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| Uber CEO Travis Kalanick should have gone years ago | Uber CEO Travis Kalanick should have gone years ago |
| (13 days later) | |
| Travis Kalanick has resigned as chief executive of Uber – too late and without an admission of personal responsibility for the many scandals that have engulfed the ride-hailing firm he helped to found. If Uber was a normal public company, subject to even a gentle governance regime, he would have been fired years ago. | Travis Kalanick has resigned as chief executive of Uber – too late and without an admission of personal responsibility for the many scandals that have engulfed the ride-hailing firm he helped to found. If Uber was a normal public company, subject to even a gentle governance regime, he would have been fired years ago. |
| As it is, Kalanick’s resignation counts as a minor triumph for the venture capitalists who own about 40% of privately controlled Uber. Benchmark, the biggest investor, led the revolt and it’s not difficult to guess why its patience finally snapped. | As it is, Kalanick’s resignation counts as a minor triumph for the venture capitalists who own about 40% of privately controlled Uber. Benchmark, the biggest investor, led the revolt and it’s not difficult to guess why its patience finally snapped. |
| First, there were the signs that the damage to Uber’s brand was affecting business. Its US rival Lyft had been gaining ground and Uber’s many fights with regulators and law enforcement agencies around the world would only become trickier as long as Kalanick remained in the driving seat. | First, there were the signs that the damage to Uber’s brand was affecting business. Its US rival Lyft had been gaining ground and Uber’s many fights with regulators and law enforcement agencies around the world would only become trickier as long as Kalanick remained in the driving seat. |
| Second, it would have been impossible for Uber to pursue a stock market listing via an IPO, or at least the supposed $68bn (£54bn) valuation would have been a fantasy. The technology bubble in the US is alive and inflating, but who would pay that kind of money for a loss-making company whose boss had become a liability? | Second, it would have been impossible for Uber to pursue a stock market listing via an IPO, or at least the supposed $68bn (£54bn) valuation would have been a fantasy. The technology bubble in the US is alive and inflating, but who would pay that kind of money for a loss-making company whose boss had become a liability? |
| Even now, any potential investor will want to know if Kalanick’s resignation is the real deal or a cosmetic exercise. He is staying on board in a capacity yet to be defined. Given the size of his shareholding and voting rights – Forbes has valued his wealth at $6bn – he can hardly be denied a position, and he doesn’t seem the type to sit quietly in the back making polite conversation. Uber will need to show that it can recruit a strong chief executive and then give that individual the freedom to operate and to hire other staff. | Even now, any potential investor will want to know if Kalanick’s resignation is the real deal or a cosmetic exercise. He is staying on board in a capacity yet to be defined. Given the size of his shareholding and voting rights – Forbes has valued his wealth at $6bn – he can hardly be denied a position, and he doesn’t seem the type to sit quietly in the back making polite conversation. Uber will need to show that it can recruit a strong chief executive and then give that individual the freedom to operate and to hire other staff. |
| There is a wider moral to the Uber tale. Kalanick was only able to survive as chief executive for so long because Silicon Valley venture capitalists swallowed the idea that founders are business visionaries who must be allowed to operate by their own rules. Sometimes that philosophy works. Sometimes, as with Uber, it’s a recipe for scandal and unnecessary risk. Proper boardroom accountability, even with startups and technology innovators, is a principle worth defending. | There is a wider moral to the Uber tale. Kalanick was only able to survive as chief executive for so long because Silicon Valley venture capitalists swallowed the idea that founders are business visionaries who must be allowed to operate by their own rules. Sometimes that philosophy works. Sometimes, as with Uber, it’s a recipe for scandal and unnecessary risk. Proper boardroom accountability, even with startups and technology innovators, is a principle worth defending. |
| Bank big beasts lock horns over interest rates | Bank big beasts lock horns over interest rates |
| It’s the big bust-up in Threadneedle Street: the governor of the Bank of England versus the chief economist. Mark Carney says “now is not the time” to raise interest rates whereas Andy Haldane thinks it would be best to get on with the job “relatively soon”. | It’s the big bust-up in Threadneedle Street: the governor of the Bank of England versus the chief economist. Mark Carney says “now is not the time” to raise interest rates whereas Andy Haldane thinks it would be best to get on with the job “relatively soon”. |
