Kalanick’s Dramatic Uber Departure: Too Little, Too Late


First, a disclaimer: losing a parent is a horrendous and painful ordeal. We at Red Herring do not want to lose sight of the grief and loss Travis Kalanick must still be feeling, after his mother was killed in a boating accident last month. We wish his father, who was also on the boat, all the best in his recovery from the tragedy.

Today Travis Kalanick, the long-embattled CEO of ride-share giant Uber, resigned. The news came with barely a whisper of admission that Kalanick himself has been largely responsible for a number of publicity disasters, that have left his successor with a lot of cleaning-up to do.

Kalanick’s ouster was, allegedly, orchestrated by Benchmark, a venture capital group which owns around 40% of the $50 billion-valued company. Its own board will breath a deep sigh of relief today. But where Uber’s future is concerned, Kalanick’s dramatic fall from grace is far too little, too late for a brand that has taken a beating like few others in the tech industry.

“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,” wrote Kalanick in a statement to the New York Times.

Scandals might be a better choice of words. 2017 has been an annus horribilis for the San Francisco-headquartered firm, which since its 2009 inception has transformed the global transport industry. First the firm was forced to pay a $20m settlement in January, amid claims it had falsely advertised the amount of money its drivers could earn.

Then there was the company’s advertising of services during a yellow cab strike at New York City’s JFK Airport the same month, in the wake of President Donald Trump’s proposed Muslim ban. That prompted the #DeleteUber campaign, and a surge for local rival Lyft. The next month sexual harassment claims grew so loud Uber hired former US attorney general Eric Holder to investigate them (Kalanick’s previous language, which includes naming his newfound desirability ‘Boob-er’, did little to assuage investors).

Next came a damaging IP theft case brought by Google parent Alphabet, pertaining to driverless technology it claimed Uber stole from its portfolio firm Waymo, which could dislodge Uber’s autonomous ambitions for some time. In March the New York Times reported that Uber had been using a special tool called Greyball to detect and deceive city agencies.

Since then it has gotten even worse. Kalanick was filmed berating an Uber driver, for which he later pledged to receive ‘leadership help’. Then he was spotted visiting an escort bar in Seoul, South Korea, and one of his executives was caught obtaining the medical records of a woman claiming to have been raped by an Uber driver. And to top it off, Uber was found to be underpaying drivers in NYC and settled for tens of millions of dollars.

This has left Uber reeling, with customer numbers falling amid competition from Lyft, whose driver protections are said to be better (drivers cannot drive as many hours as they like, for example, and customers can give tips). Just today, as Kalanick removed himself from Uber’s board, the company has made a play for hearts and minds by offering its own users the option to include a driver gratuity.

But this is also too little, too late: Uber’s reputation is–rightly–in tatters. It is beset by endemic sexual harassment and an economic rapacity that appears to care little, or not at all, for its drivers or for the cities in which it operates. Didi Chuxing has blitzed Uber in China, and companies like Ola and Lyft are winning key battles in India and the US, respectively.

In its Valley-on-steroids ambition to dominate the whole world as quickly as possible, Uber has spread itself too thin, failing to root out the rot from within. Kalanick had become a lame duck of a CEO; a Caesarian despot atop a crumbling empire. Benchmark’s Brutuses may have thrown him off the board. But as with Rome, a deeper, more systemic revolution is necessary for Uber to justify its own vaunted value.

Without it, investors are unlikely to entrust their cash to a company making barely a tenth of that value in revenue. Uber may have lost its self-saboteur-in-chief. But there is far more work to be done.