UBER’S RUDE FEUD
Irked stakeholders punch back at Benchmark
The chaos inside Uber’s boardroom just shifted into high gear.
A group of Uber shareholders is revolting against Benchmark Capital, the ride-sharing app’s biggest investor, which filed a surprise lawsuit on Thursday that seeks to oust former CEO Travis Kalanick from the ride-sharing app’s board.
The dissenting shareholder group — headed by Los Angeles billionaire Ron Burkle, Hyperloop One backer Shervin Pishevar and music mogul Adam Leber — blasted the legal salvo from Benchmark’s Bill Gurley as a “fratricidal” move against Kalanick that could jeopardize Uber’s ability to raise funds and find a new CEO.
Their Friday letter accused Gurley — who for years was a mentor to Kalanick before a slew of scandals at Uber soured their relationship — of holding Uber “hostage to a public relations disaster by demanding Mr. Kalanick’s resignation.”
In the past year alone, Kalanick has been accused of fostering a toxic work environment ridden with sex-harassment allegations, bleeding top talent and stealing trade secrets by hiring a Google executive to lead its driverless-car initiative.
Benchmark, one of Silicon Valley’s top venture-capital firms, insists in its suit that Kalanick’s reported transgressions weren’t evident when Uber’s board voted last year to increase its membership from eight to 11 and to give Kalanick sole ap- pointment rights.
Benchmark also alleges that Kalanick sensed his behavior would force his ouster. And so he contrived the expansion, “ensuring that he would continue to have an outsized role in Uber’s strategic direction even if forced to resign,” according to the suit.
Nevertheless, it is Gurley’s resignation from the board that the trio of dissenting shareholders demanded Friday, likewise asking that Benchmark sell off at least three-quarters of its 13 per- cent stake in the company, estimated to be worth more than $8 billion.
The letter’s lead author Pishevar, a close friend of Kalanick, griped that Gurley filed the Thursday lawsuit “on a few hours’ notice and within weeks of a personal tragedy, under threat of public scandal.”
The letter was referring to a May boating accident that killed Kalanick’s mother and injured his father even as the hard-charging Uber cofounder was losing his position as CEO of the company.
“We would request that Benchmark help the company realize its full potential by allowing the necessary work to be done in the board room rather than the courtroom,” the disgruntled investors wrote.
Benchmark’s suit, filed in Delaware Chancery Court, seeks to have Kalanick removed as a director by reversing the board-expansion decision.
Axios, which first broke the story, quoted a Kalanick spokesman, who called the suit “a transparent attempt to deprive Travis Kalanick of his rights as a founder and shareholder.”
The outcome of an emergency board meeting on Friday to address Uber’s warring factions could not be determined at press time.