Three Uber investors ask Benchmark to give up board seat

Uber
Photographer: Andrew Harrer/Bloomberg

Three Uber Technologies Inc. investors said a lawsuit against co-founder Travis Kalanick was designed to “hold the company hostage” and asked Benchmark, the venture capital firm that brought the suit, to step down from the board.

The investors sent a letter Friday addressed to Benchmark, saying they opposed the suit, according to a copy reviewed by Bloomberg. The investors are Sherpa Capital’s Shervin Pishevar, Yucaipa Companies’ Ron Burkle and Maverick’s Adam Leber. They don’t hold seats on the board or a majority of the company’s stock, but the letter said they’re seeking other shareholders to add their signatures.

Battles among Uber stakeholders have spilled into public view, and the conflicts risk paralyzing the ride-hailing company at a crucial time. Uber is looking to quickly fill the vacant CEO position, while trying to boost morale, battle a trade secrets lawsuit from Alphabet Inc. and defend against well-funded rivals. At least two people in consideration for the CEO job, including General Electric Co. Chairman Jeffrey Immelt, called Uber directors expressing dismay after this week’s suit, people familiar with the discussions said.

On Thursday, Benchmark sued Kalanick in Delaware Chancery Court, alleging that he withheld material information before asking the board to vote on adding three additional board seats last year. Kalanick now occupies one of those seats, but Benchmark is seeking to eliminate all three, according to the complaint. A spokesman for Kalanick has said the suit is “completely without merit and riddled with lies and false allegations.”

The firms didn’t immediately respond to requests for comment. The board is convening Friday to discuss the lawsuit, said people familiar with the matter, who asked not to be identified because the meeting is private.

“Naturally, we share your concerns about the problems that the Company has confronted in recent months,” the investors wrote in the letter. “But we are greatly concerned about the tactics employed by Benchmark to address them, which strike us as ethically dubious and, critically, value-destructive.”

Benchmark deployed a similar move in June to unseat Kalanick as chief executive officer. Bill Gurley, a partner at the firm, brought in four other major investors, who altogether hold as much as 40 percent of shareholder votes, to endorse a letter asking for Kalanick to step down. Kalanick complied, though he kept a seat on the board. After his ouster, he was looking to stay involved with the company and eventually seek a new role inside.

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Bloomberg