Uber CEO Travis Kalanick is taking a leave of absence from the company to grieve his mother's recent death and work on his leadership skills.
As had been widely expected, Uber Technologies CEO Travis Kalanick has told employees that he will take an indefinite leave of absence to “grieve” for his mother, killed in a recent boating accident, while also taking time to work on the leadership skills that he admits need to be improved.
The move comes as Uber faces a mounting series of problems, from a lawsuit alleging it stole technical secrets from autonomous vehicle company Waymo to indications the ride-sharing giant has been losing momentum and market share as customers become increasingly disenchanted with Uber. On the same day Kalanick announced his temporary leave, the company publicly released the results of an investigation led by former U.S. Attorney General Eric Holder into allegations of widespread sexual harassment.
“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 to employees, adding that, “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 likelihood that the 40-year-old Kalanick would step out of his day-to-day role was signaled over the weekend, just as the Uber board began considering the report prepared by Holder and his legal team. Directors ultimately accepted all of the recommendations it made.
(Uber fires 20 employees ahead of release of sex harassment study. Click Here for the full story.)
The probe was triggered by former engineer Susan Fowler Rigetti who went public earlier this year with allegations of the harassment she faced while working for Uber. Among other things, Rigetti was repeatedly propositioned by her former boss and then told she would face retribution for even reporting the behavior of a highly prized manager.
Holder and his law firm, Perkins Coie, have looked into 215 allegations of sexual and other forms of harassment at Uber, 57 still under investigation.
Kalanick was initially defended by his board, including Arianna Huffington, who declared him a “scrappy entrepreneur.” But that support has been eroding as more and more problems have emerged at the company, including the lawsuit filed by Waymo, which accused Uber of hiring one of its former managers who, it claimed, stole thousands of technical documents that allegedly have been used to speed up Uber’s own autonomous vehicle program. Though Uber has denied that charge it this month fired the employee, Anthony Levandowski.
Critics have accused Kalanick of creating a “baller,” or macho frat house-style, culture at Uber that seemed to not only tolerate but even encourage questionable behavior. A memo that surfaced last week warned employees attending a company retreat not to toss beer kegs off the hotel’s roof and set guidelines on who could have sexual relations.
Kalanick’s drive and ego were apparent in the letter he sent to employees. He declared, “The ultimate responsibility, for where we’ve gotten and how we’ve gotten here rests on my shoulders,” before taking a more humble tone, adding that, “There is of course much to be proud of but there is much to improve.”
(Uber fires autonomous vehicle chief Levandowski. Click Here for the story.)
His departure creates a potential vacuum at a time when Uber has plenty of challenges, including the departure of one of Kalanick’s top lieutenant’s Vice President Emil Michael. The company’s CFO and president have also resigned in recent months, even as Kalanick announced he would launch a search for a new chief operating officer.
“During this interim period, the leadership team, my directs, will be running the company,” Kalanick wrote. “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.”
Uber could be facing a number of legal problems in the coming months, including a decision on the Waymo lawsuit, as well as any repercussions from the Holder report.
Meanwhile, it is watching the spate of publicity takes its toll, even as key competitors ramp up efforts to catch up. A study created by TXN Solutions for USA Today based on credit card receipts estimates Uber has seen its share of rides dip from 90% to 75% of the last two years – with a three-point drop just since Rigetti went public with her complaints in February.
Meanwhile, chief rival Lyft’s share has grown from 21.2% to 24.7% in the past four months. Lyft has been hammering away at Uber on a number of fronts, among other things announcing tie-ups with several automotive manufacturers. That includes a $25 million deal with Jaguar Land Rover this week, as well as a $500 million investment by General Motors in early 2016.
(Kalanick’s leave of absence wasn’t a surprise. Click Here to see why.)
That said, Uber remains the largest equity capital-funded company in the world, with an estimated value of nearly $70 billion, or roughly seven times more than Lyft. And barring further setbacks, industry analysts expect it to benefit from the projected surge in ride-sharing business anticipated over the next decade.