Uber founder Travis Kalanick resigns as CEO amid scandals

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Uber CEO Travis Kalanick has resigned.

The move came after a shareholder revolt made it untenable for him to stay on at the company.

The investors included one of Uber’s biggest shareholders, the venture capital firm Benchmark.

As ride-sharing ballooned in popularity throughout the Chicago area and the rest of the world, it wasn’t always easy to tell the difference between its two large players, Uber Technologies and Lyft.

Yet after suffering nearly six months of self-inflicted damage, missteps and public relations snafus, Uber vows it’s on the road to recovery. That’s good to hear, but it’s going to be a tough journey — one that can’t afford any more detours into the bad or boorish behavior that’s giving the company a reputation as a well-funded social pariah.

Making amends with customers who are angry and disgusted with the company’s behavior is among Uber’s biggest challenges. The company must win over those who are ticked off about its damaged corporate culture, one that’s widely regarded as overly aggressive, sexist and insensitive.

Grass-roots Uber opposition is shaping up. Social media is rife with anti-company posts, and companies are boycotting Uber or rethinking their ride-sharing needs. Meanwhile, rival Lyft is building its Chicago presence and expanding into new markets.

Between February and June, about 2.5 percent of established Chicago-area Uber customers defected mainly for Lyft, according to West Coast-based TXN, which tracked more than 3 million ride-sharing credit and debit card transactions. While not an earth-shattering drop, it is the second-highest defection percentage in the country after Uber’s hometown of San Francisco, reports TXN.

Last week, Uber unveiled sweeping recommendations to address claims of sexual harassment that emerged following a monthslong probe into the company’s culture. At the same time, co-founder and CEO Travis Kalanick temporarily stepped aside and will return to a diminished executive role.

Yet even as such mammoth changes are unfolding, Uber is under fire from detractors.

On Twitter, #deleteuber leads the anti-Uber brigade with a multitude of tweets criticizing management for the sexual harassment claims. The vast majority who post say they’ll never use the ride-sharing service again.

Board member David Bonderman also felt the Twitterati’s wrath last week after saying during a company meeting — which was actually addressing a need for greater board diversity — that adding women would result in “more talking.”

Shortly after his crack, Bonderman resigned from Uber’s board, saying he didn’t want to be a distraction to the company’s revival.

If Uber’s brass thinks such Twitter flare-ups are merely malcontents grousing because they have time on their hands, they should reconsider the power and reach of social media.

“Corporate America is becoming much more sensitive and starting to respond to social media, where the waves of consumer concern first flow through,” says Jack Gillis, spokesman for the Consumer Federation of America, a Washington, D.C., watchdog group.

Outside of cyberspace, Uber also is being questioned by more corporate clients. They fret that being associated with the Uber brand could, by extension, send the wrong signal about their companies.

In February, web developer and project manager Basecamp banned the Uber app and stopped reimbursing employees for the service, encouraging them to use other transportation options. In doing so, it wanted to disassociate itself from Uber’s unbecoming conduct.

While this isn’t a scientific finding, it’s interesting to note that another local company executive — who didn’t want his name used — told the Tribune he may stop using Uber to ferry clients and staff. He too is concerned about inadvertently sending a signal that his company is OK with Uber’s out-of-bounds behavior.

I’ll wager there are plenty more company managers going through the same thought process.

While the Uber saga has taken center stage, competitor Lyft has been shrewdly and quietly advancing while wisely staying out of the spotlight.

During Uber’s travails, Lyft has added 150 more markets, giving it a total of 350. In April, Lyft raised $600 million and now has a market valuation of $7.5 billion, including at least $500 million from General Motors.

That’s chump change when compared with Uber’s whopping market valuation of $50 billion to $60 billion.

But in this rapidly changing world of new technology and fickle consumer taste, size isn’t everything.

Uber is a wounded giant that’s surrounded by competitors and detractors. Marketplace circumstances can change quickly, investment money can dry up and consumers can get angry and leave.

In other words, Uber can’t afford to make any more dumb mistakes.


 

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