More sweeping changes await after Uber's senior vice-president leaves company

Emil Michael at an interview in San Francisco, California, US, on July 29, 2014.
Emil Michael at an interview in San Francisco, California, US, on July 29, 2014. PHOTO: BLOOMBERG

SAN FRANCISCO (BLOOMBERG) - Uber Technologies's newly ousted senior vice president for business, Emil Michael, has been dogged by public scandals, ever since his off-the-cuff remarks at a dinner party in 2014 about investigating a critical journalist.

He was at the center of two more controversies made public this year that were included in an investigation into Uber's culture. The former girlfriend of his boss, chief executive officer Travis Kalanick, alleged that he tried to prevent her from speaking out about a work trip to a Korean escort-karaoke bar. He was also one of the executives recently alleged to hold conspiracy theories that the rape of an Uber passenger in India was linked to a local competitor.

At the same time, Mr Michael, an Egyptian immigrant, helped Uber raise more than US$10 billion (S$13.8 billion), negotiate a truce with Uber's Chinese rival, and strike deals with top automakers like Daimler.

Mr Michael believes that a weak board of directors, a lax internal legal team, coupled with his tight friendship with co-founder Mr Kalanick, ultimately led to his downfall-not the scandals, two people close to Mr Michael said.

He places the blame on the directors, particularly investor Bill Gurley, for his removal, accusing them of not having the backbone to stand by him amid what he sees as largely mischaracterized and inconsequential controversies, the people said. Mr Michael regrets not spending more time recruiting more experienced directors, and he has told people that Mr Gurley put his reputation above the company's best interests, said the people, who declined to be identified because they were not authorized to speak about the matter. Mr Gurley didn't immediately respond to a request for comment.

Mr Michael, Mr Kalanick's closest confidant, was forced out of the beleaguered ride-hailing company by the board, after an investigation into workplace harassment and culture was presented to directors on Sunday.

 

Mr Michael has told people that he believes that Kalanick's internal critics targeted him, likening it to coming after a prince if you can't bring down the king, the people said.

The probe was led by former US Attorney General Eric Holder. The company's board met for more than six hours to discuss the findings of that investigation, and directors approved all the recommendations, a board representative said.

The suggested actions from the Holder report included parting ways with Mr Michael and adding more independent board members, people familiar with the matter said. Uber is planning to appoint Wan Ling Martello, an executive vice president at Nestle, to the board, Bloomberg reported.

It was a former employee's allegations of sexual harassment and discrimination in February that prompted the investigation by Holder's law firm, Covington & Burling, and a separate examination of human-resources matters by Perkins Coie. The inquiry soon expanded to include more than 200 HR claims and resulted in the firings of more than 20 employees.

The company, valued at US$69 billion, plans to begin implementing the report's recommended changes early this week and will outline them to employees at a meeting Tuesday.

Ryan Graves, a director and longtime Uber executive, told employees of Michael's departure in an email, describing him as "instrumental in building the business we have today."

Other considerations at the board meeting included a possible leave of absence for CEO Mr Kalanick, who has been under fire for his involvement in the alleged incidents in question and his coarse management style. In addition to responding to a series of scandals, Mr Kalanick has been grappling with the accidental death of his mother, whose funeral was Friday.

Mr Michael has not ruled out to people that one day he could have a role at Uber again, the people said. He worries that Mr Kalanick will now be further isolated from his executive team without one of his most loyal supporters, the people said.