Travis Kalanick to Step Down From Uber Board and Exit the Company Completely
Travis Kalanick, Uber’s co-founder and former CEO recently announced his intention of stepping down from the board of the multinational ride-hailing company by the end of 2019. According to a report filed by Reuters. Uber said Kalanick would leave the board “to focus on his new business. Philanthropic endeavours,” though the company did not provide any specific information. This marks the final exit for the high-profile tech entrepreneur who grew the ride-booking start to giant albeit very controversial company in just a decade.
In 2017, Travis Kalanick was forced to resign from his position as the company’s chief executive. It was after several months of chaos that culminated in an unprecedented shareholder revolt. Uber also come under intense scrutiny following several scandals regarding its workplace culture, including a video that showed Kalanick swearing at a driver.
Uber Lost One-Third of Its Market
In a very high profile IPO, Uber went public in May 2019; however, the performance in the market after the IPO has been quite disappointing. The value of the shares plunged as much as 8.8%. It was at the opening of trading from its $45 per share at the IPO. The stock at the end of the day closed at $41.57. Uber joined a select group of big IPOs that ended the first day at a loss. Even though the pundits labelled the IPO as a failure, there is no denying the fact that it did raise $8.6 billion for it.
The shares have lost about one-third of their value. Its current market cap is around $50 billion, just half of what was projected in the pre-IPO lead-up. Kalanick himself has got rid of Uber stock worth more than $2.5 billion, which is more than 90% of his total stake in the company.
The End of an Era at Uber
Travis Kalanick’s exit from the board of Uber over which he once exercised complete control with people of his choice. It is seen to be the end of an eventful period during which the company became a major force globally. With his aggressive expansion and marketing tactics, not only did he hobble the traditional taxi industry but he also transformed the way people commuted. Even as it rose rapidly, the company came under intense scrutiny for its alleged non-compliance of regulations, hiding data from city administrators, and the impact it had on the traffic across cities.
It also drew a lot of flak for the thousands of incidents of sexual harassment faced by its riders and for engaging a large number of contractors without wage guarantees and worker protection available to employees. The “Greyball’ program that aimed to evade regulations in locations where it did not have the license to operate also came under scrutiny by the regulators.
Inside the company, Kalanick has a lot of charisma and was generally seen as an inspirational leader; however, as the company grew rapidly, his whimsical way of working often became a liability. In 2017, increasing shareholder discomfiture led to his quitting the office of CEO and he was replaced by Dara Khosrowshahi, a former Expedia CEO. While Kalanick remained on the board, he did not play any role in the day-to-day affairs of the company or even an advisory role as may have been expected of a person with his experience and stature.