Dara Khosrowshahi after a morning sessions during the Allen & Co. Media and Technology Conference in Sun Valley, U.S. (Photographer: David Paul Morris/Bloomberg)

Uber’s New CEO Embraces Travis Kalanick. Will It Last?

(Bloomberg) -- Unity vs. change. That’s the tension facing Uber Technologies Inc. Chief Executive Officer Dara Khosrowshahi.

The incoming chief spoke at Uber’s San Francisco headquarters Wednesday, with former CEO Travis Kalanick perched nearby. Board members Arianna Huffington and Ryan Graves were also present. It was one happy family. Selfies were taken.

During his remarks, which leaked—first as tweets, then in reports, later as audio, and finally, on Uber’s own website—Khosrowshahi described his conversations with various board members as part of the CEO search. Khosrowshahi acknowledged what each of them brought to the process, concluding: “I know there’s a lot of criticism around the board. I love our board. They picked me, so, awesome, best board in the world. Incredible judgment.”

Khosrowshahi gave Kalanick a hug during the meeting and playfully teased him, saying they only spoke over FaceTime audio for fear that a reporter was tapping the phone. Throughout, the message was clear: unity.

That unity will be tested once Khosrowshahi starts work Tuesday. For one, what will Khosrowshahi do about Benchmark’s legal battle with Kalanick? The situation de-escalated somewhat this week when the case was sent to arbitration, hiding it from the public eye. Still, it will be difficult for Khosrowshahi to avoid weighing in on the ongoing feud between two of the company’s board members. More important than boardroom infighting, however, is the substance of their disagreement. It’s a question of how bad things at Uber really got.

What, then, will Khosrowshahi do about Uber’s very own Chekhov’s gun? That is, the private results of former U.S. Attorney General Eric Holder’s report on Uber’s culture. The company released Holder’s recommendations, which were vanilla except in that they seemed to hint that the company needed to do everything it could to minimize the power of Kalanick, without actually prescribing his removal. (That, as you know, happened anyway.)

The actual findings of the company-commissioned investigation, which posed questions about everything from a visit to a karaoke bar in South Korea to accusations made by former employee Susan Fowler, were never made public. The report went to Uber’s board and has been tightly held, even within the company. Very few people have seen it. Uber has declined to say whether Khosrowshahi has actually read the report.

The company hasn’t apologized for everything that went on or acknowledged the extent of the problems outlined by Holder’s investigators. I’m continuing to learn about things former Uber employees relayed to Holder’s team, which have yet to become public.

“I am going to be totally transparent with you. I’m not going to bullshit you,” Khosrowshahi told employees at the all-hands meeting. “I’ll be absolutely honest with you and be completely straight and authentic with you. Hopefully that will allow me to deserve the same right back from you.” One gesture of transparency, anti-bullshitting or whatever you want to call it would be to release the report to employees and the public.

The company has not fully grappled with what went on there. Accounts vary as to what else the report actually covers. Kalanick loyalists argue there isn’t much left secret. If so, what’s the harm? Redact the names and personally identifying information, and release the document.  If it’s worse than we’ve been led to believe, as Benchmark suggests it is, then the first step to make amends is admitting where you’ve messed up.

You might say I’m being naïve here. What company would release damaging information on its own? But there’s a very real risk that the report comes out in one of the many court cases Uber is involved in. And it’s the right thing to do.

Uber’s legal challenge is enormous. I can’t underline that enough. Uber faces two Justice Department inquiries, one over Greyball and another over potential foreign bribes. The self-driving car fight with Waymo goes to court in October. Uber is also facing a lawsuit over Kalanick and others’ handling of an Indian rape case. Executives, including Kalanick, questioned whether the rape took place, even after the victim’s Uber driver had been convicted in court. Courtroom brawls are bloody, and Kalanick will be at the center of it.

What is Khosrowshahi’s endgame with Kalanick? On the one hand, many employees are loyal to the co-founder. After all, Kalanick’s smarts and hustling turned Uber into a massive global business. He built the company in his own image. Even if Khosrowshahi wanted to, how much can one person change the culture at a company of more than 15,000? Rejecting Kalanick wholesale would be difficult.

On the other hand, if Kalanick continues to be a central figure in Uber’s many legal and ethical quagmires, at what point will the sins of Khosrowshahi’s predecessor become their shared burden?

During Uber’s all-hands meeting Wednesday, Khosrowshahi quipped that Matt Cohler, who represents Benchmark on the board, played “bad cop.” Cohler asked Khosrowshahi if he would guarantee that he would still be at Uber after six months. Khosrowshahi framed his reply in terms of persistence and strength of character: “I'll show you my mettle.” But you have to wonder whether Cohler was really asking: What will you do when you find out how bad it really is?

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To contact the author of this story: Eric Newcomer in San Francisco at enewcomer@bloomberg.net.