Travis Kalanick is undermining Uber’s search for a new CEO, says the investor that’s suing him
Four days after suing former Uber Chief Executive Travis Kalanick, accusing him of fraud, early Uber investor Benchmark told Uber employees why it resorted to legal action: Kalanick, it said, was getting in the way.
In an open letter sent to Uber employees and publicly shared on Twitter, the Silicon Valley venture capital firm — which also has a seat on Uber’s board of directors — alleged that Kalanick had forced Benchmark’s hand by undermining the Uber board’s search for a new chief executive.
A spokesperson for Kalanick has disputed the claims Benchmark made in its lawsuit, describing the suit as “baseless” and “riddled with lies,” but Benchmark doubled down on its allegations Monday. Citing Kalanick’s ongoing day-to-day involvement with the company (despite his resignation as CEO a month ago) and what the venture capital firm called his failure to make good on a promise to modify Uber’s voting agreement to ensure that “independent, diverse and well-qualified” directors could be appointed to the board, Benchmark said Kalanick had created uncertainty for everyone.
“It has appeared at times as if the search [for a CEO] was being manipulated to deter candidates and create a power vacuum in which Travis could return,” the letter said.
“A number of people have asked why we took legal action before giving Travis the chance to sign these amendments. The fact is that we did give him a chance.… We were asked to postpone any filing and assured that efforts would be made to get these changes made without a lawsuit,” the letter said. “We waited and waited, watching as things deteriorated even further. Eventually, we felt that we could no longer wait and took action.”
Benchmark said the lawsuit also was intended to hasten the search for a chief financial officer and to bring about cultural change at the company.
Kalanick said in a statement Monday that he was “disappointed and baffled” by Benchmark’s “hostile actions, which clearly are not in the best interests of Uber and its employees on whose behalf they claim to be action.”
“Since 2009, building Uber into a great company has been my passion and obsession,” Kalanick said. “I continue to work tirelessly with the board to identify and hire the best CEO to guide Uber into its next phase of growth and ensure its continued success.”
Benchmark filed its lawsuit against Kalanick last week, alleging that the Uber co-founder had defrauded investors by keeping unethical business practices secret. The lawsuit attempts to void the three board seats that the board of directors approved last year on Kalanick’s insistence, a move that would effectively kick Kalanick off the board because he occupies one of those three seats. It also attempts to bar Kalanick from being involved in the day-to-day operations and decision-making of Uber and its board of directors.
In its open letter Monday, Benchmark reiterated that it believed Kalanick’s ongoing presence at Uber was creating a governance and management crisis for the company.
“It’s easy to reduce this situation to a battle of personalities,” it said. “But this isn’t about Benchmark versus Travis. It’s about ensuring that Uber can reach its full potential as a company. And that can only happen if we get rid of the roadblocks and distractions that have plagued Uber, and its board, for far too long.”
Twitter: @traceylien
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UPDATES:
3:15 p.m.: This article was updated with comment from Travis Kalanick.
This article was originally published at 2 p.m.
