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Published On: Sat, Jun 17th, 2017

Ubers CEO Found an Unhappy Compromise

Travis Kalanick’s leave of absence from Uber Technologies Inc. makes just about everyone unhappy. Whether you want the chief executive officer to stay or go, it’s a disappointment because it tries to split the difference. If you’re a Kalanick loyalist and would like to see him continue to have a big role at the company, this is a moment of weakness. If you think Kalanick is the core problem at Uber, there was a failure to act decisively, and he still remains in the mix. The fact that neither camp is happy only helps fuel the conflict further.

Kalanick’s role at Uber remains—by far—the most important factor within the company. If the goal is to put the company’s controversial past behind it, then keeping Kalanick on as CEO seems like it will be a barrier to that, at least so long as there’s a large contingent that thinks he needs to go. Kalanick allegedly played a role in the India rape debacle and attended the South Korean karaoke bar that was the subject of a human-resources claim. He’s CEO of a company that allegedly failed to respond to Susan Fowler’s human-resources complaints. And then, after a more thorough review of personnel infractions, the company fired more than 20 people. Emil Michael, who was ousted as a result of former U.S. Attorney General Eric Holder’s recommendations, wasn’t the guy in charge—just the guy’s closest confidant.

Some Uber insiders now believe that if Kalanick wanted to put these scandals behind him, he took the wrong path. He hired Holder to investigate the company and gave his law firm a wide berth to dig into scandals. This eliminated Kalanick’s ability to take credit for the housecleaning. Instead, it looked more like an indictment of his leadership. The public Holder recommendations, which were approved unanimously by the board, diminish Kalanick’s role by giving a lot of the day-to-day decision-making to a still-hypothetical chief operating officer and more power to the board of directors.

A lot hangs on the COO. Kalanick is spending much of his time searching to fill the role. Some Uber employees seem to be waiting around hoping this person will be some kind of messiah. After the experience with Jeff Jones, the former Target chief marketing officer who worked as Uber’s president for six months before fleeing, we’ll have to wait and see.

It seems like Kalanick could weather the storm here. Sunday’s board meeting may have been the peak moment of vulnerability. It reminds me of another company, Zenefits. In that case, the board basically scared the crap out of the CEO who controlled the company. They convinced him that he could face a lot of trouble for the decisions he’d made and that it would be less painful just to leave. They negotiated a peaceful departure, and then turned around and seemed to pin the blame for everything on him. When a founder has absolute control, that’s the playbook: Put the fear of god in them and hope that they relent. Kalanick is still in the mix, but Uber’s turmoil isn’t nearly over.Eric Newcomer

And here’s what you need to know in global technology news

An Amazon-Slack deal could actually make sense. After Bloomberg reported Amazon’s interest in acquiring the corporate messaging startup, we took a closer look at each business to see how they might fit together. It probably has something to do with Alexa and selling you more stuff.

American chipmakers had a toxic problem, and then they outsourced it. The tech industry’s supply chain in Asia uses chemicals that cause miscarriages and birth defects.

Bitcoin tumbled the most in more than two years. The price of the digital currency sank as much as 19 percent following a record-setting run. The surge was built on the back of a new fundraising phenomenon known as ICOs.

Apple’s Tim Cook talks Trump, HomePod and the legacy of Steve Jobs. The CEO spoke to for our cover story. The magazine has a new design in print, on the web and in the App Store. Check it out.

Spotify’s loss more than doubled even as user growth surged. The music-streaming company lost $601 million last year, but sales jumped 52 percent.

Airbnb is fighting house by house to break into China. The home-rental startup faces brutal competition in the world’s second-biggest economy, where Uber bled $2 billion.

Netflix changed course on net neutrality. After seeming to lose interest in the issue, the company now says it’ll “never outgrow the fight for net neutrality,” the Verge reports.

    Read more: http://www.bloomberg.com/news/articles/2017-06-16/uber-s-ceo-found-an-unhappy-compromise

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    Ubers CEO Found an Unhappy Compromise