The Third Degree

Exclusive: Shake Up and Resignations at Uber’s New York Office, CEO Travis Kalanick Explains

travis kalanick Exclusive: Shake Up and Resignations at Ubers New York Office, CEO Travis Kalanick Explains

Lone Ranger? Image via NextGen

Betabeat just learned that Uber’s three-person New York office, which opened four months ago, has already weathered a couple big staffing shake-ups. Both New York general manager Matthew Kochman and New York community manager James Aviaz have resigned. The San Francisco startup, which has picked up a total of $12.5 million in in financing, lets users request car service (in the case of New York, a black towncar) by texting your pickup location or inputting it into an iPhone or Android app. On the eve of Uber’s launch in Chicago tomorrow, we talked to CEO and co-founder Travis Kalanick about the state of Uber’s rollout in New York and how these resignations will affect its efforts.

According to Mr. Kalanick, who was on the phone from Chicago prepping for tomorrow’s launch, Mr. Kochman resigned a couple months ago and Mr. Aviaz resigned a couple weeks ago. “We came up with a good transition so that everybody felt good about the situation. One of the guys had the next gig sort of ready to go.” Reached by phone, Mr. Aviaz said he left because he got a better offer from a music company and that industry has long been his passion.

As for Mr. Kochman, he said the startup bug was calling him again. “Uber was a great experience and I learned a ton, but I really wanted to be doing my own thing again. I was around to help launch the company, but right now they need someone who is more experienced with the growth stage.” Mr. Kochman, already a two time entrepreneur, promised to touch base with his next venture soon.

The reason behind both resignations, as Mr. Kalanick told it, had to do with lack of senior leadership in an office struggling with regulatory hurdles and difficulty amassing supply to meet local demand. “It’s probably four—it’s probably several times bigger than San Franciso was at that same age,” he said.

“The best explanation for [the resignations], is that we’ve got an exploding business in New York and we really came at New York pretty hard and fast. We hired quickly and we hired pretty young and I think, really, a city like New York—a multi-hundred million dollar market for us, is how we look at it—the complexity and vastness of that market requires senior leadership. I think that’s probably where things went wrong. We’re big fans of both Matt and James.”

Mr. Kalanick declined to share any numbers about Uber’s adoption rate in New York, but noted, “We’re struggling to keep supply in step with the huge influx of demand.” When asked whether the resignations had to do with difficulties with the rollout in New York, Mr. Kalanick responded, “It’s been challenging keeping up on the supply side and I think that’s where, honestly, it takes strategic senior leadership to spearhead. To date that’s really been my job, but when you have as many cities rolling out as you do right now, I can’t spend all my time in New York.”

In addition to tomorrow’s launch in Chicago, Uber opened in Seattle last month, has Washington DC and Boston slated for October and November, and “then we have a whole huge list of cities rolling out in the next 12-15 months,” said Mr. Kalanick.

New York, however, has been the trickiest. “It’s a pretty complex regulatory scheme in New York and I think we have really great relationships with all the fleets, but I think making the economics work given some of the regulatory statutes and just the regime itself. If you talk to anyone in the industry, they’ll tell you it’s a complex regulatory regime that makes things tricky in New York,” he said with a laugh.

Each Uber office operates as a three-person team. In the interim, as they sift through candidates already in the pipeline, Mr. Kalanick said the New York office will be run by “a mix of myself and Ryan Graves [the company’s former CEO and co-founder].”

Betabeat wondered why New York, a city with so many transportation alternatives, was in such a rush to sign up.  “I talk to New Yorkers all the time and they say, ‘Travis, the taxis are ubiquitous and they’re cheap.’ And I go, I know, there’s taxis everywhere, it’s New York. I know they’re there. But you go to the average New Yorker and you say tell me about that time when you can’t get a taxi and the next thing you know they’re yelling my ear off. They’re like, ‘7th avenue between 20th and 35th from 7.15 to 9.30am in the morning.’ They’re like, ‘Tribeca early afternoon,’ ‘Alphabet City north of Houston,’ anytime of the day. What you see is there’s a smattering of micro-pain points across the city at all times of the day. You add those pain points up, that’s a multi-hundred million dollar business every year, that alone. Then you add rain, then you add Brooklyn, then you add shift changes and things get really crazy.”

But does Mr. Kalanick think that service is something New Yorkers would be willing to pay in some cases double for? “It’s not a matter of what I think it, the fact of the matter is that it’s happening.”

Follow Nitasha Tiku on Twitter or via RSS. ntiku@observer.com

Comments

  1. kevin ebaugh says:

    I’d quit too if there was only $12.5 in financing :)

  2. Alan Wolk says:

    Uber would seem to compete with all the “black car” services in NYC, no?

    I’m thinking their best bet would be to land a couple of corporate accounts – the big law firms and investment banks use car services all the time.

    I have been very happy with their service in NY and SF – the cars are new and clean, drivers friendly and clean and they’ve always been able to get me a car within 10 minutes. The convenience of doing everything via an app and email is fantastic.

    1. Nitasha Tiku says:

      Interesting idea, Alan. I imagine for the average consumer, the barrier is the cost more than wait time (if the idea is you’re using it when there are no cabs to be found). But big firms already have padded transportation budgets.

      1. Jess Kimball says:

        Uber is also a “clout” story… It’s double the cost of a black car, but “triple” the cool factor. I think what they need is a brilliant loyalty scheme. I’ve recommended this four thousand times to Ozocar, but those guys totally don’t get it. (Am hoping Uber eats Ozo’s lunch!) 

        People use car services for work. Like flying, that’s an expense that can be deducted. I should be able to put my work cars on my work credit card, and earn “points” to use cars for fun, like going out on the town. That’s how they stabilize their base users. 

  3. Craigsli says:

    “It’s a pretty complex regulatory scheme in New York and I think we have really great relationships with all the fleets, but I think making the economics work given some of the regulatory statutes and just the regime itself.
    …is not a sentence.

  4. Traveler says:

    I have used UBER in SF and it was great. I tried to use three times in NYC last week. First time, no cars available at 11:30p. Second time, no cars available from 48th & Park at 7pm. Third time, 15 minute wait post theater at 10pm. AP showed only one car in Upper East Side.

    Not worth the trouble. I can find cab or gypsy town car in less than 10 minutes.