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Uber’s board wants Expedia CEO Dara Khosrowshahi to be its next CEO (recode.net)
306 points by danso on Aug 28, 2017 | hide | past | web | favorite | 199 comments

CEOs often lead on partnerships and strategy. I wonder what connections in travel this new CEO is going to leverage and how that will affect the uber operations in the short term, and the ridesharing product itself in the long term.

airline points on uber? (these are surprisingly sticky with consumers)

uber exclusivity deals or packages at hotels?

I expect to see more bundles of things with uber involved.

On the face of it, it seems like a worrying idea.

Uber's success has been about evolving a core product in an emerging category. Product-market fit or whatever you like to call that kind of narrow, aggressive focus. As little "hair" as possible. Market share. Simply defined product. Simply defined (and bull-headed) strategy. Basically, make uber a significant mode of transport (again!).

Expedia is all about maximizing revenue from the existing mess of travel product categories. Finding ways of inserting themselves between consumers and: hotels, flights, rentals, tours.... Basically, people are going places and doing things. Get expedia a piece of it.

Very different approaches.

If uber starts to retain customers with miles or try to diversify revenue sources, I think it'd be a bad sign. But, who knows.

I respectfully disagree. I think that Uber has done a great job of hooking a large volume of consumers on their core product, and now there is a huge opportunity to leverage that base to create income streams all over the travel space. Considering their trouble with reaching profitability, I think this makes too much sense to avoid doing it due to concerns of losing focus on the core product. Uber is a not a startup anymore!

It also creates large swaths of potentially lucrative revenue opportunities based on the size of the Uber user base, without the quantifiability of those swaths that you would see in core-product market expansion, or core-product optimization.

The cynic in me says that you can juice Uber with a bunch of these tie-ins, box out competitors by creating these partnerships, and IPO at a valuation based on aspirational performance of these partnerships that would make most people happy.

I can certainly see our two positions sitting on the table with a strong, conventional business case for yours. It might even be right.

(btw, thanks for the friendly disagreement. Much appreciated)

Uber already has a points deal going with Starwood Hotels - SPG points are a fairly common currency among the "professional" points collectors, as they're super-exchangeable for just about any airline, but probably not the kind of deal that will work for average consumers (especially since they only start awarding points after you've actually stayed at a Starwood property).

I expect less innovation, and more "staying the course" and cleaning up processes for a stable IPO. Many sins will be forgiven if investors get liquidity.

They should start a credit card business. Rakuten did this to great effect in Japan. Use the credit card, get points you can use for Uber. Customer acquisition is as cheap as putting a signup form in the back of each car and incentivizing drivers to mention it.

Barclays is already rolling out an Uber credit card: https://www.wsj.com/articles/uber-and-lyft-look-to-hail-cred...

Searched around for it but there looks to be very little known info about the card right now (no rewards description etc).

An ubercoin and ICO would be more buzzword compliant.

We need an ICO jar. One Bitcoin in the jar everytime an ICO is mentioned in jest.

Given the current value of bitcoin, I think we'd need to put a satoshi in the jar (I'm personally not swimming in bitcoin)

UCO: Uber Coin Offering. The coins are mined by the power created by the regenerative braking of Uber vehicles.

They should do some sort of bankless electronic payments like their competitor go Jek in SE Asia is doing

Seems like a very complicated business to get into compared to chauffeurs, no? In Paris, Uber doesn't seem to handle cars at all. The drivers buy/rent cars from wherever and drive. And drivers are in charge of their car's maintenance, repairs, etc. Uber provides the smartphone apps and underlying platform. That's a challenge in and of itself, but not at the same challenge as maintaining thousands of vehicles I would bet.

Although car rental is well overdue for some disruption, I don't really see how Uber overlaps with it. I typically rent a car if I need to go long distances for multiple days, typically to remote areas where Uber doesn't serve (I currently write this from the Piedmonte mountain region of Italy).

I think he's going to go on an acquisition spree to enhance their market share outside of the US.

Watch the international space closely, uber had to retrench itself from a few international markets and it seems like those decisions may get revisited.

Wait what?

Uber is losing money and can probably only continue losing this amount of money for a few years, he needs to make sure Uber doesn't go bankrupt in the short term.

While Expedia's website is fast and works well (and I've used them a lot for finding cheap flights), their customer service is probably the worst that I've ever experienced.

Trying to do something like getting the return leg of a ticket changed, resulted in multiple dropped calls, talking to people with poor English skills (all their support is outsourced) and even getting told that all their computers crashed so they can't do anything. Then when I finally did get through to someone, I was quoted $2,500 to change the date of a $400 ticket.

A simple Google search of Expedia customer service complaints reveals that I'm not even close to being alone.

I suppose their CEO calculated that the savings from having dirt cheap customer service exceeds the losses they suffer from alienating customers with miserable support. That might be true, but I still don't think it's a good way to run a company. We'll see what it entails for Uber.

The hotel subreddit has hilarious tales about Expedia CSRs: https://www.reddit.com/r/TalesFromTheFrontDesk/search?q=expe...

> their customer service is probably the worst that I've ever experienced.

Worse than BookIt? I used Expedia for my honeymoon but didn't require any changes. I gave them two chances to rectify issues with other travel and they blew it both times. I won't book with BookIt nor Expedia any more. Sometimes booking directly with hotels & airlines end up being cheaper. I saved $50 booking directly with a hotel, so sometimes they are not cheaper and you are just paying for their sales commission.

> We'll see what it entails for Uber.

Seems like an excellent move if they want to keep Uber as is. Bad customer service, and lack of care for their clientele (drivers & riders).

I agree. I had a similar experience and was thrown into a Kafkaesque bureaucracy. It was so bad I stopped using their site and just started buying directly from airlines.

This is the guy who made a huge tactical mistake when Booking.com was challenging Expedia by choosing to stick to merchant model (i.e., buying inventory) as Booking went for the agency model (i.e., lead gen).

