Uber CEO To Take Leave Of Absence, “Dimished Role” After Holder's Report On Workplace Scandals
Uber no longer has a COO, CBO, CFO, CMO, or Head of Engineering; and is now temporarily without a CEO after the release of today’s ‘official’ investigation into workplace scandals (by former U.S. Attorney General Eric Holder).
“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… During the interim period, the leadership team, my directs, will be running the company.”
As The Wall Street Journal reports, over the past several weeks, Uber workers have been summoned to the nearby San Francisco office of Mr. Holder’s firm, Covington & Burling LLP, to describe their experiences, according to employees who have been interviewed or were requested to be. On Sunday, Mr. Holder’s firm presented its report to company directors, which unanimously approved all of the recommendations following a marathon board meeting in Los Angeles, according to people familiar with the matter. The fallout of that report was evident Monday, when Uber’s chief business officer, Emil Michael, resigned from the company. His exit, which people familiar with the matter say was recommended by the report, was surprising given his close relationship with Mr. Kalanick.
And now we have the results (and the findings)… Bloomberg reports that Uber Chief Executive Officer Travis Kalanicktold staff he plans to take a leave of absence, without disclosing a return date.
Kalanick decided to take a leave while also coping with the death of his mother, whose funeral he attended Friday.
The company will strip him of some duties and appoint an independent chair to limit his influence after a slew of scandals, 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 U.S. 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.
Several of Uber’s planned changes are symbolic. For example, a conference room known as the War Room will be renamed the Peace Room.
The company also plans to scrap many of its cultural values, notably “Let Builders Build, Always Be Hustlin’, Meritocracy and Toe-Stepping, and Principled Confrontation,” which the Holder report described as being “used to justify poor behavior.”
“Many of Uber’s 14 cultural values, while well-intended, had been allowed to be weaponized,” Huffington said in her statement. “That’s completely unacceptable.”
Some excerpts from the email…
We recommend that Uber focus on four prevailing themes with regard to taking the folowing remedial measures: tone at the top, trust, transformation, and accountability.
A. Review and Reallocate the Responsibilities of Travis Kalanick. The Board should evaluate the extent to which some of the responsibilities that Mr. Kalanick has historically possessed should be shared or given outright to other members of senior management. The search for a Chief Operating Officer should address this concern to some extent.
B. Institute and Enforce Clear Guidelines on Alcohol Consumption and the Use of Controlled Substances. Uber should take steps to provide clear guidelines about acceptable and unacceptable uses of alcohol and strictly prohibit the use of controlled substances, including prolubiting consumption of alcohol during core work hours and prohibiting consumption of non-prescription controlled substances during core work hours, at work events, or at other work-sponsored events. With respect to alcohol consumption at after-hours work events and at other work-sponsored events, Uber should consider limiting the budget available to managers for alcohol purchases, restrict reimbursement for alcohol-related events, and include training for managers on appropriate events for retreats and out-of-work events. Uber should also encourage responsible drinking, which can include limiting the amount of alcohol that is available in the office, de-emphasizing alcohol as a component of work events, and otherwise taking appropriate action to discipline and address inappropriate employee conduct fueled by alcohol consumption. Uber should support work events in which alcohol is not a strong component to ensure that employees who do not partake in consumption of alcohol still have opportunities to engage in networking and team building activities.
C. Prohibit Romantic or Intimate Relationships Between Individuals in a Reporting Relationship. Uber should developspecificand clearguidance concerningappropriate workplace relationships, including makingclear that any type of romantic or intimate relationship between individuals in a reporting relationship (either direct or indirect) is prohibited. If employees in a reporting relationship find themselves in a romantic or intimate relationship, they must be relationship find themselves in a romantic or intimate relationship, they must be required to immediately report it so that appropriate action can be taken, including making sure that the individuals are not in any type of reporting relationship (direct or indirecegoing forward. Although it is not realistic to prohibit all romantic and intimate relationships in the workplace. it should be emphasized more generally that with respect to such relationships, Uber will not tolerate any form of harassment, discrimination, or retaliation.
