so uh I came up here we scheduled this time to record what are we talking about today [Music] we haven't talked about Uber in a while hmm that's right A lot has happened since we did the IPO episode it's been what four years that is crazy all right yeah let's do it I ordered some food I hope that's okay oh yeah yeah um maybe we can eat while we uh oh dear did someone order overeats oh yeah that's me all right cool um it's got some wine in here oh great it's perfect so can I join you guys actually yeah come on in come on in who got the truth


is it you is it you is it you who got the truth now is it you is it you or is it down say it straight another story on the way who got the truth welcome to this episode of acquired the podcast about great technology companies and the stories and playbooks behind them I'm Ben Gilbert I'm David Rosenthal and we are your hosts today's episode is an interview with Uber CEO Dara khazrushahi where he joins us from the acquired home studio in Seattle and it's been a while since we checked in on Uber they've gone through quite the transformation since our 2019 episode on IPO day in the past 12 months they've done over 30 billion


dollars in Revenue up from just 10 billion two years ago and that's not gmv that's Revenue that is revenue and they have two businesses as many of you know that complement each other nicely in eats and mobility and they've divested anything Hardware International or that's too far in the future or speculative they're even doing something we couldn't imagine at IPO time which is profitability now it's very modest at this point but we wouldn't have dreamed Uber could even get to break even back when they burned David what was it three billion dollars the year before the IPO yeah I think it was the most Capital burned before an IPO by any company in


history up to that point well today's discussion question of course is partly about Uber as we're alluding to here but as David and I evolved the interview format we're putting more of a focus on Dara as a person and sharing some of his craziest stories from throughout his whole career so this is a candid conversation that dives into moments like buying Expedia right when 911 happened how he first met Barry Diller at Allen and Company and what the financial mechanics are actually like of replacing Uber's entire shareholder base or close to it anyway almost in its entirety since joining the company yeah not to mention the Uber CEO recruitment


process which I don't think Dar has talked about anywhere else before no I don't think so either well if you are not already in the slack you totally should join so many smart folks commenting on episodes and bringing new information after we record that we didn't find in the research because many of you work in the fields that were actually covering on episodes so you can join at slack listen to our other episodes on our second show acq2 like a great episode we just did with Jake saber from emergence on AI moats in B2B SAS and without further Ado this show is not investment advice David and I may have Investments


the companies we discuss and this show is for informational and entertainment purposes only on to our conversation with Dara cheers Dara cheers welcome to acquired thank you very much happy to be here appreciate you uh swinging by the home studio on your way home from Expedia board meeting is that right yes how'd that go I can't tell you yeah that's it that's the right answer I thought it was a good board actually Expedia is a good place to start for folks who don't know about your pre-uber background you were the CEO of Expedia from 2004 to 2017. is that right 13 years 13


years it's a long time and when you became the CEO your previous role was you were at IAC with Barry Diller and you guys had bought a controlling interest in Expedia you took it private it was at Microsoft with Rich Barton he spun it out it went public you made a bid to take it private I think over like two tranches there was like a controlling interest and then a full buyout yeah we bought Microsoft stake Microsoft decided it's it's non-core and we bought Microsoft controlling stake and Expedia was a public company but we had a control position and then at some point we decided hey let's bring in the whole thing because we loved what rich


and team were building so this being Acquired and US wanting to dive into a story there's one moment in particular that was pretty insane the term sheet was signed for IAC to buy Expedia before September 11th like earlier in 2001 the deal hadn't closed yet I think there was some kind of material adverse change Clause they called it yes you were allowed to pull out of the deal yes yes I mean what could be more material than September 11th for travel but you guys didn't like take us through yeah we did and we knew we had the option to get out yeah and at the time you know one of the values of an option


is time value right you don't want to exercise an option before the last uh moment that you can and Rich called I think Barry at the time and he said listen September 11th happened business obviously has fallen off cliff we think it'll come back but I don't know and he said the place is pretty unstable now because no one knows whether the deal is going to go through or not go through there's this Mac Clause so if you want to get out like it's fine Richard's very confident he's a great entrepreneur it's fine if you want to


get out but just like let us know you know if you which which way you want to go oh God he's good and he's really good which really he just to your point about time value he just wants you to make a decision and so he's like oh we'll be fine I can't imagine that if you're at the company everyone's like what's happening right there's a future a company's thrive on certainty on kind of Rhythm Etc and it was a tough macro position to be in and in the micro position of what's going to happen Expedia so I can imagine what he was going through so we got together as a team the ISE


team and all of us were kind of talking and you know there's no clear decision to be made there but Barry respected what Rich asked for and I remember the meaning we're like all having all these debates and I think it was Barry who said it he said you know if there isn't travel there's a life so like you know I've really like looked at each other we're like let's go for this let's let's do it and right after that meeting Barry called Rich and said game on no changes to the deal at all like exactly as no changes to the deal it's like we're gonna do this but Barry his passion is travel right and I think


he was right which is just when you're in the center of the storm it looks like oh my God life is going to be over but things revert to Norm I mean you look at like the pandemic and everyone's looking for all these long-term changes and everything reverts to Norm and I think that was the wisdom at the time although when you're in the middle of craziness it sure doesn't feel calm but after that we said we're in it got Rich's stability that he wanted and in hindsight it was a genius decision did you ever think you would uh then live through another moment like that over the last no and I like this one to be finally the last one never want to go through something like


that again but it made us stronger as a company ultimately good for everybody the past couple years yeah I think the pandemic was incredibly painful in that sitting together as a team 85 percent of your Mobility volume which was the profit driver of the company falls off a cliff and other CEOs you know they lost a ton of business but most of these businesses were profitable we were losing two and a half billion dollars and then it just got way worse so it was a very tough situation to be in and we uh had to cut a lot of overhead we had


to cut out businesses that we thought were core of the business you really had to bet on what's core what's non-core but it was a huge accelerator as it relates to or each delivery business and I think that discipline in hindsight has been great but I wouldn't want that as that shouldn't have been the the precipitation yeah exactly yeah yeah all right before I let David bring us to today already let's go back down memory lane so how did you meet Barry Diller so I'm at Barry Diller when I was an analyst at Allen and Company which was my first job out of college it's an investment Bank in New York City specializes in the media and


entertainment sector now much more Tech they've made the pretty cool transition and I was a lowly analyst and I got assigned to this deal where Barry Diller who at the time was running QVC he was the CEO of QC which was home shopping and he had run Paramount and Fox Studios before that correct Panama first and then he ran Fox for Murdoch and then he decided he wanted to be his own boss and at some point John Malone I think had control of QVC and Barry got the job to run the QVC and have control because he wanted to be his own boss and who can blame him for that God to be in the room with those two characters as they're negotiating it


was golden for a a kid like me and so at the time summed a redstone who was running Viacom had come to an agreement to buy Paramount Pictures which was Barry's old home and Barry thought that he was getting a steal so he decided to go after Paramount in a hostile tender offer to come in as kind of a third party bidder and it was a huge move because Paramount was bigger than QVC you know so it was like The Minnow swallowing the whale yeah it's like uh Cap City exactly exactly and I was the analyst on the deal and it was a whole kind of bidding process you know Barry would been and


then Redstone wood bit up Etc multiple steps there was a a big court case that was pretty important in terms of did Barry have the right to come in and actually bid on this thing and break apart a negotiated deal the person who I worked for the VP Etc she got sick and so I had to kind of Step Up and work with Barry directly like making these pictures to bury you guys still a couple years out of college at this point I was like two three years out of college and at some point Barry's like you know they're all these complicated numbers that you put together and Barry want to know like who is the person


running these numbers and he's like I want to talk to the person running the numbers Herbert Allen comes and he's like print out your model Barry wants to talk like I had to print out my whole lbl model bidding model Etc what are you feeling at this point like holy [ __ ] but you know what the only question in my mind was when am I going to get fired right it's it's like this is a disaster and now this is not supposed to talk to CEO but like in hindsight I've seen this patterning with Barry which is he wants to get the real stuff he doesn't want


