As it stands, hiring for executive and leadership roles places immense pressure on companies and their founders. But it’s not about finding a quick hire to fill the role and ease the pressure. Now more than ever, executives who help steer the ship, collaborate successfully with partners, stakeholders, and staff, and can take a handle on things when business shifts are in high demand.
Here are the qualities every CEO will look for when hiring for their executive team this year:
They are multigenerational
If the previous year has taught us anything, it’s certainly the value of clear and concise communication. As some leaders were conducting business from vacation homes and golf courses, much to the frustration of employees, it’s been revealing for many organizations how little their leadership can effectively rally the troops.
A leader who embraces technology, communicates strongly, and understands the value of multigenerational employees will continue to be in high demand in 2021. These exceptional leaders seek out opportunities to better communicate and will analyze how employees contribute to the new blended model of leadership. They understand and will make sure everyone is on board, from Millennials to the old guard.
While navigating interviews, take note of candidates who mention nourishing and utilizing people’s strengths, those who have introduced new automations to make things easier for their team, or those who lead with empathy especially in a pandemic. Ultimately, you’re seeking out someone who not only demonstrates “teamwork” but lives and breathes that ethos to lead your business to the next level.
They have a specialty
Gone are the days of the traditionalist. Enter the specialist. In a post-pandemic world, executives who consistently deliver on customer success, optimize team performance and enhance culture, or improve business efficiencies will be in high demand as much of the world will be in a hybrid or remote-work model. These leaders will possess a deep understanding of your company vision and the sustainability of your business, a key ingredient in future-proofing your business.
How do you know you’ve found the leader who can take your business to the next level? The candidate’s work will speak for itself. Have they been successful in navigating pandemic decisions (large or small)? Have them speak candidly about the impact they’ve had, success, or challenges throughout the pandemic.
Just as exceptional as their communication skills are, leaders who thrive off data and make analytical decisions will be at the forefront of leadership teams this year. An executive who understands metrics and data makes decisions based on facts, not instinct. This data-first mind is particularly useful for proactive planning and especially important when blended office models, a flexible arrangement of both in-office and remote work, will become increasingly popular in 2021.
Just as the pandemic required businesses to pivot and make quick business decisions for precautionary COVID-19 measures, now business leaders are making reopening plans and moves based on their employees’ and customers’ needs. Potential leaders who can identify or provide examples where they have relied on data to plan, communicate, and execute strategies, whether team or consumer-based, should be high on your list of candidates. During the interview, listen closely throughout for insight as to how they formed conclusions or made bigger decisions pre- or post-pandemic.
I’ve lost a lot of other people’s money. The most stressful times in my life have been when people believed in me and invested tens (if not hundreds) of millions in my company or idea, only to see their capital go up in smoke. I’ve also made a lot of people a lot of money – but only in America would someone with my (lack of) pedigree be given this many swings at the plate.
To be a truly great investor or operator/CEO, you need to be a bit of a sociopath: You have to be able to sleep at night even as you lose other people’s hard-earned money or lay people off. Working with OPM (i.e., Other People’s Money) is often phrased as a positive, but the real luxury is to be in a position to lose your own capital. If things go wrong, it’s a private failure.
The willingness to risk capital on a captain and harpoons (the 19th century whaling sector was proto-venture capital) has always been a key ingredient in the secret sauce of the US economy. But the secret is out. While the US still produces the most unicorns, and the most mega-corporations, China is gaining … fast. Interestingly, despite the rhetoric re: China challenging US hegemony, it’s European innovation that has drowned in the rising red tide. But that’s another post.
We should celebrate billion-dollar successes, so long as they come at the risk of failure – the whaling captain and the entrepreneur earn their wealth in part thanks to their willingness to come home empty-handed, or not at all. However, there’s a new class of billionaire in America. Meet the MeWork generation, which makes their fortunes despite returning to harbor with less than they embarked with.
To help identify members of the MeWork generation (they can be any age), we’ve devised two metrics: the Daily Benjamin Burn™ (DBB) and the Earn-to-Burn Ratio™ (EBR). The first is how much money an executive lit on fire per day during their tenure. The second is the percentage of those lost Benjamins they siphoned off for themselves – think of it as a commission on destruction. In an efficient and fair (dangerous word) market, the EBR ratio would be zero. If we can measure someone’s burn in daily stacks of 100-dollar bills, they’ve created no value and should get no compensation. Spoiler: That’s not what happens.
