Tag Archives: Uber
DETROIT (Reuters) – Toyota Motor Corp (7203.T) said on Tuesday it will pause autonomous vehicle testing following an accident in which an Uber Technologies Inc [UBER.UL] self-driving vehicle struck and killed a woman in Tempe, Arizona.
Separately, the Maricopa County Attorney’s Office in Phoenix said it was awaiting the results of an investigation by Tempe police of the fatality before reviewing whether any charges should be filed.
Reporting By Joe White; Editing by Jonathan Oatis
SAN FRANCISCO (Reuters) – A woman died of her injuries after being struck by a Uber self-driving vehicle in Arizona, police said on Monday, and the ride hailing company said it had suspended its autonomous vehicle program across the United States and Canada.
The accident in Tempe, Arizona, marked the first fatality from a self-driving vehicle, which are still being tested around the globe, and could derail efforts to fast-track the introduction of the new technology in the United States.
At the time of the accident, which occurred overnight Sunday to Monday, the car was in autonomous mode with a vehicle operator behind the wheel, Tempe police said.
“The vehicle was traveling northbound … when a female walking outside of the crosswalk crossed the road from west to east when she was struck by the Uber vehicle,” police said in a statement.
A spokesman for Uber Technologies Inc said the company was suspending its North American tests. In a tweet, Uber expressed its condolences and said the company was fully cooperating with authorities.
Reporting by Alexandria Sage; Editing by Jonathan Oatis
MEXICO CITY/SAN FRANCISCO (Reuters) – Working quietly from a shared office space in one of Mexico City’s trendiest neighborhoods, China’s ride-hailing giant Didi Chuxing is planning to hit its archrival Uber where it hurts.
Mexico is one of Uber Technologies Inc’s [UBER.UL] most prized and profitable markets. The San Francisco firm boasts a near monopoly here, with seven million users in more than three dozen cities. Which is precisely why Didi wants to knock Uber from that comfortable perch.
To learn how to conquer Uber, the Chinese firm is going straight to the source. It is poaching Uber employees for its Mexico management team. Didi employees are riding incognito with Uber drivers and chatting up passengers to pinpoint weaknesses, according to people familiar with its strategy. And Didi is thinking bigger than Uber, with ambitions for bike-sharing, scooters and motorcycles in Mexico, the people say.
The Chinese firm has deep pockets, thanks to blue-chip global investors that include Apple Inc and Japan’s SoftBank Group Corp [9984.T]. In the past year alone, it has pulled in nearly $ 10 billion to help fund global expansion.
“I would not want to go to war with Didi,” said Beijing-based investor and adviser Jeffrey Towson. “They don’t lose.”
But whether Didi can beat its nemesis here is far from certain. Mexico is the Chinese firm’s first attempt at building an operation from scratch outside of Asia – a costly gambit.
What is clear is that Didi is under pressure to keep growing to justify its $ 56 billion valuation. Latin America is the newest battleground for the old rivals, and Didi will be in enemy territory.
“It’s fundamentally different when you’re jumping across an ocean,” said IHS Markit analyst Jeremy Carlson.
Didi Chuxing Technology Co is the world’s largest ride-hailing firm by number of rides, thanks to its commanding market share in China, where it has 450 million users. It completed more than 7.4 billion rides last year, not quite double Uber’s count.
Uber learned the hard way about Didi’s brawn. After waging an expensive campaign to crack the Chinese market, Uber in 2016 sold its operation to Didi in exchange for a 17.5 percent stake in the Chinese firm, which also made a $ 1 billion investment in Uber.
The titans continue to butt heads as they race to carve up the rest of the globe. Uber is the top dog in Latin America, where Brazil and Mexico rank among its largest markets outside the United States. In Mexico, Uber held an 87 percent market share as of August, according to Dalia Research, a Berlin-based consumer research firm.
(For a graphic on Uber’s market share in Latin America, see: tmsnrt.rs/2FhfZHo)
Didi wants to change that. Reuters was first to report that Didi had designs on Mexico, where it began recruiting employees last year.
The company declined to talk openly about its plans, but details of its strategy are emerging.
Nestled on the ninth floor of a WeWork shared office building in the capital’s Juarez neighborhood, Didi is building an operation from the ground up. In foreign markets such as India and the Middle East, it purchased stakes in existing companies. But Uber is so dominant in Mexico that there is no clear investment opportunity in a local competitor, according to people familiar with Didi’s thinking.