Expedia has moved to an agency model since but the damage was done. Booking managed to get far more inventory, capitalise on more search/PPC traffic and blow past Expedia.

Wonder if he's going to make a similar kind of mistake and misread the transportation market.

Props to a fellow originally Iranian though :-)

Pretty sure even my grandma knows where the transportation sector is headed: electric, autonomous, sharing, services based, etc ;)

I think this is more about $UBER IPO. Stabilize the ship, smooth relations with investors, and start shopping to underwriters. Expect to see road show by Q2 2018.

This is spot-on, in my opinion. All they need is someone who is demonstrably competent and experienced to stabilize the ship and steer it towards an IPO.

There's no need for the candidate to be a visionary or meddle drastically with something that's already working extraordinarily well. That part is largely done - the Uber machine is mature and chugging along.

A seasoned operator needs to come in to provide PR cover, put in some basic organizational guardrails and rebuild the executive ranks to get the company IPO ready. Hiring a CFO is probably top priority as well as getting PR back on track. Those two moves alone would suppress external distractions and start the IPO process by having someone working on it full-time (CFO).

Let's see if Dara can pull this off.

I think this is exactly how Uber will fade into irrelevance. Think about it: We're bringing in a money guy to "stabilize the ship."

When the opposite of "rock the boat" is in power, don't be surprised if you get an irrelevant cruise ship. They run out of money soon, and nothing will change that short of a mass layoff or raising their prices above taxis. Then what?

They needed that autonomous driving tech. And I don't see a money guy pulling that off.

Remember how Marissa Meyer turned out? People ended up saying "Well, nothing could've saved Yahoo." But you could've said the same thing about Apple at its nadir. Same with Uber.

Uber is a real opportunity. Kalanick is unpopular, but he got Uber to where it is. So how certain are you that it was a good idea to kick the founder in exchange for a money guy? Given those options, I'd bet on the unpopular founder every time.

Autonomous driving in the sense of door-to-door taxis is not going to happen in a timeframe remotely relevant to companies like Uber. Maybe in a few decades. Uber needs someone not betting on that.

Maybe not, but it has the virtue of being their only chance of not running out of money in the next few years.

Unless a competent CEO comes along with a plan that is better than betting the companies existence on solving autonomous vehicles in the next two years they are going to run out of money either way.

If Uber wants to be a player in autonomous vehicles they have to become profitable enough to survive long enough to realize that goal. Kalanick's plan was always a pipe dream. Driverless cars just aren't going to be ready in time.

How long did Amazon float by on potential while running at a loss?

Companies can raise funds if people think it'll succeed.

Amazon is still mainly valued on projected earnings after 2020 -- the only recent change is that they went from steadily losing money to slightly making money. But the money that they're making now does not justify their stock price.

My impression was that Amazon does make plenty of revenue — it is just that all of the "profits" simply gets reinvested into Amazon? Is that too naïve? My thought was, hey they found something useful to do with that money. (Funny how I don't see Twitter that way. I think they could/ should cut their spending by something like $1B a year.) I'm of course comparing Amazon to apple which makes so much money that they can afford to keep it "cash" as opposed to reinvesting.

Indeed Amazon has never needed much funding. Crunchbase showed their most recent raise as being $100m in 2001.

Uber is very different. Their burn was $991m in Q4 2016 and growing.

Once the company goes public, the amount of money they raised is included in their finances, and not counted as a round. Take a look at the Amazon finances and you'll see how much they have raised on loans. The higher the stock price, the better loan pricing they can secure. This is the strategy that Tesla employs as well.

Amazon never burned through multiple billions of dollars a year.

It's pretty naive to make statements like this. Uber came into being when interest rates were near-zero for 5+ years (in comparison, interest rates were 5%+ in the first dot-com bubble). Money was basically free in 2009-2015. Uber likely had extremely favorable terms for its funding rounds. Now that the fed is finally raising rates again, we'll have to see if Uber can become break-even within a few years.

> Uber is a real opportunity. Kalanick is unpopular, but he got Uber to where it is.

And Lyft got to where it is with no Kalanick. (... actually, does anyone know off the top of their heads, besides Lyft and maybe Uber employees, who founded Lyft and whether they're still in charge?)

The myth of the founder-hero who is the only person who can run a company usually has little evidence in its favor, but in this case it has explicit evidence against it. Lyft as a service is basically indistinguishable from Uber in markets where it serves both, possibly slightly better. And if Lyft acquires Uber, the two services get to stop competing on price, buying them plenty of time to figure out the self-driving tech (which, I agree, they need), and the combined company will succeed easily, no Kalanick needed.

(Also, I think "unpopular" is a pretty low-information description of why Kalanick got forced out. It could mean anything from "people on the internet don't like them" to "regulators don't like them" to "investors don't like them" to "employees don't like them," each of which have very different impacts on the company, and comparing an unpopular founder in one sense to another company's unpopular founder in another sense may not be meaningful.)

I think you're overlooking a huge difference in your argument against "the myth of the founder-hero": Lyft benefited tremendously from Uber pushing into new markets / cities first. Uber and tk had a huge impact on making ride share legal, and Lyft never had to deal with that (or not nearly as much).

Also, how would Lyft ever buy Uber? Even if Uber and Lyft get 50/50 market share, which I think is impossible, you need to be way larger to buy out another company.

In the tech industry, the pioneers are usually the ones with arrows in their backs.

You are absolutely right that the TK/Uber combo going head-on against existing laws is what made ride hailing a reality for millions of consumers, but unless the pioneer has an air tight go-to market strategy to create and maintain dominance of the market, historically, the odds tilt strongly in favor of the second mover, third mover, nth mover (i.e. fast followers) achieving market dominance.

Facebook, the market leader was launched in 2004, MySpace in 2003 and there was Friendster in 2002 founded by Jonathan Abrams.

