Homepage / Technology / Uber's new CEO may have a lower appetite for risk than Travis Kalanick
Due Diligence Blog Digital Data Rooms for the Netherlands Board Room Apps Secure Board Management With Secure Board Portals What Happens at Board of Directors Meetings? Board Room Software Review How to Prepare Board Rooms for Effective Board Meetings Board Room Software Boosts Performance and Communication Selecting a Secure Data Room Review Local Data Room Service Review How to Find the Best Virtual Data Room Review What to Look for in a Data Room uk Provider Document Storage and Distribution Software Everything About VDRs Corporate Software Advantages How to Choose a Virtual Data Room Provider The Most Secure Way to Transfer Files How to Manage Online Board Meetings Benefits Virtual Data Room Solutions – Must-Haves for M&A and Due Diligence Best Data Room Functions for the Different Types of Industries How to Choose a VDR Software Provider How to Choose an Online Board Portal The Benefits of a Boardroom Review Board Room Online Solutions – How to Get the Most Out of Your Board Meetings Why You Need a Board Room How a Board Room Blog Can Transform Your Business Choosing the Best Board Room Format How to Have Productive and Engaging Board Directors Meetings Choosing the Right Virtual Data Room How to Keep Safe Documents Storage Teaching Kids About Online Safety Avoid Costly Mistakes With Free Data Room Services Corporate Virtual Data Secure Online Data Rooms Solutions How to Keep Share, Edit and Delete Your Data Safe Virtual Data Room Software Secrets for M&A Due Diligence What to Look For in Boardroom Providers Board of Directors Blog Posts How to Deliver Value at Your Board Meetings How to Have Effective Board Meetings Responsibilities of Board Members Deal Management – How to Effectively Manage a Complex Sales Pipeline Data Rooms For Mergers And Acquisitions How to Have a Successful Board Room Meeting Choosing a Board Room Service Provider What is a Board Room Service? Board Room Software Review – Choosing the Best Portal for Mother Board Meetings Why a Board Room Providers Review Is Important What Is a Board Room Review? Venture Software for VC Firms What Is an Assessment Report? The Importance of a Tech Audit Popular Business Applications What to Look For in a Data Room App What Are Business Applications? How to Choose a Virtual Data Room How to Plan a Data Room Review Coronavirus Guide What is a Virtual Data Room? What Is Data Science? What Is an Operating System? Turbotax Small Business Review How Online VDRs Are Used in M&A Deals Why Choose VDR Software? The Power of Business Software The Benefits of a Software Board Online Data Room Review The Importance of Tech Knowledge Improving Accuracy of Financial Data Online Business Records – How to Keep Your Online Business Records Accurate and Secure What is a Board Portal De? DealRoom Review – A Review of VDR Software M&A Due Diligence for Private Companies The Virtual Data Room Review Why Companies Use a Data Room Review to Facilitate M&A Transactions The Best File Sharing Services How Online VDRs Are Used in M&A Deals Best Virtual Data Room How to Choose a Best Board Room Provider Choosing a Data Room for Due Diligence What Is a Data Room Business Software? Best Data Room Providers Review Data Room Providers Review Mostbet Tr Resmî Web Sitesinde Giriş Ve Kayıt Olm Kumar Oynamak Için En Iyi Yerdir The Benefits of Cloud Data Services for Enterprises Online Data Room and SSL How to Build a Diverse Board of Directors Best Virtual Data Review A Data Room Service Review How Runn Makes Project Data Accessible, Accurate and Shareable Five Pillars of Information Protection The Importance of Online Business Reports Benefits of Colocation Services Virtual Data Rooms Guide Choosing a Business Virtual Data Room Choosing the Right VDR Service Review How to Conduct a Virtual Data Room Review Glory Online Casino Türkiye En Iyi Oyunları Ve Bahisleri Olan Kumarhane Mostbet Casino On-line Em Pt 2024 ️ Bónus As Well As Revisão

Technology

Uber's new CEO may have a lower appetite for risk than Travis Kalanick

In private and sometimes in public, Travis Kalanick was fond of describing Uber, the car-hailing service he co-founded and commanded absolutely, as the Amazon of the transportation business.

The similarities were clear. Amazon began as an online bookstore, but it was never just about selling books; over two decades, Amazon’s founder, Jeff Bezos, methodically expanded his company’s range, operational infrastructure and ambitions to ultimately pose an existential threat to the entire retail industry.

Uber, in Mr. Kalanick’s expansive vision, was similarly never just about hailing rides. To him, a taxi-like car service has always been a gateway for a business model that he believed would upend the entire trillion-dollar global transportation industry, altering the way people and things move around the world — and turning Uber into one of the handful of American tech giants that will lord over this century.