Hungry for experienced talent, Didi is aggressively recruiting current and former Uber employees, offering to nearly double their salaries in some cases, two people with knowledge of the matter said.
At the helm of Didi’s Mexico operation is Uber veteran Lin Ma, who helped launch Uber’s ill-fated venture in China. Now Didi’s director of international operations, Ma also worked on operations at 99, the Brazilian ride-hailing startup that Didi purchased at the end of last year, according to his LinkedIn profile.
Ma and others at Didi have so far poached at least five Uber managers and specialists in Mexico who have experience in operations, logistics, strategy, marketing and driver training, a review of LinkedIn profiles shows.
Ma declined to comment.
The company has yet to recruit drivers, and it is not clear which cities it will enter first, according to a person familiar with Didi’s strategy.
Rather than compete solely on price, the person said, Didi plans to promote safe drivers and fast response times; the company has built an algorithm to help it predict 15 minutes in advance where it should dispatch vehicles.
Didi is also considering offering bike-sharing, scooters and motorcycles in Mexico, while Uber so far has stuck to ride-hailing. A broad array of transport options helped Didi prevail in China.
But the biggest difference may come down to cash. To protect drivers, the person said, Didi will not handle cash fares in Mexico.
Uber, meanwhile, has pushed Mexican lawmakers hard for the right to accept cash in a region where tens of millions lack bank accounts. The move has generated business, along with controversy.
In Brazil, Uber saw a surge of robberies and murders of its drivers after the company began accepting cash there, according to a 2017 Reuters analysis. Uber says it has added tools to authenticate riders’ identities, better protecting drivers.
Mexico has not seen a similar wave of attacks so far. Nevertheless, Uber’s position puts it at odds with regulators in some Mexican states.
While Didi appears to be sidestepping that obstacle, it faces cultural hurdles in Latin America, according to Daisy Wu, head of international business at Yeahmobi, which helps Chinese startups go global.
Latin American consumers generally prefer U.S. brands to Chinese brands, she said, and Chinese business culture can be off-putting to local employees.
“Most of the Chinese companies that have gone to Latin America are still trying to be successful,” Wu said.
Didi, for example, bewildered Mexico job candidates by trying to schedule interviews the week of Christmas.
“I was very surprised … I was thinking, should I cancel my vacation?” one applicant told Reuters.
Uber’s lead in Latin America, meanwhile, has taken on heightened importance as it prepares for a potential initial public offering next year.
The company, which lost $ 4.5 billion last year, is facing fierce competition at home and in Asia, and a regulatory crackdown in Europe. It is also recovering from a year of scandals that saw co-founder Travis Kalanick forced out as chief executive in June amid multiple federal criminal probes and a workplace marred by sexual harassment allegations.
Andrew Macdonald, Uber’s vice president of operations for Latin America and Asia Pacific, said Uber is prepared to do what it takes to remain dominant in Mexico, a profitable market amid a sea of losses.
“Whether that’s more spending on customer acquisition or more deeply engaging with our existing customers, that will continue to be our focus,” he said.
Uber is committed to maintaining cheap fares for its basic service to keep its Mexican customers loyal, Macdonald said. But he said the company is considering adding more ride options such as upscale cars that would boost revenue.
If Uber is nervous about Didi stealing its lead in Mexico, it is not showing it. Macdonald said the learning curve is steep, something its rival is about to find out.
“Didi has significant bankroll,” Macdonald said. “But there are significant local complexities.”
Reporting by Julia Love in Mexico City and Heather Somerville in San Francisco; additional reporting by Noe Torres in Mexico City.; Editing by Marla Dickerson
NAIROBI (Reuters) – Uber is testing a service in Nairobi that was inspired by residents’ use of the platform for errands and aims to tap into a new segment of the city’s active ride-hailing market, a regional executive said on Monday.
Amid the minibuses, safari 4x4s, taxis and Ubers on the roads of Kenya’s capital, tiny, boxy Suzuki (7269.T) Altos are popping up. They are emblazoned with stickers reading “Uber Chap Chap”, and a slogan in Kiswahili that translates as “Arrive Faster, Save Money”.
That offer is exactly why 24-year-old lawyer Brian Mwirigi said he clicked the new “Chap Chap” option on his Uber app last week when he noticed that his short trip to deliver documents to a client would cost 100 Kenyan shillings ($ 1) less than with the standard “uberX”.
“It was a bit cramped, but for the price you’re paying, it doesn’t really matter,” he said, adding that he intends to use Chap Chap for trips downtown and in adjacent neighborhoods where it is available during the pilot.
