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Lazaro Gamio / Axios

Uber's board of directors today failed to approve governance changes that would have formally prevented former CEO Travis Kalanick from ever again taking charge of the company, according to sources familiar with the situation. It did, however, unanimously agree to reduce Kalanick's board power and help better clear a path toward IPO. In short: Everyone feels like they won, although the biggest victor is new CEO Dara Khosrowshahi.

Why it matters: Uber is the most valuable private tech company in the world, and has revolutionized urban transportation. But it has been stuck for months in a board battle that has risked putting the company's progress in neutral.

Who was in the room? New board member Ursula Burns called into today's board meeting. So did Khosrowshahi, who was in London trying to get Uber's license renewed. John Thain, who joined the board with Burns at Kalanick's request, was there in person.

What passed?

  • Super-voting rights are gone, which means shareholders are all "one share, one vote." Note that only early employees actually have shares, whereas over 90% have restricted stock units (which don't have any voting rights).
  • The board will be expanded significantly, which means Kalanick would need support of a majority of independent directors to ever regain the CEO spot or be named chairman.
  • If Uber doesn't go public by two years from now, share transfer restrictions are lifted.

What didn't pass:

  • Eliminating any path to the CEO or chairman seat for Kalanick, although it's now a much higher hurdle.

Uber statement: "Today, after welcoming its new directors Ursula Burns and John Thain, the Board voted unanimously to move forward with the proposed investment by SoftBank and with governance changes that would strengthen its independence and ensure equality among all shareholders. SoftBank's interest is an incredible vote of confidence in Uber's business and long-term potential, and we look forward to finalizing the investment in the coming weeks."

Kalanick statement: "Today the Board came together collaboratively and took a major step forward in Uber's journey to becoming a world class public company. We approved moving forward with the Softbank transaction and reached unanimous agreement on a new governance framework that will serve Uber well. Under Dara's leadership and with strong guidance from the Board, we should expect great things ahead for Uber."

It's still complicated: Just because Uber plans to move forward with the SoftBank investment, that doesn't mean it necessarily happens. The Japanese tech giant still needs to figure out pricing, and then effectively launch a tender with eligible sellers (i.e., investors and early employees, not RSU-holders). No guarantees that it will get anywhere near enough sell-side interest to finalize the deal, as SoftBank requires a minimum ownership stake of around 14%, inclusive of co-investments from firms like Dragoneer and General Atlantic (it had been 17.3%, but got lowered after Didi Chuxing dropped out of the buy-side consortium). Moreover, Uber's board can't actually approve the deal — that would require a shareholder vote, although Benchmark is now likely to vote its shares in favor.

Update: Some additional details reported by Bloomberg.are that Kalanick and Khosrowshahi are barred from chairing board committees. Also, were Kalanick to become CEO again, Benchmark would effectively be allowed to sell all of its shares. A source confirms these changes to Axios, adding that they apply to any current and former officers of the company, which also includes Khosrowshahi and current board members Ryan Graves and Garrett Camp.

Go deeper

Trump pressures Barr to release so-called Durham report

Bill Barr. Photo: Jabin Botsford/The Washington Post via Getty Images

President Trump and his allies are piling extreme pressure on Attorney General Bill Barr to release a report that Trump believes could hurt perceived Obama-era enemies — and view Barr's designation of John Durham as special counsel as a stall tactic, sources familiar with the conversations tell Axios.

Why it matters: Speculation over Barr's fate grew on Tuesday, with just 49 days remaining in Trump's presidency, after Barr gave an interview to the Associated Press in which he said the Justice Department has not uncovered evidence of widespread fraud that could change the election's outcome.

CDC to cut guidance on quarantine period for coronavirus exposure

A health care worker oversees cars as people arrive to get tested for coronavirus at a testing site in Arlington, Virginia, on Tuesday. Photo: Olivier Douliery/AFP via Getty Images

The CDC will soon shorten its guidance for quarantine periods following exposure to COVID-19, AP reported Tuesday and Axios can confirm.

Why it matters: Quarantine helps prevent the spread of the coronavirus, which can occur before a person knows they're sick or if they're infected without feeling any symptoms. The current recommended period to stay home if exposed to the virus is 14 days. The CDC plans to amend this to 10 days or seven with a negative test, an official told Axios.

  • The CDC did not immediately respond to a request for comment.
4 hours ago - Health

CDC panel: COVID vaccines should go to health workers, long-term care residents first

Hospital staff work in the COVID-19 intensive care unit in Houston. Photo: Go Nakamura via Getty

Health-care workers and nursing home residents should be at the front of the line to get coronavirus vaccines in the United States once they’re cleared and available for public use, an independent CDC panel recommended in a 13-1 emergency vote on Tuesday, per CNBC.

Why it matters: Recent developments in COVID-19 vaccines have accelerated the timeline for distribution as vaccines developed by Pfizer and Moderna undergo the federal approval process. States are preparing to begin distributing as soon as two weeks from now.