By Alan Murray and John Kell
June 14, 2017

Good morning.

Fortune’s Adam Lashinsky literally wrote the book on Uber CEO Travis Kalanick (you can buy it here…or read the Fortune excerpt here.) Below are his thoughts on the brash CEO’s announcement yesterday that he’s taking a leave of absence:

On a brisk night last July, I took a long walk through the streets of San Francisco with Travis Kalanick. We walked and talked for more than three hours, and toward the end of our conversation I asked him if he liked running a big company. He’d been around since Uber was a mere handful of employees, and now it had many thousands.

His answer spoke volumes, especially in light of the blaring headlines about Uber and its CEO in recent days. “The way I do it, it doesn’t feel big,” he said. “You constantly want to make your company feel small,” he continued. “You need to create mechanisms and cultural values so that you feel as small as possible.”

On Tuesday, Uber released a list of recommendations by former U.S. Attorney General Eric Holder and a colleague based on a months-long investigation into those very company values. Their conclusion: Uber needs to change. What’s plain to all—perhaps even Kalanick, who announced he’ll take a leave of absence of undetermined length—is that while Uber was growing to become a global behemoth its CEO willfully continued to think of it as a brash startup.

There was good in that. Startups move quickly and big companies don’t. Steve Jobs use to boast that Apple was the world’s biggest startup.

Yet for Uber the bad outweighed the good. Smallness meant perpetuating the worst of chaotic startup life and a failure to grow into the mature corporation it needed to become. The Holder report revealed an undisciplined company with poor governance, weak accountability, a founder-dominated board, and values—the very tenets Kalanick treasured—that encouraged bad behavior. Holder recommended, for example, that Uber seek top-management “candidates with experience dealing with organizations that have complicated labor and operational structures.” That would not describe leaders at the typical Silicon Valley startup Kalanick so badly wanted Uber to remain.

What comes next? Kalanick’s letter to employees implies he’s not letting go completely, noting that he’ll “be available as needed for the most strategic decisions.” Presumably he’ll have a hand in hiring the critically important chief operating officer Uber seeks as well as a finance chief and other top leaders.

Fresh blood will help Uber. But existing woes won’t vanish. Late-to-the-party investors who valued Uber at nearly $70 billion might reasonably want their money back. Uber’s legal battle with Alphabet’s self-driving car unit could be perilous if it heads to trial as planned. And a potential Justice Department investigation into a deceptive practice known as “greyballing” suggests possible criminal allegations.

Uber is attempting to turn over a new leaf. But its wild ride continues.

Meanwhile, Uber director David Bonderman resigned yesterday after making a sexist comment in a meeting with staff. You can read about that here.

Alan Murray
@alansmurray
alan.murray@fortune.com

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