What Travis Kalanick’s Resignation Means for Uber, Lyft, and You
Travis Kalanick doesn’t want to fight anymore.
Early this morning, news broke that Uber’s chief executive would resign from his role. In a statement to The New York Times, he said, “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.”
Uber is now left picking up the pieces after a tumultuous six months of PR problems including a video of Kalanick, berating a driver (he later apologized), a passenger boycott promoted on social media, and sexual harassment allegations.
Here’s what the departure of Uber’s top executive will mean for drivers, passengers, employees, and competitors.
Drivers: The widely-circulated video of Kalanick arguing with an Uber driver over pay rates was one in a series of missteps for the ride-hailing giant. Following the incident, Rachel Holt, Uber’s head of the ride-hailing service in North America, said Uber was making efforts to improve how it works with drivers to ensure “they feel heard and respected,” adding that the top complaints from drivers had revolved around earnings, stress, support, and communications. And it looks like Uber will continue to execute on these points without Kalanick as the CEO. Just yesterday, the tech giant announced some big changes in an effort to woo drivers to its platform, including adding a way to tip drivers and shortening the window for would-be passengers to cancel their rides.
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Passengers: In January, a #DeleteUber boycott campaign erupted on Twitter after some users accused Uber of trying to profit from a taxi driver protest against President Donald Trump’s immigration ban. Although CEO Travis Kalanick later announced he would create a $3 million legal defense fund for Uber drivers affected by the ban, more than 200,000 customers still deleted their accounts. The #DeleteUber hashtag came back for round two after a former engineer published a blog post in February in which she said she had repeatedly complained about sexual harassment and discrimination at the company, but was ignored or punished. On Monday, Uber sent an apology to some of its former customers in an effort to win them back. With Kalanick out, investors are counting on the company having an easier time repairing its image and regaining customer trust.
Employees: After one of its former engineer spoke out about sexual harassment, Uber launched an internal investigation into its workplace culture. The company eventually terminated more than 20 employees, citing bullying and retaliation as reasons for the firings. Uber’s board decided to implement employee-friendly recommendations, like adopting a zero-tolerance policy for substantiated complaints of discrimination and harassment and conducting an audit of pay practices. With management in flux, Uber has an opportunity to fill the top positions with leaders who could improve Uber’s toxic culture and put an end to its PR nightmare.
Competitors: Kalanick’s exit is an opportunity for rivals to push their efforts into high gear. During the ongoing scandals, Uber reportedly lost users and market share to ride-hailing competitor Lyft. While Uber has been dealing with a succession of problems, Lyft has been quietly forming partnerships and rolling out new tipping perks for drivers.
It’s still early and unclear what’s next for Uber without its aggressive founder, but as Fortune’s Adam Lashinsky put it: “Kalanick’s spectacular flameout is one for the ages. His stubborn persistence and vision made Uber what it is. Flying in the face of convention was an asset, but ultimately a horrible liability.”