Uber CEO Dara Khosrowshahi

So I came up here we scheduled this time to record what are we talking about today? We had to talk about Uber in a while. Mmm. 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, maybe we can eat what we eat. Oh, here It's one of our greets. Oh, yeah, that's me. Oh, cool. That's a wine in here. Oh great. It's perfect

So can I join you guys? Actually, yeah, be right. Come on in. Come on in. You got the truth now. Is it you? Is it you? Is it you? Is it you?

City down? Say it straight. Another story on the way. We 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 Kazrashahi 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 in revenue up from just 10 billion two years ago and that's not too young. 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? $3 billion they 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, of course, is partly about Uber as we're alluding to here. But as David and I evolve 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 dies into moments like buying Expedia right when 9.11 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 Dara's 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 acquired dot FM slash Slack. Listen to our other episodes on our second show, ACQ 2, like a great episode. We just did with Jake Saper from Emergence on AI moats in B2B SaaS. And without further ado, this show is not investment advice.

David and I may have investments that companies discuss and this show is for informational and entertainment purposes only onto our conversation with Dara. Cheers. Dara. Cheers. Welcome to acquired. Thank you very much. Happy to be here.

Appreciate you swinging by the home studio on your way home from Expedia board meeting. Is that right? Yes. Have a go. I can't tell you. Yeah, that's a good one. 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? Yes. 13 years. It was 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 and went public. You made a bid to take it private. I think over two tranches, there was a controlling interest and then a full buyout.

Yeah, we bought Microsoft's stake. Microsoft decided it's non-core. And we bought Microsoft's 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 I was 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, earlier in 2001. The deal hadn't closed yet. I think there was some kind of material adverse change clause.

Man, as well as I 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 take us through. Yeah, we didn't. And we knew we had the option to get out. And at the time, one of the values of an option is time value. You don't want to exercise an option before the last moment that you can. And Rich called 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, it's fine, Rich is very confident. He's a great entrepreneur. He's fine. If you want to get out. Just let us know, you know, which way you want to go. And he's really good.

Which really, he just, you're talking about time value. He just wants to make decisions. No, I can't imagine that if you're the company, everyone's like, what's happening, right? There's a future companies thrive on certainty on kind of rhythm, etc. And it was a tough macro position to be in. And then the micro position of what's going to happen in Expedia.

So I can imagine what he was going through. So we got together as a team, the ICT and all of us were kind of talking. You know, there's no clear decision to be made there. But Barry respected what Rich asked for. And remember, they mean we're like 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, we're like, look to each other, we're like, let's go for this. Let's do it. And right after that meeting, Barry called Rich and said, game on.

No changes to deal at all, like exactly as no changes to the deal. It's like, we're going to 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, all the way in the middle of craziness. It sure doesn't feel calm. But after that, we said, we're in it got rich stability that he wanted. And in hindsight, it was a genius decision.

Did you ever think you would then live through another moment like that over the last minute? No, I like this one to be finally. That's what never want to go through something like that again. But it made it stronger as a company. Ultimately, good for you for the past couple of years.

Yeah, I think the pandemic was incredibly painful in that sitting together as a team, 85% of your mobility volume, which was the profit driver of the company falls off the cliff. And other CEOs, they lost their 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 had to cut a lot of overhead. We had to cut out businesses that we thought were quarter of the business.

We really had to bet on what's core, what's non-core. But it was a huge accelerator as it relates to our each delivery business. And I think that discipline and hindsight has been great. But I wouldn't want that as that shouldn't have been the. All right. Before I let David bring us to today already, let's go back down the relay. So how did you meet Barry Diller?

So I met Barry Diller when I was an analyst at Allen Company, which was my first job out of college as 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 the CEO where Barry Diller, who at the time was running QVC. He was a coqc, which was on shopping.

And he had run Paramount and Fox studios for that. Correct. 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 his 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 kid like me. And so at the time, some of the rest don't who was running Vycon have 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. So it was like the minnow swallowing the whale. It's like a capsidic. Exactly. Exactly. And I was an analyst on the deal.

And it was a whole kind of bidding process. You know, Barry would bid and then Redstone would bid up etc. It was multiple steps. There was 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 Barry. You're still building your back college at this point? I was like two, three years out of college. And at some point, Barry's like, you know, there are 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. So I got to print out my whole LBO model bidding model, etc. What do you feel like?

Holy shit. But you know, the only question I might have was when am I going to get fired? Right? It's like, this is a disaster. And now it's 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 a source and you want 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 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 valent 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, et cetera.

I don't know, honestly. I remember the advice that he gave me is bet on people, known companies. And that was a patterning that he had through his old career. He was a 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'll swim. He's selective in who he throws off, you know, what deep end, et cetera. But both of them were willing to give opportunity outside of like regular scope, a regular process, et cetera. And it shows, you know, they build incredible loyalty in terms of the people who know them. How did you find your way to Alan company?

I know I'm just like pulling it, threads going backwards here. But I was, it was a very considered decision, which was I studied engineering in school and I actually had an engineering management 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. Still works there. 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 Alan company for a career. Well, I have you written her a thank you note because you'd be running a paint factory. Otherwise, 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 and 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.

You know, you could be right or I could have just gotten totally lucky by falling down on company. I really do think it was just things came together and everyone's career who successful, it's a combination of luck and opportunity and taking advantage of that opportunity and 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 Alan 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 and which is very dealer in 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 see 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. I want to make so much money by a certain time. And when you over plan your career, you know, that there's a 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 say it out on a 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 going to 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, now is a great time to tell you about a long time friend of the show.

