Uber CEO Travis Kalanick is taking a leave of absence for an unspecified amount of time, he told staff at the fast-growing ride-hail giant in a company-wide memo.
"[I]f we are going to work on Uber 2.0, I also need to work on Travis 2.0 to become the leader that this company needs and that you deserve," he stated in the memo, shared by Uber on Tuesday.
His announcement comes on the same day the law firm Covington & Burling released a series of recommendations on changing the corporate culture at Uber, which, with a roughly $70 billion market value, is considered the world's most valuable startup company.
The report stems from a blog post in February by Susan Fowler, who described experiencing sexual harassment and being stonewalled by Uber's human resources department while she was an engineer at the company.
Among the report's 47 recommendations: curbing drug and alcohol use, instituting mandatory leadership training and human resources training for senior managers, explicitly prohibiting romantic relationships between an employee and a boss, and giving some of the CEO's responsibilities to others.
Some Uber board members presented conclusions from the Covington & Burling report, whose lead author is former U.S. Attorney General Eric Holder, at a company-wide meeting Tuesday. The report doesn't address individual claims of harassment. But Uber's human resources chief credited Fowler with driving this change at the meeting, according to an account.
No more "hustlin'"
The report recommended creating an independent oversight board for Uber, beefing up diversity recruiting and retention efforts and, notably, reassigning some of Kalanick's responsibilities to others. Some of his oversight could be given to the COO, the report noted -- a position the company has beenfor some time.
Many of the recommendations took aim at the company's, including the 14 "core values" that Kalanick partly authored as Uber, founded in 2009, ramped up its growth plans. The report called for removing values it said justified "poor behavior," including Let Builders Build, Always Be Hustlin', Meritocracy and Toe-Stepping, and Principled Confrontation.
Instead, Uber should "adopt values that are more inclusive and contribute to a collaborative environment, including emphasizing teamwork and mutual respect, and incorporating diversity and inclusiveness as a key cultural value, not just as an end in itself, but as a fundamental aspect of doing good business," the report said.
Nodding to Uber's reputation of a hard-partying culture, the memo recommended putting in "clear guidelines" on alcohol use. "Uber should ... [prohibit] consumption of alcohol during core work hours and [prohibit] consumption of non-prescription controlled substances during core work hours, at work events, or at other work-sponsored events," the memo read. "With respect to alcohol consumption at after-hours work events and at other work-sponsored events, Uber should consider limiting the budget available to managers for alcohol purchases, restrict reimbursement for alcohol-related events, and include training for managers on appropriate events for retreats and out-of-work events."
Is change possible?
Uber board members presenting the report acknowledged the challenge of reforming the company culture -- and another board member unwittingly underlined that challenge by making a sexist joke during the presentation.
According to a Yahoo Finance report, board member Arianna Huffington touted Uber's addition of Wan Ling Martello, a woman, to its board. "There's a lot of data that shows when there's one woman on the board, it's much more likely that there will be a second woman on the board," she said, per the outlet.
"Actually what it shows is it's much likely to be more talking," board member David Bonderman replied, to audible dismay from Huffington and the audience.
Bonderman later apologized to Huffington and to the company's employees, according to multiple reports.
Kalanick recently lost his mother, who died in a boat accident in late May that also left Kalanick's father badly injured. The CEO cited the need to spend time with his family in his memo Tuesday.
"It's hard to put a timeline on this - it may be shorter or longer than we might expect," he wrote.