Uber's ex-CEO appoints two new directors to its board
Kalanick is trying to to take preemptive action ahead of a new board proposal
Uber co-founder Travis Kalanick appointed two new directors to the company's board last week.
The decision was seen as a way to take advance action against a move by Uber CEO Dara Khosrowshahi, who wants to restructure the board to gain more control, according to Reuters.
Kalanick appointed former Xerox CEO Ursula Burns and former Merrill Lynch CEO John Thain to the positions.
In a statement obtained by Reuters he said: "I am appointing these seats now in light of a recent board proposal to dramatically restructure the board and significantly alter the company's voting rights. It is therefore essential that the full board be in place for proper deliberation to occur, especially with such experienced board members as Ursula and John." He did not specify which proposals he is against.
Uber told IT Pro it viewed the new appointments as a "complete surprise".
"That is precisely why we are working to put in place world-class governance to ensure that we are building a company every employee and shareholder can be proud of," the company said in a statement.
In June 2016, Uber's board of directors was increased from eight members to 11, giving Kalanick the authority to choose the three empty seats. When he resigned as Uber's CEO in June 2017 he appointed himself to one of the seats, and has now finally filled the other two.
A Reuters source said Kalanick's move came ahead of Khosrowshahi's plan to restructure the company's board, which will be voted on tomorrow, to give the new CEO control of four board seats as well as his own. He wants to transfer one of the two positions controlled by Kalanick to SoftBank, the private fund that is considering investing in Uber.
Khosrowshahi could then give the other seat to a person he chooses as well as three others which currently exist, according to the source. The plan also calls for a third of directors to be elected each year.
Neither Uber nor Kalanick has responded to request for comment.
Benchmark Capital, one of Uber's biggest investors, sued Kalanick for fraud in August. The venture capital firm was upset as it claimed it would not have agreed to give Kalanick the extra seats in June 2016 if it was aware of his "gross mismanagement and other misconduct at Uber". Kalanick faced numerous scandals when he was CEO of Uber, including claims of systemic sexism and harassment in the workplace.
Uber CEO Khosrowshahi is set to meet Transport for London's (TfL) transport commissioner Mike Brown this week in order to talk about why Uber's private hire operator licence was not renewed. Uber was told it will no longer be able to operate in London last month and had 21 days to appeal TfL's decision.
TfL said Uber was not fit to hold a private operator licence as it "is not fit and proper". TfL added that the company demonstrated a lack of corporate responsibility, which includes Uber's failure to report serious criminal offences and its approach to medical certificates.
14/08/2017:Uber investors 'ask Benchmark to step down from board'
Three Uber investors have reportedly asked venture capital firm Benchmark Capital to step down from the ride-hailing company's board of directors, a day after the VC confirmed it's suing founder Travis Kalanick for fraud.
Benchmark's fraud lawsuit would see former CEO Kalanick ousted from Uber's board, and consequently a group of shareholders emailed other Uber investors and its board of directors, arguing that Benchmark should divest enough shares to no longer have board appointment rights, according toAxios.
The investors are Shervin Pishevar from Sherpa Capital, Ron Burkle of Yucaipa Cos and Adam Leber from Maverick, the publication reports.
In an email, obtained by Axios, they write: "We do not feel it was either prudent or necessary from the standpoint of shareholder value, to hold the company hostage to a public relations disaster by demanding Mr. Kalanick's resignation, along with other concessions, on a few hours' notice and within weeks of a personal tragedy, under threat of public scandal."
The investors fear that the lawsuit will cost the company "public goodwill" and impede the search for a new CEO. They point out Benchmark's investment of $27 million is worth $8.4 billion today and ask them to consider the employees of the company "who worked so hard to create such unprecedented value".
They requested: "...that Benchmark remove its representative from the Company's Board and move promptly to divest itself of enough shares in the Company so as to cease to have Board appointment rights. We have investors ready to acquire these shares as soon as we receive communication from Benchmark that they are willing to withdraw their lawsuit and sell a minimum of 75% of their holdings."
The investors also asked for the board to vote on the matter at the board meeting last Friday and said that if any other shareholders wanted to join their petition they were more than welcome.
