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Chaos at Uber: The New
CEO’s Challenge
Syeda Maseeha Qumer
ICFAI Business School, Hyderabad
Debapratim Purkayastha
“I have to tell you I am scared,”
1 wrote Dara
Khosrowshahi, newly appointed CEO of ride-
hailing service Uber Technologies Inc., in a
memo to his former team at Expedia, Inc.2 Besides
growing Uber’s business, analysts said Khosrowshahi
had the task of changing the dysfunctional culture
within the company and improving corporate gov-
ernance that had cost co-founder and former CEO
Travis Kalanick his job. On June 21, 2017, Kalanick
stepped down as CEO of Uber in the face of a share-
holder revolt that made it untenable for him to stay
on in that position. His resignation came after a
review of practices at Uber including allegations of
sexual harassment, a corporate theft lawsuit, defi-
ance of government regulations, reports of misbe-
havior, and a toxic corporate culture leading to the
departure of some key executives.

Uber’s corporate structure ensured that its
founders held super-voting shares and had dispro-
portionate control over the company. Kalanick,
because of the special class of shares he owned,
enjoyed sweeping authority on the Uber board and
nearly complete autonomy in running the company.
According to some industry observers, Uber ignored
corporate governance in its pursuit of growth and
valuation, and flouted ethical norms while hiding
behind notions of disruption and innovation. This
was fine with investors until the beginning of 2017
when the company’s public image crumbled amid
allegations of sexual harassment, they said. “The
board chose to ignore the fundamentals of their gover-
nance role and failed to provide guidance in correcting
a trait which would ultimately endanger the company in
many ways.”3 said Prabal Basu Roy, a fund manager.
The chaos inside Uber’s boardroom escalated
in August 2017 when a small group of sharehold-
ers aligned with Kalanick dissented against Uber’s
biggest investor Benchmark Capital,4 after it filed a
lawsuit to oust Kalanick from the board. Benchmark
Capital had accused Kalanick of fraud and of inter-
fering in the search for a new CEO—accusations that
he had denied. Some analysts felt that Uber’s board
needed to grow up as the constant bickering among
the members was hurting the company. According to
them, the board’s aggressive infighting was spreading
confusion and uncertainty among Uber’s investors,
customers, and shareholders, and putting the com-
pany’s nearly $70 billion market valuation at risk.
As Khosrowshahi began his new role at Uber,
he had the daunting task of dealing with a fraught
Uber board and mending the frayed relations among

investors. “Boards are so unpredictable, and this one
seems as if they’re at each other’s throats. It’s hard to
know if he’ll have the force of personality to navigate
that,”5 said Alice Armitage, director of Startup Legal
Garage.6 Khosrowshahi would have to figure out a
way to unite the divided board and end the acrimony
among them. Moreover, he would also have to con-
tend with the legacy of Kalanick who continued to
remain on the Uber board.
Khosrowshahi said that as Uber’s CEO he
wanted to set the course for the future of the company,
which included innovating and growing responsibly
as well as acknowledging and correcting mistakes of
the past. He planned to take the company public by
CASE 31
©IBS Center for Management
Research
Final PDF to printer
Case 31 Chaos at Uber: The New CEO’s Challenge C-393
2019. “The culture went wrong, and the governance of
the company went wrong and the board went in a very
bad direction. But if the product is good, then if you can
bring in good leadership, you can ultimately bring it
together,”7 he said. However, some analysts wondered
if the company valued at around $68 billion as of
January 2018 could maintain its valuation as it pre-

pared for an IPO.
BaCKGROUND NOTe
Uber was co-founded by Kalanick8 and Garrett Camp9
in 2009. The duo was in Europe attending LeWeb, an
annual European tech conference. On a snowy night
in Paris, Kalanick and Camp could not get a cab. This
was when the two came up with the idea of launching
an on-demand car-service app. After getting back to
San Francisco, Camp convinced Kalanick to partner
with him in the new project that could fill the large
and lucrative gap in the car service market.
UberCab, as it was then known, started its service
in San Francisco in the summer of 2010 with only a few
cars, a handful of employees, and a small seed round.
After entering credit-card information on the app,
customers could book a car at the press of a button.
The cost was automatically charged to the customer’s
account. Uber required its drivers to have their own car
and to pass a background check. In August 2010, Ryan
Graves, Uber’s first hire, was briefly appointed as CEO
of the company. In October 2010, the company was
renamed Uber after some regulatory bodies objected to
the use of “cab” in UberCab’s name as the entity was
operating without a taxi license. Uber closed a $1.25
million seed funding in 2014. Chris Sacca of First
Round Capital was its first institutional investor and
he invested about half a million dollars in the company.
Other investors included Napster co-founder Shawn
Fanning, venture capital fund Lowercase Capital, and
venture capitalist Mitch Kapor.
In December 2010, Graves stepped down
as CEO and Kalanick stepped into the position.
Graves stayed on as Uber’s head of global opera-

tions. In February 2011, Uber closed an $11 million
Series A funding round that valued the company at
$60 million (see Exhibit 1). Benchmark Capital led
the round and its partner Bill Gurley joined Uber’s
Board of Directors. In May 2011, Uber was launched
in New York City and thereafter it expanded to
Seattle, Boston, Chicago, and Washington D.C.
In December 2011, Uber raised $32 million in its
Series B of fund raising from Amazon Inc’s CEO Jeff
Bezos, Menlo Ventures, and Goldman Sachs. In July
2012, Uber unveiled its low-cost “Uber X” service.
In August 2013, Uber entered India and Africa, and
closed a Series C funding round which saw a massive
$258 million investment from Google Ventures. In July
2014, Uber entered China after a $1.2 billion funding
round. In August 2014, Uber launched its UberPOOL
service. Notwithstanding strikes by angry taxi driv-
ers over Uber threatening their livelihood and break-
ing local taxi rules, and unresolved questions of legal
liability, the cab service expanded rapidly. The company
continually rolled out new services from freight and
helicopter rides to food delivery to driverless cars.
Uber upended the tightly regulated taxi industry
in many countries and changed the transportation
landscape. In 2016, its gross bookings hit $20 billion,
double that of the previous year (see Exhibit 2).
As shown in Exhibits 3 and 4, net revenues were
$6.5 billion for 2016, although losses were high
at $2.8 billion. As of 2017, Uber had a presence in
724 cities in more than 84 countries.10 With a valua-
tion of nearly $68 billion, it was by far the richest of
the Silicon Valley’s private unicorn technology com-
panies (see Exhibit 5).

Analysts said that while Uber had tasted great
success, its journey had been a bumpy one. According
to them, the company was synonymous with contro-
versies. Since its launch, Uber had been the subject of
ongoing protests from taxi drivers and regulatory bod-
ies who argued that the company should be subjected
to the same regulations that they faced. From non-
compliance issues to regulatory concerns and lack of
driver background checks, Uber drew scrutiny and
criticism. The service was banned in The Netherlands
and in parts of Thailand and China. Uber’s surge pric-
ing had been one of the most controversial aspects
of the company’s business model. Customers equated
it with price gouging as it took advantage of users in
unfortunate situations. Uber had also been embroiled
in a long-standing battle with some labor organiza-
tions as it classified its drivers as independent con-
tractors and not employees, which deprived them of
various benefits. There had also been cases of sexual
assault on passengers, which some activists said hap-
pened because the background checks on drivers had
not been stringent enough. Uber’s critics went to the
extent of saying that the company ignored ethical and
legal standards in the name of disruption and valued
money, power, and control above morality.
C-394 PaRT 2 Cases in Crafting and Executing Strategy
EXHIBIT 1 Uber Funding Rounds

Date Amount/Round
Valuation
($ billion) Lead Investor Investors
April 2017 Undisclosed Amount — — 1
July 2016 $1.15 billion/Debt Financing — Morgan Stanley 4
June 2016 $3.5 billion/Series G — Saudi Arabia’s Public
Investment Fund 1
May 2016 Undisclosed Amount/Series G — — 1
Feb 2016 $200 million/Private Equity — Letterone Holdings SA
1
Aug 2015 $100 million/Private Equity — Tata Capital 1
July 2015 $1 billion/Series F — — 6
Feb 2015 $1 billion/Series E — Glade Brook Capital Partners 9
Jan 2015 $1.6 billion/Debt Financing — Goldman Sachs 1
Dec 2014 $1.2 billion/Series E 40.0 Glade Brook Capital
Partners 8
June 2014 $1.4 billion/Series D 18.2 Fidelty Investments 9
Aug 2013 $363 million/Series C 3.5 GV 4
Dec 2011 $37 million/Series B — Menlo Ventures 11
Feb 2011 $11 million/Series A 0.06 Benchmark Capital 6

