Embattled Uber CEO Kalanick to take leave of absence

By AFP/Julie Charpentrat, Rob Lever   June 14, 2017 | 08:42 am PT
Embattled Uber CEO Kalanick to take leave of absence
Uber CEO Travis Kalanick in a photo taken on January 19, 2016. Photo by Reuters/Danish Siddiqui/File photo.
The pioneering company has been facing pressure to rein in a no-holds-barred management style led by Kalanick and to reform its workplace culture.

Uber said Tuesday its chief executive Travis Kalanick would take an indefinite leave of absence as it unveiled steps aimed at restoring confidence in the scandal-plagued ridesharing giant.

The pioneering company has been facing pressure to rein in a no-holds-barred management style led by Kalanick and to reform its workplace culture, which has sparked charges of harassment and discrimination.

"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," the 40-year-old Kalanick said in an email to Uber employees.

Kalanick said one of the reasons for his stepping aside was the recent death of his mother, explaining he needs time off "to reflect, to work on myself and to focus on building out a world-class leadership team."

Kalanick said he would remain available as needed during his absence for "the most strategic decisions."

Uber simultaneously released a 13-page document calling for major reforms at the company based on a probe led by former U.S. attorney general Eric Holder, who investigated allegations of misconduct and ethical lapses.

Implementing the recommendations "will improve our culture, promote fairness and accountability, and establish processes and systems to ensure the mistakes of the past will not be repeated," said Liane Hornsey, Uber's chief human resources officer.

"While change does not happen overnight, we're committed to rebuilding trust with our employees, riders and drivers."

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."

The Holder investigation was aimed at cleaning up a corporate culture marred by accusations of harassment, discrimination and cutthroat practices to thwart rivals and evade regulators.

The company is facing questions about its covert use of law enforcement-evading software and tactics apparently aimed at disrupting rivals in the ridesharing business.

'Tone at the top'

The report said the reforms should focus on "tone at the top, trust, transformation and accountability."

It said the company should "review and reallocate responsibilities of Kalanick," and that creating the job of chief operating officer, which was discussed in recent months, "should address this concern to some extent."

Uber should also consider installing an independent board chair, "to serve as an independent check on Uber's management" and to show it is taking reforms seriously.

The Holder report called for "an ethics and culture committee" to oversee Uber's efforts to maintain ethical business practices.

Uber should implement mandatory training for managers and key leaders, create a "robust" complaint process and take steps to ensure more minorities are hired, it added.

An audio recording of Tuesday's meeting released by Yahoo Finance indicated some tense moments. Board member Arianna Huffington referred to Kalanick as "the elephant in the room," but she also called the change "a seminal moment" for Uber.

When Huffington spoke of bringing another woman to the board, fellow board member David Bonderman commented that this would lead to "more talking." Bonderman later apologized, according to a statement released to HuffPost.

A statement released by early Uber investors Mitch and Freada Kapor said they were encouraged by the "thoughtful and extensive" recommendations.

Vivek Wadhwa, a Carnegie Mellon University fellow who follows the technology industry, welcomed the "solid recommendations" unveiled by the company.

"Also commend (Kalanick) for stepping aside and doing what is right for company and employees. Expect he and company will be stronger & better," Wadhwa tweeted.

Uber, which is the world's richest venture-backed startup valued at some $68 billion, operates in dozens of countries despite problems with regulators in many jurisdictions and protests from established taxi operators.

The San Francisco group parted ways this week with its number two executive, Emil Michael, who had been reportedly 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.

Last week, Uber said it had fired 20 people following preliminary results of the investigation, after examining 215 claims of discrimination, harassment, unprofessional behavior, bullying, retaliation and "physical security."

It remains to be seen what impact will be felt by the absence of Kalanick, who has been the driving force behind Uber despite a series of embarrassing missteps.

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