San Francisco: Uber Technologies Inc’s former Chief Executive Officer Travis Kalanick is stepping down from the board, severing his last ties to the company he cofounded a decade ago and helped become one of the world’s most valuable, and controversial, start-ups.
Kalanick, 43, has sold all of his remaining shares in the ride-hailing giant and plans to focus on his new business and philanthropic endeavours.
Along with co-founder Garrett Camp, Kalanick started Uber in 2009, building the company up from an experimental black car service in San Francisco to a global transportation and logistics company, offering food delivery, freight shipping, helicopter rides and ushering in a new era of work. But he was ousted as CEO in June 2017 following months of chaos and controversy. Detractors pointed to his aggressive and sometimes reckless management style as breeding a toxic workplace hostile to women and overseeing morally questionable company programs including some that intentionally deceived regulators and law enforcement agencies and spied on riders.
“Uber has been a part of my life for the past 10 years,” Kalanick said in a statement. “At the close of the decade, and with the company now public, it seems like the right moment for me to focus on my current business and philanthropic pursuits.”
For the past year, Kalanick has been building a new start-up: CloudKitchens. The real estate company offers fully outfitted kitchens to restaurants that need more space to fulfil orders from takeout food services like DoorDash and UberEats. Along with using his own funds, Kalanick also raised $400 million from Saudi Arabia’s sovereign wealth fund.
Following Kalanick’s departure as CEO, the board replaced him with Dara Khosrowshahi, a former executive of Expedia Inc, who has worked to rebuild the company’s reputation and promise to investors. Since its initial public offering in May “” one of the worst IPOs this year — Uber shares have cratered by more than 30 per cent. They were up 1 per cent at 12:04pm in New York.
With Kalanick fully separated from Uber now, Wedbush Securities analysts said it could help the stock, since his continued presence on the board was a “distraction.”
“With ripping the band-aid off and Travis leaving stage left on the board, we believe now it’s about Dara & Co. taking Uber in the right direction for 2020 and beyond after a rough road so far,” wrote Wedbush analysts Ygal Arounian and Dan Ives, adding that the massive sell-off of shares following the Nov. 6 lock-up expiry has also hurt the stock price.
Kalanick has been steadily unloading his Uber shares in the past few weeks. He sold the remaining 5.8 million shares before resigning from the board Monday night, a spokeswoman said, for a grand haul of almost $3 billion, according to calculations by Bloomberg. Before the lock-up expired, Kalanick held a 6 per cent stake in Uber, which made him the firm’s largest individual shareholder. Softbank Group Corp. and Benchmark Capital are the company’s two largest institutional shareholders.
Such a spelldown is unusual among prominent tech tycoons. Facebook Inc’s Mark Zuckerberg and Amazon.com Inc’s Jeff Bezos still own sizeable stakes in their companies. Still, neither of them were ousted by a boardroom coup. And Kalanick’s sales mean he has plenty of financial firepower for his other projects. He created a fund called 10100 in March 2018, saying in a tweet it would focus on his “passions, investments, ideas and big bets.” The fund will handle Kalanick’s for-profit investments and philanthropy and plans to invest in real estate, e-commerce and emerging innovation in China and India, according to its website.
“Very few entrepreneurs have built something as profound as Travis Kalanick did with Uber,” Khosrowshahi said. “I’m enormously grateful for Travis’s vision and tenacity while building Uber, and for his expertise as a board member. Everyone at Uber wishes him all the best.”
Kalanick’s departure from Uber’s board will be effective Dec. 31, according to a statement Tuesday. Uber’s 12-person board has steadily shrunk since the company went public in May and now will have four openings.