Uber CEO To Take Leave Of Absence, "Dimished Role" After Holder's Report On Workplace Scandals

Uber no longer has a COO, CBO, CFO, CMO, or Head of Engineering; and is now temporarily without a CEO after the release of today's 'official' investigation into workplace scandals (by former U.S. Attorney General Eric Holder). 

"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... During the interim period, the leadership team, my directs, will be running the company."

As The Wall Street Journal reports, over the past several weeks, Uber workers have been summoned to the nearby San Francisco office of Mr. Holder’s firm, Covington & Burling LLP, to describe their experiences, according to employees who have been interviewed or were requested to be. On Sunday, Mr. Holder’s firm presented its report to company directors, which unanimously approved all of the recommendations following a marathon board meeting in Los Angeles, according to people familiar with the matter. The fallout of that report was evident Monday, when Uber’s chief business officer, Emil Michael, resigned from the company. His exit, which people familiar with the matter say was recommended by the report, was surprising given his close relationship with Mr. Kalanick.

And now we have the results (and the findings)... Bloomberg reports that Uber Chief Executive Officer Travis Kalanicktold staff he plans to take a leave of absence, without disclosing a return date.

Kalanick decided to take a leave while also coping with the death of his mother, whose funeral he attended Friday.

 

The company will strip him of some duties and appoint an independent chair to limit his influence after a slew of scandals, according to an advance copy of a report prepared for the board.

 

At a staff meeting Tuesday, the company began conveying the results of a probe conducted by Eric Holder, the former U.S. attorney general who Uber hired to look into allegations of harassment, discrimination and an aggressive culture.

 

The 47 recommendations include creating a board oversight committee, rewriting Uber’s cultural values, reducing alcohol use at work events, and prohibiting intimate relationships between employees and their bosses.

 

Several of Uber’s planned changes are symbolic. For example, a conference room known as the War Room will be renamed the Peace Room.

 

The company also plans to scrap many of its cultural values, notably “Let Builders Build, Always Be Hustlin’, Meritocracy and Toe-Stepping, and Principled Confrontation,” which the Holder report described as being “used to justify poor behavior.”

 

“Many of Uber’s 14 cultural values, while well-intended, had been allowed to be weaponized,” Huffington said in her statement. “That’s completely unacceptable.”

Some excerpts from the email...

Team,

 

For the last eight years my life has always been about Uber. Recent events have brought home for me that people are more important than work, and that I need to take some time off of the day-to-day to grieve my mother, whom I buried on Friday, to reflect, to work on myself, and to focus on building out a world-class leadership team.

 

The ultimate responsibility, for where we've gotten and how we've gotten here rests on my shoulders. There is of course much to be proud of but there is much to improve. 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.

 

During this interim period, the leadership team, my directs, will be running the company. I will be available as needed for the most strategic decisions, but I will be empowering them to be bold and decisive in order to move the company forward swiftly.

 

It's hard to put a timeline on this - it may be shorter or longer than we might expect. Tragically losing a loved one has been difficult for me and I need to has been difficult for me and I need to properly say my goodbyes. The incredible outpouring of heartfelt notes and condolences from all of you have kept me strong but almost universally they have ended with 'How can I help?'. My answer is simple. Do your life's work in service to our mission. That gives me time with family. Put people first, that is my mom's legacy. And make Uber 2.0 real so that the world can see the inspired work all of you do, and the inspiring people that make Uber great.

 

See you soon,
Travis

 

...

 

RECOMMENDATIONS

 

We recommend that Uber focus on four prevailing themes with regard to taking the folowing remedial measures: tone at the top, trust, transformation, and accountability.

 

A. Review and Reallocate the Responsibilities of Travis Kalanick. The Board should evaluate the extent to which some of the responsibilities that Mr. Kalanick has historically possessed should be shared or given outright to other members of senior management. The search for a Chief Operating Officer should address this concern to some extent.

