Kalanick Loyalists Move to Force Benchmark Off Uber’s Board

This post was originally published on this site

https://static01.nyt.com/images/2017/08/12/business/12uber1/12uber1-moth.jpg

SAN FRANCISCO — A group of investors in the ride-hailing company Uber has formed an alliance to push Benchmark, a major shareholder, off the company’s board of directors, the latest escalation of a public feud in Uber’s top ranks.

In a letter sent to Benchmark on Friday, Shervin Pishevar, a venture capitalist at Sherpa Capital, demanded that the firm surrender its seat on the Uber board and sell its shares in the company to outside investors, according to a copy of the letter obtained by The New York Times.

The request came a day after Benchmark filed a lawsuit against Travis Kalanick, Uber’s former chief executive, accusing him of fraud, breach of contract and breach of fiduciary duty. Mr. Kalanick resigned as chief executive in June in the face of a shareholder coup led by Benchmark.

“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,” said the letter, which was signed by Mr. Pishevar and claimed to represent other shareholders.

The letter did not specify how many people beyond its three signatories — including Ronald Burkle, chairman of Yucaipa Companies, and Adam Leber, a partner at Maverick Management — support Mr. Pishevar in his opposition to Benchmark.

The letter was the latest protest against Benchmark’s efforts and a public show of support for Mr. Kalanick at a time when his allies have waned.

It is also yet another contentious twist for Uber, which was last valued at nearly $70 billion and which operates in more than 600 cities worldwide. Since January, the company has experienced a series of crises, including a scandal over sexual harassment and workplace culture, multiple lawsuits and the looming threat of a Justice Department investigation.

Uber declined to comment on the letter. Mr. Pishevar did not immediately respond to requests for comment, nor did a spokeswoman for Benchmark or a spokesman for Mr. Kalanick.

In an email to its employees, the Uber board said “it has urged both parties to resolve the matter cooperatively and quickly, and the board is taking steps to facilitate that process.”

The letter was first reported by the news site Axios.

The battle at Uber is primarily over empty seats on the company’s eight-person board. Under the terms of Uber’s corporate charter, Mr. Kalanick has the power to name two more board members — a power that Benchmark is suing to nullify while also trying to remove Mr. Kalanick from the board entirely.

Some factions within Uber have said Mr. Kalanick is the root of the company’s problems, and have supported Benchmark’s actions.

Another contingent of early employees and other loyalists has sided with Mr. Kalanick, who, along with the co-founder Garrett Camp, built Uber into a global transportation giant over the past eight years.

Mr. Pishevar, a longstanding ally of Mr. Kalanick’s and an early friend in the venture capital and entertainment industries in Los Angeles, is one of the few to show public support for Mr. Kalanick.

The letter ended with a call for other shareholders to join him.

“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,” it said. “These actions do the opposite.”