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Here's the money quote: > If Mr Gurley and the rest of the board cannot find an experienced candidate willing to work with Mr Kalanick, calls for him to step d

Here's the money quote: > If Mr Gurley and the rest of the board cannot find an experienced candidate willing to work with Mr Kalanick, calls for him to step down may grow louder. But that is his decision to take. Uber is a prominent example of founders’ power at fast-growing tech firms. On its own, Uber’s board does not have the clout to change the CEO, because of his super-voting shares and those of his co-founder, Garrett Camp: together they control a majority of the voting stock. Well, that's a pretty bad corporate governance problem. The CEO's behavior, and the culture he created at the company, have badly damaged the company's image and driven away senior executives and probably a lot of engineers too -- and yet the board can't get rid of him. I would certainly think twice about investing in a company whose board is powerless to do anything about such a terrible self-inflicted wound.

shostack 10y ago
While I'm not sure I disagree with you, devil's advocate here...do you think you'd feel the same way as a founder who could prevent yourself from ever being fired from your own company? I can think of several situations where retaining that kind of control would be hugely beneficial and important (in the right hands of course, which is the whole issue here).
- twblalock 10y ago
  I suspect that most CEOs would like that level of control, but they shouldn't get it.
  - smallgovt 10y ago
    Care to elaborate on why? The initial condition here is founders having full voting rights. In a free marketplace, they're free to sell shares without (or with little) voting rights as they wish. If investors aren't happy with it (which doesn't seem to be the case), they're free to not invest. You seem to be stating that there's a moral imperative that founders voluntarily give away voting rights to investors.
    - twblalock 10y ago
      I don't know if I would call it a "moral" imperative, but it's a basic tenet of good corporate governance that the board, which represents the shareholders, should be able to prevent the management from harming the company or the shareholder's interests. In the case of Uber, the CEO could run the company into the ground, and nobody would be able to prevent that. A trend toward worse corporate governance could harm the entire economy eventually.
      - smallgovt 10y ago
        Got it, I can buy into the argument that pro-rata voting rights would lead to better performing companies than founder-controlled companies (in the long run and on average). But, I don't see any reason why founders should be obligated to give away voting rights. In other words, I would argue that if founder CEO's want that level of control, they SHOULD get it. It's sort of weird to even phrase it as "get it". They already have it by default, and I don't see why we should have any right to force them to give it away.
      - shostack 10y ago
        Isn't that the "risk" part of private investment like this? In theory if/when Uber goes public, the market can hammer his share price into submission. His choice then would be to step down and keep his money, or watch his valuation rapidly dwindle as low as the market dictates.
      - xbmcuser 10y ago
        The investors came into the company knowing he will keep the control it was a risk they were willing to take. Even if he runs it into the ground they don't have a leg to stand on. They were not strong armed into investing it was a choice they made.
- bdavisx 10y ago
  And that's why Google and Facebook (I think) both took steps for the founders to retain control in that manner. So that they would be able to focus on what's important to the company vs. bs next quarter results. And it's worked out well for both of them. But of course, they don't seem to have the "ethics" issues that Uber does.
  - Pica_soO 10y ago
    If google had a ethics issues, i certainly never found something on that on the web :D
- st3v3r 10y ago
  Problem is, every founder thinks theirs is the right hands.
sschueller 10y ago
Well the Captain should be the last one to leave the sinking ship that he ran into the iceberg. :) At this point I don't know if even a new CEO could save this company.
- evv 10y ago
  > At this point I don't know if even a new CEO could save this company. Honestly I am more concerned about saving the world from this company, because it still looks like they are going to win. Have you seen any signs that Lyft can compete in the worldwide market?
  - ProAm 10y ago
    They are in deeper trouble than that. If they cannot resolve the Waymo lawsuit in an economical fashion they will just wither and die, Lyft or not.
    - sqeaky 10y ago
      They are valued at 70 Billion, how does that just wither and die? One lawsuit can be dragged out a long time and their lawyers will do their best to reduce and fees no matter how wrong Uber actually is (or isn't I don't know). Consider the size of Uber now and compare that to the size of Microsoft 15 years in the DOJ antitrust trial. They are about the same size, that gives them lots of options.
      - ProAm 10y ago
        Valued at means nothing really, it speaks to investment and while its not worth nothing they are currently burning about 3/4 billion per quarter [1], and have no profitable quarters anywhere on the horizon. They have always been betting their future on autonomous cars and the Waymo lawsuit stands a good chance to set them back a decade and they do not have the current capital to withstand that. MS was already public when they had the antitrust lawsuit and was making money. To try and compare MS and Uber is not close to the same thing. [1] https://www.bloomberg.com/news/articles/2016-12-20/uber-s-loss-exceeds-800-million-in-third-quarter-on-1-7-billion-in-net-revenue https://www.bloomberg.com/news/articles/2016-12-20/uber-s-lo...
clamprecht 10y ago
I know Steve Jobs is the exception that proves the rule, but still, Apple fired Steve.
- simonh 10y ago
  "I didn't see it then, but it turned out that getting fired from Apple was the best thing that could have ever happened to me. ..... I'm pretty sure none of this would have happened if I hadn't been fired from Apple. It was awful tasting medicine, but I guess the patient needed it." - Steve Jobs The Steve Jobs Apple fired was not the same man that returned to save the company. The caricature portrayal of him with an aggressive, petty, demanding, obnoxious style were all pretty much true back then. If Kalanick is at an equivalent stage, then Uber may really desperately need to get rid of him. Whether he ever vindicates himself and realises a greater potential remains to be seen, but it may well be that remaining at Uber regardless of his behaviour will just feed the negative side of his nature.
  - nebabyte 10y ago
    Except as twb points out, the Uber board can't oust him. And somehow I feel like a Jobsian journey of self-discovery is outside the reach of someone whose problems aren't coming from a perfectionist streak but rather a disdain for the customers/workers/employees using/building the service. On the other hand, sounds ripe for some other company not struggling with the same culture issues nor saddled with the sizable VC debt to come in for the kill.
- sillysaurus3 10y ago
  Uber's board can't, though.
smacktoward 10y ago
It also raises another good question: how big of a fool would you have to be to take the job Gurley and the board are trying to fill? How do you rein in a CEO who has total, unchallengeable control of the company? (Maybe if they offer enough money, it's worth it even if it's a suicide mission? Though "just cash the checks and wait for your inevitable dismissal" doesn't seem like an attractive offer for anyone who's good enough to have alternatives.)
- twblalock 10y ago
  In situations like this, in which an executive is hired to reform a company and is set against entrenched management and culture, golden parachutes seem entirely justified to me.
  - Arizhel 10y ago
    I'm not so sure. Wouldn't it be better for society overall if these companies were condemned to die by their own hand, instead of being able to be saved by an outsider? If they're saved, then all the people who participated in creating this toxic culture are rewarded. If the company goes belly-up, then any valuable assets can be bought by other firms for pennies on the dollar, and those and other competing, and hopefully better-run firms will have a shot at success, with this toxic company cleared out of the market and leaving a void.
    - smallgovt 10y ago
      I'm not following. Are you proposing that companies should not be allowed to hire someone from the outside to fix severe culture issues? The problem with such a policy is the mechanism through which we'd determine which companies are condemned. From your comment, I gather that if it were up to you, you'd sentence Uber to death instead of giving them a shot at redemption. You wouldn't be alone in this perspective, but I think you're overlooking the thousands of GOOD people that would be adversely affected and punished by such a decision. All to punish a couple people you believe to be evil.

