Uber CEO’s Resignation Ends Some of Company’s Distractions
On Tuesday, the same day Uber announced “180 days of change” to fix long-standing grievances held by drivers, CEO Travis Kalanick resigned.
It was the conclusion to a string of recent controversies that saw some of Uber’s first investors, funds that had profited handsomely from Uber’s galloping unicorn success, call for his resignation.
The 40-year-old has faced increased scrutiny over Uber’s treatment of female engineers, questionable business practices, and an investigation into the culture and workplace practices of the startup.
Kalanick, often seen as brash, seemed to weather most of the criticism levelled at him and the company he started. But that changed as Venture capital firm Benchmark, whose partner Bill Gurley is one of Uber’s largest shareholders and sits on its board, as well as investors First Round Capital, Lowercase Capital, Menlo Ventures and Fidelity Investments, began pressing him to quit.
“The sense I think is that there’s been too much scandal at Uber and that it’s started to get to the point where he himself as CEO and the departure of a few executives at Uber is starting to rub off badly,” said Jasper Lawler, senior markets analyst at London Capital Group.
“It’s distracting the company from its main mission of becoming the main riding hailing app in the U.S., where Lyft has been gaining some traction and more globally. And so I think probably the sense is that maybe Uber is getting closer to a point where it can actually IPO and maybe Travis was not the man to take over that final hurdle,” he said.
Uber had also been falling behind in its core application, said Lawler, pointing out that Uber only recently started allowing some drivers to receive tips from passengers through the app.
“That’s something Lyft has had in its app for a while,” he said.
On the day Kalanick resigned, Uber launched a process of rebuilding its relationship with its drivers.
“We’ve heard you. You’ve told us what you want, and now it’s time we step up and give you the driving experience you deserve, because simply put, Uber wouldn’t exist without you,” Rachel Holt, head of US operations and Aaron Schildkrout, head of driver experience wrote in an email that went out to all drivers and delivery partners.
The changes include a new tipping feature, a shorter window for riders to cancel an Uber, and an end to unpaid wait times.
The company has pledged major changes every month for the next six months, all aimed at making “driving more flexible and less stressful” while giving drivers better earnings.
The changes come as Uber faces more competition from similar ride-hailing services. Lawler said the software itself is easy to copy. What gives Uber much of its advantage is its wide footprint, a footprint established because of its network of drivers.