Venture capital firm Benchmark, whose partner Bill Gurley is one of Uber's largest shareholders and sits on its board, as well as investors First Round Capital, Lowercase Capital, Menlo Ventures and Fidelity Investments, all pressed Kalanick to quit.
The man most closely identified with the ride-hailing giant's meteoric global ascent said he was ceding to investors' wishes that he step aside, in part to avoid yet another conflict.
Uber has been dogged by questions over its working culture, including sexual harassment, allegations of trade secrets theft and an investigation into efforts to mislead government regulators. Kalanick joins a number of Uber executives who recently left the firm, including its president.
Mr Kalanick had already been on indefinite leave amid criticism of his management style and following the death of his mother in a boating accident.
Earlier on Tuesday, five of Uber's major investors demanded that Kalanick resign immediately, according to The New York Times, which first reported the story. For now, 14 people who reported to Kalanick are running Uber. Kalanick frequently recounts how the idea behind Uber was born, when he and a colleague were attending a technology conference in Paris and failed to find a taxi on a cold night.
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The startup has been in upheaval for most of this year, following rider protests over the company's ties to the Trump administration and an investigation into Uber's corporate culture conducted by former US Attorney General Eric Holder. More than 20 people were fired as part of a separate probe by another firm.
Kalanick will remain on the board. Uber's image has been tarnished by a series of missteps including a visit by executives to a South Korean escort-karaoke bar, an attempt to dig up dirt on journalists covering the company and the mishandling of medical records from a woman raped in India after hailing an Uber ride.
The company has sought to head off a defection of drivers by adding a function to its app that lets customers provide tips, a feature that has always been offered by main U.S. rival Lyft Inc. Uber insiders may also be considered, including board member Arianna Huffington.
"This is a bold decision and a sign of his devotion and love for Uber", Uber's board of directors said in an emailed statement about Kalanick.