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6 things to know about Uber’s CEO pick Dara Khosrowshahi

August 29, 2017 by  
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Expedia chief executive Dara Khosrowshahi in April 2015. (Steve Ringman/Seattle Times/AP)

Uber’s frantic, drama-filled search for a new CEO is over.

Dara Khosrowshahi, chief executive of Expedia, would be the company’s new leader if he chooses to accept the position, in a surprise ending to a contentious selection process that saw two industry titans beaten out. Meg Whitman, chief executive of Hewlett Packard Enterprises, and Jeff Immelt, the departing chief executive of GE, were considered but ultimately didn’t land the job.

For Khosrowshahi, the road ahead won’t be easy. Uber has been rocked by a barrage of scandals in recent months, including allegations of harboring a dysfunctional workplace. Let’s take a quick look at Uber’s pick to lead the company.

1.  He’s led Expedia, and it’s growing and profitable

Khosrowshahi has presided over a huge expansion of Expedia to more than 60 countries. He has expanded the company into an even larger online travel conglomerate by acquiring other consumer brands, such as booking sites Travelocity and Orbitz, and home rental site HomeAway.

Expedia is profitable and is worth about $23 billion. Experts say that his record there will help cut Uber’s massive financial losses, eventually guiding the company closer to profitability. 

In an interview with CNBC’s Jim Cramer this year, Khosrowshahi stressed Expedia’s focus on making it easier for millennials to book trips easily on their phones. Khosrowshahi’s orientation toward expansion and mobile transactions seems like a natural fit for Uber, which is vying for a strong global footprint in transportation, food delivery and eventually driverless transit.

2.  He’s (relatively) young and experienced

At 48, Khosrowshahi isn’t as young as the hoodie-wearing Mark Zuckerberg, who created Facebook when he was 19. But he’s still young as far as U.S. CEOs go. “He has substantial CEO experience at a relatively young age,” said David Kass, a professor of finance at the University of Maryland. “Youth and experience are very important qualities in Silicon Valley.”

As Uber continues to reshape how people get around cities, that youthful vitality will come in handy to improve its services, which are frequently used by customers in their 20s and 30s, Kass said.

3.  He’s been critical of President Trump

While more than 100 technology companies joined legal challenges to Trump’s immigration ban, Expedia was one of the first to do so.

Khosrowshahi is Iranian American. His family fled Iran in 1978, just before the country’s revolution. As an immigrant from the age of 9, Khosrowshahi brings his own personal story to American politics and business.

“What some Americans don’t appreciate is how strong the brand of the American Dream is around the world,” he told Bloomberg earlier this year. “I’m an example of how powerful that product is. And now, our president is trying to pull it away from people of a certain origin and religious belief. I find that sad and very much against what our founders set out to build.”

4. ‘He’s in the catbird seat’

Khosrowshahi was named the highest paid chief executive in the United States by Equilar for his 2015 compensation, thanks largely to a long-term stock option package valued at $90.8 million he would gain access to over a period of several years.

As of Friday’s close, that means Khosrowshahi has unvested options worth about $97.5 million were he to stay on at Expedia, according to an analysis by independent compensation consultant Brian Foley. Yet he also has additional options that would be worth another $82.5 million if aggressive stock price performance targets were met, bringing the total to at least $180 million.

But Foley said it is unlikely Khosrowshahi would give up pay to take the job at Uber – and he could very well be paid more. ”I suspect the real question is not how much he gives up but how much more did he get,” said Foley. “He’s in the catbird seat. They’ve now come to him — it’s got to be something that has some real sizzle to it.”

Because Uber is a private company, the company will not be required to immediately release specifics on Khosrowshahi’s pay, though it would become public if the company launches an IPO. But Foley expects the circumstances — a high-profile, highly public search that included heavyweights like Immelt and Whitman — would mean little will be left on the table.

“I have to figure they gave him new grants that would make him whole on whatever he would lose at Expedia and then threw a sweetener on top,” Foley said, noting it would be unusual for a company losing its CEO to accelerate the vesting of his options. “They want to save that for the next guy.”

Expedia didn’t immediately respond to a request for comment.

5. He’s no Travis Kalanick. But he’s still another male CEO.

Unlike Kalanick, the former chief executive who was seen as brash and armed with a short fuse, Khosrowshahi’s demeanor is viewed as “even keeled and low-key,” Kass said. “He is not as volatile or unpredictable as the previous CEO.”

While some experts played down Uber’s choice to hire a man as CEO, others highlighted Khosrowshahi’s gender as a misstep for the company, the same company facing a crisis rooted in discrimination.

“Generally, gender should not be a factor in choosing a CEO; instead, qualifications and experience should prevail,” said Rebecca Lindland, an analyst at Kelley Blue Book. “However, there are times when gender should play a significant role in consideration, such as when a company is recovering from a gender-based crisis of confidence. Uber missed an opportunity to demonstrate they are moving beyond a culture of harassment and scandal.”

6. He’s seen as a dealmaker and could lead Uber to an IPO

“Khosrowshahi is a strategic innovator, and has shown the ability to make timely deals at Expedia,” said Michael Farr, president of Farr, Miller Washington, an investment management firm. Those skills could help Uber beat back its chief domestic rival, Lyft, as well navigate the stiff competition Uber faces abroad.

