Uber founder Kalanick resigns after getting pressured by five major stockholders

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Controversy after controversy required Uber founder Travis Kalanick to continuously put out fires. But the private ride-hailing company that is valued at $68 billion might have grown too large and unwieldy for the executive to run, and late last night the 40-year old quit as CEO of the company. Kalanick, who helped start the firm back in 2009, always seemed to be at the center of a crisis or two or three. Uber drivers have been accused of committing crimes like sexual assault, and Kalanick himself is the subject of an internal investigation after being accused of sexual harassment by a former employee.

The company has over 1 million drivers who are summoned by those needing a ride through the use of an app. No money changes hand, and everything is done through the app. Uber's success has brought about a number of copy cats with Lyft a strong second behind Uber. Many analysts feel that with management issues at Uber made worse by some of Kalanick's actions, Lyft has a chance to grab control of the top spot in the industry.

Yesterday, five major Uber investors pressured Kalanick to leave the company. He had planned to take a leave of absence due to a recent boating accident that left his mother dead, but the investors delivered a letter to Kalanick that envisioned a more permanent solution. Obtained by the New York Times, the letter was titled "Moving Uber Forward" and demanded that the CEO leave the company immediately. The five stockholders include Benchmark Capital, First Round Capital, Lowercase Capital, Menlo Ventures and Fidelity Investments. Together, the five control 25% of Uber's shares, and 40% of the voting power at the company.

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The major stockholders will now look to bring in new management that will continue to grow Uber while leading the way toward an IPO that would certainly be one of the largest in history. As for Kalanick, he still owns his stake in Uber which gives him a majority vote at the company. Unless something is done about that, Kalanick will still have a strong voice at Uber even if it is from the sidelines.

source: NYTimes

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