Oct 2010 $1.25 million/Angel — First Round 29
Aug 2009 $200 thousand/Seed — Garrett Camp
Travis Kalanick
2
Source: Crunchbase.
EXHIBIT 2 Uber Gross Bookings (Q1 2015–Q3 2016) ($ in
millions)
$0.00
$1,512
$2,149
$3,800
$5,000
$5,400
$2,000.00
$3,000.00
$4,000.00
$5,000.00
$6,000.00
$1,000.00
*Q3 2015: data not available

Q1 2015 Q2 2015 *Q3 2015 Q12016 Q22016 Q32016
Source: www.businessinsider.com.
EXHIBIT 3 Uber Quarterly Net Revenues, 2012–2016 ($ in
millions)
$
1
$0
Q
1’
12
Q
1’
14
Q
2’
14

Q
3’
14
Q
4’
14
Q
1’
15
Q
2’
15
Q
3’
15
Q
4’
15
Q
1’
16
Q

2’
16
Q
3’
16
Q
4’
16
Q
1’
13
Q
2’
13
Q
3’
13
Q
4’
13
Q
2’

12
Q
3’
12
Q
4’
12
$100
$200
$300
$400
$500
$600
$700
$800
$900
$1,000
$1,100
$1,200

$1,300
$1,400
$1,500
$1,600
$1,700
$1,800
$
2
$
4
$
8
$
1
3
$
1
9
$
2
9

$
4
2
$
4
6
$
5
7 $
1
1
4 $
2
2
8
$
2
7
4 $
3
8
9 $
4

6
7 $
5
6
0
$
9
6
0
$
1
,1
0
0
$
1
,3
2
0
$
1
,5
8

4
Source: www.investing.com/analysis/2017-39;s-uber-ipo-
200170565.
Q
1’
12
Q
1’
14
Q
2’
14
Q
3’
14
Q
4’
14
Q
1’
15
Q

2’
15
Q
3’
15
Q
4’
15
Q
1’
16
Q
2’
16
Q
3’
16
Q
4’
16
Q
1’

13
Q
2’
13
Q
3’
13
Q
4’
13
Q
3’
12
Q
2’
12
Q
4’
12
$0
$

4
$
4
$
5
$
7
$
7 $
8
$
1
2
$
1
8 $
5
2 $
1
0
9 $
1
7
5 $

2
5
0
$
3
8
5
$
6
0
2
$
4
5
0
$
5
0
0
$
5
2
0
$

7
5
0
$
7
5
0
$
7
5
0
$50
$100
$150
$200
$250
$300
$350
$400
$450
$500
$550
$600
$650
$700
$750
$800
$850
$900

EXHIBIT 4 Uber Quarterly Losses, 2012–2016 ($ in millions)
200170565.
EXHIBIT 5 Top 10 Privately Owned Technology Unicorns in
the World
(as of august 2017)
Rank Company
Latest Valuation
($ in billions)
Total Equity Funding
($ in billions) Last Valuation
1 Uber $68.0 $12.9 June 2016
2 Didi Chuxing 50.0 15.1 April 2017
3 Xiaomi 46.0 1.4 December 2014
4 Airbnb 31.0 3.3 March 2017
5 Palantir 20.0 1.9 October 2015
6 WeWork 20.0 4.4 July 2017

7 Lufax 18.5 1.7 December 2015
8 Meituan-Dianping 18.3 4.4 January 2016
9 Pinterest 12.3 1.5 June 2017
10 SpaceX 12.0 1.1 January 2015
Source: http://graphics.wsj.com/billion-dollar-club/?co=Uber.
UBeR’s CORPORaTe
sTRUCTURe
Uber followed a “founder-friendly” governance struc-
ture wherein some board seats carried more voting
power than others. In this kind of a dual-class share
structure, one class of shares carried one vote while
the other class shares came with 10 votes each or
more. According to Uber’s articles of incorporation,
the company had 11 board seats, 9 of which were
controlled by shareholders with super-voting rights.
Co-founders Kalanick and Camp along with long-
time Uber employee Graves held super-voting shares
and controlled a majority of shareholder votes. The
trio held sway over company decisions leaving other
independent directors who were mostly outsiders
with fewer rights and little influence.
Kalanick who had a larger stake in the com-
pany compared to Camp and Graves owned a spe-
cial class of voting stock that gave him control over
Uber irrespective of what percentage of shares he
owned. He reportedly held approximately 10 percent
of Uber’s stock, including approximately 16 percent
of its voting power and 35 percent of its Class B com-
mon stock. According to Davey Alba, a tech writer,

“It just so happened that at the time VCs were flush
with cash, Uber was the hottest investment opportunity.
So it raised gobs of money without having to dilute
Kalanick’s power on the board. Investors just wanted to
get a stake.”11
As of 2016, Kalanick had kept the Uber board
small, leaving four board seats empty as shown in
Exhibit 6. At the end of 2016 Cheng Wei, founder
and chairman of Chinese ride-hailing service Didi
Chuxing (Chuxing) joined Uber’s board after Uber
sold its China operations to Chuxing in exchange for
the company investing $1 billion in Uber.
THe CRIsIs UNFOLDs
The crisis at Uber began in February 2017 when
Susan Fowler, a former software engineer at Uber,
went public with her account of sexual harassment,
discrimination, and extensive sexism inside the com-
pany. In a blog post, she described how the human
resources department had ignored her complaints,
which included being propositioned by her manager.
Fowler wrote that even after she had lodged a com-
plaint with HR and higher management, she was told
the manager was a “high performer” and he would not
be disciplined for his actions. Fowler’s account was
allegedly so condemning that it inspired other women

EXHIBIT 6 Uber Board of Directors (as of 2016)
As of 2016
Travis Kalanick
Garrett Camp
Yasir Al Rumayyan
Ryan Graves
Bill Gurley
David Bonderman
Arianna Hu�ngton
Co-founder
Co-founder
Chief Executive of Saudi Arabia’s Public Investment Fund
SVP of Global Operations, Uber
General Partner at venture capital firm Benchmark Capital
Co-founder of private Equity Fund TPG Capital
Founder of media platform Hu�ngton Post
Four Empty Board Seats
Matt Cohler (replaced Gurley)

Wan Ling Martello
David Trujillo (replaced Bonderman)
Cheng Wei
General Partner at Benchmark Capital
Executive Vice President for Asia, Oceania, and sub-Saharan
Africa at Nestlé
Partner at TPG Capital
Co-Founder & CEO of Chinese ride-hailing service Didi
Chuxing
As of August 2017
New CEO
Khosrowshahi
Garrett
Camp
Ryan
Graves
Matt
Cohler
Wan Ling
Martello
David
Trujillo

Cheng
Wei
Open SeatTravis
Kalanick
Arianna
Hu�ngton
Yasir Al
Rumayyan
CEO Travis
Kalanick
Garrett
Camp
Ryan
Graves
Bill
Gurley
David
Bonderman
Arianna
Hu�ngton
Yasir Al
Rumayyan
employees at Uber to come forward with their own
stories. This eventually led to at least 200 claims of

sexual harassment against the company. Fowler also
wrote about the organizational chaos at Uber saying
that there was a “Game of Thrones” kind of a politi-
cal war raging within the ranks of the upper man-
agement. According to her, projects were frequently
abandoned and Objectives and Key Results (OKRs)
were changed multiple times each quarter.12
Earlier in January 2017, Uber was accused of
undermining a taxi union strike at JFK airport in
New York protesting United States President Donald
Trump’s refugee ban.13 Subsequently, more than
200,000 users uninstalled their Uber accounts as
use of a secret software tool called “Greyball” that
used data collected from the Uber app and other
techniques to identify and evade government offi-
cials who were trying to clamp down on Uber in
areas where its service had not yet been approved.
Analysts said the controversies took a toll on
Uber’s management team as several of the compa-
ny’s key executives either resigned or were forced out.
Since the start of 2017, 13 high-profile executives had
reportedly departed, and Uber had yet to fill many of
those roles (see Exhibit 7). Key executive positions
including the post of COO, CFO, president, general

