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Uber picks Dara Khosrowshahi as its new boss

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“A LEADER is a dealer in hope,” said Napoleon Bonaparte. For much of this year Uber, the ride-hailing firm, has lacked both leadership and optimism. But on August 27th news leaked that Uber had poached as its new chief executive Dara Khosrowshahi, the boss of Expedia, an online-travel company. Mr Khosrowshahi is seen as both an astute dealmaker and a canny manager. In his 12 years at the helm of Expedia, the gross value of its hotel and other travel bookings more than quadrupled and its pre-tax earnings more than doubled.

Can he rally the troops? Uber is a fast-growing company that was last year valued privately by investors at around $68bn, but it has suffered a host of setbacks, which led to the ousting of Travis Kalanick, its co-founder and boss, in June. The firm faces a criminal probe by America’s Department of Justice into a covert software feature that tracked regulators, as well as allegations of incubating a sexist culture. It must also contend with multiple lawsuits.

Mr Khosrowshahi is less well-known than two other finalists for the job—Jeff Immelt, who until recently was CEO of General Electric, and Meg Whitman, who runs Hewlett Packard Enterprise. But he is widely admired. He moved to America from Iran as a child (and has been an outspoken critic of President Donald Trump’s restrictive policy on immigration). On his watch Expedia acquired Orbitz and Travelocity, two competitors, and successfully integrated them. That is proof he can build a healthy corporate culture, says Erik Blachford, who used to be the CEO of Expedia and is now at TCV, a venture-capital firm.

Mr Khosrowshahi’s finance skills will be just as valuable to Uber. He served as a chief financial officer at IAC, an internet conglomerate owned by Barry Diller, and as a former dealmaker at Allen & Co, an investment bank. “More New York than Silicon Valley” is how one entrepreneur describes him (although for more than a decade he has lived in the Seattle area, where Expedia is headquartered). Financial acumen will be helpful if and when Uber goes for an initial public offering. An IPO would make Mr Khosrowshahi wealthier still: last year he was one of America’s highest paid bosses, earning around $95m in total compensation.

But his first priority will be to fill out Uber’s executive ranks. Techies like telling the joke that Uber is the first fully autonomous company, because almost all its key positions, including a chief financial officer and chief operating officer, have been vacant. He will also need to decide how much to favour international expansion in the face of huge losses. Uber is growing quickly but bleeding money: in the first half of 2017 it lost around $1.4bn. It has already retrenched in China and Russia, but has to choose between spending heavily to attract customers and drivers or driving towards profitability more quickly.

Two damaging lawsuits will also demand attention. One was filed earlier this year by Waymo, a self-driving car company owned by Google’s parent firm, Alphabet. It accuses Uber of knowingly buying a self-driving car startup called Ottomotto which had stolen Waymo’s intellectual property. The more that emerges in court, the worse Uber looks. The affair is scheduled to go to trial in October, but Mr Khosrowshahi might decide that a better course would be to settle the lawsuit.

The other suit involves Benchmark Capital, an early investor in Uber and a former ally of Mr Kalanick, who remains on the company’s board and, along with his co-founder and another early executive, controls the majority of super-voting shares. Benchmark has accused Mr Kalanick of fraud and sued to try to stop him from intervening in Uber’s affairs and appointing additional board members. Benchmark has claimed that Mr Kalanick hid critical details about the state of the firm when he asked in 2016 for Benchmark’s and other board members’ support to add three more board seats. Such a lawsuit is unprecedented. Venture capitalists in the Valley rarely, if ever, fight with the founders of startups in such a public manner. A hearing is due on August 30th, after which a judge will rule on whether to block Mr Kalanick from filling empty board seats while Benchmark’s lawsuit is ongoing.

All the legal wrangling makes things awkward for the new boss. Mr Khosrowshahi will need to deal tactfully with Benchmark, which still has a representative on Uber’s board, as well as with Mr Kalanick, who feels unjustly pushed out of the top job and who still wields significant influence. But other senior people at the firm also need to shape up. News of Mr Khosrowshahi’s hiring is believed to have been leaked by an anonymous board member before anything was formally announced to staff. That left many of Uber’s employees annoyed; no one likes learning important news about their company from press reports. To inspire hope, Uber’s whole board, as well as Mr Khosrowshahi, will have to show leadership.

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Julio Marchi ©

Publisher / Editor at BS News & Media Services
A free thinker, not labelled as anything, not associated with any party, not part of any group or engaged with any religion... A simple guy tired of the nowadays bullshit who decided to promote more serious debates about what is really happening hoping to bring back intelligence to the superficial and shallow news & headlines that unfortunately took over the existing media scene.
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