Uber’s CEO Problems Are Hurting the Business, New Board Member Says
So far, the consensus among outsiders has been that Uber’s business will continue to thrive, despite the company’s sexual harassment scandal, legal battle with the Waymo autonomous-driving unit of Alphabet, and lack of current leadership. One key insider, however, played down that rosy picture Tuesday, saying that the company’s problems have taken a bigger toll than it seems.
“I wouldn’t say it hasn’t hurt the business,” said Uber’s newest board member, TPG Capital partner David Trujillo, at Fortune‘s Brainstorm Tech conference in Aspen, Colo. “We’ve been in a tough spot. And I think if these issues aren’t addressed, very serious ones, it risks actually impacting the financial performance of the company and long-term value.”
Trujillo joined Uber’s board of directors last month, replacing TPG chairman David Bonderman, who resigned his seat on the board after making a sexist remark at Uber’s all-hands meeting in June.
So far, TPG, which is a major investor in the car-hailing company, has not seen the need to mark down the value of Uber stock in the private equity firm’s own portfolio, Trujillo said. Nor has fellow Uber investor General Atlantic, said Anton Levy, a managing director of that firm, at the conference. Other than a small reduction in the value of Uber stock by T. Rowe Price, the startup’s shares have so far held their value in spite of the scandals, at least in the eyes of its largest investors.
Still, Trujillo stressed that Uber’s “toxic culture” needs to change—even if many of the company’s workers have said they supported the status quo, with more than 1,000 employees signing a petition to reinstate Kalanick as CEO. “I wouldn’t read into that as having liked the culture the way it was, or is,” Trujillo said. “It’s not only right to change some of the things that have been experienced at the company, but it’s also practical—being a place that people are proud of, want to go work for,” he added.
Uber’s board is working together to implement the changes recommended in a 13-page report by former U.S. Attorney General Eric Holder, who conducted a months-long investigation of the company. The first priority, according to Trujillo: Finding a new CEO to replace Kalanick, as well as filling other top executive positions that have been left vacant amid a management shakeup in recent months.
“Uber, what’s going on there is somewhat unconventional and extreme,” Trujillo said. On the positive, side, though, Uber’s success wasn’t completely dependent on Kalanick, but rather on the company’s ability to “hire the best and the brightest” employees around the world, he added.
“And we have this latent talent base that is just looking for the right leadership turning the page, and are incredibly motivated,” Trujillo said. “It’s not going to be easy to get through it, but we’re certainly focused on trying to.”