Super Pumped : The Battle for Uber (9780393652253)

by Isaac, Mike

  By the summer, Recode, the technology news site, reported discovering that Alexander had carried around the files with him; Recode said it was planning to publish the story the next day. It didn’t help that Alexander was also present during the infamous South Korean karaoke bar incident with Kalanick and Michael. Once the public found out, it would be devastating.

  Members of Kalanick’s executive leadership team were disgusted, interpreting his raising the details of the medical file as a way to cast doubt on the woman’s claims. Aghast, at least two people flung back in Kalanick’s face the possibility that the victim could have been anally raped during her sexual assault.

  If there were any lingering doubts held by the executives, they didn’t get in the way of the company assisting law enforcement in India. Soon after the attack, Alexander shared GPS records with Indian officials, which showed that the account went offline in proximity to the attack’s location and around the time it had been reported to take place. Alexander also later testified in the driver’s criminal trial.

  Nevertheless, carrying around the private medical files of the victim was questionable, and Kalanick knew he had to fire his friend before the Recode story ran. So he called Alexander, told him the situation, and apologized for what he had to do. By June 7, it was over for Eric Alexander. The executive was gone, a last-ditch effort to save face. The effort failed. After the story dropped, employees were beyond outraged.

  Members of the executive leadership team had reached a crossroads. The events up until this point were bad enough, but apparent rape denialism was going too far. By then, the head of communications, Rachel Whetstone, was gone. After she had threatened to quit several times, and Kalanick had convinced her to stay, the CEO had finally had enough. Kalanick accepted her resignation in April. About a half dozen of the remaining executives drafted a letter addressed to Uber’s board of directors. Uber, they wrote, desperately needed an independent chairman to counter Kalanick’s all-encompassing power. They pleaded with the board for the termination of Emil Michael, who leaders saw as an accelerant to Kalanick’s worst impulses.

  Most of all, they wished Kalanick would take a leave of absence. For them to even begin repairing the company’s reputation they would need resources and commitment from the board, and Travis’s continued presence made their work impossible.

  Travis Kalanick was in New York at the end of May when he got the call. His parents were involved in a freak boating accident. Kalanick needed to fly to Fresno immediately.

  As he contracted a private plane from Manhattan to Fresno, his mind was on his parents, the only two people left in his life that he could truly count on. Now, five months into the worst year of his life, his father, Donald, was in critical condition, badly hurt during the accident. His mother fared far worse.

  In the weeks before the crash, Travis was considering joining his parents on the outing to Pine Flat Lake for Memorial Day weekend. The family spent summers there when Travis was young, playing on a dust-covered campground and putting in hours repairing his father’s broken-down motorboat. “The last note I got from her was a gorgeous picture of the lake as you approach it from the campground, still cajoling me to cancel my meetings on the East Coast and join them,” Kalanick wrote in a post to his Facebook page, just days after the incident. “But I didn’t.”

  During those summer trips as a kid, Travis and his family would motor north twenty miles to the source of the lake at Kings River, a trip his parents repeated together that Friday at the end of May. As they approached the riverhead, Bonnie said she wanted to take the wheel, “a switch I’ve seen them do dozens of times before,” Kalanick wrote. The family dog got in the way at the last moment, and the wheel turned sharply, steering the boat directly toward a cluster of rocks. Before Donald could swing the wheel back in time, the boat struck the rocks, pitching him over the edge of the boat and into the cold lake water. Bonnie was still in the boat when it hit.

  With five fractured ribs, a cracked vertebra, a broken leg, and one collapsed lung, Donald Kalanick swam back to the sinking boat to rescue his wife before she was carried under the water with the sinking craft. He wrapped his wife in life jackets, swimming for nearly two hours to pull both of them to shore. Once they reached the beach, Donald tried performing mouth-to-mouth resuscitation on his wife, but to no avail. Bonnie Kalanick was killed in the crash, having died immediately upon impact. Eventually a fisherman found the two of them, carting them to safety.

  Travis was devastated. Bonnie had been the person in the world to whom Travis felt closest. His parents had supported him through everything, even the lean years when he was a loser living in his parents’ house after college, too poor to hack it on his own in startup world. Bonnie doted on him whenever they were together. Now she was gone.

  For a moment, the tech world stopped pummeling Travis as he grieved his mother. The CEO sat by his ailing father’s bedside with his brother, Cory, as the two waited to see if Donald would pull through. As the news reached the public, emails began pouring in, offering words of consolation. Even Tim Cook—someone who Travis had battled with in years past—sent him a note expressing his condolences.

  Kalanick, not knowing where to turn, called Arianna Huffington. She was on the next flight out to Fresno. As the news spread, others reached out to Kalanick to see if they could help. Angie You, an ex-girlfriend who remained a close friend, asked if he wanted her to come out and join him as he sat by his father’s bedside; she knew Kalanick’s parents well from their years of dating. Huffington would later tell friends she expressed genuine care and concern for Kalanick during the darkest moment of his life. Onlookers said she took on a maternal role for Kalanick, caring for him in the absence of his actual mother. Yet some Uber executives close to the incident couldn’t help but feel that Huffington was controlling the situation to get closer to Kalanick.