Daily Benjamin Burn™
What does the DBB look like in practice? A lot like Quibi. That likely won’t mean anything to you, unless you’re one of the dozens and dozens of people who subscribed to the short-lived short video service. In 2018, Jeffrey Katzenberg and Meg Whitman raised $1.75 billion, launched a bad app with worse content, and shut it down six months later. Roku combed through the rubble and found $100 million, so Jeff and Meg immolated $1.65 billion in 750 days, or $2.2 million per day. If you stacked that $1.65 billion in 100-dollar bills, you’d have a pile over a mile high, about two Burj Khalifas, the world’s tallest building.
Eating my own Benjamins
In 2008, I raised $600 million from a hedge fund, became the largest shareholder in the New York Times Company, and ran an activist campaign against the Gray Lady. They put me on the Board, where I ranted about the evils of Google, advocated for the divestiture of non-core assets, envisioned sunlit uplands of subscription revenue and … lit Benjamins on fire. During my 24-month tour of duty watching the Great Recession kick ad-supported media in the groin, I managed to turn $600 million into $350 million, for a DBB of about $350,000. The stack of Benjamins I lost would have reached only to the top of 30 Rockefeller Plaza. Only. Jesus …
I. Want. To. Throw. Up.
Jeff, Meg, and I all made an old-school mistake. We failed to find a greater fool (e.g., the public markets, gullible board members, Softbank) to secure a mega payout for our Bonfires of the Benjamins. I was paid approximately $500,000 in board fees and a retainer from the fund; I speculate that Jeff and Meg pocketed more (their compensation remains private). But none of us took home millions.
That brings us to the Earn-to-Burn Ratio™ and the hall of fame for broken compensation.
EBR hall of fame
In 2012, Yahoo replaced its CEO with an executive from Google: Marissa Mayer. But the new CEO made a series of poor decisions, including canceling the company’s telecommuting policy while working from home herself and paying $1.1 billion for a porn site, Tumblr. (Note: Six years later, Yahoo sold Tumblr for $3 million.)
When Mayer took over, Yahoo (not including a 20% ownership stake in Alibaba) was valued at $14.4 billion. In July 2016 the company sold itself to Verizon for $4.5 billion, and Mayer was gone. That’s $9.9 billion turned to ash in four years (or 13.5 Burj Khalifas), for a DBB of $6.8 million. Mayer’s compensation began with a $30 million signing bonus and went up from there, totaling an estimated $365 million, giving her a $250,000-per-day commission for destroying $7 million per day of other people’s money. That’s an EBR of 3.7%. Shocking, sure, but not the gold standard.
Adam Neumann founded WeWork in 2010, but he didn’t start burning Benjamins at epic scale until Softbank began shoveling billions into the WeWork furnace in August 2017. By the time Neumann was fired in September 2019, Softbank had invested $10.3 billion; a few months later it wrote off $9.2 billion of that. That’s a $13.1 million DBB on Softbank’s money alone, or like flying a decade-old Gulfstream G450 (I browse planes at night – pathetic) into a mountain … every day. Impressive, but only half the story. Neumann’s compensation for this value destruction was complicated by his ouster and a subsequent lawsuit, but we estimate he made off with around $1.02 billion, most of it coming out of Softbank’s deep pockets. That’s $1.5 million per day during those two years: an EBR of 11.1%.
Joining Mayer and Neumann on the podium is Randall Stephenson, who ran AT&T from 2007 to 2020, when his chief lieutenant, John Stankey, took over. If you owned AT&T stock in 2007, you’ve collected $26 per share in dividends since, but you’ve also watched the share price drop from $39 to $29, for an aggregate annual return of 2.5%. This was a period when S&P 500 companies as a whole returned 9.8% a year – much of it on the back of AT&T’s own mobile and data networks – and AT&T’s competitor Verizon returned 7.9% to its shareholders.
How did Stephenson manage this? Among other mistakes, AT&T spent $67 billion to buy DirecTV (a pending massive write-off), blew $4 billion when it failed to acquire T-Mobile, and spent another $108 billion to buy WarnerMedia, which Stankey just sold to Discovery. To his (partial) credit, Stankey may have managed to net out the Warner deal as a wash.
So while Stephenson didn’t destroy capital outright, he was a poor steward. Had AT&T eked out even a 4% return from 2007 to today, it would have made an additional $50 billion for shareholders. That’s an implied DBB of $10 million. How did the Board respond to Stephenson’s 13-year-long sideways run at the iconic firm? His total comp was at least $250 million, including a $64 million pension as a parting gift. That’s an EBR of “only” 0.5%, but still a huge payout in the face of mediocre performance.
