Travis Kalanick steps down as Uber’s CEO

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Kicking him when he’s down: Causing more trouble to a person going through a crisis

21st June, a day of significance in the history of Uber. In the brief time it has been around, it has faced numerous challenges. Right from background checks on drivers to an unhealthy work culture, Travis Kalanick has seen everything. Now that things have gotten worse, investors are trying to send a statement by making him the fall guy. Is it really right kicking the revolutionary Tech Entrepreneur when he’s down? Let’s check it out.
“We have a lot of attention as it is. I don’t even know how we could get more,” Travis Kalanick, the king of Uber, said last year. The ride-hailing giant found a way. Mr Kalanick failed to manage the fallout from a series of high-profile blunders and scandals.
As far as the common person knows, Uber as a company has flourished. The level of Tech is outstanding. It has made cabs the commute of the middle class everywhere. Just because there have been complaints against the company, did we become totally “ethical” and switch to more expensive alternatives. No! No one is a holy cow and there is no use pretending that we are one. It is really fashionable to pretend so by writing an article on Harvard Business Review, for instance and giving the world the ‘Holier-than-thou’ look.

Uber brought some important improvements to the taxi business, which are at this point well known. But by the company’s launch, in 2010, most urban taxi fleets used modern dispatch with GPS, plus custom hardware and software. In those respects, Uber was much like what incumbents had and where they were headed.

Uber was wise to use smartphone apps (not telephone calls) to let passengers request vehicles, and it found major cost savings in equipping drivers with standard phones (not specialized hardware). But others did this, too. Ultimately, most of Uber’s technical advances were ideas that competitors would have devised in short order.

Uber’s biggest advantage over incumbents was in using ordinary vehicles with no special licensing or other formalities. With regular noncommercial cars, Uber and its drivers avoided commercial insurance, commercial registration, commercial plates, special driver’s licenses, background checks, rigorous commercial vehicle inspections, and countless other expenses. With these savings, Uber seized a huge cost advantage over taxis and traditional car services. Uber’s lower costs brought lower prices to consumers, with resulting popularity and growth. But this use of noncommercial cars was unlawful from the start. In most jurisdictions, longstanding rules required all the protections described above, and no exception allowed what Uber envisioned.

According to the Forbes, he has a real time net value of $6.8 billions. Despite his rocky tenure, Kalanick had driven his taxi-killing startup from nothing to a valuation of $68 billion in just seven years.

The identity of Mr Kalanick’s replacement will be crucial. Uber’s board will seek an experienced boss, perhaps a woman. He or she will need experience running a multinational. Whether the board should hire someone with a background in transport (perhaps from an airline or logistics firm) or a candidate from the technology industry is unclear. Some have suggested that Sheryl Sandberg, who serves as number two at Facebook, would be a good choice, but she may not be willing to jump.

Investors in Uber have accepted that Mr Kalanick will stay on the company’s board (along with his co-founder and another early executive, he controls the majority of super-voting shares) so he is likely to have a strong influence on the firm. He will need to exercise restraint. Twitter, an internet company that is struggling to attract more users, found it hard to settle on a clear strategy in part because several co-founders who once ran it continued to serve on the board and second-guessed the boss.

Mr Kalanick’s departure should be enough to placate some alienated customers. Regulators may treat Uber more kindly, too. Abroad, its scandals have barely registered. In the first quarter of this year it notched up record revenues, of $3.4bn. Its losses, of around $700m, are still high but diminishing. The next chief executive will need to decide whether to chase growth and endure continued steep losses, or cut back on international expansion in order to make more money. After watching Mr Kalanick push the pedal to the metal, Uber’s investors may hope that a more conservative era—in terms of finances as well as culture—is about to begin.

All said and done, where there is disruption, there are after effects. These are after effects. We have to wait for them to settle. In the movie ‘Steve Jobs’ where the role was rendered to near perfection by Mike Fassbender, the former says this in uncanny fashion to John Sculley (in the film): ‘I am the director of the orchestra’. Well, Travis is no less. When the tune was going great, no one complained. When it went off tune, investors are now up in arms. This man is down but not out. He will come back stronger. We all have faith in him.

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