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Uber CEO Travis Kalanick takes leave amid sweeping changes at company

Evan Agostini

Uber CEO Travis Kalanick takes leave amid sweeping changes at company

Uber chief executive Travis Kalanick said Tuesday he is taking an unspecified leave of absence as Uber announced dozens of changes intended to increase diversity, guard against inappropriate sexual behavior and bolster the independence of a board tied too closely to Mr. Kalanick.

He disclosed the leave in a company-wide email as the company sought to reverse months of controversy — much of it over allegations of sexual harassment and other unprofessional conduct — that had brought the ride-hailing service to crisis.

“The ultimate responsibility, for where we’ve gotten and how we’ve gotten here rests on my shoulders,” Mr. Kalanick wrote to employees. “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.”

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Uber also announced recommendations from a report by former U.S. Attorney General Eric H. Holder Jr., hired to address mounting criticism of the company amid a wave of scandals. The full report is being withheld from the public and the bulk of the company’s 14,000 employees worldwide. The company employs about 500 in the Pittsburgh area.

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The recommendations, which were released at an employee meeting at the company’s San Francisco headquarters, were accepted by the board at a marathon meeting on Sunday.

The recommendations are sweeping. They advocate for weakening the grip of Mr. Kalanick and his allies on Uber’s board by adding new members and appointing an independent chair.

Under the proposals, senior managers will undergo mandatory leadership training, and Uber’s current Head of Diversity will be renamed as the Chief Diversity and Inclusion Officer and report directly to the chief executive or chief operating officer. 

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Pittsburgh, which has hosted Uber’s autonomous fleet of Volvo XC90s along with its Strip District-based Advanced Technologies Group, has had a complicated relationship with the ridehailing company, vis-a-vis Mayor Bill Peduto.

Mr. Kalanick originally approached Mr. Peduto in September 2015 with plans to start autonomous testing in the city. The two had texted often and Mr. Peduto ended up being the first to test one of Uber’s autonomous cars. He originally lauded Uber in September 2016 for its potential economic impact on the city — Uber ATG employs at least 500, according to a company spokesperson.

Mr. Peduto has since issued statements that Uber has not held up its end of the deal, taking from Pittsburgh without giving back. While at a state conference on sustainability on Tuesday, Mr. Peduto said he would continue to work with Uber.

"I've had the opportunity of working with Travis Kalanick over the past couple of years. I realize that he has also had a family loss and I wish him well during this time that he will be off,” he said. “We'll continue to work with Uber. We'll be meeting with them within the next month.”

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Mr. Peduto said he does not believe Uber’s operations in Pittsburgh will be greatly impacted by Mr. Kalanick’s departure.

"Travis Kalanick did have his hand directly involved in the autonomous vehicle center and spent a lot of time in Pittsburgh,” he said. “I'm sure that there will be some changes that will come with his departure, however the Pittsburgh operation is primarily based on autonomous vehicle research and that probably will not change."

As part of the internal investigation led by Mr. Holder, Uber already has fired 20 employees while issuing reprimands and requiring new training for others amid 215 reports of possible sexual harassment, bullying, retaliation and other unprofessional conduct. (Some cases remain open pending further investigation by a second law firm, Perkins Coie.)

The Uber board has been struggling to right the trajectory of company, worth nearly $70 billion by some estimates, but have limited ability to remove or even reprimand Mr. Kalanick, who along with other allies have outsized voting power because of a special class of shares they control. The controversies have reportedly cut into Uber’s popularity and once-commanding position within the ride-hailing marketplace in 75 markets worldwide.

Rival Lyft now accounts for 25 percent of all trips taken in the U.S. ride-hailing market, up from 18 percent at the beginning of the year, according to data from TXN. In recent months, the company found, even loyal Uber customers who have stayed with the service have also increased their spending on Lyft.

The public mood over Uber began to turn when Mr. Kalanick joined an advisory board for President Donald Trump and appeared to undermine a New York taxi strike related to the president’s controversial effort to impose a travel ban, sparking the #DeleteUber movement.

A scathing blog post by former Uber engineer Susan Fowler, who reported that an unwanted sexual advance by her boss was ignored by company management, triggered a wave of denunciations of the corporate culture at Uber.

The Justice Department then launched a criminal investigation over allegations that the company used a software tool to evade regulators. At the same time, Uber got in a highly public legal battle with Waymo, the self-driving-car unit of Google’s parent company, Alphabet, over alleged theft of intellectual property. Uber fired the head of that program, Anthony Levandowski, last month for failing to comply with a court order to turn over documents in the case

Waymo has accused Uber of stealing the laser-sensing technology that allows driverless cars to see their surroundings. The legal fight’s outcome could have serious ramifications for Uber’s long-term business model.

Pittsburgh Post-Gazette reporters Karen Langley and Courtney Linder contributed to this article.

First Published: June 14, 2017, 4:00 a.m.

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