UBER ULTIMATUM
Leave of absence not enough to protect company’s image, five major investors feared
Key investors delivered a letter demanding that beleaguered CEO Travis Kalanick resign,
SAN FRANCISCO— As Travis Kalanick 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 CEO 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 per cent 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 U.S. 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 U.S. attorney general Eric Holder. The report that was present- ed 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 damageon Uber, people familiar with the matter said.
A court filing in the Waymo case, revealed Wednesday, suggested that Kalanick knew the engineer who until recently oversaw Uber’s driverless car project possessed discs of information from Google.
Kalanick told Anthony Levandowski around March 2016 that Uber didn’t want the information and that he shouldn’t bring it to the ride-hailing company, and the engineer told management that he destroyed the discs, according to the filing.
While the investors’ 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 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 diffi- cult 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 Tuesday night.
Garrett Camp, an Uber founder and director, tried to instill confidence 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.