After years of fighting, and a grand battle over the last 12 months, Uber founder and CEO Travis Kalanick has resigned. He and his company have been embroiled in a fight over sexual harassment claims, misleading regulators, and a generally “toxic” culture that lacks restraint. Kalanick recently lost his mother in a tragic accident and was on indefinite leave. His investors, who have invested the most money ever in a Silicon Valley private startup, reportedly turned against him and put Kalanick under pressure to step down. He has acquiesced to their wishes, resigning his role as CEO, but will remain on the board.
FINSUM: Things at Uber had gotten so out of hand under Kalanick that it is hard to blame the investors for wanting a change. Hopefully this will turn out best for everyone.
Amazon has big plans for its new buy Whole Foods. The acquisition of the grocery store chain is Amazon’s first major foray into brick and mortar and gives it a foothold of over 400 locations across the US. One of its plans is to lower prices for the famously expensive chain colloquially known as “whole paycheck”. It plans to do so by possibly cutting back on staff, introducing own-branded products, and potentially eliminating checkout registers like in its own pilot Amazon stores.
FINSUM: What Amazon actually does with Whole Foods will only emerge in time, but we imagine it has some big designs. That said, bidders could still emerge before the deal closes.
Uber has just taken a revolutionary and potentially dangerous step. It has transformed the way it charges riders, and in doing so has disconnected what it charges from what drivers are paid, as well as from the usual way that pricing is done in the taxi business. Rather than charging by time, distance, and demand, it is now using AI to charge people whatever it thinks they will pay. For instance, if a rider asks for a ride from a wealthy neighborhood to another wealthy enclave, it will charge then more than another rider who is taking a more blue-collar trip of the same distance and traffic level. In doing so, it is also disconnecting what it pays drivers from what it is actually taking in as revenue.
FINSUM: This is a big step for Uber and we are not sure it will be a successful one. The company says it wants to be profitable, but this could just lead to more rider and driver outrage.