Uber CEO ouster began with hand-delivered letter

Major investors wanted Travis Kalananick’s head, and they got it

SAN FRANCISCO: As Travis Kalanick ( pic) was in Chicago interviewing a candidate to be his deputy at Uber Technologies Inc, two investors were on a plane to deliver the news that they wanted the chief executive officer gone. Matt Cohler and Peter Fenton, partners at venture capital firm Benchmark, hand-delivered a letter urging Kalanick’s resignation, people familiar with the matter said. It was the result of a multi-week campaign led behind the scenes by Bill Gurley, another Benchmark partner who occupied the firm’s board seat at Uber, with the goal of ousting Kalanick. The memo was signed by five major backers, who account for as much as 40% of shareholder votes. A contentious board meeting led to Kalanick’s decision a week earlier to take an indefinite leave of absence, but many investors – worried about the company’s reputation as well as their own - believed the move didn’t go far enough. They crafted a two-page letter outlining their grievances. It blames Kalanick for putting the company at legal risk, citing a trade secrets lawsuit by Alphabet Inc’s Waymo and the use of a software tool called Greyball that’s the subject of a US criminal probe, according to two people who have seen it but asked not to be identified discussing private matters. The letter obliquely references private findings from a company investigation into Uber’s past, conducted by former US Attorney General Eric Holder. The report that was presented to the board contained details not in the public version. Several of the investors were concerned that Kalanick’s role in some of those incidents would continue to inflict damage on Uber, people familiar with the matter said. While the letter bore a folksy tone, rather than one reflecting the language of a corporate lawyer, it was direct on one point: Kalanick must step down.

Cohler and Fenton, who have had little regular involvement with Uber in the past, tracked the 40-year-old Kalanick down at his Chicago hotel on Tuesday morning. Kalanick read the memo, and the three men spoke for about an hour.

After deliberating for most of the day, Kalanick made up his mind to resign. “I love Uber more than anything in the world, and at this difficult moment in my personal life, I have accepted the investors’ request to step aside so that Uber can go back to building rather than be distracted with another fight,” he said in a statement on Tuesday night.

Garrett Camp, an Uber founder and director, tried to instill confidence on Wednesday following the previous day’s mutiny.

“We will hire a great CEO and keep pushing forward. Change is healthy, and needed,” he wrote on Twitter. “It’s much more stable than people think. We are still here; still running the company.”

The company sought to reassure all that the future was secure.

“We’re fortunate to have a strengthened board with accomplished directors to guide us as we focus on serving our customers and employees, maintaining our growing business, and building a company and culture that we can be proud of,” Uber said in a statement.

Although Kalanick’s tenaciousness ultimately led to his undoing, it was part of what drew venture capitalists to him in the first place. Under his stewardship, Uber attracted more than US$15bil to finance a global conquest that spanned more than 500 cities over about eight years.