| An increase from 0.25% can’t be delayed forever and inflation at 2.9% obviously heightens the dangers of delay. Haldane’s worry is that the Bank won’t be able to honour its promise that eventual rises will be “gradual” and “limited”. | An increase from 0.25% can’t be delayed forever and inflation at 2.9% obviously heightens the dangers of delay. Haldane’s worry is that the Bank won’t be able to honour its promise that eventual rises will be “gradual” and “limited”. |
| It’s a legitimate concern, but Carney’s position is more persuasive to this column’s mind. For starters, the impact of the Brexit negotiations on business confidence is unknown, but is unlikely to be positive. Then there’s this line from Wednesday’s report from the Bank’s agents on the ground: “Pass-through effects on material cost inflation may have passed their peak.” | It’s a legitimate concern, but Carney’s position is more persuasive to this column’s mind. For starters, the impact of the Brexit negotiations on business confidence is unknown, but is unlikely to be positive. Then there’s this line from Wednesday’s report from the Bank’s agents on the ground: “Pass-through effects on material cost inflation may have passed their peak.” |
| That doesn’t imply that inflation in output prices and consumer prices has also peaked. But it may suggest that pressures at the start of the chain are easing. Delaying the rate-rise looks best. As Brexit finally starts to feel real, so does the risk of a downturn later this year. | That doesn’t imply that inflation in output prices and consumer prices has also peaked. But it may suggest that pressures at the start of the chain are easing. Delaying the rate-rise looks best. As Brexit finally starts to feel real, so does the risk of a downturn later this year. |
| Cock-up in the cash loan business | Cock-up in the cash loan business |
| Doorstep lending is a straightforward business, according to Provident Financial’s website. The FTSE 100 company provides “simple cash-based loans” and has been doing so for 137 years. It uses self-employed agents to hand out the cash and make weekly collections. | Doorstep lending is a straightforward business, according to Provident Financial’s website. The FTSE 100 company provides “simple cash-based loans” and has been doing so for 137 years. It uses self-employed agents to hand out the cash and make weekly collections. |
| Or, rather, it used to. This year the board decided to get rid of the agents and “migrate” to a new model that uses 2,500 directly employed full-time “customer experience managers”. | Or, rather, it used to. This year the board decided to get rid of the agents and “migrate” to a new model that uses 2,500 directly employed full-time “customer experience managers”. |
| The share price has definitely migrated. It fell 17% as chief executive Peter Crook confessed to a cock-up, or “higher than expected operational disruption” as he put it. It seems many of the self-employed part-time agents don’t wish to go full-time and have offered their services to rivals. | The share price has definitely migrated. It fell 17% as chief executive Peter Crook confessed to a cock-up, or “higher than expected operational disruption” as he put it. It seems many of the self-employed part-time agents don’t wish to go full-time and have offered their services to rivals. |
| “Recent vacancy levels have been 12%, which is more than double the rate anticipated,” said Provident. It’s a problem, one might think, that could have been avoided by asking the agents what they thought of the plan. | “Recent vacancy levels have been 12%, which is more than double the rate anticipated,” said Provident. It’s a problem, one might think, that could have been avoided by asking the agents what they thought of the plan. |
| “Nonetheless, the strategic rationale for the change remains strong,” declared Crook. In year one of the great leap forward, however, divisional profits will almost halve to £60m. One hopes Provident’s customers actually want their experience to be managed – it’s not clear what the process even involves. | “Nonetheless, the strategic rationale for the change remains strong,” declared Crook. In year one of the great leap forward, however, divisional profits will almost halve to £60m. One hopes Provident’s customers actually want their experience to be managed – it’s not clear what the process even involves. |
| Travis Kalanick | Travis Kalanick |
| Nils Pratley on finance | Nils Pratley on finance |
| Technology sector | Technology sector |
| Technology startups | Technology startups |
| Uber | Uber |
| Bank of England | Bank of England |
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