SAN FRANCISCO: Uber’s embattled chief executive Travis Kalanick has resigned, yielding to pressure from investors seeking to clean up a toxic corporate culture at the fast-growing ridesharing group.
Kalanick had announced an indefinite leave of absence a week earlier following the release of a report on Uber’s workplace troubles by former US attorney general Eric Holder.
His departure, announced late Tuesday, caps a rocky period for the global ridesharing giant, which has been roiled by disturbing reports of a cutthroat workplace culture, harassment, discrimination and questionable business tactics to thwart rivals.
“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 said in a statement.
The Uber board of directors welcomed the “bold decision,” say it marked a “sign of his devotion and love for Uber.”
Kalanick, who has been the driving force behind Uber’s massive global expansion and whose brash style had made him a liability, will remain on the board with a large voting stake in the company, whose $68 billion valuation makes it the world’s largest venture-backed startup.
The pioneering company has been facing pressure to rein in a no-holds-barred management style led by Kalanick and to reform its work environment.
Investors had been growing impatient with the 40-year-old Kalanick despite a pledge to implement reforms.
In a letter, titled “Moving Uber Forward,” key investors told Kalanick that he must immediately leave as part of a necessary change in leadership, The New York Times reported.
The New York Post, citing unnamed sources, said Uber was seeking to recruit Facebook chief operating officer Sheryl Sandberg for the CEO job, with others on the listing including former Yahoo CEO Marissa Mayer and former Disney operating chief Tom Staggs.
But news site Recode said Sandberg was staying at Facebook, and that candidates include former Ford CEO Alan Mulally and YouTube chief Susan Wojcicki.
The removal of Kalanick is “healthy and long overdue,” said Larry Chiagouris, a marketing professor at Pace University.
“There was too much uncertainty about the future of the company” with Kalanick in charge, he said.
Chiagouris said the missteps at Uber have dented the company but that “this brand is still the strongest in its category” and can recover under new leadership.
Following Kalanick’s announcement, early Uber investor Bill Gurley of Benchmark Capital offered praise for the departing CEO.
“There will be many pages in the history books devoted to @travisk — very few entrepreneurs have had such a lasting impact on the world,” Gurley tweeted.
Jan Dawson of Jackdaw Research said in a blog post that Kalanick’s resignation “leaves an enormous vacuum at the top of the company,” but that “this is all for the best long term, even if it’s messy in the short term.”
Uber has not only disrupted the local transport industry in dozens of countries. It’s also been investing in autonomous driving technology, and has provoked a lawsuit from the former Google car unit now called Waymo that accused Uber of stealing trade secrets.
Kalanick’s fiery character helped Uber’s expansion in the face of opposition from regulators and established taxi operators, but it also got him into trouble.
As Uber faced a series of embarrassing disclosures, he was captured on a dashcam berating and cursing at a driver who had complained about earnings, in a video that went viral.
His resignation comes a day after the company emailed its US drivers to say it would allow passengers to tip them, starting in three cities and rolling out across the country by the end of July.
Before Kalanick’s departure, Uber had been shaking up its ranks.
The San Francisco-based firm parted ways with its number two executive, Emil Michael, who had reportedly been linked to a number of questionable practices at Uber, including a visit to a South Korean escort-karaoke bar and an attempt to dig up embarrassing information on journalists.
Previously, Uber said it had fired 20 people after examining 215 claims of discrimination, harassment, unprofessional behavior and bullying.
Uber this month released a 13-page document calling for major reforms at the company based on a probe led by Holder, who investigated allegations of misconduct and ethical lapses.
The report, recommendations of which were adopted by the board, said Uber “should reformulate its written cultural values” to “reflect more inclusive and positive behaviors.”
Uber said that its revenue during the first three months of this year rose some 18 percent to $3.4 billion, but the company logged a loss of $708 million without taking into account stock compensation for employees.