Expedia’s former CEO, Dara Khosrowshahi, took up the position of Uber’s CEO on August 30th, 2017. Khosrowshahi has led Expedia since 2005 and his tenure is most notable for the spate of acquisitions that was undertaken by the company a couple of years ago. As a result of these acquisitions that included names like Orbitz, HomeAway, and Travelocity, Expedia consolidated its position in the U.S. online travel market with an over 75% market share. Last year, Expedia struggled with its performance mainly due to integration related issues of Orbitz and HomeAway onto its platform, however, things have started recovering since this year. Expedia is just behind Priceline as a global OTA leader, and with the impressive rate of growth of online travel, small hiccups don’t look insurmountable. On the other hand, Uber is currently not at its best performance and Khosrowshahi might have left with an aim to pull up the performance of Uber, just like he did for Expedia.
Uber’s Current Troubles
Uber’s previous CEO and its founder has been recently asked to step down because of a number of allegations against him. These included Uber’s alleged tolerance of sexual harassment against its women employees, an intellectual property lawsuit by Alphabet’s Waymo, the misuse of a personal medical data of a woman passenger in India who was sexually assaulted by an Uber driver, a federal investigation regarding a software the company created to let its drivers bypass regulators, and an ongoing investigation by the U.S. Department of Justice regarding the violation of foreign bribery laws.
Reasons Why Khosrowshahi Might Have Been Chosen By Uber
Khosrowshahi has been responsible for steering Expedia against numerous obstacles and making it the respected name in the online travel market that it is today. Until a few years back, Expedia had been lagging far behind its chief rival, Priceline’s Booking.com. Under Khosrowshahi’s leadership, Expedia expanded significantly both on the domestic and international fronts, the company made a host of acquisitions, and also built a new global technology platform to lure more travelers. Though it faced some setbacks in the last year due to integration related issues, Expedia seems to be back on track once again as suggested by its recent Q2 2017 performance.
Expedia’s Q2 ended on a strong note. All the divisions performed well with Trivago, its metasearch engine (where it has a majority stake), crossed $1 billion in trailing 12-month revenues for the first time in its history. While Expedia invested in SilverRail technology in May, it announced a further investment yesterday in Indonesian OTA leader, Traveloka. This move might help the company to gain a stronger hold in Asia which it has been currently striving towards. Investments in rail ticket booking and Asian OTAs might be its way to gain a bigger part of those markets.
Though Expedia and Uber are two different companies belonging to different sectors, Khosrowshahi’s growth strategies for Expedia
might help Uber as well. Under Khosrowshahi’s leadership, Expedia has acquired companies, and grew them significantly before spinning them off. The most recent example of this is Trivago’s initial public offering. Trivago has grown exponentially on the basis of its aggressive marketing spend. Uber, too, follows the same strategy of focusing on growth rather than profitability. However, that has left Uber’s financial health in a weak state. The company needs to raise its fares instead of subsidizing the same which it does to compete with other cab service providers. Expedia has made investments abroad as well with the recent one being European railway booking site, SilverRail Technologies. The online travel company had sold off its 40% stake in China’s eLong after persistent weakness in the region. Under Khosrowshahi’s leadership, strategic investments and initiatives might help Uber in reviving its position. With a $7 billion cash position, it might be possible for Uber to finally make a turnaround under its new CEO.
Meanwhile, Expedia Witnessed Some Management Shuffles
Expedia’s erstwhile Chief Financial Officer and Executive Vice President, Mark Okerstorm,
took up the position of the company’s President and CEO after Khosrowshahi’s departure. Okerstorm’s former position in turn is now occupied by Alan Pickerill, who has been so far serving as the company’s Senior Vice President, Treasurer, and Head of Investor Relations. We are looking forward to see how Expedia performs under its new leadership.
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