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A 'Shareholder Revolt' Ousts Travis Kalanick at Uber

By NexChange
Capital Markets

Travis Kalanick resigned on Tuesday as CEO of Uber after a “shareholder revolt” effectively ousted him from the ride-sharing company he helped found in 2009, the New York Times reports.

The stunning development comes just a week after Kalanick announced that he’d be taking an extended leave of absence under a cloud of controversy and personal tragedy. Not only was Kalanick dealing with the fallout from two independent investigations into allegations of sexual harassment and a hostile work environment at Uber, but he was also mourning the death of his mother from a boating accident.

However, according to the Times, Kalanick stepped down as CEO of the company following “hours of drama involving Uber’s investors” who believed a change in leadership was needed at Uber.

Earlier on Tuesday, five of Uber’s major investors demanded that the chief executive resign immediately. The investors included one of Uber’s biggest shareholders, the venture capital firm Benchmark, which has one of its partners, Bill Gurley, on Uber’s board. The investors made their demand for Mr. Kalanick to step down in a letter delivered to the chief executive while he was in Chicago, said the people with knowledge of the situation.

In the letter, titled “Moving Uber Forward” and obtained by The New York Times, the investors wrote to Mr. Kalanick that he must immediately leave and that the company needed a change in leadership. Mr. Kalanick, 40, consulted with at least one Uber board member, and after long discussions with some of the investors, he agreed to step down. He will remain on Uber’s board of directors.

In addition to Benchmark, the shareholders who demanded Kalanick’s resignation include Uber’s other biggest investors, according to the Times: Fidelity Investments, Lowercase Capital, First Round Capital and Menlo Ventures. These five shareholders together carry a quarter of Uber’s stock and since “some of the investors hold a type of stock that endows them with an outsize number of votes, they have about 40 percent of Uber’s voting power,” the Times reports.

As part of a probe conducted by former attorney general Eric Holder into the workplace culture at Uber the company was urged to make changes to its leadership, which included reducing Kalanick’s responsibilities as CEO. Uber’s board unanimously voted to accept all of Holder’s recommendations and had assigned a multi-person committee to replace Kalanick during his leave of absence.

Kalanick will remain on Uber’s board.

“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,” Kalanick said in a statement.

Photo: JD Lasica

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