Nairobians such as Mwirigi, who looks for a bargain when hailing a ride on his phone and will shop around, are one of the targets of Chap Chap, Uber’s East Africa general manager Loic Amado said in an interview.
“It’s about giving people choices,” he said. “Kenyans specifically are very open to adapting to new things and are very creative in using Uber for different things.”
The test phase began three weeks ago. More than 200 Altos have hit the roads.
Kenya is Uber’s second-largest market in sub-Saharan Africa, after South Africa. It competes against its global rival Taxify, which has gained popularity in Nairobi in the past year but does not disclose numbers of active riders and users. The Kenyan app Little said in September it has close to the 5,000 drivers that Uber boasts.
Nairobi is the first city in Africa in which Uber has piloted the low-cost, quick-trip option using small, brand-new vehicles.
If the positive response is sustained, he said, Uber will consider introducing Chap Chap across Nairobi and in the capitals of neighboring Uganda and Tanzania, Amado said.
Uber partnered with a local Suzuki dealer that imported 300 cars. Kenyan bank Stanbic arranged the financing so drivers with high ratings could opt in to the new service and own their Alto in three years.
The company noticed people were using Uber for errands, such as sending packages from office to office or for bank runs.
“There wasn’t a price point that was so affordable or attractive to do these shorter errands,” Amado said. The lower price is possible because the Alto is, at 25 km per liter, twice as fuel-efficient as the average car an Uber driver uses, he said.
There is another possible market.
Several Nairobians told Reuters they commute to work downtown in packed minibuses but hail Ubers for emergencies.
Harrison Iratenga, a security guard, said Uber had enabled his wife to deliver their third child at a hospital. “Our first two were born at home, before Uber was invented.”
The cheaper option could make it possible for him to use Uber more frequently, he said, as an Alto with the Chap Chap sticker cruised by.
The new service won’t suit everyone, including middle-class Kenyans who see their car as part of their personal style.
“I wouldn’t be caught dead in one of those,” said Mark Kuria, a 45-year-old civil servant dressed dapperly in a well-cut suit.
Reporting by Maggie Fick; Editing by Dale Hudson
LONDON (Reuters) – Uber [UBER.UL] will defend its right to operate in London in a court hearing on Monday after the app was deemed unfit to run a taxi service and stripped of its license in its most important European market.
Regulator Transport for London (TfL) shocked the Silicon Valley firm by rejecting its license renewal bid in September, citing its approach to reporting serious criminal offences and background checks on drivers.
Uber’s 40,000 drivers, representing around one in three of all private hire vehicles on the British capital’s roads, can continue to take passengers until the appeals process is exhausted, which could take years.
The legal battle pitches one of the world’s richest cities against a tech giant known for its forays into new markets around the world that have prompted bans, restrictions and protests, including by drivers of London’s famous black cabs.
Uber’s lawyers will begin their appeal at Westminster Magistrates’ Court on Monday, in what is expected to be a largely administrative hearing designed to set a date for a fuller hearing next year.
Chief Executive Dara Khosrowshahi has apologized to Londoners and met TfL Commissioner Mike Brown in October for what both sides described as constructive talks.
Brown told Reuters in November that “there are some discussions going on to make sure they are compliant.”
Months of legal wrangling are likely unless the Silicon Valley app, valued at around $ 70 billion with investors including Goldman Sachs (GS.N), can come to a new arrangement with the regulator.
“We continue having constructive discussions with Transport for London in order to resolve this,” an Uber spokesman said ahead of the hearing. “As our new CEO Dara Khosrowshahi has said, we are determined to make things right.”
Losing its London license was just one of many blows to Uber this year as a stream of executives left amid controversies involving allegations of sexual harassment and issues surrounding data privacy and business practices.
In Britain, Uber is looking to appoint a new boss after Jo Bertram announced her departure less than two weeks after London’s decision.
It also faces potential problems in the northern English city of Sheffield where its license has been suspended and in Brighton, southern England, where local officials extended the firm’s license for only six months to give them more time to consider the outcome of the dispute in London.
Reporting by Costas Pitas; Editing by Keith Weir
SAN FRANCISCO/WASHINGTON (Reuters) – A 20-year-old Florida man was responsible for the large data breach at Uber Technologies Inc last year and was paid by Uber to destroy the data through a so-called “bug bounty” program normally used to identify small code vulnerabilities, three people familiar with the events have told Reuters.
