Travis Kalanick, the CEO of the ride sharing giant Uber has resigned. Uber's board confirmed the resignation on Wednesday. They released a statement that Kalanick will be taking time to heal from the death of his mother in a boating accident "while giving the company room to fully embrace this new chapter in Uber's history." Removal of his position was from the pressure from investors. Although no longer CEO, he will remain on the board. The ride sharing giant, although can be considered successful with its large user database and growth into countries all over world, but has had been struggling to mature into a company that can stanch losses and post consistent profits. It is unclear who Kalanick's successor will be.
However, the resignation is not a surprise move, nor did it shock industry experts as they expected something similar to happen due to the string of affairs that has cost the company a lot of PR. Kalanick has damaged Uber's reputation with the revelations of sexual harassment in its offices, allegations of trade secrets theft and a federal investigation into efforts to mislead local government regulators. The company has already departed on their 180 day program to change its image by allowing riders to give drivers tips through the Uber app, an idea that Kalanick had ferociously resisted. The company's drivers have made statements that Kalanick didn't value their labor even though it is the heart of the San Francisco based company.
Uber's board in the statement defended Kalanick as he had "always put Uber first." However, under Kalanick's guidance, the company developed a reputation for ruthless business tactics that have occasionally outraged government regulators, drivers, riders and employees. The company often flouted city regulations for taxi companies with a culture that encouraged "Principled Confrontation." Uber has been having trouble dealing with its success. It posted a $708 million first-quarter loss, unable to turn a profit even with $3.4 billion in revenue into profit. Investors have talked about selling Uber stock to the public. The company was valued at nearly $70 billion the last time it looked for a capital injection.