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Uber needs a lift as CEO Kalanick gets canned

Unrest behind the scenes finally comes to a head as big investors seek a big change. Kalanick says his resignation means "Uber can go back to building."

Now playing: Watch this: Travis Kalanick resigns as CEO, stays on as board member
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A week after saying he was taking a leave of absence, Travis Kalanick was forced to step down as chief executive officer of ride-hailing service Uber.

The move came at the behest of five major Uber investors, according to The New York Times, who requested Kalanick's immediate resignation in a letter titled "Moving Uber Forward." He will, however, stay on the board of directors.

"I love Uber more than anything in the world," Kalanick, 40, said in a statement to the newspaper, "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."

Uber has been in turmoil since February when a former engineer Susan Fowler wrote a blog post about her "very, very strange year at Uber." Fowler detailed a chaotic company culture rife with gender bias, sexual harassment and unprofessional business practices. Her post prompted an internal investigation.

Kalanick's resignation makes the company's future even less certain. Founded by Kalanick and Garrett Camp, a businessman who now serves as Uber's chairman, it's upended the taxi industry and now operates in over 60 countries. With its no-apologies attitude and the notoriously aggressive Kalanick, Uber became the most prominent ride-hailing service on the planet. While this approach helped the company grow, it's unclear if that style can be sustainable in the long run -- especially if it seeks to go public. 

Founded in 2009, Uber is one of the world's most valuable privately-held companies. It's raised over $14 billion in funding from investors and has a valuation of almost $70 billion.

The five investors who called for Kalanick's ouster -- Benchmark, First Round Capital, Lowercase Capital, Menlo Ventures and Fidelity Investments -- together own more than a quarter of Uber's stock and control about 40 percent of Uber's voting power, according to the New York Times.   

After Fowler published her blog post, Uber hired former US Attorney General Eric Holder to lead an inquiry into allegations of sexual harassment at the San Francisco startup. He finished his investigation and presented it to Uber's board of directors to review, along with a set of recommendations. The board earlier this month unanimously voted to adopt all of Holder's recommendations, which were made public on June 13.

Among the report's 10 main recommendations was a call for "changes to senior leadership." This, in part, led to Kalanick last week announcing that he was taking a leave of absence from the company he helped start in 2009.

"The ultimate responsibility, for where we've gotten and how we've gotten here rests on my shoulders," Kalanick wrote in a memo to Uber employees last week. "For Uber 2.0 to succeed there is nothing more important than dedicating my time to building out the leadership team. 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."  

Since February, Uber has suffered personnel losses, including finance head Gautam Gupta, President Jeff Jones and senior vice president of engineering Amit Singhal. Earlier this month, over 20 employees were fired after Holder's sexual harassment investigation. At the same time, it's been defending itself against a lawsuit from Waymo, the self-driving car business run by Alphabet -- Google's parent company.

Last month, Kalanick's mother died in a boating accident, and his father was injured.

Uber didn't respond to a request for comment. 

Update, June 21 at 2:05 p.m. PT: Adds details about investors and Waymo lawsuit.  

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