Uber President Resigns Unexpectedly, Citing Problems With “Beliefs and Approach to Management”

Uber, once the company that could do no wrong, at least in the eyes of the press, now seems to be careening from one PR disaster to another. And in a telling bit of irony, the latest scandal is the result of the president, Jeff Jones, who was brought in a mere six months ago from Target, quitting suddenly. And what was Jones’ job? To clean up Uber’s image!

Jones’ resignation is now the lead story at Bloomberg; the Financial Times, Wall Street Journal and Reuters have their accounts on their front pages above the fold.

The immediate trigger for the departure appeared to be Uber’s recently-announced search for a #2, in which Jones was not under consideration for the post and was thus effectively being demoted. However, the real dirt came out in industry site Recode.

Uber issued a bog standard polite official goodbye, but Kalenick sent out a more tart message internally:

And, in a note to staff, Uber CEO Travis Kalanick said: “After we announced our intention to hire a COO, Jeff came to the tough decision that he doesn’t see his future at Uber. It is unfortunate that this was announced through the press but I thought it was important to send all of you an email before providing comment publicly.[“]

Indeed, the fact that Jones went out first with the news suggests that there was a lot of tension and/or mistrust before he resigned. Recode next posted Jones’ statement, which, to put it mildly, isn’t the sort of thing you see normally issued by a departing exec who has worked in public companies. And since Jones’ entire job involves dealing with the press, he knew exactly what he was doing. Again from Recode:

Jones also confirmed the departure with a blistering assessment of the company. “It is now clear, however, that the beliefs and approach to leadership that have guided my career are inconsistent with what I saw and experienced at Uber, and I can no longer continue as president of the ride sharing business,” he said in a statement to Recode.

Translation: “I couldn’t find a way to put enough lipstick on this pig.”

At a minimum, this is going to make the COO search more complicated. It will be fair game for candidates to press Kalenick hard on whether he is committed to change. Perhaps a candidate from a Fortune 500 company will think twice about how badly he wants this job. Of course, most problems in corporate America can be solved with money, so the pay pot for the role might be sweetened at the margin. The Financial Times reports that Uber was losing staff before the Jones blow-up:

Recruiters and rival firms have reported an uptick in job applications from Uber employees in recent weeks, with some saying that workers are losing faith in the company’s leadership team.

The Journal reminded readers of executive departures:

Mr. Jones is among a string of key executive departures in recent weeks, including Ed Baker, vice president of product and growth, and Raffi Krikorian, who helped oversee Uber’s self-driving car efforts. Amit Singhal, a top software engineer at Uber, was fired after a month, for failing to disclose allegations of sexual harassment at his previous employer, Alphabet Inc.’s Google, a person familiar with the matter said.

The Journal also described a recent misfire by Jones:

In an ill-fated attempt to respond to driver concerns in February, he held a question-and-answer session on Facebook but addressed only about a dozen of hundreds of questions and signed off after about 30 minutes, despite promising a full hour.

Oddly, Bloomberg used the Jones departure as the reason for reciting the local transportation company’s litany of transgressions, yet downplayed the content of Jones’ statement to Recode:

The scandals range from allegations of sexual harassment and a toxic work culture to the combative behavior of Chief Executive Officer Travis Kalanick. After Bloomberg published a video on Feb. 28 showing Kalanick berating an Uber driver, he said he would seek “leadership help” and was planning to hire a chief operating officer. The plan was viewed internally as an effective demotion for Jones, who was hired last year as president of ride-sharing and second in command, a person familiar with the matter said…

Jones decided to leave because the long string of controversies are not what he signed on for when he left his post as chief marketing officer at Target Corp., according to Recode, which reported his departure earlier Sunday. Jones’s purview at the closely held company included Uber’s brand, which took a beating during his short tenure, largely for reasons beyond his control.

Note Bloomberg’s list does not include Greyball, an app which gave certain customers different views than regular rides, with the intent of stymieing police, and a suit by Alphabet alleging that Uber stole designs from Alphabet’s self-driving car business.

Nevertheless, Jones wasn’t merely talking about controversies. The very reason for Jones’ hiring was that Uber was getting more (deserved) bad press. Jones’ choice to single out “beliefs and approach to leadership” says the rot at Uber is coming from the head.

An additional issue is if any of the current Uber contretemps escalate into lawsuits, a plaintiff could call on Jones in an effort to bolster an argument that any alleged bad conduct is the result of institutionalized behavior, and not accidents or isolated incidents. While Jones no doubt signed a very tough non-disclosure agreement, they can be set aside in judicial proceedings.

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29 comments

  1. Massinissa

    GOOD. Maybe everyone else will resign next and Uber won’t exist anymore. We can dream I suppose.

