Uber has chosen Dara Khosrowshahi, the chief executive of travel company Expedia, as its chief executive, handing him the challenge of leading the ride-services company out of a nearly year-long crisis.
Khosrowshahi, 48, takes 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.
Contending with Travis Kalanick’s legacy
But he would also 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% of the company’s voting power signed a letter asking him to step down amid growing concern over his behaviour and the behaviour of senior managers under him.
Khosrowshahi, who has run Expedia for 12 years, was not widely known to be among the top candidates for the job.
He beat Jeff Immelt, chairman of General Electric, and one of the finalists for the job, who said on Sunday he was no longer in the running. Meg Whitman, chief executive of Hewlett Packard Enterprise, had also been a leading candidate.
Unlike Immelt and Whitman, 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.
Expedia more than doubled revenue
The Iranian-American businessman came to the United States as a child in 1978 with his parents following the Iranian Revolution. He received a bachelor’s degree in engineering from Brown University and got his start at investment bank Allen and Co.
Khosrowshahi has certainly done well for himself – in 2015 he was the highest paid chief executive in the country, 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.
Under Khosrowshahi’s leadership, Expedia more than doubled its annual revenue since 2012 to nearly $8.8bn in 2016. He led Expedia through a string of acquisitions since 2014, buying Airbnb rival HomeAway for $3.9bn, Orbitz Worldwide for $1.3bn and Travelocity for $280m.
He has been an outspoken critic of President Donald Trump, criticising Trump’s travel ban. Expedia filed a legal challenge to the ban.
At Uber, he would 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.
Despite the controversies, Uber is still a growing company. Last week, the company reported a 16% increase in ride bookings and a 17% jump in net revenue for the second quarter over the previous period, and its losses shrank by 9%.
What role Kalanick has in the company going forward is a critical question whose answer remains unclear. In a previous statement, Kalanick said he would support the new CEO “to guide Uber into its next phase of growth and ensure its continued success.”