Zuckerberg learnt how not to run a social network from watching the mistakes of Friendster and MySpace before him.

This. Kalanick is as much Lyft's founder as Uber's founder. Without Kalanick, Lyft would be a tiny fraction of its current size and available only in a few markets.

Companies with a founder leading are more likely to be successful: https://a16z.com/2010/04/28/why-we-prefer-founding-ceos/

There is some survivorship bias here, right? Only successful companies would allow their founder to continue leading them.

More relevantly, this is about founders who voluntarily step down thinking it's a recommended best practice to let an experienced CEO take the job once the company is big. That might have been common wisdom in 2010, but it doesn't seem to be quite as common wisdom today, and in any case, that's a very different scenario from a founder who's been forced out or even one who's almost been forced out. The reason to look for a non-founder CEO in this case is some specific belief that this particular person has become bad for the company, not a generic belief that all founders are bad as CEOs.

The change that nobody is factoring into predictions is what happens if local governments pass minimum pay requirements for drivers. This will end the race to the bottom, which will be a good thing for all parties (except passengers who are freeriding off investor subsidies and crap driver pay).

As a driver, the pay is well over (+30%) minimum wage after all expenses including depreciation.

Don't know where this 'crap pay' trope is coming from, might be different in different markets.

30% over minimum wage. Wow, sign me up! That would be $18 an hour in San Francisco, so working a 40 hour week, that would be about $2900 pre tax. Let's shave off 25% for taxes, that's $2160 per month, not enough to make rent (and that's assuming you allocate 100% of your income to rent). Explain again how this is not crap pay.

It's good pay for an easy job that requires no skills and offers perfect flexibility. The alternatives are a lot shittier.

Lyft wouldn't get anywhere if Uber didn't exist. They don't have the guts to flaunt the laws like Uber did. It's always easier to follow.

Why do people keep bringing this up? Mayer did exactly what she was brought into do: increase the value of the stock to make an exit out of a failure.

"The real winner here is Yahoo, which is receiving far more value for this asset than it is worth and has also managed to halve its exposure to liabilities that it should be fully on the hook for. ... It is not difficult to still see upside in the Yahoo share price. Marissa Mayer may have been terrible at executing on a digital ecosystem, but she seems to be a great salesperson."

[1] http://www.investors.com/news/technology/yahoo-marissa-mayer...

> " Mayer did exactly what she was brought into do: increase the value of the stock to make an exit out of a failure."

Why are you giving her credit for that? Nearly all of Yahoo's value was its investment in Alibaba (which happened years earlier). If anybody deserves credit for Yahoo's recent exit, it's Jack Ma.

Mayer was brought on to turn around Yahoo, not to sell it. Evidence is the Tumblr acquisition for $1B, which was then written off in full or close to it. She failed the turn around and the only way out after that was a sale.

Because Yahoo faded into irrelevancy. If you want Uber to rise in value for a short time, Khosrowshahi seems like an excellent bet. I wonder who Uber will cede their throne to? Lyft?

You could argue that the damage was done, that Kalanick screwed up the company so badly that nothing could save it at this point, so you may as well try to cannibalize it for value. But the best investors know better.

Let it sink in: they're going to run out of money. What then?

If you look at the numbers I have to say that's a little bit silly to say. They have $6.6 bill cash on hand, they are burning ~$2.5 bill per year, although quarter to quarter net loss fell 9% last quarter. They very likely have 2 years, likely more, to start making profits each quarter.

If they really need to jettison more expensive parts of the business they can sell off their autonomous unit and their VTOL investments, along with a ton of other fat they can trim.

Your viewpoint does not seem connected with reality IMHO.

It seems so insane to me that we have a company that is spending billions of dollars per year to break the law all over the world by undercutting while making a loss to corner markets, that is breaking labour laws all over the world, is a horribly toxic place to work, and this is just... okay and fine?

Why is this a thing? Imagine all the useful things those billions could do. Feeding and housing all the homeless people in the USA, for example.

That's Kalanick's genius: people HATE taxi drivers so much, they'll be ok with almost anything to avoid dealing with them. This is the real business opportunity he saw.

I got one the other day. £7, I was happy, the driver presumably was happy. Pre Uber I would have got the bus. There's a lot of value created for ordinary people on limited budgets.

We'll find out. That's two years to turn a 2.5B burn rate into profits. I wonder what Dara will do?

Users won't like the changes. And Lyft is waiting with open arms and promo deals. That 6.6B cash is only impressive because of their user base and fleet.

Drivers might be the first to suffer. They'll probably feel the effects -- less pay -- before the users see price increases. So if Uber is about to switch to moneymaking mode, their fleet may become unreliable soon.

I think uber has the exact model they're trying to execute in mind. They'll turn their existing funds into growth and turn cash flow positive at around their last $100m left in the bank. That way, they most effectively utilise the resources they have and grow as big as they possibly can get. The fact that they are firmly closing the losses gap with constant rate of improvement kinda proves that fact. They definitely won't switch to new pricing model overnight to turn profit, the process has to be gradual anyway. Of course, market forces could be more sophisticated than a simple mathematical model of funds vs returns, and there could be unseen side effects if stopping half way or closing the gap way to quick, but it's probably an assessed risk.

Uber's model of survival isn't exactly self-driving ambitions, it's more about utilising their asset sheet effectively. That's why benchmark could be so eager to get a CFO - someone needs to vouch and stand behind the path to Uber's profitability. Right now, the only person who's left who can stand behind it is Travis, and he lost a lot of cred. Recent rumours about softbank investment might suggest that Travis thinks that this model can be extended even further at the cost of the dilution, and even greater market scale could be achieved (along with his own personal desire to lead on with that deal, possibly), but investors would rather not play another round of uncertainty and ambitious spending and would rather cash out quick. Also after an IPO the company would have a much better chance at leveraging a simple loan/bond to continue growth, as because the rate of its growth would still most likely exceed the interest rates.