  2. Ash

    The immediate trigger for the departure appeared to be Uber’s recently-announced search for a #2, in which Jones was not under consideration for the post and was thus effectively being demoted.

    The #2 position was designated a female position, men need not apply.

    Presumably this was due to the sexual harassment at Uber, which is one of many many ethical lapses. Only a woman can credibly change the atmosphere that leads to sexual harassment.

    http://www.nbcnews.com/tech/tech-news/uber-board-has-full-confidence-ceo-kalanick-huffington-says-n735201

    Uber board member Arianna Huffington says the ride sharing company’s board of directors “absolutely” has full confidence in CEO Travis Kalanick to lead Uber despite several controversies in recent months.

    Huffington also said the search for the newly-created Chief Operating Officer role is continuing.

    On March 7, 40-year-old Kalanick said in a statement that Uber is “actively looking for a Chief Operating Officer: a peer who can partner with me to write the next chapter in our journey,” following allegations of sexual harassment and sexism inside the company by former employees.

    “We have an amazing amount of incredibly successful, brilliant women who have applied for the COO job,” Huffington said. “We cannot share the names but it is really an indication of how excited people are to help lead Uber into the future.”

    Jones had all the right qualifications for the job plus a history of fighting for LGBT rights at Target, but he lacked what was needed between the legs.

    1. different clue

      The whole company is one big ethical lapse by its every nature. The answer to Uber is extermination.

      1. Tim

        My fortune 500 company is actively tracking metrics for numbers of women in leadership roles. There are more than a few open leadership and middle management positions that the whisper is “men need not apply”, even where men are sitting in those roles in an acting capacity, with no hope of assuming the position permanently.

        1. HotFlash

          Interesting, reminds me of the olden days when a black woman was a shoo-in for a (mumble mumble) union job — ticked two boxes! Would like to hear more abt your co’s results, if you can say.

          Meanwhile, I do believe A Slim was talking about the perception that ‘Only a woman can credibly change the atmosphere that leads to sexual harassment.’ In that case, I can only echo, “Yeesh.”

        2. reslez

          That’s markedly different from the tech company I work at, which has literally zero women at the senior management level. We were recently acquired by a second tech company with the same cast of white and Asian males (mostly in their 20s). I called in to the big company meeting where the acquisition was announced and an entire two hours went by before I heard a single woman’s voice. Naturally it was the CEO’s assistant. It’s a bit grating considering how I’ve watched plenty of younger men with less experience get promoted over their senior female peers — no surprise how many leave the industry. Of course tech is pretty ageist, and that goes double for women. No wonder there are fewer female programmers now than there were in the 80s.

  3. Max

    I wonder how much in stock options he walked away from? It’s either $millions or zero. My guess is the latter.

    1. Yves Smith Post author

      He would almost certainly have had a serious employment lawyer negotiate his deal, so if he didn’t get some stock goodies as a signing bonus (you usually have to pay them to entice execs out of jobs), he would have gotten cash.

      At a $69 billion valuation and no prospect of profit, why are you of the view that recently-issued options are valuable, unless Jones got a markedly below current valuation exercise price? The round with a $62 billion valuation went to Saudis, who are known to be dumb money, and the last round, for the $69 billion valuation, went to the ultimate suckers, high end retail. Even then, two banks refused to participate in the marketing because the investor docs didn’t include a lot of basic financial information.

      We’ve also had readers tell us that insiders who have insisted on and gotten liquidity have been cashed out at much lower valuations than in recent funding rounds. While you could expect that up to a point, the sources indicate that the discounts are awfully large for a supposed high-flier. And the fact that anyone with stock wants out is revealing.

      1. PlutoniumKun

        Thats serious money, even for Saudi’s. If Uber were to suddenly crash, I wonder would that have systemic implications for the wider global economy?

        1. paul

          The actual money raised is about 11bn, the other 50 billion is pure optimism. I’m sure SA has dropped that much (in ordinance) on Yemen recently.

          1. PlutoniumKun

            Thats a fair point – I tend to mentally visualise big money sums these days in terms of F-35 units, so I was thinking of the loss equating to at least three squadrons of F-35’s, more than most countries can afford. But if most of the capital is notional gain, then I guess it can be hidden away on balance sheets and everyone will conveniently forget it ever happened.

            1. cnchal

              So I can get an understanding of the value of an F-35 currency unit, how many Nimitz units are in an F-35? One Nimitz = $4.6 billion at their original cost.

              1. PlutoniumKun

                With the naval version of the F-35, about 30 of them. At least if you believe the official figures, I’m not sure anyone does (incidentally, it looks like the successor to the Nimitz class will cost about 3 times as much per ship).

