Is this the final straw for CEO Travis Kalanick?
If you ask most competent executives what they would do if an employee brought them a potentially controversial file that was part of a criminal investigation, the answer is always the same.
Which is: You do not read it or even touch it. You order that it be given to the company’s lawyer immediately. You quiz the employee as to the provenance and consider firing that person if you suspect it was illegally obtained.
So why did it take so long for his bosses at Uber to find out why and how a top executive named Eric Alexander, the now former president of business in the Asia Pacific, managed to acquire the confidential medical records, along with a police file, concerning the case of a woman who was violently raped in India in 2014.
As Recode reported last night, Uber’s board is meeting this morning to discuss this incident and many others that call into question the management of the car-hailing company’s abilities and judgment. That discussion is likely to include whether to fire some execs and how to handle a series of missteps by CEO Travis Kalanick.
While it does not appear that he will lose his CEO job yet, a leave of absence is being contemplated, in part due to a recent personal tragedy in which his mother died in a boating accident and his father was hurt badly. In addition, the Wall Street Journal is reporting that his close confidante and SVP of business Emil Michael plans to resign as soon as Monday, ahead of a possible firing that Recode reported on last night.
Michael figures prominently in a post Recode wrote about Alexander’s actions earlier this week, including the fact that Alexander spent months carrying the documents around in his briefcase before others at the company finally demanded that he turn them over. Whether that file was destroyed or not still remains unclear and Uber declined to comment about it.
Worse still: After Alexander showed the files or described the contents to top execs, some, especially Kalanick, began declaring that the records might indicate that the circumstances around the rape did not track and positing that Uber’s Indian rival Ola might be involved in a set-up.
None of this is even remotely true (and, yes, it’s also offensive), but it can be traced to the sometimes paranoid, frequently frantic and always high-octane tone of the car-hailing startup, which is now valued at $ 70 billion. Rather than an exception, the actions of Alexander are more typical of a company in desperate need of adult supervision, despite the fact that many of its leaders are, in fact, adults.
If that sounds perplexing, so too does the circumstances around the firing of Alexander, which only took place this past week when reporters began asking about his unusual involvement in obtaining the files. Before that, despite what appears to be a questionable act which many top execs knew about, he had never been disciplined.
The reasons why are complex, according to numerous sources, including what many describe as a close relationship between Alexander and Kalanick and Michael. Also important was Alexander’s ability to strike important deals in Asia for the car-hailing company for the pair.
Michael, to whom Alexander reported directly, is effectively considered to be the No. 2 to Kalanick inside of Uber and is also one of his closer friends (“It’s a bromance” is a common refrain about the pair). For many at Uber, Michael is considered untouchable, especially since he has been at the center of its biggest deals and fundraising.
“Not many people cross Emil and live to tell the tale,” joked one Uber executive, who then quickly added, “No, really.” Another source was more harsh: “Emil is the chief sycophant officer to Travis.”
Those sympathetic to Michael note that he has only a small number of Uber employees working for him and has less power than is perceived. “It’s more a function of jealousy than anything else,” said one person who admires him. “He’s definitely guilty of being a close friend.”
Company politics are company politics, obviously, but Michael definitely engenders more negative reaction than most inside Uber.
In any case, Alexander reported directly to Michael at Uber and had done so before at voice recognition platform Tellme Networks, which was sold to Microsoft in 2007. Alexander later worked at Flipboard for former Tellme CEO Mike McCue — where Michael was also an adviser. Earlier in his career, Alexander worked at AOL and also at Netscape for the late Mike Homer.
Over the years, those who have worked with Alexander in Silicon Valley describe him as an affable, peripatetic and endlessly energetic business development exec who delivers the goods no matter the cost.
“He’s coin-operated,” said one person who has worked with Alexander, using a term often attributed to those sales- and deal-focused employees. “You put money in and he spits it back out with contracts and revenue and whatever you need.”
Said another person: “He’s a Tasmanian devil and lives out of suitcases. I don’t think he ever gets off a plane.” In fact, in Alexander’s LinkedIn profile, referring to planes, he notes his location as “Hong Kong, India, China, A380, A330, 777 and many other airports ;).”
Still another: “He loves landing whatever the bigger guy he is hustling for like Emil or Travis wants … if you need a document to find out who else someone is talking to, for example, he’s your guy.”
But there are more complex assessments of Alexander, including that he was willing to charge in whatever direction he was directed to, which made him susceptible to overreach. “Like a Jedi, if he was trained by Obi-Wan Kenobi, he was great,” one person to whom he reported said. “But if it was Darth Vader, who knows?”
Another colleague at Uber echoed that sentiment. “Like a lot of sales guys, everything is business as usual to Eric,” said one Uber exec. “So if Emil or Travis said jump, he jumped.”
It was Michael who brought Alexander to Uber in 2014, because he was a rare breed — an American executive who was deeply comfortable operating in Asia and had widespread contacts in the key region for the company. At Uber, he worked on numerous key deals there.
Sources inside Uber said as long as Alexander was delivering deals and striking partnerships in Asia, he could almost do no wrong.