The big question is whose investors are willing to go for the big prize.

If both companies push for profitability, then the market slows to the pace they both push it while remaining profitable.

If however only one company pushes for profitability now and the other has investors willing to fund growth for the foreseeable future we could see one emerging as a winner.

Personally, barring an economic downturn on the horizon, it's foolish to go public now if their competition doesn't also go public.

Because there is still plenty of growth opportunities across their various products globally, they can get at least 1-2 more private funding rounds before they truly need to turn to public markets for funding. They should take that money while it's still there.

> I think this is exactly how Uber will fade into irrelevance.

Like Amazon? Because they used to break rules left, right, and centre. Their competitive advantage, in their early years, was ignoring tax law. The difference was that Bezos was smart enough to hedge against the day he'd have to comply, and to diversify.

> was ignoring tax law

Most online/catalog companies don't collect sales tax and leave it up to buyers to pay usage tax [which is legal absent a physical nexus https://en.wikipedia.org/wiki/Quill_Corp._v._North_Dakota]. This remains the case. Amazon just got pressured into collecting because they're so big and have affiliate sales programs.

The way Amazon was ignoring tax law was that they operated warehouses in states while claiming that they had no physical nexus in them, by using shell companies.

I may be wrong but as I remember it, the dispute was over whether affiliates constituted a physical presence. They collected where they had actual warehouses.

There was an additional dispute about affiliates. The tax dispute over warehouses went through several iterations.

Kalanick wasn't just unpopular; he was completely incompetent as the leader of a large company.

This would make sense to me if they had a decent business. But they are currently losing money hand over fist [1]. If they stabilize as is, they don't look like a good IPO target to me. The median amount taken in by an IPO in 2016 is $94.5 million [2], which would cover less than 2 weeks of Uber losses at their current burn rate. (Surely their IPO won't be the median size. E.g., Facebook's brought in $16 billion. But at that point, Facebook had been in the black for 3 years and their profit for their last full year was a billion dollars.)

Can they raise rates enough to get to break even before IPO? Maybe. But that would drastically reduce pressure on their competitors. Lyft is growing fast. Uber can really only justify their current valuation if they end up with no real competitors and can extract monopoly rents.

So I think their CEO needs to do a lot more than stabilize things. They either need to find a way to make the current business work much better (something I'm skeptical exists) or to drastically change the business to one where they have more of a moat.

My guess, though, is that they have run out of "greater fools" [3], and that the public market would realize that Uber, at least as currently constituted, is not a high-margin tech company but a low-margin discount taxi dispatch company.

[1] https://www.axios.com/exclusive-uber-financials-2475912645.h...

[2] https://www.wilmerhale.com/uploadedFiles/Shared_Content/Edit...


Even if that's the only way it could be headed (and I think there's lots of room for variation) - The correct path for Uber for the next few years and through an IPO is hardly a given.

They're currently far and away the market leader but that's a dangerous place to be. Lots of people want them to fail - both for competitive reasons and because they just hate the evil guy at the top.

Competition (backed by huge names like GM) is healthy in some markets for both riders and drivers, and they haven't been able to make a go of it in others. On top of that the autonomous space alone is going to be a war zone for the next decade and casualties will happen.

Pretty sure even my grandma knows where the transportation sector is headed: electric, autonomous, sharing, services based, etc ;)

I'm sure big names such as Uber and Tesla are hoping for that outcome. Personally, I'll believe it when I see it. For now, both autonomous and electric vehicles are still looking like technologies with great PR videos but also quite a few fundamental problems with no credible solutions yet.

I wouldn't be surprised if Uber was aiming for a big IPO before too much of that reality invades those PR videos, particularly if the financial foundations of their current business model are as shaky as some reports have suggested.

I think Musk realizes that electric cars will be a commodity which will lead to razor-thin margins. The one thing that's not yet a commodity, and will not be for a while, is lithum-ion battery tech which is why they are building the gigafactory to cement their place as near sole supplier to the rest of the industry when they eventually catch up with selling all-electric drive trains.

Tesla is going to consume the entire output of the gigafactory and build also more battery factories.

And there are already examples of other companies making lots of batteries. LG is making them for the Bolt.

What if it isn't heading that way, what if thats mostly just hype? I think its easy to be smug and pretend to know whats going to happen, but if predicting trends was so easy, nobody would ever be suprised by anything.

There are a lot of indicators that driverless cars arnt comming any time soon, and it seems like one of the few things that would work as a get out of jail free card for uber.

In any case, a market that is (supposedly) about to be rocked by major techtonic shifts is no place to make "sure bets" about the future.

IMO, it's almost best to ignore that.

Transport may be going autonomous, but it isn't there yet. It won't be affected until full autonomy goes live, and the network of drivers becomes obsolete.

It will be 5, 10, 15 years before technology, laws, etc. are mature enough. Meanwhile, uber needs to be the dominant ride-sharing service. That might be even harder if they're being too clever and thinking beyond the next couple of years.

I think that's one of those decisions that only look better with hindsight though. The merchant model had absolutely monster margins compared to the agency model (especially with bundle deals that provided a defensive moat) and Expedia was in a strong negotiation position vis a vis hotels that they didn't want to lose.

I think a lot of people were surprised at just how much inventory was out there and how much the merchant model hindered going after that extreme long tail.

Fair. However, nothing stopped them from testing a hybrid (agency/merchant) as the agency model made way more sense to consolidate international hotel inventory as it is way more fragmented than in the US.

I think a hybrid would have been the worst of both world because you lose your negotiation leverage without getting in a superior strategic position.

I think Expedia was hoping the hotel industry would modernize and consolidate way faster than it actually did (remember, this was the gogo 90s where the entire world was hopping onto the information superhighway). What they eventually discovered was that it's hard to underestimate just how much hoteliers hate technology, even when you take into account this effect.

