Entrepreneurs in the information technology era usually have strong personalities, which can both help and hurt their careers.
Uber co-founder and chief executive Travis Kalanick resigned on Tuesday. The decision came at a difficult time, since his mother was killed in a boat accident last month and his father was badly injured.
Although the family issue may have played a part in his decision, pressure from major investors seem to be the key reason behind his departure.
Kalanick, 40, founded Uber in 2009. The ride-hailing company has revolutionized the taxi industry and posed great challenges for transport regulations.
Uber has raised more than US$15 billion from investors and become a transportation colossus valued at US$69 billion, the largest private firm backed by venture capitalists worldwide. Kalanick owns around 10 percent stake, which makes him the 190th richest man with a personal wealth of US$6.3 billion.
In fact, Uber has been considered as the most anticipated IPO deal since 2014. However, the deal has yet to materialize due to Kalanick’s never-ending expansion push.
As a result of aggressively growing its presence worldwide and burning cash, Uber posted a huge loss of US$2.8 billion last year despite recording total revenue of US$6.5 billion. Investors have seemingly started to run out of patience.
Uber now operates in nearly 100 nations and provides services in more than 600 cities. In most cases, it has launched services without explicit regulatory support. Its usual strategy is first accumulate a big number of users and win public support, then use that as a bargaining chip to negotiate with local regulators.
This tactic has worked well in the US, UK and Singapore markets, but Uber is also engulfed in a series of legal suits in other regions.
Uber’s listing plan has been delayed year after year, although its valuation continues to spike.
Frankly speaking, Kalanick’s management style is critical for Uber’s success while fending off rivals like Lyft, Ola, and Didi Kuaidi.
But venture investors might feel it’s the right time for Uber to slow down its pace and gradually improve cash flow and mitigate legal issues. That’s clearly against the ambitions of Kalanick.
Five of Uber’s major investors, who have a combined 40 percent voting rights, demanded that the chief executive resign immediately. In the letter, titled “Moving Uber Forward”, the investors wrote to Kalanick that he must immediately leave and that the company needs a new chief financial officer to improve corporate governance.
“l have accepted the investors request to step aside so that Uber can go back to building rather than be distracted with another fight,” Kalanick said in a statement.
Entrepreneurs must have a strong passion and obsession in order to succeed in the new era. Dynamic leaders like Tesla’s Elon Musk, Amazon’s Jeff Bezos and Alibaba’s Jack Ma all have very strong personalities. Let’s just wait and see if Kalanick will stage a comeback.
This article appeared in the Hong Kong Economic Journal on June 22
Translation by Julie Zhu
[Chinese version 中文版]
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