a version an edited version of reality because then it's just an edited version he wants to go to the source and he wants to know like there are these numbers and I'm making at the time one of the business decisions of my professional life based on like these pieces of paper who's responsible for this and I want them to explain it to me so for me it was like you know crazy luck but it was also it's part of Barry's process which is get the unvarnished truth because that helps them make better decisions but then I met him and I remember thinking hey if if there's ever a person that I want to work with like I want to


work for that person do you think there was something about you and the way you presented that made her ballot and believe that you would be customer ready and you could go and speak to you know one of the biggest media Moguls of our time you know herb was a big believer in betting on people and not hierarchies Etc I don't know honestly I remember the advice that he gave me is BET on people not on companies and that was a patterning that he had through his whole career he was very loyal found a good person and then would bet on that person and Barry's the same which is like he'll


throw a young person off the deep end and you'll either sink or you swim he's selective in who he throws off you know what depend Etc but both of them were willing to give opportunity outside of like regular scope or regular process Etc and it shows you know they build incredible loyalty in terms of the people who know them how did you find your way to Allen and Company I know I'm just like pulling at threads going backwards here but uh I was um it was a very considerate decision which was I studied engineering at school and I actually had an Engineering Management um job lined up at a paint factory and


then I fell in love with a commodity Trader in New York City and at the time I'm like I need a job in New York City what kind of job can I get and it was Investment Banking my brother worked there uh still works there right still works there so I got the job and chased the woman of my dreams and broke up with her six months later but you know I got a job at all in the company a pretty cool career well I have you written her a thank you note because you'd be running a paint factory otherwise no that's a very good point I owe it all to her but based on observing you and your history and everyone else in your family it would become like a


paint factory that would then like buy all the other paint factories then expand up and down the stack and then figure out how to add like 15 other businesses and it would become this like beautiful conglomeration of something I don't know you know you could be right or I could have just gotten totally lucky by falling into all on a company I really do think it was just things came together and everyone's career who's successful It's a combination of luck and opportunity and taking advantage of the opportunity and yeah I just got lucky so that's like a nice thing to say there are a lot of other people that


could have lucked their way into an allen and Company job and then not turned it into an incredible performance with one of the most important people where your model needs to hold weight which is Barry Diller and that exact Crucible moment in time what do you say to young people when they sort of ask you this question about how much does luck have to do with it and how should I be the most prepared and how can I seize opportunities when they come up I think I always tell people that the most common mistake that I see in young people is that they over plan their career and like oh I want to do X or I want to


be vice president or I want to make so much money by a certain time and when you over plan your career you know that there's this human bias which is to look for signal that agrees with the plan that you have and ignore it everything else that doesn't agree with it so my advice for young people is like don't over plan you never know what opportunities are going to come up I plan to stay at Allen and Company my whole life it was my place my brother wound up being there but being open to possibilities being open to Opportunities and then when you get that opportunity going all in you know


like it's just don't hedge if you're gonna be in something go all in and do what's required of you and then like 50 more like blow people away and then you know tomorrow maybe something else comes up and you'll get there but like while you're in you go all in but at the same time like keep your eyes open because you never know all right listeners for our first sponsor of this episode we have a new member of the acquired family that I am very excited about common room common room is the platform that ties community-led growth and product-led growth to revenue yes common room solves a problem that tons of businesses have


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tell them that Ben and David sent you all right so we're going to catch back up to that Expedia era 13 years you have a pretty wild competition with and I think you learn a lot of lessons from watching booking just crush it Top Line profit margins rate of expansion everything about it booking built a hell of a company incredible when you're on the Expedia side of things and then you get a fresh start at Uber how do you take those lessons with you and what did you learn God I learned so much um booking was an execution machine and their focus when we talked about Focus


was hotels hotels and Expedia was much more it started with air right in hotels was to some extent secondary and so I think one of the lessons is like hey go off to the larger market and if you're a Marketplace business go after fragmentation of Supply which is if you think about hotels there's so many more hotels in the world than there are Airlines so I think they focused completely in the right area and built a global business first uh and just were an absolute execution machine the other area was that Expedia was


probably more focused on building demand kind of consumer demand brand Etc booking was more supply-led and especially in the states nobody knew what bookings totally but it's like for for them it was about building up the hotel Supply and as you built up the hotel Supply every Hotel became another piece of data that you could Market through Google or meta search and if you have a hundred hotels in a market and you expand that to 200 hotels on the market that market is also going to convert better so not only do you build kind of a new segment of demand but then if there's a search for you know hotel in nice


nice becomes a better product and convert more if it can convert more you can get more traffic from Google Etc they play that optimization game like no one else and for me the biggest lesson as I came to Uber was Uber's Marketplace business very very fragmented Supply base right it's 5.6 million drivers and Couriers who are earning on our platform and a few million restaurants yeah close to a million restaurants and for us our growth is also Supply LED so if you think about post pandemic and one of the reasons why I think generally we're doing really well and gained a bunch of categories share versus lift coming out


of the pandemic was because we really focused on bringing those drivers back to the platform building our service Etc and it was a supply-led way of building the business which definitely was learning that I took from with booking the you can build a market uh of a say a geography for hotels and then use that to build a vertical you can do the same thing at Uber in a way that your competitors on both sides of the business can't right because you can cross Market exactly rides and eats exactly and especially in the US there's a much more crossover between couriers Who deliver food and then drivers who


draw people there's a much larger crossover and we can actually use eats almost as a recruitment tool in that moment when someone says I am interested in earning money you know gig money on demand Etc with all the flexibility Freedom Etc the faster you can get that person earning money the higher the conversion rate and because of eats you don't need to get your car inspected you know there's a lot of steps additional steps background check Etc that's required for driving those steps don't necessarily need to be completed to deliver food you can get people into uh the food ecosystem they can start earning on the


Uber platform and then you can upsell them into additional opportunities driving people shopping Etc it's a structural recruitment Advantage we have in terms of building up Supply and as you build up the supply the liquidity in the marketplace gets better you know surge comes down pricing gets better ETA gets better your ability price gets better and the demand shows up to some extent so everything you just said that's always been like the the story yeah right it seems like in the past few years though especially relative to your competitors it's actually become more of a reality


and I'm curious maybe you talked about booking being execution machines like what what is the Uber execution machine looked like since the pandemic to maybe make that more of a reality well I think that there's always a delay between inputs and outputs right which is you you can start changing the inputs in terms of how you build a system Etc it takes a while for the outputs to become emergent we did take a big step post-pandemic once eats got to size to merge all the teams together the technical teams together the marketplace teams together uh single earner team Etc when East was small it needed its own


dedicated teams because if you had one team doing rides and eats like all the attention would go to rides once we combined the teams that allowed you know One technical team to really focus on the demand side eats is the recipient you know so the rides business has most of the audience and generally we move more people from rides to eats so it's a it's a almost free customer acquisition tool for for eats it's your largest customer acquisition channel for eats right yeah we we get more new customers from Mirage than we do from Google meta Instagram you know all of these other channels come back pretty nice to own your own


it's awesome it's crazy at a quarter of the cost so it's like it's it's a proprietary Channel and it's cheaper and um how do you do like charge internally for totally oh yeah totally totally it's an even advertising business right so it's an ad unit like any other exactly exactly and and so and we're gonna have to start charging each other for the plugs on it okay we can tell you a little about internal pricing mechanism but you know all of it sounds great but the fact is that whatever picks soul that you put on the rides app to promote eats is taking something away from the rides at right so there's there's a bunch of


experimentation that had to be done which is what are the right surfaces what are the right messages how do you target it how often do you target it Etc so there's a there's a bunch of Machinery that you have to build to do this stuff successfully and for the benefit that eats gets to be significantly larger than the detriment that rides gets and to not get in the way of the rides experience you know like you don't want to screw up that experience so to the question of like why is it happening now is one it looks great on paper but then to build the Machinery to actually do it effectively takes time


and then you know if eats has this new customer acquisition uh Source every year new customers for eats account for less than 10 percent of the business of the overall business because it's a big reapee business so in year one hey is it nice yeah it's nice but it doesn't really show up to investors external investors but then once you know it's uh the the saying compounding is the seventh wonder of the world the eighth wonder of the world what's happening now is the compounding is happening right so we've had like three years of the Machinery working so one year may not be noticeable two years may not be noticeable but three four


