Uber CEO Travis Kalanick will take a leave of absence from the company he founded and the company will make changes to its culture, following a highly-anticipated investigation into sexual harassment and toxic workplace culture at the ride-hailing startup.
“The ultimate responsibility, for where we’ve gotten and how we’ve gotten here rests on my shoulders,” Kalanick wrote in a company-wide email obtained by Gizmodo. “For Uber 2.0 to succeed there is nothing more important than dedicating my time to building out the leadership team. But 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.”
Kalanick told staffers that he needed time to grieve after losing his mother in a tragic accident last month, but his memo also acknowledged the scandals that have plagued the company and his role in them.
After a lengthy meeting on Sunday, Uber’s board of directors voted unanimously to accept all the recommendations put forth in the culture investigation, a spokesperson for the board told Gizmodo. The guidance was laid out in a report created by former U.S. attorney general Eric Holder and his law firm partner Tammy Albarrán.
The recommendations, which were shared with Uber’s employees and the public today, also included guidance for inclusion and employee training.
“Implementing these recommendations will improve our culture, promote fairness and accountability, and establish processes and systems to ensure the mistakes of the past will not be repeated. While change does not happen overnight, we’re committed to rebuilding trust with our employees, riders and drivers,” Uber’s HR head Liane Hornsey wrote in a statement.
The board reportedly insisted on the ouster of Uber’s senior vice president of business and Kalanick’s close friend Emil Michael, who left the company yesterday. Kalanick and Michael have both figured prominently in Uber’s recent scandals, although Michael reportedly believes he was scapegoated by the board.
Uber called on Holder and Albarrán to investigate the company’s culture one day after Susan Fowler, a former Uber engineer, published a blog post in February describing pervasive sexual harassment at the company. Holder’s investigation, and a concurrent one conducted by the law firm Perkins Coie, have dragged on for several months. The Holder report contains sweeping recommendations about corporate structure, while the Perkins Coie investigation focused on specific employee complaints, and eventually led to the firing of 20 employees and the resignation of several senior executives.
Fowler said she experienced harassment shortly after joining the company and, although she raised concerns to management and HR, her harasser was not disciplined. Instead, Fowler wrote, a manager threatened to fire her if she complained again. Fowler told Uber’s chief technology officer Thuan Pham about the retaliation threat, and Pham acknowledged it was illegal but took no action, Fowler said.
“What’s described here is abhorrent & against everything we believe in. Anyone who behaves this way or thinks this is OK will be fired,” Kalanick tweeted in response to Fowler’s revelations. “There can be absolutely no place for this kind of behavior at Uber.” Kalanick added in a later statement that Fowler’s blog was the first time he’d heard the allegations.
However, Kalanick’s private actions belied his public statements, and as his behavior made headlines over the past several months, it became increasingly clear that Uber’s brazen and toxic culture came from the top. A video surfaced of the CEO berating an Uber driver; after the video’s publication, Kalanick, who is 40 years old, said it was time for him to “grow up.” A story emerged about Kalanick and several other male executives, including Michael, visiting an escort bar in South Korea. An executive obtained the medical file of an Uber passenger who was raped in India, and Kalanick and Michael reportedly used the file to question the woman’s account of her assault. Michael also once floated the idea of conducting opposition research on journalists who wrote unfavourably about Uber.
Stories of this misbehavior—and presumably other incidents that haven’t been made public yet—were shared with Holder and Albarrán over the course of their investigation.
In his resignation letter to employees, Michael said he’d worked hard to build an inclusive culture on his team at Uber. “Beginning with my first day at Uber, I have been committed to building a diverse Business Team that would be widely recognised as the best in the technology world: one that is welcoming to people of all genders, sexual orientations, national origins and educational backgrounds,” Michael wrote. “I am proud that our group has made so much progress toward these goals and is a leader in the company in many of these categories. As an Egyptian immigrant who was taken under the wing of a great business leader like Bill Campbell, I have an abiding belief that we all should pay it forward by ensuring that our workplace represents all types of people.”
In addition to allegations of widespread harassment and discrimination, Uber is also facing a Justice Department investigation into its use of special software to hide its vehicles from law enforcement officials who used the app. In February, just days after Fowler published her post, the self-driving car company Waymo sued Uber for trade secret theft and patent infringement, claiming that Uber knowingly hired a prominent Waymo engineer who had downloaded confidential documents in order to advance Uber’s autonomous vehicle development efforts.
Despite all of Uber’s problems, Kalanick has managed to hang on to his position, helped in part by Uber’s share structure that gives him more voting shares than the company’s other board members. Kalanick (and other tech founders like him) have used this sort of share structure to ensure they stay in control of their once-small startups even as investors and board members come aboard.
That’s why the choice to take a leave of absence was ultimately up to Kalanick—his board can make suggestions, but ultimately they don’t have the power to force him out.
With all of the problems facing Uber and the many leadership positions that are currently vacant, Kalanick’s leave of absence may seem surprising. But the death of his mother in a boating accident last month influenced his decision to temporarily step away from work.
Although Kalanick did not say when he would return to the company—“It’s hard to put a timeline on this,” he wrote—he did say that his leadership team would run the day-to-day operations in his absence and he would remain available to help with strategic decisions.