In April 2014, toward the end of Steve Ballmer’s controversial run as CEO, Microsoft closed the $7.2 billion purchase of 1999’s leading mobile handset maker, Nokia. Just 15 months later, Ballmer was gone, and the company wrote off $10 billion for the failed acquisition – the deal was so bad it ended up costing Microsoft more than it paid, mostly due to severance for laid-off Nokia employees. That’s an incredible $22.2 million per day, the highest DBB we could find. (Ballmer only made $1.65 million his last year at the company, so a minimal EBR.)
Burning Benjamins doesn’t just happen in the US. In 1998, Daimler-Benz acquired Chrysler for $35 billion in the largest industrial merger ever at the time. After nine years of culture clash and billions in losses, Daimler unloaded 80% of Chrysler to a private equity firm for $7.4 billion, valuing the company at $9.25 billion. That equates to an impressive $7.8 million DBB.
How do these corporate money losers compare to the largest and longest-running Ponzi scheme in history? Bernie Madoff ran his fake fund for nearly 30 years, costing investors an estimated $19 billion. The date his fraud began is disputed, but assuming it was 1980, that’s a DBB of just under $2 million per day. A massive, decadelong legal project has repaid most of these losses through fines and settlements, and Madoff died in prison, but only after a multi-decade run paid for by the destruction of thousands of people’s economic security.
Growing up, I loved to watch my dad pack for business trips. He smelled of Aqua Velva and draped his Izod sweaters over a Ram Golf bag. He’d iron the mammoth collar of his Pierre Cardin shirts, fold them around a piece of wax paper, and lay them into his Hartmann luggage like newborns. It was ceremonial, just as when he’d wear his kilt. Elegant yet masculine. During one of these pre-business-trip ceremonies, when I was about eight, my mom walked in. I looked at my dad’s stuff and asked, “How come dad is so rich, and we’re so poor?”
My dad loves this story and laughs out loud when he tells it. But it wasn’t funny. He’s been married – and divorced – four times. There was some financial stress, there was incompatibility. But the real fissure was that there were two Americas … under one roof.
Whether we’re executives, parents, or citizens, we need to ask ourselves: Have our interests diverged from those of the people who matter most to us and society? Do our spouses, children, neighbors, employees, and countrymen win and lose in reasonable harmony? Are we part of a family, part of a nation? Or have we become the MeWork generation?
Clarke Murphy is a CEO recruiter and adviser for Fortune 500 companies.
He said board rooms are looking for leaders with a high “LQ” or learning quotient.
Having high “LQ” means you’re able to adapt to change quickly.
This article is part of a series called “Secrets of Success,” which examines specific leadership tips from prominent business leaders.
For over three decades, Clarke Murphy has helped the biggest companies name their next CEO. For the last eight years, as the CEO consultancy Russell Reynolds, Murphy has advised more than 30 Fortune 500 CEO appointments and over 60 board appointments at companies that will remain unnamed due to privacy agreements.
While Murphy’s advice spans multiple industries including finance, retail, and technology, he’s found that boardrooms and executive committees today are looking for leadership candidates with one particular trait in common: a high LQ – a person’s willingness and ability to adapt to change.
“CEOs are not paid to have all the answers,” Murphy told Insider. “Today, it’s about your ability to be agile.”
The events of 2020 forced leaders to double down on this trait, the CEO adviser explained. Many corporate executives had to move their employees to remote work in a matter of days and ensure their workers were safe. Weeks later, they had to respond to demands for racial equity amid nationwide protests with statements and pledges. The role of the CEO changed, and leaders have had to adapt.
“What the COVID pandemic has brought on is the need for pretty rapid transformation,” he said. “Leaders not only have to have emotional intelligence, they have to have LQ, the ability to learn, listen, watch, and communicate transformation.”
How to develop LQ
To develop your own sense of LQ, Murphy recommends professionals ask their bosses for feedback, explore how they can improve work for their direct reports, and think about the problems their consumers face.
Ask your boss where you feel you could grow personally and professionally. Having this understanding will help you focus on how to become a better leader, Murphy said.
“You want to show that you’re always learning,” he said, “that you’re always improving.”
The second is to explore the obstacles your direct reports encounter at work, in order to make your organization more efficient. According to Murphy, this will help you lead transformation within your company.
Lastly, Murphy recommends that managers keep a pulse on the issues their customers care about, like reducing pollution or increasing data privacy, so they can develop innovative products.