shostack 10y ago

While I'm not sure I disagree with you, devil's advocate here...do you think you'd feel the same way as a founder who could prevent yourself from ever being fired from your own company? I can think of several situations where retaining that kind of control would be hugely beneficial and important (in the right hands of course, which is the whole issue here).

twblalock 10y ago
I suspect that most CEOs would like that level of control, but they shouldn't get it.
- smallgovt 10y ago
  Care to elaborate on why? The initial condition here is founders having full voting rights. In a free marketplace, they're free to sell shares without (or with little) voting rights as they wish. If investors aren't happy with it (which doesn't seem to be the case), they're free to not invest. You seem to be stating that there's a moral imperative that founders voluntarily give away voting rights to investors.
  - twblalock 10y ago
    I don't know if I would call it a "moral" imperative, but it's a basic tenet of good corporate governance that the board, which represents the shareholders, should be able to prevent the management from harming the company or the shareholder's interests. In the case of Uber, the CEO could run the company into the ground, and nobody would be able to prevent that. A trend toward worse corporate governance could harm the entire economy eventually.
    - smallgovt 10y ago
      Got it, I can buy into the argument that pro-rata voting rights would lead to better performing companies than founder-controlled companies (in the long run and on average). But, I don't see any reason why founders should be obligated to give away voting rights. In other words, I would argue that if founder CEO's want that level of control, they SHOULD get it. It's sort of weird to even phrase it as "get it". They already have it by default, and I don't see why we should have any right to force them to give it away.
    - shostack 10y ago
      Isn't that the "risk" part of private investment like this? In theory if/when Uber goes public, the market can hammer his share price into submission. His choice then would be to step down and keep his money, or watch his valuation rapidly dwindle as low as the market dictates.
    - xbmcuser 10y ago
      The investors came into the company knowing he will keep the control it was a risk they were willing to take. Even if he runs it into the ground they don't have a leg to stand on. They were not strong armed into investing it was a choice they made.
bdavisx 10y ago
And that's why Google and Facebook (I think) both took steps for the founders to retain control in that manner. So that they would be able to focus on what's important to the company vs. bs next quarter results. And it's worked out well for both of them. But of course, they don't seem to have the "ethics" issues that Uber does.
- Pica_soO 10y ago
  If google had a ethics issues, i certainly never found something on that on the web :D
st3v3r 10y ago
Problem is, every founder thinks theirs is the right hands.

