FILE – In this Feb. 26, 2017, file photo, Uber CEO Travis Kalanick arrives at the Vanity Fair Oscar Party in Beverly Hills, Calif. Former Uber CEO Kalanick will resign from the company’s board next week, effectively severing ties with the company he co-founded a decade ago. (Photo by Evan Agostini/Invision/AP, File)
Travis Kalanick, who built Uber into a ride-hailing giant, only to be ousted as CEO over the company’s sexist “bro” culture, is cashing out.
Kalanick disclosed Tuesday that he has sold off all his Uber stock — estimated at more than $2.5 billion — and is resigning from the board of directors, severing ties to the company he co-founded a decade ago.
“Uber has been a part of my life for the past 10 years. At the close of the decade, and with the company now public, it seems like the right moment for me to focus on my current business and philanthropic pursuits,” the 43-year-old entrepreneur said in a statement.
Uber, based in San Francisco, transformed the way people get around and how they make a living, too, turbocharging the gig economy and undermining the taxi industry. Its nearly 4 million drivers around the globe have logged 15 billion trips since 2010, when Kalanick and Garrett Camp came up with the idea of hailing a ride from a smartphone after a trip to Paris when they couldn’t find a taxi.
But Kalanick was fired as CEO in the summer of 2017 with the company mired in lawsuits.
Uber under Kalanick grew with incredible speed, but like a number of other tech startups, it ran into trouble with a corporate culture that appeared at times to be spinning out of control. Before his ouster as chief executive, Kalanick acknowledged he needed to “fundamentally change and grow up.”
His career at Uber seemed to fit a certain pattern seen in Silicon Valley: The brash and disruptive personalities who are great at creating startups can be ill-suited for the corner office when the company reaches maturity. Sometimes “adult supervision” in the form of experienced executives has to be brought in.
In one of the Uber’s biggest scandals, Kalanick was accused of presiding over a workplace environment that allowed rampant sexual harassment.
A former Uber engineer, Susan Fowler, leveled sexual harassment and sexism allegations in a 2017 blog post, saying a boss — not Kalanick — had propositioned her and higher-ups had ignored her complaints. Kalanick called the accusations “abhorrent” and hired former Attorney General Eric Holder to investigate. Holder recommended reducing Kalanick’s responsibilities.
After multiple investigations, Uber fired 20 employees accused of sexual harassment, bullying and retaliation against those who complained. This month, the company paid $4.4 million to settle a federal investigation over workplace misconduct.
The problems went beyond employee relations.
Waymo, the self-driving car company spun off from Google, sued Uber in 2017, alleging a top manager at Google stole pivotal technology from the company before leaving to run Uber’s self-driving car division.
Uber also gained a reputation under Kalanick for running roughshod over regulators, launching in markets before officials were able to draft rules and regulations to keep the ride-hailing business in check.
During Kalanick’s tenure, The New York Times revealed that Uber used a phony version of its app to thwart authorities in cities where it was operating illegally. Uber’s software identified regulators who were posing as riders and blocked access to them. The U.S. Justice Department is investigating.
“Many investors will be glad to see this dark chapter in the rear view mirror,” Dan Ives, managing director of Wedbush Securities, said in a note to investors.
Kalanick, through a spokeswoman, declined to be interviewed Tuesday.
Kalanick is not alone among visionary tech entrepreneurs who have stumbled after building startups from nothing.
Tesla founder Elon Musk has had too loose a grip on his Twitter habit and has been fined by the Securities and Exchange Commission for misleading investors with a tweet. He was also sued for defamation, but ultimately cleared, for going on Twitter and calling a British cave explorer “pedo guy” — short for “pedophile.”
Adam Neumann, the former CEO of WeWork, recently stepped aside after the workplace-sharing company canceled its initial public offering amid concerns about his judgment, including his use of WeWork stock to secure a $500 million personal loan.
After Kalanick’s ouster, former Expedia CEO Dara Khosrowshahi was brought on as Uber’s chief executive to clean up its image and steer the company to its stock market debut in May. But Uber’s stock floundered and fell almost 11% in its first day of trading as a public company. It has tumbled more than 30% since.
“Let’s call it like it is: Uber stock has been a nightmare since the IPO coming out of the gates,” Ives said.
Kalanick had been one of Uber’s biggest shareholders, owning 9% of the company at the time of the IPO.
Sam Abuelsamid, principal analyst at Navigant Research, said it was not surprising Kalanick sold his stake.
“He, like everyone else, probably realizes now that Uber and its competitors are unlikely to reach sustainable profitability in the foreseeable future,” Abuelsamid said. “Automated vehicles are not the savior for ride hailing and won’t be mainstream for many years. With that in mind, his Uber stake is probably as valuable as it will get for a long time, if not forever.”
Source: Associated Press – CATHY BUSSEWITZ