Uber has announced that Travis Kalanick, the controversial former CEO of the company, would be stepping down from his position on the board of directors and has sold all of his stock options, estimated to be worth at least $2.5 billion, according to CNBC.
Kalanick’s last day at the company he founded will be December 31. The company launched its IPO in the spring of 2019.
In a statement released by the company, Kalanick said “Uber has been a part of my life for the past 10 years. At the close of the decade, and with the company now public, it seems like the right moment for me to focus on my current business and philanthropic pursuits.” This may be a reference to Kalanick rumored next project, a startup called CloudKitchens, which will provide industrial kitchen space to restaurants that want to focus on food delivery, as first reported by The Information.
It’s unclear if there might be more to Kalanick’s departure, or what the company might look like without him attached. But at least one expert thinks this is a cyncial move on Kalanick’s part.
“This changes nothing for Uber, which has a business model that doesn’t work, and is losing billions of dollars because it subsidizes its passenger rides,” said Steven Hill in an email to Digital Trends. Hill is a journalist and the author of “Raw Deal: How the ‘Uber Economy’ and Runaway Capitalism Are Screwing American Workers.” He published an op-ed in the New York Times, arguing that the company needs more than just a leadership change if it’s going to turn a profit.
“Kalanick’s resignation, as well as his sell off of $2 billion in stock, likely reflects his realization that this money losing company has no future,” Hill wrote to DT. “Uber is losing billions of dollars because it is subsidizing at least 50% of every ride. In the ultimate irony, the more people use Uber, the more money it loses. At some point Uber will have to either double its prices and lose customers or go out of business. It looks like Kalanick is betting that it will be the former.”
Kalanick was forced out as Uber’s CEO in 2017 after an avalanche of scandals — a series of stories culture of sexual harassment at the company and the lack of response to Uber riders who reported being assaulted had Kalanick’s reputation as a precocious disrupter looking abusive and callous. The revelation of Uber’s “greyball” app — a fake app the company installed on the phones of people Uber suspected of being regulators, which allowed the company to get around inspections — as well as several other unsavory stories rocked the company and proved untenable with Kalanick’s continued leadership, although he remained on the board.
The company still faces challenges around the world for its culture of “disruption.” In November the city of London — Uber’s biggest European market — refused to renew its license to operate, citing persistent safety concerns that remained unaddressed (not the first time this had happened to the company in London), and in the last weeks of December, a German court banned Uber in the entire country, effective immediately. The company said it is still deciding whether to appeal the verdict.
Uber has not yet responded to a request for comment, and it’s not clear if there will be a replacement for Kalanick on the board.
“Very few entrepreneurs have built something as profound as Travis Kalanick did with Uber,” CEO Dara Khosrowshahi said in a statement. “I’m enormously grateful for Travis’ vision and tenacity while building Uber, and for his expertise as a board member. Everyone at Uber wishes him all the best.”
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