“Successful leaders of the future will know these three things,” Murphy said. “They’ll know where they can grow and innovate to help their stakeholders.”
The PepsiCo case
In addition to the transformation exhibited by corporate leaders during the pandemic, one CEO, PepsiCo’s Ramon Laguarta, stands out to Murphy for his ability to be agile.
Laguarta has grappled with rapidly changing consumer habits that pose a threat to the company. People are looking for healthier food options and environmentally friendly products. That’s a potential risk for a company that sells snacks and plastic bottle products.
In response, Laguarta doubled down on a decades-long effort to cut calories in its products and engineer new, healthier ones. In the company’s 2021 statement to investors, the Pepsi CEO spoke about the company’s “special focus on no sugar beverages” and its continued efforts to “reduce added sugars, sodium and saturated fat in many of our products.”
He also announced the company’s goal to cut greenhouse gas emissions by more than 40% by 2030, and has launched new climate-friendly agricultural projects. All the while, the company’s stock has been on a generally-upward trajectory.
“Laguarta has really been able to usher in change,” Murphy said. “He’s an example of truly embracing transformation.”
More CEOs will be tested on their LQ as the climate crisis worsens, Murphy added. Investors and consumers will want leaders who are able to respond to environmental, social, and good governance (ESG) issues like the need for more transparency around diversity efforts as well as carbon-cutting measures.
“I think the great leaders of the future will balance operational profit with sustainable leadership,” Murphy said. “They’ll adapt to changing times.”
One of the most long-running and pernicious myths about Asian Americans is the “model minority” idea that the group is overrepresented in the upper echelons of American society.
But a closer look shows that there’s a big problem with the pipeline for Asian Americans moving up the corporate ladder. While there is a high level of Asian American representation in professional roles, research into career advancement across workers of various ethnicities suggests the group remains deeply underrepresented among managerial and executive positions.
For example, a 2020 analysis of the C-suites at Fortune 500 and S&P 500 companies by executive recruiting firm Crist Kolder Associates found that just 38 CEOs, or 5.6% of the total 682 executives in the study, identified as Asian or Indian.
That long-running gap between strong representation in the white-collar workforce and much lower numbers in the C-suite implies Asian Americans don’t have the same opportunities for promotion as their white colleagues.
Buck Gee, one of the authors of the research and an executive advisor to the Ascend Foundation, a non-profit dedicated to improving Asian American representation in the workforce, told Insider that “the problem is not representation” across all roles. “The problem is equity of promotions.”
A dearth of Asian-Americans at the top of the corporate ladder
The Ascend Foundation analyzed 2018 data from the Equal Employment Opportunity Commission (EEOC).
To help put that comparison in perspective, the Ascend authors took the ratio of the executive share divided by the professional share to make an “Executive Parity Index.” If that index is above 1, it indicates that a group is overrepresented at the executive level, relative to its share of workers in the professional pipeline; if it is less than 1, it means the group is underrepresented.
That index shows that in 2018, white Americans were overrepresented in executive positions relative to their share of the white-collar professional workforce, while non-white groups, including Asian Americans, were underrepresented:
Those disparities suggest that Asian Americans and other people of color are not moving up the corporate ladder at the same rate as white workers. The share of executives who are white outstrips the white share of professionals, indicating that white workers are more likely than people of color to ascend to the executive suite.
Silicon Valley and the financial sector are just as bad
While the above charts focus on national disparities across all industries, the EEOC data also allows for a closer look at specific industries in specific places.
An earlier Ascend Foundation analysis focused on Silicon Valley, in particular calculating a similar Executive Parity Index as above for the manufacturing and information sectors in the San Francisco and San Jose metropolitan statistical areas using EEOC data from 2007 through 2015.
That analysis showed that while Asian Americans are very well represented among rank and file Silicon Valley workers, with about 47% of the professional workforce identifying as Asian, they were similarly underrepresented at the executive level as in the national, all-industry analysis above:
The finance and insurance sector shows similar results, based on 2018 national data provided to Insider by Ascend:
It’s important to fight stereotypes to break through this racial glass ceiling
This all suggests a problem with the executive pipeline, with Asian Americans and other workers of color not being promoted to higher managerial levels as their white peers. Fortunately, there are clear steps organizations can take to improve equity.
Gee told Insider in an email that a key step to addressing the problem is for diversity and inclusion programs to “look beyond the superficial numbers and recognize that a review of diversity must separately examine three issues.”
