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Uber turnaround? Dara Khosrowshahi seems up to the task

Industry insiders say the former Expedia CEO is a highly capable outsider who can bring discipline to the ride-hailing company's chaotic corporate culture.

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Expedia CEO Dara Khosrowshahi has been tapped to be Uber's new CEO.

Drew Angerer/Getty Images

Dara Khosrowshahi has his work cut out for him.

The new Uber CEO will have to see the company through multiple lawsuits, turn a profit, repair a fractured board of directors and more.

But most industry insiders agree that as a highly capable, neutral outsider, he's a good pick for the job. He's said to be a hard-nosed businessman with a stellar background in finance, management and leadership. He's been the CEO of travel site Expedia for the last 12 years and saw the company through several high-profile acquisitions and stock prices that tripled over the last few years. If anyone can turn Uber around, analysts say, it's Khosrowshahi.

"Khosrowshahi faces a great and surmountable task of righting a ship rife with internal and external challenges," said Brian Solis, principal analyst for Altimeter Group. "Consider that Uber faces notable annual losses, a culture in dire need of repair, refocus and nurturing, and an evolving competitive landscape, Khosrowshahi appears to have the demeanor, acumen and results to make impressive strides."

Uber has experienced a spectacular fall from grace over the last several months. It's been beleaguered by dozens of scandals, including a #DeleteUber movement, workplace sexual harassment allegations, an internal investigation led by former US Attorney General Eric Holder and the stepping down of more than a dozen high-level executives. In June, Uber's board of directors forced its CEO and co-founder, Travis Kalanick, to resign.

Late Tuesday, Uber officially named Khosrowshahi as CEO, two days after word leaked that he was the board's choice.

"We're really fortunate to gain a leader with Dara's experience, talent and vision," the board said in an email sent to all Uber employees. "The board and the executive leadership team are confident that Dara is the best person to lead Uber into the future building world-class products, transforming cities, and adding value to the lives of drivers and riders around the world while continuously improving our culture and making Uber the best place to work."

The company, founded in 2009, managed to upend the taxi industry and become the world's most valuable startup, with a valuation of $68 billion. With its no-apologies attitude and notoriously aggressive CEO, Uber quickly became one of the biggest ride-hailing services on the planet. While this approach helped the company grow, it called into question its long-term sustainability.

"Uber has been a massive disruptor to a traditional industry, but it is facing competitive pressures from outside the company and cultural challenges within the organization," said Brett Sappington, senior director of research for market research firm Parks Associates. "The key for Uber will be to capitalize on those advantages and build new areas of strength."

It's been more than two months since Uber was left leaderless. Rumors had a handful of front-runners for the job, including General Electric Chairman Jeffrey Immelt and Hewlett Packard Enterprise CEO Meg Whitman. Both said they decided not to pursue the position. On Sunday, Khosrowshahi emerged as the dark horse.

Shortly after that, Expedia Chairman Barry Diller all but said the deal had been sealed. In a letter sent to company employees and the Securities and Exchange Commission, which CNET obtained, Diller said Khosrowshahi will likely make the move.

"Dara Khosrowshahi has been asked to lead Uber. Nothing has been yet finalized, but having extensively discussed this with Dara, I believe it is his intention to accept," Diller wrote. "I know Dara would like to communicate now with all of you but I've asked him not to until this is fully resolved." 

Diller also said he regrets that Khosrowshahi will be leaving Expedia but he wishes him well in this "next adventure."

Who is Khosrowshahi?

Khosrowshahi addressed Uber employees during an all-hands meeting Wednesday, saying he's "all-in" and prepared to "fight" for the company. He also said that what got Uber successfully to where it is, "is not what's going to get us to the next level" and "this company has to change." Khosrowshahi said he believes Uber should go public, The Wall Street Journal reported, but it probably won't happen for another 18 to 36 months.

On Tuesday, Khosrowshahi sent a farewell email to Expedia employees saying his decision to accept Uber's offer was "one of the toughest decisions of my life," according to GeekWire, which obtained the email. He said working at Expedia were the best years of his life and he's proud of his accomplishments there, but it's time for a new journey.

"The times of greatest learning for me have been when I've been through big changes, or taken on new roles," he wrote. "You have to move out of your comfort zone and develop muscles that you didn't know you had."

Khosrowshahi was born in Iran in 1969 and immigrated to the US nine years later. After getting an engineering degree from Brown University in 1991, he worked as an investment banker though the 1990s. Khosrowshahi joined Expedia as CEO in 2005 after seven years at Diller's IAC, which shortly after spun off the travel site.

In this position, he's taken the company from a midsize business to a global family of brands. He's overseen the acquisitions of travel sites Orbitz, Travelocity and HomeAway, and the company's revenue has grown from $2.1 billion in 2005 to $8.7 billion in 2016. He's also well-liked by his employees. On jobs site Glassdoor, he has a 93 percent approval rating.

"The people who have worked for him have said he's tough and he's demanding but he's fair," said Henry Harteveldt, travel industry analyst for Atmosphere Research Group. "He's definitely not a tech bro, he doesn't have the same capricious nature as Travis Kalanick."

Unlike Kalanick, who was selected by President Donald Trump to sit on the economic advisory council (a position he later stepped down from after being pressured by Uber customers and employees), Khosrowshahi has been vocal in criticizing the president. Following Trump's decision early in his presidency to restrict immigration from seven countries, Khosrowshahi sent an email to Expedia staff saying the president's executive order was shortsighted. 

"The US may be an ever so slightly less dangerous as a place to live," he wrote, "but it will certainly be seen as a smaller nation, one that is inward-looking versus forward thinking, reactionary versus visionary."

Looking at Khosrowshahi's leadership at Expedia, it appears he values forward-thinking and visionary ideas. What remains to be seen is if he can bring that same positive workplace culture to Uber.

First published Aug. 28, 2 p.m. PT.
Update, Aug. 30 at 5:16: Adds that Uber has officially named Khosrowshahi as CEO. 10:08 a.m.: Adds details from Khosrowshahi's farewell email to Expedia employees. 2:18 p.m.: Adds information from Wednesday's all-hands meeting.

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