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Uber CEO says he will take a leave of absence, as probe into toxic workplace concludes

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“I need to take some time off of the day-to-day

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Uber CEO Travis Kalanick will take a leave of absence from the ride-hail company to grieve for his mother who just died in a boating accident, according to a company-wide email that just went out. Kalanick’s decision comes as the investigation in a pervasive culture of sexism and harassment at Uber has reached its conclusion.

“For the last eight years my life has always been about Uber,” Kalanick wrote. “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.”

Kalanick wouldn’t say how long he intended to step away from Uber — “it may be shorter or longer than we might expect,” he wrote — but that the move was necessary for the company to effectively improve its battered image. “For Uber 2.0 to succeed there is nothing more important than dedicating my time to building out the leadership team,” Kalanick said. “But if we are going to work on Uber 2.0, I also need to work on Travis 2.0 to become the leader that this company needs and that you deserve.”

Kalanick had been weighing a leave of absence in the week since Uber’s board received the report from the law firm Covington & Burling into its toxic workplace. The investigation was prompted by Susan Fowler, an ex-Uber engineer, whose disturbing account of pervasive sexism, harassment, and managerial incompetency at the ride-hail company came to light last February. After Fowler’s story went viral, Kalanick said the company would “conduct an urgent investigation” into the allegations, and promised to fire anyone who “behaves this way or thinks this is OK.”

Since then, it’s been scandal after scandal at Uber, from high-level executives running for the exit to revelations about legally questionable practices. Every time Uber’s employees thought they were climbing out of the hole they were in, a new controversy would surface and the hole would get deeper. Just last week, it was revealed that two of the company’s top executives, Kalanick and senior vice president of business Emil Michael, had obtained the medical records of a woman in India who was raped by an Uber driver. After the news broke, Michael was fired from the company, while Kalanick weighing stepping away from the company he helped found eight years ago.

The probe was led by former US Attorney General Eric Holder and his colleague Tammy Albarrán. During the course of the investigation, Holder and Albarrán reported on a weekly basis to a subcommittee of Uber’s board of directors, consisting of Arianna Huffington, Bill Gurley, and David Bonderman.

At the time, the news drew criticism because of Holder’s ties to the company. Uber retained Covington & Burling for advice on safety issues. Holder even advocated for Uber last summer by sending letters to officials to drop policies mandating fingerprint-based background checks for drivers. Holder’s former chief of staff and Covington employee, Margaret Richardson, also sits on Uber’s safety advisory board. Early Uber investors Mitch and Freada Kapor Klein called the move “disappointing.”

Uber also retained the law firm Perkins Coie to specifically look into Fowler’s allegations. As a result of that firm’s investigation, 20 employees were fired and 215 claims of harassment, bullying, retaliation and other inappropriate behavior were investigated. Of those claims, 100 were dismissed with no action taken, while 31 employees were referred to training or counseling sessions, and seven were handed written warnings. Fifty-seven cases are still being investigated.

In its review, Covington says it conducted “200 interviews with current and former employees who shared a broad range of perspectives,” including employees with direct knowledge of Fowler’s allegations.

So what does Holder and Albarrán recommend Uber do to fix what’s broken? The report lands on 10 major recommendations, including “changes to senior leadership,” “enhance board oversight,” and “reforumulate Uber’s 14 cultural values.”

You’ll recall that Uber’s cultural values, created by Kalanick and chief product officer Jeff Holden, include such memorable turns-of-phrase as “Let Builders Build,” “Always Be Hustlin’,” “Meritocracy and Toe-Stepping,” and “Principled Confrontation.” The firm recommends that any value that has been used to “justify poor behavior” should be eliminated. At Uber’s all-hands meeting today, Huffington went further on the values, asserting that some of them have been “weaponized,” according to New York Times scribe Mike Isaac.

The firm also recommends that Uber create a “diversity advisory board” to ensure the company’s efforts to promote diversity through its hiring process is properly implemented. Uber should regularly publish its diversity numbers too, Covington suggests. The company published its diversity numbers for the first time back in March, showing that Uber was overwhelming white and male.

Covington recommends Uber update its discrimination and harassment policies to make them easier to understand, and to ensure that no reported instance of inappropriate behavior goes unreported. The company should also develop specific guidance on appropriate workplace relationships, including the types of relationships that are explicitly banned such as “individuals in a reporting relationship.” (Recode recently got a hold of a letter from Kalanick outlining Uber’s rules for sexual relationships, which came off as very trashy and tone-deaf.)

With Kalanick stepping aside, and many of the company’s top executives fired or resigned, the question remains: what comes next for Uber? Many of the company’s critics will no doubt be disappointed that Kalanick’s departure won’t be permanent. The argument is that with Kalanick’s leave only temporary, any attempt to start with a clean slate would be meaningless. But Uber’s defenders still see this as an opportunity for the company to hit the reset button.

Bradley Tusk, an outside advisor to the company, told The Verge that he came away with three main takeaways. The first was that Uber should report on a quarterly basis on the status of the implementation of each of the report’s recommendations. This would demonstrate that Uber cares about accountability and transparency. “They won’t want to do it because it’ll be a pain,” but the company should still consider making these quarterly reports, he said.

Second, Tusk said that when Kalanick returns to the company, his focus should be “innovation, growth, and scale,” and he should leave the drudgery of running a massive bureaucracy to his lieutenants. “He’s not a guy who gets excited about reading the minutes from the last board meeting or performance evaluations,” Tusk said, adding that since Kalanick wants to change the future, Uber needs to let him be “the future-changer.”

And lastly, Tusk noted that any tech startup that wants to avoid the many scandals that have befallen Uber over the last few months would be advised to read the Holder report and take it to heart. “You can upend the status quo while still being respectful and accountable to your employees,” he said. “It would behoove startups to think about how this applies to them.”