Uber announced on Nov. 21 that the personal data of 57 million passengers and 600,000 drivers were stolen in a breach that occurred in October 2016, and that it paid the hacker $ 100,000 to destroy the information. But the company did not reveal any information about the hacker or how it paid him the money.
Uber made the payment last year through a program designed to reward security researchers who report flaws in a company’s software, these people said. Uber’s bug bounty service – as such a program is known in the industry – is hosted by a company called HackerOne, which offers its platform to a number of tech companies.
Reuters was unable to establish the identity of the hacker or another person who sources said helped him. Uber spokesman Matt Kallman declined to comment on the matter.
Newly appointed Uber Chief Executive Dara Khosrowshahi fired two of Uber’s top security officials when he announced the breach last month, saying the incident should have been disclosed to regulators at the time it was discovered, about a year before.
It remains unclear who made the final decision to authorize the payment to the hacker and to keep the breach secret, though the sources said then-CEO Travis Kalanick was aware of the breach and bug bounty payment in November of last year.
Kalanick, who stepped down as Uber CEO in June, declined to comment on the matter, according to his spokesman.
A payment of $ 100,000 through a bug bounty program would be extremely unusual, with one former HackerOne executive saying it would represent an “all-time record.” Security professionals said rewarding a hacker who had stolen data also would be well outside the normal rules of a bounty program, where payments are typically in the $ 5,000 to $ 10,000 range.
HackerOne hosts Uber’s bug bounty program but does not manage it, and plays no role in deciding whether payouts are appropriate or how large they should be.
HackerOne CEO Marten Mickos said he could not discuss an individual customer’s programs. “In all cases when a bug bounty award is processed through HackerOne, we receive identifying information of the recipient in the form of an IRS W-9 or W-8BEN form before payment of the award can be made,” he said, referring to U.S. Internal Revenue Service forms.
According to two of the sources, Uber made the payment to confirm the hacker’s identity and have him sign a nondisclosure agreement to deter further wrongdoing. Uber also conducted a forensic analysis of the hacker’s machine to make sure the data had been purged, the sources said.
One source described the hacker as “living with his mom in a small home trying to help pay the bills,” adding that members of Uber’s security team did not want to pursue prosecution of an individual who did not appear to pose a further threat.
The Florida hacker paid a second person for services that involved accessing GitHub, a site widely used by programmers to store their code, to obtain credentials for access to Uber data stored elsewhere, one of the sources said.
GitHub said the attack did not involve a failure of its security systems. “Our recommendation is to never store access tokens, passwords, or other authentication or encryption keys in the code,” that company said in a statement.
‘SHOUT IT FROM THE ROOFTOPS’
Uber received an email last year from an anonymous person demanding money in exchange for user data, and the message was forwarded to the company’s bug bounty team in what was described as Uber’s routine practice for such solicitations, according to three sources familiar with the matter.
Bug bounty programs are designed mainly to give security researchers an incentive to report weaknesses they uncover in a company’s software. But complicated scenarios can emerge when dealing with hackers who obtain information illegally or seek a ransom.
Some companies choose not to report more aggressive intrusions to authorities on the grounds that it can be easier and more effective to negotiate directly with hackers in order to limit any harm to customers.
Uber’s $ 100,000 payout and silence on the matter at the time was extraordinary under such a program, according to Luta Security founder Katie Moussouris, a former HackerOne executive.
“If it had been a legitimate bug bounty, it would have been ideal for everyone involved to shout it from the rooftops,” Moussouris said.
Uber’s failure to report the breach to regulators, even though it may have felt it had dealt with the problem, was an error, according to people inside and outside the company who spoke to Reuters.
“The creation of a bug bounty program doesn’t allow Uber, their bounty service provider, or any other company the ability to decide that breach notification laws don’t apply to them,” Moussouris said.
Uber fired its chief security officer, Joe Sullivan, and a deputy, attorney Craig Clark, over their roles in the incident.
“None of this should have happened, and I will not make excuses for it,” Khosrowshahi, said in a blog post announcing the hack last month.
Clark worked directly for Sullivan but also reported to Uber’s legal and privacy team, according to three people familiar with the arrangement. It is unclear whether Clark informed Uber’s legal department, which typically handled disclosure issues.
Sullivan and Clark did not respond to requests for comment.
In an August interview with Reuters, Sullivan, a former prosecutor and Facebook Inc (FB.O) security chief, said he integrated security engineers and developers at Uber “with our lawyers and our public policy team who know what regulators care about.”
Last week, three more top managers in Uber’s security unit resigned. One of them, physical security chief Jeff Jones, later told others he would have left anyway, sources told Reuters. Another of the three, senior security engineer Prithvi Rai, later agreed to stay in a new role.
