In many ways, Travis Kalanick built Uber—the ubiquitous ride-sharing and delivery service company—in his own image. His bold, brash, unapologetic frat-boy attitude was mirrored in the company’s rapid growth, expanding into cities over the objections of local politicians and launching smear campaigns against those who stood in their way.
For years, that strategy worked, and Uber grew into a $70 billion business. But more recently, the company—and Kalanick—have faced bumpier roads.
A cascading series of sexual harassment allegations and public relations disasters finally caught up to Kalanick, and late Tuesday night he resigned as CEO from the company he founded.
The news comes barely a week after the company announced Kalanick would take an indefinite leave of absence from his post, at the recommendation of a report by former U.S. Attorney General Eric Holder, who was commissioned to investigate the company’s toxic culture.
But his temporary dismissal apparently did not assuage nervous investors, who have watched Uber’s value steadily fall. According to the New York Times, five top investors delivered an ultimatum to Kalanick on Tuesday, demanding he resign from the company. In a letter entitled “Moving Uber Forward,” the group of investors called for a change of leadership, and Kalanick acquiesed. He will keep a seat on Uber’s board of directors.
Uber has spent years putting out fires on multiple fronts. Almost from the beginning, the company has dealt with accusations of mistreatment of its drivers, who make up the backbone of the company but who are nevertheless hired as contractors, allowing Uber to avoid costly expenses like health insurance and overtime benefits.
During its rapid expansion across the country, Uber also ran afoul of several local governments who were concerned about Uber’s largely unregulated model of livery service. Cities like Austin and New York sought to halt or at least slow Uber’s growth to assess the impact that hundreds or thousands of new cars on busy city streets would have, and in its home state of California, Uber was slapped with hefty fines for its failure to ensure drivers were adhering to anti-discrimination laws. In 2015, the state’s Labor Commission also ruled in favor of drivers, dealing a blow to Uber’s business model of treating them as contractors.
Uber responded to these setbacks by launching counter-offensives. In New York City, the company launched multi-million ad campaigns targeting Mayor Bill de Blasio and other uncooperative politicians. In Seattle, Uber hired a CIA-linked firm to investigate the city’s union laws after drivers were given the right to collectively bargain. And in cities across the world, Uber deployed “greyball” software to evade government regulators and mask the true scope of its operations. Even journalists who sought to expose Uber’s shady practices were subjected to the company’s aggressive tactics: over dinner, one executive suggested the company hire private investigators to dig up personal information about a female journalist who had written critically about the company’s “sexism and misogyny.”
As it turns out, those critical reports were also accurate. It begins in the car, where dozens of lawsuits have been filed by passengers who accuse their drivers of rape, assault, kidnapping, and harassment, and accuse the company of doing virtually nothing to prevent these crimes.
Uber’s problems are no less prevalent in its board room. In a widely shared blog post, former Uber engineer Susan Fowler detailed numerous instances of sexual harassment she endured during her time at the company, and the complete disregard shown by executives after she brought her allegations to corporate executives. After all, she was bringing her complaints to the same people who signed off on an ad campaign touting “hot chick” drivers, who hired a senior vice president who had been previously fired for sexual harassment, and whose CEO lovingly referred to the company as “Boober.” Earlier this month, at least 20 Uber employees were fired after an investigation into hundreds of claims of sexual harassment, discrimination, retaliation, and other transgressions.
So enshrined is the company’s sexist culture that, during a meeting on the same day the report about corporate sexism was publicly released, an Uber board member cracked a sexist joke to fellow board member Arianna Huffington and subsequently resigned.
Such is the legacy that Kalanick leaves in his wake.
Uber, though perhaps no longer the tech wunderkind it once was, is still considered a behemoth in Silicon Valley. If and when it files for an IPO, it will likely rank among the largest in U.S. history. But first, the company will have to stop bleeding users, clean up its corporate image, and start acting like the model company it wants to be. In other words: It’s time to grow up.