Little known fact: Expedia was actually close to buying out Booking.com and switching them over to an merchant model buy Booking.com got cold feet and got bought by Priceline for a pittance just a few years later. If Expedia had owned the biggest merchant provider in the US + Europe, there's a fair chance today no agency competitor could have stood up against them and the entire world would be still on the merchant model.

All good points. I just don't think a merchant model would've worked in anywhere but the US. The market is just too fragmented elsewhere (especially Asia & Europe).

Personally as an Expedia shareholder and former employee, this sucks. I thought he did a good job as CEO. EXPE is down 4% right now, so it seems like the stock market agrees. Hopefully EXPE has someone groomed to take over.

>>> Expedia has moved to an agency model since but the damage was done. Booking managed to get far more inventory, capitalise on more search/PPC traffic and blow past Expedia.

Absolutely not! Expedia has the hotels.com brand. They are doing very very well by all metrics.

hotels.com and booking.com are about 50/50 market share globally. hotels is bigger in the USA, booking is bigger in the EU.

Historically, the USA hotels are massive chains whereas the EU hotels are smaller and independents. That's why they respectively started with the merchant and agency model.

Source: Insider data.

booking.com and hotels.com 50/50?


And yes, failing to kill booking.com when Expedia was a clear market leader is a huge mistake indeed.

> booking.com and hotels.com 50/50?

If you consider only OTAs, this is about right.

Yes, they are.

Could you elaborate on how the merchant model vs the agency model works in online hotels booking sites? I have not heard this before.

Merchant model is where the OTA (online travel agency) is the merchant of record. Your credit card is debited by the OTA when you book. Behind the scenes, OTA buys N room nights from the hotel chain for some discounted price, and sells the room nights via their site.

Agency is where OTA acts as an agent between customer and lodging supplier. The OTA takes a fee and/or percent cut of the booking. Usually the customer pays the hotel directly upon checkin, and the hotel in turn pays the OTA.

Booking.com uses the Agency model and they dominate Europe. Expedia is strong in North America and struggles to get a foothold in other regions.

Expedia now uses the agency model and merchant model. Europeans understandably do not prefer to pay for the hotel stay at the time of booking.

There are more nuances, but that is basically how it works.

> Europeans understandably do not prefer to pay for the hotel stay at the time of booking.

I do not understand the obviousness of "understandably". Seems like a likely culture difference. Explain?

Not sure what the OP meant, as I'm an European who does all of his traveling through Booking.com and as such I've encountered both situations, I'd say in equal measure: i.e. I've either paid the booking up-front or I've paid it after the stay was over (at check-out). I slightly prefer to pay at check-out, but that is in no way a stopping point for me when shopping for accommodation.

What Booking.com is really excellent for is that it just works and that it takes away a lot of the stress when traveling. Just by filtering on 8+ -rated reviews and by your desired nightly pay and you're sure to get what you want, no hidden gotchas, no anything.

In general, pre-pay seems to be increasing pretty much everywhere. It used to be mostly limited to some resorts and other pre-pay packages. Today, it's pretty common at a lot of hotels, both in the US and elsewhere, to get substantial discounts for pre-paying.

It "just works"... except when reviews and ratings and inventory ("just 1 room left!") are bogus, as I experienced last week.

>'It "just works"... except when reviews and ratings and inventory ("just 1 room left!") are bogus, as I experienced last week.'

These are all the reasons to just avoid booking.com. The whole site is like a shady used car salesman - for example returning search results that say -"You just missed it", then why tell me about it? Or "5 people looking at this right now", seriously who cares? Do people really liked to feel pressured? Or how booking.com returns properties with the red "sold out!" in search queries for hotel rooms? Booking.com is one of the most miserable user experiences on the internet and the UI? What a total 1990s looking shit show that is. And of course the reviews seem dubious as you mentioned.

I've been burned by them more times than I care to admit and prepaying means you are stuck with it.

I found similarly bogus ratings issues with both Booking.com and TripAdvisor.

Had I taken a closer look at the patterns of reviews (as I've learned to do with Yelp), I would have realized the preponderance of fakes. Ratings are all over the place. Numeric scores are inconsistent with comments. Vast majority of 8+ reviews are one-time reviewers, and a bad review is immediately followed by multiple high reviews the same week.

In the Booking.com case, the primary photo is phony (a different property -- room is wrong configuration). Many reviews refer to nonexistent features. The few negative reviews paralleled my experience very well (this place was a D-I-V-E, by far the worst I've stayed in anywhere in North America).

TripAdvisor used to show photos of the properties taken by what looked to be actual past visitors, in all the cases I was involved in those photos matched my ulterior experiences with said places. And, yeah, like almost all the reviews-based websites out-there you have to learn to filter through the fake reviews. I'm European and as such travel mostly to non-English speaking countries, and you can spot those fake-reviews pretty well if they come from the owner or his relatives/friends, as they tend to make the same grammatical mistakes. I admit, in North-America things might be different in this regard.

If you suspect a fraudulent property, ratings or images on booking.com, please report that. Personally, I've never come across any, but I know we've had such cases. In all such cases I'm aware of, the fraud was dealt with quickly and effectively.

Disclosure: I work for Booking.com albeit neither in the hotels facing department nor customer service. Managed fraud ops and security ops and eng years ago. Do not speak for the company.

>Booking.com is one of the most miserable user experiences on the internet and the UI

Their search by map or whatever is called it's actually pretty handy. It keeps the filters you have already selected on (which is a big thing in this day and age) and you can "travel" through the general area you're interested in staying, showing the prices on map-pin mouse-over, if I remember correctly. I tried doing this on GMaps directly and the experience was clearly inferior (no clear way to filter for price and rating, a lot less available properties), or maybe Google has another travel-like interface of which I don't know anything about.

I admit, there are tons of dark-patterns, some of which you mentioned, but I got used to them and learned to ignore them, the same as I do with online ads.

