The CEO of Uber Technologies Inc., Travis Kalanick, has resigned, leaving the Indian sector of the company in uncertainty. Kalanick was a big backer of the money-losing Uber business in India. His departure leaves rival Ola an opportunity to retain the market leadership.
Kalanick's resignation indicates that Uber may be forced to cut it's aggressive spending to gain market share. If Uber is unable to keep prices low for riders in Indian markets, and fails to promote drivers' incentives, it will hit the growth of the company.
Moreover, a company with a founder as a CEO is expected to have more aggressive growth than a company with a professional CEO, who would take a more cautious approach. In the short term, Uber may take a hit. Investors may also rethink future investments, and may take the 'wait and watch' approach.
CEO Kalanick's resignation came under pressure in the wake of a wide ranging probe, that looked into Uber's practices on tackling issues, including sexual harassment at the company, and professionalism and ethics of the company leaders. Kalanick's resignation has come as a shock to junior executives and employees at Uber India, who came to know about his departure from the company after he wrote them a letter.
Both Uber and Ola are claiming market leadership and are close rivals. That Uber will stabilize over time is a 'given', but then the rivals will certainly look to gain, during this period of stabilization. A period of uncertainty for any company will prove beneficial to it's rivals. The competition always tries to win the war. Ola stands a good chance.