After such a promising start, things continue to look a little shaky for the ‘upstart’ ride-sharing service Uber.
Even though he is now the ex-CEO, Uber co-founder Travis Kalanick has long boasted that he personally would never sell a single one of the shares he holds in the company he worked so hard to launch.
Now, however, according to Bloomberg, he is trying to sell about 29% of his holdings in the company to Softbank, the Japanese tech giant who had already been announced as new major investors in the venture.
For Kalanick this is perhaps a good thing, as his 2017 did not go so well. He was ousted as CEO last June and his status as ‘one of the world’s wealthiest men’ was called into question when experts declared that Uber’s on paper value was wildly overstated.
This proved to be true, as when Softbank announced its investment the official valuation of the company fell 30 percent to $48 billion, down from the $70 billion that the beleaguered company had been claiming.
Despite the cash injection from the Japanese, Uber still faces a great many challenges in 2018. In the UK they have already been banned from operating in the lucrative London market and many other cities there are attempting to do the same. In the US an ongoing battle with New York City is likely to result in a defeat similar to the one the company took in London and its general legal woes are mounting as well.
According to John Foy, founder of a personal injury firm in Atlanta, “As personal injury lawyers, we are seeing a rise in the number of claims related to Uber accidents. These claims can often be complicated by the company’s law-skirting habits, but payouts will have to be made sooner rather than later.”
And it does get worse. Under Kalanick’s controversial tenure the unlawful actions it is said he ‘overlooked’ have resulted in at least five ongoing criminal investigations. There is also a lawsuit brought by Google parent company Alphabet over alleged trade secrets thefts to be heard later this month that pundits expect will result in some embarrassing revelations and potentially billions in fines for Uber and even perhaps Kalanick himself.
So, while Travis Kalanick may be having a good start to 2018 – with his estimated payout on the shares sale it’s believed he will finally really become the billionaire he has often claimed to be – it’s likely to be very tough for his incoming replacement, Dara Khosrowshahi and the company he has been tasked with cleaning up and reviving.