June 11, 2017 5:05 pm
Updated: June 12, 2017 7:48 pm

Uber board to discuss CEO Travis Kalanick’s role amid criticism of company culture

Uber's leadership is in danger of driving the company into the ditch after several complaints of bullying, harassment and a questionable cooperate culture at the top. Mike Le Couteur looks at whether the company can make a U-turn on its reputation.

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SAN FRANCISCO, June 11 (Reuters) – Uber‘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 person briefed on the matter said the board will discuss Kalanick taking time off from the company. The discussion involved the possibility that Kalanick might return in a role with less authority, this person said, either in a position other than CEO or as CEO with narrower responsibilities and subject to stronger oversight.

WATCH: Uber board to discuss CEO absence


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The source said it is not clear that the board will make any decision to change Kalanick’s role. The board is expected to adopt a number of internal policy and management changes recommended by outside attorneys hired to investigate sexual harassment and the firm’s broader culture. The outside lawyers made no recommendation about Kalanick.

READ MORE: Uber fires 20 employees after sexual harassment probe, source says

An Uber spokesman had no comment. Kalanick did not immediately respond to requests for comment late on Saturday.

The meeting, which Uber has not publicized, could be a pivotal moment for the world’s most valuable venture-backed private company, which has upended the tightly regulated taxi industry in many countries but has run into legal trouble with a rough-and-tumble approach to local regulations and the way it handles employees and drivers.

At the Sunday meeting, according to two people familiar with the matter, the seven voting members of Uber’s board, including Kalanick, are expected to vote on recommendations made by the law firm of former U.S. Attorney General Eric Holder, which conducted a review of the company’s policies and culture.

WATCH: Toronto Uber customers with complaints say no one to call

The review 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.

Uber’s board will likely tell employees and the public of its decisions by Tuesday, one of the sources said.

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.

WATCH: Uber CEO apologizes after meltdown caught on dash-cam

“I must fundamentally change as a leader and grow up,” Kalanick said in a statement following the video’s release.

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.

READ MORE: Uber CEO Travis Kalanick says it’s time for him to ‘grow up’

The report was prepared by Holder and partner Tammy Albarrán at Covington & Burling, which did not respond to requests for comment. 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 behavior, bullying and other employee complaints.

Recommendations for tighter controls

San Francisco-based Uber is valued at nearly $70 billion but has yet to turn a profit.

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.

READ MORE: Uber fires 20 employees after sexual harassment probe, source says

Kalanick, along with two close allies, has voting control of the company.

The board’s discussions come at a moment when Kalanick is facing a personal trauma: his mother died last month in a boating accident, in which his father was also badly injured.

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.

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They said that Kalanick and his lieutenants had favorites 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 comment on that characterization.

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.

READ MORE: Uber driver charged after teenage passenger sexually assaulted in Toronto: police

Though the man was convicted in 2015, Kalanick and other 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.

© 2017 Reuters

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