There is no question Uber has changed the way we travel. Travis Kalanick, the co-founder and former CEO of Uber, reinvented the transportation industry, but the history of the company is riddled with controversy.
While cabs have always been around (or at least it feels like they’ve always been around), they’re most accessible in major cities such as New York or Los Angeles. However, since the emergence of Uber over the past decade or so, people in mid-sized cities across the country are able to get from place to place without needing a car. Do you want to go out with friends but don’t want to drive? Just take an Uber. Need a ride home from the airport? Call an Uber!
Thanks to smartphones, we all want what we want when we want it. Nobody wants to wait for a car service, to drive to get their food, or to use an encyclopedia to look something up. With Uber, there’s almost no waiting. You get the ride where you need it and when you need it.
But despite his disruptive innovation, Travis Kalanick’s story isn’t a simple tale of Silicon Valley success. From his early beginnings to his decision to ultimately leave the company to his net worth, here’s everything you need to know about the tech mogul.
Kalanick grew up in Northridge, California, which is a suburb just outside of Los Angeles. While he initially wanted to be a spy when he was growing up, he was a well-rounded kid. He played sports and got good grades, but yet he was still bullied by other kids in school. Like a lot of kids who get picked on during their adolescent years, Kalanick vowed to prove every person who ever doubted him wrong. He knew he was destined for greatness.
Kalanick decided he wanted to start making some money, so he began going door-to-door selling knives for Cutco. Then, when he was just 18 years old, he started his first business, an SAT prep course called New Way Academy.
The course was called “1500 and Over,” encouraging high school students they could raise their SAT score by hundreds of points if they took his classes. According to some of Kalanick’s classmates, he was always destined to run a company. But, despite his ambitious ways, Kalanick wasn’t always fun to be around according to those who knew him.
“The fact that Travis is a good salesman — I think originally he let that be the entirety of his personality, both to his friends and within work,” one classmate told Business Insider.
“There was definitely a feeling for me that he was always trying to sell something to me, like a used car salesman. You know it’s their job, but it doesn’t make it any less annoying.”
The Begining–and the End–of Scour
Kalanick ultimately decided to attend the University of California, Los Angeles (UCLA) to study computer engineering and business economics. While at school, he started his first real business, a file exchange service called Scour, with classmates Michael Todd and Vince Busam. Kalanick then decided to drop out in 1998 to work at Scour full-time.
Unfortunately, the company didn’t last long. Just two years after Kalanick started working for Scour full time, the Motion Picture Association of America, the Recording Industry Association of America, and the National Music Publishers Association sued Scour for $250 billion, claiming copyright infringement. Yep, that’s right — $250 billion.
From Scour to RedSwoosh
Due to the lawsuit, Scour filed for bankruptcy in September 2000, but Kalanick wouldn’t be dejected for long. In fact, he and Todd started RedSwoosh, another file-sharing company, shortly after saying goodbye to Scour. While RedSwoosh was able to avoid the legal issues Scour faced, the company began running out of money after only a year.
Kalanick and Todd tried to figure out different ways to keep RedSwoosh from going under, which included one plan that wasn’t exactly legal. At one point the company stopped withholding income taxes from their employee’s paychecks. If you’re wondering if that’s a crime, you’d be 100% correct.
However, Kalanick maintains it was Todd’s decision to withhold taxes and that he didn’t know anything about it. Todd, on the other hand, said the pair made the decision together.
“We owed $110,000 to the IRS in un-withheld income taxes, which is a white-collar crime that pierces the corporate shell, and it doesn’t matter whether you knew or not. If you’re an officer of the company you’re going to jail,” Kalanick told Business Insider.
Despite all the turmoil–and even Kalanick deciding to move back in with his parents–the pair managed to sell their company to Akamai Technologies for $19 million in 2007.
An “Uber” Idea
After selling his company, Kalanick began living the lifestyle of the rich and famous. He had a large home, a personal chef, and spent his days traveling the world. In fact, it was during a LeWeb technology conference in 2008 that Kalanick first heard the idea for a little company that would soon be known as Uber.
StumbleUpon founder Garrett Camp was attending this conference and told Kalanick about a New Year’s where he and his friends spent $800 hiring a private driver.
Camp was baffled at the steep price and wanted to figure out a way to make private driving more affordable. He realized splitting the cost of the drive with a number of people would make it cheaper, an idea that eventually became the essence of Uber.
The first iteration of Uber was called UberCab, a black car service that allowed users to call a car by just pressing a button on their phone. It was built by Camp and two of his friends, Oscar Salazar and Conrad Whelan. Kalanick, on the other hand, was brought on as a “mega advisor.”
“Garrett and I incubated Uber at first because we thought it was like this limo company. We were like, ‘Dude I don’t want to run a limo company. I just want a car to take me around. We need to find someone who can come into a city like San Francisco and kill it,” Kalanick said at an event in San Francisco.
“Bring a really high quality to the table, a really sound operational system, and make Uber San Francisco an amazing place so that basically Garrett can ride around like a pimp.”
So, in 2010, they brought in Ryan Graves to be UberCab’s general manager. He was later promoted to CEO. However, less than a year later, Kalanick took over as CEO and Graves returned to being the company’s general manager.
Though rumors swirled the transition wasn’t exactly amicable, Graves explained his feelings in an interview with Open View Partners.
“When you spend a year investing yourself in a project, you feel pretty strongly about how it should be run or which direction it should be taken in… When Travis asked me about the transition, I told him I was excited about it. I think he was a little thrown off by that, because very few CEOs embrace their succession plan so willingly.”
Growing the Company
In 2011, Uber launched in New York City and as you can imagine, the company was a huge success in the Big Apple. Then, just a few months after launching in NYC, Uber moved across the pond to Paris.
But, as the company continued to grow and more people started using the app, things also started going haywire. In February 2017, a former Uber employee named Susan Fowler claimed she was sexually harassed at Uber. Reports of the company’s mistreatment of women started going viral, including one made by Kalanick’s ex-girlfriend, Gabi Holzwarth. Not to mention, a video of Kalanick on Super Bowl Sunday in 2017 caught him in an argument with an Uber driver over lowered fees. As you can imagine, it’s not a very good look for the CEO of a company to be in a screaming fight with his employees.
Needless to say, things were getting out of hand for Kalanick and the company. So, due to pressure from investors, Kalanick decided to step down as Uber’s CEO in June 2017.
“I love Uber more than anything in the world and at this difficult moment in my personal life I have accepted the investors request to step aside so that Uber can go back to building rather than be distracted with another fight,” he said in a statement at the time.
Kalanick was replaced by Dara Khosrowshahi, though he remained on the company’s board. In March 2018, Kalanick’s investment fund bought a controlling interest in a startup called City Storage Systems. He then started a service called CloudKitchens, which builds kitchens for chefs who are looking to start a food-delivery business.
Despite leaving Uber, Kalanick’s net worth sits at about $2.8 billion dollars. For a guy who no longer has any stake in Uber, that’s not too shabby!
Though Kalanick is still in the tech space and is a CEO of a major company, his rise and eventual fall from Uber’s graces is certainly a cautionary tale for other CEOs of major businesses.