Challenges Loom for Next Uber CEO

Now that Uber has chosen Expedia CEO Dara Khosrowshahi to fill its vacant CEO position, it’s time to focus on the huge challenges he will face as he comes on board.

The big-picture challenges lie in restoring the company’s credibility and figuring out ways to drive growth on a global scale, according to Jeffrey Cunningham, professor of leadership at Arizona State University’s Thunderbird School of Global Management.

“Uber’s primary problem is that they need to reestablish value and growth, and they have to do it right away,” Cunningham told Chief Executive. “The short-term answer is they need an IPO.” The larger issue here is that if Uber stumbles, it could damage the entire digital sector because of overvaluation.

“Uber has to grow globally, and if their cultural image and the problems that have already occurred is in any way embedded in the minds of people in, let’s just say Singapore, Uber’s got a real problem.”

The first step toward reestablishing value and growth is to fix Uber’s credibility in the minds of global decision-makers. The new CEO will need to immediately start re-establishing credibility with municipalities and nations around the world where Uber does business.

“Uber has to grow globally, and if their cultural image and the problems that have already occurred is in any way embedded in the minds of people in, let’s just say Singapore, Uber’s got a real problem,” Cunningham says.

Another issue Uber’s new CEO will have to deal with is the chaotic and caustic situation with the company’s board of directors, which has been going back and forth for the past two months on how best to proceed. The adversarial relationship between board members aligned with ousted CEO Travis Kalanick and those in line with venture capital investor Benchmark Capital, who pushed Kalanick to resign amid controversy, must be resolved.

Cunningham believes a strong leader would make cleaning house on the board a priority to avoid future problems—meaning that the Benchmark element would have a reduced role.

“The governance challenges [need to be fixed] right away.” The CEO needs to “build an A-list board, which it’s not now,” Cunningham says. “What the venture capitalists at Benchmark did was prove that as a company, Uber is close to being public. VCs have no business on a [public] board—they’re good incubators, they’re good at nursery school, but they’re not good at overseeing a major global organization.”