 

B. Institute and Enforce Clear Guidelines on Alcohol Consumption and the Use of Controlled Substances. Uber should take steps to provide clear guidelines about acceptable and unacceptable uses of alcohol and strictly prohibit the use of controlled substances, including prolubiting consumption of alcohol during core work hours and prohibiting consumption of non-prescription controlled substances during core work hours, at work events, or at other work-sponsored events. With respect to alcohol consumption at after-hours work events and at other work-sponsored events, Uber should consider limiting the budget available to managers for alcohol purchases, restrict reimbursement for alcohol-related events, and include training for managers on appropriate events for retreats and out-of-work events. Uber should also encourage responsible drinking, which can include limiting the amount of alcohol that is available in the office, de-emphasizing alcohol as a component of work events, and otherwise taking appropriate action to discipline and address inappropriate employee conduct fueled by alcohol consumption. Uber should support work events in which alcohol is not a strong component to ensure that employees who do not partake in consumption of alcohol still have opportunities to engage in networking and team building activities.

 

C. Prohibit Romantic or Intimate Relationships Between Individuals in a Reporting Relationship. Uber should developspecificand clearguidance concerningappropriate workplace relationships, including makingclear that any type of romantic or intimate relationship between individuals in a reporting relationship (either direct or indirect) is prohibited. If employees in a reporting relationship find themselves in a romantic or intimate relationship, they must be relationship find themselves in a romantic or intimate relationship, they must be required to immediately report it so that appropriate action can be taken, including making sure that the individuals are not in any type of reporting relationship (direct or indirecegoing forward. Although it is not realistic to prohibit all romantic and intimate relationships in the workplace. it should be emphasized more generally that with respect to such relationships, Uber will not tolerate any form of harassment, discrimination, or retaliation.

Of course this is just the latest in a string of PR disasters for the 'unicorn' of 'unicorns'. As noted recently, here is a snapshot of some of the most notable scandals that have emerged, involving the world's most valuable private company:

  1. Another tale of sexism and unacceptable workplace behavior in Silicon Valley company has emerged. This time it's at Uber, according to an explosive blog post published on Sunday by a former company engineer named Susan Fowler Riggetti.
  2. Uber's newly-hired VP of engineering Amit Singhal was asked to, and did, resign on Monday after the company learned from Recode that he was accused of sexual harassment shortly before leaving Google a year ago. Here's more on the difficult position of former employers in this case.
  3. A video showing Uber CEO Travis Kalanick rudely arguing with a long-time driver at the end of his ride was published by Bloomberg. "I need leadership help," Kalanick said in an apology he issued shortly after.
  4. Susan Fowler Rigetti, the former Uber engineer who wrote of discrimination, said she's hired attorneys after a new law firm began to investigate her claims. Uber confirmed it has hired Perkins Coie, which reports to former A.G. Eric Holder, who's leading the investigation.
  5. Uber said on Thursday that it will finally apply for a DMV permit to test self-driving cars in California after its cars' registrations were revoked in December because it refused to get the permit.
  6. Charlie Miller, one of the two famous car hackers who joined Uber's Advanced Technology Center in August 2015, announced he's leaving the company.
  7. The New York Times uncovered a secret Uber program called Greyball, through which the company uses software and data to evade law enforcement in cities.
  8. Keala Lusk, a former Uber engineer, published a blog post detailing how her female manager mistreated her, signaling that the company's problematic culture isn't limited to the men who work there.
  9. Ed Baker, Uber's head of product and growth, resigned. Though the reason is unclear, he was allegedly seen kissing another employee three years ago, which was anonymously communicated to board member Arianna Huffington, according to Recode.
  10. A report outlines a trip by a group of Uber employees to a Seoul karaoke-escort bar in 2014, which included company CEO Travis Kalanick and his girlfriend, Gabi Holzwarth. After arriving, several male employees picked escorts to sit with, and went to sing karaoke. Uncomfortable, a female marketing manager, who was part of the group, left after a couple of minutes, while Holzwarth and Kalanick left after an hour.
  11. California regulators have recommended that Uber be fined $1.13 million for failing to investigate and/or suspend drivers who are reported by a passenger to be intoxicated. The state requires ride-hailing companies to have a zero-tolerance policy for driving under the influence of alcohol or drugs.
  12. A new report says Uber used a secret program dubbed "Hell' to track Lyft drivers to see if they were driving for both ride-hailing services and otherwise stifle competition. Only a small group of Uber employees, including CEO Travis Kalanick, knew about the program, according to a story in The Information, which was based on an anonymous source who was not authorized to speak publicly.
  13. Waymo sued Uber in civil court, claiming that Uber was using trade secrets stolen from Google to develop Uber’s self-driving vehicles.
  14. Uber fires Anthony Levandowski, a star engineer brought in to lead the company’s self-driving automobile efforts who was accused of stealing trade secrets when he left a job at Google.
  15. Uber said Tuesday that it had made a mistake in the way it calculated its commissions, at a cost of tens of millions of dollars to its New York drivers, and the company vowed to correct the practice and make the drivers whole for the lost earnings.
  16. Uber fires over 20 staff following the release of a report about sexual harrassment in the workplace.
  17. Reports emerge that Uber CEO Travis Kalanick fired off a bizarre email in 2013 to hundreds of employees where he listed the conditions under which they could have sex with each other at a company outing in Miami
  18. Uber’s chief business officer, Emil Michael, resigned from the company.

