Uber Investors Threaten to Sue over Board Vote


Today (Oct. 4) Uber announced in a statement it would move forward with a proposed investment from Japanese tech giant SoftBank which could close "in the coming weeks", and also voted in favor of a number of corporate governance reforms.

The board's decisions mean that Uber, valued at almost $70 billion and closely watched by other start-ups, may have defused - at least temporarily - another fractious situation. The unusually large board would accommodate two spots for SoftBank representatives and more independent voices.

The company is seeking to shore up its reputation after a series of scandals and to move beyond a battle between Kalanick and Uber investors spearheaded by Silicon Valley's Benchmark Capital. Benchmark helped force out Mr. Kalanick as chief executive in June. Kalanick still appears to control three board seats, and new barriers were reportedly not introduced to block the cofounder from one day returning as CEO. "Following the meeting, early Uber investors Shervin Pishevar and Steve Russell called the board vote "unfair and illegal", and pledged to "[move] forward with a class action lawsuit" over vote to reclassify stock. On Tuesday, the directors, led by Khosrowshahi, moved to decrease the power of Kalanick and other early executives and investors by removing certain voting privileges from their Uber shares.

The meeting will consider proposals to strip early investors of super-voting power and secure a multibillion-dollar investment.

Under the new plan, shareholders will eventually have one vote per share. In practice, this means putting a limit on Kalanick's influence over the company.

Kalanick's comments on the matter were equally effusive, saying: "Today the Board came together collaboratively and took a major step forward in Uber's journey to becoming a world-class public company".

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On Tuesday, Khosrowshahi - who has apologized to Londoners for the firm's mistakes- will meet TfL's Commissioner Mike Brown in a bid to fix a fraught relationship between the regulator and the taxi app, which has prompted strong opposition from unions and traditional taxi drivers over working rights.

The company's new chief executive, Dara Khosrowshahi, flew to the British capital, its biggest European market, to hold talks with the city's transport chief on Tuesday.

Recode's Kara Swisher and Theodore Schleifer reported more details on the proposals that the board is considering next week. To prepare for that, the company would create two new board seats for SoftBank as well as hire three additional independent directors and a chairperson, bringing membership on the board to 17 people.

Jo Bertram will leave Uber U.K.in the next few weeks to take up an undisclosed new role outside the company.

Last time Uber's board went into such heated deliberations, they were weighing two high-profile candidates for CEO: General Electric Co.'s Jeffrey Immelt or Hewlett Packard Enterprise Co.'s Meg Whitman.