A trio of people in their thirties are running the cab-hailing giant’s global operations, which account for nearly all revenue.
As Uber Technologies Inc. tries to move past a disposition of misconducts without its founding leader, running the core business falls to a trio of 30-somethings who had no experience managing anything of this scale before joining the startup.
Officially, Uber will be managed by a 14-person committee until the return of Chief Executive Officer Travis Kalanick, who’s on leave after a couple of workplace botches found dozens of abused human-resources claims during his incumbency. But thanks to a corporate structure he set up in 2013, three people in that committee will be in charge of Uber’s main operations. Their work accounts for nearly all revenue the company produces.
The managers of Uber’s three regions were all consulting associates at Bain & Co.. within a few years of leaping aboard the young ride-hailing startup. Rachel Holt joined in 2011 to help put the first cars on the road in Washington, D.C., Uber’s sixth city. The next year, Andrew Macdonald was hired to do the same in Toronto, while Pierre-Dimitri Gore-Coty managed France.
Holt, 34, now runs Uber’s business in the U.S. and Canada, which last year produced about $10 billion in gross bookings and was, for a brief time, profitable. Macdonald, 33, oversees Asia and Latin America, the fastest-growing markets. Gore-Coty, 32, has Europe, the Middle East and Africa.
Each regional manager operates with notable sovereignty They help decide prices in their cities and expenses for hiring drivers. Regions have their own marketing departments and customer service representatives. Managers have the final say in many of the legal and product decisions impacting their territories.
Despite recent upheaval, Uber’s business seems to remain on course. Bookings grew 8.7 percent to $7.5 billion last quarter, while losses decreased. However, it can’t go on autopilot. Tumult opens opportunities for competitors to raise money, recruit and chip away at the global ride-hailing leader’s market share.
The empty CEO chair could result in problems. Ruling by committee isn’t a strategy favored by many management experts. “You need somebody who is taking the reins,” said Cindy Schipani, a professor at the University of Michigan’s business school. “I don’t think it’s sustainable. It’s a too-many-cooks-in-the-kitchen model.”
Uber hires frequently from top consulting firms for operational jobs, who bring with them the training required for figuring out solutions to a mishmash of local problems, like how to win over city council members and where to advertise for drivers. Holt signed on at Uber six years ago because she thought it would give her the opportunity to be “CEO of a city,” she told Bloomberg’s Brad Stone for his book, The Upstarts.
But the region-based system isn’t flawless. Last year, Macdonald upheld for adding cash as a payment option in Latin America to compete with taxis and other local competitors. He asserted there weren’t data to support the idea that carrying cash put drivers at greater risk of getting mugged. “If they’re worried, it’s a bit emotional,” Macdonald told a reportrer. After a string of Uber drivers were murdered in Brazil, Macdonald apologized for his comment and started giving drivers the option to turn down paper money.
Uber has been actively looking for a chief operating officer since March who can serve as a partner to Kalanick when he returns. This person will take over much of the day-to-day management of the company, leaving more strategic decisions to the 40-year-old CEO. Uber is also looking for a chief marketing officer, chief financial officer, general counsel and board chair.
Kalanick, who has been mourning the death of his mother, struggled to define his role at a time of intense internal discord. Kalanick was still hammering out the details of a possible leave of absence within 24 hours of the planned announcement, said a person acquainted with the matter.
With the core business now in the hands of three executives, it’s up to Frances Frei, the new senior vice president for strategy and leadership, to squabble them and the 10 others on the committee. The heads of product, HR, policy and legal also sit in the group. Before starting full-time at Uber this month, Frei helped create a more functional, inclusive environment at Harvard Business School. Frei will marshal the committee process at Uber, acting as a mentor rather than a stand-in CEO, one of the people said.
The San Francisco-based company’s board is also set to take a bigger role in Kalanick’s absence. Arianna Huffington, Bill Gurley and David Bonderman all spoke at a Tuesday staff meeting to discuss sexism and other personnel issues. At that meeting, Bonderman made a sexist remark and resigned later that day.
Meanwhile, the business faces major threats around the world. Holt’s purview accounts for about half of Uber’s bookings, but she’s had to make compromises between reaching for profit and defending against the prime U.S. competitor, Lyft Inc. At eight years old, Uber is facing pressure to vigorous losses.
Gore-Coty tackles with the prospect of the European Union dealing a catastrophic blow to his business there. An adviser to the top court there said in May that Uber should be treated like a transportation company, not a technology firm as Uber had argued. The change would open it up to countless regulatory risks.
For Macdonald, the latest crisis is in India. This year, Uber called back expensive incentives paid to drivers. The nation’s Uber workforce is mostly poor and increasingly unhappy. The decision prompted a public-relations problem nationally and an ethical debate inside Uber.
Making matters worse, the country has been rocked in the last week by allegations of Uber’s misconduct in a 2014 India rape case. The incident contributed to the dismissal of at least two executives. The victim sued, and Uber issued an apology on Thursday. As the gaffe indicates, regional operators aren’t immune to the problems at Uber’s core, no matter how much freedom they’re given.