Those issues are diversity of recruitment, or making sure that an organization is hiring a diverse array of new employees; diversity of retention, which seeks to make sure employees from underrepresented groups actually stay with a company; and diversity and equity of promotions, or making sure that representation flows up the entire corporate ladder.
He also advocates that companies use data to get a clear picture of the situation, and create “an executive sponsorship program for high-potential AAPI senior managers.”
Denise Peck, an executive advisor with the Ascend Foundation and one of the authors of the above studies, says she acted as a mentor in one such program at Cisco, when she worked there as an executive 10 years ago.
In that program, about 35 mid-level Asian managers spent six months attending lectures from industry leaders, mentoring sessions with executives like Peck, skill-building workshops, and fireside chats with company executives.
Peck said that the program was successful. She told Insider that “a high percentage of the people who went through this program were promoted to Director level within 18 months of the program, and some even left the company because they became more skilled, confident, and attractive to companies on the outside.”
A few of them became VPs at Cisco, Peck said, “and probably sooner than they would have without the program.”
Zhang Yiming, cofounder of the Chinese internet giant ByteDance, which owns TikTok, is stepping down as CEO, Reuters reported Wednesday.
“The truth is, I lack some of the skills that make an ideal manager. I’m more interested in analyzing organizational and market principles, and leveraging these theories to further reduce management work, rather than actually managing people,” Yiming wrote in a memo to employees, according to Reuters.
“Similarly, I’m not very social, preferring solitary activities like being online, reading, listening to music, and contemplating what may be possible,” he added.
Yiming said ByteDance cofounder and HR chief Rubo Liang will transition into the CEO role over the next six months, Reuters reported.
Yiming, a 38-year-old software engineer who cofounded ByteDance in 2021, has since built a net worth of around $36 billion, Forbes estimates. Despite being one of the wealthiest people in China as ranked by the Bloomberg Billionaires Index, Zhang is extremely private and little is known about his personal life.
Meanwhile, progressive consumer rights advocacy group Public Citizen, also reshared the post, saying Musk should “do a skit where you donate the $126,000,000,000 you added to your wealth during the pandemic.”
Musk is the second-richest person in the world with an estimated net worth of $184 billion, according to Bloomberg’s Billionaire Index. His wealth more than quintupled during the COVID-19 pandemic – Insider reported in January that his net worth increased 545% from January 2020 to 2021. However, his wealth is primarily tied up in his companies.
The Service Employees International Union also replied: “Let your workers form a union without trying to intimidate them,” and linked a New York Times article about Tesla firing an employee for organizing a union, which the National Labor Relations Board ruled illegal in March.
The tycoon also received suggestions from other Twitter users about how his sketch should revolve around him denying the coronavirus pandemic.
Since the start of the pandemic, Musk has spread misinformation about coronavirus case numbers, calling the panic around the deadly virus “dumb” on March 6.
The billionaire also suggested “Baby Shark & Shark Tank merge to form Baby Shark Tank.”
NBC announced in late April that Musk would be hosting the May 8 episode of the long-running, late-night comedy show SNL. Donald Trump was invited to host the show in 2015, which brought the show’s highest ratings in years.
As the vice chair of the Federal Reserve from 1997 to 2006, he steered the country’s economy through the massive financial aftershock of September 11. After serving as an executive and then chair of reinsurance company Swiss Re for two years, he took the helm as CEO of TIAA in April 2008 – leading a financial-services company that manages over $1 trillion in retirement funds.
And in the past year, he’s overseen 17,000 employees through a shift to remote work during a pandemic and the racial reckoning following George Floyd’s death.
“I’m really proud of the fact that during those periods, we kept our values,” Ferguson told Insider. “We have come through these series of crises as a financially strong and stable company with ample capital.”
Ferguson is set to retire at the end of April, handing the company over to Thasunda Brown Duckett, former CEO of consumer banking at JP Morgan. As his tenure as the company’s chief winds down, he’s had more time to reflect on his career. He told Insider that there are four specific traits that define a good leader: expertise, vision, perseverance, and empathy.
Empathy, he said, has been the most helpful in his career as a leader – especially during difficult or uncertain times. Having this trait, regardless of your industry, will make you a better manager or executive, he said.
Empathy, as Ferguson defines it, is the ability to create an environment in which team members can bring all of themselves to work.
“Individuals don’t want to follow someone who’s going to treat the follower as just a cog in some grand plan, a small piece of wood in the large machine – that does not make anyone feel very good,” the CEO said.
