To say new Uber CEO Dara Khosrowshahi has his work cut out for him would be an understatement.
When the 48-year-old former Expedia (EXPE) chief executive starts on Tuesday, he’ll inherit an embattled company rocked by numerous scandals, including allegations of sexual harassment, and a board of directors fractured from months of infighting.
But it’s not all doom and gloom for Khosrowshahi. For one thing, Uber remains a juggernaut, valued at nearly $70 billion as of February. According to a study from digital research firm eMarketer, Uber will capture 85% of the ride-hailing market in the U.S. this year, with 44.4 million adults expected to use Uber at least once this year — up from 28.5% in 2016.
To keep that momentum going, however, Khosrowshahi will have to right the ship in a number of ways, starting from within.
Create a set of core values
Corny as it sounds, a company’s core values are more than just feel-good gobbledygook. They’re the principles the company abides by and instills in its workplace on a day-to-day basis.
Uber, to be clear, has no official list of core values.
“In the beginning, it was a lifestyle company,” former Uber CEO Travis Kalanick told me in 2012. “You push a button and a black car comes up. Who’s the baller? It was a baller move to get a black car to arrive in 8 minutes.”
That kind of bro-like attitude and rhetoric permeated through Uber’s halls for years and created an atmosphere where male employees allegedly sexually harassed female employees without consequences.
Charlene Li, founder of the San Francisco-based research firm Altimeter Group, contends that having a core sent of values — and having executives, managers and human resources enforce them — could help repair Uber’s overall image. Adopting these values could also help the company’s current difficulty attracting top-shelf talent.
“It’s a fantastic brand, but it’s very tarnished because of the problems,” Li added. “They need to re-establish trust in the workplace. But what does Uber stand for? They need to clarify that.”
Double-down on self-driving car technology
Unfortunately for Uber, most of the headlines this year around its self-driving car technology focused on an ongoing legal battle with Waymo. The self-driving car business, which Google (GOOG, GOOGL) spun out in latest 2016, alleges that former Google engineer Anthony Levandowski downloaded nearly 14,000 confidential files in late 2015 related to Google’s self-driving car technology before leaving the company to co-found Otto, a startup that developed self-driving technology for truck rigs. Uber then acquired Otto for a reported $680 million in August 2016.
Uber would be wise to double down on its self-driving car technology efforts, regardless of how things shake out with Waymo, simply because self-driving rides are expected to cost less than today’s Uber or Lyft rides with human drivers. And for a business like Uber, having a sustainable cost advantage against rivals like Lyft, which is also developing self-driving car tech, is tantamount to long-term success.
Make several, smart acquisitions
In addition to shoring up its self-driving car efforts, Uber would also be wise to make some smart acquisitions. Sometimes, the best way to succeed in an aggressively competitive market like ride-hailing is to acquire talent and technology from outside companies. Although Uber’s acquisition of Otto last year sparked the lawsuit from Waymo, it’s the type of strategic move Khosrowshahi should replicate.
“They haven’t been doing very many acquisitions,” Li explained. “They need to think about acquisitions that help them achieve scaleable, sensible profits.”
As luck would have it, Khosrowshahi is already in a good position to acquire other types of transportation companies. The Iranian-American executive is an investor in Convoy, a Seattle-based startup with an Uber-like app that connects over 10,000 trucking companies with shipments from 300 businesses including Anheuser-Busch (BUD) and Unilever (UL) to transport thousands of shipments each and every week.
Acquiring a company like Convoy would be a practical way to expand Uber’s vast reach and an excellent way for Khosrowshahi to kick off his first year as the company’s CEO.
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