A statement was sent out by Uber co-founder and chairman Garett Camp on behalf of all directors on Friday which said: "The Board of Directors is disappointed that a disagreement between shareholders has resulted in litigation. The Board has urged both parties to resolve the matter cooperatively and quickly, and the Board is taking steps to facilitate that process.
"At a time when thousands of employees around the world are working hard to serve our drivers and riders and continue to innovate, our priority remains to select Uber's new CEO as quickly as possible. We are fortunate to have several outstanding candidates who share our belief in Uber's great future."
Benchmark is suing Kalanick for breach of contract, breach of fiduciary duty and fraud. It is reportedly not happy that Kalanick increased Uber's board from eight members to 11 while giving the former CEO the power to choose who fills those seats. The venture capital firm claimed it would never have agreed to the decision if it had known of the "gross mismanagement and other misconduct at Uber".
11/08/2017: Travis Kalanick sued for fraud in bid to oust him from Uber's board
Former Uber CEO Travis Kalanick is being sued by Benchmark Capital, one of the company's biggest investors, for fraud in a move that looks to oust him from the ride-sharing company's board.
The venture capital firm owns 13% of the ride-hailing company and is suing Kalanick, who owns 10%, for breach of contract and breach of fiduciary duty as well as fraud, according to Axios.
In its lawsuit, Benchmark claims that Kalanick tried to increase his power over Uber for his own "selfish ends". Benchmark is not happy with a decision from June 2016 where Uber's board was increased from eight members to 11, which gave Kalanick the authority to choose who takes the empty seats. Kalanick later naming himself as a board member once he resigned as CEO, whke a further two seats remained empty.
This move upset Benchmark, which the venture capital firm claimed it would not have agreed to giving Kalanick the extra seats if it was aware of his "gross mismanagement and other misconduct at Uber".
Benchmark said that by withholding that information, which includes everything from pervasive gender discrimination at the company to an Uber employee allegedly taking trade secrets from a competitor, it annuls Benchmark's vote to increase the size of the board.
It said: "Kalanick's overarching objective is to pack Uber's Board with loyal allies in an effort to insulate his prior conduct from scrutiny and clear the path for his eventual return as CEO--all to the detriment of Uber's stockholders, employees, driver-partners, and customers."
The VC firm was also one of the five major investors which demanded Kalanick's resignation back in June.If successful, Benchmark will kick Uber off its board of directors.
Benchmark is seeking to overturn the June 2016 vote which would mean the three extra board seats would be eliminated. This would remove Kalanick from Uber's board of directors. Benchmark has also asked for a preliminary injunction against Kalanick's continued involvement in the Uber board which would prevent him from being included in the ongoing CEO search.
A spokesperson for Uber told IT Pro that it is not commenting on this.
In June 2017, Kalanick officially resigned as CEO of Uber after bowing to mounting pressure from investors over his leadership of the company. He faced numerous scandals over recent months, which included claims of systemic sexism and harassment in the workplace. Benchmark was one of five major investors who demanded the he would resign.
He was Uber CEO since he co-founded the company in 2009 and helped it to grow to the company it is today, valued at nearly $70 billion. The company also has an ongoing intellectual property lawsuit with Waymo, Google's self driving car unit.
23/06/2017: Uber staffers petition to get ex CEO Travis Kalanick rehired
Some Uber employees miss Travis Kalanick, so much so that they have set up a petition begging for the former CEO to return.
According to an Axios report, a thousand Uber staffers have signed a joint letter to the board of directors, calling for the return of Kalanick, who left following a series of controversies (see below).
The report said the petition was circulated among Uber employees, with roughly 10% signing it in the first 12 hours.
"As the folks who've actually worked alongside Travis for years to help create Uber from nothing, we are extremely disappointed by the short-sightedness and pure self-interest demonstrated by those who are supposed to protect the long-term interests of our company," the letter reads.
"Yes, Travis is flawed, as we all are. But his passion, vision, and dedication to Uber are simply unmatched," it continued. "We would not be here today without him, and believe he can evolve into the leader we need. He is critical to our future success."
