Meet the CEO taking Uber public
Now, he’s set to take the company public in the most highly-anticipated tech IPO of the year.
Getting to this point was no small undertaking.
Uber’s founder and first CEO, Travis Kalanick, had turned the company into a global force but had also created such a mess that the board pushed him out four months after harassment and sexism allegations rocked the company. Uber hired outside investigators to conduct a company-wide probe concerning its culture. It was basically headed for self-destruction.
Among the challenges Khosrowshahi inherited when he took over in September 2017 included a slew of sexual harassment and gender discrimination allegations, a messy lawsuit with Alphabet-subsidiary Waymo, a near-empty C-suite, disgruntled drivers, and an income statement bleeding red.
“I didn’t get into this expecting an easy ride. It’s been just as challenging as I expected,” he told CNN Business during an interview last August, ahead of his one year anniversary at the company.
Khosrowshahi was called on to be the adult in the room at a company that had come to be viewed as a frat house. He was in many ways considered the opposite of Kalanick, who was known for being a brash and non-traditional executive, spouting off mottos like “always be hustlin’.”
A professional and seasoned leader, Khosrowshahi was known for not being afraid to assert himself, but in calculated ways. An Iranian refugee, he immigrated to the United States at the age of 9. That perspective has informed his leadership decisions, such as leveraging his power on issues concerning immigration.
Expedia was one of the first in the tech industry to file a legal challenge to President Trump’s travel ban (targeting people from several mostly Muslim countries). Kalanick, on the other hand, was widely criticized for joining Trump’s economic advisory board before ultimately stepping down.
A major test in leadership came early for Khosrowshahi when London threatened not to renew Uber’s license to operate. The city relented when Khosrowshahi made several concessions, including sharing the company’s traffic data. More significantly, Khosrowshahi admitted to past mistakes and shortcomings — something Kalanick was resistant to doing.
Khosrowshahi stressed that the first step in dealing with cities and regulators is “getting in the room and having a dialogue. We’re having a continuing dialogue with really all the cities that we operate with, and the regulators we operate with.”
“We want to be seen as a partner that’s part of the solution,” he added.
Moreover, Khosrowshahi has helped diversify Uber’s offerings. One of the crown jewels of the company ahead of its IPO is its meal delivery service, Uber Eats, which generated nearly $1.5 billion in revenue in 2018, up from $587 million the year before.
He added that many aspects of the company have been improved upon in order to prepare it to go public — including its corporate governance, filling executive roles including hiring a CFO after three years without one, and revamping the company’s culture.
Still, Uber is far from trouble-free as it goes public. The company continues to post huge losses — it lost $1.8 billion in 2018, an unprecedented amount for a company about to IPO. Its closest comparable — ride-share rival Lyft — has struggled on the public market.
And Uber is still plagued by a number of longstanding issues.
For one, drivers remain discontented: Ahead of Uber’s IPO, drivers protested the company’s worker treatment and compensation — and the company continues to face ongoing challenges resulting from its classification of its drivers as independent contractors and not employees.
On Thursday, Uber said it has reached settlement agreements with a large portion of the 60,000 drivers who had filed, or expressed they intend to file, arbitration demands asserting that they are misclassified. A similar claim cost Uber $20 million in a settlement with thousands of drivers in Massachusetts and California.
There are also safety concerns, including sexual assault by its drivers, that weigh on the company. While Khosrowshahi has said safety is Uber’s top priority, it has yet to release a safety transparency report that it promised it would put out in 2019 after a CNN report last April into sexual assault and abuse by drivers. The company says the report is forthcoming.
Khosrowshahi has been paid handsomely to bring the company to the brink of an IPO. He received compensation valued at $45 million last year, according to a filing with the SEC.
There’s no telling yet how the company will fare as it continues to mature as a public company. In a letter to shareholders accompanying Uber’s SEC paperwork, Khosrowshahi tempers expectations: “I won’t be perfect, but I will listen to you.”