Dara Khosrowshahi, the man Uber chose to be its new CEO, may not have the name recognition or star power of some of his Silicon Valley peers.
But according to one Wall Street analyst who has followed Khosrowshahi’s career closely for years, he might be exactly what Uber needs to get its business back on track after a year of turmoil and controversy.
We spoke with Mark Mahaney, an internet analyst at RBC Capital Markets, who covers Expedia, the online travel company where Khosrowshahi currently serves as CEO. According to Mahaney, Khosrowshahi bring several skills to the table that will be especially useful at Uber, including:
- Proven success running a massive, international organisation, and working with very assertive board directors
- Experience negotiating with government officials in a regulation-heavy industry
- Success in an intensely competitive industry facing off against deep-pocketed rivals and in difficult business environments
Here’s how those come into play
One of Khosrowshahi’s most immediate challenges will be healing Uber’s fractured board. Right now, there are two camps in Uber’s boardroom: those who stand with former CEO Travis Kalanick, who resigned under pressure in June, and those who are loyal to venture capital firm Benchmark. The situation is unique, and with an ongoing lawsuit between Kalanick and Benchmark, likely won’t be solved quickly.
“I think there are very few people who have had experience dealing with a board as fractured as this one,” Mahaney says. “That said, he has had experience dealing with strong willed board members.”
Consider some of Khosrowshahi’s fellow directors on Expedia’s board. There’s Barry Diller, the media mogul who climbed his way up from the mailroom of a Hollywood talent agency; and there’s John Malone, the cable TV pioneer who sold his company to AT&T for $US59 billion in 1999 and later fought a two-year battle with Rupert Murdoch over a stake in News Corp.
That’s not an easy group to get along with. But Khosrowshahi was so valued by Expedia’s board that they reportedly gave him a massive pay package if he stays with the company until 2020.
Khosrowshahi will also be tasked with recovering Uber from its culture meltdown of the past few months. Uber has suffered a wave of executive defections and sagging morale during a period in which the company has faced allegations of sexual discrimination and a toxic work culture.
“It will be a challenge for anyone coming in, but in the twelve years he’s run the company it seems like he’s run a relatively progressive employee culture at Expedia,” said Mahaney.
Khosrowshahi was number thirty-nine on Glassdoor’s list of highest rated CEO’s, and has a 93% approval rating from employees on the site. Mahaney also added that to his knowledge, there haven’t been any personnel issues at Expedia over the past twelve years, and that he doesn’t think Khosrowshahi will bring any other workforce diversity issues to the table.
The right touch
On the business side, Khosrowshahi seems well prepared for the job. Over the past twelve years, he’s grown Expedia into the largest online travel agency in the US, and brought revenues up from $US2.1 billion in 2005 to $US8.7 billion in 2016. Mahaney cites Khosrowshahi’s experience running a global organisation of 20,000 employees, and his successful focus on long term growth over short-term financial gains.
Mahaney also notes that anyone walking into the Uber job will have to spend a lot of time working through regulatory issues, and that there aren’t many CEO’s who have the type of experience needed to handle Uber’s complex regulatory issues.
Uber has encountered friction with regulators around the world as its ride-hailing business has expanded at a breakneck pace and disrupted the incumbent taxi industries.
While Expedia’s regulatory issues are different, the company’s business is also subject to a complex web of rules and jurisdictions.
“Dara has had to do a lot of negotiations, and Expedia has had to do a lot of negotiations with local authorities, municipal, and state governments relating to tax issues.” Mahaney says.
Of course, there’s one big if to all of this: Khosrowshahi needs to actually accept Uber’s job offer, which by end of day Monday was still not confirmed.