By Hope King and Chloe Aiello
As Cheddar reflects on 2018, we are profiling the most innovative, flamboyant, and often-controversial entrepreneurs and corporate leaders who delivered the year's most memorable moments in business. Of the CEO Class of 2018, who was crowned Biggest Flirt? Class Clown? Look here for all the Cheddar Awards and more year-end coverage.
Dara Khosrowshahi was an Uber noob at the beginning of the year ー but he hit the books, studied hard, and carried the company through a turbulent tumultuous year.
Khosrowshahi assumed the role as CEO of Uber in the late summer of 2017 after the downfall of founder and former CEO Travis Kalanick. In the immediate aftermath, Khosrowshahi had to change the culture inside the company ー and the perception of it from the outside ー to ensure investors didn’t lose faith and customers didn’t flee.
But for Khosrowshahi, 49, righting a wayward ship is a standard activity. After serving as CEO of Expedia ($EXPE) for 12 years, he earned himself a reputation as a turnaround CEO. Experts speculated his experience schmoozing with airline and hotel partners would prove be invaluable at Uber, where several key relationships had gone sour. Khosrowshahi was also known for his dealmaking and an instinct for mergers and acquisitions. That background has already proved valuable to Uber, as the company expands into a multi-modal transportation provider and logistics company.
Almost immediately after coming aboard, Khosrowshahi proved his worth. He launched a charm offensive, hitting the road to make amends with cities like London, where Uber had previously offended lawmakers and existing driver unions. He also secured the best possible settlement in an intellectual property lawsuit from Alphabet’s ($GOOGL) self-driving division, Waymo. He addressed the company’s toxic culture head on and promoted a democratic, bottom-up workplace after only two months on the job.
“I feel strongly that culture needs to be written from the bottom up. A culture that’s pushed from the top down doesn’t work, because people don’t believe in it. So instead of penning new values in a closed room, we asked our employees for their ideas,” Khosrowshahi wrote in a post on LinkedIn.
Of course, scrubbing a workplace of toxic behavior requires more than good intentions.
In September, during a New York event marking his one-year anniversary as CEO, Khosrowshahi reiterated his commitment to turning things around, saying growing the company in the right way is about making “doing the right thing” the norm.
His comments came six months after one of Uber’s self-driving test vehicles killed an Arizona pedestrian. The preliminary National Transportation Safety Board report found the car was in self-driving mode when the accident occurred. The car’s system identified the pedestrian, Elaine Herzberg, as an unknown object, but Volvo's emergency braking and swerving features were not enabled in self-driving mode. And the system was not designed to alert the human operator, who was watching a video on her phone at the time of the crash.
In the aftermath of the fatality, Business Insider reported on the Uber Advanced Technologies Group, the self-driving unit ーand, more specifically, its chaos and “rampant infighting.”
According to an excerpt from the story, current and former Uber employees alleged that “despite many warnings about the car's safety, the senior leadership team had a pressing concern in the months before the accident: impressing Khosrowshahi, Uber's then-new CEO, with a demo ride that gave him a pleasant "ride experience" for fear he might cancel the program.
Khosrowshahi downplayed those allegations at a November staff meeting, even attempting at one point to discredit Business Insider. But he also admitted “we did screw up”.
Uber’s push into self-driving has been a costly venture. The ATG unit burns through at least half a billion in cash a year, a source told the Financial Times. That spending piles onto the company’s deepening losses as it expands ー into Uber Eats for food delivery, electric bikes with the acquisition of Jump, and potential ventures in the e-scooter space.
To shore up the company’s coffers for expansion, Khosrowshahi secured fresh cash from the likes of Softbank, Sequoia and Dragoneer Investment to the tune of $1.25 billion this year. He also brought on Toyota ($TM) as a partner and investor in self-driving cars, with a $500 million deal.
These funds demonstrate a healthy hunger to invest in Uber. But as the company approaches its 10-year anniversary next year, there’s an even bigger milestone ahead: an IPO.
Uber confidentially filed for an IPO last week in tandem with rival Lyft. According to The Wall Street Journal, proposals submitted to the company value it at as much as $120 billion. Uber ultimately selected Morgan Stanley to lead the offering, Bloomberg reported.
By all accounts, Khosrowshahi is on track to take Uber public in 2019.
Khosrowshahi may not have earned perfect marks across the board, but considering Uber's position when he started ー a company wobbling on its wheels following the departure of a controversial leader ー the CEO deserves an “A” for effort for navigating Uber through one seriously challenging year.
Read all the 2018 Cheddar Awards here.