counsel, and senior vice president of engineering
were left vacant at the company.
For quite some time, the corporate culture at
Uber had been under attack. Critics alleged that
the company had a “bro culture” enabled by the top
management—covering up sexual harassment at the
workplace and cutting ethical corners. One Uber
manager, who was later fired, was said to have groped
several female co-workers at a company retreat in
Las Vegas. Another manager had reportedly threat-
ened to beat an underperforming employee’s head in
with a baseball bat. The ride hailing service was also
accused of using a woman’s confidential medical
record to contradict her claims that she was raped
by an Uber driver in India. An internal email leaked
part of the #DeleteUber campaign triggered by
Kalanick’s decision to be a part of Trump’s business
advisory council. Kalanick subsequently resigned
from the council.
In February 2017, Google’s parent company
Alphabet’s self-driving arm Waymo filed a lawsuit
against Uber for theft of trade secrets and intellectual
property. Alphabet alleged that one of its former exec-
utives, Anthony Levandowski, had decamped with
14,000 confidential files related to self-driving car
technology that he had downloaded onto an external
hard drive. He later started his own self-driving truck
company, Otto, which Uber acquired in August 2016.
Thereafter, Levandowski was appointed as the head
of Uber’s self-driving car program. Alphabet claimed
that Uber was using the stolen documents that
Levandowski had allegedly taken to advance its self-
driving technology. Though Uber fired Levandowski

in May 2017, experts said the move would not protect
the company from the explosive charges contained in
the lawsuit.
To add to its list of problems, Kalanick was
caught on a dashcam video berating an Uber driver
for questioning him about the company’s treatment
of drivers. The video went viral, prompting Kalanick
to apologize. In May 2017, the U.S. Department of
Justice launched a criminal investigation into Uber’s
EXHIBIT 7 Top executive Departures at Uber
Name of the Executive Designation
Jeff Jones Uber President
Ryan Graves SVP Global Operations
Emil Michael SVP of Business
Amit Singhal Senior Vice President of Engineering
Raffi Krikorian Senior Director of Engineering at Advanced
Technologies Center
Charlie Miller Senior Engineer of Uber’s Autonomous Driving
Division
Ed Baker Vice President of Product and Growth
Gary Marcus AI Labs director
Brian McClendon Vice President of Maps
Rachel Whetstone Head of Policy and Communications

Anthony Levandowski Head of Uber’s self-driving car unit
in 2013 said Kalanick had allegedly instructed
Uber employees at a company party on the ground
rules for partying and having sex with co-workers.
According to some Uber employees, the culture at
the company was aggressive and demanding with
emphasis on hustling, toe-stepping, and meritocracy.
“This is a company where there has been no line that
you wouldn’t cross if it got in the way of success,”14 said
Hadi Partovi, an Uber investor.
However, the final nail in the coffin was the blog
post by Fowler. Calling the behavior meted out to
Fowler “abhorrent & against everything we believe in,”
Kalanick tweeted that “anyone who behaves this way or
thinks this is OK will be fired.”15 He announced that the
company would launch an independent investigation
into Fowler’s claims. He hired former U.S. attorney
general Eric H. Holder Jr. and his colleague Tammy
Albarrán, partners at the law firm Covington &
Burling LLP, to probe the matter and conduct a review
of Uber’s corporate culture. On March 1, 2017, Uber’s
Board of Directors unanimously approved a resolution
establishing a Special Committee of the Board16 to
look into the allegations. The team also involved board
member Arianna Huffington and the company’s newly

appointed human resources chief, Liane Hornsey.
Meanwhile, Uber investors Freada Kapor Klein
and Mitch Kapor wrote an open letter to Uber’s
board and investors criticizing the company for
choosing a team of insiders to investigate the matter.
According to them, Holder had previously worked on
Uber’s behalf to advocate the company’s concerns
while Huffington was on the board of the company.
Hornsey reported to the executive team. “We are
disappointed to see that Uber has selected a team of
insiders to investigate its destructive culture and make
recommendations for change. To us, this decision is yet
another example of Uber’s continued unwillingness
to be open, transparent, and direct,”17 they wrote. In
response to the letter, the review committee said it
would conduct the investigation impartially.
THe HOLDeR RePORT
On June 13, 2017, Uber released the results of the
highly anticipated internal investigation. Lack of
oversight and poor governance were some of the key
issues running through the findings of the report.
The Holder report specifically identified Kalanick
as part of the problem as the first line of the report
read, “Review and Reallocate the Responsibilities of
Travis Kalanick.” The report in total made 47 recom-
mendations including emphasizing more on diversity
and companywide performance reviews, and install-
ing an independent chair and oversight committee to
handle ethics issues. In the area of corporate gover-
nance, the report advised that the board should have
greater independence and the additional board mem-
bers should be directors with meaningful experience
on other boards and should exercise independent

oversight of Uber’s management.
The same day, Kalanick in an email to employ-
ees announced that that he was taking time off to
mourn his mother, who was killed in a boating acci-
dent. Kalanick said the company would be run by
an executive committee and that he would be avail-
able if needed. Uber’s SVP and business leader Emil
Michael, a close confidante of Kalanick who had
reportedly been pressured to resign following the
investigation, also left the company. In addition, at
least 20 other employees were fired as a result of a
separate investigations related to sexual harassment
and discrimination by law firm Perkins Coie.
Uber’s board unanimously decided to adopt all
the recommendations for improving corporate gov-
ernance including sexual harassment prevention and
improving workplace diversity. However, during the
meeting, Uber board member David Bonderman
made a sexist remark18 and had to resign thereafter.
David Trujillo, a partner at the private equity firm
TPG Capital, replaced Bonderman. Also, Uber
appointed Nestlé executive Wan Ling Martello
(Martello) to the board. She was the second woman
after Huffington to serve as an Uber Director.
INVesTORs ReVOLT
When Uber became embroiled in a series of legal and
ethical scandals, the investors who until then saw
little wrong with Kalanick’s aggressive antics became
suddenly combative. They felt that their investment
in Uber was at risk and started agitating for change
at the top as the #DeleteUber campaign and Fowler’s
complaints gained traction. Exhibit 8 illustrates the
impact of the scandals on Uber’s market share. The

Board of Directors, who were under fire themselves,
decided to replace Kalanick but that was easier said
than done. According to Richard Mahony, an expert
in communication strategy and investor relations,
“[Kalanick’s super-voting shares] has made the task of
removing him much more complicated. It took a former
connections) at last found their voice, he had little choice
but to step down. Quite simply, he needs their money.”20
Kalanick, however, continued to serve on Uber’s
Board of Directors. “I love Uber more than anything in
the world and at this difficult moment in my personal
life I have accepted the investors request to step aside
so that Uber can go back to building rather than be
distracted with another fight,”21 he said in a statement.
A day after his resignation, Gurley, who pushed
Kalanick to leave, resigned from the Uber board. He
was replaced by his colleague, Matt Cohler, also a
partner at Benchmark Capital.
CORPORaTe GOVeRNaNCe
FIasCO
Experts attributed the root of Uber’s problems to
weak corporate governance marked by a rapid chase
after growth, the cult of Kalanick, and the company’s
failure to address workplace issues. They felt that
Uber’s Board of Directors did not care about gover-

nance issues and let Kalanick run the company the
way he did as long as profits were generated and
attorney general and a nearly constant stream of media
leaks to pry Mr. Kalanick out of his seat.”19
Five of Uber’s major investors—Benchmark
Capital, First Round Capital, Lowercase Capital,
Menlo Ventures, and Fidelity Investments—which
together controlled 40 percent of the company’s
votes and owned more than a quarter of Uber’s
stock, demanded Kalanick’s resignation. In the letter
titled “Moving Uber Forward,” the investors wrote
to Kalanick that he must immediately leave. On the
other hand, some Uber board members including
Camp and Huffington extended support to Kalanick
as they believed that his leadership was necessary
for Uber to survive in the aggressive taxi industry.
Huffington even attested to Kalanick’s willingness
to change. The shareholders’ unrest, however, made
it untenable for Kalanick to stay on at the company.
Finally, after hours of negotiations and consultations
with his confidants, Kalanick agreed to step down on
June 21, 2017. According to Fast Company’s Ainsley
Harris, “Kalanick held on to Uber’s reins in the face of
scandal after scandal—sexual harassment, discrimina-
tion, obstruction of regulatory enforcement, privacy vio-
lations. But when shareholders (with checkbooks and
EXHIBIT 8 Impact of senior Leadership scandals on Uber’s U.s.
Market share
90.00%
80.00%

