Uber CEO goes on leave and will be stripped of power when he comes back
Uber Chief Executive Officer Travis Kalanick told staff he plans to take a leave of absence to grieve for his late mother, without disclosing a return date.
The company will be run by a management committee as it tries to navigate a wave of scandals.
Upon Kalanick’s return, Uber will strip him of some duties and appoint an independent chair to limit his influence, according to an advance copy of a report prepared for the board.
At a staff meeting Tuesday, the company began conveying the results of a probe conducted by Eric Holder, the former US attorney general who Uber hired to look into allegations of harassment, discrimination and an aggressive culture. The 47 recommendations include creating a board oversight committee, rewriting Uber’s cultural values, reducing alcohol use at work events, and prohibiting intimate relationships between employees and their bosses.
Uber’s board met Sunday to review a detailed version of the report and voted unanimously to approve the recommendations. Afterward, the San Francisco-based company ousted Emil Michael, Uber’s head of business.
The board will move to diminish Kalanick’s role once he comes back by giving some of the CEO’s job responsibilities to a chief operating officer -- a position Uber has been actively recruiting for but has yet to fill. This person would “act as a full partner with the CEO but focus on day-to-day operations, culture and institutions within Uber,” the report said.
“The ultimate responsibility, for where we’ve gotten and how we’ve gotten here, rests on my shoulders,” Kalanick wrote in an email to employees. “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.”
Uber lost or removed much of its management team in recent months as scandal after scandal emerged. The 14,000-plus workforce lacks a clear No 2 who could run things in Kalanick’s stead. Uber has started taking steps to fill out the executive bench. Last week, it hired Harvard Business School’s Frances Frei as senior vice president of leadership and strategy, and will add Nestle SA’s Wan Ling Martello as an independent director.
Despite recent turmoil, Uber’s business is growing. Revenue increased to US$3.4 billion in the first quarter, while losses narrowed -- though they remain substantial at US$708 million. But Lyft has stolen some market share in the US, and Uber’s internal strife could open opportunities for competitors globally to lure partners, raise funds or poach talent.
Executives at Uber had looked to the Holder report as a likely turning point in their efforts to put the company’s past indiscretions behind them and provide a road map for the future.
Holder, an attorney at law firm Covington & Burling LLP, interviewed employees as part of a 14-week probe he conducted with his colleague Tammy Albarran. A separate examination by Perkins Coie LLP is reviewing 215 HR claims. More than 20 people have been fired as a result of that inquiry.