Swapping a more comfortable CEO position at Expedia for a position Uber was a bold move for Dara Khosrowshahi. But that didn’t bother him. Uber offers great opportunities for this tech career. Even so, the company is as controversial as it is impressive, and it’s both loved and loathed by users.
For instance, Uber has several driver lawsuits to deal with. The app has been deleted by celebrities and accused of colluding with Donald Trump. And let’s not forget the sexism scandal it’s facing. It is because of such scandals that the former CEO was ousted. Nevetheless, the CEO still serves on the board of directors
In the midst of all this drama, you can never underrate the potential of good leadership. When you least expect it, it can turn public perception around. As the CEO of Expedia, Khosrowshahi was a powerful leader. Thanks to his capabilities, the company was a success under his tenure.
Stakeholders are expecting him to turn things around at Uber. But while he’s known for his successes, he’s faced failure several times. In this article, we’ll talk about the failures of Khosrowshahi and how he resolved them.
1. Uber Eats backlash
As a PR stunt that was meant to promote the company, Khosrowshahi logged 5.5 hours serving as a courier for Uber Eats. Thereafter, he posted his pay for the service. Instead of evoking positive engagement, he got complaints instead. Many audiences felt outraged by the pay gap between the uber contractors and the CEO.
As a result, Khosrowshahi found himself dealing with a publicity crisis. The PR stunt didn’t deliver the sort of response he was anticipating. Instead, it highlighted the great wealth gap between the executive and courier services.
After delivering 16 packages for five and half hours, his pay was $149.54. That means he was getting paid $27.19 per hour according to his Twitter post. He worked as a courier for three and a half hours on Saturday, and two hours on Sunday. On Saturday, he completed 3.5 hours of delivery. And on Sunday, he did two hours.
Only a handful of people were intrigued by this move. Most of them were accusing the CEO of failing to realize that he was underpaying his full-time Uber Eats employees. Some of the comments read, “Try that job for a month with the same salary and see if it can pay your bills and feed your family.” And another tweet dared him to work as an Uber Eats employee for a month with a rate of $98 per day. Another user asked him to do this for a month as his only income source.
When you look at the CEO’s monthly pay including the annual bonuses, it’s easy to see why people felt outraged. The pay gap between him as the CEO and an actual courier is enormous. And there’s no exaggeration.
In San Francisco for instance, an Uber Eats delivery guy will receive $23.34 an hour for their services. This rate is was obtained from a Gridwise 2020 study. It’s an application that rideshare drivers use.
This works out to approximately $49k annually, and that’s assuming the employee works 40 hours weekly for an entire year. We should also take into account the fact that there’s no vacation for the rest of the year. This amount doesn’t factor tips in, but it also doesn’t factor in the cost of running a vehicle.
2. The mistaken notion of a mistake
What do you call the dismemberment and killing of a journalist? Is it a mistake? What would you call an experiment that costs someone’s life? Are these mistakes? Well, it seems Dara Khosrowshahi, the Uber CEO was caught unaware during an interview when he was asked these questions. His immediate response was, they’re all mistakes This is another move that outraged the public thereby worsening the existing brand crisis.
The interview was aired on HBO during the Axios program. It was filmed by Dan Primack and Mike Allen. During the interview, the hosts made a few references to the relationship between the company and Saudi Arabia’s Wealth Fund. It didn’t help that Yasir al-Rumayyan, the governor of this fund, is among the Uber board members.
When asked why Uber was maintaining ties with Saudi Arabia despite the recent murder of Jamal Khashoggi, he stated that it was a mistake.
According to a BBC report, the last time Khashoggi was seen, he was entering the Saudi Embassy in Istanbul. He never came out. A few months later, the CIA investigation concluded that the journalist had been assassinated. According to the finding, it was the Crown Prince of Saudi who ordered this.
By declaring this to be a mistake, Khosrowshahi damaged the company’s reputation even further. He went on to consider the self-driving accident that costs a woman’s life a mistake as well. To many, this was like twisting a knife in a raw wound. As much as we all make mistakes and deserve forgiveness, stating this on air was an unwise move on Khosrowshahi’s part.
How Khosrowshahi overcame this
It didn’t take long for Khosrowshahi to realize his mistake that cost the company its reputation. 12 hours after the interview, he went on Twitter to mitigate it. According to his tweet, we can’t forget or forgive the Jamal Khashoggi incident. He went even further to apologize for referring to the incident as a mistake.
He claimed to have said something he didn’t believe. He added that he was truly sorry for misrepresenting his feelings on the matter during the interview.
NOTE: Some of the failures of Khosrowshahi were a result of bad PR. But, he inherited some of them from the former CEO. Let’s have a look at these challenges:
3. Toxic culture
During the reign of the former CEO, the company was blasted for condoning sexual harassment and sexism. This came to light when a former employee started blogging. That’s the story that kick-started the exit of Kalanick from the company. On the other hand, it was creating an opportunity for Khosrowshahi to join the company. Unfortunately, he got the company while it was still in bad shape.