Business Insider also has a collection of quotes from staffers praising Kalanick for "inspiring an entire generation of entrepreneurs," his dedication and hard work, and his listening skills as well as his propensity to take selfies.
Not all agree, of course. Susan Fowler, a former Uber staffer who wrote a blog post last year revealing sexual harassment issues at the company, noted that seeing former colleagues defend the company was "sickening".
21/06/2017: Uber's Travis Kalanick resigns as CEO
Uber's long-embattled CEO, Travis Kalanick, finally bowed to mounting pressure from investors over his leadership by resigning from the company.
Kalanick, who was forced to take a leave of absence last week, faced criticism after numerous scandals emerged over recent months, including claims of systemic sexism and harassment in the workplace.
Five major Uber investors, including venture capital firm Benchmark, demanded on Tuesday that the CEO resign immediately, according to theNew York Times.
"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," said Kalanick, in a statement published by the New York Times.
Kalanick has been Uber's CEO since he co-founded the company in 2009, helping to turn it into one of the most disruptive and influential transportation companies in the world, valued at nearly $70 billion.
But Uber has faced one problem after another over the past few months. The firm was subjected to both internal and external workplace reviews after former employee Susan Fowler claimed she had been the victim of sexual harassment, adding that her complaints were dismissed by the firm.
Uber has also been plagued with legal woes, including an intellectual property lawsuit from Google's self-driving car unit Waymo that has yet to be resolved, and the US Department of Justice launched an investigation in May after the discovery of the software 'Greyball', a tool that helped Uber drivers avoid authorities trying to clamp down on the service.
The ride-hailing firm has since committed to tidying up its practices, firing more than 20 employees as a result of the investigations and committing to workplace culture changes. Following that commitment, Kalanick took an indefinite leave of absence, however investors clearly felt this wasn't enough to reform the company.
Bill Gurley, who is a partner at Benchmark and also sits on Uber's board, was one of the earliest supporters of Kalanick, and paid tribute to his work in a tweet on Tuesday evening.
Kalanick's resignation comes at a time when Uber's future remains uncertain, as it could still face significant legal fallout from its case with Waymo. It is reported that the former CEO will remain on Uber's board of directors, and will likely retain some influence in the company as its majority shareholder.
14/06/2017: Uber's Travis Kalanick steps back from CEO role
Uber's CEO, Travis Kalanick, is to take a leave of absence following a damning review of management practices at the firm and the death of his mother.
Kalanick wrote to staff to explain his decision, which came after his mother died in a boating accident recently, while his father remains in a critical condition.
But his stepping back also coincides with the release of recommendations from a review into Uber's culture and management practices prompted by accusations of endemic sexism by former Uber engineer Susan Fowler, published in a blog post in February.
Recodepublished Kalanick's email in full, with the message reading: "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."
When Kalanick does eventually return, it will be in a diminished role after the company pledged to follow the recommendations of the review, conducted by former Attorney General Eric Holder's law firm, Covinton & Burling. In its report, the firm said there should be a review and reallocation of Kalanick's duties.
"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," the report said.
It also called for "key metrics" to be established to hold senior leaders to account during performance reviews, as well as increasing the profile of Uber's head of diversity, Bernard Coleman, renaming his role 'chief diversity and inclusion officer.
Covington urged Uber to add more independent seats to the board, and to create an oversight committee for ethics and culture, as well as making diversity and inclusion a factor in senior employees' compensation.
"Uber should ensure it has appropriatetools, including complaint tracking software, to keep better track of complaints,personnel records, and employee data," the report added, after Fowler alleged that her HR complaints about a superior were mishandled.
She reacted to the report on Twitter, saying: "They'll never apologize. I've gotten nothing but aggressive hostility from them. It's all optics."
The company has also seen another high-profile resignation this week, after leaked audio from a meeting of Uber's board to investigate the claims of sexism showed one of the male board members making a sexist joke.
Referring to the recent appointment of another woman, Wan Ling Martello, board member Arianna Huffington can be heard saying: "There's a lot of data that shows when there's one woman on the board, it's much more likely that there will be a second woman on the board."
