Uber reveals its path to reform, to implement Holder recommendations

SAN FRANCISCO – Travis Kalanick, Uber’s co-founder and chief executive, will take an indefinite leave from the company following a months-long investigation into allegations of pervasive harassment inside the ride-hailing firm.

In an email sent to staff Tuesday morning, Kalanick acknowledged his responsibility for the turmoil at Uber and said he was taking leave to grieve for his mother, who died in a boating accident last month.

“Recent events have brought home for me that people are more important than work, and that I need to take some time off of the day-to-day to grieve my mother, whom I buried on Friday, to reflect, to work on myself, and to focus on building out a world-class leadership team,” he said in an email that was sent to Uber’s employees.

His leave of absence coincides with the release of recommendations from former U.S. Attorney General Eric Holder’s investigation into the company’s workplace culture.

Uber hired Holder and his law firm, Covington & Burling, in February to conduct an independent investigation into the company’s culture after a former Uber employee alleged in a blog post that she had experienced sexual harassment at work and that Uber managers tried to cover it up.

Covington & Burling’s report, which was made public Tuesday morning, offers more than 40 specific recommendations the company could take to change its ways. Uber’s board voted unanimously Sunday to implement the changes, which include:

Reviewing and reallocating the responsibilities of Kalanick.

Hiring an experienced chief operating officer with a proven track record in running large, diverse companies.

Prioritizing diversity and elevating the status of its current head of diversity, Bernard Coleman, to show that the company is committed to diversity and inclusion.

Bringing on more independent board members.

Eliminating “Always Be Hustlin’” and “Meritocracy and Toe-Stepping” from its list of 14 cultural values and reformulating them to reflect more inclusive behaviors.

Adopting practices that are standard at many companies, such as mandatory human resources and manager training, increased management support for human resources, a robust complaint process, and tightened rules around alcohol consumption in the workplace and romantic relationships between employees who report to one another.

A separate independent investigation by the law firm Perkins Coie examined 215 employee complaints, including allegations of sexual harassment, bullying, discrimination and retaliation, the company announced last week. That investigation resulted in the termination of 20 employees. Of the remaining complaints, 57 are under review, while 31 employees were ordered to undergo training, and seven have received final warnings.

Uber, a company once lauded for its brash defiance of the rules, has endured its fair share of existential crises in its seven-year history, from being slapped with preliminary injunctions in its early days after ignoring city and state regulators, to facing class-action lawsuits over the alleged misclassification of its drivers as independent contractors.

It has also weathered controversies such as when its head of business Emil Michael told a BuzzFeed editor at a party in 2014 that the company should spend millions of dollars to investigate journalists critical of the firm.

Throughout all of it, Uber maintained an air of invincibility as it continued to raise funding and its valuation skyrocketed to nearly $70 billion. Investors also continued to praise Kalanick and his right-hand man Michael for their no-holds-barred approach to running the business – a quality that they saw as a strength rather than a liability.

The findings of the Holder investigation – as well as its timing, coming on the heels of eight difficult months in which Uber faced crisis after crisis – have led Uber’s board of directors to weigh in to an extent it hadn’t before.

Board members held a daylong meeting in Covington & Burling’s Los Angeles offices on Sunday to unanimously approve Holder’s recommendations. By Monday, Michael announced that he’d left the company, although it’s unclear whether he was fired or resigned.