That narrative fails to account for something that is increasingly clear about Khosrowshahi’s leadership style: Since joining the ride-hailing giant in August, observers say, he has been just as bold as he has been businesslike, imposing sweeping changes that would be considered dramatic in any corporate environment.
Those changes — big and small — include negotiating the end to a contentious battle with Waymo, strengthening background checks and embarking on a worldwide apology tour. Khosrowshahi has pushed his company to offer free rides in disaster zones and to marches for progressive causes. He has also filled his Twitter feed with images that reflect a warmer leadership style, opting for vulnerability over strength.
Khosrowshahi will have to show that his changes are permanent and reflect sincerely held values to win back customers who have deleted Uber’s app, according to Jim Lukaszewski, a crisis consultant who quit using Uber as negative headlines mounted last year.
“This company started with a culture of arrogance and carelessness, and they hurt people. None of us wants to be party to someone else being hurt — especially people who provide services to us,” he said. “To repair the company’s reputation, Khosrowshahi has to continue to connect with the people who have suffered, and that could take a long time. He’s got to earn his way out of this.”
The changes arrive at a crucial moment in Uber’s history. Despite being valued at almost $72 billion and growing last year, according to company officials, Uber remains unprofitable — with $4.5 billion in losses in 2017 alone. To turn a profit, Uber’s leadership must find a way to raise prices without losing riders or fares, a step that would also allow the company to increase driver pay, which remains a contentious issue worldwide.
In some cities that dynamic is beginning to change. Uber monitors market conditions in each market and has been raising rates in cities where the demand from customers is high and more driver hours are needed, the company said.
“If you raise pay and raise prices, demand goes down,” Khosrowshahi said. “If demand goes down, the utilization — which is the number of hours that drivers are driving — goes down. Drivers get paid more for every mile that they drive, but they drive less, so their pay overall is less.”
For almost all of its nine-year existence, Uber has been synonymous with a particular kind of unrestrained, Silicon Valley aggression.
Channeling the energy of its confrontational founder, Kalanick, the company evolved almost overnight from a whimsical idea into a multibillion-dollar slayer of traditional industry. Now it’s a force that operates in 65 countries around the world, employs more than 18,000 people and has more than 3 million active drivers. More than 75 million people use the service, according to Uber.
Kalanick’s “always be hustlin’ ” rule-bending attitude was a force that forged the company. But his “us against the world” mentality — as one insider characterized it — nearly toppled Uber.
Kalanick’s ouster was months, if not years, in the making. A backlash began to build once the service was accused of trying to profit from protests against President Trump’s controversial entry ban, leading to a #DeleteUber campaign that hundreds of thousands joined in early 2017. Weeks later, a former employee penned a blog post detailing rampant sexual harassment and discrimination inside the male-dominated company.
A daunting lawsuit from Waymo, a video showing Kalanick berating an Uber driver and numerous other allegations of corporate misdeeds followed. With crises mounting, Kalanick resigned as chief executive in June. Cleaning house, the company would eventually dismiss 20 employees for unacceptable behavior, including sexual harassment issues, according to company officials.
With Kalanick gone, Khosrowshahi has been asked to perform a surgical balancing act that requires him to remove the cancerous parts of Uber’s culture without sacrificing the company’s competitive energy.
Willing to go to battle with mayors, mislead government investigators with fake apps and sacrifice relationships, Kalanick was a relentless unilateralist at heart. By most accounts, he appeared to believe fervently his singular ability to reshape the business world and was willing to do so at any cost. The man now tasked with fixing Uber is in many ways his opposite. Multilateral and considerate, with a talent for building relationships and disarming enemies, Khosrowshahi appears at ease operating within the boundaries of good behavior.
Unlike Kalanick, a founder who was thrust into a leadership role almost overnight, Khosrowshahi was groomed over time. He spent more than a decade refining his executive skills at Expedia, where he was highly regarded chief executive.
“This was a founder-led culture that was incredibly competitive,” Khosrowshahi said, referring to the Uber he inherited last year. “The company just had a fighting spirit that sometimes went too far. From a culture standpoint, that singular combative nature that got the company to be the great company that it is now started failing at some point and started going overboard.”
Eight months after he took over, Uber’s new chief executive remains entrenched in a protracted makeover campaign, an effort taking place inside the company’s San Francisco headquarters and in far-flung cities around the world, according to Uber employees. His Twitter feed is awash with images of the easy-going chief executive shaking hands with global leaders, snapping smiling selfies with drivers the world over, marching for justice and championing diversity alongside his employees.
The images attest to the fact that many of Uber’s biggest crises have erupted outside the United States, where the company has clashed with international governments and faces stiff competition from localized ride-hailing apps in Asia, Europe and South America. In recent months, Khosrowshahi has attempted to repair damaged relationships in places like London and Brasilia and India, where the company had been accused of attempting to discredit the victim of a widely publicized sexual assault.
Back at home, instead of prolonging a high-profile courtroom showdown with Waymo over allegations of stolen intellectual property, Khosrowshahi in February personally negotiated behind the scenes to reach a settlement. The compromise struck many as refreshingly low risk and drama free.
Khosrowshahi — who says he doesn’t see technology as a “zero-sum game” — said winning the case was less important than moving the company forward. Within hours of the settlement, Khosrowshahi was addressing Uber’s former adversary as its “friends at Alphabet.”
“I do think we had a good case, but we just didn’t want to be at war with Google — it just makes no sense,” he said. “Whereas prior management had had issues — and both sides felt bruised — I could come in with a fresh perspective based on relationships and trust that I’ve built with Google for a long time.”
In an effort to clean up the company’s toxic internal culture, Khosrowshahi has implemented other changes at Uber’s headquarters. He hired a chief diversity officer and reviewed his employees’ salaries to ensure that everyone — especially women and minorities — receives fair pay. Where his predecessors encouraged competition inside Uber to stimulate innovation, Khosrowshahi has pushed for “inclusion” and “teamwork.”
Khosrowshahi also unveiled a new set of cultural norms for the company in November. Among them is a simple phrase that Khosrowshahi characterizes as his bottom line: “We do the right thing. Period.”
Khosrowshahi has also made a point of publicly emphasizing the importance of safety. This year, the company announced that it would mandate that drivers take six-hour breaks, a concession to rival taxi commissions, which have similar rules. Uber announced plans to beef up its driver-screening process and plans to include an emergency button in the app that will connect riders to 911.
When a self-driving Uber struck and killed a pedestrian in Arizona last month, Khosrowshahi immediately grounded the company’s autonomous vehicle program in Arizona, San Francisco, Pittsburgh and Toronto. While other corporate giants continue to test their autonomous technology, gaining precious ground in the high-stakes race to control the future of self-driving vehicles, Khosrowshahi has promised caution.
“For me personally to be satisfied that we can get on the road again — and we are going to get on the road again — we have to be as safe as humanly possible,” he said.
Since that tragedy, Uber has also announced plans to beef up its driver screening process and to include an emergency button in the app that will connect riders to 911.
It’s also a moment where major technology companies find themselves at a crossroads. They’ve invented platforms and apps and devices that are now the tools of everyday life the world over. And as they’ve been taken up by bad actors — white supremacists fomenting culture wars and Russians interfering in U.S. elections — some chief executives have tried to describe their wares as neutral instruments.
Khosrowshahi says he rejects the notion and feels a responsibility for how his company’s technology is used.
“If you think about us as a transportation platform, then our number one priority this year is standing for safety,” Khosrowshahi said. “We have to stand for the content of our platforms. That means we have to know who our drivers are, and we have to be open and fair. We can’t just say we’re a platform, and our job is done.”