Controversial Uber co-founder Travis Kalanick severs ties with ride-hailing app

He was formerly the company's chief executive, but was ousted in 2017

(FILES) In this file photo taken on December 16, 2016 Co-founder and Chief Executive Officer (CEO) of US tranportation company Uber Travis Kalanick gestures as he speaks at an event in New Delhi on December 16, 2016. About decade after co-founding Uber, Travis Kalanick on December 24, 2019 severed his last ties from the ride-hailing giant, announcing he would exit the board of directors at the end of 2019 / AFP / MONEY SHARMA
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Travis Kalanick, 43, a co-founder of Uber,  has announced he is cashing out of the taxi service app.

He built Uber into a ride-hailing giant, but was ousted as chief executive in 2017 over a string of scandals, many linked to the company's sexist "bro" culture.

The Los Angeles-born businessman said on Tuesday he has sold off all his Uber stock – estimated at more than $2.5 billion – and is resigning from the board of directors, severing ties to the company he co-founded a decade ago.

Mr Kalanick was one of Uber's biggest shareholders, owning 9 per cent of the company at the time of its initial public offering in May this year.

His resignation will go into effect on December 31.

"Uber has been a part of my life for the past 10 years. At the close of the decade, and with the company now public, it seems like the right moment for me to focus on my current business and philanthropic pursuits," the entrepreneur said.

Since leaving the ride-hailing app, Mr Kalanick has launched a new start-up called CloudKitchens, which rents out space to restaurants running delivery companies.

Uber chief executive Dara Khosrowshahi said he was grateful for Mr Kalanick’s "vision and tenacity” when building the ride-hailing app, as well as his “expertise” as a board member.

The San Francisco company transformed the way people get around and the way they make a living, turbocharging the gig economy and undermining the taxi industry. Its nearly four million drivers around the globe have logged 15 billion trips since 2010, when Mr Kalanick and Garrett Camp came up with the idea of hailing a ride from a smartphone after a trip to Paris when they could not find a taxi.

But Mr Kalanick was fired as chief executive in the summer of 2017 with the company mired in lawsuits.

His resignation on Tuesday comes at a time when Uber is facing increasing threats from regulators, competitors and its business is continuing to burn cash.

Uber under Mr Kalanick grew with incredible speed, but like a number of other tech start-ups, it ran into trouble with a corporate culture that appeared at times to be spinning out of control. It was a problem the businessman acknowledged. Before he was removed as chief executive, he said he needed to “fundamentally change and grow up.”

His career at Uber seemed to fit a certain pattern seen in Silicon Valley: the brash and disruptive personalities who are great at creating start-ups can be ill-suited for the corner office when the company reaches maturity. Sometimes “adult supervision” in the form of experienced executives has to be brought in.

In one of Uber's biggest scandals, Mr Kalanick was accused of presiding over a workplace environment that allowed rampant sexual harassment.

A former Uber engineer, Susan Fowler, levelled sexual harassment and sexism allegations in a 2017 blog post, saying a boss – not Mr Kalanick – had propositioned her and higher-ups had ignored her complaints. Mr Kalanick called the accusations “abhorrent” and hired former US Attorney General Eric Holder to investigate. But Mr Holder recommended reducing Mr Kalanick’s responsibilities.

After multiple investigations, Uber fired 20 employees accused of sexual harassment, bullying and retaliation against those who complained. This month, the company paid $4.4 million to settle a federal investigation over workplace misconduct.

The problems went beyond employee relations.

Uber also gained a reputation under Mr Kalanick for running roughshod over regulators, launching in markets before officials were able to draft rules and regulations to keep the ride-hailing business in check.

During mR Kalanick's tenure, The New York Times revealed Uber used a phony version of its app to thwart authorities in cities where it was operating illegally. Uber's software identified regulators who were posing as riders and blocked access to them. The US Justice Department is investigating.

“Many investors will be glad to see this dark chapter in the rear view mirror,” Dan Ives, managing director of Wedbush Securities, said in a note to investors.

After Mr Kalanick's ouster, former Expedia chief executive Mr Khosrowshahi was brought on as Uber's chief to clean up Uber's image and steer the company to its stock market debut in May. But Uber's stock floundered and fell almost 11 per cent in its first day of trading as a public company. It has tumbled more than 30 per cent since.