years what we're doing is essentially our margins are growing faster than our competition because we have a bunch of proprietary traffic that's coming over and then on the right side there's proprietary Supply coming over from eats again compounding is it still that um Supply acquisition cost is bigger than demand acquisition cost for you guys yes yeah yes I mean it it is we are a supply-led business at this point um probably two years ago we could have added uh 25 more drivers and Couriers into the platform they would all be like super


busy instantly right now our supply generally is growing faster than demand because it's catching up to demand and the average driver who's on the platform is working more because experience is better earnings levels are are pretty are really good so at this point probably Supply is still trailing Demand by you know five percent or so but the marketplace is now getting to a point where it's balanced but the it's that compounding that really starts working I was reading through the most recent earnings and you have a chart where on average over the last five years or so drivers make more money per hour if we entered some economic environment where


a whole bunch of people were out of work and they wanted to become Uber drivers but that would make it so that the average earnings across the whole platform would plunge because you have a whole ton of new drivers coming on would you guys sort of gate it and be like hey we want to like make sure that we don't sort of flood the supply side of the marketplace no because one of our core philosophies is this is an open platform and if your background check comes in okay Etc then you can have access to earnings opportunities that's a core belief for us the economics take care of themselves


right when you look at mid-cycle long cycle if earnings come down on the platform then it becomes a less attractive platform to drivers and they will do something else there is this counter cyclicality about our Marketplace which is during really good times it becomes harder for us to recruit drivers so the cost of Supply goes up so while revenue and gross bookings are growing and unifolumes are strong our supply base becomes more expensive during softer Economic Times you get more drivers coming into the platform ETA has come down prices come down the price becomes cheaper so actually our


unit volumes accelerate so if you look like our q1 unit volumes they grew 24 versus 19 in Q4 so we accelerated you know trip growth which is not something that you see at our scale but it's it's some of this stuff working out right so sort of the Invisible Hand of the market theory that sort of self-regulates this for you yeah it's not a theory it happens yeah I guess like yeah it's this very cool experiment yeah economists like to talk about like things in theory but like you actually have a one of the largest data sets in human history of you know people doing work and other people consuming Services yeah if you ask our


top Economist at Uber he would say that we actually don't control the price to the consumer that is actually the spot price for this kind of Labor the marketplace sets based on the supply of labor coming in and the demand for transportation and so there's this you know people say like Uber's setting prices he'd say we're not setting prices the marketplace is setting its own price so what do you do then like you have to have some levers at your disposal you're getting a lot more profitable yes I mean certainly I think in 20 whenever we did the IPO episode Uber had lost like close to three billion dollars the year before


going public you said in the in the episode that it was the most that a company had ever lost before going public in history yes I don't know if that's true but uh attributed to Ben Gilbert at the time but now order of magnitude that's true uh depending on what profitability metric you look at you guys are a break even or slightly positive business and increasingly getting more profitable and looking like a self-sustaining business so what can you do then if you aren't in the business this of deciding what a ride should cost well I think we're in the scale business right which is we essentially wire up every form of


transportation of whether it's people or things and you know it's increasingly people and then shared uh taxis Etc right they're four and a half million taxis in the world who would imagine that Uber will be working with taxis but we're going to wire up every single taxi in the world right and then on the curbs and the capulices and the uh flywheels and by the way we work with them right A lot of times we will connect through them as anti-miridaires again to wire up these taxis and then we've gone from food to uh alcohol to groceries Etc and then we have a freight uh business as well so the more we wire up the more we get the events now I'm sorry you have


boats now we got boats in Mykonos which is pretty cool we have the uh boats on the Thames too you know it's just like if it moves then it carries people and things we're going to wire it up and make it available on demand that usually brings in the demand for transportation Etc and then it's like math you have to do it in a more and more efficient way I think one of the secret sauces that we have is we have a very large and capable Marketplace team these are ml Engineers who are building out the systems that match price all of this connectivity yeah and when you're


you know working over an ecosystem of two billion transactions a quarter the data sets that that we have the experimentation that we can do in terms of what's the most optimal match how do you price Etc it's just a bigger database than anyone else so every year when I can't speak to who our competitors are matching and pricing but every year matching and pricing probably improves by five percent a year so you improve your the marketplace throughput by about five percent everything else being the same and that's like free growth and when it's on top of you know call it 120 130 billion


dollar run rate it gets big and again it's compounding like every year this Machinery gets better so then just to make sure I'm understanding right the reason why because you talk to anybody and and they're like you're like oh what should I ask Dara and they're like ask them why Ubers are more expensive than they used to be and I'm like because it's a good business now but actually I I don't think it sounds like that's not actually the right answer that the reason rides have gotten more expensive over time is a inflation but B just that there is more demand for those rides than there is Supply to serve them correct the cost of Labor has gone up


right I mean how much you have to pay for any kind of blue collar job you know everybody's talking about it right a bunch of retailers we're having trouble hiring enough people uh restauranters Etc and then it did become more expensive to bring drivers into the Uber ecosystem earnings expectations have gone up and by the way I think that's a healthy thing right it's if you kind of step back you know the increase in salary and wages for Blue Collar jobs hasn't kept up with the salary of like Tech workers or you know Capital Etc so I think the catch-up is a really healthy catch-up that is the reason why Ubers are more expensive now now in this


environment where we are adding Supply faster than demand because the supply is really coming into the marketplace prices in Uber now year on year or down airport in San Francisco this morning was the cheapest it's been in months so pretty cool well specifically not thank you thank the invisible Handover thank you Mr Market yes exactly how has the complexity of uber relative to Expedia matched up with your expectations coming in so there's complexity in terms of all of the stakeholders that you have to think about


and that's like it's a difference between chess and like four-dimensional chess it is like Expedia Travel Agency you're bringing demand to your supply base Etc and and you have to think about the travel ecosystem but with Uber Uber is like a incredibly important service to the cities of the world and also Expedia you weren't providing the service yes you were a we were demanding a Marketplace layer that you're not operating the airplanes exactly you're not you know making up the hotel rooms exactly you know the drivers are providing the service right but it's we're much more responsible end to end but you know you're responsible for your


customers we have a very very important responsibility to driver and career communities over 5 million people who are making and earning or making kind of a side earnings on on Uber and then the responsibility in terms of like regulators and governments Etc that consideration set is is just so much bigger so from that standpoint it's tough but also really interesting and satisfying in some ways were you ready for it was I ready for it yeah no I had no idea is this one of those like if you knew you wouldn't have done it but now you've done it and so all this value's been created and like great I'm so glad I did


it it was a friend of mine's like hey are you having fun I'm like no I'm not having fun I love it you know like the job is too hard to like it's not fun but it's so cool it's such an interesting space you really feel like you're having impact everyone at Uber like we always talk like you don't come to Uber for easy like you don't come here for an easy job it's complicated it's hardcore people work their asses off but like you love it and it's not fun like it ain't fun but people love being at the company that's something I didn't know and they


and then the the dynamic real-time nature of the marketplace and how we balance the marketplace and the pricing Etc is unique right it's Thursday night there's a Taylor Swift concert all hands on deck we gotta figure things out that operational nature but how Dynamic and fast it is it does a uber HQ plan for Taylor concerts ahead of time as they're happening yeah I mean Uber HQ doesn't but there are Ops teams on the ground yes and you know they're the heroes like they're on the ground City by City work their ass off and and they they are they are kind of where the rubber meets the road so to speak to use a to use the


transportation metaphor so David asked this interesting question that I want to dig a little bit deeper on that were you ready for it what kind of diligence did you get to do on the opportunity when this job came on the market in the national news in a very prominent way in a very short time first when did you first get contacted about it like how did you how did you enter the Uber orbit so um I was reading about the news just like everyone else was right it was just all over the place and it was it was crazy everything going on what led to it you know the the


