Uber’s founder and former CEO, Travis Kalanick, retaliated against Uber’s board of directors by appointing two new board members last week in what looks like the opening round in a battle for control of Silicon Valley’s most valuable tech unicorn.
Kalanick issued a statement: “I am happy to announce that Ursula Burns and John Thain have agreed to join Uber’s Board of Directors. Until earlier this year, Ursula was Chairman and CEO of Xerox, while John was formerly CEO of CIT Group, Merrill Lynch, and NYSE. Ursula and John are two highly accomplished corporate leaders with extensive board experience.”
Kalanick had been quiet after resigning on June 20, following a board-authorized 47-point report compiled by former Obama Attorney General Eric Holder that claimed the company was a management disaster. The 40-year-old entrepreneur, who had built the value of Uber into a $69 billion unicorn, was under extreme duress at the time due to the death of his parents in a boating accident three weeks earlier.
Holder’s law firm, Perkins Coie, presented report a June 6 to the Uber Board Directors detailing 215 Uber incidents regarded as sexual harassment, bullying, bias, and retaliation. Holder’s investigation led to 20 staff terminations, 31 employees in counseling, seven written warnings, 100 cases with “no action taken” letters, and 57 cases still open.
But just a day after Kalanick resigned to quiet company turmoil, Holder stood alongside California Senate leader Kevin de Leon at a public rally in Los Angeles to trumpet his support for a law restraining policy from enforcing immigration laws. Basking in what he called “notoriety” in Uber’s house cleaning, Holder said he was joining the Trump “resistance” and considering a 2020 presidential run.
And yet Breitbart News suggested that despite all the negative publicity, Kalanick could make a Steve Jobs-style comeback.
Apple’s board forced founder Steve Jobs to resign as CEO in 1985, because he was too entrepreneurial and lacked corporate profitability discipline. The move destroyed Apple’s tech leadership and nearly bankrupted the company. The board was forced to bring Jobs back a decade later.
Breitbart News pointed out Kalanick had a huge advantage over Jobs, because the board had awarded him the right to super-voting shares that would allow him to appoint 3 additional members to Uber’s 14-member Board.
Breitbart News also noted that the Harvard Business School held a one-day forum in 2015 featuring top corporate executives to analyze “Uber’s Keys to Success,” and that the consensus was that Kalanick’s willingness to violate corporate norms and flaunt laws was the key to Uber’s access in raising $8.81 billion in 14-rounds of venture capital.
Uber has gone from internal turmoil before Kalanick left, to massive external turmoil in the 100 days since he was ousted. The Transport for London ministry stated on September 22 that they would not renew Uber’s operating license, and Uber was forced to suspend operations in the Province of Quebec, Canada, on September 26 over licensure.
But the most traumatic post-Kalanick disaster is the September 14 report by Fortune magazine that Softbank is negotiating a $10 billion investment in Uber at a $50 billion valuation, a 30 percent discount to the $69 billion valuation before Kalanick was ousted.
Board member Benchmark sued Kalanick in early August, claiming the Board was defrauded into voting for the Kalanick super-majority stock award. Benchmark hoped they could humiliate Kalanick in a salacious public proceeding, but Judge Samuel Glasscock of Delaware’s Court of Chancery ordered the case to confidential arbitration.
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