The list of what ails Uber is long — and has grown longer in lock step with the tenure of its founder, Travis Kalanick. His departure as chief executive amid pressure from other shareholders ends the first leg of Uber’s journey from a start-up to a $70 billion enterprise to, eventually, a public company. That it was able to jettison its controlling shareholder suggests a small, but welcome, modicum of market discipline in the start-up world.
Uber’s woes are not all Mr. Kalanick’s doing. Its original conceit was to offer an asset-light solution to hailing taxis: Uber provides a handy GPS and payments application, drivers bear all the costs and liabilities of transportation, and Uber takes a fee. To beat back pesky livery and taxi regulations, Uber helpfully picked up the tab for drivers’ infractions. Now that municipalities have either loosened the rules, leveling the playing field for Uber and its competitors, or simply clamped down, the arbitrage trick is up. A nasty fight in which Kalanick berated a driver bemoaning the cost he had incurred in acquiring his vehicle showed that Uber’s practice of heaping liabilities on its freelancing workers was reaching its limits.
On top of these headwinds, however, Kalanick generated a few of his own. A frat-like culture led to an investigation into charges of sexual harassment and unprofessional behavior. Senior executives departed. So did David Bonderman, the TPG boss and Uber board member, last week, after an ill-judged joke that more women on the board means “more talking.” Mr. Kalanick had planned a leave of absence, but it appears that was not enough for top shareholders, including Benchmark Capital.
Mr. Kalanick’s willingness to step back disrupts the tech-sector model of founders wielding executive power, aided by super-voting shares and cadres of boardroom allies. It also sets a positive example that might one day help a Snap or Facebook through bad times. The question is what Mr. Kalanick does next. If Uber’s controlling shareholder simply drives from the back seat, the company will look even less suited to public life. From the outside, though, Uber is now on a better course.
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