Of course this is just the latest in a string of PR disasters for the ‘unicorn’ of ‘unicorns’. As noted recently, here is a snapshot of some of the most notable scandals that have emerged, involving the world’s most valuable private company:
- Another tale of sexism and unacceptable workplace behavior in Silicon Valley company has emerged. This time it’s at Uber, according to an explosive blog post published on Sunday by a former company engineer named Susan Fowler Riggetti.
- Uber’s newly-hired VP of engineering Amit Singhal was asked to, and did, resign on Monday after the company learned from Recode that he was accused of sexual harassment shortly before leaving Google a year ago. Here’s more on the difficult position of former employers in this case.
- A video showing Uber CEO Travis Kalanick rudely arguing with a long-time driver at the end of his ride was published by Bloomberg. “I need leadership help,” Kalanick said in an apology he issued shortly after.
- Susan Fowler Rigetti, the former Uber engineer who wrote of discrimination, said she’s hired attorneys after a new law firm began to investigate her claims. Uber confirmed it has hired Perkins Coie, which reports to former A.G. Eric Holder, who’s leading the investigation.
- Uber said on Thursday that it will finally apply for a DMV permit to test self-driving cars in California after its cars’ registrations were revoked in December because it refused to get the permit.
- Charlie Miller, one of the two famous car hackers who joined Uber’s Advanced Technology Center in August 2015, announced he’s leaving the company.
- The New York Times uncovered a secret Uber program called Greyball, through which the company uses software and data to evade law enforcement in cities.
- Keala Lusk, a former Uber engineer, published a blog post detailing how her female manager mistreated her, signaling that the company’s problematic culture isn’t limited to the men who work there.
- Ed Baker, Uber’s head of product and growth, resigned. Though the reason is unclear, he was allegedly seen kissing another employee three years ago, which was anonymously communicated to board member Arianna Huffington, according to Recode.
- A report outlines a trip by a group of Uber employees to a Seoul karaoke-escort bar in 2014, which included company CEO Travis Kalanick and his girlfriend, Gabi Holzwarth. After arriving, several male employees picked escorts to sit with, and went to sing karaoke. Uncomfortable, a female marketing manager, who was part of the group, left after a couple of minutes, while Holzwarth and Kalanick left after an hour.
- California regulators have recommended that Uber be fined $1.13 million for failing to investigate and/or suspend drivers who are reported by a passenger to be intoxicated. The state requires ride-hailing companies to have a zero-tolerance policy for driving under the influence of alcohol or drugs.
- A new report says Uber used a secret program dubbed “Hell’ to track Lyft drivers to see if they were driving for both ride-hailing services and otherwise stifle competition. Only a small group of Uber employees, including CEO Travis Kalanick, knew about the program, according to a story in The Information, which was based on an anonymous source who was not authorized to speak publicly.
- Waymo sued Uber in civil court, claiming that Uber was using trade secrets stolen from Google to develop Uber’s self-driving vehicles.
- Uber fires Anthony Levandowski, a star engineer brought in to lead the company’s self-driving automobile efforts who was accused of stealing trade secrets when he left a job at Google.
- Uber said Tuesday that it had made a mistake in the way it calculated its commissions, at a cost of tens of millions of dollars to its New York drivers, and the company vowed to correct the practice and make the drivers whole for the lost earnings.
- Uber fires over 20 staff following the release of a report about sexual harrassment in the workplace.
- Reports emerge that Uber CEO Travis Kalanick fired off a bizarre email in 2013 to hundreds of employees where he listed the conditions under which they could have sex with each other at a company outing in Miami
- Uber’s chief business officer, Emil Michael, resigned from the company.
This list is by no means comprehensive.
And then there is the biggest problem of all: Uber’s chronic cash burn.
Uber lost $708 million in the first quarter, despite another rise in revenues. Last year, Uber managed to burn through almost as much cash as NASA’s $4.8 billion budget last quarter. Previously, Bloomberg reported that Uber has burned through at least $8 billion in its lifetime through the end of 2016. While the company had $7 billion of cash on hand as of March 31, along with an untapped $2.3 billion credit facility, inevitably questions will emerge if and when the world’s most previous “unicorn” will ever turn a profit. The company was most recently valued at $68 billion, although in light of the recent turmoil in the C-suite that number will likely be revised significantlly lower.