  When Kalanick wasn’t at his father’s bedside, he was back at the Holiday Inn across the street from the hospital, trying to salvage what was left of his career. He had rented out a conference room in the hotel—circumstances much reduced from his usual Four Seasons suites—and used it as a makeshift war room away from Uber headquarters. The idea, to take his mind off his parents, was to write a letter to his staff expressing true contrition, something that proved he was listening to their grievances and that he wanted to change. He paced as he dictated his thoughts aloud to himself, alternating between the conference room and a huddled position in the dim, carpeted hallway of the hotel, working on the letter. Following Arianna’s advice, he was trying to strike the right tone, somewhere between humble, apologetic, and inspiring—something befitting of a leader willing and able to make a comeback and steer the company through a difficult time.

  After many drafts, they settled on a version that, to them, sounded like Kalanick was taking full responsibility for his actions. The letter said things that he believed his staff would appreciate hearing from him. It was an apology, the first he had ever uttered in writing about his shortcomings. He realized he should have owned up to his mistakes long ago, and thought the letter might even save his job.

  Team,

  Over the last seven years, our company has grown a lot—but it hasn’t grown up.

  I’ve been an entrepreneur my whole life. Most of the time, I’ve been on the brink of imminent failure and bankruptcy. I was never focused on building thriving organizations. I was mostly just struggling to survive.

  When Uber took off, for the first time in my life I was leading an organization that wasn’t on the brink of failure each day. In just the last three and a half years, our service and our company has grown at an unprecedented rate . . .

  Growth is something to celebrate, but without the appropriate checks and balances can lead to serious mistakes. At scale, our mistakes have a much greater impact—on our teams, customers and the communities we serve. That’s why small company approaches must change when you scale. I succeeded by acting small, but failed in being
bigger. . . .

  . . . Over the last few days, as I’m sure you can imagine, family has been on my mind a lot.

  My mother always encouraged me to stay as connected as possible with the wonderful, talented, inspiring people that make Uber everything that it is. She always put people first, and it’s time I live her legacy. My dad taught me that actions speak louder than words, and to lead by example. So I felt it was important to be very candid here about the challenges we face at Uber—but also how we’re taking action without delay to make things right.

  I hope you will join with me in building an even better Uber.

  Hunched over his laptop in the hallway of the Holiday Inn, Kala­nick looked at the letter, which included the line, “sometimes it’s more important to show you care than to prove you’re right.” He was tired, having gone days without any real sleep, but felt like this was solid work. It was something he could deliver in the next few weeks, something to re-instill faith in his leadership after the Holder report was finished.

  At that moment, Kalanick would have no way of knowing he would never deliver the letter to his employees.

  PART Ⅴ

  Chapter 27

  THE HOLDER REPORT

  Over the four and a half months since Travis had hired Eric Holder and his partners at Covington & Burling to investigate Uber, the forthcoming report had been elevated to mythical status among employees and outsiders alike. Some saw it as a Necronomicon, an almost occult document filled with the company’s dark secrets. Others saw it as a chance to clean house, to acknowledge and admit wrongdoing, and begin reframing the debate. Either way, on Tuesday June 13, at Uber’s internal all-hands employee meeting, the company planned on presenting the recommendations of the Holder report.

  Everyone knew the report would contain new bad news. The question was, how much? Executives at Uber decided to do some damage control in the run-up to the big day. At an internal meeting on June 6, Uber announced it had already fired twenty people as a result of the findings. That group included Josh Mohrer, the general manager from New York who had spied on a reporter and toyed with staff. Mohrer was given a soft landing; he said he was leaving to become a managing partner at Tusk Ventures,******** a firm founded by a political operative and early Uber supporter and advisor. Others had similarly comfortable exits. Aside from the firings, the company announced that thirty-one employees were in counseling or additional training, while seven employees had received written warnings for their behavior.

  On Sunday, June 11, Uber’s board of directors met at Covington & Burling’s offices in downtown Los Angeles to discuss the findings of the report, and the firm’s recommendations. Each of the seven board members walking into the firm’s offices that afternoon had a different agenda. Bill Gurley, the venture capitalist, needed the drama to end. David Bonderman, the private equity magnate, wanted Uber to pull out of this awful press cycle. Both men wanted Uber to make its way to an initial public offering so that their firms could reap billions in returns on their initial investments.

  Garrett Camp, the man who had invented the company in the first place, had been checked out for years, an absentee founder who was happy to allow Kalanick to take the reins. After all, Kalanick had made Camp very, very rich by now, and was only going to make him richer. Ryan Graves, Uber’s first, brief-tenured CEO and operations chief emeritus, felt loyal to Kalanick. Graves, too, believed that the press was unfairly targeting Uber and in turn Kalanick. Graves didn’t think Kalanick should be ousted, but Graves did believe that some temporary time away from Uber would serve Kalanick—and the company—well.

