Uber investor sues Travis Kalanick for fraud and breach of contract

Travis, in better times.
Image: Tyler Boye/WWD/REX/Shutterstock

It’s a bad year to be Travis Kalanick and Uber.

The ousted Uber CEO is now being sued for fraud by one of the ride-hailing company’s most important investors, with the lawsuit also detailing some particularly damaging allegations about the ongoing Google lawsuit against Uber over self-driving car technology.

For Kalanick, the lawsuit could strike a major blow to his control over Uber, the company he cofounded in 2009 and built into one of the world’s most valuable private companies.

If Benchmark Capital’s lawsuit is successful, Kalanick would be kicked off of Uber’s board of directors. That would mean the last glimmer of hope TK loyalists have of Kalanick “Steve Jobs-ing it” and coming back to Uber would be gone.

In a complaint filed Thursday in Delaware Chancery Court, venture firm Benchmark Capitalan early Uber investor with a seat on its board of directorsaccused Kalanick of fraud, breach of contract, and breach of fiduciary duty. The complete text of the lawsuit can be found below.

Kalanick, the firm claims, used Uber’s board to secure his position at the company even after he stepped down as CEO. More specifically, the lawsuit says that Kalanick added three extra voting seats to Uber’s board and gave himself the sole right to decide who got them. Kalanick gave one to himself after his resignation and left the other two unfilled.

“Kalanicks overarching objective is to pack Ubers Board with loyal allies in an effort to insulate his prior conduct from scrutiny and clear the path for his eventual return as CEOall to the detriment of Ubers stockholders, employees, driver-partners, and customers,” the complaint says.

Benchmark Capital claims it never would have approved the extra three seats if it had known about Kalanick’s “gross mismanagement and other misconduct at Uber.” The firm refers to both sexual harassment at Uber and the lawsuit Uber faces over stealing self-driving technology from Google.

That lawsuit, with Google’s self-driving car division Waymo, revolves around Anthony Levandowski, who left Google to found the self-driving startup Otto, which Uber later acquired. Kalanick and Levandowski reportedly had a long-standing relationship, going back to Levandowski’s time at Googlewhich means some of the knowledge he shared with Uber was allegedly Google’s intellectual property.

In the lawsuit against Kalanick, Benchmark said Kalanick did not disclose this potential issue and rather portrayed Levandowski as “transformative for Uber’s business.”

Benchmark is firmly Team Not-Travis. The VC firm pushed, ultimately successfully, for Kalanick’s resignation in June. Continued tensions, as Kalanick still holds a seat on Uber’s board, have slowed down the search for a replacement CEO.

Uber declined to comment, and Benchmark Capital has not responded to request for comment.

Jason Abbruzzese [3:51 PM]

Kalanick/Benchmark lawsuit by Jason Abbruzzese on Scribd

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Tags: business sharing-economy travis-kalanick uber uber-sexism

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