Not so long ago, Uber was swimming in calamity with co-founder and then-CEO Travis Kalanick at the center. Eventually, the board persuaded him to resign and brought in Dara Khosrowshahi, formerly of Expedia.
Things began to calm down, and then Uber finally had its IPO. All was sailing in the right direction (well, other than the stock price, since eventually investors want to see that you have a path to making money). And then Khosrowshahi did a video interview on the Axios on HBO show that aired last night.
The company hopped a ride back to the corner of Controversy and What the Hell Did He Say.
A CEO always has to be prepared for tough questions. When going on video with experienced business journalists, they not only need the answers but should gather in advance whether the questions they might field are going to be so tough that there's no way for the company to look good. If only Khosrowshahi and his media team had realized how badly things could blow up. Which should have been obvious.
Two things specifically made him look like he was dissembling. Let's start with the question of Saudi Arabia's being an investor and the murder of journalist Jamal Khashoggi. Here's what Khosrowshahi said:
Dan Primack at Axios first asked Khosrowshahi about not attending a Saudi Arabia investment conference two years running. The first year, Khosrowshahi wanted to wait for more information about what eventually was determined to be a brutal murder and dismembering of a dissident journalist. This year, he said it was because of a board meeting conflict, although if there hadn't been one he said, "I don't know if I would have [attended]."
Then Primack pressed Khosrowshahi on the Saudi sovereign wealth fund's being the fifth largest investor in Uber and whether one of its representatives should be on Uber's board as is currently the case. Khosrowshahi's answer? "I think that government said they had made a mistake," Khosrowshahi said.
When Primack pointed out that the "mistake" resulted in someone's death, Khosrowshahi continued, "Well, listen, it's a serious mistake. We've made mistakes, too, right?, with self-driving," referring to a death from a road accident and technical problem. "We stopped driving and we're recovering from that mistake. So, I think that people make mistakes. It doesn't mean they can never be forgiven. I think they've taken it seriously."
Honestly, who here hasn't accidentally invited a critic to their house, tortured and murdered them, and then cut them up into pieces to be sent off with minions for disposal? Really, couldn't this have happened to anyone?
According to Axios, Khosrowshahi was on the phone "to express regret for the language he used" immediately after and sent a statement: "I said something in the moment that I do not believe. When it comes to Jamal Khashoggi, his murder was reprehensible and should not be forgotten or excused."
Then he posted this on Twitter:
There's no forgiving or forgetting what happened to Jamal Khashoggi & I was wrong to call it a "mistake." As I told @danprimack after our interview, I said something in the moment I don't believe. Our investors have long known my views here & I'm sorry I wasn't as clear on Axios https://t.co/RxapzktrXq-- dara khosrowshahi (@dkhos) November 11, 2019
This was as bad a case of a CEO trying to maneuver with both feet planted firmly in the mouth as I've ever seen. But that wasn't all.
Less obviously combustive but, I'd argue, ultimately as telling and damaging were comments about Uber's drivers. Khosrowshahi insisted, as the company has for years now, that drivers aren't and shouldn't be employees and that the pay they receive is fair.
Let's remember for a moment that drivers don't control the relationships with customers, don't set their rates, and often have trouble paying their expenses.
Further remember that the company has argued to courts that the services provided by the drivers aren't "core" to Uber's business. Even though transporting customers is something the company absolutely needs because that is the service it offers to consumers. And Khosrowshahi said to Axios, "The core to our business is building out this platform that riders and drivers can use, right? If riders don't come onto the app, we have no business." He argued that what the drivers do isn't core.
That will clearly go over well with the drivers. But then, maybe it was all an accident.
Again, don't get into an interview if you can't figure out what someone is likely to ask you about and if you don't have answers that sound credible. This was an unmitigated public relations catastrophe.