Uber CEO Dara Khosrowshahi Mulls Acquiring the Company He Formerly Led for 12 Years
Uber is reportedly considering making its largest-ever acquisition as it continues expanding service offerings beyond ride-hailing. The company is targeting Expedia, the travel booking site formerly headed by Uber’s current CEO Dara Khosrowshahi. No formal approach has been made to Expedia yet, according to the Financial Times, which reported talks of the deal. Uber did not respond to requests for comment from Observer. Expedia declined to discuss the matter.
An Expedia purchase would bolster Uber’s mission to become a “super app,” referring to a singular platform that provides everything from social networking to e-commerce and banking. Expedia, which currently has a market capitalization of around $20 billion, reported a 6 percent year-over-year revenue increase to $3.5 billion in the most fiscal quarter. Uber’s market cap stands at $166 billion. Its share price is up more than 80 percent in the past year.
Khosrowshahi has close ties to Expedia. Before joining Uber in 2017, he served as CEO of the travel booking site for 12 years. Before that, he served as chief financial officer of its parent company, IAC, for seven years. Khosrowshahi remains a board member of Expedia and has a deep personal relationship with Expedia chairman Barry Diller. The two met decades while Khosrowshahi was working at the investment bank Allen & Company. The Uber CEO once described Diller as a “great mentor.”
Uber’s vision for a “super app”
Uber’s interest in Expedia isn’t a surprise, given its ambition to build Uber into an “everyday app,” according to Khosrowshahi. “We want to be that everyday case for consumers, and we want to surprise and delight them and make their life a little bit easier—you can call it a super app if you want to,” the CEO said at last year’s Skift Global Forum in New York.
In addition to Khosrowshahi’s former experience at Expedia and the fact that Uber and Expedia have similar business models that would enable a “somewhat easy” integration, said Tom White, an analyst at D.A. Davidson, in an investor note, an expansion into travel booking fits into Uber’s “long-term super app strategy.”
Uber has spent the past few years diversifying its services through acquisitions. In 2019, it bought out Careem, a Dubai-based ride-hailing rival, for $3.1 billion; the following year, it acquired the food delivery platform Postmates for $2.7 billion.
Besides branching out into car-sharing and bike-sharing services, Uber added train, bus and plane rentals to its U.K. app in 2022 and even experimented with delivering kittens to users to celebrate National Cat Day. Uber has also explored the world of autonomous taxis through partnerships with Google (GOOGL)’s Waymo and General Motors (GM)’ Cruise.
Some analysts worry an Expedia acquisition might be too complex for Uber. The company is still in the midst of competing in the “early innings” of markets like grocery and commerce delivery, said White, who added that Uber’s ability to expand into travel isn’t “perishable” and will remain an option in the future. “Simply put, we don’t believe Uber needs the distraction right now.”