Uber’s surprise pick for CEO is a dealmaker
The former head of Expedia specializes in day-to-day operations and growing revenue
Investors and industry watchers alike rallied around Uber’s new CEO pick on Monday, seemingly hopeful that Expedia chief executive Dara Khosrowshahi has what it takes to rescue the troubled ride-hailing company from its months-long series of scandals.
Experts say Khosrowshahi, a surprise pick for the job, has demonstrated some of the key traits a successful Uber CEO will need: he’s an accomplished deal maker, with experience growing revenue in a public, international company.
But he faces a host of daunting challenges in his new role — including figuring out how to work collaboratively with ousted CEO Travis Kalanick — who remains on the board — resolving a potentially disastrous legal battle over Uber’s self-driving car technology, fixing Uber’s workplace culture after reports of sexual harassment and sexism left a black mark on the company, and ultimately taking Uber public. The world’s most valuable startup, worth nearly $70 billion, also has several high-level jobs vacant, which Khosrowshahi will be expected to fill.
“I don’t think there’s any one person who would hit all 20 items on someone’s checklist,” early Uber investor Bradley Tusk of Tusk Ventures said of Khosrowshahi. “But I think he comes really close on a lot.”
Uber’s board on Sunday put an end to a two-month CEO search by voting to offer the job to Khosrowshahi, who had not yet publicly accepted late Monday, but was expected to do so. The move came as a shock to those in Silicon Valley who had been following the high-profile search. Hewlett Packard Enterprise CEO Meg Whitman and former General Electric CEO Jeffrey Immelt had been rumored to be likely candidates for the Uber role, but Khosrowshahi had flown under the
radar.
Khosrowshahi (pronounced Cause-row-shahee) is a 48-year-old Iranian immigrant who came to the U.S. as a child on the eve of the Iranian Revolution. He studied electrical engineering at Brown University, and later went on to become chief financial officer of IAC, a media and internet company that controls more than 150 brands, including The Daily Beast, Match.com and Vimeo.
Khosrowshahi took the reins at Expedia in 2005, when it was spun out from IAC. He helped Expedia grow into a travel powerhouse — under his guidance, the company’s annual revenue ballooned from $2.1 billion in 2005 to nearly $8.8 billion last year. Expedia’s stock has climbed steadily, increasing by nearly 150 percent over the past five years. Shares dropped about 5 percent Monday following news of his expected departure.
During his tenure at the company, Khosrowshahi spearheaded Expedia’s $3.9 billion acquisition of short-term rental site HomeAway — a move that put Expedia in direct competition with Airbnb. Expedia also scooped up Travelocity and Orbitz under Khosrowshahi’s watch, showing his prowess as a deal-maker. That’s a plus when it comes to Uber, said Tusk, who would like to see the ridehailing company continue to shrink its losses by executing more global mergers. Uber sold its Chinese business to rival Didi Chuxing last year and merged with Russian rival Yandex this summer, and Tusk hopes Uber will reach similar deals in the Middle East and Southeast Asia.
Another thing Khosrowshahi may have going for him — he’s not another Kalanick. Khosrowshahi is an operator who specializes in day-to-day logistics and getting things done, while Kalanick is a visionary always thinking about the next big idea, said Brendan Connaughton of San Francisco-based wealth management firm ClearPath Capital Partners. And that’s a good thing, said Connaughton, who called Khosrowshahi a “great hire.”
“Because of where Uber is, they don’t need a super charismatic leader,” he said. “They’ve already come up with the business model and everything else. What they really need is an operator.”
In addition to being a deal-maker and an operator, Khosrowshahi also is an outspoken opponent of President Donald Trump.
“I keep waiting for the moment when our Prez will rise to the expectations of his office and he fails, repeatedly,” Khosrowshahi tweeted earlier this month.
Under his watch, Expedia was one of the first companies to denounce Trump’s executive order barring immigrants from seven Muslim countries. In February, after the travel ban was announced, Khosrowshahi painted a grim picture of the country’s future by telling analysts on an earnings call: “hopefully we will all be alive to see the end of next year.”
Kalanick was criticized in Silicon Valley for lingering on Trump’s business advisory council, especially after Trump signed the travel ban. After activists around the country planned to protest Uber, Kalanick stepped down from the council in February.
Khosrowshahi, unlike Kalanick, also resides outside of the Silicon Valley bubble. He’s based at Expedia’s headquarters in Bellevue, Washington, but has a host of connections in the tech community. For example, his cousin is Hadi Partovi, an investor in startups including Uber, Airbnb and DropBox, and co-founder of computer science education nonprofit Code.org. His other cousin, Amir Khosrowshahi, co-founded artificial intelligence startup Nervana, which was acquired by Intel last year. And Khosrowshahi also reportedly has a family connection at Google Ventures.
Neither Uber nor Khosrowshahi has commented on the board’s decision. But that didn’t prevent Expedia chairman Barry Diller from saying his goodbyes. Though Khosrowshahi’s role at Uber has not been finalized, Diller wrote in a letter sent to Expedia employees and filed with the Securities and Exchange Commission that he expects Khosrowshahi to accept the offer.
“If Dara does leave us, it will be to my great regret but also my blessing — he’s devoted 12 great years to building this Company and if this is what he wants for his next adventure it will be with my best wishes,” Diller wrote. “I say that because he deserves nothing less and I say that also because he will leave behind a tremendously talented corps of executives.”