In the wake of founder Travis Kalanick’s resignation, the company will be intent on steering a steadier course free of controversy, or he could regain control and set that course himself.
Travis Kalanick decided to step down as CEO of Uber back in June following intense pressure from five major investors, The New York Times reported. But not all Uber employees agree with that decision, and Kalanick himself is reportedly vying for ways to retake the reins at the company. According to a new report from The Information, the former CEO asked some of Uber’s earliest employees (those still at the company) to support him in a potential shareholder battle. This could signal an ongoing battle over Uber’s rather murky future, at least insofar as leadership is concerned.
Now, the latest twist in the ongoing Uber drama involves Uber investor Benchmark Capital, who is suing Kalanick for fraud. But it gets weirder still — as a result of this pending litigation, another group of investors has asked Benchmark to divest its Uber shares and get off the board.
Benchmark decided to sue Kalanick after the former exec attempted to create three new seats on the board (one of which he would occupy). But Benchmark wanted Kalanick completely removed from the company. Now, however, it seems as though the tables have turned once again. In an email obtained by Axios, three investors — Shervin Pishevar, Ron Burkle of Yucaipa and Adam Leber of Maverick — called Benchmark’s lawsuit is “ethically dubious and, critically, value-destructive rather than value enhancing.” Noting that the case would be “fratricidal,” these investors said that the move could “cost the company public goodwill, interfere with fundraising and impede the critical search for a new, world-class Chief Executive Officer.”
Uber’s board only recently signed off on new rules that forbade current board members from contacting current Uber employees for information or assistance unless given express permission from the board. The Information reported that this decision “was triggered by Mr. Kalanick’s discussions with former colleagues that alarmed some employees, a person familiar with the matter said.”
News of the 40-year-old founder’s departure from the company followed mounting criticism over the way the company has been conducting its business, and came just a few days after the funeral of Kalanick’s mother, who died in a boating accident at the end of May.
In a statement seen by the Times, Kalanick said: “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.”
According to reports, Kalanick’s decision followed a revolt among shareholders who told him that new leadership was required for the company to move forward.
Kalanick, who founded Uber in 2009, reportedly received the demand by letter while in Chicago. After several hours of discussions, he finally agreed to leave the top job.
While Uber has always faced plenty of criticism about how it conducts its business, matters appeared to take a turn for the worse earlier this year when a former employee made allegations of a company culture where sexual harassment and gender discrimination was rife.
Keen to clean up its act, the company conducted an investigation into its workplace practices, which culminated in the firing of 20 employees and the release of a report last week that recommended Kalanick play less of a major role in the business.
Besides concerns about its workplace culture, the company is also embroiled in a legal battle with Google spinoff Waymo over the alleged theft of autonomous-car tech. It’s also facing a probe by the Department of Justice following accusations that it used secret technology to hide its vehicles from officials in some cities where attempts were being made to cut down on the service.
Uber’s investors will be hoping new leadership will set the company on a steadier course free of controversy, but even the decision to force out Kalanick has proven controversial. As originally reported by Recode, Uber employees have circulated a petition asking the company’s board to keep Kalanick onboard in some capacity, and that petition has already garnered more than 1,000 signatures.
“Nobody is perfect, but I fundamentally believe [Kalanick] can evolve into the leader Uber needs today and that he’s critical to its future success,” read the email circulated within the company. “I want the Board to hear from Uber employees that it’s made the wrong decision in pressuring Travis to leave and that he should be reinstated in an operational role.”
Update: An Uber investor is suing Travis Kalanick, but is being asked to leave the board as a result.