Fellow board member David Bonderman responded: "Actually what it shows is it's much likely to be more talking."
Bonderman resigned around 12 hours after the audio was leaked, due to the "inappropriate" comment.
The full audio can be heard atYahoo News.
12/06/2017: Uber board agrees to sexism review culture changes
Uber's executive board has unanimously agreed to implement all the recommendations suggested by an external investigation, launched after allegations of systemic sexism and malpractice.
The recommendations are to be kept secret until they are formally shared with employees tomorrow, so it is unclear exactly what Uber board members agreed to on Sunday.
The Holder Report, overseen by former Attorney General Eric Holder, is the culmination of an investigation launched in February following allegations by former Uber engineer Susan Fowler. In a scathing blog post, Fowler alleged that she had been the victim of repeated sexual harassment, and that Uber had refused to remove the man in question due to his strong performance record.
"The Uber board met today with Eric Holder and Tammy Albarran," said an Uber board spokesperson. "The board unanimously voted to adopt all the recommendations of the Holder Report. The recommendations will be released to the employees on Tuesday."
A separate internal investigation, which looked at 215 cases of sexual harassment, bullying and unprofessional behaviour, resulted in the firing of 20 employees last week, including senior executives.
Holder's report, which is partly based on those 215 cases, is likely to include reforms to Uber's workplace culture, but may even suggest personnel changes. It is currently unclear whether Travis Kalanick is secure in his position as CEO, and the board may consider asking him to take a leave of absence, according to a report by the Wall Street Journal today.
The report also claims that Emil Michael, Uber's long-serving chief business officer is contemplating leaving the company as a result of the report. Recode reports that this is not accurate, but that the executive is under pressure from the board to resign.Uber has declined to comment to several publications about Michael's future.
07/06/2017: Uber has fired 20 employees after an internal review prompted by accusations of endemic sexism at the ride-hailing firm.
The widespread investigation, the findings of which were delayed more than a month, examined sexual harassment, bullying, unprofessional behaviour and more, with Uber revealing the terminations at a staff meeting in its San Francisco headquarters, according to aNew York Timesreport yesterday.
An anonymous employee told the publication that the firings are because of an internal investigation that occurred in the last few months, and that some of those who were fired were senior executives, although the company did not name those it sacked.
An Uber spokesperson told IT Pro: "All reported incidents to date have been investigated, and where they were corroborated we have taken swift, decisive action.
"We have been doing this consistently and with rigour for the past few months and will continue to do so as issues are raised. This is not a one time activity".
Uber investigated a total of 215 claims, which included discrimination, sexual harassment, unprofessional behaviour, bullying, harassment, retaliation and physical security. The majority of the claims were raised by team members located in San Francisco, although claims were raised in offices all over the world.
The spokesperson added: "Contrary to some reports, the 215 claims were not all related to sexual harassment, nor were the 20 terminations. They fell into one of the categories listed above."
Former Uber engineer Susan Fowler accused her previous employer of various sexism allegations in a blog post in February, which prompted a separate, external, review of the ride-hailing firm's culture, the results of which were expected towards the end of May, but are now expected to land next week.
Fowler accuseda more senior member of staff of propositioning her for sex and, when she asked a director what needed to be done about the dwindling number of women in the organisation, he allegedly said "that the women of Uber just needed to step up and be better engineers".
21/04/2017:Uber delays sexism report until next month
Uber's board of directors has granted an extension for a review investigating sexual harassment claims.
Former US Attorney General Eric Holder and Tammy Albarrn are leading the review into Uber's corporate culture, sparked by accusations of sexism from former employee, engineer Susan Fowler.
The board said in a statement that it had extended the review to "leave no stone unturned" and now expected a report by the end of May, after Holder failed to get the required interviews with executives key to the investigation.
The report had previously been expected by the end of this month.
"When Eric Holder and Tammy Albarrn began their review, we told them that they would have all the support and time necessary to conduct an intensive, thorough review of Uber's workplace and culture," board member Arianna Huffington said in a written statement.
