San Francisco - Uber will appoint
Dara Khosrowshahi to run the global ride-hailing leviathan, two people familiar with the matter said. He’ll succeed co-founder
Travis Kalanick, who led the firm to $20bn in annual bookings before scandals
forced him out.
In hiring Expedia’s chief executive officer (CEO), Uber will land a
seasoned deal-maker and an outspoken critic of President Donald Trump,
who’s accustomed to sparring with one of his new company’s biggest
rivals, Alphabet. While a spokesperson for Uber directors confirmed
that they’ve chosen a CEO, she declined to name the person, saying the
board would inform employees first.
Expedia didn’t immediately respond
to requests for comment.
Khosrowshahi will face a number of hurdles as Uber - which has
raised more than $15bn from private investors - navigates its way
toward a still-unscheduled initial public offering. The new top
executive must grapple with the company’s persistent losses, a
high-stakes trade secrets suit filed by
Alphabet’s Waymo, a tarnished brand and low morale among Uber’s more
than 15 000 global employees.
Uber’s board met over the weekend for a last round of interviews with
candidates and to discuss options, said people familiar with the
matter, who asked not to be identified because the deliberations were
private. Hewlett Packard Enterprise CEO
Meg Whitman and
General Electric chairperson
Jeffrey Immelt were under consideration for the job.
The board ultimately went with a dark horse. Khosrowshahi hadn’t been
named publicly as a finalist during a CEO search that was plagued by
leaks, boardroom infighting and a lawsuit involving two directors. He
has accepted the position, people familiar with the discussions said.
Khosrowshahi, 48, is an Iran-born American who graduated from Brown
University with an engineering degree. He had a stint in investment
banking at Allen & Co before joining with billionaire Barry Diller
at IAC during the dot-com boom. Khosrowshahi led an acquisition binge in
online travel, expanding IAC’s Expedia with takeovers of Orbitz and
He’s also one of the technology industry’s most outspoken CEOs in
opposition to some of President Trump’s policies. He railed against the
immigration ban and mocked Trump on Twitter as repeatedly failing to
“rise to the expectations of his office” after the president’s response
to protests in Charlottesville, Virginia.
Uber’s long year of
controversies began in January when Kalanick tried to justify his
position on a Trump business council before
ultimately resigning that post after customers staged a boycott.
Khosrowshahi was effective at marrying disparate businesses across
Expedia, many brought together through acquisitions, said Woody
Marshall, an investor in the online travel industry who has known
Khosrowshahi since they were kids.
“He’s been able to leverage
technology in a thoughtful way,” said Marshall, a general partner at
venture capital firm TCV, which isn’t an Uber investor. “He’s the real
deal. He’s not bigger than life in terms of his public appearance or
public personality. He’s bigger than life in terms of culture and
Under Kalanick, Uber grew into a massive global business. In the
second quarter of 2017, the company lost $645m $1.75bn in net revenue. During Kalanick’s nearly seven-year stint, the San
Francisco-based startup achieved a $69bn valuation, struck
partnerships with major auto manufacturers, took a sizable stake in its
biggest global competitor and established itself as the premier
ride-hailing business in most of the developed world.
Kalanick earned a
sort of legendary Silicon Valley status, elbowing into the ranks of
founders like Elon Musk and Jeff Bezos.
However, Kalanick, 41, cultivated a brash reputation and played a
central role in many of the company’s controversies. He was
caught on tape arguing with an Uber driver over pay and was tied to the
mishandling of medical records for an Indian woman who had been raped by
an Uber driver.
Kalanick helped author the company’s cultural values,
which consultants described as a way to justify bad behaviour in the
office. He also drove the acquisition of the autonomous trucking startup
Otto for $680m in stock, which led to a
the lawsuit from Alphabet.
Khosrowshahi has experience jousting with Alphabet’s Google. Expedia
was among Google’s top search advertisers. But as Google began to
promote more of its own travel services, Expedia was among the companies
that formally opposed the search giant’s dominance in a European Union
“We’re comfortably uncomfortable as it relates to
Google,” Khosrowshahi told Bloomberg in July.
Uber’s search for a CEO started as a bid to find Kalanick “leadership
help,” a process that began in March after Bloomberg published a video
of Kalanick’s verbal altercation with a driver. It shifted focus to the
top job after Kalanick’s resignation on June 20.
Uber’s other leadership
needs include heads of finance and marketing, a general counsel and
more independent board members, including a chairperson. Uber is being led
by a 14-person management committee alongside the eight-member board
until the new CEO starts.
HPE’s Whitman gained support from some Uber board members for the CEO
presenting her vision for the company on Saturday. She had previously
denied that she would take the job. Whitman had been an informal adviser
over the years to Kalanick and Ryan Graves, the company’s
longest-running executive who’s set to depart next month but will remain
on the board.
Benchmark, Uber’s largest venture capital backer, was a
fan of Whitman. But Kalanick wanted someone willing to bring him back as
a partner, something she was unlikely to do, people familiar with the
matter said. Kalanick threw his weight behind GE’s Immelt, who was a
serious contender but failed to win sufficient support from the board.
He withdrew his name Sunday morning in a Twitter post.
The CEO search had been further complicated by an ongoing legal fight
between Kalanick and Benchmark. The VC firm accused the former CEO of
fraud and asked a Delaware Chancery Court to strip him of control over
three board seats, effectively removing him from the board.
courtroom squabble is a sticking point in a potential investment from
SoftBank, Didi Chuxing and others that would
inject at least $1bn into Uber and allow a large contingent of
shareholders to cash out.
In the end, the board voted unanimously for Khosrowshahi, a person
familiar with the matter said. Investors seem to like him. Expedia’s
stock is up 32% this year, built partly on enthusiasm for the
company’s home-rental competitor to Airbnb.
At Uber, Khosrowshahi
will be tasked with instilling the same sort of confidence in
shareholders and whipping the business into shape for an IPO. That will
involve fixing a raft of issues that have been festering inside the
company for years.
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