What caused the exit of the former CEO was his earlier quotes which placed him in a bad position. At one point, he was recorded using the term ‘Boober’ to refer to the company. In light of the sexual harassment allegations, this term created a perception that he was not a solution to the problem but rather a part of it.
How Khosrowshahi overcame this
Khosrowshahi joining the company as the CEO meant that he was inheriting the toxic sentiments as one of his failures. Fortunately, he has a great track record to prove the company is heading in the right direction.
During his CEO days at Expedia, he fostered gender equality. This was exactly what Uber needed to mitigate the sexism allegations. Thanks to his efforts, there were 35% and 50% women in the Expedia leadership and workforce respectively. Not to mention, there was no pay gap between different genders performing the same role.
4. Travis Kalanick
Taking over a company from its founder is never easy, especially, if they’re a renowned public figure like Kalanick. We’re not just talking about a founder who is popular outside the company, but one who is also popular within the company. It’s even harder to take on the role if that founder was ousted forcefully. It’s ten times worse if said founder hasn’t even left the premises yet. This is the exact situation Khosrowshahi found himself in when he took over from the former CEO, Travis Kalanick.
While Kalanick is no longer a CEO, he’s still a member of Uber’s board. That means you can’t eliminate his former legislation and strategies. According to speculations, he wants to try to make a Steve Jobs type of comeback. He’s just waiting for the scandals to die down before he takes on his CEO role back.
How Khosrowshahi overcame this
According to Khosrowshahi, running Uber is not that easy. He’s facing lots of challenges, especially at the executive level. Not to mention, he cannot afford to be part of the in-house politics that have been wrecking the Uber board for years.
He has no choice but to work constructively with Kalanick, among other board members. At the same time, he’s striving to establish his boundaries as the company CEO. Of course, the path is not easy, but that doesn’t seem to bother Khosrowshahi. Remember, he was unanimously voted in as CEO by the board. And the former CEO was around during the voting. For the time being, both parties seem to be allowing Khosrowshahi to do his job.
5. Battered reputation
When you think of a battered reputation, it seems like an easy problem to deal with. You only need to avoid doing anything controversial for a while, right? Thereafter, the common assumption is that the negative headlines about the company and its leaders will evaporate and you will receive praise from the media. As Khosrowshahi learnt, things weren’t that easy with the #deleteUber social media campaign will become a past.
Uber has faced a lot of controversy in its time, and it doesn’t look like that’ll change anytime soon. Under good leadership, there might just be hope for the company. As with Uber’s successes, these controversies have been persistent.
The former CEO would pursue expansion relentlessly before any other strategy. His approach was to act first and ask questions later. When it came to company legislations or policies, he was a fierce lobbyist. After Uber became part of the users’ lives, the only way he could win an argument was by imposing legislation to capitalize on grey areas.
As we write this article Khosrowshahi is still striving to lead the company beyond his predecessors’ failures. Despite his best efforts, there are controversies that he can’t eliminate completely.
Even so, he’s managed to deal with many of these controversies in a diplomatic way, and every little step improves the company image a little further.
When he assumed the CEO position at Uber from Expedia, Khosrowshahi stepped into a storm. Expedia was rather a successful company whose reputation wasn’t shrouded by controversy. This made it easy to run. However, the controversies surrounding Uber didn’t prevent Khosrowshahi from taking a shot at the Uber CEO Position. This gave him a chance to diversify his experience in the world of CEOs.
To entrepreneurs, this is a worthy lesson to note. You should never be too afraid to venture out of your comfort zone. If there’s a chance you’ll succeed in a new field or industry, you should take it. Furthermore, the greatest successes often occur after failures. History has proven this over and over again. Just look at the likes of Elon Musk, and Steve Jobs. Despite Khosrowshahi’s failures, whether management- or PR-related, he still manages to steer Uber towards success.
Khosrowshahi has refused to let the failures he’s encountered define him. This should be a lesson to entrepreneurs to leverage drawbacks as the stepping stone to success. Learn from them so that next time you can make more thoughtful decisions.
How Pressfarm can help
Uber is constantly facing one crisis after another. To make things worse, they’ve made huge PR mistakes in some cases, further damaging the company’s reputation. This is a lethal combination that can cost any company its reputation.
You don’t have to be in the middle of a crisis to deploy crisis management tactics. Rather than wait to respond reactively to a crisis, it’s important to invest time and effort into building a positive brand image before a crisis hits. Once you’ve done this, the public will be more willing to give you the benefit of doubt and more forgiving when you find yourself in crisis mode.
By partnering with PR experts like the ones at Pressfarm, you can transform your brand into a positive one that clients feel emotionally invested in. The team at Pressfarm is skilled at creating quality content that will put you in the limelight and help you earn trust. This includes quality press releases, guest posts and media kits to help put your brand in front of the right eyes. They also provide custom media lists that can help you connect with the right media contacts to share your positive brand story with the world. When you’re hit by a crisis, the team at Pressfarm can also work closely with you to resolve the issue and regain public trust.
With help from the PR team, you can build a positive brand image and develop a solid reputation that will survive a crisis.