The ridesharing giant’s CEO Travis Kalanick may be on his way out
Uber is in (even more) trouble.
The ridesharing platform today lost its chief business officer, Emil Michael, for reasons related to a recently completed report on its workplace culture, the Wall Street Journal reported. Former U.S. Attorney General Eric Holder had been commissioned to investigate allegations of sexual misconduct and sexism at Uber and presented his findings to the board over the weekend, which subsequently unanimously approved all his recommendations.
While the report will only be released to employees Tuesday, it’s already had an impact. Silicon Valley is now abuzz with chatter that Travis Kalanick, the abrasive co-founder and chief executive that led Uber’s growth into a company valued at around $70 billion, may be forced to take a temporary leave of absence. Among the issues that Uber’s had to contend with include allegations that it tracked users even after they deleted its app; it also recently admitted to overcharging customers in New York City.
This has translated in real-world problems for the tech darling, which was an early mover in the ridesharing space but now faces stiff competition from nimbler startups like Get and Lyft. The latter in particular has capitalized on Uber’s missteps: it reported 22.8 million rides this past February, up 137% from a year before. “All the public press around Uber has led to quite a few people choosing not to use it,” says Bob O’Donnell of Technalysis Research, a consulting firm. “At the end of the day, it’s a brand people have to spend money with and people get to choose if they want to support a brand.”
The company has already lost numerous key executives and doesn’t currently have a chief operating officer (it recently added three women to senior leadership positions.) Additionally, while the company has previously entered new markets without seeking legislative permission, cities are now pushing back. That raises big question marks for a company that despite its sky high valuation, has yet to turn a profit. “It’s a big poster child of ridesharing so its management has enormous impact,” says O’Donnell. “The question is if they’ll get to a point where they make money, and will these other challenges slow them down?”
Still, will removing Kalanick, even for just six months, make any difference? O’Donnell thinks that’s primarily a public relations play. “The hope is that doing it will calm things down and reduce the backlash,” he says. “But changing the culture doesn’t take place overnight. It takes months, and sometimes years.”
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