September 01, 2017
Uber Technologies Inc. has chosen Iranian-born Dara Khosrowshahi, the chief executive of travel company Expedia Inc., as its chief executive, handing him the challenge of leading the ride-services company out of a nearly year-long crisis.
Khosrowshahi, 48, would take on the daunting task of mending Uber’s image, repairing frayed relations among investors, rebuilding employee morale and creating a profitable business after seven years of losses.
In Khosrowshahi, Uber’s board has picked an executive with a track record of driving growth while also delivering profits—precisely what the unprofitable Uber needs to satisfy investors. He has also proven capable of making Expedia the leader in another industry full of change and competition—online travel.
But he will have to contend with the legacy of Travis Kalanick, Uber’s pugnacious co-founder, who was ousted as CEO in June after shareholders representing about 40 per cent of the company’s voting power signed a letter calling on him to step down amid growing concern over his behavior and that of senior managers under him.
Khosrowshahi, who has run Expedia for 12 years, was not known to the public to be among the top candidates for the job.
He beat out Jeff Immelt, chairman of General Electric Co. and one of the finalists for the job, who said earlier on Sunday he was no longer in the running. Meg Whitman, chief executive of Hewlett Packard Enterprise, had also been a leading candidate, according to sources close to the process. Whitman last month denied having any interest in the job.
Unlike Immelt and Whit-man, Khosrowshahi is not a fixture in the celebrity executive community. And since Expedia is based in Bellevue, Washington, he is a Silicon Valley outsider, offering a contrast to the “tech bro” culture Kalanick established at Uber.
The Iranian-American businessman came to the United States as a nine-year-old in 1978 with his parents during the Iranian revolution. His family had founded the Alborz Investment Company, a diversified conglomerate involved in pharmaceuticals, chemicals, food, distribution, packaging, trading, and services. Canadian billionaire Hassan Khosrowshahi is a relative of his.
Khosrowshahi graduated from the Hackley School in Tarrytown, New York. In 1991, he graduated with a B.A. in electrical engineering from Brown University in Rhode Island.
He also knows something about the problems of dual nationals with the current regime in Tehran. He told Bloomberg in an interview, “My father had to go back to Iran to take care of his father when I was 13 and was detained for six years before returning. My mom was raising three kids without a dad.”
Khosrowshahi has done well for himself. In 2015, he was the highest paid CEO in the United States, mainly because of a nearly $91 million stock option grant. He is also on the board of The New York Times Company and sports merchandise company Fanatics Inc.
He has led Expedia through a string of acquisitions since 2014, buying Airbnb rival HomeAway Inc for $3.9 billion, Orbitz Worldwide Inc for $1.3 billion and Travelocity for $280 million, cobbling together an online travel empire. Expedia is the world’s largest online travel agency by bookings.
He has been an outspoken critic of President Donald Trump, blasting his visa ban as “inward-looking” and “reactionary.” Expedia filed a legal challenge to the ban.
At Uber, he will bring an end to a company culture built on founder control. Kalanick enjoyed sweeping authority on the board and nearly complete autonomy in running the company, a governance style that helped to create a workplace that had few checks and balances.
Uber has been hit by allegations of sexual harassment, a lawsuit alleging trade-secrets theft, a federal criminal probe over use of software to evade city regulators, and allegations of executives mishandling the medical records of a victim who was raped by her Uber driver in India, among other controversies.
It has suffered an executive exodus this year. The firm needs a CFO, COO, CMO and president.
People who know Khos-row-shahi told The Associated Press he will bring two main assets to Uber. First, he is considered even-keeled and low-key—a sharp contrast to Kalanick, who has been known for fits of anger. His other asset is his skill as a dealmaker in the highly competitive market of online travel.
Uber was valued at $68 billion last year, but recently some mutual funds have written down the value of their Uber investment by as much as 15 percent, a sign of wavering confidence in the company.
Despite the controversies, Uber is still a growing company. Last week, the company reported a 16 percent increase in ride bookings and a 17 percent jump in net revenue for the second quarter over the previous period, and its losses shrank by 9 percent.