70.00%
60.00%
50.00%
40.00%
30.00%
20.00%
10.00%
0.00%
Before #deleteuber
campaign
(Week up to Jan 29)
20.9% 21.3%
79.1%
83.5%
After #deleteuber
campaign
(Week up to Feb 19)
Following Susan
Fowler Story
(Week up to Feb 24)
Uber Lyft

78.7%
16.5%
Source: TXN
Solution
s.
investors and the board members asking Benchmark
Capital to withdraw the lawsuit, divest its shares, and
step down from Uber’s board. According to them, the
tactics of Benchmark Capital were “ethically dubious
and, critically, value-destructive rather than value
enhancing.”27 They accused Gurley of holding Uber
hostage to a public relations disaster by demand-

ing Kalanick’s resignation. Calling it a “fratricidal”
move against Kalanick, the investors said the lawsuit
could harm Uber’s valuation, risk the company’s abil-
ity to raise funds, and hinder the search for a new
CEO. They wanted Kalanick to make a comeback at
Uber in an operational capacity. Commenting on the
fallout, Heather Somerville, a technology reporter,
wrote, “The division and hostility emerging among
Uber investors and directors opens a new front in a
highly unusual public battle for Silicon Valley. It is rare
for a venture firm to sue the central figure of a valuable
portfolio company, and equally unexpected for investors
to make a counter-move to push out a fellow investor
backing the same company.”28
According to some analysts, with the power play
and ego battles among Uber’s Board of Directors,
the company had been pushed to the point of a cri-
sis. They felt that both the pro-Kalanick and pro-
Benchmark factions were fighting for short-term
personal gains and risking damage for everyone
involved, including Uber’s employees and share-
holders. On August 10, 2017, Graves, Uber’s lon-
gest running executive, announced that he would
be stepping down from his role as SVP of global

operations at Uber but would continue to remain on
Uber’s board.
The search for Kalanick’s replacement also left
the Uber board deeply divided as they squabbled
over the choice of CEO. Meg Whitman,29 CEO of
tech giant Hewlett-Packard, and Jeffrey R. Immelt,30
former CEO of General Electric, were the front run-
ners for the CEO’s post. While Kalanick and his loy-
alists Huffington and Yasir bin Othman Al-Ruayyan
also an Uber board member supported Immelt, Team
Benchmark Capital, including Cohler and Graves,
favored Whitman. Later, Immelt pulled out from the
race allegedly because he did not have the necessary
support from Uber’s board. Meanwhile, Whitman,
a strong contender, started negotiating for condi-
tions including limiting Kalanick’s clout and poten-
tially reshaping the Board of Directors were she to
accept the job. She showed strong affiliation toward
Benchmark Capital that wanted Kalanick’s removal.
growth achieved. According to Jean-Louis Gassée,
Editor of Monday Note, a tech and media blog,
“Uber’s investors had one goal—the IPO—and one strat-
egy: create a market position so dominant that it would

eliminate the competition and, as a result, provide the
pricing power that would support a stratospheric IPO
price. As for tactics, investors left the matter to Kalanick
while looking elsewhere.”22
Critics contended that Uber’s board had failed
to institute a corporate governance framework that
focused on the legal, regulatory, institutional, and
ethical environment of the company. They added that
the continued silence of board members had encour-
aged employees to commit and engage in criminal
conduct, opened the door to corporate wrongdoing,
and contributed to more lawsuits.23 Only when the
scandals reached too far and investors realized that
they could lose their money if Uber’s valuation was
marked down, had the board woken up and fired
Kalanick, they said.
UBeR’s BOaRDROOM DRaMa
Amidst a series of scandals, Uber’s Board of
Directors found themselves divided. On August 10,
2017, investor Benchmark Capital, which held a
13 percent stake in Uber and spearheaded Kalanick’s
ouster, filed a lawsuit against him for fraud, breach of
contract, and breach of fiduciary duty. The investor

wanted him removed from the Uber board. According
to Benchmark Capital, Kalanick had concealed mate-
rial information from investors when he created three
new board seats and expanded Uber’s board from
8 to 11 directors in June 2016. Kalanick gave himself
control to appoint members to those seats, it alleged.
Benchmark Capital felt that Kalanick had covered up
for the company’s failings and his own mismanage-
ment before the Board of Directors in order to retain
and increase his own power on the board. It called
him a toxic force at Uber and held him responsible
for its cultural failings. Kalanick’s spokesman said
the lawsuit was peppered with lies and false allega-
tions. However, on August 31, 2017, a Delaware judge
stayed the lawsuit and sent the case for arbitration,
moving the legal battle out of the public eye.
Meanwhile, some pro-Kalanick investors includ-
ing Shervin Pishevar, Managing Director of Sherpa
Capital;24 Ron Burkle, co-founder of Yucaipa
Companies;25 and Adam Leber, an investor who
managed Maverick Records,26 sent an email to Uber

changing the way we do business, putting integrity at
the core of every decision we make and working hard
to earn the trust of our customers,”31 he said in a com-
pany blog post.
THe ROaD aHeaD
Despite a tumultuous 2017, Uber’s business continued
to grow. In the second quarter of 2017, Uber raked in
$8.7 billion in gross bookings, a 17 percent increase
from the previous quarter and a 102 percent increase
year-over-year.32 The company also curbed losses. In
the second quarter of 2017, adjusted net loss fell almost
9 percent quarter-over-quarter to $645 million com-
pared to $708 million in the first quarter. The com-
pany’s adjusted net revenue amounted to $1.75 billion,
a 17 percent growth compared to the first quarter of
2017. Buoyed by holiday travel, Uber’s adjusted losses
narrowed to $741 million in the fourth quarter of 2017,
compared with $1.02 billion during the third quar-

ter.33 Meanwhile, gross bookings and net revenue both
rose 61 percent year on year, reaching $11.1 billion in
bookings and $2.2 billion in net revenues, a record
level for the company. Exhibit 9 presents a summary
of Uber’s financial performance for 2017.
In February 2018, Uber settled its legal dispute
over trade secrets against Waymo in a deal that gave
Alphabet a 0.34 percent stake in Uber, worth about
As a result, some of the Directors who were report-
edly put off by Whitman’s tactics swung decisively in
favor of Khosrowshahi who until then had not even
been in the reckoning. They felt that Khosrowshahi
was a stronger candidate and came with fewer disad-
vantages. Finally, on August 29, 2017, Uber’s board
voted unanimously to appoint Khosrowshahi, an
Iranian American who had led Expedia for 12 years,
as Uber’s new CEO.
And just when the public thought that Uber
would not get any worse, in November 2017 the com-
pany announced that it had discovered a major data
breach as part of a board investigation into its busi -
ness practices. Uber had concealed a massive cyber-

attack that took place in October 2016 that affected
around 57 million driver and customer accounts
whose personal data had been stolen. The company
revealed that it had paid the hackers $100,000 to
delete the stolen data and prevented the news from
going public. The deal was allegedly arranged by the
company’s chief security officer Joe Sullivan under
the watch of Kalanick. Khosrowshahi said he had
only learned of the breach after he took over as
CEO of Uber in September 2017 and publicly apol-
ogized for the hack. “None of this should have hap-
pened, and I will not make excuses for it. While I can’t
erase the past, I can commit on behalf of every Uber
employee that we will learn from our mistakes. We are
EXHIBIT 9 summary of Uber’s Quarterly Financial
Performance, 2017
–1
–2
Q1
* Includes stock-based compensation

Q2 Q3 Q4
1
2
3
0
$bnNet revenue
Adjusted ebitda
Net income*
Source: Financial Times reporting; Uber
https://www.ft.com/content/a0f2af96-1117-11e8-940e-
08320fc2a277.

EXHIBIT 10 Uber’s Cultural Norms
Under Kalanick Under Khosrowshahi
1. Customer obsession (Start with what is best
for the customer).
2. Make magic (Seek breakthroughs that will
stand the test of time.)
3. Big bold bets (Take risks and plant seeds
that are five to ten years out.)
4. Inside out (Find the gap between popular
perception and reality.)
5. Champion’s mind-set (Put everything you
have on the field to overcome adversity and
get Uber over the finish line.)
6. Optimistic leadership (Be inspiring.)
7. Superpumped (Ryan Graves’s original Twitter

proclamation after Kalanick replaced him as
CEO; the world is a puzzle to be solved with
enthusiasm.)
8. Be an owner, not a renter (Revolutions are
won by true believers.)
9. Meritocracy and toe-stepping (The best idea
always wins. Don’t sacrifice truth for social
cohesion and don’t hesitate to challenge the
boss.)
10. Let builders build (People must be
empowered to build things.)
11. Always be hustlin’ (Get more done with less,
working longer, harder, and smarter, not just
two out of three.)
12. Celebrate cities (Everything we do is to
make cities better.)
13. Be yourself (Each of us should be authentic.)
14. Principled confrontation (Sometimes the

world and institutions need to change in
order for the future to be ushered in.)
1. We build globally, we live locally. We harness the power
and scale of our global operations to deeply connect with
the cities, communities, drivers, and riders that we serve,
every day.
2. We are customer obsessed. We work tirelessly to
earn our customers’ trust and business by solving their
problems, maximizing their earnings, or lowering their
costs. We surprise and delight them. We make short-term
sacrifices for a lifetime of loyalty.
3. We celebrate differences. We stand apart from the
average. We ensure people of diverse backgrounds
feel welcome. We encourage different opinions and
approaches to be heard, and then we come together and
build.
4. We do the right thing. Period.
5. We act like owners. We seek out problems and we solve
them. We help each other and those who matter to us.