Reporting by Joseph Menn in San Francisco and Dustin Volz in Washington; Additional reporting by Heather Somerville and Stephen Nellis in San Francisco; Editing by Jonathan Weber and Bill Rigby
MOSCOW (Reuters) – Uber [UBER.UL] and Yandex’s ride-sharing businesses can merge in Russia, anti-monopoly regulator FAS ruled on Friday, but stipulated that the combined company not bar drivers from working for competitors.
Uber and Yandex, often referred to as the “Google of Russia”, announced plans in July to combine operations in 127 cities in Russia, Armenia, Azerbaijan, Belarus, Georgia and Kazakhstan.
San Francisco-based Uber has agreed to invest $ 225 million while Yandex will contribute $ 100 million into a new joint company in which Yandex will own 59.3 percent.
The two companies must allow their partners, drivers and passengers to work for or use competitors’ services and fully inform users of the legal entity providing the service, the FAS said in a statement.
Yandex said consumers would be able to use both Yandex.Taxi and Uber apps, while their driver apps will be integrated, leading to shorter passenger wait times, increased driver utilization rates, and higher service reliability.
The companies aim to close the deal in January 2018, after the New Year holidays in Russia, Yandex said in a statement.
Moscow-listed Yandex was up 3.47 percent as of 1123 GMT.
It said the anti-monopoly regulator in Belarus had also approved the deal while a decision by the Kazakh regulator was pending.
Reporting by Maria Kiselyova; editing by Jason Neely
(Reuters) – Uber Technologies Inc [UBER.UL] failed to disclose a massive breach last year that exposed the data of some 57 million users of the ride-sharing service, the company’s new chief executive officer said on Tuesday.
Discovery of the company’s handling of the incident led to the departure of two employees who led Uber’s response to the incident, said Dara Khosrowshahi, who was named CEO in August following the departure of founder Travis Kalanick.
Khosrowshahi said he had only recently learned of the matter himself.
The company’s admission that it failed to disclose the breach comes as Uber is seeking to recover from a series of crises that culminated in the Kalanick’s ouster in June.
According to the company’s account, two individuals downloaded data from a third-party cloud server used by Uber, which contained names, email addresses and mobile phone numbers of some 57 million Uber users around the world. They also downloaded names and driver’s license numbers of some 600,000 of the company’s U.S. drivers, Khosrowshahi said in a blog post.
He said he had hired Matt Olsen, former general counsel of the U.S. National Security Agency, to help him figure out how to best guide and structure the company’s security teams and processes.
“None of this should have happened, and I will not make excuses for it,” Khosrowshahi said in the blog post.
“While I can’t erase the past, I can commit on behalf of every Uber employee that we will learn from our mistakes,” he said. “We are changing the way we do business, putting integrity at the core of every decision we make and working hard to earn the trust of our customers.”
(Corrects paragraph 1 to data instead of date)
Reporting by Jim Finkle in Toronto; Editing by Tom Brown
MEXICO CITY (Reuters) – Uber Technologies Inc, which has been facing a wave of regulations in Latin America, is fighting proposed rules in Cancun that the ride-hailing service says could drive it out of the top Mexican beach resort.
Legislators in Quintana Roo, the southeastern state that includes Cancun, are considering a proposal that would bar drivers from accepting cash and set minimum value and age criteria for the cars used for trips.
Accepting cash from users is often seen as making drivers robbery targets.
Federico Ranero, general manager for Uber in Mexico, said the law would have grave implications for the company’s operations in the tourist destination, where 40 percent of trips are paid for in cash.
“This regulation, if it is passed as it is, would so limit the service and so drastically affect the experience of our users and driver-partners that Uber would feel obligated to suspend its operations in the state of Quintana Roo,” Ranero said in an interview.
Fernando Zelaya, president of the state legislature’s transportation commission and one of the lawmakers who presented the initiative, could not be reached for comment. But his staff said legislators could discuss it as soon as this week.
Last month, lawmakers in the central Mexican state of Puebla approved new rules aimed at stricter vetting and monitoring of ride-share drivers working for companies like Uber and Cabify after the recent murders of two female college students.
Senators in Brazil scrapped parts of a bill last month that would have treated ride-hailing companies like traditional taxi services after a lobbying effort by Uber that included a trip there by new Chief Executive Officer Dara Khosrowshahi.
