The IUP Journal of Corporate Governance
Case Study
Chaos at Uber: The New CEO’s Challenge

Article Details
Pub. Date : Oct, 2018
Product Name : The IUP Journal of Corporate Governance
Product Type : Article
Product Code : IJCG31810
Author Name : Syeda Maseeha Qumer and Debapratim Purkayastha
Availability : YES
Subject/Domain : Management
Download Format : PDF Format
No. of Pages : 19

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Abstract

The case talks about the crisis at ride-hailing service Uber Technologies Inc. (Uber). While Uber had tasted great success, its journey had been a bumpy one. On June 21, 2017, co-founder Travis Kalanick (Kalanick) stepped down as CEO of Uber in the face of a shareholder revolt that made it untenable for him to stay on in that position. His resignation came after a review of practices at Uber including allegations of sexual harassment, a corporate theft lawsuit, defiance of government regulations, reports of misbehavior, and a toxic corporate culture leading to the departure of some key executives. Uber followed a “founder-friendly” governance structure wherein Kalanick, because of the special class of shares he owned, enjoyed sweeping authority on the Uber board. The case highlights Uber’s boardroom battle which escalated in August 2017 when a small group of shareholders aligned with Kalanick dissented against Uber’s biggest investor Benchmark Capital, after it filed a lawsuit to oust Kalanick from the board. According to some industry observers, Uber ignored corporate governance in its pursuit of growth and valuation, and flouted ethical norms while hiding behind notions of disruption and innovation. Some key challenges before Dara Khosrowshahi (Khosrowshahi), the newly appointed CEO of Uber, were: fixing Uber’s culture and helping it evolve some of its own core cultural practices to foster growth and improve stakeholder relationships; working with a splintered board and ushering in corporate governance reforms; and regaining the confidence of its investors, employees, and customers.


Description

“I have to tell you I am scared,”i wrote Dara Khosrowshahi (Khosrowshahi), newly appointed CEO of ride-hailing service Uber Technologies Inc (Uber), in a memo to his former team at Expedia, Inc.1 Besides growing Uber’s business, analysts said Khosrowshahi had the task of changing the dysfunctional culture within the company and improving corporate governance which had cost co-founder and former CEO Travis Kalanick (Kalanick) his job. On June 21, 2017, Kalanick stepped down as CEO of Uber in the face of a shareholder revolt that made it untenable for him to stay on in that position. His resignation came after a review of practices at Uber including allegations of sexual harassment, a corporate theft lawsuit, defiance of government regulations, reports of misbehavior, and a toxic corporate culture leading to the departure of some key executives.

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