Along with creating a new culture for employees, putting Uber on the road to profitability would be one of Khosrowshahi first tasks, experts say.

Well respected within Silicon Valley and Wall Street, he could also be an enormous asset as the company considers going public. To investors skeptical of a company whose reputation has recently been battered, Khosrowshahi could help revamp Uber’s image. Experts say that through his contacts, experience and track record, investment banking firms would be more inclined to work with Uber under Khosrowshahi if the company goes public.

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Whole Foods’ Amazon-powered price cuts are live, have already expanded to include several grocery staples

August 29, 2017 by  
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Amazon’s $13.7 billion acquisition of Whole Foods closed today, and the grocer is already rolling out discounts on select food items as result. While Amazon last week shared a list of products expected to be discounted on Monday, a trip to local Whole Foods stores indicate that the price cuts are already broader than announced. For example, prices on some grocery staples – like milk, cheese, pasta sauce, meats, and more – have also been slashed as of this morning.

On Friday, Amazon had detailed how the merger between the two retailers would impact consumers. It noted that Amazon Prime would eventually be integrated into Whole Foods point-of-sale system, allowing Prime members to receive special savings and other in-store benefits.

Amazon also said that, starting Monday, consumers would see an immediate impact in terms of lower prices on a selection of groceries.

Above: both organic and non-organic Hass avocados saw price cuts

Specifically, Amazon said items being discounted today would include the following:

“Whole Trade bananas, organic avocados, organic large brown eggs, organic responsibly-farmed salmon and tilapia, organic baby kale and baby lettuce, animal-welfare-rated 85% lean ground beef, creamy and crunchy almond butter, organic Gala and Fuji apples, organic rotisserie chicken, 365 Everyday Value organic butter, and much more.”

The “more,” apparently, includes several everyday grocery items.

In a morning shopping trip, we found that milk – including both regular and almond milk – and a wide assortment of cheeses also had their prices lowered, in addition to cases of bottled water, frozen whole chickens, various pasta sauces, and even boneless rib-eye steaks. None of these products were in Amazon’s original list of Monday’s planned discounts.

Above: A half-gallon of milk dropped from $3.99 to $3.49 in one store we visited. Almond milk was down from $2.19 to $1.99.  

Plus, while Amazon had said that fish like salmon would be one of the first seafood items to see a price cut, we had originally understood this to include fresh fillets and cuts – the kind behind the glass case at the seafood counter. As it turned out, however, packages of frozen salmon received the discount, as well. Before, the Atlantic Salmon Fillet “club pack” was $21.99/32 oz.; today it’s $19.98.

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  2. Photo Aug 28, 11 18 51 AM

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Meanwhile, Amazon had announced only that “organic” rotisserie chicken, previously $13.99 now $9.99 for a whole chicken, would be discounted. But the in-store display’s signage showed that non-organic chicken is today cheaper, too, going from $8.99 to $7.99. Price on half-chickens, where available, were also slashed. (We should note that prices will vary from store to store, but a Whole Foods spokesperson said the items whose prices are being lowered will not.)

And prices on frozen chicken was slashed, too – both organic and not.

In fact, the trend to discount the “non-organic” item in addition the organic one continued across several products. Amazon had clearly wanted to emphasize how it was making organic groceries cheaper when it announced its list of price cuts last week. But some of the lower-priced non-organic items were cut, too – like frozen chicken, avocados, and eggs.

For instance, Amazon had said that the price on organic large brown eggs would be dropped, but it actually dropped price on cage-free brown eggs and on the extra-large size, as well. The organic large brown eggs were $4.79 in one store we checked, and are now $3.99, while the cage-free eggs went from $3.69 to $2.99.

The apples, Hass avocados, baby kale, bananas, almond butter, organic butter, and 85% lean ground beef was discounted as promised.

Depending on your market, some of these discounts can be sizable. For instance, organic Fuji apples went from $3.49 a pound to $1.99, or a 43% discount, according to a report from Recode.

However, prices at Whole Foods are higher in some cities compared with others. In one store we shopped, for example, both the Fuji and Gala apples were only $2.99 per pound before the price drop, and they came down to $1.99 per pound. That’s still a better deal, but the discount is not as large.

Many Whole Foods stores stayed open late on Sunday night to make the price changes, but Amazon had given stores an 11 AM deadline to have them completed. Some stores were working last-minute to get their signage up, like the Whole Foods in SOMA, San Francisco, which still had the old prices showing this morning when it opened.

Amazon’s plans for Whole Foods extend beyond more affordable groceries. The company will also use the stores as “hubs” for this like ship-to-store e-commerce (like Walmart does today with its “local pickup” discount program); returns, and grocery delivery services.

The eventual plan is to bring down the price of many other grocery items in-store, too. That could lead to further savings on more staples, ranging from bread to cereal to diapers and more. Whole Foods’ brands – including 365 Everyday Value, Whole Foods Market, Whole Paws and Whole Catch—will also become available through Amazon.com, AmazonFresh, Prime Pantry and Prime Now in the future.

Today’s lower prices today are considered a “down payment” on Amazon’s vision – or, in other words, a starting point – Amazon had said. The company has not yet announced how long before more in-store discounts roll out, but store staff was unaware of others in the works this week.

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