In a last-minute shuffle Sunday night, Uber’s strife-ridden board chose Expedia CEO Dara Khosrowshahi as the new chief executive for the troubled ride-hailing giant, Recode reported.
Khosrowshahi, whose name hadn’t been rumored as a CEO prospect for Uber, was waiting in the wings after the exits over the weekend of two other finalists for the challenging job. These were former General Electric CEO Jeff Immelt and Meg Whitman, leader of Hewlett Packard Enterprise, the New York Times reported, based on interviews with unnamed sources. Although Whitman had previously bowed out of contention, she was apparently drawn back into consideration by the board.
Recode’s Kara Swisher reported that Uber planned to make the announcement first to employees before publicly disclosing the choice of Khosrowshahi. Recode and other news outlets did not confirm Sunday night whether Khosrowshahi has accepted the CEO position.
Khosrowshahi has served as CEO of Bellevue, WA-based travel e-commerce group Expedia (NASDAQ: [[ticker:EXPE]]) since 2005, according to his LinkedIn profile. Before that, he was CFO of IAC (Nasdaq: [[ticker:IAC]]), which acquired Expedia in 2003.
Khosrowshahi began his leadership of Expedia when IAC spun out the company. Over his dozen-year tenure, he oversaw revenue growth to more than $8.7 billion in 2016, when the company earned a net income of $281.8 million. Expedia also expanded into a global conglomerate of more than 200 travel booking sites through the acquisition of companies including Orbitz, HomeAway, Travelocity, and Trivago.
Khosrowshahi, an Iranian-American born in Tehran in 1969, has been critical of President Donald Trump’s attempts to impose a travel ban on visitors to the U.S. from certain predominantly Muslim countries. Expedia was one of the first companies to file legal briefs in support of a court challenge to the ban filed by Washington state Attorney General Bob Ferguson in January.
Expedia has a market capitalization of $22.6 billion, far less than the $68.5 billion valuation ascribed to Uber by its private investors, despite its large and continuing losses. An erosion of investor confidence in that valuation is among the costs of a turbulent period at Uber this year, as Reuters has reported.
After the company came under scrutiny for alleged gender bias and sexual harassment of women, Uber’s board commissioned an investigation of the company’s workplace culture. That resulted in recommendations for sweeping changes, including a reduced management role for co-founder and CEO Travis Kalanick. Benchmark and other investors then pressured Kalanick to resign as CEO in June, but that move didn’t end the in-fighting among the company’s directors. Benchmark is now suing Kalanick to try to force him off the board.
Although the hiring of Whitman or another female chief executive could have signaled an intent to improve the standing of women at Uber, Khosrowshahi may bring some credibility on that count from Expedia’s reported track record. The company says over 50 percent of its U.S. employees are women, as are 35 percent of those in leadership positions. Only 25 percent of tech roles are filled by women; but Expedia maintains that it has achieved equal pay for women and men in equivalent roles.
It remains to be seen what goals the Uber board has in mind for the company under Khosrowshahi’s leadership; how much control Kalanick will retain over Uber’s direction; how much Uber agreed to pay Khosrowshahi to take on the daunting assignment; and whether he was able to negotiate any conditions before taking the job—if he has agreed to do so.
Business Insider has identified a possible sign that the board intends to prepare Uber for an IPO by shoring up its financial picture. Uber has decided not to occupy the huge Oakland, CA, office building it had renovated, and which the company had formerly planned to fill with thousands of workers. Uber may sell the building, Business Insider reported.
