Uber, a ride-hailing service, hired Expedia boss Dara Khosrowshahi as its new chief executive late Tuesday, in the hopes he can steer the ride-sharing service away from the string of controversies it has faced in the past year.
Khosrowshahi will be at Uber’s headquarters in San Francisco on Wednesday for an “all-hands” gathering to meet workers at the embattled company. “We are delighted to announce that Uber’s board has voted unanimously to appoint Dara Khosrowshahi to be our new CEO,” Uber executives said in an email sent to employees late Tuesday.
Khosrowshahi is credited with turning Expedia into a global travel services behemoth, winning admiration from employees along the way. Khosrowshahi replaces Uber co-founder Travis Kalanick, who was pressured to resign as chief of the leading smartphone-summoned ride service.
Kalanick was the driving force behind Uber, taking a spur-of-moment idea and turning it into the world’s most valuable venture-funded tech startup. But his brash personality and freewheeling management style, which some argue set a problematic tone at the company, made him a liability as well as an asset to the global ridesharing giant. He stepped down as chief executive in June.
Khosrowshahi was nine years old when he and his family immigrated to the United States on the eve of the Iranian Revolution, according to Uber.
Khosrowshahi is known as an experienced top executive, willing to speak his mind and to advocate for women getting equal pay and leadership opportunities.
“We’re really fortunate to gain a leader with Dara’s experience, talent, and vision,” Uber said in the message to employees.
Khosrowshahi will face challenges including conflicts with regulators and taxi operators, a cut-throat company culture, and board members feuding with investors over Kalanick.
Kalanick frequently recounts how the idea behind Uber was born, when he and a colleague were attending a technology conference in Paris in 2008 and failed to find a taxi on a cold night.
Uber now operates in hundreds of cities and more than 80 countries.
But the hard-charging style that helped Uber succeed also made Kalanick a target for critics. He has borne responsibility for allegations of nasty workplace tactics and covert use of law enforcement-evading software.
Dents to Uber’s image include a visit by executives to a South Korean escort-karaoke bar, an attempt to dig up dirt on journalists covering the company, and the mishandling of medical records from a woman raped in India after hailing an Uber ride.
The US Justice Department is investigating whether Uber broke American laws against bribing foreign officials to promote business interests, the company confirmed.
The US government earlier this year was reported to have launched an investigation into Uber for the use of secret software that enabled the company to operate in areas where it was banned or restricted.
But despite the company’s dented image, its financial engine still appears to be purring. Earnings figures confirmed by AFP showed that adjusted net revenue was $1.75 billion in the second quarter, more than doubling from about $800 million in the same period in 2016.
Gross bookings at the service doubled as the number of trips climbed 150 per cent from a year earlier. The company’s adjusted net loss fell nearly 14pc to $645mn from the same quarter last year, Uber confirmed.
Meanwhile, Uber drivers have earned $50mn in tips since a gratuity option was added to the ride-sharing application in June.
Uber has also been investing in autonomous driving technology and provoked a lawsuit from the former Google car unit now called Waymo that accused Uber of stealing trade secrets.
Some mutual funds have reportedly marked down their stakes in Uber in a sign that months of scandal were taking a toll on the private company’s value of some $68bn.
Kalanick is asking for the dismissal of an investor lawsuit against him, calling it part of a personal attack aimed at sidelining him.
The Benchmark lawsuit filed in a Delaware court accused Kalanick of fraud, breach of contract and of plotting to manipulate the board of directors to allow him to return as CEO following his resignation in June.
But in a legal filing, Kalanick claimed that Benchmark “began secretly planning an effort to oust him” and “executed its plan at the most shameful of times” following the death of his mother in a May accident.
The first court hearing in the case is slated for Wednesday.