The future of $69 billion Uber is in flux with even CEO Travis Kalanick's final fate unknown (2024)

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The blog that started it all

It started with a story about "one very, very strange" year at Uber.

On February 19, Susan Fowler published a blog post about hertime as an engineer at the ride-hailing company.

Fowler detailed what happened after a manager allegedly propositioned her for sex. Uber's HR department dismissed her complaints, because the manager was a high performer, she said. When she persisted with her complaints, Uber's HR ignored them,and then her manager threatened to fire her for reporting things to HR, she said.

She also wrote about the broader culture at Uber. One time, all the men on her teamgot leather jackets, she said, adding that the team's women didn't get any.

Fowler's post was hard to dismiss as just the rantings of a disgruntled employee.In response to it, Kalanick immediately called for an internal investigation into the company's work culture. In the last four months, Uber's HR department and two law firms have been interviewing employees, fielding complaints, and digging into what went wrong at the company.

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Fowler's blog was just the beginning. Since then, the number of scandals at Uber has multiplied.

The New York Times published abombshell storysoon after Fowler's post reporting thather claims weren't unique.Employees did cocaine during a company retreat, and a manager had to be fired after groping multiple women, according to the report. Former employees said they'd notified Uber's leadership, including Kalanick and CTO Thuan Pham, of the workplace harassment.

The retreat apparentlywasn't an isolated thing. Kalanick's former girlfriend, Gabi Holzwarth, told Bloombergshe spoke to Holder's investigators directly about two other incidentsat the company.

One of them involved a visit to an escort-karaoke bar in Seoul Uber officials made in 2014 where"four male Uber managers picked women out of the group, calling out their numbers, and sat with them," according to areport in The Information.Michael, Uber's business head, allegedly called Holzwarth directly to ask that she not divulge thatstory.

Among thoseat the bar in Seoul was Eric Alexander,an Uber exec the companylet go last weekamid reports about a different scandal. Alexander, reportedlyobtained the medical records of an Indian rape victim and carried them around in a briefcase for ayear. According to Recode, senior Uber executives, including Kalanick and Michael, were paranoid the rape was being used by one of the company's competitors in India to sabotage Uber.

Uber's problems have gone beyond its alleged bro culture to include questions about its business ethics. In March, the New York Times revealedUber secretly deceived authorities for years with a tool called "Greyball". The companyused the tool to evade authorities, particularly in cities like Boston, Paris, and Las Vegas where regulators were trying to block the ride-hailing service.The U.S. Justice Department has begun a criminal probeinto "Greyball".

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What's next? Uber executives could be on the chopping block, depending on the results.

Uber's executive rankshave been decimated recently. The companylacks a chief financial officer, chief marketing officer, president, and a chief operating officer. And it now lacks a chief business officer, after Michael, Kalanick's right-hand man, announced he was leaving.

But because otherexecutives still at the company have been linked to thescandals,evenmore heads could still roll.

Among them might be Ryan Graves, the Uber exec and board member who oversaw the HR department. Graves has been strangely absent during the crisis, andas early as Februaryobservers inside and outside the company were wondering whetherhe mighttake the fall for Uber's allegedly toxic culture,Business Insider reported. On top of that,Graves also had ties to and was reportedly aware of "Greyball".

Another executive on the hot seat: Uber's CTO, Thuan Pham, who was implicated in Fowler's blog post. Fowlersaid Pham did nothing after she notified himabout her boss' threat to fire her.

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Travis Kalanick is likely safe, but could still take a leave of absence.

Kalanick was recorded getting into a verbal fight with a driver. He also sent out crude emails spelling out the rules at a company party, including advising employees when they should or shouldn't have sex with their colleagues.

Those revelations and others about the company's broader culture have led some observers tocall for Kalanick's head. Despite that, he's largely seen as untouchable.

Kalanick and many Uber board members have super-voting shares, which give them outsized control compared to typical stockholders. What's more, employees who sell a portion of their stock back to the company are required to vote all of their remaining shares in accordance with Kalanick's wishes, according to the New York Times.

Thanks to those provisions, it'd be hard to force Kalanick out.Backchannel's Jessi Hempel explains it best:

"According to Uber’s articles of incorporation, the company has 11 board seats, nine of which carry super-voting shares. As of now, the company has filled only seven of those spots. Two outside investors hold super-voting seats. The others fall to Kalanick and two of his allies: Garrett Camp, a cofounder who is a non-executive chairman of the board, and early employee Ryan Graves. Kalanick has chosen to leave four super-voting seats empty, according to The Information. Were board members to counter Kalanick, he could simply fill the empty seats."

That means Kalanick's future is largely in his own hands.He could leave the company or take a few months off, especially as he deals with a family tragedy after the sudden death of his mother. But the decision would likely be up to him.

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Uber has already taken some steps to fix its culture.

The company may get headlines by firing executives and employees. But a longer-term remaking of its culture will likely be determined by changes the company makes in how it operates.

Uber said it's already taken steps to turn things around, including:

• Releasing a diversity report
• Opening an anonymous tip line for employees to air complaints
• Holding morethan 120 "listening sessions" with employees
• Updating1,500 job descriptions to eliminate any "unconscious bias"

It also added two powerful women to its c-suite to help lead itsturnaround.

Frances Frei, a renowned leadership expert, joined the company to specifically fix its management messas SVP of leadership and strategy. Uber also brought in one of Apple's top marketing leaders, Bozoma Saint John, to be the new public face of the company.

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Still, the future of Uber is at stake.

The cascading series of crises will come to a point on Tuesday when employees will find out just how far the recommendations go and what changes the company will make.

Should Holder recommend that Pham, Graves, and Kalanick all go, Uber could facea leadership vacuum that's unparalleled for a $69 billion company. Even if Kalanick just takes a leave of absence for a few months, it could place Uber in a tough spot, given that it has few topleaders who couldtake his place.

Internally, the company will have to struggle with rebuilding its workplace culture to make it feel inclusive and welcoming. One Uber employee told Business Insider that companyall-hands meetings now feel more like press conferences than company gatherings, because Uber officials are now much more guarded about what they say and how they say it. As a result, employees have lost some of their trust that they're getting the whole story from Uber's executives.

Whether or not Uber can navigate the changes brought on by the Holder report remains to be seen, but it's a pivotal time for the company.

Should Uber succeed, people maylook back to the Holder report as the defining moment when the companygrew up and put itself back on the path to an IPO. If Uber fails, it could well be because it didn't push itself hard enough to change in the wake of the report and decided instead to protect its status quo.