Every CEO answers to multiple constituencies, and no CEO can survive for long in his or her job without committed support from at least one of them.
The nature of Uber's business model has always made that abundantly clear. As the proprietor of a so-called two-sided marketplace, Travis Kalanick, who resigned Tuesday night as chief executive of the $70 billion ride-hailing startup, spent years carefully balancing the interests of drivers against those of passengers. Despite his best efforts to convince both parties that it wasn't a zero-sum game--that Uber could keep cutting pay rates and prices and drivers would still earn more through improved efficiency--it was always obvious there was an unresolvable tension here, as the company occasionally acknowledged with its actions by tilting the scales one way or the other.
Those weren't the only constituencies Kalanick had to juggle. He also had to answer to his more than 6,700 employees, to governments and regulatory bodies in markets all over to the world, and to the investors who have provided his company more than $8 billion in capital.
If there was one of these constituencies Kalanick should have been able to rely on, it was the riders. Uber began with a consumer-friendly vision: an app that allowed anyone anywhere to feel like a high-rolling VIP by summoning a luxury car with the touch of a button. In drawing up Uber's list of corporate values, Kalanick looked to Amazon and its list of 14 leadership principles. No. 1 on that list: "Customer obsession."
Amazon makes for a good role model. At one time or another, it has faced many of the same accusations as Uber: that it harbors a harsh corporate culture; that it's an excessively sharp-elbowed competitor; that it disregards laws it doesn't care for. For all the fear and loathing directed its way, Amazon has won almost every fight it has ever picked on the strength of Jeff Bezos's indisputable desire to providing the fastest delivery, lowest prices, widest selection and best customer service on earth.
Kalanick was so enamored of the Amazon way, Uber has an entire Customer Obsession team to handle complaints. But so often over the years, Uber has shown a reluctance to listen to its customers and a disregard for their interests. Uber users have complained for years about "surge pricing," which causes fares to skyrocket at times of peak demand, like rush hour and during heavy storms. Kalanick's demeanor in his responses was consistently that of a man trying to win an argument, lecturing customers about why something they hated was good for them when all they wanted to hear was that it would change.
Uber's approach to passenger safety under Kalanick was even worse. As reports of assaults by drivers against female riders became a staple of news reports, Uber's go-to move was pointing out that taxi drivers have also attacked people. The company dragged its feet on background checks while trying, unsuccessfully, to stick riders with a "Safe Rides" surcharge. Nothing did more damage to Kalanick's reputation than Uber's response to a reported rape in India; an underling of Kalanick's obtained the victim's medical records in hope of proving she was faking her claim to hurt Uber and help a competing service.
Yet Kalanick, who is almost inevitably described as "combative" in profiles, was even more antagonistic toward his other constituencies. A leaked video of him arguing with a driver pretty much sums up how he approached relations with Uber's vast force of independent contractors. An incendiary blog post by a former female engineer, and the results of the independent investigation it sparked, show a workplace where whole classes of employees felt the leadership was deaf to their concerns. Kalanick fairly boasted of his willingness to ignore regulations restraining Uber's growth.
That leaves investors. Kalanick had good reason to think he could count on the support of Uber's shareholders: He owns the biggest individual stake and controls a majority of the super-voting shares, making his grip on the board of directors difficult to loosen. But board votes aren't everything. Uber is still burning hundreds of millions of dollars every quarter and relies on fresh infusions of capital to continue its growth plans.
The coalition of investment firms that asked for Kalanick's resignation--Benchmark Capital, First Round Capital, Menlo Ventures, Lowercase Capital and Fidelity--didn't have the votes to force Kalanick's hand. What they did have was the knowledge that no one--not Uber's employees, its drivers, or even the customers he was supposedly obsessed with--would speak up in Kalanick's defense. Whatever he called his customer complaints department, Kalanick's real obsession was winning, and winning isn't a constituency that can help you when you're not.