Uber is officially an adult company, in large part due to CEO Dara Khosrowshahi

By Therese Poletti

The transition of Uber Technologies into a fully adult company, as it joins the S&P 500 index, is largely due to the leadership of Chief Executive Dara Khosrowshahi.

It was just six years ago that Khosrowshahi was named CEO of the ride hailing app company, replacing co-founder Travis Kalanick, the bad boy of tech who fostered a toxic, frat boy culture at Uber (UBER), that ultimately lead to his ouster by the board.

The hiring of Khosrowshashi was a typical Silicon Valley story, where he came in as the adult to help, or in this case rescue, a company where a maverick techie founder had run amok, but unlike the scenario when Eric Schmidt joined Google co-founders Larry Page and Sergey Brin as a partner and the adult CEO in the C-suite, Kalanick was booted.

The Uber Khosrowshahi inherited at the time was a mess. Known for moving fast and breaking things as it worked to establish the ride hailing business, that concept also pervaded the company itself. The bad behavior started at the top with Kalanick, who infamously yelled at an Uber driver, among other things. He took a leave of absence after an independent investigation into widespread sexual harassment at the company recommended that some of his responsibilities be reduced.

Like Schmidt, who took Google public in 2004, Khosrowshahi took Uber public in 2019, in a deal that was much anticipated but its stock has been volatile for years. This year, Uber has jumped almost 132%, and its shares jumped over 5% in after-hours trading on Friday.

Khosrowshahi initially seemed like an unlikely candidate to turn the company and its culture around. He was little known in Silicon Valley, compared to the other candidates being considered for the job, including former Hewlett-Packard CEO Meg Whitman, despite being the CEO of Expedia (EXPE). According to a profile of him at the time in the Mercury News, he was known for avoiding publicity.

But Khosrowshahi has transformed the company, along with his team and employees, into a profitable entity, after years of heavy losses, some unsuccessful investments, and rivalry with Lyft Inc. (LYFT). Some analysts had predicted that the company could never be profitable unless its rides business was operated with robotaxis/autonomous vehicles.

Read also: How Uber pulled off its stunning turnaround from money pit to cash machine.

His has been a steady, decisive hand at the wheel, so far, taking Uber into other new adjacent businesses, and out of its riskier ventures. He also had to try to work on the culture quickly, and jettisoned the growth at all costs mentality at the company. He focused on evolving to a culture that embraced doing the right thing, among many other norms. Uber has emerged as the No. 1 in ride hailing.

Now, as the company heads into adulthood, it still risks moving too quickly, as some analysts have said, with possible plans for a capital return program for investors that could mean share buybacks or dividends. But for now, hats off to Khosrowshahi and his team, for achieving what some believed was not ever going to be possible.

-Therese Poletti

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12-02-23 0008ET

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