Uber’s pick for CEO is both tough and visionary
Under his care, Dara Khosrowshahi has turned Expedia into a powerhouse
Deal alert: Expedia CEO Dara Khosrowshahi, the surprise pick to helm Uber, comes with a résumé tailored to fixing many of the ride-hailing company’s problems.
Now, the price alert: Khosrowshahi’s success after 12 years leading Expedia means Uber will have to cover nearly
$200 million in compensation left on the table, according to a Bloomberg analysis.
But paying that tab may be worth it for a company valued at
$70 billion that is desperately in need of a leader to put it back on track, travel industry experts familiar with the Expedia CEO’s tenure say.
“If Uber needs someone who’s strategic, can define true north and can create a culture of winning, that’s what Dara can do in his sleep,” says Woody Marshall, a partner at venture capital firm TCV.
“I’ve known him my whole life, and what you see is what you get,” says Marshall, who says he met Khosrowshahi, 48, when they both attended prep school in New York. “Dara is a person of substance who is very steady. Not to mention that he took an also-ran in the industry and turned it into a powerhouse.”
While Khosrowshahi may not have a familiar name, Marshall and others say he may well have precisely what it takes to tackle Uber’s challenges, which include deep cultural issues, a
lawsuit from self-driving car rival Google and a dysfunctional board.
Expedia, the online travel booking website, has faced a fiercely competitive landscape, battling both start-ups such as Priceline and tech stalwarts such as Google. Khosrowshahi has made Expedia a leading player in the space through a combination of astute dealmaking.
“There’s a lot of overlap (to Uber),” says Dennis Schaal, executive editor of travel industry news site Skift. “It’s getting people from point A to point B. It’s customer service. It’s dealing with partners and regulators.”
On the business front, Khosrowshahi went on a bold acquisition run in recent years that culminated in Expedia’s $1.6 billion purchase of Orbitz in 2015, making it the online booking market leader to second-place Priceline.
“He’s built Expedia into a destination business that attracts and keeps good talent, which is significant when you have Amazon and Microsoft in your (Seattle) backyard.” Henry Harteveldt, travel industry analyst
Under his reign, Expedia also scooped up Hotwire, Trivago and Travelocity. Its stock is worth six times more than it was in 2005 when he was appointed CEO. Over the past year, Expedia stock rose to $142 from $109.
On the personal front, Uber gets in Khosrowshahi an American success story, the son of Iranian immigrants whose financial acumen saw him rise quickly at Barry Diller’s IAC Travel, which bought Expedia in 2003.
Khosrowshahi has been critical of President Trump’s immigration ban push, chastising him after Charlottesville for failing to “rise to the expectations of his office.” That stand may sit well with Uber’s riders, who protested former CEO Travis Kalanick’s postinauguration involvement with a Trump business council, which Kalanick later left.
How he’ll tackle making Uber a more inclusive place for women and underrepresented minorities is less clear. Under Khosrowshahi, the company said last year that 51% of employees are women, although only 35% of them are in senior leadership positions. Expedia’s track record of hiring minorities isn’t known.
“He’s built Expedia into a destination business that attracts and keeps good talent, which is significant when you have Amazon and Microsoft in your (Seattle) backyard,” says Henry Harteveldt, travel industry analyst with Atmosphere Research Group.