Uber has chosen Dara Khosrowshahi, who leads the online travel company Expedia, to be its chief executive. The selection on Sunday capped a contentious search process as the ride-hailing company seeks to move past a turbulent period.
Khosrowshahi emerged as the leading candidate from a field of three finalists over a weekend of Uber board meetings. One finalist, Jeffrey R Immelt, the former chief executive of General Electric, withdrew on Sunday when it became clear that he did not have enough support. The board of directors and executives inside of Uber had instead been leaning toward Meg Whitman, the chief executive of Hewlett Packard Enterprise (HPE). But matters changed quickly over the course of Sunday afternoon, as directors and Whitman could not agree on terms under which she would take over as chief executive.
Ultimately, the board decided on the third candidate, Khosrowshahi. Uber, the company’s board and Expedia did not immediately respond to requests for comment.
Stability required
Choosing Khosrowshahi is crucial to returning stability to Uber, the world's biggest ride-hailing company, which has been without a leader since its co-founder, Travis Kalanick, stepped down from the CEO job under pressure on June 20th.
Under Kalanick, Uber changed the transportation landscape by offering people the ability to summon a ride through an app, and the privately held company swelled to a nearly $70 billion colossus. But Uber’s future became murkier this year when the company was pummelled by scandal after scandal, including sexual harassment accusations in the workplace, a Department of Justice criminal investigation into some of its methods, and an intellectual property dispute with a self-driving car rival.
While Uber’s business continued to grow, Kalanick’s management style faced scrutiny and investors mutinied against him. How much of an impact Khosrowshahi can have on Uber is uncertain.
The company still bears the imprint of Kalanick, who remains on Uber’s board. The board itself has been riven with discord, especially between Kalanick and Benchmark, a venture capital firm that is a major Uber shareholder and that also has a seat on Uber’s board.
Preferred candidates
Both Kalanick and Benchmark had their own preferred candidates for a new chief. Benchmark also has sued Kalanick to try and force him off the board. Khosrowshahi, who has been president and chief executive of Expedia since 2005, has experience in a digital industry that, like Uber, affects offline life and the logistics and movement of people.
Based in Bellevue, Washington, Expedia has travel brands including Hotels.com and Orbitz. The publicly traded company is smaller than the privately held Uber, with a market capitalisation of around $23 billion compared with Uber’s private valuation of nearly $70 billion.
Khosrowshahi also joined the board of the New York Times in 2015, and previously worked at IAC/InterActive Corp. At Expedia, Khosrowshahi has been an outspoken chief executive.
His family emigrated to the United States from Iran because of the revolution in that country in the late 1970s, so Khosrowshahi had a personal perspective on the executive order that Donald Trump signed restricting travel from seven predominantly Muslim countries this year.
Expedia, along with Amazon, became one of two technology companies to contribute early declarations to a lawsuit filed by Washington State’s attorney general objecting to the travel ban. Khosrowshahi described his early experience as an immigrant to the US in an email to employees at that time. “We sure didn’t feel like refugees, but in hindsight I guess we were – my father and mother left everything behind to come here, to be safe and give their boys a chance to rebuild a life,” he wrote. He expressed other pointed concerns in the wake of Mr Trump’s coming to office. In February, he raised eyebrows when he concluded a conference call with Wall Street analysts by saying, “Hopefully we will all be alive to see the end of next year.”
Split boardroom
At Uber, the chief executive search has been turbulent. Board members were split over candidates early on in the process. According to people with knowledge of the situation, Kalanick favoured Immelt while Benchmark, whose partner Matt Cohler sits on Uber’s board, preferred Whitman. A spokesman for Kalanick did not immediately respond to a request for comment. Benchmark declined to comment.
Last month, after Whitman emerged as a candidate for the job, she posted on Twitter that she was "fully committed to HPE and plan to remain the company's CEO". She also gave an interview to the Wall Street Journal last week reiterating that there was "a lot of work to be done at HPE". But, in reality, Whitman was in touch with members of Uber's board in recent days about the chief executive role, said the people with knowledge of the process. Immelt, who recently left his job as chief executive of GE, also had emerged as a candidate in recent weeks. Khosrowshahi's candidacy was kept under wraps.
As recently as late last week, Uber’s board was deadlocked on candidates, the sources said. On Friday, the board met in San Francisco, with Immelt and Khosrowshahi presenting to the directors. Whitman presented on Saturday. On Sunday morning, Immelt posted on Twitter that he had “decided not to pursue a leadership position at Uber”.
Software experience
By then, it was apparent that Immelt did not have the software experience that some board members deemed important for the Uber chief executive role, said people with knowledge of the process. Another person with knowledge of the situation said Immelt considered Uber’s board to be dysfunctional. GE declined to comment on behalf of Immelt. A spokesman for Whitman also declined to comment.
At that point, the board was leaning toward Whitman, said two people with knowledge of the process. Whitman, who had previously also led eBay, had a wealth of management experience. As a female leader, she also offered the opportunity for Uber to improve its workplace image. Whitman asked Uber’s board about some issues, including what role Kalanick would play in Uber’s future, the people said.
Another point of discussion was the current legal battle over board control between Kalanick and Benchmark. By late Sunday, Whitman and the board could not agree on some of those matters, the sources said. Soon, Uber’s board had settled on Khosrowshahi.
– (New York Times News Service)