battle between Travis and Benchmark and all that stuff it was it was fascinating as an observer I never ever ever imagined that I would then play a part and a Headhunter call me about this role so not a board member directly a Headhunter head hunter called me it was a Structure process and I'm like no way like no thank you goodbye yeah I love working for Barry like it was I was good this is fun yeah and then and then we yeah exactly it was fun and then I I was at the Sun Valley Conference the Allen and Company Sun Valley Conference and


um having drinks with Daniel eck and he's like Dora you know did you get the call from a Headhunter about the Uber job uh I think you'd be perfect for the job and I didn't know what the Headhunter why the Headhunter called turn out Daniel I'm like dude why would I ever do that like I'm happy like why why would I ever jump into that mess so Daniel gave the Headhunter your number yes and and I'm like no way no way and he looks he looks at me like with those like piercing Scandinavian eyes he's like Dara since when is life about having fun it's about having impact this is


important like you can do this and I'd had a couple of drinks and the alcohol was flowing and we were having fun and my wife says like yeah you can do this I'm like yeah I could do this so uh the next day I called they had Hunter back and I said let's talk and the next step was for me to meet a board member and we had dinner and he was very charming and he kind of started the the recruitment it was pretty cool and how long between then and when you accepted the job God I I think it was about two months it was over the summer and keep it secret nobody knew I told him I said listen up front


um I have a job and it's a great job so the nanosecond that my name shows up in the news I'm out of here so I just want you to know like the nanoseconda shows up in the news I'm out of here but I had to be realistic that it could show up in the news it's amazing that that it didn't so actually at that point I called a Barry because I couldn't put bear in a situation or myself in a situation like I'd work with him 13 years probably 20 years at IEC and then even before as a banker like he and I have an incredible relation I owes like so much to him I couldn't take the risk of his seeing it


in the Press and you know the consequences of that um and and the and the loss of trust so I called him up as a Barry I don't want to call me about Uber um I'm going to talk to them and he's like you're effing crazy hung up on me I told I told say like oh my God I'm gonna get fired and nothing Dead Silence you were going to get fired because what was Barry gonna do like step in and be CEO himself he wasn't good maybe he would I didn't know we worked together for a long time call him the next day


he said uh uh speaking as the chairman of Expedia it would be a real mistake but speaking as a friend I understand why you're interested I would be too how can I help and that's the definition of who he is yeah you know because we weren't in the news it was like we gossip about it he's like oh did you hear like Meg is this and so it was a fun thing that we gossiped about but he actually there was a point in time when I had to make a presentation to the Uber board this was like my big presentation and and I heard that the other candidates were coming in


to present as well so this was a big day and I told them I think it was a Saturday or Sunday that I'm coming in making presentations like show me the presentation yeah it was a PowerPoint so I showed them PowerPoint and he actually helped me in the PowerPoint he's like this is good this is good you have to add this page uh so it's just it shows you the kind of person he is which is he put friendship in that case over his own business interest maybe maybe it was sick of me I don't know but it was just calculated yeah it just shows you that is true personal loyalty yeah and there's an element to it too where if he


got to collaborate with you on it then there was a chance you would stick around on the Expedia board and and remain a friend of the company even though you're not in the seat yes and I still am on the board it's you know I love the company but it's weird being on the board as a former CEO like it's it's a strange experience did you do anything to prepare for that no like usually my life it's like stumble into something and then figure it out you're also a busy dude yeah but it was I wanted to stay on the board I wanted to help and you know the company's going through its own Journey now so hopefully to Greatness did you consider I mean this


sort of famously was an issue in the Microsoft transition and um has been an issue in the Disney transition did you consider hey actually maybe it would be better for the company if I didn't serve on the board just to give enough space for new leadership I talked to Barry about it and it's ultimately up to him right and I think he decided that he wanted me there and I try to be helpful but but I think it's absolutely right which is it you know the job of the new CEO to some extent is to be the CEO and do something different from the old CEO and like that's definitional and the you know a little bit about that


yeah exactly there could be hesitancy at a board meeting Etc because the old person's there you know and so that it was I think on a net net I trusted Barry's judgment it does feel weird sometimes because I've moved up but it's working I think it's working but it's complicated I bet all right listeners for our next sponsor we are excited to talk about one of our favorite companies vouch and some big news that they are dropping soon they are officially launching their AI vertical yeah so if you're wondering what does it mean for your vouch to launch a new vertical well they start by diving deep into the industry in this


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all right so back to the reverse diligence question yes what did you get to learn about Uber and I mean to directly ask did you get to talk to Travis like did you get to talk to any of the sort of departing leadership well I talked to Travis a couple times I talked with Ryan and Garrett who were the other Founders I talked to a couple of other board members I did Financial diligence Etc and you know for me it was ultimately about the opportunity it's such an important company I always tell people like I'll look for three things right it's do you work with people whom you like and you can learn from can use an individual make an impact and


then is the place or the company that you're at going to make an impact I wasn't sure number one but I was a CEO so I could build my own team and as it turned out there have been like great folks there who have stayed who were there before me and then new folks like uh you know Tony West and Nelson Che that we brought Etc so the new teams like a combination of new and all which is great and definitionally as a leadership team we can have an impact on Uber and Uber is a company that it's Unique in terms of its impact on the ground on the city so it all checked off in the financials


yeah it you know it was still a really young company so the financials for me yeah right yeah less than that probably yeah it was just about 10 years okay yeah there you go you know better than I do I imagine you had to have been feeling like God if we can make this work the opportunity here is just like absolutely you know alternowns are hard Tech turnarounds are especially hard but I think Uber had a global position a talent pool a brand that was absolutely exceptional that was just going through really really hard time it was a verb yeah exactly and so that that was


actually the advice that my dad gave me like when a company who's a verb asks you to run it just say yes I'm like all right so sometimes you can over complicate things and it's like hey do you want to take a shot I want tick shot it's so funny you say turn around I literally it never occurred to me that you could construe Uber as that but it might be the only turnaround in history where it was growing incredibly fast had 10 billion of Revenue had some of the smartest people in the world working at it had all this momentum of course burning money catastrophe in the boardroom catastrophe in the c-suite so it is a turnaround in that sense and I


was losing a bunch of share to lift yeah moments Etc so that that was a tough thing which is you're burning a bunch of cash and at the same time you were losing category position to you know was a tough competitor and a strong brand tell me if you agree with this statement in the U.S you no longer really have a formidable competitor in ride sharing but in food delivery you have a tremendously formidable competitor I think Lyft is stronger than people give you credit for yeah it's definitely going through a tough time I mean the new CEO is you know he's like moving


he's he's making moves he's super aggressive we'll see where that ends up I feel way better today than I did five years ago but I wouldn't count them out Lyft is such a great example of a story we see over and over again unacquired of like it's never over till it's over it's never over yeah it was over for Lyft yeah and then it was not over and you know now they're having a tough time we'll see but doordash is a tough competitor like doordash is larger than we are in the U.S we are focused on keeping share in the U.S and then gaining a bunch of share outside the U.S and then over a period of time using the


structural Advantage you know one build profit pools outside of the US use that to attack the us over a period of time and then use the structural advantage that we talked about in terms of customer acquisition over a period of time to hopefully gain category position against doordash but they're a tough competitor we respect them we don't like them but we respect them is there something in particular that you think they've done I mean when I think about them I think about what you were saying about booking I'm just like being an execution machine uh I'm curious from your perspective I think it comes so like these company biases which are


pretty important which are pretty important they made a bet on the suburbs and they made a bet on selection restaurant selection Uber was an urban company we operate in the big cities Transportation Etc the business and suburbs is much lower so we want to leverage a customer base that was an urban customer base so we went after the Urban restaurants Etc and Uber was about cheap and fast right so the if you think about it if what you're trying to do is optimize for Speed let's say delivering 15 or 20 minutes the radius of restaurants that you can deliver from is smaller so you


make a you make a sacrifice in terms of selection in order to optimize for Speed as it turned out one the suburbs in terms of food are bigger uh than a lot of families than cities yeah big families Etc big demand Etc so we because of our Urban biases we didn't look at the overall Market we're like what's our Market how can we leverage our demand Etc that I think in hindsight was a mistake and this is like a 2013 to 16 decision that everyone's still sort of living with now I mean now we've corrected that yeah but listen it was uh I was running this the same Playbook 2018-2019 too so I don't want to blame it on oh this is you know it


