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Uber: the great retreat from Asia
At first glance, Uber’s track record under founder Travis Kalanick’s successor doesn’t look great. But in fact, Dara Khosrowshahi is making all the right moves to get the ride-sharing group back on track, says Jane Lewis.
At first glance, Uber's record under founder Travis Kalanick's successor doesn't look great. But in fact, Dara Khosrowshahi is making all the right moves to get the ride-sharing group back on track, says Jane Lewis.
When Uber's former boss, Travis Kalanick, introduced his successor to staff last August, he grew emotional. "The old chapter ends, and the next one begins," he said. It was a new start for the ride-hailing firm, "a poster child for the worst excesses of Silicon Valley", says the Financial Times. The new boss, Dara Khosrowshahi, arrived with glowing credentials from travel group Expedia and spent much of his first six months apologising "for things that did not happen under his watch". His task was to clean up Uber for an initial public offering (IPO) in 2019. How's it going?
Judged on headlines alone, not great. On Khosrowshahi's watch, Uber has admitted to covering up a data hack affecting 57 million customers. This month it made history in the worst possible way when one of its self-driving cars killed a pedestrian in Arizona. And this week's news that Uber has closed its southeast Asian unit, after losing a turf war with local rivals, prompted speculation of "a global retreat". Even the bald financials look worse. When Masayoshi Son's tech giant SoftBank took a 10% stake in December, notes Bloomberg, Uber's value on the secondary market was put at $43bn 30% lower than previous fundraisings.
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But fears that Uber might never "escape Kalanick's shadow" seem wide of the mark, says the FT. Last month, Bill Gurley of Benchmark the venture capitalist who pushed hardest for Kalanick's removal tweeted that he was "super impressed by the maturity and tone being set" by Khosrowshahi who, as well as securing the crucial SoftBank deal, had just settled a potentially debilitating court battle with Alphabet's self-driving car outfit, Waymo, over alleged theft of trade secrets, for just $250m. Another big investor, Chris Sacca, said: "This is what real leadership looks like. Acknowledgement, apology, commitment, optimism."
Experience made Khosrowshahi a self-starter, says Slate. He was born in Tehran in 1969 into a family who owned several manufacturing plants. He arrived in the US on the eve of the 1979 Iranian revolution. When Khosrowshahi was 13 his father returned to Iran to care for his own ailing father and was held for six years, leaving the family without its main breadwinner.
After studying electrical engineering at Brown University, the young Khosrowshahi worked at investment bank Allen & Co, before moving into travel with InterActive. When the latter bought travel booking website Expedia from Microsoft, then spun it out in 2005, Khosrowshahi took over, notes TechCrunch. His clever dealmaking grew Expedia into a $23bn global giant. In 2015 he was the S&P 500's highest-paid CEO, on $95m.
On track for better days
Today, Uber's IPO next year looks to be on track. The retreat from Asia, after the sale of its operations to Grab, in exchange for a 27.5% stake in the combined outfit, follows similar withdrawals from Russia and China and is seen by most analysts as a necessary tidy up. "Even if it doesn't end up as the global giant it once aspired to be", Uber at least walks away with "hefty stakes" in local champions, notes Quartz. And Khosrowshahi has also made strides in reforming Uber's toxic culture. Indeed, if anyone can right Kalanick's shipwreck, you suspect it may well be this "sophisticated" Iranian-American diplomat.
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Jane writes profiles for MoneyWeek and is city editor of The Week. A former British Society of Magazine Editors (BSME) editor of the year, she cut her teeth in journalism editing The Daily Telegraph’s Letters page and writing gossip for the London Evening Standard – while contributing to a kaleidoscopic range of business magazines including Personnel Today, Edge, Microscope, Computing, PC Business World, and Business & Finance.
