The resignation of Uber CEO Travis Kalanick offers the embattled ride-hailing giant a chance to reset its often-poisonous relationship with regulators across the country and the world — and make a fresh start with Washington as it considers rules for Uber’s next big thing: self-driving cars.
Kalanick’s decision to step down under pressure from Uber’s shareholders marks a turning point for the company after months of turbulence under the brash CEO. His aggressive tactics upended local transportation markets and won early praise as an example of the so-called emerging economy. But the tenor changed around Uber as complaints piled up over everything from the company’s treatment of its drivers to sexual harassment within the company.
Despite Uber’s efforts to smooth out its political troubles — by temporarily hiring Obama 2008 campaign manager David Plouffe, for example — the toxic culture embodied by Kalanick proved hard to erase. And now that Kalanick, who was so closely associated with Uber’s brand, is gone, the company may look to rethink its lobbying and policy operation — and the way it attacks obstacles in communities where it’s trying to expand.
“We hope it makes a difference," said Jason Stanford, a spokesman for Austin, Texas, Mayor Steve Adler, who has done battle with Uber. "The mayor’s always said that if Uber returns to Austin he hopes they operate in a way that’s aligned with Austin’s values. And if this is a step in the right direction, then great.”
Uber spent millions of dollars on a bruising lobbying campaign against rules in Austin that would have imposed background-check requirements for drivers — and the company followed through on a threat to withdraw from the city last year after it lost. Uber is returning to Austin only now, after the Texas Legislature passed a bill saying the state, not municipalities, is responsible for regulating ride-on-demand companies.
The bitter fight was one of dozens Uber has in places like Portland, Ore., New York City and the state of Nevada.
In Washington, too, Uber has much to gain from keeping on the good side of regulators. DOT has issued voluntary guidelines for driverless cars — a key priority for Uber — with an update promised soon. House members are working up a draft package of bills on autonomous vehicles, and the bipartisan leaders of the Senate Commerce Committee just released a set of principles to inform future legislation — a sign that Congress is starting to engage on this issue. Uber has a deep interest in molding such nascent regulation to its advantage.
Kevin Werbach, an associate professor of legal studies and business ethics at the University of Pennsylvania’s Wharton School, said it’s unrealistic to expect that a company still aiming to make a profit would do a complete flip-flop and become totally deferential to regulators.
But if investors’ move to get rid of Kalanick has something to do with a desire to eventually take Uber public, "the company would want to put its house in order first before going and doing an IPO, which would definitely include a willingness to resolve some of its disputes with localities," said Werbach, who’s also a former FCC official.
It wasn’t so long ago that Republicans and some Democrats clung to Uber as a breakthrough in an otherwise stagnant U.S. economy. Sen. Marco Rubio, as he contemplated a run for the White House in 2016, visited Uber’s D.C. headquarters and, citing the company’s legal battles in places like Miami, said that "one of the things that’s holding back innovation in America is regulations." The Florida Republican titled one of the chapters of his pre-campaign book "Making America Safe for Uber."
One of Rubio’s GOP competitors for the White House, former Florida Gov. Jeb Bush, once made a point of summoning an Uber in front of about a dozen reporters in a demonstration of what The New York Times described as an example of "the unfettered market leading to economic prosperity."
That kind of overt fawning has died down in recent months, as Uber grappled with scores of sexual harassment claims; a trade secrets lawsuit with Waymo, a unit of Google parent company Alphabet; and a DOJ review of its reported use of Greyball software to evade law enforcement. But the company still has friends in D.C. An Uber-backed bill that allows thousands of federal workers to expense ride-hailing services passed Congress and was signed by President Donald Trump in May.
Sen. Gary Peters (D-Mich.), who recently led a hearing on testing and deployment of self-driving cars, said he’s not concerned about Uber’s internal drama.
“It’s been a good relationship. We’ve met with folks from the company,” Peters said in an interview Wednesday. “I’ve spent time in California with some of their thought leaders as well, so they’ve been very helpful throughout the whole process.”
Rep. Mike Doyle (D-Pa.), who has sought to downplay Uber’s political skirmishes with elected leaders in Pittsburgh, said people in his district still value the company’s role there. (Uber has been running a pilot project with self-driving cars in the city.)
“We’re happy Uber is in Pittsburgh,” Doyle said. “We’ve got good jobs there, it’s a good project, and we want Uber there. Shareholders spoke and they want new leadership in the company, and given some of the problems that they’ve had, that’s probably a good thing for Uber. So we just hope it just means that good things are on the way and the new leadership will take a fresh look at the corporate culture there.”
But Sen. Brian Schatz (D-Hawaii) took a harsher view.
"For the tech industry to retain broad public support, it’s essential that they walk the talk. That means being fair to employees and having leadership that looks like America," he said.
Already, there are signs of movement in Uber’s Washington operation, with Niki Christoff, the head of Uber’s D.C. policy shop and a former aide to Sen. John McCain (R-Ariz.), leaving for a position at Salesforce. She’s part of a wave of executives, including senior vice president of engineering Amit Singhal and senior vice president of communications Rachel Whetstone, heading for the exits in recent months.
Uber has also shown signs it’s rethinking some of the policy choices that have earned it such ire. Shortly before Kalanick’s departure, two company leaders — head of product Aaron Schildkrout and Rachel Holt, head of the company’s North America operations — announced that Uber would start offering drivers greater protections, like helping to cover the costs of their injury-protection insurance coverage.
"Why now?" the two Uber executives wrote in a blog post. "Because it’s the right thing to do, it’s long overdue, and there’s no time like the present."
In Pittsburgh, which welcomed Uber’s self-driving car initiative only to sour on the company’s sharp-elbowed tactics, Mayor Bill Peduto said he’s been in contact with Uber over the last 24 hours and hopes new leadership can bring about some of the cultural changes he’s called for at the company.
Uber "has a strong interest in working with us, to not only build autonomous vehicles, but to make sure they’ll be able to benefit cities," Peduto said. "So we will sit down in the middle of July and conversations will continue.”