Uber CEO says he needs ‘leadership help’ after yelling at Uber driver, but he’s got bigger problems


It’s getting a bit cliché to talk about Uber’s problems, but considering the company’s problems are mounting in new and creative ways. Founder and CEO Travis Kalanick has said he needs “leadership help” following his recent run-in with an Uber driver angry about management’s persistent fare dropping.

“It’s clear this video is a reflection of me—and the criticism we’ve received is a stark reminder that I must fundamentally change as a leader and grow up. This is the first time I’ve been willing to admit that I need leadership help and I intend to get it,” Kalanick wrote in an apology on Uber’s website. “I want to profoundly apologize to Fawzi, as well as the driver and rider community, and to the Uber team.”

“To say that I am ashamed is an extreme understatement. My job as your leader is to lead… and that starts with behaving in a way that makes us all proud. That is not what I did, and it cannot be explained away.”

His own statements could be an indictment of his leadership of the company as Uber simultaneously battles allegations of a lax company culture with sexual harassment and a lawsuit accusing the company of stealing self-driving car designs from Google.

Either crisis would be enough to embroil the entire company, but the two things together, now grouped with Kalanick’s personal leadership faults and Uber’s propensity for landing itself in court create a perfect storm that could make the company’s future untenable.

Let’s try looking at this as a timeline.

Susan Fowler blogged about a dismissive Human Resources department, even predicting she would receive a poor performance report from the same supervisor she accused of sexual harassment should she not switch to another department in the company. The New York Times later highlighted a culture of impunity at the company following interviews with 30 former and current employees. About a week later, Recode asked Uber if they had been aware of previous harassment allegations against SVP Amit Singhal when he worked at Google. Kalanick tried to control that story by demanding Singhal’s resignation.

While this was happening, Waymo announced its lawsuit and in so doing undermined the credibility of Uber’s self-driving car project. Waymo accuses Otto’s founder Anthony Levandowski of secretly downloading LiDAR designs while he worked at Google before abruptly resigning and forming Otto. To make matters worse, Waymo alleges Levandowski met with Uber executives on January 14, 2016 two weeks before he resigned. Within six months, Uber had bought Otto. This is circumstantial evidence of collusion between Uber and Levandowski to steal Waymo’s designs.

Of course, this timeline does not include a litany of local court cases against Uber over violating local taxi laws around the world and its recent, obstinate refusal to get a license to test self-driving cars on San Francisco roads. Nor does it include the PR damage done by the #DeleteUber campaign following a failure to join cabbie strikes at airports following President Trump’s recent, legally plagued executive order against immigration. Taken all together, Kalanick has a big problem.

Is Kalanick safe as CEO?

Consider what members of Uber’s board of directors are thinking right now. It’s not clear what kind of protections Kalanick has worked into his investment agreements with board members and what it would take to replace him as CEO. The board has only a few members on it even though there have been massive contributions from a slew of other investors. Co-founder Garrett Camp and SVP of Global Operations Ryan Graves sit with him alongside Benchmark’s Bill Gurley, Yasir Al-Rumayyan of the Saudi Arabian Public Investment Fund, David Bonderman, and Ariana Huffington.

Bill Gurley, general partner of Benchmark Capital Holdings Co and Uber board member., speaks during the WSJDLive Global Technology Conference in Laguna Beach, California, U.S., on Tuesday, Oct. 25, 2016. (Photographer: Patrick T. Fallon/Bloomberg via Getty Images Israel)

A tight board with close relationships can protect Kalanick’s job, but Uber’s investors have interests, too. Early investors Freada Kapor Klein and Mitch Kapor wrote a scathing post after the internal investigation was announced. Even more critical to the company’s operations, Kalanick will face a serious problem in raising follow-on capital with non-financial problems accentuating the fact Uber has never, ever been profitable. They were reportedly on track to lose $3 billion in 2016 according to leaked financial documents. It has spent intensively on grabbing market share around the world, unloading billions in places like China before conceding defeat to local competitor Didi last year.

Powerful, impatient investors might include Goldman Sachs, Amazon’s Jeff Bezos, Microsoft, the governments of Qatar and Saudi Arabia, Square Peg Capital, Menlo Ventures, Fidelity Investments, and GV (Google Ventures, whose parent company is out for blood right now).

A self-driving Uber on the streets of San Francisco December 2, 2016 (Geektime/Yaniv Feldman)

Its move into self-driving technology is in many ways a pivot from the traditional taxi business and brings with it dreams of cutting costs on drivers and earning money off autonomous technology IP. Getting to profitability with that strategy is now a bigger question with Google’s lawsuit looming.

What happens if a judge orders Uber to pay compensation to Google? What if Uber cannot secure an agreement to license the technology afterwards?

Answering these two questions is beyond the scope of this article. What is clear is that Travis Kalanick’s admission he needs “leadership help” highlights anew questions about Uber’s entire strategy of ignoring regulations, mocking cities which ban its services after repeated warnings, and an aggressive spend-first-get-more-venture-capital-later strategy that seems to parallel aggressive attitudes among employees.

With all these factors in mind, a plea for “leadership help” might invite demands for leadership replacement.


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