We have a bias for action and accountability. We finish
what we start and we build Uber to last. And when we
make mistakes, we’ll own up to them.
6. We persevere. We believe in the power of grit. We don’t
seek the easy path. We look for the toughest challenges
and we push. Our collective resilience is our secret
weapon.
7. We value ideas over hierarchy. We believe that the best
ideas can come from anywhere, both inside and outside
our company. Our job is to seek out those ideas, to shape
and improve them through candid debate, and to take
them from concept to action.
8. We make big bold bets. Sometimes we fail, but failure
makes us smarter. We get back up, we make the next bet,
and we go!
Source: https://www.uber.com/en-IN/newsroom/ubers-new-
cultural-norms/.
$245 million. The settlement also included an agree-
ment to ensure that Waymo’s confidential informa-
tion was not incorporated into Uber technology,

which Waymo said was its main intent in bringing
the lawsuit. As part of his cultural overhaul at Uber,
Khosrowshahi introduced eight new cultural norms
for Uber, replacing the 14 values first introduced
by his predecessor Kalanick, in 2015, as shown in
Exhibit 10. Khosrowshahi also made some changes
internally, including hiring a new set of executives.
In October 2017, he appointed Tony West, a former
federal prosecutor, from PepsiCo as Uber’s new Chief
Legal Officer. Barney Harford, the former CEO of
online travel site Orbitz, who has been working as a
senior adviser to Khosrowshahi at Uber since October
2017, was named Chief Operating Officer at Uber.
Uber’s valuation of nearly $70 billion as shown
in Exhibit 11 left some analysts wondering if and
when the company would go public. However, some
analysts were concerned that all the scandals and
internal strife could result in Uber’s market value
going down. Following the company’s scandal- ridden
year, four mutual fund companies marked down
their investments in Uber by as much as 15 percent
for the quarter ended June 30, 2017.34 However, in
January 2018 a group of investors35 led by SoftBank

Group Corp36 acquired a 17.5 percent stake in Uber,
thereby providing the much-needed boost to the
controversy-ridden company. The deal brokered by
Khosrowshahi, included a large purchase of shares
from existing Uber investors and employees at a dis-
counted valuation. SoftBank became Uber’s largest
shareholder with a stake of 15 percent. As part of the
terms of the deal, Uber would expand its board from
11 to 17 members including four independent direc-
tors and limit voting power of some early sharehold-
ers. Benchmark had also agreed to drop its lawsuit
against Kalanick upon completion of the deal.
Analysts said that, going forward, Khosrowshahi
would have to face some daunting tasks, including

prepping Uber for the long-awaited IPO. According
to them, another challenge for him would be work-
ing with his predecessor. The company still bore the
imprint of Kalanick, who remained a major share-
holder and a board member of Uber, all of which
would give him significant influence over Uber’s
future. The question, according to some analysts, was
whether with Kalanick on the board, Khosrowshahi
would be able to make the decisions that he needed
to make.37
As Uber set out to incorporate the basic tenets of
corporate governance, a key task for Khosrowshahi
would be dealing with an uptight board whose divi-
sions and rivalries had reached epic proportions and
ending the bitter war among the Board of Directors.
Some key challenges before Khosrowshahi were:
fixing Uber’s culture and helping evolve some of
its own core cultural practices to foster growth
and improve stakeholder relationships; working
with a splintered board and ushering in corporate
governance reforms; and regaining the confidence
of its investors, employees, and customers. Sanket
Vijayasarathy, a tech journalist, “[G]iven the timing
of his entry, Khosrowshahi had a lot of fires to douse,

which by no means is an easy task. The silver lining to
this was that despite the events of the past year, Uber
financial situation was still good. The company is still
in a good position today, and the recent cyber-attack
may hurt the company further, but not so much as to
cause a collapse. This still gives time for Khosrowshahi
to turn the company around.”38
EXHIBIT 11 Uber’s Market Valuation
2009 2010 2011 2012 2013 2014 2015 2016
0
10
20
30
40
40
60

70
Valuation
Funding
$
Source: CB Insights.
eNDNOTes
7 Seth Fiegerman, “Uber CEO Says Company
Plans to Go Public in 2019,” November 9,
2017, http://money.cnn.com.
8 Kalanick was a college dropout whose first
business venture went bankrupt. He sold
his second start-up Red Swoosh, a content-
delivery company to Akamai Technologies for
$20 million.
9 Camp was an entrepreneur who had sold
his company StumbleUpon, a Web discovery
engine, to eBay for $75 million in 2007.
10 https://uberestimator.com/cities.
11 Davey Alba, “Even Uber’s Crisis Won’t Kill
Founder Worship in Tech,” June 13, 2017,

www.wired.com.
12 Julia Carrie Wong, “Uber’s ‘Hustle-Oriented’
Culture Becomes a Black Mark on Employees’
Résumés,” March 7, 2017, www.theguardian
.com.
1 Kara Swisher, “‘I Have to Tell You I Am
Scared’: Dara Khosrowshahi Says in a Memo to
Expedia’s Staff That He Has Finally Been Hired
at Uber,” August 29, 2017, www.recode.net.
2 One of the world’s leading online travel
companies.
3 “The Uber Episode: Is Monoculturalism the
Real Problem?” June 30, 2017, www.livemint
.com.
4 A US-based venture capital firm responsible
for the early stage funding of successful
startups including Dropbox, Twitter, Uber,
Snapchat, and Instagram.
5 Carolyn Said, “History of Uber’s CEO Pick
Praised,” August 29, 2017, www.pressreader
.com.
6 An innovative program in which law students
provide legal work for early stage Tech and
BioTech startups.

13 On January 27, 2017, Trump signed an
executive order for a temporary ban on
refugees and a suspension of visas for citizens
of seven Muslim-majority countries.
14 Leslie Hook and Hannah Kuchler, “Uber’s
Turmoil Compounded by David Bonderman’s
Sexist Quip,” June 14, 2017, www.ft.com.
15 Danica Kirka, “Uber to Investigate Sexual
Harassment Claim by Engineer,” February 20,
2017, www.chicagotribune.com.
16 The investigation team conducted over 200
interviews with current and former employees
of Uber who shared a broad range of perspec-
tives. Covington interviewed individuals with
knowledge of Fowler’s allegations, employees
who reported workplace environment-related
complaints, employee representatives of
Uber’s diversity groups, and present and for-
mer members of the Senior Executive Team.