More from the New York Times:

That vision now lies in the hands of Dara Khosrowshahi, the longtime chief executive of the online travel company Expedia, whom Uber on Sunday picked to replace Mr. Kalanick. Mr. Khosrowshahi faces one primary question in that role that has everything to do with ambition: Will the company still aim to become the Amazon of transportation, or will it settle for being the Expedia of its market — one of the largest of several players in its industry, but not expansionist and messianic, hellbent on becoming the next great American technology behemoth?

Mr. Khosrowshahi is a cipher in Silicon Valley. Much about the future of transportation, as well as the start-up scene in Silicon Valley, rides on his still unknown plans. Expedia declined to comment and Uber did not return a request for comment.

But Mr. Khosrowshahi’s past at Expedia sheds some light on his temperament. He has had a largely successful run there, and appears to be a patient operator who can fix an ailing company.

His tenure also suggests a very different outlook from Mr. Kalanick’s. In one of the biggest misses of Expedia’s history, Mr. Khosrowshahi appeared wary of taking a big, potentially lucrative risk on a groundbreaking new idea in his industry — and he came out the loser. To his credit, he helped steer Expedia to adjust from that mistake. But his initial impulse may suggest a more risk-averse mindset than Mr. Kalanick’s — though that, of course, may be just what Uber needs now.

The story of Expedia’s big early miss is well-known in the online travel industry. Expedia was one of the pioneers of online travel bookings. The company was created by a team at Microsoft in 1996 and later merged with properties at the media company IAC, then spun off as an independent public company in 2005, with Mr. Khosrowshahi as C.E.O.

Its hotel booking business grew out of an acquisition that Mr. Khosrowshahi made while he was an executive at IAC in the late 1990s, and for several years, it looked unstoppable and deliciously lucrative.

Expedia then operated according to what’s known as the “merchant model.” Under this system, when you booked a hotel, you would pay up front to Expedia, which would take a profitable cut of the deal and buy the room on your behalf. Expedia’s margins were startling — the company got 25 percent or more of what you paid for the room.

But there was a great disrupter on the horizon. As Dennis Schaal, who covers the online travel industry at the travel-news site Skift, has reported, in the mid-2000s a small Amsterdam-based site called Booking.com set about turning the merchant model on its head.

Instead of taking a large cut of the room, Booking.com used what is known as the “agency model.” The site let hotels set their own far smaller commissions — as low as 12 percent. And it also let hotel guests pay when they got to the hotel rather than up front.

Mr. Khosrowshahi and his team considered buying Booking.com, but as he explained to Mr. Schaal in 2014, Expedia was too fixed in its ways, and could not tolerate Booking’s lower margins.

“I think it was because we were attached to the merchant model and we were attached to high margins at the time,” he told Mr. Schaal. “And I think in hindsight that blinded us.”

It was a costly mistake. Expedia’s biggest competitor, Priceline, swooped in to buy Booking.com — and turned it into a monster.

Under Priceline, Booking.com quickly became the largest hotel booking site in the world, because its cheaper model created a dynamic that Mr. Khosrowshahi and others at Expedia had not anticipated. It lowered prices and vastly expanded the number of hotels participating on the site — making Booking.com very popular with hotel-seekers, and making it impossible for hotels to pass up.

Ben Thompson, who writes the tech newsletter Stratechery, argued in his Monday edition that Mr. Khosrowshahi deserves credit for recognizing the mistake and working to repair it. Expedia began delving into the agency model and now runs something of a hybrid approach, and in recent years its growth rate has been catching up to Priceline’s.

This history, Mr. Thompson wrote, might inform how Mr. Khosrowshahi approaches Uber. In the same way that Booking.com became popular with hotel guests because it had the largest inventory of hotels, Mr. Khosrowshahi might understand Uber’s secret is its popularity with riders.

“In fact, what makes Uber so valuable — and still so attractive, despite all of the recent troubles — is its position with riders,” Mr. Thompson wrote. “The more riders Uber has, the more drivers it will attract, even if the economics are worse relative to other services: driving at a worse rate is better than not driving at a better one.”

This sounds reasonable enough. Yet I still found myself fixated on Mr. Khosrowshahi’s initial dismissal of Booking.com. I suspect that if you told Mr. Kalanick, not to mention Mr. Bezos, that there was a competitor out there that had figured out a way to sell the same product at a vastly lower price, they would have moved instantly to purchase or copy it, regardless of the risks to short-term profits. Sacrificing lots of money today for a potentially huge share of the market in the future — that’s classic Mr. Bezos, and then classic Mr. Kalanick.

In fact, that’s pretty much what Mr. Kalanick did when he created UberX, a cheaper version of his original black-car service, in response to lower-priced entrants like Lyft.

That Mr. Khosrowshahi did not do that suggests he has a very different appetite for risk. It also suggests he may seek to turn Uber into a more normal, slower, less intense, less globe-swallowing company — but perhaps also a better company to work for, and one that may begin making money instead of losing it.

For everyone who’s had enough of Uber’s drama lately, that may be a fine trade.

Source: Tech CNBC
Uber's new CEO may have a lower appetite for risk than Travis Kalanick

Comments are closed.