Travis Kalanick has resigned as chief executive of Uber – too late and without an admission of personal responsibility for the many scandals that have engulfed the ride-hailing firm he helped to found. If Uber was a normal public company, subject to even an gentle governance regime, he would have been fired years ago.
As it is, Kalanick’s resignation counts as a minor triumph for the venture capitalists who own about 40% of privately-controlled Uber. Benchmark, the biggest investor, led the revolt and it’s not difficult to guess why its patience finally snapped.
First, there were the signs that the damage to Uber’s brand was affecting business. US rival Lyft had been gaining ground and Uber’s many fights with regulators and law enforcement agencies around the world would only become trickier as long as Kalanick remained in the driver’s seat.
Second, it would have been impossible for Uber to pursue a stock market listing via an IPO – or, at least, the supposed $68bn (£54bn) valuation would have been a fantasy. The technology bubble in the US is alive and inflating, but who would pay that kind of money for a loss-making company where the boss had become a liability?
Even now, any potential investor will want to know if Kalanick’s resignation is the real deal or a cosmetic exercise. He is staying on board in a capacity yet to be defined. Given the size of his shareholding and voting rights – Forbes has valued his wealth at $6bn – he can hardly be denied a position but he doesn’t seem the type to sit quietly in the back making polite conversation. Uber will need to show that it can recruit a strong chief executive and then give that individual the freedom to operate and to hire other staff.
There is a wider moral to the Uber tale. Kalanick was only able to survive as chief executive for so long because Silicon Valley venture capitalists swallowed the idea that founders are business visionaries who must be allowed to operate to their own rules. Sometimes that philosophy works. Sometimes, as with Uber, it’s a recipe for scandal. Proper boardroom accountability, even with start-ups and technology innovators, is a principle worth defending.