Travis Kalanick, the embattled CEO of Uber, is taking an indefinite leave of absence, he announced in a company-wide email on Tuesday morning.
“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 email said.
While the death of Kalanick’s mother in a boating accident last month is the official reason for the leave, Kalanick is also facing a growing list of scandals at the company he co-founded. At the top of the list is allegations of rampant misogyny at the ride-hailing company. His announcement coincides with the release of recommendations from an external investigation led by former attorney general Eric Holder into allegations of rampant misogyny at Uber.
“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 Holder report states.
The board is also struggling with a lawsuit over alleged theft of technology from Google’s Waymo self-driving car unit, a federal criminal investigation for allegedly misleading local regulators, and backlash from drivers angry about low pay and poor working conditions.
In wake of these issues, Bloomberg reported, Uber is making some changes, but many of them are “symbolic”:
Several of Uber’s planned changes are symbolic. For example, a conference room known as the War Room will be renamed the Peace Room. The company also plans to scrap many of its cultural values, notably “Let Builders Build, Always Be Hustlin’, Meritocracy and Toe-Stepping, and Principled Confrontation,” which the Holder report described as being “used to justify poor behavior.”
You might expect a CEO with as many problems as Kalanick has to be facing the prospect of losing his job outright. But Uber has an unusual corporate structure that gives Kalanick and two other insiders near-total control over the company. As a result, Uber’s board has limited room to remove Kalanick.
But it’s unlikely that Kalanick going on leave, on its own, will address many of the problems facing Uber.
“The leadership team, my directs, will be running the company,” Kalanick writes in the company-wide email. “I will be available as needed for the most strategic decisions, but I will be empowering them to be bold and decisive in order to move the company forward swiftly.”
What Uber really needs is new executives who can credibly promise to change Uber’s corporate culture. Uber recognizes this, and the company has been searching for a new chief operating officer. Ideally, the COO would report directly to Uber’s board and have independent authority over sensitive issues like human resources. But as long as Kalanick continues to hold ultimate authority over Uber, it’s not clear if anyone with the necessary stature would be interested in the job.