June 11, 2017
By Joseph Menn and Heather Somerville
SAN FRANCISCO (Reuters) – Uber Technologies Inc’s [UBER.UL] board will discuss Chief Executive Travis Kalanick temporarily stepping away from the embattled ride-hailing firm and consider sweeping changes to the company’s management practices at a meeting on Sunday, according to a person familiar with the situation.
The source said it is not clear that the board will make any decision to change Kalanick’s role. The board is expected to adopt a number of internal policy and management changes recommended by outside attorneys hired to investigate sexual harassment and the firm’s broader culture. The outside lawyers made no recommendation about Kalanick.
The meeting, which Uber has not publicized, could be a pivotal moment for the world’s most valuable venture-backed private company, which has upended the tightly regulated taxi industry in many countries but has run into legal trouble with a rough-and-tumble approach to local regulations and the way it handles employees and drivers.
At the Sunday meeting, according to two people familiar with the matter, the seven voting members of Uber’s board, including Kalanick, are expected to vote on recommendations made by the law firm of former U.S. Attorney General Eric Holder, which conducted a review of the company’s policies and culture.
The review was launched in February after former Uber engineer Susan Fowler published a blog post detailing what she described as sexual harassment and the lack of a suitable response by senior managers. Fowler now works for digital payments company Stripe.
Uber’s board will likely tell employees and the public of its decisions by Tuesday, one of the sources said.
An Uber spokesman had no comment. Neither Kalanick nor Holder’s law firm, Covington & Burling, immediately responded to requests for comment late Saturday.
Kalanick has developed a reputation as an abrasive leader, and his approach has rubbed off on his company. The 40-year-old executive was captured on video in February berating an Uber driver.
Uber board member Arianna Huffington said in March that Kalanick needed to change his leadership style from that of a “scrappy entrepreneur” to be more like a “leader of a major global company.” The board has been looking for a chief operating officer to help Kalanick run the company since March.
The report was prepared by Holder and partner Tammy Albarrán at Covington & Burling. It comes shortly after another law firm, Perkins Coie, submitted a separate report on sexual harassment and other employee concerns at the company.
On Tuesday, Uber responded to that report’s findings by saying it had fired 20 employees for a variety of reasons, and was increasing training and adopting new policies. Uber said that report considered 215 cases encompassing sexual harassment, discrimination, unprofessional behavior, bullying and other employee complaints.
MORE OVERSIGHT ON CEO?
San Francisco-based Uber is valued at nearly $70 billion but has yet to turn a profit.
Some of the recommendations in Holder’s firm’s report would force greater controls on spending, human resources and other areas where executives led by Kalanick have had a surprising amount of autonomy for a company with more than 12,000 employees, one person familiar with the matter said. Uber’s more than 1.5 million drivers worldwide are classified as independent contractors rather than employees.
Less clear is the fate of Kalanick, who with close allies has voting control of the company.
The person briefed on the matter said the board will discuss Kalanick taking time off from the company. The discussion involved the possibility that Kalanick might return in a role with less authority, this person said, either in a position other than CEO or as CEO with narrower responsibilities and subject to stronger oversight.
Kalanick is also facing a personal trauma: his mother died last month in a boating accident, in which his father was also badly injured.
Employees and former employees interviewed by Holder’s team complained about sexual and racial bias, bullying and retaliation, according to people familiar with their accounts.
They said that Kalanick and his lieutenants had favorites who played by different rules than other employees, and that even those favorites were nervous that they could fall from grace, which they sometimes did. Uber declined comment on that characterization.
One of the issues that came to Holder’s team’s attention, according to two people familiar with the matter, was the company’s handling of a crisis in India after one of its drivers was arrested for raping a customer.
Though the man was convicted in 2015, Kalanick and other executives became convinced that the crime was a set up by a local competitor, former employees said. Eric Alexander, the head of Asian business, shared medical records internally that he argued showed that the woman had been assaulted but not raped, people who spoke to him said. Alexander was fired this week; he did not return messages seeking comment. Uber confirmed Alexander had left the company but declined to discuss the matter further.
(Reporting by Joseph Menn and Heather Somerville in San Francisco; Additional reporting by Aditya Kalra in New Delhi; Editing by Jonathan Weber and Bill Rigby)