was happening all along it's just like usually you focus on the things that you're good at and we are really good at Urban and we're really good at fast and cheap right and uh we now are much more focused about building out selection uh as we built out selection in urban centers a category position versus doordash is actually quite constructive really strong we are looking to break into the suburbs uh and there we got some work to do and and the suburbs are a very very strong position it's kind of their profit pools right and then we're building our profit bills outside and international and you know kind of the yeah the battle is


happening in the big city yeah it's interesting I uh I would imagine the suburbs there are so much more weighted to food delivery than ride share total hit yeah totally now we are expanding garage air into the suburbs now and it's a pretty fast growing part of our business so maybe like we'll get there over time but definitely it was an early aim of the business we we now specifically are aiming in certain suburbs and you know you have to build out your career base your restaurant supply demand so all of it has to come together which is difficult and doordash has done a good job yeah not the end of the story though I'm curious there's so


much of this strategy that if you connect this the dots looking backwards and to use the Steve Jobs parlance it just makes so much sense this uh expanded internationally leveraged the fact that you're sort of the leading Global player or generate cash use it to compete domestically eats feeds ride sharing which feeds you know you can sort of use this flywheel we haven't talked about freight yet but I'm curious like of the three pillars today of ride sharing ubereats and freight and divesting everything else all the autonomy all of the self I guess self-driving cars is autonomy well so did you guys


bikes and scooters yeah planes right yeah Elevate et cetera yeah what of today's strategy was in your pitch to the board when you were joining a CEO and what is an emergent thing that's happened while you're in the seat so the pitch to the board was really different in that it wasn't about strategy it was about operations and how you take the business to break even and profitability Etc right it was it was presenting myself as a mature operator and my track record at Expedia I think now things have changed which is we have become much more focused on those on those three segments and if you look at


rides we have a number of growth bets which is there's this base business uberX which is like going to be 50 over growth then about 15 of our growth are international countries where the business model as we had it wasn't legal so the attitude of time was well if our business model is legal then like we're not coming in until we're invited in and we took a different attack which as well what business model is legal and let's adjust our business model to the country versus have the country adjust to the business model and once you're in you and you build trust within


a country and you build a voice Etc maybe then the business model can change over a period to benefit you know drivers couriers Etc so like we're in Germany we're in Spain we're in Japan we're in Korea we're in Turkey there's a bunch of countries that we're expanding into with tweaks of the business model to make sure that we're expanding to into those countries the right way and then there's a whole host of new bets that we're making in terms of Transportation taxi which is huge low-cost hailables two-wheelers three-wheelers Uber for business Health uh Transportation um all of these different segments that


whole kind of the new bets portfolio will be 35 of our growth so if we do it right we will 50 of our growth will come from these new initiatives that really didn't exist and then on the each side obviously it was about food and kind of the general expansion of that business but it's really about getting into the other categories getting into grocery liquor Etc and one of the parts that I'm super excited about is we've always had kind of um call it an integrated offering if you think about eats there's a Marketplace offering you come to ubereats and eats is bringing you demand


and then there's the Fulfillment of that Demand right the my green wine here and delivering it right that's delicious by the way that has nothing to do with demand necessarily but it's filament yeah these are two separate businesses that got stapled together exactly so so we have now we're separating the tech stack right so that now we can offer we can go to Merchants to say if you want Marketplace great but if you want fulfillment we can offer you fulfillment in a separable way so for example Walmart isn't in our Marketplace because they're Walmart they have an incredible brand


Etc but they use our fulfillment services and more and more that our vision is we essentially want the local grocer to out Amazon Amazon like every single local business can deliver same day which is better the next day um if we can connect that to Marketplace that's great but that can also be a separate part of our business that can grow and Thrive it's so funny how much of this you know goes back to like the original 10 years ago 15 years ago vision for Uber it just takes so long to realize these things it looks great on paper and then you know real life is a lot more difficult right are there activities that you've


sort of thought about where you you used to need to do something different or counter position the market in order to be successful where now you sort of look around and you're like actually in this area where the incumbent so there's a different strategy that we need to lean into as an incumbent our working with taxis was was an interesting twist right which is to some extent they have been definitionally the competition or we have been the competition or the um Challenger to those incumbents um at some point we became much bigger than taxi but in the end if you remove


yourself from the emotions Etc and you know we're competing against X or Y EP we're in the job of wiring up you know vehicles and drivers who want to drive people to places and that includes tassy like they're four and a half million of them and if you take the hypothesis which is the the days of old where you wave your arm to you know wave a taxi down like things are changing then it was a move that was obvious but at the same time like the beauty of Ubers when you get into the actual challenges like for example we launched Taxi and the way that we match generally Uber


is one to one so you uh hail for an Uber we will match you we'll make an offer to a specific driver driver says yes driver comes pick you up Etc what we found in taxi markets is that when we made the one-to-one match if we weren't integrated into the taxi meter and that's something that we'll build over a period of time the taxi might be full but the acceptance rate of the taxis was much much lower and we didn't know why and if the acceptance rate is lower you might wait for a long time to get matched because we're going to come send offer offer offer offer before you get a match so the team built a technology blast dispatch which is


instead of a one-to-one match it's a you know we'll make a dispatch of 10 different taxis one of them accepts just like the old taxi dispatch system literally like it was you know there's a pickup on 54 Leonard Street and someone says Joey says yes I got that one yeah I got that one so like what's what's old becomes new what's new becomes old but it what's been interesting is there's a simple idea but then building out the tech infrastructure to be able to fit to that particular Market becomes a challenge but also it's an opportunity which is now for some of our competitors to copy that one is it's taking a lot of tuning


to actually get that experience to be excellent there are some markets where we're mixing demand you know you might click for an uberX a taxi might show up right is that a good thing is there a bad thing it improves Marketplace liquidity and things that seem very simple on the surface to actually make the magic happen of pushing a button and the car shows up in five minutes and you get great service it's actually pretty difficult Tech to build on the ground it's really cool that is cool I have another sort of corporate structure question that I'm curious about


I think you guys between when you took the job and today turned over basically the entire Uber shareholder base I'm sure there's some people that still hold their shares from those early days but what is that like at the scale of a 70 80 billion dollar market cap company turning over a shareholder base in its entirety very painful it was the displacement in terms of shareholders it was tough right and there's a certain cohort of shareholders going after hyper growth Etc especially in this marketplace where it's much more about discipline growth profitable growth Etc that that changeover has been


difficult but we now have a set of shareholders like the fidelities of the world Capital Morgan Stanley Etc that have the capacity to own a lot of shares way more than they do today and there's a consistency about it as we keep delivering they keep upping their stake and we're now seeing a stock price that generally is is working but I'll tell you when we're in the middle of it like it was it was tough you know after the IPO after the lockup stayed Travis sold all his shares and those days like those were numbers probably 15 of the company they're moments when you remember that


stock prices are a function of supply and demand and when 15 of a company's outstanding shares hit the market all at once or two percent or two percent or what yeah right like that's yeah well I mean like I think in hindsight um I think it was a good move by him because it created separation he wanted to move on and so by in hindsight I respect what he did and in hindsight like I didn't see it at the time I was like pissed right and we were panicking oh my God Travis is selling what does that mean Etc like and you know there's this everyone wants to create drama around uber so it it's difficult as the leader to keep the team


focused and believing right because it's very easy to keep score based on the stock price and the stock prices that's definitely moving in the wrong direction and Travis you know whether you liked him or not you respect him he's a really smart person he's a founder of the company like that was a tough time but I think we're now in a good place which is the shareholding is moving from either some of the startup folks or hedge funds to fundamental long only players who hopefully they'll be shareholders for the next 10 years one of the things that we heard from many people as we were researching that time period was just the


immense uh degree of the stakes involved for the whole ecosystem like this went beyond just the drama in the Press that's one level right but like the number of University endowments who through the Venture funds that were invested in Uber had large portions of their whole university endowment that were dependent on the private Mark of uber and and fund of funds where some compensation had already been paid out as if this was a liquid security but it's not a liquid security Sovereign Nations that were you know not dependent but like paid attention to this sure were you aware of that did you feel that


