Why Ousting Of Kalanick Is An ‘Uber-bad' Move

Following the many recent scandals, allegations and lawsuits rocking Uber’s shaky ship and threatening to turn it over, Travis Kalanick finally gave in to the board of directors and agreed to step down from his office as CEO of the car-hailing company.

The company is now left in the hands of a committee of executives and board of directors who, it would seem, have a very hard work to do in ensuring that Uber does not go under.

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However, the board’s insistence that the CEO resign immediately while he was still away to work on ‘improving himself and becoming a leader the company need', besides mourning the tragic passing away if his mother, may not have been the best of decisions.

It is a step for the right reasons in the wrong direction. The business savvy move would have been making him stay on to help mop up the huge mess he had already created while the board goes in search of a new suitable chief executive to man the leadership position.

Leaving a big company like Uber without a head is actually a big recipe for a potential disaster which is already lurking around in the background. There is a reason why top posts in big companies are hardly ever left unmanned. It is certainly not for an aesthetic purpose.

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Uber, as a company, has done quite well after being established 8 years ago by Kalanick and Garrett Camp.
The company now has up to 12,000 workers under its employ. It also boasts of $6.5 billion as revenue and operates in 82 countries. In addition, it has raised $12.9 billion in funds and its worth has been estimated at $68 billion. People no longer take taxis or buses, it is now all lyft codes However, after the allegation of its former engineer, Susan Fowler, in an explosive blog post against the widespread gender bias, sexual harassment and mismanagement going on unhindered in the company, the company has paid dearly, losing most of its valued employees.

Among these important employees are the head of strategy, head of finance, head of engineering, and head of marketing. The positions which they have left vacant are important ones that need to be filled, and fast.

To add to these pressing issues, the company’s board of directors have only recently unanimously voted to overhaul Kalanick's 14 corporate values in favour of a list of recommendations, from a 13-page report by former attorney general, Eric Holder’s legal team.

In order for the new policies to be implemented and become effective, it is imperative that a new CEO is urgently recruited to serve as a full partner to Kalanick.

The list of recommendations, therefore, would not be effective until the company finds a new chief, and this could take many months, while things continue going downhill. What this means is that Uber has found itself in a tight corner, an operating and strategic limbo.

This would not even have been much of a problem if the company is not currently undergoing some crisis, but they are, which makes it all the more sticky. Now, handling the rampaging and damaging crisis in this state will be an uphill task, if not near impossible. It is very much like the situation of a man who has got his hands tied in a fight with an angry dog.

As one of the very fastest growing companies in the tech industry, recruiting and holding on to its invaluable talents is certainly among Uber’s top priorities.

It will be an unenviable and unpleasant business at the moment with its company culture under the gravest of attacks and its reputations in tattered shreds.

Recently a leaked audio file had the HR chief, Liane Hornsey, telling employees he’s aware they are probably polishing their resumes in preparation for an exodus. Liane was heard imploring them not to leave.

You would think it does not get tougher than this, right? Wrong! This might probably just be the tip of the iceberg.


Even if Uber manages somehow to raise the capitals it needs, it might find itself being forced into a down round. Early stage VC's may not be troubled by this, seeing as they actually forced Kalanick’s exit. But investors who came in late could be potentially hurt by this.
Such investors include Citigroup, Goldman Sachs, Kleiner Perkins, Microsoft, New Enterprise Associates and Morgan Stanley. The employees' morale also, will be affected in no little way.

However, perhaps the reason for the extreme action of forcing one of the company’s founders to step down was the need to show that the bleeding has been stemmed and the problem cut off at the very root in order to speed up the recovery of Uber’s bleedibg brand.

After all the former CEO was an author of what the world and Holder’s report all-but-addressed as a depraved and dangerous culture, which puts external growth above human dignity, diversity and internal growth.

Uber may not be the evil company it’s been made out to be, being that it may have taken many right steps in the wrong direction. But then, the fact that Kalanick and Camp together control voting rights make this ousting of the CEO seem senseless.

Leaving the company in a limbo seems senseless as well, and even with the brilliant reasons and motives at play, is ill advised and could very well just be the iceberg that will get the ship tumbling.

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