Uber’s new CEO ‘wrings efficiency out of assets’
For a surprise choice, Expedia CEO Dara Khosrowshahi appears to check the boxes needed to tackle the massive job of leading Uber from a rapidly growing but dysfunctional money-loser to a company that can turn a consistent profit.
Like Uber, Expedia is a global juggernaut that uses an internet platform to process millions of transactions every year. Expedia went through a big growth phase just like Uber, and has mastered making money on travel booking transactions, something that’s only an aspiration for Uber.
Khosrowshahi also has experience leading a public company, which Uber wants to become, and he has handled vocal investors and strong-willed board members, which Uber has.
“The businesses he was in are all about wringing efficiency out of underutilized assets and using a network to do it,” said Gartner analyst Michael Ramsey. “He’s really in the same business.”
Uber’s eight-member board voted Sunday to offer the job to Khosrowshahi, 48, who has spent most of his career at Expedia or what was once its parent company, IAC/InterActiveCorp. Expedia’s board chairman confirmed the offer in a note to employees, but as of late Monday there was no announcement from Uber, where Khosrowshahi reportedly was meeting with employees.
At Uber, Khosrowshahi will face a multitude of problems that led to the ouster of contentious CEO and co-founder Travis Kalanick. Board members are engaged in a very public fight, one that has spilled into the courts and influenced the CEO pick. An investigation by an outside law firm found rampant sexual harassment and bullying and there have been allegations of theft and deceit.
To right the company, Khosrowshahi must calm employees, showing them he’s got a specific plan to change culture and make money, Ramsey said.
He has the credentials to do that, RBC Capital Markets analyst Mark Mahaney wrote Monday in a note to investors. “Expedia’s loss is Uber’s gain,” he wrote.
Uber’s drivers are already worried that Khosrowshahi will trim their wages as part of the effort to make money, said Chris Townsend, director of field mobilization for the Amalgamated Transit Union, which has been organizing drivers in New York.
Culture
“Until we see whether this CEO can bring a meaningful change in the company’s behavior, we are going to be fastening our seat belts,” Townsend said. “While we are trying to be hopeful, there is as much as dread and trepidation as anything else.”
Khosrowshahi has 19 years of leadership at Expedia and IAC, and has had to deal with acquisitions and challenges, said Morningstar senior analyst Dan Wasiolek in an interview. Moreover, Khosrowshahi has created a corporate culture that employees respect, as measured by third-party surveys, Wasiolek said.
“Given all the problems at Uber, the lack of any real controversy amongst employees at Expedia indicates that he may do a good job at personnel leadership,” Mahaney said.