VC Firm Benchmark Capital, An Early Investor In Uber, Sues Travis Kalanick For Fraud (axios.com)

Dan Primack, reporting for Axios: The battle between Benchmark Capital and Travis Kalanick just went nuclear, with the venture capital firm suing the former Uber CEO for fraud, breach of contract and breach of fiduciary duty. The complaint was filed earlier today in Delaware Chancery Court. Key graph, per the suit: "Kalanick, the former CEO of Uber, to entrench himself on Uber's Board of Directors and increase his power over Uber for his own selfish ends. Kalanick's overarching objective is to pack Uber's Board with loyal allies in an effort to insulate his prior conduct from scrutiny and clear the path for his eventual return as CEO -- all to the detriment of Uber's stockholders, employees, driver-partners, and customers." Why it matters: If Benchmark's suit is successful, Kalanick would be kicked off Uber's board of directors -- thus eliminating any faint hopes of him returning to the company in a substantial role.

Comments

Nice try, Benchmark.

[cunina]

There are few organizations on Earth I hate more than Uber (see Disney), but in this case, Kalanick is right. An investor isn't entitled to every piece of information one of its assets has, and even if it did, rolling back a shareholder vote is a way, way too extreme measure to deal with it.

Re:Nice try, Benchmark.

[HornWumpus]

Even if they both lose, the lawyers win. So there is nobody to cheer for in this fight. Maybe if the lawyers agree to get paid with options there's a lose, lose, lose proposition (good outcome). But I don't see it happening.

Re:Nice try, Benchmark.

[lactose99]

From the article, he was making an end-run around Benchmark. I can certainly see them suing him.

Re:Nice try, Benchmark.

[fustakrakich]

Even if they both lose, the lawyers win. So there is nobody to cheer for in this fight.

Unless you're a lawyer...

Re:Nice try, Benchmark.

[Luthair]

There are issues with boards - something I hadn't realized prior to listening to Planet Money #594 new board members must be approved for voting by the existing board. So if you're in control of a board you can ensure perpetual control.

Re:Nice try, Benchmark.

[loufoque]

The reason you give people voting rights is that they usually ask for it in exchange of bringing new capital.

Sue

[Anonymous Coward]

Sue? Never met her...

Travis and Black Lives Matter

[Anonymous Coward]

As if getting sued was not his only problem.

Travis Kaepernick is also being blacklisted by the NFL. What was Travis crime? Travis would not stand for the national anthem because he said "All Lives Matter" and he was protesting the virtue signaling of the Black Lives Matter movement who don't feel that every life is important. Travis Kaepernick is being blacklisted unfairly. Let the NFL know that All Lives Matter, and that you stand with Travis. Demand that his unfair treatment end immediately and that he be given a job with one of the NFL teams.

Caveat emptor

[Anonymous Coward]

VCs getting what they deserve: nothing.

Is the Web 2.0 bubble finally bursting?

[Anonymous Coward]

It has survived longer than many expected it would, but we may be at the point where the Web 2.0 bubble is starting to burst, if it hasn't already.

Ruby on Rails heralded the start of Web 2.0. It might have been one of the most hyped technologies of all time. Yet pretty much all of this hype has dried up. The technology it supposedly enabled was never really that impressive, either. A lot of Ruby on Rails adopters ended up ditching it in favor of PHP and other traditional web development languages because Ruby code ended up being too slow and difficult to maintain.

Like Ruby on Rails, Node.js received a lot of hype, but most of that has disappeared. Like Ruby, JavaScript proved to be too slow and too unmaintainable to use for any serious software development.

Now we're seeing trouble at the major companies and organizations in Silicon Valley and San Francisco. I'm sure we're all aware of the troubles that Uber has faced. Now the identity politics strife at Google is coming to light. Mozilla isn't in a good position, either, with Firefox's usage dropping off, and many of their other projects (like Firefox OS, Persona, Rust, Servo, and Firefox for Android) seeing little adoption, or otherwise being failures. We're seeing users become uneasy with Twitter and Facebook.