Effective leaders take time to embrace diversity, the unique skill sets individuals bring to the table. They care about how their employees feel and cultivate an environment where all people can feel comfortable.
Workplace experts agree that empathy, and emotional intelligence in general, are key to leading productive and engaged teams.
Empathy can take many forms. It can be a leader making work more flexible for employees juggling caregiving responsibilities or expanding child care benefits, as many parents struggle to work and raise their children during a pandemic. Ferguson took both of these steps to support employees recently.
“In a crisis moment, showing some empathy gets people to follow you,” he said.
There’s a clear payoff. People are generally happier when they’re shown empathy. And multiple studies, including one conducted in 2019 by the University of Oxford, have found that happier employees are more productive.
“At the end of the day, the leader probably makes a small number of decisions, but many other people make daily decisions and they must be done in a way that’s consistent with the larger goal,” Ferguson said. “I think that’s best done by people who are really most engaged and are really committed to and bought into the vision.”
Of business models, of workforces, of organizations themselves. Insider’s inaugural list of the Most Transformative CEOs celebrates the four executives who are best meeting the needs of their many stakeholders. They do not merely protect the bottom line. They also devise strategies to respond to changing markets, tackle the climate crisis, and serve as stewards for the well-being of their employees – and the world.
Insider is proud to announce this first class:
Mary Barra, the CEO of General Motors
Albert Bourla, the CEO of Pfizer
Jensen Huang, the CEO of Nvidia
Shantanu Narayen, the CEO of Adobe
Insider arrived at this list by way of both quantitative and qualitative analysis. We considered the 100 CEOs of the largest publicly traded US companies by market capitalization on the S&P 500 who have been in their positions since at least January 2019. We ruled out executives who are on their way to stepping down, including Ken Frazier, the CEO of Merck.
We evaluated companies and CEOs across measures of recent financial performance, ratings on employee review sites Comparably and Glassdoor, typical employee compensation and the CEO-to-median-pay ratio, and the 2021 Just Capital ranking of companies’ commitment to social responsibility.
To choose the CEOs we wanted to feature, we considered the above metrics, as well as a qualitative sense of leaders guiding their firms through a historically difficult year. We believe these CEOs exemplify the traits and achievements needed to survive and thrive in that challenging environment.
Keep scrolling to learn more about what makes each CEO on Insider’s list deserving of the title of Most Transformative CEO.
MARY BARRA, the CEO of General Motors
Without doubt, the most successful CEO in GM’s recent four or five decades. Bob Lutz, a former GM vice chairman
What they’ve done on the vaccine is remarkable. How quickly they’ve developed it, and now getting it out, especially in the US, is incredible. Vamil Divan, a senior biopharmaceuticals research analyst at Mizuho
His ability to connect dots across different parts of the business, across different market trends, and then very succinctly distill the key decisions that need to be made is something I marvel at. Amit Ahuja, Adobe’s VP of Experience Cloud
The CEO of Uber got into a feisty Twitter exchange on Wednesday with a food delivery service rival.
After announcing that Uber Eats will expand into Germany – and a 5.4% drop in the stock of market-leader Just Eat Takeaway – the Dutch company’s CEO, Jitse Groen, insinuated Uber’s strategy was to “depress our share price.”
“Advice: pay a little less attention to your short term stock price and more attention to your Tech and Ops,” Uber CEO Dara Khosrowshahi replied.
Groen shot back: “Start paying taxes, minimum wage and social security premiums before giving a founder advice on how he should run his business.”
Neither company immediately responded to a request for comment on the exchange.
Just Eat Takeaway enjoys a dominant position in Germany after it acquired a local business in 2018, according to Bloomberg. The company also beat out Uber in a recent deal with GrubHub that will give the European company a major slice of the US food delivery market.
Across Europe, 24 million people used Uber Eats to order meals last year, but Just Eat Takeaway’s dominance in Germany suggests there’s room for Uber to expand there. Uber says it will start offering deliveries in Berlin in the coming weeks.
Uber’s head of delivery told the Financial Times that Germany is a “strategically important country” in the company’s push to profitability, and that Just Eat Takeaway’s fees are “extraordinarily high.”
“That translates into consumers and merchants actually being quite desperate for additional options,” he said.
Part of the challenge for Uber will be adapting its delivery model to a fleet management system in order to comply with German labor laws. Under that system, Uber pays a partner company that hires and pays drivers, as opposed to the independent gig-worker model that is common in the US.
Uber, which has expanded from ride-hailing to food delivery, package delivery, and courier service, is scheduled to release its earnings on May 5.