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Former Uber CEO and Co-Founder Travis Kalanick to Resign From its Board, Cutting All Ties to the Company

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【Summary】Travis Kalanick, the man who changed how people get around as the co-founder and CEO of ride-hailing giant Uber, is cutting ties with the company he co-founded in 2009.

Eric Walz    Dec 24, 2019 9:00 AM PT
Former Uber CEO and Co-Founder Travis Kalanick to Resign From its Board, Cutting All Ties to the Company

Travis Kalanick, the man who changed how people get around as the co-founder and CEO of ride-hailing giant Uber, is cutting ties with the company he co-founded in 2009.

Kalanick announced on Tuesday that he is leaving Uber's board by the end of the year.

Uber's rapid rise was a wild ride. The company went from a small San Francisco startup to a behemoth that upended the taxi and limousine industry in the U.S. and around the world with its ride-hailing app.

"Very few entrepreneurs have built something as profound as Travis Kalanick did with Uber. I'm enormously grateful for Travis' vision and tenacity while building Uber, and for his expertise as a board member," Uber's current Chief Executive Dara Khosrowshahi said in a statement.

Kalanick was forced out as CEO in June of 2017, after a whistleblower revealed Uber's toxic company culture, which included bullying and sexual harassment claims from employees, which went unchecked for years.

After his resignation however, he remained on the company's board, and was still one of Uber's biggest shareholders and remained a director at the company.

Kalanick said in a statement that now Uber was a public company, he wanted to focus on his current business and philanthropic pursuits. He is currently working on a food delivery startup called Cloud Kitchens.

The former Uber CEO started unloading his shares this year after Uber's IPO, cashing out equity along with thousands of other employees after going public and Uber's lockup period ended.

Kalanick sold most of his $2.5 billion worth of shares after Uber went public in May, regulatory filings showed. Uber shares have dropped more than 30% since the loss-making company went public. Kalanick still held around 5.83 million Uber shares worth roughly $177 million, regulatory filings showed.

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Travis Kalanick, speaks at an event in China in 2016. (Wang K'aichicn / Getty Images)

Uber Investor Tried to Remove Kalanick in 2017

One of Uber's biggest investors Benchmark, tried to limit Kalanick's control over Uber, filing a lawsuit in August 2017. Benchmark accused Kalanick of fraud and saying he stacked the board with "loyal allies." 

Benchmark was trying to limit his control and influence over the board with the lawsuit and attempted to take away two board seats from his control, as well as get the former CEO removed from the board.

The lawsuit was dropped in conjunction with a massive financing deal Uber closed with another major investor Softbank. Softbank ended up buying about a 15% stake in Uber, mostly from existing shareholders, including Kalanick and Benchmark. 

At the time, Uber was under investigation by the U.S. Department of Justice over trade secret theft in connection to its self-driving unit. 

In 2017, Uber was sued by Waymo, self-driving arm of Google parent Alphabet, after former Waymo engineer Anthony Levandowski was accused of downloaded intellectual property related to lidar, a technology that helps autonomous vehicle to navigate. 

Levandowski joined Uber days after resigning from Waymo and was accused of conspiring with Kalanick to utilize Waymo's trade secrets for Uber's own self-driving car program. The suit eventually settled in February 2018, with Uber agreeing not to use any of Waymo's technology and paying out a 0.34 percent equity stake to Waymo, worth roughly $245 million at the time.

Uber's current CEO Khosrowshahi took over in August 2017 after the ouster of Kalanick, and immediately began a transformation of Uber's company culture and public image in order to ready the ride-hailing giant for its IPO, one of the biggest in recent years.

Uber once reached a valuation as high as $70 billion, but a lackluster IPO in May resulted in the company's stock price to falling around 35% from its IPO price. Since going public, Uber, along with other ride-sharing companies, are struggling to reach profitability with their ride-hailing models. 

Uber's new business ventures include bike-sharing, food delivery and adding public transportation options to its app, as it looks to diversify its offerings. 

However, despite Uber's new efforts, Uber reported a loss of over $5 billion in the second quarter of 2019. In addition, court documents revealed in March that Uber's autonomous driving division was bleeding $20 million per month. 

Kalanick, who became a tech billionaire with Uber, no longer needs to worry about that so much, now that he's sold a majority of his shares and is cutting ties with the company he co-founded.

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