Uber board votes to pursue SoftBank deal, governance changes

Tammy Harvey
October 6, 2017

In the picture, Uber employees, who had spent the last eight months watching the company's dirty laundry aired in public, smiled for the camera hoping that the moment marked a new beginning. Members basically voted to make some changes to the power structure of the company, making former CEO Travis Kalanick's influence less potent.

Now, a little more than a month later, the united front on display in that photo has been severely tested.

Kalanick, still one of the largest shareholders and a board member, contends that fellow Uber board members are moving too fast on a dramatic restructuring and wants to delay a decision on governance changes, a third person said.

Uber has confirmed a significant investment from Softbank earlier this week, and numerous changes to the board.

Uber's top boss in Britain will quit the taxi-hailing app, according to an email seen by Reuters on Monday, as the company prepares to meet the London transport regulator in a bid to keep operating in one of its most important foreign markets.

His right to fill those seats is now being challenged in a lawsuit filed by Benchmark, an early investor that owns 13 percent of Uber.

It's not clear whether the board chose to strip the shares of their special voting power, or if the board devised a different method to "ensure equality among all shareholders", as it said in a statement provided to Business Insider on Tuesday. Allegations of sexual harassment spurred the company to hire former US Attorney General Eric Holder to investigate Uber's corporate culture.

A spokesperson for Uber made a brief statement late yesterday (October 3) after CEO Dara Khosrowshahi met with Transport for London boss Mike Brown, saying the discussion was "constructive". This is a big step for Uber, which has so far operated as a private company despite the sheer magnitude of its business.

"SoftBank's interest is an incredible vote of confidence in Uber's business and long-term potential, and we look forward to finalising the investment in the coming weeks". Rather than take a seat from any existing board members as Khosrowshahi had previously considered, Uber added three spots for independent directors, plus another for an independent chair, and two more for SoftBank.

Not everyone was happy with today's results. It's not clear whether the pair will join the board, though at least one current director believes the group will embrace Kalanick's appointees, a person familiar with the matter said.

Per the approved proposals, certain Uber shareholders will lose some of their power - including Kalanick himself.

"Today's action is a naked violation and repudiation of those rights", he said in a statement. "Under Dara's leadership and with strong guidance from the board, we should expect great things ahead for Uber". CEO Ursula Burns, to Uber's board without consulting other directors.

Other reports by Ligue1talk

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