It looks like the sun won’t be shining on Uber anytime soon. The ride-hailing company has had no few number of problems for a long time now. Many senior executives have resigned including the CEO. The company is now searching for a new CEO while battling multiple intellectual property theft lawsuits, alleged sexual assault cases, and a new problem in which one of Uber’s investors has sued former CEO Travis Kalanick for fraud.
In a new turn of events, some of Uber’s investors have formed an alliance and written a letter to Benchmark, demanding that its partners step down from the board at Uber. These investors are Kalanick loyalists including Sherpa Capital’s Shervin Pishevar and Yucaipa Companies’ Ron Burkle. Maverick’s Adam Leber also signed the letter.
Below is the full text of the letter:
Dear Benchmark Partners,
As a group of shareholders of Uber Technologies, Inc. (the “Company”) we were surprised and distressed to learn through the media of the lawsuit brought by your firm against the Company, and its founder and former Chief Executive Officer Travis Kalanick.
Naturally, we share your concerns about the problems that the Company has confronted in recent months, but we are greatly concerned about the tactics employed by Benchmark to address them, which strike us as ethically dubious and, critically, value-destructive rather than value enhancing.
Specifically, we do not feel it was either prudent or necessary from the standpoint of shareholder value, to hold the company hostage to a public relations disaster by demanding Mr. Kalanick’s resignation, along with other concessions, on a few hours’ notice and within weeks of a personal tragedy, under threat of public scandal. Even less so your escalation of this fratricidal course – notwithstanding Mr. Kalanick’s resignation – through your recent lawsuit, which we fear will cost the company public goodwill, interfere with fundraising and impede the critical search for a new, world-class Chief Executive Officer. Benchmark has used false allegations from lawsuits like Waymo as a matter of fact and this and many other actions have crossed the fiduciary line.
Benchmark’s investment of $27M is worth $8.4 billion today and you are suing the founder, the company and the employees who worked so hard to create such unprecedented value. We ask you to please consider the lives of these employees and allow them to continue to grow this company in peace and make it thrive. These actions do the opposite.
Accordingly, we would request that Benchmark help the Company realize its full potential by allowing the necessary work to be done in the Board Room rather than the Courtroom. To this end, at this point, in light of your suit against the Company, we believe it would be best, and hereby request, that Benchmark remove its representative from the Company’s Board and move promptly to divest itself of enough shares in the Company so as to cease to have Board appointment rights. We have investors ready to acquire these shares as soon as we receive communication from Benchmark that they are willing to withdraw their lawsuit and sell a minimum of 75% of their holdings.
We are also asking for a symbolic Board of Directors vote on this matter at today’s Board meeting to show how the Board of Directors stands on this lawsuit brought against the company, its founder and the 15,000 employees of Uber who have all worked so hard in concert to create the fastest growing company in history.
Many other shareholders share our views and will be adding their names in the days ahead. Any shareholders who want to join this letter and petition may email one of our signatories of this letter so that we can submit a final list of shareholders who support this request. Emails can be addressed to Shervin Pishevar at UberShareholderAlliance@gmail.com.
Personal Investor, Advisor and Former Uber Board Observer (2011-2015) Coordinator, Uber Shareholder Alliance
Benchmark has not responded to the letter or made any comment about it, however, it looks like Uber may not be getting out of very many problems for a good long while.