announcement that Kalanick would be taking an indefinite leave was accompanied by a company promise to unanimously adopt a series of 47 recommendations submitted by Tammy Albarrán and Eric Holder, a former U.S. attorney general, on behalf of international law firm Covington & Burling LLP. They included mandatory leadership training for senior management; the implementation of a comprehensive process for employee complaints; the naming of a chief diversity and inclusion officer; a promise to interview at least one woman and one minority candidate for all senior positions; a ban on sexual relationships between managers and subordinates; and a reduced leadership role for Uber’s CEO.
The company has also fought a bitter legal battle with Waymo, the company that runs Google’s self-driving car research. According to a lawsuit filed in February 2017, Uber hired former Google engineer Anthony Levandowski after Levandowski stole trade secrets about Waymo’s LiDAR sensor technology. If successful, the suit could bring Uber’s research into self-driving technology to a halt, though for the time being a judge has allowed it to continue, and Uber fired Levandowski in May.
Uber also made headlines after recently firing more than 20 employees in response to a separate investigation.
Despite the controversy, Uber remains an icon of the so-called “gig economy,” having undeniably upended transportation industry laws and practices around the world – including in Canada – and it remains valued at nearly $70 billion USD.
It also recently announced that users would soon be allowed to provide tips through its signature app, in an apparent effort to improve its frayed relationship with drivers.
Tip tip hooray! The option to tip from the app is arriving soon: https://t.co/tc8FxJla3N pic.twitter.com/y3sw6Jn6tk
— Uber (@Uber) June 20, 2017