Well, he could actually, including being the senior regional executive at a gathering that Kalanick and Michael also attended at a karaoke bar in South Korea, where women wearing numbers could be hired to drink with the group and often more. The visit attracted criticism both inside and also outside the company.
But nothing was more problematic than what Alexander did in India, in the wake of a violent rape of a woman there. While Alexander helped the police with the investigation that led to the perpetrator’s arrest and in which he also testified against him, his behavior around the case became problematic after he managed to obtain a police file that contained the medical records of the victim related to the attack.
How that happened soon becomes murky. Sources close to Alexander said he got it from the Indian law firm that Uber had hired there, while others report he told tales of having information shoved under his hotel room door.
Others note that it is common practice for such records to be available in India, while others said the country’s strict privacy laws forbid it and that law firms typically do not get that much access to information until closer to trial.
The driver was ultimately sentenced to life in prison. As for Uber, the company was banned from operating in New Delhi until 2015. It was also sued in civil court by the victim and quickly settled for more than $ 3 million dollars, sources said.
The incident also led to questions about the efficiency of Uber’s background checks given the driver was awaiting trial for at least four criminal charges at the time of the assault. In addition to stalling Uber’s growth in the massive market of New Delhi, the incident was naturally a cause for distrust among potential and current consumers. Publicly, the company denounced the incident and rolled out new privacy and safety features.
Whatever the circumstances, most executives would not have held such a sensitive file in their possession, nor would their managers have allowed that immediately upon finding out about the situation.
Which is why many ask the obvious question of whether Alexander was pushed or did he jump of his own volition when he decided to obtain the records of the Indian rape victim in the first place.
His infractions didn’t end there either. Upon getting a hold of these records, according to numerous sources, Alexander spent months carrying the documents around in his briefcase. Sources familiar with Alexanders thinking said that he was “terrified that the file would fall into the wrong hands” in India, which does not explain why he held it elsewhere.
Alexander also either told or showed numerous executives at Uber the dossier. That included Kalanick and Michael, as well as top lawyer Salle Yoo, who asked Michael to order Alexander to hand over the file. But neither seemed to move with any sense of speed or urgency.
Sources sympathetic with Michael said he was busy with one of Uber’s massive financings and also a giant deal in China with rival Didi and was not told and did not realize how sensitive the files were. Others dispute that a highly-trained lawyer like Michael would have not understood the gravity of such documents.
Sources said Kalanick indicated that he did read the file, while others said Michael did not actually read it, even though he was aware of the contents. What is clear is that the information from the file was relayed to other execs at the company, many of whom were horrified that Alexander had it in his possession.
It got worse. Rather than question how he got it or why, Kalanick used the files to postulate on how the victim was attacked, including telling several people that the medical files seemed to indicate that the victim was still a virgin (while Recode has not viewed the files, sources with knowledge of the records said it appeared as if the woman was sodomized).
Kalanick also raised the prospect that perhaps Ola — Uber’s India competitor — was somehow behind the incident. This quickly became a fixation with him, and other execs like Michael did not stop him from his dark ruminations.
While sources supportive of Michael said he never believed that the rape was false or Ola was involved, he did repeat what was in the files to others. Whether it was simply to discuss the situation to fix it is not clear, but the discussions by top execs around the rape victim most definitely bothered many inside Uber.
This behavior by Kalanick is what several sources describe as “going into the conspiracy cave,” which he often did, a situation often made worse in other instances when he got “spun up” by Michael and other executives close to him.
“It was insanity to talk like this and many people told him to stop,” said one person, although it is not clear if others indulged his more problematic thoughts on the India controversy in what another person called the “squirrel nest.” (Translation: Nuts.)
Eventually, sanity prevailed when the company’s security department got control of Alexander’s copy and apparently destroyed it.
In any case, Alexander’s actions have been reported to both Perkins Coie and Covington & Burling — two independent law firms that are investigating both individual and overall workplace malpractice at Uber. This all sprung from a blog post in March by a former female engineer named Susan Fowler, who alleged pervasive sexism and sexual harassment at the company.
Alexander wasn’t fired as part of the first round of the 20 terminations that Perkins Coie recommended last week, due to the allegations. But he was out the next day after Recode called about the India files.
Sources said he was told of the firing on the phone by Yoo — without Michael’s involvement — and was given no specific reason as to why. Alexander is an at-will employee, meaning he could be fired at any time.
His departure leaves a major hole in Asia for Uber, including in India where it is facing huge losses competing with Ola. With the new revelations, the government might again take action against Uber, as it did immediately following the fallout from the rape and questions about how the driver was vetted.
Sources inside Uber said Michael has been telling colleagues that he had not read or been as involved with the file as people thought, although he has regretted some of his own judgment calls around Korea and also the mess that resulted when he suggested publicly that Uber should dig up dirt on a reporter several years ago.
Since then, he has claimed the discussion was off the record and hypothetical, but it created a major controversy for the company.
As for Kalanick, he has even more to answer for, including a messy lawsuit with Alphabet over self-driving technology that some think is even more of an issue.
“Travis has a lot to answer for,” said one person close to the board. “And he will soon.”