Yeah, I've recently noticed the "just 1 room left!" thingie, I generally tend to ignore it, as I travel by myself or with my gf. The reviews have held up for me, though. Granted, I also look at the number of reviews and at way those reviews are written, if it seems like there's something fishy I just skip it. On top of that I use TripAdvisor, which is really holding up pretty well for me in terms of traveler reviews.

FYI: TripAdvisor is an expedia brand.

Expedia sold trip advisor few years back, now they own another Meta Trivago.

It was never sold. They are both part of the Expedia brands.

In December 2011, TripAdvisor was spun off from Expedia in a public offering. [https://en.wikipedia.org/wiki/TripAdvisor#cite_note-16]

The spun off is a financial maneuver, it doesn't mean the company is not under Expedia.

yup- he's bound to miss the next big strategic thing that everyone else can see, because that's the only thing he did at Expedia!

C'mon dude

Agent model is not sustainably competitive+scalable. C.f. Groupon

I think booking.com and the Priceline Group stock (PCLN) and financial performance beg toyl differ about being competitive and scalable for many years now.

Disclosure: booking.com employee.

I wonder how much Uber will have to give him. He's already running a $22b company and was granted $90m in options less than two years ago. My guess: $500m minimum at a ~$30b valuation.

1/60 of the company value? That is insane

That's pretty typical for a new CEO. 2-3%. In fact, that's a bit low.

This isn't a series B/C/D company. Expedia is losing a CEO and the new one isn't going to be paid 400m (2% of Expedia by market cap).

500m at 30b sounds unrealistic. The low end of secondary market is ~45-50b. He will doubtless make a pretty penny.

More likely matching salary and bonus, covering the $90m (worth more at hand than vesting over X years) + $XXm stock which could still see a nice bump before an IPO happens.

CEOs can ask for a few %. 2% isn't that outrageous when you consider the company will lose more than that if they spend a few more months without a CEO, or with the wrong one.

Based on his bio [0], Khosrowshahi seems like a more apt CEO pick for Airbnb instead of Uber. Thus, I think that someone with a more extensive experience in the transportation industry such as Kathryn Marinello (CEO of The Hertz Corporation) [1] or David Abney (CEO of UPS) [2] is more suitable for the job.

[0] http://www.expediainc.com/brands/dara-khosrowshahi/

[1] http://ir.hertz.com/executive-officers?item=108

[2] https://pressroom.ups.com/pressroom/ContentDetailsViewer.pag...

Those are massive fleet and supply chain owners. Uber is a booking platform that doesn't own a single vehicle or employ a single driver.

That said, I don't think same industry experience is that critical.

this. It's not even transport, its the logistics piece. That original vision of "the car is in continuous motion, delivering ____". That fill in the blank is what gives Uber it's high valuation, not necessarily its dominance of ridesharing.

Seems like a pretty good fit. Khosrowshahi was brought in to take Expedia public and Expedia and Uber's business models are close-ish.

It seems unlikely that he was brought in to take Expedia public, since he joined 6 years after their IPO.

Expedia went public in 1999 [1], when Dara Khosrowshahi was working for an Expedia competitor: IAC. He didn't join Expedia until 2005, when IAC acquired Expedia [2].

Maybe I'm missing something?

[1]: http://www.nasdaq.com/markets/ipos/company/expedia-inc-1567-...

[2]: https://en.wikipedia.org/wiki/Dara_Khosrowshahi

That's odd, crunchbase says their IPO was in July of 2005.[1] According to Expedia's website, IAC acquired Expedia in August of 2003[2]. It looks like between 2000 & 2005 Expedia/IAC had acquired a number of online travel companies. My thought is that when IAC purchased Expedia it was no longer being traded publicly. In 2005 IAC rolled in the additional travel companies and put Expedia back on the public markets. [1] https://www.crunchbase.com/ipo/7451f106bd9bae69f9eb02a69f8c4... [2] http://www.expediainc.com/about/history/

Wish him luck, but all the controversy and outrage are a huge distraction to the business.

I feel like most of the world outside sv is actually somewhat unaware.

It occasionally shows up in the local syndicated media outside of SV and major urban centers, however in my opinion you're correct, most of the US could hardly care less. Most people are properly too busy leading their own lives to obsess over the latest vapid drama coming out of a tech company.

Americans in general likely care as much about who is running Uber, as they do about who is running Expedia or Priceline. Which is to say, it simply does not matter to 99.9% of people and it never will.

And even if they are aware of the tech shenanigans at Uber, they will forgive and forget as long as they can get a subsidized ride with their local Uber drivers. People care more about their own bottom line than what is going on out in SV. In general, it simply does not affect their world.

They still have to hire the best and brightest from SV and others to remain successful. So it matters what those people think.

I'm effectively in the Valley and Valley culture and I still use Uber.

Hell, I hate Uber's abuse of regulatory structures e.g. here in DC and I still use Uber.

Curious, why not use Lyft then? The experiences for me have been virtually indistinguishable between them.

The people within the company, and talent they're looking to hire, certainly know. It's not like this stuff has no effect in the long term.

Looks like Recode has only had time to update the title to reflect the Expedia decision. The story was previously about how "Uber's board says it voted, but will not divulge its new CEO until employees know".


This probably has something to do with their desire for IPO. However I don't even know how it will look like when Uber finally opens up their books. I'm only one data point but I get over half the invoices wrongly calculated by Uber since flat fare system started (down to the tax calculation), mostly in my favour, but still.

Again, I'm only one data point, but my usage of Expedia has exponentially fallen since the aforementioned CEO took over. This obviously not a decision to make Uber a better service. This is a bid to sell Uber to a bigger fool on the wall street.

I have no confidence in Travis-less Uber. The war with private car ownership is over. Private cars won.

Private cars won? I'm guessing you live in one of the US's urban sprawls? In the Netherlands, in London, in Brazil, ride sharing is taking over and competitors are enjoying the path cleared by Uber to take over with better service and fares.

