UBER ON

There would be no Uber without Travis Kalanick

Travis Kalanick made Uber great.

It’s easy enough to forget, especially this year, as Uber’s founder and newly deposed chief executive has come to embody startup culture gone awry. Travis Kalanick visited an escort-karaoke bar on business in Seoul, perused the medical records of a rape victim in India, and told a struggling Uber driver, “some people don’t like to take responsibility for their own shit.” He coined the term “boober,” nicknamed his apartment the “JamPad,” and for years boasted a Twitter avatar that was the cover of Ayn Rand’s The Fountainhead. He wrote things like “superpumped,” “toe-stepping,” and “always be hustlin’” into Uber’s values code. He broke laws, evaded regulators, defied Apple’s Tim Cook, and leaned into his aggressive, devil-may-care image. “I like pissing people off,” Kalanick once said in an interview.

Yes, Travis Kalanick pissed people off. And Uber will be forever indebted to him for it.

Because what made Uber great, and what has made the company one of the biggest disruptors in the new global economy was that very attitude. Disruption is never easy and many who try fail. To upend the transportation industry with his ride-sharing app, Kalanick shrugged off legal threats, ignored taxi protests, and sent Uber crashing through regulatory barriers. He waged unapologetic war on the taxi industry from Uber’s San Francisco headquarters, hiring famed political strategist David Plouffe to lead “the Uber campaign” against the “Big Taxi cartel.” He was never willing to negotiate, even with the people making the rules, if their solution didn’t fit his vision to make calling an Uber car the easiest way to get around town. “You have to have what I call principled confrontation,” Kalanick said in 2014. “That is the thing we do that I think can rub some people the wrong way.”

Creating enemies

Some was more like many as Uber hurtled its way across the US, breaking down local resistance with a combination of seasoned political operatives, grassroots lobbying, and highly targeted campaigning. Uber condemned bills designed to rein in its operations as harmful to consumer choice. To shame New York City mayor Bill de Blasio during a spat, in 2015 it deployed a DE BLASIO mode in its app that showed 25-minute waits to get a car in Manhattan and no service in the outer boroughs. It similarly derided a city councilwoman in Austin, naming a horse-and-buggy app setting after her. The scorched-earth tactics worked. In 2015 alone Uber convinced 22 states to pass sweeping rules that legalized its shared rides business model.

Politicians weren’t the only people Travis Kalanick pissed off. He pissed off drivers by cutting their rates to boost demand, classifying them as independent contractors rather than employees, and saying they’d inevitably be replaced by robots. He pissed off customers first by instituting surge pricing, which boosted fares during busy times, and then by writing impassioned defenses of it on Twitter (New Year’s was always a good day for this). Kalanick pissed off his main US competitor, Lyft, by attempting to sideline one of its early fundraising efforts with news Uber would raise money, too. He took his Lyft war further by hailing and cancelling thousands of rides from its drivers, something he later spun as a harmless recruiting tactic. “If you call another employee at a company and say, ‘Hey, would you like to work for me?’ that’s normal,” he told CNN in 2014. “But if that happens in the car service business—oh my god, the sky is falling!”

Uber was and remains brilliant for its simplicity. Just a decade ago, an app that used real-time data to get you a ride—anytime, anywhere—and let you pay without taking out cash or a credit card would have seemed magical. To the generations who grew up dialing black-car companies and hailing cabs on street corners, it still is. But technology advances quickly and today Uber’s app faces plenty of competition in all corners of the world.

It remains to be seen whether multiple companies can “win” in the new business of ride-hailing, but being the first app on a customer’s phone is certainly an advantage. By late last year, Uber’s share of the ride-hailing market versus Lyft was at or above 80% in most US cities, according to a report from 7Park Data. Kalanick’s role in getting Uber into those cities and onto those phones first cannot be understated. Regardless of whether Uber, still a private company, was ever truly worth the $68 billion investors said it was, the company could not have attained that valuation without him.

Too much fighting

Unfortunately, Kalanick never learned when to stop fighting and that sealed his fate. It’s true that the personality of a CEO tends to permeate a company, and Kalanick’s brash, arrogant, uncompromising attitude spread unchecked, until it turned what were once victories into defeats.

In May 2016, Uber lost its first major political confrontation in the US after its efforts in Austin, Texas, backfired. The city voted in a special election to uphold a fingerprint-background-check requirement for Uber, despite the unprecedented millions the company had spent fighting stringent rules. Last December, Uber deliberately put its self-driving cars on the road in San Francisco without the proper permitting from the state. Within hours one of its driverless cars was filmed running a red light and the California department of motor vehicles moved to shut the operation down. Uber’s status has also crumbled in Pittsburgh, where it gutted Carnegie Mellon University’s top robotics lab to set up an autonomous-vehicle research facility in 2015. At first local officials welcomed Uber, but they became disillusioned after it refused to share data, invest in public transportation, or help Pittsburgh win a federal “smart city” grant. “This is a two-way street, not a one-way,” its mayor said earlier this year.

Finally, the people Kalanick pissed off got revenge. A blog post by Susan Fowler, a former engineer, accusing the company of sexual harassment, kicked it off. More allegations of sexual harassment and workplace misconduct followed, plus the leaked footage of Kalanick berating an Uber driver. In late February he issued a public mea culpa—“I must fundamentally change as a leader and grow up”—but years of bad behavior are hard to undo. Kalanick’s ex-girlfriend, Gabi Holzwarth, turned against him and told a reporter about their mid-2014 visit to an escort-karaoke bar in Seoul.

Uber’s top executives and Kalanick’s closest lieutenants streamed out, some fired, others choosing to quit. Riders—some bothered by the recent corporate developments, others rankled by Kalanick’s falsely perceived support of the Trump administration—deleted their accounts and switched to Lyft. In a blow that could jeopardize its very future, Uber became embroiled in a legal battle with Alphabet subsidiary and self-driving car maker Waymo over trade secrets allegedly stolen by Anthony Levandowski, who Uber hired last summer (and, under court pressure, fired in late May) as its head of autonomous technologies. Through it all the company has continued to bleed money, though it narrowed those losses to $708 million in the first quarter this year, from $991 million in the fourth quarter of 2016.

The end arrives

On June 13 Travis Kalanick announced he would take an indefinite leave of absence from Uber as CEO, ostensibly to grieve for his mother, who died in a tragic boating accident in late May. Late on June 20 he handed in his resignation. The end came after two venture capitalists met Kalanick at a hotel in Chicago, where he was interviewing executive candidates for Uber, and presented him with a list of demands from five major shareholders, including his immediate resignation. “I love Uber more than anything in the world,” Kalanick said in a statement later that day. “I have accepted the investors’ request to step aside so that Uber can go back to building rather than be distracted with another fight.”

Investors often say they bet on the person, not the company. Never has this been more true than with Uber. A bet on Uber was always a bet on Kalanick, a fearless and cocky founder willing to break the rules for his company to win. Arguably that’s what Uber had to do to upend the global, $100 billion taxi market.

But Uber outgrew Travis Kalanick. Its political frontmen shied away from the rudeness to politicians and the callous treatment of drivers. Its employees recoiled at the toxic, Machiavellian culture and poor treatment of women. Its investors, who have collectively put more than $15 billion into the company, tired of the drama, not to mention the billions of dollars that Uber kept losing.

Travis Kalanick is no longer the leader Uber needs. It wouldn’t be the company it is today without him.

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