This list is by no means comprehensive.

And then there is the biggest problem of all: Uber's chronic cash burn.

Uber lost $708 million in the first quarter, despite another rise in revenues. Last year, Uber managed to burn through almost as much cash as NASA’s $4.8 billion budget last quarter. Previously, Bloomberg reported that Uber has burned through at least $8 billion in its lifetime through the end of 2016. While the company had $7 billion of cash on hand as of March 31, along with an untapped $2.3 billion credit facility, inevitably questions will emerge if and when the world's most previous "unicorn" will ever turn a profit. The company was most recently valued at $68 billion, although in light of the recent turmoil in the C-suite that number will likely be revised significantlly lower.

Comments

fx Tue, 06/13/2017 - 13:05 Permalink

That fits well for a company aiming to offer autonomous driving. Nobody in the driver's seat at the company level as well. Plain revolutionary! Should be good enough for another financing round at a $100bn + valuation.

hedgeless_horseman NugginFuts Tue, 06/13/2017 - 13:28 Permalink

 

...a group of Uber employees to a Seoul karaoke-escort bar in 2014, which included company CEO Travis Kalanick and his girlfriend, Gabi Holzwarth. After arriving, several male employees picked escorts to sit with, and went to sing karaoke. Uncomfortable, a female marketing manager, who was part of the group, left after a couple of minutes, while Holzwarth and Kalanick left after an hour.

Give me a fucking break.   The time has come for The First ZeroHedge Symposium and Live Fight ClubAll former or current Uberians are welcome to come to Marfa this week, and sing or sit with nieces, escorts, etc., and have has much sex with each other as you mutually desire, and feel free to speak your mind.  The symposium is anonymous.  No registration, and no badges.If you get bored or tired, the talks and music should be pretty good, too. UPDATE:   Why ZH Fight Club matters: The scarcity of real discussion and debate in today's society and what we can do about it.UPDATE: Road tripping and Project Mayhem homework assignmentUPDATE: Our Schedule for the First ZeroHedge Symposium and Live Fight Club In Marfa, Texas, June 16-18

In reply to by NugginFuts

Mr.BlingBling any_mouse Tue, 06/13/2017 - 14:26 Permalink

IMO, off-topic posting 'privileges' (i.e. the ability to do so without annoying other readers) are similar to a bank account.  Those who have made numerous positive contributions to the board are often granted unofficial license by others for things like OT posts.  Unlike the other examples you gave, HH has a substantial balance upon which to draw.EDITED TO ADD:  I will grant you that HH's food porn is somewhat annoying, but that's only because he tends to post them when I'm slated to eat some crap from a box.  Along those lines, here's a funny video from The Onion about Stouffers' plan to include suicide prevention tips on single-serving microwave meals; it's 2:10 in length.  (Bon Appétit!)http://www.theonion.com/video/stouffers-to-include-suicide-prevention-t…

In reply to by any_mouse

any_mouse fx Tue, 06/13/2017 - 13:52 Permalink

Autonomous C level and Boards. I like it. Save a a fuckton of shareholders money.

Depends on the Silicon Valley Bros who do the programming.

Leave out the sociopath function.

Have a world where the shareholders are happy, the employees are happy, and the C level hates going to work.

In reply to by fx

SmittyinLA Tue, 06/13/2017 - 13:05 Permalink

Can you imagine if they imposed the same rules on federal elected officials and lobbyists?

