What's going on?

A compromise deal between feuding members of Uber�s board appears to have been made late on Tuesday � and the result is a seemingly much more stable company. The board also instigated a two-year deadline to �go public�…

What does this mean?

Uber has had a tumultuous year to say the least: a series of scandals, lawsuits and senior executive departures, culminating in June when its founder � Travis Kalanick � relinquished the CEO post. Expedia�s Dara Khosrowshani was brought on to right the ship.


The deal, between Kalanick and the rest of the board, involves adding seats to the board and creating new rules that dilute the voting power of Kalanick and other early investors (Uber is moving to a �one share, one vote� model rather than giving extra votes to certain shareholders). At the same time, the board accepted an investment worth about $1 billion from Japan�s SoftBank and said it would allow SoftBank to buy up to $9 billion more shares from existing investors (SoftBank will end up owning about 15% of Uber).

Why should I care?

For the market: This deal is paving the way for an IPO.

In order for Uber to maximize its valuation prior to the IPO that it aims to complete within two years, it almost certainly needs to become a much more �normal� company. It will likely focus on hiring much-needed executives while trying to minimize the impact of outstanding lawsuits. Creating stronger rules for the board, and a sense of harmony at the top, is a start.


The bigger picture: Kalanick has sacrificed rights that some founders fight hard to keep.

When Snap Inc. became a public company, its co-founders retained supreme voting rights that limited the influence of other shareholders. Mark Zuckerberg has, essentially, done the same thing with Facebook. For Uber, that won�t be the case. But the good news for potential new shareholders is that if they ever do buy Uber�s stock, they will have voting rights that most companies deem to be totally normal.