eWEEK content and product recommendations are editorially independent. We may make money when you click on links to our partners. Learn More.
UPDATED: It looks as if Uber may be finally made a positive step toward recovery after a year of management upheaval with the selection of a new CEO to replace founder Travis Kalanick.
The board decided to appoint Dara Khosrowshahi, who currently serves as the CEO of Expedia. In his first public statement regarding his selection as CEO of Uber, Dara Khosrowshahi told The Wall Street Journal on Aug. 29 that he plans to accept the job, but that terms of an employment contract still need to be worked out. Nor has Uber issued a statement confirming that Khosrowshahi has accepted the position.
Uber’s board voted unanimously Aug. 27 to offer the job to Khosrowshahi following protracted battles between factions on the board favoring outgoing General Electric CEO Jeffrey Immelt or Hewlett Packard Enterprise CEO Meg Whitman.
Immelt withdrew his name from consideration via a note on Twitter over the weekend. Whitman apparently was not chosen after she and the board were unable to come to agreement on the CEO’s duties.
Khosrowshahi has apparently been on Uber’s short list for several weeks, although that information has been kept a closely guarded secret. After Immelt and Whitman fell by the wayside, Khosrowshahi’s name was brought up and the rival Uber board factions agreed to set aside their differences voted to offer the job to him.
So what exactly is going on with Uber and its would-be CEO? Right now, it’s hard to say since we don’t have any leaks from the board. But it’s not hard to guess the general outlines of what’s going on between Khosrowshahi and the Uber board.
The first issue to be resolved is to make sure he’s not hurt by his loss of compensation from Expedia. Khosrowshahi was promised million of dollars in a compensation plan that included stock options and bonuses, but to get that, he had to stay at Expedia for five years.
If he leaves Expedia before the five years is up, Khosrowshahi forfeits most of the deferred compensation. Before he departs to run Uber, he’s going to want to be made whole.
In addition, Khosrowshahi needs to make sure that his place in Uber’s management structure and his place on Uber’s board are assured. He will also want to make sure that he can pick the senior executives he wants to help him run Uber. Finally, he will need to be convinced that he has full authority to run Uber and not be subject to second guessing or even board challenges from former CEO Travis Kalanick, who remains on Uber’s board.
In the past year Uber has been hit with multiple complaints of gender discrimination, and sexual harassment resulting in criminal investigations, lawsuits, executive departures and mass firings.
In June Kalanick initially took a leave of absence ostensibly to take time off to mourn the untimely death of his mother in a boating accident last May.
But facing pressure from Uber investors, chiefly venture capital firm Benchmark Capital, Kalanick resigned as CEO, but only after reappointing himself to the board of directors. Now Benchmark Capital is suing to have him removed from the board.
If Khosrowshahi is going to take over as Uber CEO, he needs some assurances that he can effectively manage the company in the midst of all this legal turmoil, that Kalanick won’t try to arbitrarily to force him out so he can take over and that his role as CEO won’t be complicated by legal challenges from one investor group or another.
Some of those concessions will require negotiation, which is likely why there has been a delay between the board’s vote and any announcement.
For Uber’s sake, one can only hope that the board is able to finalize Khosrowshahi’s appointment. By all accounts, he’s exactly what Uber needs if the company is going to recover from the chaos that has challenged it. Perhaps most important, Khosrowshahi has demonstrated that he’s a calm, thoughtful leader who gets results.
Under his leadership, Expedia has grown globally, it’s been profitable for Khosrowshahi’s entire run as CEO and it has made a number of strategic corporate acquisitions. He’s also shown that he can manage a company where women make up 50 percent of the workforce and receive pay that is equal to male employees, according to Expedia’s report on its gender balance.
Notably, Expedia hasn’t been hit with the complaints of sexual harassment or gender discrimination that made headlines at Uber, although women at Expedia trail men in terms of leadership positions and technical roles.
In other words, Uber’s board has apparently found adult supervision for a company that sorely needs it. Now the challenge is for Uber to find a way to make the job attractive enough for Khosrowshahi to agree to take it and stay long enough to turn the company around. This is a tall order.
If he does accept Uber’s offer, Khosrowshahi will face a formidable task. He will have to stamp out the “bro” culture that has infected Uber since its founding and he will have to make a diverse, gender neutral workplace a reality. He also needs to calm the roiled waters of regulation by demonstrating that the new Uber will work with local and regional governments instead of trying to work around them.
In addition, Khosrowshahi will have to get the company on an even keel so that it can compete against market rivals that have been emboldened by Uber’s dysfunction, including Lyft and other ride hailing services as well as traditional taxi companies that are introducing their own apps to win riders. He will also have to find a way to get Ubers finances in line, even if it means abandoning autonomous vehicles.
It’s going to be a tough assignment, but all indications are that if anyone can do it, Khosrowshahi can.
Editor’s Note: This article was updated to on Aug. 29 with Khosrowshahi’s comment to the Wall Street Journal that he plans to accept Uber’s offer to appoint him the ride-sharing company’s new CEO.