Too bad Cogress is exempt from sexual harassment laws

Insearch Tue, 06/13/2017 - 13:15 Permalink

I am a woman Uber driver for 2.5 yrs, I was sexually assaulted ... rider in front seat grabbed my crotch 3x, drunken/drugged out of his mind, wife passed out in back seat in sonoma...
I reported it to Uber 45 min email response...
Told me to report it to police then blocked the information gathering process...
Called critical support line week later asking how long the "critical support line" was there I had never been aware of it, especially when it's Phillipines customer support 9 to 5 Monday through Friday ...
Is that guy who was communicating with me on the critical support line said that "this isn't an emergency that he needs to stay on task" and hung up.
The sonoma police were even concerned at the blocking impeding of the info gathering...
You would think they would follow up w/me, maybe invite me to this meeting... no xilch nada nothing...
This is a true example of how they treat drivers much worse than the employees...

Overleveraged_… Tue, 06/13/2017 - 13:20 Permalink

Ubers biggest mistake was not going public. If it was public, the Central Banks and President's Working Group on Financial Markets would have it at new All Time Highs today.Dummies.

acheron2016 Tue, 06/13/2017 - 13:54 Permalink

While I have no love lost for this shady company I have absolutely no faith in a man that makes lawyers seek out armed guards (holder).  Most of his changes will make the company a neutered monument to political correctness.  I'm sure losers and moochers will find it an easier place to bring nuisance complaints  about a fantasy abuse they wish to promulgate.  But none of this will make Uber a better company.  In fact it will probably kill the few good things it had going for it.  But in the world of crony capitalism conformity is rewarded.  This will all put paid to them shaking up the industry. 

a Smudge by an… acheron2016 Tue, 06/13/2017 - 14:02 Permalink

I used it once, it worked well, I think it's an awesome service. I love the way it kills corrupt taxi and limo commissions. But I don't see using it much more than I have.

My point would be that I don't give a shit about their culture, I don't give a shit about worker's experiences (find another job) and I don't give a shit how much drugs and alcohol are at corporate. I really don't care if Travis is a jerk. I haven't heard anything that rises to the level of a crime here.

In reply to by acheron2016

adr Tue, 06/13/2017 - 14:08 Permalink

SiliCON Valley corporations are notorious for taking up 100% of thier employees lives. You have unlimited vacation, but you can't actually take any because you'll miss something and some other no life individual will take your job. Guess there's no relationships for Uber employees if you can't fuck your coworkers. If you try, some other no life employee will rat you out. Unless you are a transgender butterfly fucker, then you'll get a promotion. Uber has always been a con to soak up VC and make certain individuals paper billionaires. 

CheapBastard adr Tue, 06/13/2017 - 14:18 Permalink

One fascinating thing my friend said about SF and LA tech and other companies is everyone has 1) a degree from Berkely or some other Cali school; and, 2) 99% of the people appplying for management jobs has an MBA, usually also from a Cali school. So she said everything thinks alike. Very intolerant were her words.No outside of the box thinking is allowed despite the project managers call to "think outside the box." She's from Wahrton, near top of her MBA class and left for more fertile grounds in Texas where creative thought and true "outside the box thinking" is not only encouraged but it is accepted and sough for she said.

In reply to by adr

Hongcha Tue, 06/13/2017 - 14:42 Permalink

Here's a possible tell - the progress of the renovation of the old Sears Building on Broadway.  Uber (valued in the dozens of billions at the time) paid the City of Oakland $8 million for the rights ... planning to bring in 2000 employees, et cetera.  The condo sellers ran wild with that info - it was the #1 pitch for buying a $650 studio condo in one of the most truly dangerous cities in the US.UBER has since scaled back the employment by 90%.  I have not been by to see the renovation, which has been going on behind visqeen for months.  I still have $1000 that says they never take occupancy.

Hong Kong Phooey Tue, 06/13/2017 - 14:47 Permalink

From the Bloomberg article:"Several of Uber’s planned changes are symbolic. For example, a conference room known as the War Room will be renamed the Peace Room. "No better indicator of how well and truly fucked this company is than the statement above.Lesson learned for future CEOs:  When the SJWs have your back up against the wall, never show weakness and keep being an asshole.

PGR88 Tue, 06/13/2017 - 14:51 Permalink

For example, a conference room known as the War Room will be renamed the Peace Room.Seriously?  What it indicates - Uber is now big and wealthy enough that deep state parasites like Holder must be involved, and will have their skim.  In the meantime, the public face and culture will be sanitized to match the prevailing soft-left, PC narrative belong to government, the main-stream media, academia, most of corporate America, etc....