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The Uber dumpster fire burns brighter as Travis Kalanick and board prepare for a showdown

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For the dozens and dozens of investors who have pumped $8.8 billion into making Uber the most highly valued startup on the planet, the events of this weekend must have caused some severe clenching of sphincters.

As was widely predicted and widely feared, co-founder and former CEO Travis Kalanick has decided to not go gently into that goodnight. Instead, he and the board are headed toward a showdown on Tuesday that could either permanently sideline him, entrench him even more deeply, or simply tear the company apart while leaving it practically ungovernable.

The only surprising thing, really, is that this duel is happening so quickly.

Having been given the boot after months of controversy surrounding the company’s charged atmosphere of sexual harassment, not to mention years of generally over-aggressive attitudes toward competitors and regulators, getting rid of Kalanick was seen by the board as the best way for the company to most past its ogre-like reputation.

But the hiccup was that Kalanick still was a major stockholder and remained on the board. In searching for a replacement, this understandably spooked many otherwise capable candidates. And it eventually resulted in the compromise selection of Expedia’s Dara Khosrowshahi. Kalanick even tearfully introduced him at an Uber staff meeting in late August.

The hug-a-thon did not last.

Late last week, Kalanick announced he had appointed two new board members: Former Xerox Chief Executive Ursula Burns and former Merrill Lynch Chief Executive John Thain.

In a statement, Kalanick said: “I am appointing these seats now in light of a recent board proposal to dramatically restructure the board and significantly alter the company’s voting rights. It is therefore essential that the full board be in place for proper deliberation to occur, especially with such experienced board members as Ursula and John.”

That proposal is reportedly an effort by Khosrowshahi to gain more control over the board, and thus, the company, by restructuring the board and approving a stock sale to SoftBank. Khosrowshahi and Uber issued a statement saying they were “disappointed” by Kalanick’s counter-move.

No doubt. Uber is now getting a taste of how countless regulatory agencies around the world have felt when confronting Kalanick’s “never-give-an-inch” mentality.

This sets up an awkward situation where the two new board members will theoretically be on hand tomorrow for the board meeting to vote on the new governance plan. Lurking in the background is investor Benchmark’s lawsuit that challenges the very power Kalanick just wielded.

No matter who is right and wrong in this situation, this sort of murkiness is poison. Khosrowshahi may have overplayed his hand by pressing for a board change. Kalanick may be at risk of alienating even more board members, executives and users. With Uber’s business model in question, its service getting banned in various places, and facing surging competitors on all sides, the top leadership is now instead focused on internal power games.

I wouldn’t be surprised if Khosrowshahi is already regretting his decision to become CEO, and maybe even rethinking it. No one could blame him for bailing rather than wasting time battling Kalanick.

Uber may survive. But it’s ability to inflect self-damage remains. And it some point, it surely has to be fatal.

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