Uber’s Kalanick takes leave of absence from scandal-dogged company

Travis Kalanick, embattled CEO of Uber Technologies, has revealed that he is taking a leave of absence from the company. He informed employees of the ride-hailing firm via email on Tuesday, citing the need to grieve his recently deceased mother.

Kalanick’s leave of absence follows growing criticism of the leadership team at the tech firm, with accusations of a ‘toxic culture’ that resulted in multiple reported incidents of sexual harassment, as well as an ongoing court battle with Google over claims of stolen technology.

Uber has also released the recommendations of a months-long investigation by Covington & Burling, the law firm of former US Attorney General Eric Holder, who was retained by the company to perform a thorough review of its company culture and practices.

The recommendations, which were unanimously adopted by Uber’s board on Sunday, called for reducing Kalanick’s authority at the company, which was previously almost unchallenged, and introducing stricter controls over spending, human resources and the behaviour of managers.

Independent members will be added to the company board, including an independent chair, and a number of changes to human resource guidelines and rules will be introduced, including prohibiting relationships between bosses and their direct reporting staff.

It’s understood that the possibility of Kalanick’s temporary absence from the firm was discussed during a day-long board meeting on Sunday. Following the same meeting, Uber’s chief business officer and Kalanick’s close friend Emil Michael stepped down from his position.

The departure of Kalanick, albeit temporary, is the latest in a long line of controversies that have plagued the firm, which has never shied away from the spotlight. Uber originally made a name for itself by disrupting the minicab industry, which resulted in protests around the world from traditional taxi drivers who felt their livelihood was threatened.

More recently, the firm has found itself hit with problems from multiple quarters. Google’s parent company, Alphabet, is currently engaged in a lawsuit over the alleged theft of trade secrets related to self-driving cars. The company has been criticised over its data collection policies, forcing it to rethink how its app operated. Kalanick himself was caught on video in an argument with an Uber driver who voiced concerns over fares.

On top of all of that, in February 2017, Susan J. Fowler, a former site reliability engineer at Uber posted a blog entry alleging that sexual harassment was being ignored by HR at the company, and that there was “a game-of-thrones political war raging within the ranks of upper management” that created “insane organisational chaos”.

The blog post began a closer look at Uber’s culture (as well as attitudes throughout the tech industry) and has seemingly culminated with Kalanick’s leave of absence. In between then and now, 20 employees have been fired over claims of discrimination, harassment, bullying and more. The firm has also seen a number of high profile departures by executives over the past six months, with rumours that dissatisfaction with the company’s reaction to Fowler’s claims were the motivating factor.

With all the controversies swirling around the company, the $708m loss that the firm made in Q1 was barely remarked upon, but the company’s difficulty in reducing costs and establishing a sustainable business have made investors as hesitant to back it further as all the other rumours over the past year.

After such a disastrous six months, it’s not surprising that the board is seeking to make some sweeping changes, and removing Kalanick’s influence certainly seems like a starting point. In his email to employees, Kalanick wrote that “for Uber 2.0 to succeed there is nothing more important than dedicating my time to building out the leadership team. But 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.”

While Kalanick has not said how long he will be away from the firm, don’t expect Travis 2.0 to be ready for beta any time soon.