By specifying the value and age of drivers’ cars, the regulation in Quintana Roo is among the more onerous in Mexico, said Carlos Martinez, who heads the Center for Citizens and Consumers, a group that has studied the proposals.
“You have here a clear barrier to entry in the market,” he said.
Ranero warned that tourism in Cancun, a relatively small but growing market for Uber, could take a hit if the company leaves.
“The tourists trust Uber,” he said.
Cash payments have proved to be a thorny issue for Uber as it pursues growth in emerging markets where many consumers do not have credit cards. After a wave of attacks on drivers in Brazil, Uber began using social security numbers to verify the identity of riders who pay with cash.
After testing various methods in Mexico, Uber has been authenticating such riders through their Facebook profiles, Ranero said.
Reporting by Julia Love; Editing by David Alire Garcia and Lisa Von Ahn
SAN FRANCISCO/NEW YORK (Reuters) – Uber Technologies Inc’s [UBER.UL] warring board members have struck a peace deal that would allow a multibillion-dollar investment by SoftBank Group Corp to proceed, and would resolve a legal battle between former Chief Executive Travis Kalanick and a prominent shareholder.
Venture capital firm Benchmark, an early investor with a board seat in the ride-services company, and Kalanick have reached an agreement over terms of the SoftBank investment, which could be worth up to $ 10 billion, according to two people familiar with the matter. The Uber board first agreed more than a month ago to bring in SoftBank as an investor and board member, but negotiations have been slowed by ongoing fighting between Benchmark and Kalanick. The agreement struck on Sunday removes the final obstacle to launching the tender offer.
SoftBank, a Japanese conglomerate that has become a heavyweight in Silicon Valley tech investing, is leading a consortium of investors that plans to invest $ 1 billion to $ 1.25 billion in Uber, and in addition, will buy up to 17 percent of existing shares from investors and employees in a secondary transaction. The terms are expected to be signed on Sunday, one of the people said, although the tender offer would likely take weeks to complete.
Uber is valued at $ 68 billion, the most highly valued venture-backed company in the world. SoftBank’s roughly $ 1 billion investment of fresh funding is expected to be at the same valuation. The secondary transaction, or the purchases from employees and existing investors, would be at a lower valuation.
A spokeswoman for Benchmark did not immediately respond to a request for comment, and a spokesman for Kalanick declined to comment. Uber did not immediately respond to a request for comment.
Completing the SoftBank deal would allow Uber to open a new chapter after a year of controversy, including the resignation of Kalanick, the ouster of several top executives, sexual harassment and discrimination allegations, and multiple federal criminal probes. The deal is also tied to new governance rules that aim to more equally distribute power and bring more oversight to the company.
“Uber had a remarkable first six or seven years, a bumpy past two years, and now the Softbank deal allows for a full reset,” said Bradley Tusk, an Uber investor and political strategist who works with tech companies.
It would also be a major victory for Uber’s new CEO Dara Khosrowshahi, who often served as a mediator to help broker the agreement, according to a third person familiar with the matter.
To allow the deal to go forward, Benchmark has agreed to immediately suspend its lawsuit against Kalanick, which it filed in August in an effort to diminish the ex-CEO’s power at the company and force him off the board, one of the sources said.
Upon the successful completion of the SoftBank investment, Benchmark would drop the lawsuit entirely, the person said.
In turn, Kalanick must receive majority board approval should he want to replace the board seats over which he has control, according to the source. In addition to his own seat, Kalanick controls two more, which are occupied by Ursula Brown, the former Xerox Corp CEO, and former Merrill Lynch & CO Inc [BACML.UL] CEO John Thain. Kalanick appointed them in September without first consulting with the board.
“Ending the litigation is a big step forward if it finally ends the specter of Kalanick retaking control,” said Erik Gordon, an entrepreneurship expert at the University of Michigan’s Ross School of Business.
Uber’s board already approved a slate of governance reforms that are contingent on completion of the SoftBank deal. They include removing super-voting rights that gave Kalanick and his allies outsized power, adding new independent directors and increasing the size of the board to 17.
Uber plans to run newspaper ads informing investors about the share purchase, and SoftBank will propose a price at which it will buy stock. The company has threatened to invest in ride-hailing rival Lyft if it doesn’t get the Uber deal done.
The deal gives early investors such as Benchmark, whose Uber stake is worth nearly $ 9 billion, the opportunity to cash out a very lucrative investment.
Reporting by Heather Somerville in San Francisco and Greg Roumeliotis in New York. Additional reporting by Liana Baker in San Francisco.; Editing by Diane Craft