  4. different clue

    I am again reminded of the story written by that computer expert woman who left a perfectly good job somewhere else to come to Uber and help it grow and help it grow her. I was supposed to feel sorry for her about how its abusive and exploitive inner self and true nature destroyed her humanity and self worth and so forth. And at a narrow and sentimental level I did feel sorry for her suffering, and still do.

    But in the wider scope, she went out there to help an evil company do evil. She chose to be part of a rolling crime-wave in company clothing which lived to destroy the lives and livelihoods of a million or more professional drivers all over the earth.

    She can redeem herself and get her self-worth back. She can use her knowledge and skills to help exterminate Uber from existence and help to wipe Uber from off the face of the earth. Aside from earning moral redemption, think of the justly earned true sense of real empowerment she could regain by being able to take part of the true credit for exterminating a “multi-billion-valued” company and destroying every last evil dollar which evil people invested in that evil company. “I helped kill Uber.”
    Talk about POWER! Being able to say that would be a true token of POWER.

    1. Ash

      Over at Hacker News, I said something very similar (but not as nice) regarding her enabling Uber’s ethical nonsense, and applied it to all Uber engineers, and well, got banned for it. (Downvoted mightily for the suggest at reddit.)

  5. oho

    my cynical side wonders if he sees the trajectory re. revenue/profits/valuation and decided that his options have no chance of being in the money.

    and lmfao re. his language re. “beliefs” etc. The dude still needs a new job and it looks much better for him to resign on principle (which probably is partly true)….than look like a greedy technocrat who’s worried about his options.

    on a sinking ship, you wanna be the first off.

  6. Jim A.

    When your “business model” is based on doing an end run around the barriers to market entry, market dominance just isn’t worth as much in the long term. So a huge loss leader program to achieve market dominance doesn’t make a huge amount of sense.

  7. DJG

    Yves: What is Greyball? You make a passing reference at the end of the post. Is it an app that lets the driver speed? Or is it an app that doesn’t ask questions about what the rider has in those little bags?

    1. Kukulkan

      From Wikipedia:

      Greyball is a computer program used by the computerized ride-hailing service Uber to identify government authorities and reroute Uber drivers away from them. It was part of a strategy to keep “undesirables” out of its cars, and it was used in numerous cities and nations around the world. It is unclear whether Uber’s strategy was legal or illegal. In some jurisdictions, Uber’s service was restricted or banned, and government agents could ticket Uber drivers, or impound their vehicles, and Uber often ended up paying for these costs, so Greyball was used to evade and circumvent law enforcement efforts against them.

  8. JustAnObserver

    Interesting story I read somewhere (Guardian IIRC so add the appropriate amount of salt) that engineers are finding having Uber on their resume is becoming a distinct negative. To the extent that recruitment agencies are warning them about it or even not taking therm on.

    1. NotTimothyGeithner

      The harassment stuff sounds bad. Tech isn’t supposed to be friendly for women, so any group at the top is going to come under extra scrutiny. Given the employment situation, why not just hire people who aren’t connected to problems? We don’t have a STEM shortage anymore if there ever was one and it wasn’t just an excuse to prevent unionization.

  9. Elizabeth

    Uber is such a vile company – run by a vile human being, I hope they’re out of business soon. I do have sympathy for the drivers, as many of them are desperate to survive economically. It always amazed me it’s valued as a $69 billion company, but they consistently lose millions of $$. When Uber took the Saudi money, it reminds me of a line in the movie “Network.” The corporate head (forget his name) says, “yeah, we need that Saudi money baaad.” A pox on all the “sharing” ripoff scams.

    1. paul

      Doesn’t matter who’s in the saddle,as horan’s series illustrates, uber can’t work except as some giant monopoly which it does not have the leadership,time,capital or technology to become.

      That celebration of the plutocracy, the forbes rich list has uber’s founders as worth 6.2billion USD each, which I think exceeds all funding raised.

      As they would have had to take out around 20% of all funding and stick it in their back pocket just to make them monobillionaires, you have to wonder about forbes methodology.

      The intro to the list is grimly amusing:

      t was a rough year for the world’s wealthiest, who faced uncertain markets and the continued decline in oil prices, plus the ongoing Syrian Civil War that has disrupted European economies and created some 18 million Syrian refugees and people in need. In total 221 former billionaires fell off the list (though 198 newcomers joined) and the average billionaire’s net worth dropped $280 million, from $3.86 billion to $3.58 billion, last year. Americans were hit harder than average: The typical U.S. billionaire lost nearly $350 million, or about 7% of his wealth, falling from an average net worth of $4.79 billion to $4.44 billion within one year.

      Sometimes we forget the real victims.
      Thank the lord that forbes is still there to offer its shoulder to them.

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