23 Davey Alba, “Even Uber’s Crisis Won’t Kill
Founder Worship in Tech,” June 13, 2017,
www.wired.com.
24 San Francisco-based venture capital firm.
25 An American private equity firm.
26 A U.S.-based music company.
27 Heather Somerville, “Uber Investors Seek to
Oust Benchmark After ‘Destructive’ Lawsuit–
Report,” August 11, 2017, www.cnbc.com.
28 Ibid.
29 Meg Whitman, a tech veteran, is one of the
most respected corporate executives in the
world having led companies like eBay.
30 Jeffrey R. Immelt was the chairman of GE
from 2001 until August 1, 2017.
31 Mike Isaac, Katie Benner, and Sheera
Frenkel, “Uber Hid 2016 Breach, Paying
Hackers to Delete Stolen Data,” November 21,
2017, www.nytimes.com.
32 Johana Bhuiyan, “Uber is Curbing its
Losses and Growing its Business While it

Searches for a New CEO,” August 23, 2017,
www.recode.net.
17 Mitch & Freada Kapor, “An Open Letter
to The Uber Board and Investors,” https://
medium.com, February 24, 2017.
18 As the board was discussing the addition
of a new female board member, Huffington
said that the presence of one woman on the
board would eventually lead to more. To this,
Bonderman retorted “actually what it shows is
that it’s much more likely to be more talking.”
After the meeting, Bonderman apologized and
later announced his resignation from
the board.
19 Richard Mahony, “Uber’s Shareholder Revolt,”
June 14, 2017, www.mahonypar tners.com.
20 Ainsley Harris, “Uber’s Ousted CEO Travis
Kalanick Discovered the Limits of Founder
Control—The Hard Way,” June 21, 2017,
www.fastcompany.com.
21 Sam Byford, “Travis Kalanick Resigns as Uber
CEO,” June 21, 2017, www.theverge.com.
22 Jean-Louis Gassée, “Travis Kalanick’s
Bosses Share Just as Much Blame for the Uber

Calamity,” June 28, 2017, https://qz.com.
33 Leslie Hook, “Uber Pares Quarterly Losses
and Lifts Revenues,” February 14, 2018,
www.ft.com.
34 Trevor Hunnicutt, “Unhappy Uber Investors
Mark Down Value of the Scandal-Ridden
Ride-Sharing Company,” August 23, 2017,
www.independent.co.uk.
35 The investor group led by SoftBank includes
Dragoneer Investment Group and Sequoia
Capital.
36 SoftBank Group Corp. is a Japanese
multinational conglomerate that together
with its subsidiaries provides information
technology and telecommunication services.
37 Marisa Kendall, “Uber’s Ex-CEO Isn’t
Really Leaving. Can the Company Change
Anyway?” June 28, 2017, www.santacruz
sentinel.com.
38 Sanket Vijayasarathy, “Uber Hacking
Scandal Proves Ghost of Ousted Travis
Kalanick Still Haunts The Ride-Hailing
Company,” November 23, 2017, www.india
today.in.

Chaos at Uber: The New
CEO’s Challenge
Syeda Maseeha Qumer
Debapratim Purkayastha
“I have to tell you I am scared,”
1 wrote Dara
Khosrowshahi, newly appointed CEO of ride-
hailing service Uber Technologies Inc., in a
memo to his former team at Expedia, Inc.2 Besides

growing Uber’s business, analysts said Khosrowshahi
had the task of changing the dysfunctional culture
within the company and improving corporate gov-
ernance that had cost co-founder and former CEO
Travis Kalanick his job. On June 21, 2017, Kalanick
stepped down as CEO of Uber in the face of a share-
holder revolt that made it untenable for him to stay
on in that position. His resignation came after a
review of practices at Uber including allegations of
sexual harassment, a corporate theft lawsuit, defi-
ance of government regulations, reports of misbe-
havior, and a toxic corporate culture leading to the
departure of some key executives.
Uber’s corporate structure ensured that its
founders held super-voting shares and had dispro-
portionate control over the company. Kalanick,
because of the special class of shares he owned,
enjoyed sweeping authority on the Uber board and
nearly complete autonomy in running the company.
According to some industry observers, Uber ignored
corporate governance in its pursuit of growth and
valuation, and flouted ethical norms while hiding
behind notions of disruption and innovation. This
was fine with investors until the beginning of 2017

when the company’s public image crumbled amid
allegations of sexual harassment, they said. “The
board chose to ignore the fundamentals of their gover-
nance role and failed to provide guidance in correcting
a trait which would ultimately endanger the company in
many ways.”3 said Prabal Basu Roy, a fund manager.
The chaos inside Uber’s boardroom escalated
in August 2017 when a small group of sharehold-
ers aligned with Kalanick dissented against Uber’s
biggest investor Benchmark Capital,4 after it filed a
lawsuit to oust Kalanick from the board. Benchmark
Capital had accused Kalanick of fraud and of inter-
fering in the search for a new CEO—accusations that
he had denied. Some analysts felt that Uber’s board
needed to grow up as the constant bickering among
the members was hurting the company. According to
them, the board’s aggressive infighting was spreading
confusion and uncertainty among Uber’s investors,
customers, and shareholders, and putting the com-
pany’s nearly $70 billion market valuation at risk.
As Khosrowshahi began his new role at Uber,
he had the daunting task of dealing with a fraught
Uber board and mending the frayed relations among

investors. “Boards are so unpredictable, and this one
seems as if they’re at each other’s throats. It’s hard to
know if he’ll have the force of personality to navigate
that,”5 said Alice Armitage, director of Startup Legal
Garage.6 Khosrowshahi would have to figure out a
way to unite the divided board and end the acrimony
among them. Moreover, he would also have to con-
tend with the legacy of Kalanick who continued to
remain on the Uber board.
Khosrowshahi said that as Uber’s CEO he
wanted to set the course for the future of the company,
which included innovating and growing responsibly
as well as acknowledging and correcting mistakes of
the past. He planned to take the company public by
CASE 31
©IBS Center for Management
Research

2019. “The culture went wrong, and the governance of
the company went wrong and the board went in a very
bad direction. But if the product is good, then if you can
bring in good leadership, you can ultimately bring it
together,”7 he said. However, some analysts wondered
if the company valued at around $68 billion as of
January 2018 could maintain its valuation as it pre-
pared for an IPO.
BaCKGROUND NOTe
Uber was co-founded by Kalanick8 and Garrett Camp9
in 2009. The duo was in Europe attending LeWeb, an
annual European tech conference. On a snowy night
in Paris, Kalanick and Camp could not get a cab. This
was when the two came up with the idea of launching
an on-demand car-service app. After getting back to
San Francisco, Camp convinced Kalanick to partner
with him in the new project that could fill the large
and lucrative gap in the car service market.
UberCab, as it was then known, started its service

in San Francisco in the summer of 2010 with only a few
cars, a handful of employees, and a small seed round.
After entering credit-card information on the app,
customers could book a car at the press of a button.
The cost was automatically charged to the customer’s
account. Uber required its drivers to have their own car
and to pass a background check. In August 2010, Ryan
Graves, Uber’s first hire, was briefly appointed as CEO
of the company. In October 2010, the company was
renamed Uber after some regulatory bodies objected to
the use of “cab” in UberCab’s name as the entity was
operating without a taxi license. Uber closed a $1.25
million seed funding in 2014. Chris Sacca of First
Round Capital was its first institutional investor and
he invested about half a million dollars in the company.
Other investors included Napster co-founder Shawn
Fanning, venture capital fund Lowercase Capital, and
venture capitalist Mitch Kapor.
In December 2010, Graves stepped down
as CEO and Kalanick stepped into the position.
Graves stayed on as Uber’s head of global opera-
tions. In February 2011, Uber closed an $11 million
Series A funding round that valued the company at
$60 million (see Exhibit 1). Benchmark Capital led

the round and its partner Bill Gurley joined Uber’s
Board of Directors. In May 2011, Uber was launched
in New York City and thereafter it expanded to
Seattle, Boston, Chicago, and Washington D.C.
In December 2011, Uber raised $32 million in its
Series B of fund raising from Amazon Inc’s CEO Jeff
Bezos, Menlo Ventures, and Goldman Sachs. In July
2012, Uber unveiled its low-cost “Uber X” service.
In August 2013, Uber entered India and Africa, and
closed a Series C funding round which saw a massive
$258 million investment from Google Ventures. In July
2014, Uber entered China after a $1.2 billion funding
round. In August 2014, Uber launched its UberPOOL
service. Notwithstanding strikes by angry taxi driv-
ers over Uber threatening their livelihood and break-
ing local taxi rules, and unresolved questions of legal
liability, the cab service expanded rapidly. The company
continually rolled out new services from freight and
helicopter rides to food delivery to driverless cars.
Uber upended the tightly regulated taxi industry
in many countries and changed the transportation
landscape. In 2016, its gross bookings hit $20 billion,

double that of the previous year (see Exhibit 2).
As shown in Exhibits 3 and 4, net revenues were
$6.5 billion for 2016, although losses were high
at $2.8 billion. As of 2017, Uber had a presence in
724 cities in more than 84 countries.10 With a valua-
tion of nearly $68 billion, it was by far the richest of
the Silicon Valley’s private unicorn technology com-
panies (see Exhibit 5).
Analysts said that while Uber had tasted great
success, its journey had been a bumpy one. According
to them, the company was synonymous with contro-
versies. Since its launch, Uber had been the subject of
ongoing protests from taxi drivers and regulatory bod-
ies who argued that the company should be subjected
to the same regulations that they faced. From non-
compliance issues to regulatory concerns and lack of
driver background checks, Uber drew scrutiny and
criticism. The service was banned in The Netherlands
and in parts of Thailand and China. Uber’s surge pric-
ing had been one of the most controversial aspects
of the company’s business model. Customers equated
it with price gouging as it took advantage of users in
unfortunate situations. Uber had also been embroiled
in a long-standing battle with some labor organiza-

tions as it classified its drivers as independent con-
tractors and not employees, which deprived them of
various benefits. There had also been cases of sexual
assault on passengers, which some activists said hap-
pened because the background checks on drivers had
not been stringent enough. Uber’s critics went to the
extent of saying that the company ignored ethical and
legal standards in the name of disruption and valued
money, power, and control above morality.
EXHIBIT 1 Uber Funding Rounds
Date Amount/Round
Valuation
($ billion) Lead Investor Investors
April 2017 Undisclosed Amount — — 1

