Uber Technologies Inc. has reportedly chosen Dara Khosrowshahi, chief executive officer of online travel company Expedia Inc. (EXPE) - Get Expedia Group, Inc. Report , to succeed Travis Kalanick at the helm. While Khosrowshahi has had a tremendous run at Expedia, one analyst said the appointment represents a missed opportunity for the ride-hailing company.
"Generally, gender should not be a factor in choosing a CEO; instead, qualifications and past experience should prevail," said Rebecca Lindland, executive analyst for Kelley Blue Book, an automotive research company. "However, there are times when gender should play a significant role in consideration, such as when a company is recovering from a gender-based crisis of confidence. Uber missed an opportunity to demonstrate they are moving beyond a culture of harassment and scandal."
Kalanick, 41, resigned in June after five of Uber's major investors, including the venture capital firm Benchmark Capital, demanded that he step down. His departure came after months of turmoil, including allegations of sexual harassment and discrimination at Uber that led to two investigations and the dismissal of nearly two dozen employees. Given the rather tumultuous culture at the ride-hailing company, selecting a female CEO "would have been a stronger message to the company and to the Street," Micah Alpern, a principal at management consulting firm A.T. Kearney said in a recent interview.
But after two months of searching for a CEO, Khosrowshahi, 48, emerged as the board's "truce" choice, Recode first reported. Former General Electric Co. (GE) - Get General Electric Company (GE) Report CEO Jeff Immelt and Hewlett Packard Enterprise Co. (HPE) - Get Hewlett Packard Enterprise Co. (HPE) Report CEO Meg Whitman were also being considered to fill the role. Whitman and the board apparently could not agree on terms, while Immelt publicly withdrew on Sunday when it became clear he did not have enough support, according to the New York Times.
Khosrowshahi, an Iranian-American, has led Expedia since 2005, and during his tenure, the stock has climbed 198%. He currently serves on the board of Trivago NV (TRVG) - Get trivago N.V. Sponsored ADR Class A Report and The New York Times Co. (NYT) - Get New York Times Company Class A Report , according to BoardEx, a relationship mapping service of TheSteet Inc. Shares of Expedia fell by 4.5% to $142.60 at around 11:15 a.m. EDT during the trading session on Monday.
"Nothing has been yet finalized, but having extensively discussed this with Dara I believe it is his intention to accept," Expedia Chairman Barry Diller wrote in a filing with U.S. Securities and Exchange Commission. "If Dara does leave us, it will be to my great regret but also my blessing - he's devoted 12 great years to building this Company and if this is what he wants for his next adventure it will be with my best wishes."
Part of the draw for Khosrowshahi might have been the opportunity to change the toxic corporate culture at Uber.
"Every organization develops its own culture, and in this, still a very young organization, any leader coming in will likely see tremendous opportunity to shape and define the culture going forward," said Nada Usina, member of the CEO/Board Service Practice at executive search firm Russell Reynolds Associates.
For a young company, such as Uber, which was founded in 2009, transforming the corporate culture could take six months to a year, said Alpern. He suggests that the new CEO redefine the culture from scratch.
"He should tell everyone Uber is going to create a new set of values that demonstrate how we will be different and what we want to be going forward," Alpern said. "This is a clear signaler that he is going to create real change throughout the organization."
One of the behaviors that needs to be defined is "respecting individuals' expertise and differences" because "differences of opinion and background lead to the best solutions," Alpern said.
"[Khosrowshahi's] a peace maker," said TheStreet's founder Jim Cramer on CNBC's "Squawk on the Street."
"This guy is a miracle worker, he's done great things," said Cramer. "If anyone can pull this off, he can."
-- This story has been updated to include the statement from Expedia Chairman Barry Diller.
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