sschueller 10y ago

Well the Captain should be the last one to leave the sinking ship that he ran into the iceberg. :) At this point I don't know if even a new CEO could save this company.

evv 10y ago
> At this point I don't know if even a new CEO could save this company. Honestly I am more concerned about saving the world from this company, because it still looks like they are going to win. Have you seen any signs that Lyft can compete in the worldwide market?
- ProAm 10y ago
  They are in deeper trouble than that. If they cannot resolve the Waymo lawsuit in an economical fashion they will just wither and die, Lyft or not.
  - sqeaky 10y ago
    They are valued at 70 Billion, how does that just wither and die? One lawsuit can be dragged out a long time and their lawyers will do their best to reduce and fees no matter how wrong Uber actually is (or isn't I don't know). Consider the size of Uber now and compare that to the size of Microsoft 15 years in the DOJ antitrust trial. They are about the same size, that gives them lots of options.
    - ProAm 10y ago
      Valued at means nothing really, it speaks to investment and while its not worth nothing they are currently burning about 3/4 billion per quarter [1], and have no profitable quarters anywhere on the horizon. They have always been betting their future on autonomous cars and the Waymo lawsuit stands a good chance to set them back a decade and they do not have the current capital to withstand that. MS was already public when they had the antitrust lawsuit and was making money. To try and compare MS and Uber is not close to the same thing. [1] https://www.bloomberg.com/news/articles/2016-12-20/uber-s-loss-exceeds-800-million-in-third-quarter-on-1-7-billion-in-net-revenue https://www.bloomberg.com/news/articles/2016-12-20/uber-s-lo...

clamprecht 10y ago

I know Steve Jobs is the exception that proves the rule, but still, Apple fired Steve.

simonh 10y ago
"I didn't see it then, but it turned out that getting fired from Apple was the best thing that could have ever happened to me. ..... I'm pretty sure none of this would have happened if I hadn't been fired from Apple. It was awful tasting medicine, but I guess the patient needed it." - Steve Jobs The Steve Jobs Apple fired was not the same man that returned to save the company. The caricature portrayal of him with an aggressive, petty, demanding, obnoxious style were all pretty much true back then. If Kalanick is at an equivalent stage, then Uber may really desperately need to get rid of him. Whether he ever vindicates himself and realises a greater potential remains to be seen, but it may well be that remaining at Uber regardless of his behaviour will just feed the negative side of his nature.
- nebabyte 10y ago
  Except as twb points out, the Uber board can't oust him. And somehow I feel like a Jobsian journey of self-discovery is outside the reach of someone whose problems aren't coming from a perfectionist streak but rather a disdain for the customers/workers/employees using/building the service. On the other hand, sounds ripe for some other company not struggling with the same culture issues nor saddled with the sizable VC debt to come in for the kill.
sillysaurus3 10y ago
Uber's board can't, though.

smacktoward 10y ago

It also raises another good question: how big of a fool would you have to be to take the job Gurley and the board are trying to fill? How do you rein in a CEO who has total, unchallengeable control of the company? (Maybe if they offer enough money, it's worth it even if it's a suicide mission? Though "just cash the checks and wait for your inevitable dismissal" doesn't seem like an attractive offer for anyone who's good enough to have alternatives.)

twblalock 10y ago
In situations like this, in which an executive is hired to reform a company and is set against entrenched management and culture, golden parachutes seem entirely justified to me.
- Arizhel 10y ago
  I'm not so sure. Wouldn't it be better for society overall if these companies were condemned to die by their own hand, instead of being able to be saved by an outsider? If they're saved, then all the people who participated in creating this toxic culture are rewarded. If the company goes belly-up, then any valuable assets can be bought by other firms for pennies on the dollar, and those and other competing, and hopefully better-run firms will have a shot at success, with this toxic company cleared out of the market and leaving a void.
  - smallgovt 10y ago
    I'm not following. Are you proposing that companies should not be allowed to hire someone from the outside to fix severe culture issues? The problem with such a policy is the mechanism through which we'd determine which companies are condemned. From your comment, I gather that if it were up to you, you'd sentence Uber to death instead of giving them a shot at redemption. You wouldn't be alone in this perspective, but I think you're overlooking the thousands of GOOD people that would be adversely affected and punished by such a decision. All to punish a couple people you believe to be evil.