July 2016 $1.15 billion/Debt Financing — Morgan Stanley 4
June 2016 $3.5 billion/Series G — Saudi Arabia’s Public
Investment Fund 1
May 2016 Undisclosed Amount/Series G — — 1
Feb 2016 $200 million/Private Equity — Letterone Holdings SA
1
Aug 2015 $100 million/Private Equity — Tata Capital 1
July 2015 $1 billion/Series F — — 6
Feb 2015 $1 billion/Series E — Glade Brook Capital Partners 9
Jan 2015 $1.6 billion/Debt Financing — Goldman Sachs 1
Dec 2014 $1.2 billion/Series E 40.0 Glade Brook Capital
Partners 8
June 2014 $1.4 billion/Series D 18.2 Fidelty Investments 9
Aug 2013 $363 million/Series C 3.5 GV 4

Dec 2011 $37 million/Series B — Menlo Ventures 11
Feb 2011 $11 million/Series A 0.06 Benchmark Capital 6
Oct 2010 $1.25 million/Angel — First Round 29
Aug 2009 $200 thousand/Seed — Garrett Camp
Travis Kalanick
2
Source: Crunchbase.
EXHIBIT 2 Uber Gross Bookings (Q1 2015–Q3 2016) ($ in
millions)
$0.00
$1,512
$2,149
$3,800

$5,000
$5,400
$2,000.00
$3,000.00
$4,000.00
$5,000.00
$6,000.00
$1,000.00
*Q3 2015: data not available
Q1 2015 Q2 2015 *Q3 2015 Q12016 Q22016 Q32016
Source: www.businessinsider.com.

EXHIBIT 3 Uber Quarterly Net Revenues, 2012–2016 ($ in
millions)
$
1
$0
Q
1’
12
Q
1’
14
Q
2’

14
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EXHIBIT 4 Uber Quarterly Losses, 2012–2016 ($ in millions)
200170565.
EXHIBIT 5 Top 10 Privately Owned Technology Unicorns in
the World
(as of august 2017)

Rank Company
Latest Valuation
($ in billions)
Total Equity Funding
($ in billions) Last Valuation
1 Uber $68.0 $12.9 June 2016
2 Didi Chuxing 50.0 15.1 April 2017
3 Xiaomi 46.0 1.4 December 2014
4 Airbnb 31.0 3.3 March 2017
5 Palantir 20.0 1.9 October 2015
6 WeWork 20.0 4.4 July 2017
7 Lufax 18.5 1.7 December 2015
8 Meituan-Dianping 18.3 4.4 January 2016

9 Pinterest 12.3 1.5 June 2017
10 SpaceX 12.0 1.1 January 2015
Source: http://graphics.wsj.com/billion-dollar-club/?co=Uber.
UBeR’s CORPORaTe
sTRUCTURe
Uber followed a “founder-friendly” governance struc-
ture wherein some board seats carried more voting
power than others. In this kind of a dual-class share
structure, one class of shares carried one vote while
the other class shares came with 10 votes each or
more. According to Uber’s articles of incorporation,
the company had 11 board seats, 9 of which were
controlled by shareholders with super-voting rights.
Co-founders Kalanick and Camp along with long-
time Uber employee Graves held super-voting shares
and controlled a majority of shareholder votes. The
trio held sway over company decisions leaving other
independent directors who were mostly outsiders
with fewer rights and little influence.
Kalanick who had a larger stake in the com-
pany compared to Camp and Graves owned a spe-

cial class of voting stock that gave him control over
Uber irrespective of what percentage of shares he
owned. He reportedly held approximately 10 percent
of Uber’s stock, including approximately 16 percent
of its voting power and 35 percent of its Class B com-
mon stock. According to Davey Alba, a tech writer,
“It just so happened that at the time VCs were flush
with cash, Uber was the hottest investment opportunity.
So it raised gobs of money without having to dilute
Kalanick’s power on the board. Investors just wanted to
get a stake.”11
As of 2016, Kalanick had kept the Uber board
small, leaving four board seats empty as shown in
Exhibit 6. At the end of 2016 Cheng Wei, founder
and chairman of Chinese ride-hailing service Didi
Chuxing (Chuxing) joined Uber’s board after Uber
sold its China operations to Chuxing in exchange for
the company investing $1 billion in Uber.
THe CRIsIs UNFOLDs
The crisis at Uber began in February 2017 when
Susan Fowler, a former software engineer at Uber,
went public with her account of sexual harassment,

discrimination, and extensive sexism inside the com-
pany. In a blog post, she described how the human
resources department had ignored her complaints,
which included being propositioned by her manager.
Fowler wrote that even after she had lodged a com-
plaint with HR and higher management, she was told
the manager was a “high performer” and he would not
be disciplined for his actions. Fowler’s account was
allegedly so condemning that it inspired other women
EXHIBIT 6 Uber Board of Directors (as of 2016)
As of 2016
Travis Kalanick
Garrett Camp

Yasir Al Rumayyan
Ryan Graves
Bill Gurley
David Bonderman
Arianna Hu�ngton
Co-founder
Co-founder
Chief Executive of Saudi Arabia’s Public Investment Fund
SVP of Global Operations, Uber
General Partner at venture capital firm Benchmark Capital
Co-founder of private Equity Fund TPG Capital
Founder of media platform Hu�ngton Post

Four Empty Board Seats
Matt Cohler (replaced Gurley)
Wan Ling Martello
David Trujillo (replaced Bonderman)
Cheng Wei
General Partner at Benchmark Capital
Executive Vice President for Asia, Oceania, and sub-Saharan
Africa at Nestlé
Partner at TPG Capital
Co-Founder & CEO of Chinese ride-hailing service Didi
Chuxing
As of August 2017
New CEO
Khosrowshahi

Garrett
Camp
Ryan
Graves
Matt
Cohler
Wan Ling
Martello
David
Trujillo
Cheng
Wei
Open SeatTravis
Kalanick
Arianna
Hu�ngton
Yasir Al

Rumayyan
CEO Travis
Kalanick
Garrett
Camp
Ryan
Graves
Bill
Gurley
David
Bonderman
Arianna
Hu�ngton
Yasir Al
Rumayyan
employees at Uber to come forward with their own
stories. This eventually led to at least 200 claims of

sexual harassment against the company. Fowler also
wrote about the organizational chaos at Uber saying
that there was a “Game of Thrones” kind of a politi-
cal war raging within the ranks of the upper man-
agement. According to her, projects were frequently
abandoned and Objectives and Key Results (OKRs)
were changed multiple times each quarter.12
Earlier in January 2017, Uber was accused of
undermining a taxi union strike at JFK airport in
New York protesting United States President Donald
Trump’s refugee ban.13 Subsequently, more than
200,000 users uninstalled their Uber accounts as
use of a secret software tool called “Greyball” that
used data collected from the Uber app and other

techniques to identify and evade government offi-
cials who were trying to clamp down on Uber in
areas where its service had not yet been approved.
Analysts said the controversies took a toll on
Uber’s management team as several of the compa-
ny’s key executives either resigned or were forced out.
Since the start of 2017, 13 high-profile executives had
reportedly departed, and Uber had yet to fill many of
those roles (see Exhibit 7). Key executive positions
including the post of COO, CFO, president, general
counsel, and senior vice president of engineering
were left vacant at the company.
For quite some time, the corporate culture at
Uber had been under attack. Critics alleged that
the company had a “bro culture” enabled by the top
management—covering up sexual harassment at the
workplace and cutting ethical corners. One Uber
manager, who was later fired, was said to have groped
several female co-workers at a company retreat in
Las Vegas. Another manager had reportedly threat-
ened to beat an underperforming employee’s head in
with a baseball bat. The ride hailing service was also
accused of using a woman’s confidential medical

record to contradict her claims that she was raped
by an Uber driver in India. An internal email leaked
part of the #DeleteUber campaign triggered by
Kalanick’s decision to be a part of Trump’s business
advisory council. Kalanick subsequently resigned
from the council.
In February 2017, Google’s parent company
Alphabet’s self-driving arm Waymo filed a lawsuit
against Uber for theft of trade secrets and intellectual
property. Alphabet alleged that one of its former exec-
utives, Anthony Levandowski, had decamped with
14,000 confidential files related to self-driving car
technology that he had downloaded onto an external
hard drive. He later started his own self-driving truck
company, Otto, which Uber acquired in August 2016.
Thereafter, Levandowski was appointed as the head
of Uber’s self-driving car program. Alphabet claimed
that Uber was using the stolen documents that
Levandowski had allegedly taken to advance its self-
driving technology. Though Uber fired Levandowski
in May 2017, experts said the move would not protect
the company from the explosive charges contained in
the lawsuit.

