New Uber CEO promises change, sees IPO in 18-36 months

SAN FRANCISCO/GEORGETOWN, Del. - 31 August 2017: Uber Technologies Inc’s new Chief Executive Dara Khosrowshahi told employees on Wednesday the ride-services company would change its culture and may go public in 18 to 36 months.

Khosrowshahi, who led travel-booking site Expedia Inc for 12 years, made the remarks as he introduced himself to Uber’s workforce on Wednesday during an all-staff meeting at its San Francisco headquarters.

His plans include rebuilding Uber’s culture and growing market share as well as possibly conducting an initial public offering in 18 to 36 months, according to people who attended the meeting. It is common for venture capital-backed companies to signal an IPO at a vague time in the future.

“This company has to change,” Khosrowshahi told employees, according to the Twitter feed of Uber’s communications team. “What got us here is not what’s going to get us to the next level.”

Khosrowshahi said Uber needed to stabilize itself but also take what he called “big shots.”

The appointment of Khosrowshahi, who described himself as “a fighter,” comes as Uber is trying to recover from a series of crises that culminated in the ouster of former CEO Travis Kalanick in June. It is also a key step toward filling a gaping hole in its top management that at the moment has no chief financial officer, head of engineering or general counsel.

In his first meeting with Uber employees, Khosrowshahi emphasized recruiting new talent - particularly a chief financial officer - as well as a chairman to help him run the board, according to tweets from Uber.

Kalanick, who attended Wednesday’s staff meeting, welcomed his replacement in a statement.

“Casting a vote for the next chief executive of Uber was a big moment for me and I couldn’t be happier to pass the torch to such an inspiring leader,” Kalanick said.

BOARD DYSFUNCTION

Khosrowshahi inherits a dysfunctional board that has been divided by a lawsuit filed by investor Benchmark Capital against Kalanick. The lawsuit, which seeks to force Kalanick off the board and rescind his ability to fill two board seats, has caused shareholder infighting and complicated the CEO search.

Delaware Judge Sam Glasscock on Wednesday brought that dispute closer to a resolution when he stayed the lawsuit and moved it to arbitration, which moves the legal fight out of the public eye and hands a victory to Kalanick.

“I think what we have here is a political battle that belongs in the boardroom and not the courtroom,” said Donald Wolfe, an attorney for Kalanick.

Glasscock stopped short of dismissing the lawsuit, as Kalanick had requested, because of concerns about the impact the dispute might have on other Uber shareholders who may also want to take legal action.

The board had already selected Khosrowshahi as Uber’s next CEO in a vote on Sunday. But the firm and its board did not speak publicly on the decision until Tuesday evening, as contract negotiations were ongoing.

“The board and the executive leadership team are confident that Dara is the best person to lead Uber into the future,” Uber’s eight-member board wrote in an email to employees sent late Tuesday that was also made public.

Khosrowshahi has been replaced at Expedia by Mark Okerstrom, the company’s chief financial officer for the last six years. On a call with reporters Wednesday, Okerstrom hinted at the surprise and confusion that followed Khosrowshahi’s appointment as Uber CEO. Khosrowshahi was not a publicly known candidate for the job, and he told Expedia staff he was accepting the new role two days after the first media reports on his selection.

“I think the way that this whole thing unfolded is not the way that most people would have planned it,” Okerstrom said.

Khosrowshahi will remain on the Expedia board.