Some people will point to tech stocks hitting record highs, but that's exactly what we'd expect as a bubble is growing, and it's exactly what we'd expect to see just before a disastrous pop of such a bubble. That's what defines a bubble: rapid and excessive growth, followed by a sudden and unexpected popping that negates all of that growth extremely quickly.

Even Apple, which might not necessarily be considered a Web 2.0 company but is closely related, is seeing some discontent. Slashdot recent reported how employees are allegedly unhappy with the new campus. It also wasn't long ago that the creator of Swfit, Apple's next-generation programming language, left for Tesla, only to leave Tesla a few months later.

Open source projects have been suffering, too. Like mentioned earlier, Firefox is not doing well at all, in terms of its ever-dwindling market share. The GNOME project is suffering, especially after the GNOME 3 debacle which was not well received by its user base. Even well-established Linux distros like Debian and Ubuntu are in a world of pain thanks to how systemd has divided their communities.

Across the board we're seeing more and more uncertainty. In many ways this reflects what happened during the .com bubble of almost 20 years ago. Everything seemed rosy and optimistic until reality set in. When it went downhill, it went downhill fast, and the landing was very painful. We may now be seeing the same thing happen.

Re:Is the Web 2.0 bubble finally bursting?

[JohnFen]

Web 2.0 can't die, because it never actually meant anything.

Re: Is the Web 2.0 bubble finally bursting?

[Anonymous Coward]

More like an economy bubble in general, but sure.

It's too late

[JohnFen]

I don't see any way that Uber could become a non-evil company without, at a minimum, replacing all of management and the board of directors.

Re:It's too late

[mjwx]

I don't see any way that Uber could become a non-evil company without, at a minimum, replacing all of management and the board of directors.

Or changing their business model.

Here in the UK, Uber is legal but they still aren't making a profit (or any cheaper than a minicab). Their business model relies on ignoring costs that other providers have to bear, right now they cant even make a profit by ignoring private hire laws, how can they make a profit when they abide by the same regulations as regular private hire cars (which in the UK, are minimal).

Re:It's too late

[Anonymous Coward]

Uber's business plan is to destroy all taxi companies. They've already blown through 2 billion dollars of investor's money, 7 billion left. Once the existing cab companies are gone, the plan is that magic Uber owned auto-driving cars will take over, no need for a human driver. Akin to Home Depot destroying all mom and pop hardware stores, then Home Depot's the only game in town, jack up prices at will.

What's happening now is Uber drivers have learned how to game the system. Drivers collude with each other in areas, they meet up and mass text each other. Groups of drivers turn off or make themselves 'unavailable', so to the Uber program's algorithim, surge pricing activates. A call that is say, $30 gets jacked up to $90+. Then it's the group of drivers who got the surge price turn to make themselves 'unavailable', so the next group of drivers get the surge price rate. Rinse and repeat. This is happening in Europe/England, and it's happening in certain high income areas in the U.S.

What if he sues for counter-rape?

[Anonymous Coward]

Then he gets awarded a free rape of the woman? He could rape her on the floor in front of everyone, like in the olden days
 

Re: What if he sues for counter-rape?

[Anonymous Coward]

Olden days? They still do that at Uber HQ.

Driver partners???

[Anonymous Coward]

That's what they actually call them??? Oh my god, I about threw up.

Tactical lawsuit

[Anonymous Coward]

Designed to pressure the board and various shareholders. It's not designed to be won in a courtroom.

Uber can't become a non-evil company

[rsilvergun]

because their business model is predicated on shifting the cost of doing business onto their employees which is in turn made possible by those same employees economic desperation. They're inherently evil.

I'd never take money from benchmark

[Anonymous Coward]

Trying to kick out a successful founder. Unforgivable.