Dara Khosrowshahi, Uber’s newly appointed CEO, will inherit a company that has been wracked with public scandal, infighting amongst its board members, an investigation into office harassment and a slew of lawsuits.
In different phrases, the longtime Expedia CEO has his work minimize out for him.
Khosrowshahi, who has but to settle for the corporate’s supply, was a shock decide for the Uber board, however he’s a famous operator with dealmaking chops, and has garnered the great will of his staffers at Expedia, with a 94 % approval score, in accordance to recruiting website Glassdoor.
Here’s what Khosrowshahi could have to do to repair Uber’s myriad scandals and enterprise points:
Manage Travis and the board
First and foremost, he’ll have to hash out Travis Kalanick’s position. The founder was ousted as CEO in June, however he nonetheless sits on the board and owns a big voting stake within the firm. Some of the rank and file nonetheless lookup to Kalanick as a visionary, and really feel deep loyalty to him because the founder. At the identical time, it’s Kalanick’s marauding ethos that has led to most of the firm’s issues. He was additionally attempting a comeback earlier than a new CEO was appointed. Kalanick might have to take a task underneath the new CEO, however will probably be lower than what he’s used to, which signifies that managing Kalanick’s ego shall be Khosrowshahi’s largest problem.
Along with that, he may also have to handle how a lot affect the board may have on day-to-day operations. Uber’s board is unusually arms-on, which might be argued as needed through the current management vacuum. Now that there’s somebody designated to lead, it will make sense for the board to step again. Still, it will not be straightforward for some administrators to relinquish their management.
Hire C-suite executives
As Uber is working with no chief monetary officer, a CMO and a COO, it’s a big alternative for Khosrowshahi to discover an ally. Khosrowshahi, who used to be CFO of Barry Diller’s IAC, has a deep nicely of contacts.
Khosrowshahi may have to achieve the belief of Uber staffers, particularly within the wake of a collection of sexual harassment claims inside the firm.
Khosrowshahi has a couple of benefits coming into the state of affairs. As an outsider with out too excessive a profile, he comes as a clear slate. He additionally was not the handpicked candidate of Uber investor Benchmark, which controls a board seat and is presently suing Kalanick over claims that he withheld essential info relating to firm operations. Staffers loyal to Kalanick have little belief in Benchmark.
The experience-hail participant can also be in the midst of implementing recommendations made by former U.S. Attorney General Eric Holder’s regulation agency, Covington & Burling. Holder started investigating the corporate’s inner points after former engineer Susan Fowler make clear the sexism and sexual harassment she encountered at Uber, in a publish she revealed in February.
It’s not clear whether or not Khosrowshahi has but seen the Holder report that got here out of the investigation, however accelerating the trouble to rent a chief variety officer, as an example, might be key to his capability to earn the belief of the corporate.
Figure out the enterprise: Uber nonetheless loses cash — a lot of it.
It raked in $8.7 billion in bookings, but lost $645 million in the second quarter of 2017. The firm has spent the final yr discovering methods to reduce its losses.
Identifying extra areas the place the corporate can curb its losses will probably be paramount for Khosrowshahi, who’s described by many as an adept dealmaker. For occasion, as The Information reported, Uber lately thought-about offloading the prices of its self-driving improvement efforts by partnering with an automaker.
Manage the lawsuits
In addition to the Benchmark lawsuit and other sexual assault complaints, Uber is embroiled in a messy legal battle with Alphabet. The trial for the commerce-secret misappropriation lawsuit is scheduled for Oct. 10. If Alphabet is profitable, its litigation might serve to stunt Uber’s efforts at creating self-driving know-how.
Know when to go IPO
As it’s for any CEO, Khosrowshahi’s constituency is the shareholders. And on this case, it’s a small however highly effective group that has been itching for an exit. But timing an IPO is as a lot artwork as it’s science. In this case, all the above points have to be handled, and even then it’s not clear if that can be sufficient to take Uber public.
Khosrowshahi, who noticed steadily growing inventory costs whereas he led Expedia, could have to discern what benchmarks the corporate will want to hit earlier than it’s prepared to be traded on the general public market. That consists of figuring out whether or not Uber wants to increase further funding.
To Kalanick’s credit score, Khosrowshahi is inheriting an organization that has achieved large international scale in a brief time period, and — whereas Lyft’s market share is rising — continues to be the dominant participant within the U.S. and different elements of the world. With the best management, the experience-hail participant has the potential to considerably speed up its progress.