To add to its list of problems, Kalanick was
caught on a dashcam video berating an Uber driver
for questioning him about the company’s treatment
of drivers. The video went viral, prompting Kalanick
to apologize. In May 2017, the U.S. Department of
Justice launched a criminal investigation into Uber’s
EXHIBIT 7 Top executive Departures at Uber
Name of the Executive Designation
Jeff Jones Uber President
Ryan Graves SVP Global Operations
Emil Michael SVP of Business
Amit Singhal Senior Vice President of Engineering
Raffi Krikorian Senior Director of Engineering at Advanced
Technologies Center
Charlie Miller Senior Engineer of Uber’s Autonomous Driving
Division

Ed Baker Vice President of Product and Growth
Gary Marcus AI Labs director
Brian McClendon Vice President of Maps
Rachel Whetstone Head of Policy and Communications
Anthony Levandowski Head of Uber’s self-driving car unit
in 2013 said Kalanick had allegedly instructed
Uber employees at a company party on the ground
rules for partying and having sex with co-workers.
According to some Uber employees, the culture at
the company was aggressive and demanding with
emphasis on hustling, toe-stepping, and meritocracy.

“This is a company where there has been no line that
you wouldn’t cross if it got in the way of success,”14 said
Hadi Partovi, an Uber investor.
However, the final nail in the coffin was the blog
post by Fowler. Calling the behavior meted out to
Fowler “abhorrent & against everything we believe in,”
Kalanick tweeted that “anyone who behaves this way or
thinks this is OK will be fired.”15 He announced that the
company would launch an independent investigation
into Fowler’s claims. He hired former U.S. attorney
general Eric H. Holder Jr. and his colleague Tammy
Albarrán, partners at the law firm Covington &
Burling LLP, to probe the matter and conduct a review
of Uber’s corporate culture. On March 1, 2017, Uber’s
Board of Directors unanimously approved a resolution
establishing a Special Committee of the Board16 to
look into the allegations. The team also involved board
member Arianna Huffington and the company’s newly
appointed human resources chief, Liane Hornsey.
Meanwhile, Uber investors Freada Kapor Klein
and Mitch Kapor wrote an open letter to Uber’s
board and investors criticizing the company for
choosing a team of insiders to investigate the matter.

According to them, Holder had previously worked on
Uber’s behalf to advocate the company’s concerns
while Huffington was on the board of the company.
Hornsey reported to the executive team. “We are
disappointed to see that Uber has selected a team of
insiders to investigate its destructive culture and make
recommendations for change. To us, this decision is yet
another example of Uber’s continued unwillingness
to be open, transparent, and direct,”17 they wrote. In
response to the letter, the review committee said it
would conduct the investigation impartially.
THe HOLDeR RePORT
On June 13, 2017, Uber released the results of the
highly anticipated internal investigation. Lack of
oversight and poor governance were some of the key
issues running through the findings of the report.
The Holder report specifically identified Kalanick
as part of the problem as the first line of the report
read, “Review and Reallocate the Responsibilities of
Travis Kalanick.” The report in total made 47 recom-
mendations including emphasizing more on diversity
and companywide performance reviews, and install-
ing an independent chair and oversight committee to

handle ethics issues. In the area of corporate gover-
nance, the report advised that the board should have
greater independence and the additional board mem-
bers should be directors with meaningful experience
on other boards and should exercise independent
oversight of Uber’s management.
The same day, Kalanick in an email to employ-
ees announced that that he was taking time off to
mourn his mother, who was killed in a boating acci-
dent. Kalanick said the company would be run by
an executive committee and that he would be avail-
able if needed. Uber’s SVP and business leader Emil
Michael, a close confidante of Kalanick who had
reportedly been pressured to resign following the
investigation, also left the company. In addition, at
least 20 other employees were fired as a result of a
separate investigations related to sexual harassment
and discrimination by law firm Perkins Coie.
Uber’s board unanimously decided to adopt all
the recommendations for improving corporate gov-
ernance including sexual harassment prevention and
improving workplace diversity. However, during the
meeting, Uber board member David Bonderman

made a sexist remark18 and had to resign thereafter.
David Trujillo, a partner at the private equity firm
TPG Capital, replaced Bonderman. Also, Uber
appointed Nestlé executive Wan Ling Martello
(Martello) to the board. She was the second woman
after Huffington to serve as an Uber Director.
INVesTORs ReVOLT
When Uber became embroiled in a series of legal and
ethical scandals, the investors who until then saw
little wrong with Kalanick’s aggressive antics became
suddenly combative. They felt that their investment
in Uber was at risk and started agitating for change
at the top as the #DeleteUber campaign and Fowler’s
complaints gained traction. Exhibit 8 illustrates the
impact of the scandals on Uber’s market share. The
Board of Directors, who were under fire themselves,
decided to replace Kalanick but that was easier said
than done. According to Richard Mahony, an expert
in communication strategy and investor relations,
“[Kalanick’s super-voting shares] has made the task of
removing him much more complicated. It took a former

connections) at last found their voice, he had little choice
but to step down. Quite simply, he needs their money.”20
Kalanick, however, continued to serve on Uber’s
Board of Directors. “I love Uber more than anything in
the world and at this difficult moment in my personal
life I have accepted the investors request to step aside
so that Uber can go back to building rather than be
distracted with another fight,”21 he said in a statement.
A day after his resignation, Gurley, who pushed
Kalanick to leave, resigned from the Uber board. He
was replaced by his colleague, Matt Cohler, also a
partner at Benchmark Capital.
CORPORaTe GOVeRNaNCe
FIasCO
Experts attributed the root of Uber’s problems to
weak corporate governance marked by a rapid chase
after growth, the cult of Kalanick, and the company’s

failure to address workplace issues. They felt that
Uber’s Board of Directors did not care about gover-
nance issues and let Kalanick run the company the
way he did as long as profits were generated and
attorney general and a nearly constant stream of media
leaks to pry Mr. Kalanick out of his seat.”19
Five of Uber’s major investors—Benchmark
Capital, First Round Capital, Lowercase Capital,
Menlo Ventures, and Fidelity Investments—which
together controlled 40 percent of the company’s
votes and owned more than a quarter of Uber’s
stock, demanded Kalanick’s resignation. In the letter
titled “Moving Uber Forward,” the investors wrote
to Kalanick that he must immediately leave. On the
other hand, some Uber board members including
Camp and Huffington extended support to Kalanick
as they believed that his leadership was necessary
for Uber to survive in the aggressive taxi industry.
Huffington even attested to Kalanick’s willingness
to change. The shareholders’ unrest, however, made
it untenable for Kalanick to stay on at the company.
Finally, after hours of negotiations and consultations
with his confidants, Kalanick agreed to step down on

June 21, 2017. According to Fast Company’s Ainsley
Harris, “Kalanick held on to Uber’s reins in the face of
scandal after scandal—sexual harassment, discrimina-
tion, obstruction of regulatory enforcement, privacy vio-
lations. But when shareholders (with checkbooks and
EXHIBIT 8 Impact of senior Leadership scandals on Uber’s U.s.
Market share
90.00%
80.00%
70.00%
60.00%
50.00%
40.00%
30.00%
20.00%

10.00%
0.00%
Before #deleteuber
campaign
(Week up to Jan 29)
20.9% 21.3%
79.1%
83.5%
After #deleteuber
campaign
(Week up to Feb 19)
Following Susan
Fowler Story
(Week up to Feb 24)
Uber Lyft

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