"Eric and Tammy have asked us for more time to complete their assessment, which includes information received from hundreds of employees through interviews and anonymous online focus groups and reflects the global scale of the company's operations."
23/02/2017:Uber tells fleeing users it is "deeply hurting"
Amid growing backlash against practices at Uber, the company has attempted to smooth over relations with users by writing to those trying to abandon the service.
Uber has had a turbulent month, which began with accusations that the company took advantage of airport strikes during protests against President Donald Trump's travel ban on Muslim-majority countries. Now the resulting #DeleteUber campaign has been bolstered by a former Uber engineer's allegations of sexual harassment and systemic discrimination within the company.
Susan Fowler alleged that her manager propositioned her, and that HR fobbed off her reports of sexism. Uber CEO TravisKalanick described the content of the claims as "abhorrent" and has ordered a full review of Uber's diversity and culture in light of Fowler's claims.
Now, those deleting their Uber accounts receive a formal message outlining the company's desire to change, also reminding them they cannot recover their accounts once they are deleted.
"Everyone at Uber is deeply hurting after reading Susan Fowler's blog post," the letter states, which has since been shared on Twitter. "We believe in creating a workplace where a deep sense of justice underpins everything we do and it's everyone's number one priority to create change in the coming months and years."
The message appears to be a last ditch attempt to change the minds of those seeking to ditch Uber, but makes no attempt to force users to stay with the service.
Uber recently committed to a full internal review of Fowler's allegations, which claim she faced discrimination and sexual harassment from a senior manager, an employee who Uber apparently refused to reprimand because of his "stellar performance reviews".
Former US Attorney General Eric Holder and Uber board member Arianna Huffington will oversee Uber's investigation into the claims, and Uber has also promised to deliver its first diversity report in the coming months.
Uber has stated to IT Pro that messages were only sent to a small number of US customers, and that the letter has since been removed.
21/02/2017:Uber hires ex-Attorney General to probe sexism claims
Uber has enlisted the help of a former US Attorney General to investigate claims of sexism made against the company by a former employee.
Eric Holder, who held the office under President Barack Obama, will conduct a review of the complaints made by Susan Fowler, a former Uber engineer who alleged she had been the victim of sexual harassment by her manager, amid a string of accusations painting a picture of widespread sexism at the taxi app firm.
Claims range from female engineers being denied leather jackets because there weren't enough engineers to justify the spend, to her request to move teams being denied because a manager wanted to keep women on his team.
Holder, who Airbnb hired last year to help create new anti-discrimination policies for its online room sharing platform, will be joined by Tammy Albarran, his partner at Covington & Burling law firm, according to an internal staff memo by Uber CEO Travis Kalanick, seen by Reuters.
"Every Uber employee should be proud of the culture we have and what we will build together over time," said Kalanick in the memo. "It is my number one priority that we come through this a better organisation, where we live our values and fight for and support those who experience injustice."
Uber board member Arianna Huffington, chief human resources officer Liane Hornsey, and associate general counsel Angela Padilla will also help with the investigation, which will additionally assess diversity and culture at Uber.
Kalanick also revealed to staff that Uber will release its first diversity report within the next few months. The memo highlighted that 15.1% of employees at Uber are women, compared to the 18% at Google, 17% at Facebook, and 10% at Twitter.
In her blog post revealing the allegations, Fowler maintains that when she left Uber in December 2016, just 3% of 150 engineers in her division were female.
Kalanick has called the content of the allegations "abhorrent and against everything Uber stands for and believes in".
20/02/2017:Ex-Uber engineer accuses firm of systemic sexism
Uber has been accused of systemic sexism by a former employee, who alleged that sexual harassment claims were repeatedly buried by the company's human resources department.
The claims were made by ex-Uber engineer Susan Fowler, who worked in the company's site reliability engineering department from November 2015 to December 2016. She published a blog post on Sunday detailing a laundry list of troubling accusations against the company.
Uber CEO Travis Kalanick described the content of the claims as "abhorrent" and has ordered an urgent investigation.