oh yeah obviously Benchmark and Travis were in this power struggle but there was this um heavy feel like when you talk to The Benchmark folks there's this responsibility which is that this was one of the hits of the century like this is a category defining um company and Investments and benchmarks had a lot of good ones but this this one was a great one and while I wouldn't say it was a probability there was a much higher than non-zero uh possibility that it could all go it could all go poof so I think that was a very very heavy weight


uh on Benchmark and and some of the other startups Etc which led to all events that ultimately led to like they're bringing in an unknown Outsider like that those are some heavy decisions to make I wasn't there I was kind of yeah at the tail end of all that drama and but then you had to deal with the shareholder-based turnover which was like the real the unwinding of those that expectation well one one cool kind of um it wasn't cool at the time but but one one really interesting kind of dynamic that that played out when I got in was like there's all this stuff happening


like it had to go to London tfl they revoked our license and there had been a data breach and we had to deal with that and just like it was craziness right and at the same time softback was looking to invest in the company right and this is the vision fund days and you know SoftBank the only way they came in was heavy like there was no there's no place let's talk yeah and um the the issue that we had to deal with was one where Benchmark and Travis and and the founders they all had high vote shares and they both wanted to control the company


and if you sold your shares they would flip into low vote so there was this game of chicken which is SoftBank wanted in and in typical Masa fashion it was like Hey if you don't let us invest in you we're going to invest in that pink company right and it's billions of dollars and so we had to get SoftBank in and they want to invest in Uber because it was top brand had top Tech Etc but the same time none of the shareholders wanted to sell because there was this game of chicken whoever sold might lose control Etc


and so we have to go around to all of the high vote shareholders and we literally had to like get everyone to agree to blow up the high vote shares I think it's it's actually the only time when Tech a tech company like they blew up all of the high votes and so every like we literally had to go shareholder shareholder and like Ben said he would say yes and George like like everybody and if anyone said no none of it would work and you know South Bank would go to game to you know Club pink which would be a disaster wow so that was a really interesting kind of this it was like all or none right and


in the end we got everyone including Travis Benchmark everyone agreed to essentially switch over High vote to low vote and that one it got SoftBank in but it stopped the power struggle because then no one could control the company and that was actually a real secondary benefit which is then it became like how do we build a great company versus who's going to get control and who's going to have more impact that that like we did it for SoftBank but in hindsight it was a really important move which is okay no more board control like this is no longer going to be control company let's go build


this was an 80 billion dollar prisoner's dilemma yeah yeah because if anyone said actually I'm I'm gonna move in my own self-interest here actually long term it blows up everybody everything would have blown up and and you might have had a lift who was gaining category position against us with a 10 billion dollar investment from SoftBank that's right he was 10 billion it was actually I think 15. right and some secondary and some primary wow it would have been like that that would be maybe it would have been life or death who the hell knows and I mean Uber had raised the most money of any company any


startup at that point it was just it was a very very high stakes game and it was we had a deal person cam who like did Heroes work like just talked to everyone and then he would like kind of bring me in as a nice guy and you know say all the nice things and but you know in the end in the end like it worked it was a big move and everybody everybody converted which is pretty awesome wow this is like a little bit of Echoes of uh you know Sumner Redstone in your early uh you know good training that'd be good training right it was a good training like I love the the operating side of the business the tech Etc like that's the stuff that I love but I have


to say the investment banking background that I had help like even the concept of hey how do we get out of this issue the way to get out this control issue is everyone blows up the shares and everyone's like wait like that'll work we're like yeah like that could work no they're like going after like starting to call people wow it was awesome it was cool humility is great and all but uh you know were you proud of yourself when that went through no because the next day there was another crisis like it was like you know breathe for two minutes you know drink more wine and then off to the next battle


all right listeners our next sponsor for this episode is pitch book which I used heavily in preparing for this interview so let's go down memory lane using pitchbook as our guide while Uber is worth nearly 80 billion dollars today the valuation at the initial seed round in 2010 was five and a half million dollars with an m i remember that according to pitchbook there was a ridiculous group of angels including Brian chesky Ashton Kutcher Jeff Bezos Scott belsky like 25 others and who could forget Jason calacanus their series a was the next year famously led by Benchmark where Bill Gurley joined the board at quite the Step Up in


valuation 60 million dollars so all those early Angels got a 10x even before Benchmark came in which was something I did not know without the pitchbook data it's so funny I feel like all these folks involved in the investor group for Uber is like a all-star cast of past acquired subjects and guests and Friends of the show seriously so flashing forward to the IPO in 2019 Uber had raised an astonishing 20 billion dollars while private plus another 8 billion on IPO day and notably for this new era of uber according to pitchbook that is all the capital that they would need to raise they got to break even on that cash like no more new raises since IPO


day which was a very new motion for Uber given their history pitchbook has tons of other great stats like Uber's 32 000 employees all the patents and great graphs of Revenue breakdowns for each year by business unit and interestingly enough I just realized looking at this that in the last two years Uber Freight actually does make up a material amount of their revenue now again something I wouldn't have known otherwise so you can get access to all the best company data with pitchbook basically every VC and PE firm that I know has a pitchbook account and if you aren't using it you're essentially at a competitive disadvantage if you want to sign up for


pitchbook they are currently offering a free week trial that is coming up soon so you can go to acquired to get all the details and just tell them that you heard about them from Ben and David had acquired I'm very curious about how you operate your Twitter account on the one extreme there's like an Elon Musk type uh operating a Twitter account whereas there's only one Elon Musk type operator yeah like there is no type yeah it's it's a singular point there is one in I don't know how many mdos they have but one in some 100 million uh data point of tweeting whatever comes to your mind no matter the consequences and so much so


that he bought the company yes and then on the complete other side there's like Barack Obama and Tim Cook and I'd say you're like one click in from the Barack Obama Tim Cook and I'm curious like you consider that compliment yeah thank you like you definitely operate your public persona with sort of a head of state Grace and I'm curious if you ever think about letting it fly a little bit more or do you have a full drafts folder like how do you ever wish you could express yourself a little bit what I really think yeah Twitter feed do you have a burner account [Laughter]


so I tweet mostly myself there's some stuff that folks say hey we did this it's it's me like I don't have someone running the account and you know I mix it up with some personal stuff and then some business stuff because you want to keep it entertaining but at the same time I'm not using Twitter to express myself I'd rather have a long-form discussion like this like this is to me much more interesting and so Twitter tweets can be taken out of context Etc so like I'm I'm not there to stir the pot right um so maybe that's what comes out in terms of my Twitter persona I'll take Obama ask her Clinic


yeah like that's that's quite a compliment all right next I could we're kind of in like a lightning round here so next random lightning round topic you were on the board of the New York Times Yes what are some of your biggest learnings from being involved with that company it was um definitely my favorite board to be on it was a really interesting time at the New York Times because they were really becoming a top technical company in terms of being a publisher like it's at a pretty extraordinary learning organization and


they wanted me as like the tech person almost come from Expedia and you know optimization all that stuff and their capacity to learn like super traditional company capacity to learn was pretty awesome um one of the fascinating Parts about the company and it's both a superpower or it could be a weakness is total separation of church and state in terms of content and business right so like when I asked well what's the cost of certain kinds of content and then how much traffic you know can we have the connection between cost to content and traffic I was like no you


cannot ask that question because the content is separate so it's it's just a fascinating organization and the bet that they made on subscriptions was amazing um it was not obvious because the advertising business was much bigger the time but it was an Enterprise bet based on a core identity of the company which is we believe in quality content and I thought that was one of the most impressive bets because it was totally non-obvious at the time like all every single news organization Etc was advertising advertising this is the BuzzFeed days right it was quick content


