When the pugnacious Uber CEO and founder Travis Kalanick announced he was taking an indefinite leave of absence last week, it was, at least in part, an effort to mollify his critics inside and outside the company—the ones who said that Uber’s sexist, brutish workplace culture had become too toxic not to require a wholesale overhaul, the ones repulsed by the startup’s mercenary business tactics, the ones who kept piling on after months of self-inflicted scandals, and, of course, the investors who worried all of this chaos at a firm worth $69 billion could suddenly cost them fortunes. Uber had to change, so Kalanick, who built the company in his image, vowed to work on “Travis 2.0, to become the leader this company needs and that you deserve.”
It wasn’t good enough—and now, Kalanick is out.
The New York Times was first to report that Kalanick stepped down Tuesday after five of Uber’s large investors called for his exit:
In the letter, titled “Moving Uber Forward” and obtained by The New York Times, the investors wrote to Mr. Kalanick that he must immediately leave and that the company needed a change in leadership. Mr. Kalanick, 40, consulted with at least one Uber board member, and after long discussions with some of the investors, he agreed to step down. He will remain on Uber’s board of directors.
In a statement, Kalanick said, “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.”
Fighting and building used to be synonymous goals for Uber, whether it was tussling with city and state regulators, rivals like Lyft (for ride-hailing) and Apple (for self-driving cars), or Uber’s own drivers, like the one whom Kalanick was caught on video berating for complaining about shrinking pay. That stance, laid out in a series of company principles such as making bold bets and “always be hustlin’,” unquestionably helps account for the massive scale and valuation Uber has achieved since its founding in 2009.
But the consequences of that attitude, filtered down from an executive who once added the hashtag #FML to a memo advising employees not to have sex with co-workers in their same chain of command on a company retreat, became too much in aggregate, especially after former Uber engineer Susan Fowler wrote a horrifying post about the sexual harassment she’d faced working at the startup. That eventually led the company to commission former Attorney General Eric Holder to investigate Uber’s culture; the company’s board adopted all of the suggestions of a resulting report last week.
The board wasn’t finished. While Kalanick controls the board through his own shares and the seats of his allies, the group of investors who demanded he step down has about 40 percent of the voting power, the Times reports. They’ll now seek a new chief executive—in addition to filling many other senior roles left vacant by a recent employee exodus. Those investors insisted that Kalanick support the talent search, which he undoubtedly will—even if, in the back of his head, he’s also muttering “#FML.”