When last we left Uber, there were major leadership problems, the board pushed out co-founder and CEO Travis Kalanick, and the company wanted to hire a business wizard like GE's Jeff Immelt or Meg Whitman from HP to become chief executive.
Only, no one would get Immelt to make a comment and Whitman declined via Twitter, using three of her four only tweets since 2011 to do so. Guess she means it, eh? And she's an investor in the company and has met with several board members recently to offer advice on how to handle the troubled rideshare company's problems, according to the New York Times. So, what's the problem?
Apparently Mike Isaac at the Times spoke with a dozen sources, all of whom wanted to remain anonymous, with knowledge of what was happening. The issue reportedly is a split on the board, with Kalanick, who remains on the board and controls a majority of shareholder votes, and his allies pushing to the tech's current poster bad boy back in control.
Boards are more often than people realize a source of underlying problems of companies. I remember many years ago being at a firm that a CEO I knew and saw as embattled. I mentioned to him that the particular make-up of the board meant the chief executive had far less control than usual. He said, "Erik, I appreciate thought, but, honestly, you're naïve.
A month later he was out of the job. I went to him and said, "I don't usually do this, but remember when I warned you about the board? I told you so," to which he replied, "You might have been right."
Might. Ah, well, it's hard to admit you were wrong when you're packing your things. But I had seen this board operate for a number of years and was privy to some ugly financial deals it had imposed on the company, siphoning off a lot of cash that could have helped smooth operations.
Boards, particularly of venture-backed firms are populated largely by major investors who want to keep an eye on their properties. When money is on the line and people differ on strategy, you can get factions and even warring camps. Here's how the Times describes the current conditions at Uber.
The Uber board -- which recently added new members amid a history of internal tensions -- is mostly split into two camps. On one side is Mr. Kalanick, who is plotting a comeback. On the other are many of the company's other directors, including the venture capitalist Matt Cohler and the private equity investor David Trujillo, who represent Uber investors like Benchmark and TPG Capital. Garrett Camp, an Uber co-founder, and Ryan Graves, an early employee, were part of this group in supporting Ms. Whitman's candidacy last week.
What, Kalanick wants a comeback? Of course he does. His previous actions have shown huge helpings of ego -- not unusual among major executives, but he's brought them to an unusually public level. Keeping control is why Uber, like a number of tech companies, structured its IPO to leave founders with absolute control over shareholder voting. That means, no matter what happens, they can ultimately force any issue they want. Plus, Kalanick has gained even more leverage through a buy-back program for employee-owned shares, according to CNBC. To get their money, workers selling even a portion of their shares have to turn all their voting rights over to Kalanick.
People who look for that kind of control aren't betting on anyone's perception of their performance. They're not interested in earning a leadership position, as if businesses were always meritocracies. They want to tell others what to do.
It was a deal everyone went for at first, because too many investors were hungry for a share of what they thought would be a dominant company in a new market. Except, the market of providing rides to other people is hundreds of years old (if you could horses and carriages) and the economics make it very tough for Uber, which has been losing $2 billion a year, to ultimately become profitable.
One scandal after another, including a major internal investigation into sexual harassment charges, horrible PR like the allegations of raising prices during the London Bridge terrorist attack, and a lawsuit brought by a Google sibling company for alleged trade secret theft, have compounded Uber's problems. The company's best hope was to move Kalanick aside, find a mature and seasoned replacement (a woman would be a wise choice), and focus on how to make the company profitable. But with Kalanick apparently looking to return, it could be that an Uber resurgence will more likely be a second, or even third, time going down. Just look for the desperately waving hand.