Etc but I I think that the bet that they made in quality was very much a bet on their identity that wasn't backed up by data and certainly wasn't backed up by their financials but the company went all in and uh they've really benefited do you think that could have happened in a company that wasn't family controlled like did that have something to do with how they could make a bet like that without the data to support it yeah I think they're very sure of that core the quality of the content that they're


building and that allows them to make those kinds of business bets because in the end they know that the content is going to win absolutely a little bit like Netflix too it's like quality content focus on subscriptions now they are going to the advertising right so you can't have a forever strategy or be so dogmatic as to not to understand that markets change strategies have to change at the time but it was absolutely the right bet at the right time well I'm curious how much this was an explicit boardroom conversation the times also made a very explicit bet on scale of quality content You could argue maybe


Wall Street Journal but other than maybe them maybe maybe the post maybe nobody else has aggregated quality content at scale globally you know people might think of the political stuff or the new stuff but like the New York Times company covers every vertical every geography has at least twice as many reporters employed as any other news organization in the world I think how much was that a discussion in the boardroom there was absolutely a view of the management and the board agreed and I have to be careful because it was a boardroom and it's confidential Etc


which is if there's going to be a top Global brand for Quality news that should be the New York Times like why why would it not be the New York Times they're very clear out about that and they're and they're quite determined to achieve that I think they're they're doing a great job yeah and it's interesting right like the company's called the New York yeah times and yet it's a global you know it it really was a in a way that you know in in video and with Netflix I think it was a more an easier leap to make for news I think it was a really unique leap that the that the times made well it will be interesting to see which is they


you know Netflix is building like Korean content that then extends globally New York Times isn't necessarily doing that right it's English language content that is relevant to the world but is probably relevant especially International to sub-segment right it's it's higher end consumer Etc who can't afford the price but again it's been an absolute winner of a strategy and what's been a tough business yeah I mean there's a graveyard in the middle between the independent publisher with a low-cost structure and the New York Times and there's not much in between the Middle is where you go to


die yeah more lightning round uh I remember hearing in 2013 that it was cool that I was in 2013 because 2014 one year away was going to be the year of self-driving cars and here we are in 2023 is next year of the year how close are we oh that is a it's an unanswerable question I mean because there's the last two percent of use cases the tail use cases it's unknowable what it'll take to get past that last two percent and there's this pretty interesting philosophical question which is how safe does a robot have to be in the US I think there are 40 000 deaths as a


result of car accidents let's say that robot cars are 10 times safer so and I think that's highway accidents are one of the top two or three causes of death in the United States period period so like something 10 times safer yeah if you're 10 times safer you know fast forward 25 years from now like who knows what I'll be four thousand deaths a year right so a little more than 10 a day and like if you have four companies that are responsible for for the marketplace five five companies right and they're 10 deaths a day like a good day is hey we only had one fatality


that's a good day like it's just I can't imagine that and so there's this well does it have to be 10 times better I don't think that's good enough they have to be a hundred times better that maybe that's not good enough so like from a societal standpoint of course if it's a hundred times better uh we should go forward with it but that'll mean there are 400 fatalities a year one every single day and I don't know how society would deal with that Society is very I would call forgiving but like they understand humans are human and humans make mistakes


I think you must have experience with this already with you yeah right I mean listen we had this unbelievably unfortunate circumstance in in Phoenix and it caused us to completely re-design how we built for safety first Etc ultimately because of the pandemic we decided to get out of self-driving which I think is it was a good decision because our core skill set as like building this demand Network connecting uh demand to supply in a dynamic way Etc and we now get to work with a bunch of Partners and like waymos a partner Aurora as a partner Etc so we get to work with a much larger ecosystem but I think the


question of that that last two percent and then what is society ready you know what what safety will Society underwrite to those two questions you know are for me unanswerable my instinct is that you will see small scale continued experiments kind of get bigger over the next five years but it's going to take a good 10 years for it to be a material part of our Network or Transportation at large but that's a guess I'm curious too also uh I want to ask given both your job and uh you and I both live in San Francisco something crazy has happened in the past six eight months that like it's now


happening in San Francisco like we went from uh for 15 years everybody's been like yeah self-driving cars it's happening tomorrow and like yeah yeah yeah but like have you ever taken a ride in a while I haven't yet but like every day you walk down the street you feel like there's cars going by with no driver in the seat it's pretty extraordinary and it's it's become just so commonplace that like I don't even think about it anymore but then friends come visit and they're like what what's going on here yeah but still like the the service for certain originations and destinations it works the the pickup you know again it's it's okay for a human


driver to double park for a pickup not okay for a robot so there's like again when you get into the detail if you look at our ride share service for example if a fulfill rate which is the percentage of time someone asks for a ride and then there's a car available if that's less than calling 98 that's like all hands on deck like it's a disaster so like we are available all the time everywhere Etc and there's a lot of work that goes into that for any singular Rideshare provider to provide that kind of coverage is going to be really really difficult which why ultimately we think the better solution is for the waymos of


the world auroras of the world Etc mobilize to work with us so that you you have this kind of hybrid transition state where you can still have this 98 coverage everywhere no matter what weather it is ETC but we have this smart kind of switching layer sometimes a human should come pick you up sometimes a robot should come pick you up but the transition is going to take a while but it is happening it's cool all right last lightning round question and then I have a closing segment if you could only own ubereats or Uber the transportation business which one would you rather own


also it is a transportation business transportation [Laughter] like choose between your children like is it George or is it Donny like come on you can't be serious you could own a business with a 20 take rate or a business with a 30 take rate which one would you rather own so I I will answer uh someone seriously which is um High take rates are dangerous so our job as a company is to grow volume as much as we can as fast as we can and make our shareholders happy enough yep minimizing the take rate which is


taking as much of that dollar and and giving it to drivers and Couriers like last quarter gross bookings grew um you know over 22 or so which is really good the the money that drivers and Couriers including tips made on the platform grew by 30 percent higher and at the same time we're able to expand our margins brief free cash flow positive so like the design spec that we're building is how do you like torture the organization because sometimes it is torture like watch every single nickel and die be incredibly efficient in everything that


you do automate everything get fraud out of the system Etc so that you can actually operate a business at scale at the lowest take rate possible like talking about and one thing that we learned when I started Expedia expedia's taker it was 25 percent and bookings take rate was 15. and over like a torturous 13 years we took expedia's take rate from 25 to the teens it was like 17 I think or so when when I left and those are like pure margin dollars that you're taking out like there's no goodness that comes out of it and so there's it's just really hard work to do and as a result we're pretty hardcore


which is any quarter I can deliver anything on the bottom line if I can move my take rate up a little bit but like it's too easy it's too tempting yeah and so we're very hardcore about like no no we gotta keep take right flow and you got to do the hard work to be able to take great glow so I'd say I take the 20 take rate business like it's it's more lasting the growth can go on for much much longer yep I asked in a tongue-in-cheek way but I completely understand that and see the um it's the NCS Capital thing it's the do you want uh Bill Gurley wrote that blog post years ago about a rake too far right yeah exactly right you build more


durability by leaving more on the table for your ecosystem partners or maybe more accurately you make yourself too vulnerable if you slaughtered right yeah yeah all right pigs get fat Hogs exactly and like you can't you don't want to put yourself in that position it's very tempting it's very very easy this is Temptation obviously this quarterly kind of treadmill that you're on Etc and there's like you can make someone happy by increasing take rate and throwing it to the bottom line and we we really really culturally try to resist that notion cool well the last segment that I have


here is giving you the floor you know we're at the end of a long-form podcast so anybody that's still listening appreciates nuance and so if there's something that you feel is often misunderstood or that you want to say to people that are willing to let a long-form argument soak in what do you think is misunderstood about the company or you or the industry or this time that we're in right now really anything you want to talk about I don't know if it's misunderstood but but it's certainly something that that's top of mind for us is that we ultimately the future of the business as it stands now depends on our building


of the best platform for earners and it goes to like the take rate right if the take rate goes up too much then we're taking too much of the service Etc and the fact is that I think Uber was guilty of taking earners for granted because when I first came in and for much of the company like we were in a state of oversupply we had too many drivers it goes and instead of gating him Etc we just did really invest in the driver experience and The Courier experience the way that we should have and then the way that we organize the company around the earner experience was pretty standard in terms of a b2c business right there's a team you know