One of Fowler's main claims centres around her first manager, who allegedly propositioned Fowler on her first day of working on his team. According to Fowler, when she reported him to HR for sexual harassment, she was told that it was his first offence.
That, combined with the fact that he "had stellar performance reviews from his superiors", meant that no action was taken against him, Fowler said. Instead, Fowler was forced to either switch to a team that she was less suited to or to stay on the team and accept that the manager in question would likely give her a poor performance review.
"One HR rep even explicitly told me that it wouldn't be retaliation if I received a negative review later because I had been 'given an option'. I tried to escalate the situation but got nowhere with either HR or with my own management chain," she wrote.
However, after talking with female colleagues, Fowler said she discovered that multiple women had lodged HR complaints against this manager, all of whom were told that he'd never had any incidents in the past.
"It became obvious that both HR and management had been lying about this being 'his first offense', and it certainly wasn't his last," she wrote. "The situation was escalated as far up the chain as it could be escalated, and still nothing was done."
This was far from the only example of workplace sexism detailed by Fowler. For instance, after promising leather jackets for all employees in the division, Uber reportedly informed female staff that they would not be receiving any because "there were not enough women in the organization to justify placing an order".
Eventually, the situation got so bad that Fowler decided to transfer to a different engineering organisation within Uber, but despite saying she met all the relevant criteria and having a "perfect performance score", she found her transfer blocked.
Senior managers within the company said that her transfer was denied due to "undocumented performance problems", but Fowler claims the real reason is that having a female engineer on the team made her manager look good.
In order to keep her on the team, she said, one of her performance reviews was retroactively downgraded - which meant that she was also no longer eligible for an Uber-sponsored position on a Stanford computer science program she was enrolled in.
After keeping extensive records of sexist incidents and filing numerous reports with the company's HR department, Fowler claims she was summoned to a meeting. "The HR rep began the meeting by asking me if I had noticed that I was the common theme in all of the reports I had been making, and that if I had ever considered that I might be the problem," Fowler wrote.
Uber's HR representative also allegedly said that "certain people of certain genders and ethnic backgrounds were better suited for some jobs than others, so [she] shouldn't be surprised by the gender ratios in engineering".
"Our meeting ended with her berating me about keeping email records of things, and [telling] me it was unprofessional to report things via email to HR," said Fowler.
Following this meeting, Fowler claims that her manager threatened to fire her if she continued reporting incidents of sexism to HR. She said that nothing was done about this threat, despite saying she then told HR and Uber's CTO, who apparently admitted that it was illegal. She claims the lack of action was once again due to the manager in question being "a high performer".
She added: "When I joined Uber, the organization [division] I was part of was over 25% women," she said. "By the time I was trying to transfer... this number had dropped down to less than 6%." On her last day, she said 3% of more than 150 engineers in her division were women.
Multiple women in Silicon Valley and beyond have taken to Twitter and the comments section of Fowler's blog to show their support and to share similar stories.
Uber CEO Travis Kalanick has expressed his horror at the accusations, and promised a complete investigation into the issue. "I have just read Susan Fowler's blog," he said in a statement sent toIT Pro. "What she describes is abhorrent and against everything Uber stands for and believes in."
"It's the first time this has come to my attention so I have instructed Liane Hornsey our new Chief Human Resources Officer to conduct an urgent investigation into these allegations. We seek to make Uber a just workplace FOR EVERYONE and there can be absolutely no place for this kind of behavior at Uber - and anyone who behaves this way or thinks this is OK will be fired."
Amy Douthwaite, senior associate at Kemp Little Employment, told IT Prothe claims undermine schemes aimed at bringing more women into tech, saying: "Women are notoriously under-represented in the tech sector in the UK, leading to a number of recent initiatives to encourage more women into the sector; these sorts of headlines are unlikely to help change this."
She added: "As these allegations have been so public, this may lead to employees in the UK coming forward with similar complaints, which could in turn lead to grievances and Employment Tribunal claims if they are not resolved. Of course, any allegation has to be substantiated to be upheld, but evidence of the mistreatment of other employees could be used to support arguments of an ingrained cultural problem at Uber in claims by other similarly affected employees."
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