Uber shareholders feud over investor's lawsuit

Travis Kalanick

Travis Kalanick

In a letter to Benchmark last week, investors siding with Kalanick accused the company of hurting Uber by holding "the company hostage to a public relations disaster" by calling for his resignation on short notice "and within weeks of a personal tragedy, under threat of public scandal".

Benchmark, which led Uber's Series A funding round in early 2011, has injected almost $30 million into the company, according to fellow shareholders.

Benchmark Capital said Kalanick was still involved in the day-to-day operations at Uber, which has created a sense of uncertainty and undermined the search for his replacement.

"The search for a new CEO started over 50 days ago", the un-signed letter says.

Other Uber shareholders led by Shervin Pishevar of Sherpa Capital have vehemently opposed Benchmark's lawsuit. Among other things, Benchmark said, Kalanick knew Uber might be accused of stealing trade secrets from Waymo, Google's self-driving auto unit. For the uninitiated, Benchmark's lawsuit alleges that Kalanick purposefully packed the board with allies which could eventually pave the way for him to return as the company's leader, "Steve Jobs-ing" it, as he reportedly said.

The letter goes on to detail that Kalanick appears to be working against the firm's efforts. Benchmark sued Kalanick for fraud last week, adding another controversy to the company's already disastrous winter. "These actions do the opposite". The company is also looking for a chief operating officer, a finance chief and a general counsel, meaning it is ostensibly being run by more than a dozen top employees.

The fractured Uber board is now considering proposals by investing groups that want to buy Uber shares from existing holders of the company's shares, according to an account of the internal deliberations by Isaac and Katie Benner in the Times on Sunday. Waymo sued Uber earlier this year.

Kalanick's departure as CEO came in the wake of an investigation into Uber's workplace environment, which was commissioned by the company's board.

But he has a tough task ahead of him. Pishevar and his supporters have argued that Benchmark's actions are destroying the value of their investments in Uber.

Nevertheless, he doesn't think Uber's recent board troubles will be the company's downfall.

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