Connect with us

Hi, what are you looking for?

News

Uber Crisis: Why Travis Kalanick Got The Boot

543105090
543105090

The Uber crisis has been unfolding for quite a while, as a tsunami of bad PR enveloped the world’s favorite ride sharing company. Uber is the most valuable startup company in the world, and until very recently, a young Californian named Travis Kalanick was calling the shots.

While there’s little doubt that Travis and his team built an amazing company with an incredible valuation, it became clear over time that he wasn’t the right guy for the job. Here’s a brief history of how scandal after scandal led to dethroning the once untouchable CEO of Uber.  

Uber’s ascent

In nearly every corner of the world, you can now hail an Uber with your smartphone. Getting there didn’t happen overnight, and the company continues to face legal setbacks in every way imaginable. That’s because Uber’s legality in many places has been dubious at best. But those formidable barriers didn’t stop its vaulting ambitions of global expansion.

Investors poured in money, and made Uber the envy of every startup on earth. By the nature of its quasi-legal existence, Uber and other ridesharing companies haven’t had it easy. But no one was prepared for the seemingly endless chain of shocking revelations that would threaten to sink Uber, and ultimately lead to Kalanick’s downfall.

Burning cash

It’s hard to list every negative story to come out of Uber in the past year, so here’s a partial list.

First and foremost, the company isn’t profitable at all. Instead, it’s burning through money at a rate that alarms many investors and analysts alike. Last year, Uber lost an eye watering $3 billion, something that clearly isn’t sustainable for long periods of time.

Legal defiance

Additionally, the company has run so blatantly afoul of government regulations that it’s facing serious allegations on a number of fronts. For instance, the company was apparently using a secret technology tool called Greyball to evade the authorities who were trying to regulate the company. This discovery triggered a criminal investigation by the U.S. Department of Justice.

Uber has also pissed off several governments including the city of Pittsburgh, the state of California, and many others. It promised to team up with Pittsburgh to roll out its autonomous vehicle, and that ended poorly. It refused to get a required permit from the California DMV to operate autonomous vehicles and instead moved their program to Arizona. They later backtracked.

Speaking of those self-driving cars, a report later leaked that they required much more human assistance than the company cared to admit, requiring manual overrides every mile.”

Lawsuit mania

Uber has also faced a dizzying amount of lawsuits, some of which have been settled, and others that are still ongoing. Uber paid $20 million to settle a lawsuit with the Federal Trade Commission for “misleading drivers on how much they could earn.”

They’re dealing with other lawsuits from both passengers and drivers that revolve around overpayment from customers and underpayment to contractors.

The nightmare rolls on

Uber’s problems also extended to their employees at their headquarters. An ex-employee, Susan Fowler, wrote a jaw-dropping expose on just how hostile the company was to females, including harboring employees who sexually harassed people, and retaliating against people who tried to report such behavior.

Travis’ own fratty behavior has also come under the spotlight. A dramatic video emerged of a combative confrontation between him and an Uber driver. That later triggered a heartfelt apology, and a promise that he would seek “leadership help.” If you know Travis’ history, this is indicative of a long track record of regrettable behavior.

The combination of the CEO’s personal behavior and the constant negative PR proved to be too much for the company’s board to handle.

Kalanick’s rocky tenure ended when he received a surprise visit at his Chicago hotel room from two venture capitalists. They demanded his resignation and he eventually agreed.

Uber is not in good shape

Uber is now left without much of its leadership team, as many of them departed as a result of the scandals that have rocked the company. Some are even imagining a future without Uber, as the company could collapse under the weight of its massive losses and never ending scandal.

Whoever takes over the world’s largest digital car service has a lot of weight on their shoulders. Kalanick is out as CEO, but even in the best of scenarios, the mess he leaves behind will take years to clean up. The worst case scenario may be what was once unimaginable — a world without Uber.

Have something to add to this story? Comment below or join the discussion on Facebook.

Header image: Getty Images

Click to comment

Leave a Reply

Your email address will not be published. Required fields are marked *

You May Also Like

economy

In the early 2000s, I remember watching a game show, and the grand prize was a million dollars. I thought to myself, “Wow, that’s...

economy

When starting college and choosing a major, it’s important to know which college degrees will make you the most money. Since last year’s quarantine,...

2016 president election

In a political climate dominated by a two-party system, Libertarians are constantly confused as off-brand Republicans. Although the two groups sometimes align on issues,...

Business

What is the gap between culture and technology? According to Damas, entertainers have passions that brands and companies may not be aware of, and...

Copyright © 2020-2021 GenBiz. GenBiz is owned and operated by owned by the Foundation for American Content and Entertainment, a 501(c)(3) non-profit organization.