Keeping CEO Job Was One Fight Too Many for Uber’s Kalanick

June 21, 2017 Updated: August 1, 2018

DETROIT—Travis Kalanick’s combative personality created the culture that let Uber grow from startup to behemoth in just eight years. But under his direction the ride-hailing company had trouble growing up, leading to his downfall.

Kalanick, 40, stepped down on June 20, saying in a statement that his departure would help Uber return to growth “rather than be distracted by another fight.”

This time the fight was with investors and his board, with several big players pushing for him to move aside. It was one fight too many after years of tussles with just about every business partner Uber touched.

“When you’re at war with customers, employees, service suppliers, you can’t build up a business model and Kalanick was at war with everyone,” said Ferdinand Dudenhoeffer, director of the Center for Automotive Research at the University of Duisburg-Essen. “There is no business model in being at war.”

App-based ride-hailing itself remains a topic of intense interest for the tech and auto industries as they compete to see whether Silicon Valley or the automakers will reap the profits from the digitalization of how people get from one place to another.

But “the significance of Uber has declined because the company has not managed to present itself in a stable and socially responsible way,” Dudenhoeffer said.

Uber’s board confirmed Kalanick’s resignation early on June 21, saying in a statement that Kalanick is taking time to heal from the death of his mother in a boating accident “while giving the company room to fully embrace this new chapter in Uber’s history.” He will remain on the Uber Technologies Inc. board.

The move comes as Uber, the world’s largest ride-hailing company, struggles to morph from a free-wheeling startup into a mature company that can stanch losses and post consistent profits. After years of phenomenal growth at the expense of the taxi business, Uber had reached a point where the culture that created the company had become a liability that threatened to kill it.

It was unclear who would replace Kalanick.

Uber made a series of costly missteps under Kalanick that damaged its reputation, including revelations of sexual harassment in its offices, allegations of trade secrets theft, and a federal investigation into efforts to mislead local government regulators.

Uber lost an expensive battle for supremacy in China against Didi Chuxing and had to be satisfied with taking a stake in Didi as a consolation prize. Uber posted a US$708 million first-quarter loss, unable to turn $3.4 billion in revenue into a profit. The loss narrowed from $991 million in the previous quarter.

 

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