Uber co-founder Travis Kalanick has resigned as CEO of the cab-hailing company after allegations of a macho management culture that turned a blind eye to claims of sexual harassment.
Mr Kalanick had already taken a leave of absence in a bid to calm concerns over his management style when he announced his sudden resignation
The move followed demands for a change of leadership by five high-profile investors, led by venture capital firm Benchmark.
In a letter obtained by The New York Times, the investors wrote to Mr Kalanick demanding that he leave immediately. After discussions with some of the investors, he agreed to step down as CEO but remains on the board.
The $70bn privately-owned company, which launched its revolutionary app-driven ride service in 2010, has nearly 6,000 employees and operates in more than 450 cities across the globe, with roughly 40 million monthly riders.
Investors include Google, Chinese search engine Baidu, Toyota and the Public Investment Fund of Saudi Arabia.
Brash leadership style
But Kalanick’s brash leadership style has tarnished the company’s brand, with video footage emerging earlier this year of him berating an Uber driver.
This was soon followed by claims that an incident of sexual harassment by a manager at the company had been ignored by the HR department.
Former Uber engineer Susan Fowler posted a blog in which she said she had been sent a message by her manager on the company’s chat system propositioning her for sex.
When she reported him to HR, she claimed she had been told he would only get a “talking-to” because he was a “high performer”.
Ms Fowler was told she had the option of staying on the team – and probably getting a poor performance review from the manager concerned – or moving teams.
The allegations prompted Uber to hire former US attorney general Eric Holder to carry out an independent investigation into the company’s management culture, with his top recommendation being to reassess Kalanick’s role.
Uber has also sacked 20 staff, including some managers, following an internal investigation.
Uber’s board said in a statement that Mr Kalanick was taking time to heal from his mother’s recent death in a boating accident, and that his resignation as CEO would give the company “room to fully embrace this new chapter in Uber’s history”.
In a statement given to the New York Times, Mr Kalanick said: “I love Uber more than anything in the world and at this difficult moment in my personal life I have accepted the investors’ request to step aside so that Uber can go back to building rather than be distracted with another fight.”
Some tech industry figures have spoken out in support of Kalanick, however. Alexia Tsotsis, former co-editor of technology website TechCrunch, tweeted that Kalanick’s departure was “very frustrating for people who know him. He’s not the monster the media turned him into”.
Travis leaving Uber is a big loss, and very frustrating for people who know him. He’s not the monster the media turned him into.— Alexia Tsotsis (@alexia) June 21, 2017
Uber has faced legal battles around the world over the status of its drivers, with many countries claiming they are employees, not self-employed workers. In the UK an employment tribunal ruled last year that drivers were employed, and had the right to the minimum wage and sick pay. An appeal by Uber will be held on September 27.
Meanwhile Uber is facing stiff competition in its US heartland from new ride providers such as Lyft, available in more than 200 US cities, and Curb.