Uber CEO Travis Kalanick speaks to students at the Indian Institute of Technology campus in Mumbai, India, January 19, 2016. Photograph: (Reuters)
Uber Technologies Inc's board will discuss Chief Executive Travis Kalanick temporarily stepping away from the embattled ride-hailing firm and consider sweeping changes to the company's management practices at a meeting on Sunday, according to a person familiar with the situation.
The source said it is not clear that the board will make any decision to change Kalanick’s role. But they have voted unanimously to adopt all recommendations from the report by former US Attorney General Eric Holder following a sprawling, multi-month investigation into Uber's cultures and practices.
The recommendations will be released to Uber employees on Tuesday, a representative said.
Holder's review's was launched in February after former Uber engineer Susan Fowler published a blog post detailing what she described as sexual harassment and the lack of a suitable response by senior managers. Fowler now works for digital payments company Stripe.
The report was prepared by Holder and partner Tammy Albarrán at Covington & Burling. It comes shortly after another law firm, Perkins Coie, submitted a separate report on sexual harassment and other employee concerns at the company.
On Tuesday, Uber responded to that report's findings by saying it had fired 20 employees for a variety of reasons, and was increasing training and adopting new policies. Uber said that report considered 215 cases encompassing sexual harassment, discrimination, unprofessional behaviour, bullying and other employee complaints.
Sexual and racial bias, bullying and retaliation
Employees and former employees interviewed by Holder's team complained about sexual and racial bias, bullying and retaliation, according to people familiar with their accounts.
They said that Kalanick and his lieutenants had favourites who played by different rules than other employees, and that even those favorites were nervous that they could fall from grace, which they sometimes did. Uber declined to comment on that characterisation.
Abrasive leader, questionable culture
Uber's board will likely tell employees and the public of its decisions by Tuesday, one of the sources said. An Uber spokesman had no comment. Neither Kalanick nor Holder's law firm, Covington & Burling, immediately responded to requests for comment late Saturday.
Kalanick has developed a reputation as an abrasive leader, and his approach has rubbed off on his company. The 40-year-old executive was captured on video in February berating an Uber driver.
Uber board member Arianna Huffington said in March that Kalanick needed to change his leadership style from that of a "scrappy entrepreneur" to be more like a "leader of a major global company". The board has been looking for a chief operating officer to help Kalanick run the company since March.
India rape, a set-up?
One of the issues that came to Holder’s team's attention, according to two people familiar with the matter, was the company’s handling of a crisis in India after one of its drivers was arrested for raping a customer. Though the man, Shiv Kumar Yadav, was convicted in 2015, Kalanick and other company executives became convinced that the crime was a set-up by a local competitor, former employees said.
Eric Alexander, the head of Asian business, shared medical records internally that he argued showed that the woman had been assaulted but not raped, people who spoke to him said. Alexander was fired this week; He did not return messages seeking comment. Uber confirmed Alexander had left the company but declined to discuss the matter further.
At the time, the BBC reported that a 26-year-old was taken to a secluded area and raped after booking a ride home with Uber. Delhi banned Uber, accusing them of neglecting to carry out adequate background checks on drivers. Uber apologised and said "it must do better". Amit Jain, the president of Uber India, welcomed the verdict.
More oversight on CEO?
San Francisco-based Uber is valued at nearly $70 billion but has yet to turn a profit. Uber has also been accused of aggressively using tax loopholes. For example, in the US, it's been reported that only two per cent of their revenue is taxable.
Some of the recommendations in Holder's firm's report would force greater controls on spending, human resources and other areas where executives led by Kalanick have had a surprising amount of autonomy for a company with more than 12,000 employees, one person familiar with the matter said. Uber's more than 1.5 million drivers worldwide are classified as independent contractors rather than employees.
Less clear is the fate of Kalanick, who with close allies has voting control of the company.
The board, according to a person briefed on the matter, said they will discuss Kalanick taking time off from the company. Another possibility is that Kalanick may return in a reduced role, one with diminished authority, said this person. This may mean a position other than CEO, or as CEO but with narrower responsibilities and subject to more oversight.
Kalanick is also facing a personal trauma: Last month his mother died in a boating accident, which also badly injured his father.