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TECHNOLOGY

Uber Founder Travis Kalanick Resigns as

C.E.O.
By MIKE ISAAC JUNE 21, 2017

Travis Kalanick stepped down Tuesday as chief executive of Uber, the ride-hailing
service that he helped found in 2009 and built into a transportation colossus, after
a shareholder revolt made it untenable for him to stay on at the company.

Mr. Kalanicks exit came under pressure after hours of drama involving Ubers
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 Ubers major investors demanded that the chief
executive resign immediately. The investors included one of Ubers biggest
shareholders, the venture capital firm Benchmark, which has one of its partners,
Bill Gurley, on Ubers 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.

In the letter, titled Moving Uber Forward and obtained by The New York
Times, the investors wrote to Mr. Kalanick that he must immediately leave and that
the company needed a change in leadership. Mr. Kalanick, 40, consulted with at
least one Uber board member, and after long discussions with some of the
investors, he agreed to step down. He will remain on Ubers board of directors.

I love Uber more than anything in the world and at this difficult moment in my
personal life I have accepted the investors request to step aside so that Uber can go
back to building rather than be distracted with another fight, Mr. Kalanick said in
a statement.

Ubers board said in a statement that Mr. Kalanick had always put Uber first
and that his stepping down as chief executive would give the company room to
fully embrace this new chapter in Ubers history. An Uber spokesman declined to
comment further.

The move caps months of questions over the leadership of Uber, which has
become a prime example of Silicon Valley start-up culture gone awry. The company
has been exposed this year as having a workplace culture that included sexual
harassment and discrimination, and it has pushed the envelope in dealing with law
enforcement and even partners. That tone was set by Mr. Kalanick, who has
aggressively turned the company into the worlds dominant ride-hailing service
and upended the transportation industry around the globe.

Mr. Kalanicks troubles began earlier this year after a former Uber engineer
detailed what she said was sexual harassment at the company, opening the
floodgates for more complaints and spurring internal investigations. In addition,
Uber has been dealing with an intellectual property lawsuit from Waymo, the self-
driving car business that operates under Googles parent company, and a federal
inquiry into a software tool that Uber used to sidestep some law enforcement.

Uber has been trying to move past its difficult history, which has grown
inextricably tied to Mr. Kalanick. In recent months, Uber has fired more than 20
employees after an investigation into the companys culture, embarked on major
changes to professionalize its workplace, and is searching for new executives
including a chief operating officer.

Mr. Kalanick last week said he would take an indefinite leave of absence from
Uber, partly to work on himself and to grieve for his mother, who died last month
in a boating accident. He said Ubers day-to-day management would fall to a
committee of more than 10 executives.

But the shareholder letter indicated that his taking time off was not enough for
some investors who have pumped millions of dollars into the ride-hailing
company, which has seen its valuation swell to nearly $70 billion. For them, Mr.
Kalanick had to go.
 The five shareholders who demanded Mr. Kalanicks resignation include some
of the technology industrys most prestigious venture capital firms, which invested
in Uber at an early stage of the companys life, as well as a mutual fund firm. Apart
from Benchmark, they are First Round Capital, Lowercase Capital, Menlo Ventures
and Fidelity Investments, which together own more than a quarter of Ubers stock.
Because some of the investors hold a type of stock that endows them with an
outsize number of votes, they have about 40 percent of Ubers voting power.

Benchmark, Lowercase, First Round, Menlo Ventures and Fidelity did not
respond to requests for comment.

But on Twitter, Mr. Gurley of Benchmark, one of the earliest supporters of Mr.
Kalanick at Uber, said of the executive, There will be many pages in the history
books devoted to @travisk very few entrepreneurs have had such a lasting
impact on the world.

Mr. Kalanicks resignation opens questions of who may take over Uber,
especially since the company has been so molded in his image. And Mr. Kalanick
will probably remain a presence there since he still retains control of a majority of
Ubers voting shares.

Taking a start-up chief executive to task so publicly is relatively unusual in

Silicon Valley, where investors often praise entrepreneurs and their aggressiveness,
especially if their companies are growing fast. It is only when those start-ups are in
a precarious position or are declining that shareholders move to protect their
investment.

In the case of Uber one of the most highly valued private companies in the
world investors could lose billions of dollars if the company were to be marked
down in valuation.

Uber, which has raised more than $14 billion from investors since its founding
in 2009, has a wide base of shareholders apart from the ones who signed the letter.
Ubers investors also include TPG Capital, the Public Investment Fund of Saudi
Arabia, mutual fund giants like BlackRock and wealthy clients of firms like Morgan
Stanley and Goldman Sachs.
 In the letter, in addition to Mr. Kalanicks immediate resignation, the five
shareholders asked for improved oversight of the companys board by filling two of
three empty board seats with truly independent directors. They also demanded
that Mr. Kalanick support a board-led search committee for a new chief executive
and that Uber immediately hire an experienced chief financial officer.

Mr. Kalanick is stepping down as Uber works to improve its relationships with
some of its constituencies. Earlier Tuesday, the company emailed its drivers, who
work as contractors, to let them know they would soon be allowed to take tips,
which drivers had not been able to accept previously. The tipping change was
among several new initiatives announced for drivers.

Over the next 180 days we are committed to making driving with Uber better
than ever, the company said. We know theres a long road ahead, but we wont
stop until we get there.

Follow Mike Isaac on Twitter @MikeIsaac.

2017 The New York Times Company