Side note:

This new guy is an outspoken trump critic.

Meg is a republican, and ran as one for california governor

#deleteUber was started and accelerated partially by assumed associations between Uber and Trump

I wonder if the politics had any influence in the decision to pick him over meg.

I doubt it. Whitman was probably the most outspoken Republican against Trump, called him a "demagogue", and stated publicly "I will vote for Hillary, I will talk to my Republican friends about helping her, and I will donate to her campaign and try to raise money for her."

Plus, given Uber's issues, being a woman had to be a big plus for Whitman.

> Plus, given Uber's issues, being a woman had to be a big plus for Whitman.

Seems to me that if she had been offered the job, she'd be set up for failure. I'm glad they went with the other one.

She's a bad CEO tho.

fair, for the next 4 years, I believe "wokeness" is going to be a lot more valuable for public facing roles (leadership & comms) than it used to be. Companies without "wokeness" will experience more and more twitter/media wrath.

Relevant article: https://www.vox.com/identities/2017/8/17/16162226/corporatio...

The thesis of the article is that corporations are replacing the role of churches as the moral voice of society. Interestingly, this applies on both sides of the spectrum: both liberal and conservative corporations are becoming more and more outspoken on issues.

Companies who use the term 'wokeness' will experience the wrath of people who no longer want to do business with them. People don't want to hear what CEOs or other private sector leadership political thoughts are such as we don't care for celebrity or sports figure opinions either.

Unclear why you got downvoted. Very valid point and considering the relationship between "wokeness" and the issues uber is facing internally, it's presumably a consideration (though perhaps they did not use "wokeness" internally as they discussed it).

"Wokeness" being the cynical term for a leader that doesn't tolerate sexual harassment in the workplace like the former one did.

#deleteUber happened weeks before Susan Fowler's blog post, was accelerated because TK was on the Trump business council at the time (assumed connection between the two) and had a much larger impact on the business metrics. A more "woke" CEO would have been able to stem the bleeding from that situation or have avoided it all together.

Bingo. Anyone who thinks the pile-on on Kalanick was the result of Fowler's expose is naive beyond belief. It was a coordinated punishment campaign, the bro culture story just served as a convenient starting point. Now high profile CEOs will think twice before they as much as talk to anyone not approved by the liberal establishment, let alone sit on any council.

Except everything that came out against Uber was things that they had actually done. Susan Fowler wasn't planted. Waymo wasn't planted. And these things started long before Trump took office.

everything that "came out against uber" had little impact on the business metrics. The bad event for uber was a widespread campaign to delete the app that started in january when Tk was on trumps business council and uber caused some outrage when they turned off surge during a "muslim ban" strike by taxi workers at JFK.

I suspect the Waymo business was a bigger deal.

Expedia? The #1 Dark Patterns? Wow, this should end well.

linnkedin is #1 for dark pattern

Booking.com takes the cake. "5 more people are looking at this property right now! Book now! This is our best price!"

Two days later, it's the same damn message

You've clearly never booked a flight with Ryanair ;-)

Can't say I agree. They upsell heavily, but it's not that confusing to navigate and avoid the extras.

Just don't try and change anything on the flight after booking. I had to cancel a flight and although Ryanair won't refund you the ticket price, they will refund the taxes. However interestingly their administration fee for the refund was exactly the same as the amount of taxes I was due to be refunded, so I got nothing.

I don't think they are nearly as bad as they used to be - pretty sure the "I don't want to buy travel insurance" is no longer half way down a list of countries!

Snapchat is atleast in that race.

Based on his Twitter profile, he seems like a cool guy to run Uber. Good luck!

From Wikipedia on the Expedia CEO:

>Ten years later, in 2015, Expedia awarded him $90 million worth of stock options as part of a long-term employment agreement, stating he would stay until 2020.

On that note...

Sources close to one leading candidate, Meg Whitman, said she has not been informed as yet about a choice.

No one thinks Travis has a chance at gaining back control?

No, I don't think that can happen.

He's far too controversial. To say the company isn't profitable is understating things: it's a money fire. If you brought back Travis now, the VCs would walk away and stop putting money into the fire. New VCs might show up, but the terms for getting more money would start to get exorbitant, and Uber's spiral to bankruptcy would be a slightly shorter one.

Any guesses on how long it would take Uber to IPO from this point on?

Has he even accepted the offer?

why are all recode articles written in bro english?

Ugh. Now I remember why I usually don't read recode articles.

It's bad/overly casual language lacking professionalism. I don't even know many "bro's" who would write like this, and it's a female author who seems to consistently write in this horrific style.

It's Kara Swisher's style. She's a sufficiently well-known journalist to get away with it, though I agree it can grate a little.

It's not much of a style. I have to guess her audience has low exposure to literature.

Bro English, is that because of phrases like "more to come, obvi!"?


This breaks the HN guideline against not taking HN threads on flamewar tangents.

Would you please (re-)read https://news.ycombinator.com/newsguidelines.html and follow the rules when commenting here?

Alrighty, thanks.

Tough? Uber is already leading the market. Their only competition is from Lyft, which from what I understand isn't nearly as popular as Uber. All they've got to do is lead a PR campaign to shift public perception & they're golden. Or am I missing something?

They still compete with taxis, and the regulations and labor laws that govern taxi-like services. At some point, they'll be dealing with the effects of self-driving cars. Even though that may be a decade away, Uber has been operating at a loss to the tune of hundreds of millions every quarter even as revenue increases [0]. It's not about to run out of cash but it has plenty of existential threats to contend with.

[0] https://www.cnbc.com/2017/08/23/uber-q2-earnings-loss-narrow...

> All they've got to do is lead a PR campaign to shift public perception & they're golden.

I don't see how you do that in any sort of reasonable time without making big changes. A new CEO won't do that, and actually paying drivers more eats into that road to profitability hard.

