| SAN FRANCISCO, April 13
SAN FRANCISCO, April 13 Help Wanted: A chief
operating officer to help change a Silicon Valley giant's
now-notorious "bro" culture, but who can thrive in a power
dynamic that hands the boss overwhelming control.
At Uber Technologies Inc., co-founder and CEO
Travis Kalanick commands everything from board decision-making
to the exact hour the beer taps will open at the company's San
That management approach is rooted in more than just a cult
Uber's governance and share structure, and the
"founder-friendly" terms of the $13 billion in equity the
company has raised, give Kalanick, his co-founder and a fellow
employee ultimate control over the company, according to company
documents and an Uber investor with knowledge of the matter.
As the company searches for a chief operating officer who
can in theory take on some of Kalanick's sweeping authority,
that looks to be a problem.
"A COO would report into Travis, so structurally, there's
the rub," said Dave Carvajal, an executive recruiter for
venture-backed tech companies. "This COO is going to need to
have influence at the board level to effect change."
Kalanick's near-total control at Uber is made possible
largely by a dual-class share structure that gives certain
owners 10 votes per share, according the company's certificate
of incorporation filed with the State of Delaware.
Kalanick, along with Garrett Camp, Uber's co-founder who is
now working on another startup, and Ryan Graves, Uber CEO prior
to Kalanick, together hold enough of those super-voting shares
to give them control of the company, according to an Uber
investor with knowledge of the matter.
The documents say Uber's executive board may have eleven
voting members, including nine seats controlled by shareholders
with super-voting rights.
But Kalanick has kept the power circle small, leaving four
board seats empty. In addition to Kalanick, Camp and Graves, the
board includes venture capitalist Bill Gurley of Benchmark,
David Bonderman of TPG Capital, Yasir Al Rumayyan of the Saudi
Arabian public investment fund and media impresario Arianna
Leaving control with founders has become popular in Silicon
Valley in recent years, both because of the success of
founder-led enterprises like Facebook Inc and Alphabet
Inc's Google and because investors compete with each
other to fund entrepreneurs by offering them the best terms.
Those circumstances helped Uber obtain a $68 billion
valuation, the biggest of any private venture-backed company.
But with Uber rocked by scandals, including detailed
accusations of sexual harassment from a former female employee
and a video showing Kalanick harshly berating an Uber driver,
Kalanick just weeks ago promised to "grow up" and hire a COO who
would offer "leadership help."
The COO search is ongoing, but Uber's human resources chief
told reporters last month that Kalanick, 40, is already showing
a more collaborative style.
The share structure leaves investors with few options if
they lose patience with Kalanick, though there is little sign of
that happening. With two public exceptions, investors have
either supported Kalanick or stayed silent as the company's
all-important rider numbers continue to grow even in the face of
Mitchell Green, a partner at Lead Edge Capital that invested
in Uber at a $40 billion valuation, believes the controversies
will blow over and he even wants to buy more stock.
"We believe that Travis continues to drive shareholder
equity value higher," said Green.
CONTROL A COO DETERRENT?
The most effective COOs have broad authority and direct
access to the board, governance experts say. At Facebook, for
example, COO Sheryl Sandberg works in partnership with founder
and CEO Mark Zuckerberg and holds a board seat.
At Uber, it's not so easy to envision what a power-sharing
arrangement would look like, or how the brash founder could be
an agent of managerial change under such a governance structure,
the experts said.
"People don't like to correct their own homework," said Bill
Aulet, managing director of the entrepreneurship center at the
Massachusetts Institute of Technology. "This is a situation
where the checks and balances are not really in place."
An Uber spokesman declined to comment for this story.
A string of high-level executive departures – including
company president Jeff Jones last month and top communications
chief Rachel Whetstone this week – has centralized even more
authority with Kalanick and raised questions about the staying
power of his deputies.
Kalanick is known to obsess over details like office decor
alongside big issues like pricing strategy and driver relations.
Kalanick at one point ordered the beer taps in the office
locked during certain hours, controlling when employees could
pour themselves a pint, after expressing displeasure with one
imbibing staff member, said one former employee.
The CEO closely managed Uber's logo redesign last year,
despite himself not being a designer, according to a source
close to the company. Design chief Andrew Crow announced he was
quitting the day after the new logo was unveiled.
Soon after, Kalanick rejected the new logo designers brought
him for Uber Eats, the company's food-delivery business, upset
that the team hadn't shown him every iteration of the design,
according to a second former employee.
The CEO also at times edited press statements following a PR
incident, the former employee said. He was especially anxious
that the company didn't come across as too apologetic.
This sort of iron grip may deter qualified COO candidates
who "don't want to do their job with one arm tied behind their
back," said Robert Siegel, a lecturer at Stanford University and
venture capitalist at XSeed Capital.
(Editing by Jonathan Weber and Edward Tobin)