Uber is changing in several ways. Its board members on Tuesday, Oct. 3, voted to implement governance changes that will ultimately reshape the company's power structure and allow an investment from SoftBank to come through.
Much of Uber CEO Dara Khosrowshahi's proposed plans, which he put forward last week, in addition to investor Goldman Sachs's proposals, got approved by the board. The board currently seats 11 members after former CEO Travis Kalanick added Ursula Burns and John Thain as new directors recently in what's seen as a power play to regain some control.
Per the approved proposals, certain Uber shareholders will lose some of their power — including Kalanick himself. As Axios reports, the ride-hailing service is dropping special super-voting rights in a bid to ensure equality among all shareholders. In this setup, all shareholders will eventually have only a single vote per share, irrespective of the class of company stock they own.
But the board didn't approve all proposed terms — for instance, changes that would have prevented Kalanick from regaining the CEO seat were dropped from the proposal before the meeting.
Uber Paves The Way For SoftBank Investment
SoftBank previously held discussions on whether or not it should buy a huge portion of Uber's stock, but reports said that depended on whether the company was willing to implement governance changes. With that out of the way, the SoftBank investment is officially going forward.
Kalanick spent much of the past week trying to reverse such proposals, however. Again, he appointed Burns and Thain as new board directors in an attempt to have more advantage in the board. But during the meeting, Uber's board members voted to drop the special super-voting power of class B common shares and preferred shares — Uber's two stock categories.
Uber Board To Add 6 More Seats
Uber is also planning to add six more seats to its 11-member board, as The New York Times reports, citing anonymous sources. Two of those will belong to SoftBank, one will go to an independent chairperson, and three will go to independent board directors.
Uber IPO Plans
Uber's board also approved plans to go public by 2019. This is a big step for Uber, which has so far operated as a private company despite the sheer magnitude of its business. Even Snap Inc., a smaller company in comparison, decided to go public earlier this year. But size is just one factor. Uber has to sort its pile of scandals first before it moves to become publicly traded.