  Yasir al-Rumayyan, the representative of the Saudi Public Investment Fund, had sided with Kalanick from the very beginning. The Saudis were looking to diversify the royal family’s holdings and eventually move away from being an oil dynasty. And Kalanick was the one who brought the Saudis into the Uber fold. Al-Rumayyan liked Kalanick; there was no reason, he believed, for him to leave the company. He would follow Kalanick’s lead.

  Arianna Huffington, the independent board member, was far from impartial. Even as the Holder investigation was under way, Huffington was expressing public shows of support for Kalanick. “He definitely has my confidence, he has the board’s confidence,” Huffington said of Kalanick at a conference in March. That made other board members and executives nervous; it was clear to those at the top of the company that Huffington was on “Team Travis,” and would vote to keep Kalanick at the helm of the company. The two had grown close over the years since she joined Uber’s board. Importantly, she also knew that Kalanick still held majority voting power as long as his allies Camp, Graves, and al-Rumayyan were with him. While Huffington professed independence in public, everyone inside Uber knew her allegiance.

  And finally there was Kalanick. He hoped the delivery of the Holder report would bring Uber a much-needed reprieve from public scrutiny. No matter what the report recommended, he had no intention of ever leaving his position as CEO.

  To forestall unintended leaks, the group settled on a secure method. Each board member was required to read a printed copy in the Covington & Burling office, leaving all electronic devices outside the room. No digital copies would exist outside of the Covington & Burling office hard drives.

  Those who read the report in its entirety were shocked. It was hundreds of pages long, a winding, repetitive list of infractions that had occurred across Uber’s hundreds of global offices, including sexual assault and physical violence. The company had numerous outstanding lawsuits against it, and would likely face many more. After Ryan Graves read the report, he felt he needed to vomit.

  In a marathon meeting that Sunday, June 11, Uber’s seven-person board met to discuss the pages they had just read. No one outside of the room was ever going to see the investigation findings, but still there was great fear of leaks. Up to that point, reporters had found willing sources at every level of the company. It seemed inevitable that the Holder report would also hit the press. Graves asked, from the beginning, for everyone to keep the meeting’s contents between themselves. Then he started begging. “Please. Please don’t talk to the press.”

  With the report came a series of recommendations from Holder and partner Tammy Albarrán. The final list would span a dozen pages and include a number of serious structural alterations, and different versions of the recommendations would later be distributed. But Holder and Albarrán had put their most important action items at the top: Travis Kalanick needed to take a leave of absence from his own company, relinquish his control of Uber’s business, and hire a proper chief operating officer to help him do so. The second order of business, the report recommended, was to fire Emil Michael. And finally, the company badly needed to appoint an independent board chairperson, someone completely unconnected to Uber, to give perspective and balance to executive deliberations.

  The room was split. Gurley and Bonderman worried Holder’s recommendations might not have gone far enough, since they stopped short of pushing Kalanick out for good. Some members of the executive leadership team were convinced Huffington had leaned on Holder and Tammy Albarrán, Holder’s partner, to convince them not to recommend Kalanick’s termination in the final report. But ultimately, Gurley and Bonderman were still satisfied with the proposed reforms; it was time to clean up the company, and those changes started from the top.

  Though they didn’t want him axed, Huffington, Camp, Graves, and al-Rumayyan all believed Kalanick needed some time away. Public scrutiny of Uber was growing too intense; the press wanted blood, Kalanick leaving the spotlight—if only momentarily—would alleviate the pressure.

  Travis already knew he was going to be asked to leave, the question was whether he could ever return, but the decision to fire Michael was painful for Kalanick. The CEO had watched the world turn against his friend in just six months, but Michael had stood by him to the end, the only person connected to Uber he felt he could trust. Even his ex-girlfriend had betrayed him at tha
t point. But Kalanick knew the board had to act in unison to make Uber’s turnaround appear legitimate and earnest. By the end of the day, all seven board members voted unanimously to accept all of Holder’s recommendations. Though no one on the board—perhaps not even Travis himself—knew what Kalanick was going to do on Tuesday, when they were expected to present the report to the entire company.

  Michael got the call that evening. Many employees who worked for Michael still supported him. Even Michael’s biggest detractors admitted he was a talented executive, whose work ethic and ability to forge relationships and close deals was equaled by few.

  “Uber has a long way to go to achieve all that it can,” Michael wrote in a letter to his team, full of self-congratulatory praise. “I am looking forward to seeing what you accomplish in the years ahead.” Michael also dialed in, unannounced and uninvited, to one final conference call with his former business team employees. Michael was grief-stricken. He had devoted the past four years of his life to Uber and had tried to be a mitigating influence on Kalanick. Instead, he had let Kalanick bring out the worst in him. As Michael commandeered the conference call, he again told employees that he was proud to have helped build a world-changing company.

  And that was the end of Emil Michael’s career at Uber.

  Every Tuesday morning, each Uber employee earmarks the 10:00 a.m. Pacific time slot on their calendar for the company’s all-hands meeting. Workers from across the world dial in to Uber’s video conference line to watch company leaders give an update on the state of affairs, from vice presidents to board members to Travis Kalanick himself. As employees filed into Uber’s spacious conference area, they saw some of the executive leadership team and a handful of board members, ready to give a presentation.