September 16, 2017

Five Leadership Tips For Uber’s New CEO

After much debate and public intrigue, ride-sharing company Uber has selected Dara Khosrowshahi — the former chief executive officer of travel website Expedia — as the company’s next CEO. He started on August 30, 2017.

I want him to be successful, just like he was at Expedia. So much so, I have come up with five key leadership actions he might consider.

Come Clean. Apologize.

If Khosrowshahi wants to win back the hearts and minds of any disaffected Uber employees at its headquarters, potentially disengaged drivers across the planet, as well as any disconcerted customers, he could apologize for its past mistakes.

Setting this type of tone on day one sends a remarkable signal. It demonstrates humility. It also evokes transparency. The new leader is not trying to hide from past errors in judgment. He is putting it on the table for all to see. Khosrowshahi need not detail each of the errors with the sordid details. Rather, he can simply make mention of past mistakes, allude to how the company can learn from those mistakes, and (perhaps) commit to being more open and transparent going forward. This brings me to my second leadership action.

Improve the Culture

If feedback is to be believed — and there is no reason in which not to — there is an opportunity to improve the culture at Uber. Notwithstanding the public apology, Khosrowshahi can commit to doing what he did at Expedia. Create a best place to work culture. Elizabeth, a marketing manager at Expedia says this about her company:

“Our work environment is healthy, happy and very collaborative. At Expedia you can work hard, while knowing that the organization is highly supportive of your personal time. Work-life balance and job satisfaction is a reality here!”

Expedia is revered for its corporate culture. It is something near and dear to Khosrowshahi’s heart, so I would not be surprised if “improving the culture” at Uber is number one on his own list. Rather remarkably, 90% of Expedia employees say that their workplace is great and 95% indicate the atmosphere at the company is great. In my research and professional life as a Chief Learning Officer and Chief Envisioner, I too know that “culture can be your competitive advantage.” There is no doubt Khosrowshahi believes in this adage, too.

Build a Gender-Balanced Leadership Team

When Prime Minister Justin Trudeau announced his first political cabinet in late 2015 it was gender-balanced. Of the 31 posts that made up Canada’s new government, 15 were held by women. When asked about the parity, Trudeau responded, “Because it’s 2015.”

Uber and Khosrowshahi possess a unique opportunity to steal a page from Canada’s photogenic prime minister. While it may not be possible to achieve it on day one of his tenure, Khosrowshahi can announce to the world that in due time, Uber’s leadership team will be equally balanced by men and women. The ripple effects would be far-reaching. More importantly it sets another important tone for Khosrowshahi. Men and women hail Uber cars so men and women are going to lead the company going forward.

Driver Relations and Compensation

Uber’s business model relies on a cadre of drivers right across the globe. These “employees” have become part of the over-used and quintessential definition of the so-called “gig economy.” In essence, they aren’t really employees. They are part-time contractors. According to data provided by Earnest, Uber drivers earn on average $364 per month. Granted many of them are supplementing their income through Uber, the company still has ways to go to improve relations.

The bottom line? If Uber drivers are unhappy, be it with their pay package, lack of incentives, or Uber technologies, the customer winds up unhappy. For every issue that an Uber driver is allowed to fester on or complain about, there is a customer who might be at the receiving end. Ride-sharing is a lonely job. There is no team, per se. Each customer (or party of customers) that an Uber driver picks up has the potential to be a customer service nightmare due to a disenfranchised driver. Finding ways to improve both the relations with Uber drivers as well as their compensation levels (think livable wage) can only positively affect the bottom line for Uber.

Denounce Your Stock Options Pay Package

The final leadership action Khosrowshahi ought to take is to denounce whatever pay package the Uber board of directors have put together to lure him away from Expedia. During his tenure at Expedia, Khosrowshahi earned a lot of money. According to Fortune,Khosrowshahi’s 2015 total pay package was approximately 4,756 times that of his team at Expedia. Management guru Peter Drucker advocated a ratio “around 25-to-1 (as he suggested in a 1977 article) or 20-to-1 (as he expressed in a 1984 essay and several times thereafter)” between the CEO and the average worker. Clearly Khosrowshahi’s ratio at Expedia was significantly more than Drucker’s recommendation.

But he has a chance to potentially do something unique. He has an opportunity to take a stand. Imagine if Khosrowshahi were to publicly announce that his total pay package (inclusive of any restricted stock units or stock options) was going to be within the 25-1 ratio that Drucker recommended. That is, Khosrowshahi would be paid with some normality. Not only would his leadership team have gender parity, he would be signaling to the world that the manner in which he was going to be compensated was going to be fair. Ethical, in fact. If not, perhaps he can donate whatever portion is above the 25-1 ratio to various charities and causes.

In summary, on top of being a successful Iranian immigrant, with these five leadership actions Khosrowshahi could be redefining what it means to be a CEO while redefining the culture and organizational purpose of Uber itself.


Dan Pontefract is the author of THE PURPOSE EFFECT & FLAT ARMY. His next bookOPEN to THINK, is publishing in 2018.

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