So far there haven’t been any reports of Uber’s board members coming to blows, but the way things are going, that possibility doesn’t seem too far fetched.
Now, a new report ups the ante again — the board apparently is moving forward with investment proposals that could shake things up even more by shifting power away from current shareholders. Uber’s board has agreed to pursue an investment by SoftBank, The New York Times reports, and earlier voted to take the next step with regard to an offer from a group led by the Dragoneer Investment Group. And Uber’s board is considering a third offer by early Uber investor Shervin Pishevar, which would strip another major investor it its shares.
These offers add another dynamic to escalating in-fighting between Uber’s major investors that has Silicon Valley watching in disbelief, wondering how the drama will shake out, and where it will leave the world’s most valuable startup. That question is especially important right now because Uber’s board currently has an outsized amount of power and influence over the company — the board is in charge of picking a new CEO to replace ousted leader Travis Kalanick.
On Thursday one of Uber’s most prominent investors, Benchmark Capital, sued Kalanick for fraud, attempting to oust him from the San Francisco-based ride-hailing company’s board and prevent him from appointing his allies as directors. Benchmark accuses Kalanick of breaching his fiduciary duty to Uber by trying to “entrench himself on Uber’s board of Directors and increase his power over Uber for his own selfish ends.”
“Kalanick’s overarching objective is to pack Uber’s Board with loyal allies in an effort to insulate his prior conduct from scrutiny and clear the path for his eventual return as CEO — all to the detriment of Uber’s stockholders, employees, driver-partners, and customers,” the lawsuit claims.
That lawsuit didn’t sit well with another group of investors. On Friday a group led by Pishevar of Sherpa Capital, launched a coup in an attempt to kick Benchmark off the board — the shareholders demand Benchmark sell at least 75 percent of its holdings, saying they have investors standing by waiting to buy them. The group made the demand in a letter and invited other shareholders to sign.
“Benchmark’s investment of $27M is worth $8.4 billion today and you are suing the founder, the company and the employees who worked so hard to create such unprecedented value,” the group wrote, according to a copy of the letter obtained by Axios. “We ask you to please consider the lives of these employees and allow them to continue to grow this company in peace and make it thrive. These actions do the opposite.”
So, just to recap: Benchmark Capital is trying to kick Kalanick off the board. Another group of investors, led by Pishevar, is trying to kick Benchmark off the board. Meanwhile, Uber’s board is considering Pishevar’s investment offer, as well as two additional offers that could also shake things up.
Photo: The logo of the ride sharing service Uber is seen in front of its headquarters on August 26, 2016 in San Francisco, California. (Photo by Justin Sullivan/Getty Images)