The IPO deadline of 2019 is not due to pressure from potential investor SoftBank, the ultimate long-term investor, Khosrowshahi said.
Khosrowshahi has already made waves since officially joining Uber at the end of August. He did not inherit an easy company to manage. When he took over, Uber was reeling from regulatory investigations and a workplace culture investigation that resulted in the exodus of key staffers.
“I don’t know exactly when it went sideways. Winning can hide rot within an organization, and I think Uber was winning …. and I think winning gave some excuses for bad behavior,” Khosrowshahi said.
In fact, Khosrowshahi said he ignored calls early on to guage his interest in the CEO role, wanting to avoid the “media circus.” He said he viewed himself as a back-up option behind “giants of industry” like Hewlett Packard Enterprise’s Meg Whitman and Jeff Immelt, formerly of GE.
“I was really worried about the leaks, etcetera, that were going on, and really happy that my name did not leak out there until the very end,” Khosrowshahi said. “Things are never as bad as the press makes them out to be.”
Khosrowshahi said he has read some of the allegations of sexual harassment at Uber, but he did not ask to see the workplace culture report before taking the job. He said he thought about making it public once he joined the company.
“When I got into this role, I didn’t want to take sides. And I wasn’t interested …. in what happened in the past. I’m interested in the company, and the employees, and the brand, and how we move forward,” Khosrowshahi said. “Don’t tell me what happened, tell me what we’re going to do.”
On top of that, the co-founder, Travis Kalanick, was sparring with top investors, dividing the board of directors. Major investors — like SoftBank — and potential foes — like Alphabet’s Waymo — have also been circling amid Uber’s shakeup.
“The board went in a very bad direction,” Khosrowshahi said. He later added: “We’re reconstituting the board. It’s going to be a big board, but that’s ok …. our bringing in SoftBank as a strategic investor at the right price would be a good thing.
One of the disputes at Uber was the extent to which certain shareholders could control the make-up of the rest of the board. Many companies have multiple share classes and are able to make long-term investments, Khosrowshahi said. But in Uber’s case, the structure needed to be simplified.
“You have two parties here who are far from being in concert and are shooting at each other,” Khosrowshahi said. “And to some extent, what I told the board is, ‘If we’re going to shoot at each other, at least let’s shoot at each other with conventional weapons instead of nukes’. … This is not about control, this is about the company.”
Khosrowshahi said he pushed Kalanick, who is still a board member, to back off, and he took it “really well.”
“Over a period of time, I would be foolish not to use Travis’ incredible genius and his knowledge …. Some weeks we won’t talk, some weeks we talk 10 times,” Khosrowshahi said. “I think he understands the ‘why,’ which is that early on I’ve got to have my space …. He’s been very plain with me that he wants to be involved in the company, and I’ve told him I want him involved.”
He’s also reformulated the company’s cultural code from the bottom up as the massive start-up prepares to go public. When Uber’s license to operate in London was canceled, Khosrowshahi did something that’s stereotypically un-Uber: Apologized.
“I think we were generally immature about how we dealt with regulators,” Khosrowshahi said.
But Khosrowshahi is not softening on one of Uber’s other battles, namely, a lawsuit from Alphabet’s Waymo.
“It’s going to court,” Khosrowshahi said. “The damages claims that they have, I think, are highly questionable.”
Khosrowshahi also pushed back at proposals that all drivers should be staffers instead of contractors, saying that drivers like to be their own bosses. He pointed to changes Uber has made under his tenure, including tipping, to support driver happiness and higher pay.
“Part of the issue is the cost of insurance, and the biggest winner in this is the insurance companies,” Khosrowshahi said. “Believe me, we’re not making a ton of money here in the U.S. on the drivers.”
