Uber’s CEO, Travis Kalanick, has announced that he will take an indefinite leave of absence as the embattled company released a damning report on its workplace culture that called on the company to “review and reallocate” Kalanick’s responsibilities.
“I need to take some time off of the day-to-day to grieve my mother, whom I buried on Friday, to reflect, to work on myself, and to focus on building out a world-class leadership team,” Kalanick wrote in an email to staff on Tuesday that referenced the death of his mother last month in a boating accident. “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.”
Kalanick’s leave comes at a time of considerable turmoil for the ride-hail app. On Sunday, the board of directors voted unanimously to adopt the recommendations of a workplace review led by the law firm of the former US attorney general Eric Holder.
Further complicating the situation, venture capitalist David Bonderman resigned from Uber’s board of directors Tuesday evening after making a sexist comment at the all-staff meeting where the Holder report’s recommendations were presented.
The report’s recommendations, made public Tuesday, are notable for how rudimentary many are for such a large company with a valuation as high as $70bn. The report, for example, calls for training human resource personnel on “the effective handling of complaints”, training senior management and executives in leadership, and the introduction of a policy banning romantic relationships between employees and their managers.
Uber commissioned the inquiry and report following the publication of a viral blogpost by the former engineer Susan Fowler, who described her experience of sexual harassment and gender discrimination at the company. Fowler responded to the report’s release on Twitter, where she reacted to a comment about its lack of an apology, saying, “Ha! Yeah, they’ll never apologize. I’ve gotten nothing but aggressive hostility from them. It’s all optics.”
The report also called on Uber to significantly improve its diversity efforts, starting with elevating the head of diversity to the most senior level of the company’s executive team. In addition, Uber is encouraged to establish an “employee diversity advisory board”, use a blind résumé review process for evaluating job applicants, and adopt a “Rooney Rule” requiring at least one female and one underrepresented minority candidate be identified for key positions.
The review and reallocation of Kalanick’s duties was accompanied by recommendations for hiring a chief operating officer (COO) to function as a “full partner” with the CEO, adding more independent seats to the board of directors, and establishing an oversight committee.
The report also called on Uber to “reformulate” the company’s notorious cultural values, eliminating “those values which have been identified as redundant or as having been used to justify poor behavior, including Let Builders Build, Always Be Hustlin’, Meritocracy and Toe-Stepping, and Principled Confrontation”.
“Implementing these recommendations will improve our culture, promote fairness and accountability, and establish processes and systems to ensure the mistakes of the past will not be repeated,” said the company’s human resources chief, Liane Hornsey, in a statement.
Freada Kapor Klein – one of Uber’s earliest investors who, with her husband, Mitch Klein, published an open letter in February criticizing the company – praised the recommendations, but raised questions about whether Kalanick would return to the company.
The adoption by the board of directors of the report’s recommendations are “very different than the CEO saying, ‘Sorry, I’ll try to do better”, she said.
Kapor Klein also said Kalanick’s leave from the company “enhanced” Uber’s ability to hire a strong COO.
“Somebody needs to run a world-class business, reboot the culture and take diversity and inclusion seriously,” she said. “I can imagine that team with Travis coming back, and I can imagine that team without Travis.”
Whether the company will be successful in implementing a culture change remains an open question.
During the all-hands meeting presenting the report to Uber employees on Tuesday, Bonderman interrupted his fellow board member Arianna Huffington with a sexist remark, according to an audio recording of the meeting obtained by Yahoo Finance.
After Huffington mentioned the addition of a second female board member, she said that data showed that once a company had one woman on its board, it was more likely to have a second.
Bonderman interjected: “Actually, what it shows is that it’s much more likely to be more talking.” After apologizing in an email to the staff, he resigned from the board later Tuesday.
Though it’s hard to think of a time when Uber wasn’t facing one scandal or another, over the past six months the company has been in unprecedented turmoil.
The company started the year paying a $20m settlement to the Federal Trade Commission to settle charges that it misled drivers over their potential earnings, and things have only gone downhill from there.
The brand was tarred with the Trump brush at the end of January, thanks to Kalanick’s position on a Trump economic advisory council and the company’s non-participation in a New York City taxi strike in protest of the first iteration of Trump’s travel ban. Kalanick stepped down from the advisory council, and the company claimed that it did not intend to violate the strike, but the damage was done: according to the New York Times, about 500,000 users followed through on a social media campaign calling for people to #DeleteUber.
In February, Fowler’s blogpost paved the way for dozens of reports on a seemingly toxic workplace, and a non-stop drip of revelations including a trip by executives to a South Korean escort bar, an internal “sex memo”, and the alleged mishandling of a rape victim’s medical records by executives who sought to discredit her story.
Last week, at least 20 people were fired over incidents of harassment, retaliation, discrimination and bullying, dozens more were disciplined and 57 complaints remain under investigation by Holder’s law firm, Perkins Coie.
And in February, Uber’s self-driving car program, which Kalanick has described as “existential” to the company, was threatened by an explosive intellectual property lawsuit by the Google spinoff Waymo. The suit, which Uber has so far failed to force into arbitration, has already claimed the job of the head of Uber’s self-driving car program, Anthony Levandowski, and could fatally wound the company’s autonomous vehicle ambitions when it lands in front of a jury in October.
The alleged intellectual property theft case has been referred to federal prosecutors for a potential criminal investigation, and Uber is also facing a federal investigation into its use of a program called Greyball, which was exposed by the New York Times in March. The program allowed Uber to systematically evade law enforcement in cities where its service was illegal.
Kalanick’s leadership was called into question when Bloomberg released a video of the executive berating an Uber driver after the driver complained about the difficulty making a living with Uber’s falling rates. Kalanick apologized for his behavior in a statement that conceded he needed “leadership help”, and he announced his intention to hire a COO to assist him in the management of the company.
The COO position has yet to be filled, and in the meantime, the company has seen a mass exodus of executives. Among the recent departures are president Jeff Jones, senior vice-president of engineering Amit Singhal, head of policy and communications Rachel Whetstone, vice-president of maps Brian McClendon, vice-president of product and growth Ed Baker, and head of finance Gautam Gupta. In the past week, Eric Alexander, the president of business for Uber Asia Pacific, was fired over his mishandling of the rape victim’s medical records, and Emil Michael, senior vice-president for business, departed amid pressure from the board of directors.
