Then-CEO Travis Kalanick was indicted in South Korea in December 2014 for violating that country’s transportation law. South Korea’s Ministry of Land, Infrastructure and Transport said that Uber’s provision of paid transportation using unregistered vehicles was “clearly illegal activity,” and that this was the basis of the indictment.
Tensions between Kalanick and mega-investor Bill Gurley
Benchmark Capital general partner Bill Gurley and Travis Kalanick started off thinking highly of each other and working closely, but their relationship deteriorated. Business Insider offers details:
Initially, Gurley saw Kalanick as young and inexperienced, needing guidance and not always listening to advice. Gurley pressed Kalanick to find a mentor and hire an experienced CFO. Later, Gurley wanted Kalanick to stop losing so much money, reduce growth plans, and increase profits.
BI describes Kalanick’s response:
Kalanick, meanwhile, began to see Gurley as a drama-filled drag, perpetually appearing on CNBC to whine about a possible tech bubble. He pushed communications with Gurley off to his wingman, Michael; it was a cold-shoulder strategy Kalanick had used with others, including Whetstone, when he felt he didn’t need them anymore.
Eventually, Gurley worried that his investment in Uber could be worthless. Worried about Uber’s culture and the many lawsuits and government investigations, he said he had trouble sleeping; he gained weight and took up yoga. His concerns reflected worries about both his own investment and funds from Benchmark’s other partners and investors.
Kalanick criticized SVP Whetstone for reporting escort bar visit to investigators
After Uber then-CEO Travis Kalanick and colleagues visited an escort bar and tried to cover it up when asked, one person who had been there contacted Rachel Whetstone, then Uber’s senior vice-president of communications and public policy, seeking guidance. Whetstone in turn reported the matter to Uber’s attorneys, who turned it over to Eric Holder, who was at the time investigating possible improprieties at Uber.
Business Insider described Kalanick’s response:
Kalanick was not pleased. As his head of PR, he felt Whetstone was supposed to be defending the company from stories like these, not be part of them.
BI continued, explaining how some at Uber saw Whetstone as “difficult to work with … or even irrational,” but others saw her “speaking truth to power”:
One employee described her as “intellectually honest.” Whetstone was already rich from her years at Google and wasn’t under the spell of potential wealth, which drove other top players at Uber. “That made her feel like she could speak truth to power with Travis,” a former executive said. “She wasn’t part of the group of yes-men who would never disagree with him.”
For her part, Whetstone had become disillusioned with Uber. In her role as a powerful woman in the company, she was someone who many troubled employees and other insiders felt comfortable venting to. As these people shared stories with her, Whetstone began to see Uber differently. She became angry.
She saw a company that needed to grow up, but that under Kalanick wouldn’t.
Ultimately Whetstone resigned and Kalanick accepted her resignation. BI reports that Whetstone’s exit package included millions of dollars worth of stock as well as keeping Whetstone on as a consultant to save face.
Salle Yoo demanded $100 million when leaving Uber, got most of it
Business Insider reports that when then-General Counsel Salle Yoo prepared to leave Uber, she sought a $100 million severance package, entailing the repurchase of her Uber shares. Travis Kalanick thought that amount was excessive, but BI says the final amount was “tens of millions” although less than 2/3 of her requested amount.
BI reported Yoo grounding her demand in thoughts about gender:
Yoo thought it was only fair because she had seen male executives ask for huge exit packages and get them. She had spent her career at Uber encouraging women to lean in. So she took her own advice, opened her negotiations with Kalanick by shooting high and held her breath.
Salle Yoo questioned Kalanick’s handling of Levandowski
In addition to insisting that Uber hire outside investigators to check what improper information Otto held, then-General Counsel Salle Yoo questioned other aspects of Kalanick’s handling of that acquisition. Business Insider explains that she said she wanted Uber to fire Levandowski long before the company did so, and also that she was excluded from critical discussions about Levandowski. Business Insider reports that these disagreements led to Yoo’s departure from Uber.
Kalanick blamed Yoo for mishandling investigation of Otto
Loooking back at an outside investigator’s report that Uber managers did not receive, Kalanick blamed then-General Counsel Salle Yoo, suggesting that too many legal issues were falling through the cracks of her team.
Considered releasing unflattering information about an employee critical of the company
Planning a response to reports of sexual harassment by employee Susan Fowler, Travis Kalanick and colleagues considered releasing unflattering information about Fowler during her time at Uber. They ultimately did not do so.
Kalanick’s stated objectives for acquisition of Otto
In litigation with Google about alleged theft of Google intellectual property, Google counsel presented notes from John Bares, then director of Uber’s driverless car center in Pittsburgh, from a December 2015 meeting with Uber then-CEO Travis Kalanick discussing:
TK what we want
source
all of their data
Tagging
road map
pound of flesh
IP
On one interpretation, the “what we want” was what Uber wanted from a prospective acquisition of Otto — but notably, what Otto would in turn bring from Google (where key staff had worked previously). In particular, Uber had no fight with Otto and no reason to want a “pound of flesh” from Otto. In contrast, Uber’s tensions with Google were longstanding and well known. In that case, these notes would also indicate Uber intentionally wanting “all of their [Google’s] data” as well as Google’s “source [code]” and more.
Kalanick defended Otto founder Anthony Levandowski
Against the advice of then-General Counsel Salle Yoo and without support from then-Chief Business Officer Emil Michael, Uber then-CEO Travis Kalanick pushed forward with the acquisition of Otto, a startup for self-driving trucks.
Bloomberg reports multiple reasons why Kalanick could have been concerned about the deal and Levandowski’s tactics.
One, Otto consisted primarily of ex-Google staff, and Uber’s acquisition of Otto angered Google leaders, including co-founder Larry Page.
Two, before the deal closed, Uber’s investigators learned that Levandowski had possessed five disks of data from Google’s driverless effort including “source code, design files, laser files, engineering documents and software related to Google self-driving cars.” Uber’s investigators also knew that Levandowski’s claims to have destroyed the disks could not be verified. Kalanick said he did not read the investigators’ report.
Three, Levandowski asked Uber to protect him from legal attacks from Google, and Kalanick agreed to do so.
Even when Google sued Uber over the acquisition, and Levandowski invoked the Fifth Amendment’s protection against self-incrimination to decline to cooperate with litigation, Kalanick continued to support Levandowski, claiming he would eventually be vindicated.
Bloomberg further reports Kalanick calling Levandowski his “brother from another mother.”
Business Insider adds that Kalanick had vouched for Levandowski. Meanwhile, Emil Michael, then Uber’s head dealmaker, did not support the acquisition because he thought the price was too high.