Uber's boss could be 'one screw-up away' from being pushed aside

UBER HAS STARTED searching for a second-in-command to help embattled chief executive Travis Kalanick steady the wheel at the fast-growing on-demand ride service after a series of embarrassing revelations.

“This morning I told the Uber team that we’re actively looking for a chief operating officer; a peer who can partner with me to write the next chapter in our journey,” Kalanick said in a statement yesterday.

The company founder has been under pressure to yield some control after a rocky month – marred by disclosures about a culture of sexism and the company’s covert use of law enforcement-evading software – underscored the need for more mature management at the world’s most valuable venture-backed startup.

Kalanick, known for being brash and aggressive in propelling Uber’s rise, also poses potential to be a liability as the company deals with more complex corporate issues, say some analysts.

Uber lost tens of thousands of users from the dust-up when Kalanick joined and then quit a panel advising president Donald Trump. This and the other incidents could have dented its value, which has been pegged at a whopping $68 billion.

San Francisco-based Uber last month hired former attorney general Eric Holder to review workplace conditions after an ex-employee alleged sexual harassment and sexism at the firm.

Separately, Google’s parent company Alphabet filed a lawsuit against Uber alleging the ridesharing firm used stolen technology for its autonomous driving program.

Adding to the pile-up of woes, Kalanick last week was forced to make a humbling apology after a video showed him verbally abusing a driver for the service; at the same time, he admitted “I must fundamentally change as a leader and grow up.”

Uber CEO Travis Kalanick

A new face

Kalanick could help Uber by stepping aside as CEO, possibly taking the role of chairman, said Larry Chiagouris, a Pace University marketing professor.

“If I were him, I would remain connected to the business but I would step up and bring someone with a fresh face and a lot of maturity,” said Chiagouris.

This would “give riders and drivers a sense there is a serious and mature person running the business,” he said. ”He needs to find a way to put a face on Uber other than his own.”

One of the firm’s most damaging recent revelations has been its admission to using secret software to steer drivers away from problems, though it denied reports the ‘Greyball’ program was used to evade sting operations.

“They have a history of priding themselves about being aggressive in moving into markets,” said Daniel Korschun of Drexel University’s LeBow School of Marketing.

“Some of this is starting to come back to haunt them. This aggressive behavior is coming out in ways that are disturbing to their stakeholder base.”

Uber needs to better balance the interests of its investors, riders and drivers, according to Korschun.

An anti-Uber protest in Argentina

Little room

Scott Galloway, who teaches brand strategy and digital marketing at New York University’s Stern School of Business, said Uber has little room for further error after its missteps.

Galloway, who also founded business intelligence firm L2, said the news about Uber over the past month has been “very damaging” but may be surmountable.

“What the market underestimates is the importance of being likeable; the CEO needs to be likeable,” he said. Having a reputation for being disagreeable “will cost your shareholders billions”.

Galloway said Kalanick’s image problems can affect not only customers, but regulators and the news media.

“The media is more apt to create a pattern and publish more negative stories,” he said. “I would say he’s one screw-up away from being promoted to chairman.”

Analyst Rob Enderle of Enderle Group said Kalanick’s rough-and-tumble image may not be suited to CEO of a major technology company. Kalanick “doesn’t get the need for maintaining image,” he said.

“He is relatively young, dropped out of college, and lacks the breadth of experience in business and education to give him the skills to deal with a lot of this stuff; which is why everything is turning into a crisis.”

“If this continues, he is going to have to step down to save the company,” Enderle said.

For now, Uber remains a major force in the so-called “sharing economy” with tens of thousands of drivers operating in dozens of countries.

The latest missteps may be “a minor bump in the road” if Uber is able to recover, according to Chiagouris.

“Uber provides an enormously valuable service and in many cases there are no cost-effective alteratives,” he said.

“But Uber won’t have an unlimited amount of goodwill if this continues.”