Tough because they're not making money.

I would say they are missing a key concept: profit. You can only provide a service at a loss for so long.


Is this really a surprise though? There's a steep cultural motivation to prove a capability for success within the Iranian American population, likely at least in part a byproduct of displacement (for those who moved to the US up to the revolution) and continued survival in the face of sour odds (for those who left after the revolution, the Iran/Iraq war, etc).

My question: you're suggesting this is bad for benchmark. I don't quite understand why? This doesn't seem like a coordinated effort by an "Iranian Cabal" so to speak. Just a group of people who share an ethnic background and who happen to also be succeeding in the valley.

He's insinuating that Shervin Pishevar (who is officially at war with Benchmark) convinced the board to make this choice.

Could be, but weird insinuating this just based on ethnicity.

rdxm on Aug 28, 2017 [flagged]


# of f to give == 0

You've been posting a lot of unsubstantive comments to HN. Would you please (re-)read https://news.ycombinator.com/newsguidelines.html and stop doing that? We're hoping for a higher quality of discussion here. In vain, perhaps; but still hoping.

i'll grant that i can exude a somewhat negative outlook. but seriously, are you even remotely surprised about a comment like this related to uber?

If we're being honest uber represents pretty much everything negative comeing out of SV at this point....

Frankly I expect more from the valley (and from YC) in general..#justsayin...

I wasn't replying about Uber but to your entire comment history, which falls short of what we're hoping to see here. Also, the issue isn't primarily about being negative, it's about lowering the signal/noise ratio of the forum. We all have to be careful not to do that, because if we lower it a little bit enough times in a row, the whole thing will one day fall off a cliff. The basic idea of HN is stave that day off for as long as possible. In my experience, most people who get that idea are willing to help. We'd appreciate it if you'd help too.

This picture looks like a postal worker in uniform ready to walk into a Breaking Bad look-alike convention, he even has the badge ready to go.

I couldn't imagine how all-consuming a gig like this must be. If I were to hear the news, I think I would spend the entire day in bed... just one last time.

If this guy doesn't accept, they should try to lure Bill Belichick and Tom Brady from the NFL. I don't think you could find two people who win as much as they guys do.

I think I'll throw in my resume, just in case.

But... Uber isn't travel. It's logistics. Expedia isn't logistics.

I mean, seems like a good CEO overall (in the vein of the "any CEO for Uber is better than none"), but I can't see what he specifically brings to the table to uniquely bring them to market. That said, it's not like Kalanick had something special either, it's just as the founder he has different cache.

I like to try to watch a few videos of a prominent individual when sizing them up. Here are a few I found:

- https://www.youtube.com/watch?v=AsiiqlodKvU

- https://www.youtube.com/watch?v=9PNT2I2Xsxc

Overall I'm not impressed, but I'm curious what others' thoughts might be.

Talk about judging a book by its cover. Surprised as well that this sort of sentiment comes from a forum which loves to complain about hiring practices in tech.

Apologies; I had meant to start a conversation, not bash on them because of a few short videos.

Worth noting that "speak about strategy in front of a camera" is an important aspect of being a CEO, and that one of the videos was very similar to a common interview question. So I'm not sure this was entirely unfair; just not a very meaningful observation given its limited informedness.

I watched those videos and I don't think he said anything unreasonable. So what do people dislike about those videos? Communication style? Personal distaste?

I watched those two and I wouldn't work for that guy.

I know nothing about expedia but it sounds like airbnb ate their lunch. That and google.com/flights.

But that's just a few minutes. Hacker News tends to have smart people with domain specific knowledge. Any of those around who know this guy? What's your take?

Expedia owns a ton of business lines. You've almost certainly used them whether you realize it or not. They've diversified far beyond just selling hotel rooms. Definitely not Amazon level of dominance but not dying either.

expedia stock up 5x since 2012, market cap 22b, their lunch has not been eaten.

Not to mention that they also own hotels.com...

And a ton of other travel brands you're probably familiar with: http://www.expediainc.com/expedia-brands/

Expedia is awesome. Rated best place to work in the UK, even in front of Google. They have hundreds of brands, which you certainly know and use whenever you travel.

They own hotels.com, which is doing incredibly well by any metrics you could think of. Last I checked, airbnb was about 2% of the bookings of hotels.com. It's negligible.

That being said, they are not competing. Hotels and BnB are not interchangeable.

Source: insider data.

Wow,downvotes. OK doke. Based on those two videos I wasn't impressed. And I stated that. And I asked what your opinion was. And I get down voted for that? I need to rethink if I want to be here. You all have a good day.

And I get down voted for that? I need to rethink if I want to be here.

If you had 10,000 karma at HN, could you trade those in at Starbucks for a free latte? No?

How about 1,000,000 karma? Could you trade those in at Delta for a free flight to Tahiti? No?

You can't take karma too seriously. Sometimes I've said something that I thought was adding to the conversation and I've been voted down a lot for it. Other times I've said something quick and flippant and earned some unexpected karma.

It's just HN fun points. Don't take the downvotes too seriously. I try not to.

But I have had 'dang' chastise me a few times, and I do try to pay attention to that, because he attempts to set the tone here. So if you avoid his wrath, you're cool.

Uber story is interesting: it's a fall of an American business not due to underlying business reasons, but due to politics and the board virtue signaling to the customer base. More similar cases to come, until the entire economy folds in 25-30 years (I budgeted ~5-7 downvotes on this: to me these downvotes only confirm the new growing anti business virtue signaling "consensus" that is toppling down the economy)

The fact that they're not profitable and have no obvious path to profitability seems like an "underlying business reason" to me.

Bezos should have been out too by 2003 then

Amazon always had a route to profitability, raise prices _a bit_.

Uber's route is to raise prices _a lot_.

Except that apart from AWS Amazon is still not profitable

What, are you saving up your upvotes to buy a pony or something?

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