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Comment by goseeastarwar | Hacker News Reader

Founder CEO's do not resign, they are fired.

The article skips over the board entirely, but Travis must have been blindsided by his co-founder Garret Camp and early CEO Ryan Graves for this to have transpired. The board likely threatened to fire him unless he resigned, because there's no way Travis walks away because of this investor letter. It's more than likely the letter just provided the air cover his old friends needed to send him packing.

edit: For those replying that Travis has control of the board, please cite your sources. Being the majority shareholder using dual-class stock is a much different thing. Shareholders elect board members, but you can't remove investors' board seats, that language is boilerplate in financing documents.

Uber does not need the backing of the investors from the letter to remain solvent. With the exception of Fidelity, these aren't big players. Hundreds would take their place immediately given the chance.

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The board lacked the power to fire him. He controls most of the company. They had persuasive power, sure. But if he had wanted to dig in and refuse to leave, he could have.

But then he probably would have a hard time raising more money.

This is the part that I think people are missing. Uber has a tight runway and burns a ton of cash every year. It needs focus, execution, and some more time (aka $$) to push this thing over the edge into profitability and IPO readiness. This means that Uber may need some money in about a year if it isn't IPO ready by then. Someone here mentioned that at their current burn, they have less than a year of runway left.

So while Travis holds the majority of the voting power, he doesn't hold a ton of real-world cachet because of circumstance around the company. Uber is in a relatively fragile period in it's journey and no one at the top can afford to disagree right now so he has to mostly do what the big chunk of investors collectively tell him to do. The hope is that they can stay calm, run on autopilot without Travis for a bit and guide this cruise missile right through an IPO if everything goes according to plan. Since the investors effectively control the supply of additional capital, they are in a unique position of power here relative to Travis.

I think Uber's downfall is a bit exaggerated in the rest of these comments here. They'll go through some troubling times, but they just need to stay calm, and guide the ship. A lot of the pieces are already in place thanks to Travis, but Uber doesn't necessarily need him to oversee the next milestone the same way they needed him the past couple of years of insane growth.

That, and the fact that there's likely a ton of capital senior to Travis's under a liquidation event. If Uber gets revalued below $10B in "we can't get funding and ran out of runway" restructuring, Kalanick's stock is likely getting zeroed out.

>> The board lacked the power to fire him

That sounded right, but I was curious where that gets quantified. You can find the information in Uber's Articles of Incorporation. Not sure if this is the most recent copy, but here's a version from 2013...

http://orfe.princeton.edu/~alaink/SmartDrivingCars/PDFs/Uber...

The stuff about voting rights and board members starts on page 16.

If Camp, Graves, Gurley, Wei, al-Rumayyan, and Huffington all wanted Travis gone, explain the mechanism he can stop that for me please.

He owns more than 50% of the voting stock. Boards don't operate on one-man-one-vote, they operate on one-share-one-vote. If he had really wanted to stay no matter the consequences, he could simply have voted against his own firing.

That's not usually the case. Boards normally operate on one-person-one-vote. A majority of the current sitting board members can therefore fire the CEO.

Shareholder meetings operate on one-(voting)-share-one-vote, so a majority shareholder ultimately controls the composition of the board. But if one of "his" directors, who his shares elected, breaks ranks and votes to fire him, simply owning the shares doesn't allow him to immediately override that vote. Kalanick could have voted out the board members opposed to him at the next shareholder meeting, and voted in sympathetic ones, who then might rehire him as CEO. But that's a different question than whether he could win any board vote simply by virtue of owning a majority of voting shares. Shares don't directly have board votes, they just elect directors who have board votes, who usually vote with the interests of the shares that elected them, but might not always. Besides exercising their personal judgment, directors also have independent legal responsibilities that may in some cases make it prudent for them to vote to fire even the person who put them on the board.

> Boards don't operate on one-man-one-vote...

Of course they do.

_delirium already said it, but it bears repeating since so many are confused.

I don't think he was or could be fired, I think he lost support of the major investors, and decided to resign as requested.

No, he definitely had and still has a controlling vote on the board. The group of investors representing 40% of the company's ownership has more than enough financial leverage to force his hand, by threatening to close their purses for the next funding round.

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