Uber's Travis Kalanick (Credit: Heisenberg Media)
Travis Kalanick is no longer Uber’s CEO. The ride-hailing app company’s infamous founder stepped down Tuesday following a shareholder revolt.
According to the New York Times:
Mr. Kalanick’s exit came under pressure after hours of drama involving Uber’s investors, according to two people with knowledge of the situation, who asked to remain anonymous because the details were confidential.
Earlier on Tuesday, five of Uber’s major investors demanded that the chief executive resign immediately. The investors included one of Uber’s biggest shareholders, the venture capital firm Benchmark, which has one of its partners, Bill Gurley, on Uber’s board. The investors made their demand for Mr. Kalanick to step down in a letter delivered to the chief executive while he was in Chicago, said the people with knowledge of the situation.
But as the Times points out, Kalanick and Uber are an intertwined entity at this point, with the company molded in its founder’s image. The next CEO won’t just be helming an empire, they will be steering a company whose divide-and-conquer (or, if you prefer, “disruptive”) mentality reflects Kalanick’s own abrasive worldview. A leadership change may appease the Twitter wrath, but it will only go so far if the company’s core practices remain exploitative and evading regulation continues to be its M.O.
With those systemic issues in mind, here are four criteria Uber might use in its search for a new CEO. Perhaps if the company were led by someone with a deeper understanding of how top-level policies affect drivers and passengers alike, it could begin to shed the Kalanick rep.
1. Someone who has worked closely with people who drive for a living
Kalanick’s caught-on-tape fight with driver Fawzi Kamel earlier this year went viral, in part, because it captured and distilled a power dynamic that has made Uber notorious. The company’s new tipping option and “180 days of change” campaign may be small steps in the right direction, but Catherine Ruckelshaus, general counsel and program director at the National Employment Law Project, argued in a Newsweek opinion piece in May, that the whole independent contractor model that Uber relies on has become problematic, particularly because so many “gig economy” companies have followed its lead.
Uber is built on a rocky foundation of swindling its own workers to make a buck. From the get-go, Uber turned to a manipulative, centuries-old tactic: deny workers “employee” status and label them “independent contractors” instead. Other companies engaged in app-based shopping, cleaning, delivery and care-giving soon adopted Uber’s playbook.
Uber’s business model also includes barring workers’ access to the courts. Not only must Uber drivers agree to be independent contractors in order to be hired, they must also agree to take any claims they may have to arbitration—not to court.
It might be pie in the sky to expect Uber’s next CEO to overhaul the company’s business model, but the lack of driver representation in discussions between leadership and policymakers is a glaring problem. Uber can, and must, do better to understand the needs of the workers who make its app run, if not for any ethical reason, then for the sake of its own bottom line. According to John Paul MacDuffie, a professor at the Wharton School of the University of Pennsylvania, Uber’s treatment of its drivers has become its “primary strategic vulnerability, something that Lyft has worked hard to take advantage of with its willingness to pay drivers more, allow customers to tip drivers, etc.”
“The stories about Uber’s toxic internal organizational culture is now another major vulnerability, hurting the brand, making it difficult for them to attract executive talent, and giving customers a reason to choose alternative mobility services,” MacDuffie writes in an email.
2. Someone with a public policy background
Again, this might be the stuff of fantasy. But are Uber’s continuous battles with city officials, police officers and regulators really serving it well? The underdog image that it tried to cultivate in its first halcyon run-ins with the taxi industry is long gone; this is a company that has raised upward of $14 billion since 2009. As MacDuffie points out, it needed to ignore regulatory oversight at first, “until customer demand was sufficiently strong to provide a political counterweight.” But it’s there, it’s arrived. And working with the public sector on everything from long-term planning (particularly with congestion and emissions in mind) to driver records is increasingly obvious as the best path forward for the company.
Uber’s made several strides in this area, but results have been mixed with “some evidence of cooperation (perhaps after initial defiance) and working together on initiatives of shared value but also other evidence of entering into relationships but not following through,” MacDuffie says. Several examples of the latter include “not providing data that would shed light on whether Uber’s services are equitably distributed across neighborhoods or income groups or individuals of different races or ethnicity” and “not helping cities pursue other public transportation goals (Pittsburgh seems particularly miffed that Uber hasn’t contributed much of anything for the right to test out its “driverless” cars on its streets),” MacDuffie adds.
Uber doesn’t need to crown a former mayor CEO. But a leader who thinks in terms of city systems — rather than simply about one private company’s best interest — would help the company more than any publicity stunt.
3. Someone able to “Airbnb-ify”
“From various accounts, it seems that Airbnb has been willing to work much more closely with cities on issues such as levying and collecting taxes; dealing with landlords who convert regular apartments to full-time Airbnb in violation of many city rules; addressing concerns of neighbors in tourist-heavy places like New Orleans to put limits on how much any given Airbnb property can be rented out in a given year,” MacDuffie says. “Doing this takes a willingness to be less insistent on sticking with the original business model no matter what (to “win” each confrontation by not conceding); to be more diplomatic and accepting of other interests and points of view; and to be willing to deal with those interests in a more customized and process-attentive way.”
Airbnb doesn’t have a perfect record, to be sure, and it’s had to make public pledges about being a good urban citizen amid concerns about how its business model affects local rental markets, but concession and give-and-take has been missing from Kalanick’s leadership style.
4. A Woman
Think about it Uber. From the latest sexual harassment scandal to the lawsuits alleging rape by male drivers to a former executive’s deeply disturbing comments about a female journalist to Kalanick’s own casual sexism, the company’s so-called baller culture is catching up to it. It could continue to try and clean up its image by offering free rides to local women’s shelters. Or it could put a woman in charge.