Uber Cyberattack: Travis Kalanick Needs to Explain His Role

(Bloomberg Gadfly) -- What did Travis Kalanick know, and when did he know it? 

That's the question Uber needs to answer after a stunning revelation that the company concealed a cyberattack last year that compromised personal information on 57 million Uber riders and 600,000 of its U.S. drivers.

Bloomberg News reporter Eric Newcomer wrote Tuesday that the company fired its chief security officer and one of his deputies for concealing the cyberattack, which ironically came at the same time that Uber was making up with regulators over misrepresentations of how it handled consumer and driver information. 

The new Uber Technologies Inc. CEO, Dara Khosrowshahi, essentially fell on his sword and apologized for the company's data breach and inexplicable failure to disclose it promptly. What he left unsaid was the role of Kalanick, the CEO at the time of the cyberattack and still an active participant in the company's strategy and board of directors. 

The Bloomberg News article said Kalanick learned about the hack in November 2016, a month after it happened. If Kalanick knew both about the cyberattack and the failure to disclose it to those affected and to regulators, he needs to account for why he let that happen.

And if Kalanick didn't tell his fellow Uber board members what happened, that is an equal stunner and deserves further explanation. And Kalanick must explain why people who worked for him repeatedly put the company, its customers and drivers in jeopardy by pushing the envelope of the law and normal standards of propriety. 

Khosrowshahi wrote in September that the company's poor reputation hurts its business. "The truth is that there is a high cost to a bad reputation," he told employees. That is the best summary of the hangover of Uber's years of flouting regulations and basic human decency. The cyberattack shows that the public may still not have a full accounting of all that Uber has done wrong. Changing the CEO doesn't change Uber's history, nor that history's continued fallout for the company. 

People Affected by Uber's Cyberattack

57 Million

Uber is trying to mend fences. Khosrowshahi has been on a goodwill tour of skeptical regulators and trying to calm employees who are frazzled after a year of crises. But Kalanick is still in the picture, and his association continues to throw Uber into tumult.

It's time for him to account for the maladies that Uber developed under his watch. And Kalanick needs to justify why he deserves to stay on Uber's board despite the repeated revelations of wrongdoing from his time at the helm. 

This column does not necessarily reflect the opinion of Bloomberg LP and its owners.

Shira Ovide is a Bloomberg Gadfly columnist covering technology. She previously was a reporter for the Wall Street Journal.

To contact the author of this story: Shira Ovide in New York at sovide@bloomberg.net.

To contact the editor responsible for this story: Daniel Niemi at dniemi1@bloomberg.net.

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