Tech

Early Uber investor says the troubled company should merge with Tesla

Key Points
  • A combination would give Uber autonomous driving technology and put Tesla in many more cities.
  • Musk would be CEO and Kalanick could be on the board.
  • "They're on a collision course, for sure."
Early Uber investor says the troubled company should merge with Tesla
VIDEO0:5400:54
Early Uber investor says the troubled company should merge with Tesla

Angel investor Jason Calacanis, one of Uber's first investors, has a top pick to be the company's next CEO: Elon Musk.

Calacanis said Friday on his web show "This Week in Startups," that a tie-up between Tesla and Uber would give Uber the autonomous driving technology it so badly needs and expand Tesla's reach into many more markets.

"If those two companies were together, they would beat everybody at transportation," said Calacanis, who backed Uber in 2009. "They're on a collision course for sure."

The only reason Calacanis is entertaining such a wild idea is that Uber is in utter chaos. It lost its co-founder and CEO Travis Kalanick to a forced resignation in June and venture firm Benchmark, one of the company's biggest investors, is now suing Kalanick alleging fraud and breach of fiduciary duty. In court documents filed last week, Kalanick called the suit a "public and personal attack" without merit.

Uber, which was valued at about $70 billion in its last private financing, is operating without a C-suite and with nobody clearly in charge. Meanwhile, the company is locked in a court fight with Alphabet's Waymo unit that could thwart Uber's effort's to keep developing self-driving cars.

Judge refers Uber-Waymo lawsuit to federal prosecutors
VIDEO2:2602:26
Judge refers Uber-Waymo lawsuit to federal prosecutors

By merging with Tesla, Uber would get its new CEO in Musk and be able to keep Kalanick involved as a board member, Calacanis said.

This is all far-fetched speculation. Tesla has a $58 billion market cap, but loses hundreds of millions of dollars a quarter. And Uber lost more than $700 million in the first quarter. While Silicon Valley may love the combination of two trailblazing transportation companies, it would likely be a very tough deal for Wall Street to swallow.

Calacanis wants the company to get past this ugly patch as quickly as possible. He said the crisis embroiling Uber and its board is "very sad for me."

On Monday, he posted a picture on Twitter from 2014, featuring himself, Kalanick, Benchmark's Bill Gurley and venture investor Shervin Pishevar, an early Uber backer who is trying to get Benchmark removed from the board in the wake of the lawsuit.

In his tweet, Calacanis said the photo was "presented without comment," but he talked about the meaning behind it on Friday.

"We need to get back to that sense of camaraderie and resolve these issues for the employees and the stakeholders in Uber," Calacanis said. "We need the founder involved. Banishing the founder is a mistake."

For Kalanick to come back, he would need to acknowledge his mistakes and show a sincere willingness to evolve, Calacanis said.

Another suggestion from Calacanis is to get Uber drivers more involved through various incentives. The company took an important first step in June by enabling in-app tipping, but it could go even further by giving drivers access to Uber shares.

"I'd like to see the best drivers have an equity stake in the company," he said.