there's a team that runs the Uber app there's a team that runs the eats app and the team that runs the driver app and you do all the typical stuff which is analytics and measurements and a B test Etc in order to optimize throughput in the marketplace Etc but like as we step back you know we don't a B test what the 401K match should be for employees right like it was equivalent some of the experimentation that we were doing on the earner side is like you know yeah should we match a three percent or six percent and let's look at employee


turnover cool experiment maybe you could optimize but when you're building a product that people are making a living off of or are earning money that they have to earn with there's a different duty of care and the amount of time that they're spending on the app most of uber employees myself too like order rides all the time order eats all the time you know you get in get out Etc but a driver will be spending four hours five hours six hours with the app every single day so the consequence of like all this coming together and are building for drivers the way that we essentially


build for consumers which is like pretty cool in techy Etc you know one is like the P95 experience usually like you build you don't look at p50 because averages lie and then you look at P95 well that's the worst experience well the probability percentage Yeah the probability percentage is you know drivers an average driver who's driving a week experience likes a P95 circumstance every single week multiple times a week because they spend a lot more time on that so there's been a pretty important culture change of the company which is like higher duty of care actually slowing down in terms of


how we build for earners being a lot more humble listening to them their experience Etc the fact is that when you have 5.6 million earners on the platform there's this Marketplace which is it works for some earners and it doesn't right so there's always going to be 10 which is like half a million people who are not happy with experience but we've got to make sure that 90 are we're getting more uh people who like the experience into the platform but because of where we came from it's actually pretty new muscle for us to like build this earner experience and I do think like as


I step back and I think about like what am I going to be proud of at the company and like there's a lot to be proud of in terms of turning around the business and like the team that we built and the service that we built I think there's a sense which is like Tech is out of touch with the real world and it's a lot like Tech is you know you're building for the virtual world and and Uber is unique in that it's a technology company that's like built for the real world and the impact that we have especially as it relates to earners


is like it's real people and so what I would be most proud of one is there's a practical reality which is if we build a company that is has the best product and experience for earners we're going to win long term but if we're that technology company that's like very much connected not with the elite but with you know an earner base and the broad population not just in San Francisco but all over the world like that that's a company to be proud of but at the same time it's like we I think that the muscle we've been developing in the last two to three years we have a long way to


go is Uber the largest herder platform in the world yeah I think we're the largest source of work anywhere by far and growing pretty fast that's a crazy statement yes yeah because the largest companies who like even if you just look at employees companies that employ people employ Max like 2 million Max yeah yeah and Uber has how many earners on the platform 5.6 million you know as of the last quarter it's growing what is that's a lot of earners what is the federal government employee it's like on par with it's got to be on par with that now a lot of the vast majority are I know they're not


part-time yeah but it's still the scope is pretty extraordinary wow and it's everywhere so cool well thank you Dara you're very welcome it was a pleasure I'm glad leading me to the wine well no I mean you you treated us and and I'm glad you decided to stay after dropping it off you gave me a good tip it all worked out oh David that was a blast so fun funny it's like you were just here next to me in Seattle and now you're there in San Francisco the magic of the internet I'm really missing that delicious one that uh Dara brought us I know listeners you can tell us if you liked


that bit or not or if it was too campy with that our thanks to Common room vouch and Pitch book Common room is the platform to manage community-led growth and revenue and gives you 20 off with a link in the show notes vouch is the best way to get insurance period if you're a tech company get 10 off your first six months of coverage pitchbook is the best way to get data on companies public or private and is offering a free trial all of these links are in the show notes if you want more of David and I we recently did an episode on my first million and it was really fun we went behind the scenes of acquired and we sort of talked about acquired's business our journey


turning it from a podcast into a business why we think the podcast works and listeners you might have your own ideas but where our differentiation is in the market of content out there today and I know it's just a blast Sam and Sean are really fun to talk to so if you are interested in hearing that you can click the link in the show notes to specifically go to that episode or search any podcast player for my first million they also did episodes recently with couple friends of the show David senra from the founders podcast and actually David one of you and my favorite YouTubers yes Doug demiro in the car category for anyone interested


in cars Doug is such such a nice guy yeah check out acq2 it's our interview show where we talk to folks who are on The Cutting Edge of what's next figuring out things like where is the defensibility in AI for B2B SAS companies or you know our interview with the CEO of Angelus talking about how they're deploying AI at their company I know AI is a buzzword but like it is just dominating how every company is making moves these days and it's great to talk to the protagonists who are actually in the arena right now making all of these moves so that's on acq2 check out the slack it's where we're talking about this episode and


every other slack and if you want to come closer into the kitchen and be a part of what David and I are building here become an LP LP current benefits include once a season you guys will pick an episode y'all picked Lockheed Martin which is shaping up to be one of our biggest episodes ever so thank you and I had a blast researching that one so thanks to our LPS and David we get a schedule an LP call here yes month or so let's get it on Works yup without listeners thanks so much and we'll see you next time we'll see you next time [Music] foreign

Key Themes, Chapters & Summary

Key Themes

  • Leadership and Management

  • Strategic Decision-Making

  • Corporate Evolution and Growth

  • Market Competition and Dynamics

  • Operational Discipline and Profitability

  • Regulatory Navigation and Shareholder Management

  • Technological Innovation and Service Optimization

  • Global Expansion and Market Adaptation

  • Crisis Management and Organizational Challenges

  • Future Outlook and Expansion Strategies


  • Early Career Insights and Joining Uber

  • From Growth to Operational Discipline

  • Strategic Divestments and Core Focus

  • Competitive Landscape in Ride-Sharing and Food Delivery

  • Adapting to Global Markets and Technology Utilization

  • Overcoming Regulatory and Shareholder Challenges

  • Navigating Through Crises and Corporate Turnaround

  • Future Directions and Expansion Plans


In an illuminating interview conducted by Ben Gilbert and David Rosenthal for their podcast "Acquired," Dara Khosrowshahi, the CEO of Uber, offers a comprehensive view of his professional journey and the strategic evolution of Uber under his leadership. The discussion spans a wide array of topics, from Khosrowshahi's early career experiences to the nuanced challenges and future directions of Uber.

Khosrowshahi begins by reflecting on his early career trajectory. Starting as an analyst at Allen and Company, he recounts pivotal moments, including his experiences during the 9/11 attacks, which significantly influenced his role at Expedia. He shares insights into his decision to join Uber, a move shaped by conversations with influential figures like Daniel Ek and marked by Uber's internal challenges and external competition, particularly from Lyft.

Central to the conversation is Khosrowshahi's strategic vision for Uber. He underscores the company's shift from its initial, aggressive growth-focused startup mentality to a more operationally disciplined approach. This transition involved a strategic reorientation to divest from non-core ventures, such as certain hardware initiatives and speculative international expansions. Instead, the focus shifted to strengthening Uber’s core businesses in rideshare and food delivery, aligning with the aim of achieving profitability.

The discussion also delves into Uber's evolution and its position in the market. Khosrowshahi outlines the company's growth strategies, including its international expansion and the development of new services. He acknowledges the intense competition in both the ride-sharing and food delivery sectors, with formidable rivals like Lyft and DoorDash. Further, he explores Uber's approach to integrating taxis into their service model, the varying market demands across regions, and the crucial role of technology in enhancing Uber's operational efficiencies.

Khosrowshahi candidly addresses the myriad challenges faced during his tenure. These include navigating complex regulatory environments, managing diverse shareholder expectations, and steering the company through various crises. He particularly highlights the period of SoftBank’s significant investment in Uber, which led to a complete overhaul of the shareholder base and a transition from high-vote shares to a more democratized structure.

Looking ahead, Khosrowshahi expresses a positive outlook on Uber's future. He emphasizes the company's ongoing initiatives across different sectors, including freight and international expansion. He also discusses leveraging technological advancements to drive growth and operational efficiency.

Throughout the interview, Khosrowshahi provides a detailed and reflective account of his leadership philosophy and the strategic decisions shaping Uber's journey in the rapidly evolving technology and transportation landscape. His insights offer a unique perspective into the complexities and dynamics of leading a high-profile, global technology company.