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So we're going to catch back up to that expedient era. 13 years, you have a pretty wild competition with booking.com. 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 expedient 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? Got to learn so much. Booking was an execution machine and their focus, when we talked about focus was hotels, hotels, hotels. And Expedia was much more it started with air. Right.

And hotels was to something secondary. And so I think one of the lessons is like, I go after 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 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, et cetera. Booking was more supply.

And the states nobody knew what booking was. Totally. But it's like 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 spend that 200 hotels in the market, that market has also been 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 and niece, niece becomes better product and convert more, if you can convert more, you can get more traffic from Google, et cetera. 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 days, 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 getting 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, et cetera. And it was a supply led way of building the business, which definitely was a learning that I took from Booking.

With Booking, you can build a market of a say 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 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, et cetera, with all the flexibility, freedom, et cetera. 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, et cetera, that's required for driving. Those steps don't necessarily need to be completed to deliver food.

You can get people into the food ecosystem. They can start earning on the Uber platform and then you can upsell them into additional opportunities, driving people, shopping, et cetera. It's a structural recruitment advantage we have in terms of building up supply. And as you build a supply, liquidity in the market case gets better, you know, surge come down, pricing gets better, et gets better, your ability, price gets better. And the demand shows up.

So everything you do, that's always been like the story. Yeah. 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 does the Uber execution machine look 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 can start changing inputs in terms of how you build a system, et cetera. It takes a while for the outputs to become emergent. We did take a big step post pandemic once each got to size to merge all the teams together, the technical teams together, the marketplace teams together, single earner team, et cetera. When each was small, it needed its own dedicated teams because if you had one team doing rides and eats, like all the attention will 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 a ride than we do from Google, meta, Instagram, you know, all of these other channels combined. Nice to own your own. It's crazy at a quarter of cost. So it's like, it's, it's a proprietary channel and it's cheaper and I'm surprised. You do like charge internally for totally.

It's an advertising business, right? So you're having it like any other. Exactly. Exactly. And so, and it's, we're not to start charging each other for plugs on the camera.

We can tell you a little bit about internal pricing. But you know, all of it sounds great. But the fact is that whatever pixel that you put on the rides app to promote Eats is taking something away from the rides app. 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? So there's a, there's a bunch of machinery that you have to be able 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 a machinery to actually do it effectively takes time.

And then, you know, if Eats has this new customer acquisition source, every year, new customers for Eats account for less than 10% of the business of the overall business, because it's a big, repeat 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 the same compounding as the seventh wonder of the world, 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 going faster than a competition. Because we have a bunch of proprietary traffic that's coming over. And then on the ride side, there's proprietary supply coming over from Eats again compounding.

Is it still that supply acquisition cost is bigger than demand acquisition cost for you guys? Yes. I mean, it is we are a supply led business at this point. Probably two years ago, we could have added 25% more drivers and careers into the platform. They would all be like super busy instantly. Right. Now our supply generally is going fast

in the demand because it's catching up to demand. And the average driver who's on the platform is working more because experiences better earnings levels are pretty or really good. So at this point, probably supply is still trailing demand by 5% or so. But the marketplace is now getting to a point where it's balanced. But it's that compounding that really starts working.

I was reading for 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 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, et cetera, then you can have access to earnings opportunities. That's a core belief for us. The economics take care of themselves. 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 countercyclicality about a 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 growth bookings are growing and univolumes are strong, our supply base becomes more expensive. During softer economic times, you get more drivers coming into the platform. ETA's come down, prices come down, the price becomes cheaper. So actually, our univolumes accelerate. So if you look like our Q1 univolumes, they're group 24% versus 19%

Q4. So we accelerated trip growth, which is not something that you see at our scale, but 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 that happens. Yeah, I guess like it's this very cool experiment.

Yeah. The economists like to talk about things in theory, but you actually have one of the largest datasets in human history of 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

idea episode, Uber had lost like close to $3 billion the year before going public. You said in the episode that it was the most that a company had ever lost before going public in history. Yes. That's true, but attributed to Ben Gilberg. But now we're a magnitude that's true. Depending on what profitability metric you look at,

you guys are a brick 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 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 it's increasingly people and then shared taxis, etc. There are 4 and 1 half million taxis in the world who would imagine that Uber would 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 cabbaluses and the flywheels.

And by the way, we work with them, right? A lot of times we will connect through them as inter-meridiers, again, to wire up these taxis. And then we've gone from food to alcohol to groceries, etc. And then we have a freight business as well. So the more we wire up, the more demands- You have boats now? We have boats in the connoisseurs. Cool.

We have boats on the Thames too. It's just like if it moves and 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. We have to do it in a 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. And when you're working over an ecosystem of two billion transactions a quarter, the data sets 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 how our competitors are matching and pricing, but every year, matching and pricing probably improves by 5% a year. So you improve the marketplace throughput

by about 5%, everything else being the same. And that's free growth. And when it's on top of $120, $30 billion run rate, it gets big. And again, it's con connoisseurs. Every year, this machinery gets better. So then just to make sure I'm understanding the reason why,

because you talk to anybody and you're like, oh, which I asked Dara and they're like, ask them why Uber's a more expensive than they used to be. And I'm like, this is a good business now. But actually, 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 is not up. I mean, I'm going to have to pay for any kind of blue

collar job. Everybody's talking about it. A bunch of retailers were having trouble hiring enough people, restaurateurs, 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, the increase in salary and wages for blue collar jobs hasn't kept up with the salary of tech workers or capital, etc. So I think the catch up is a really healthy catch up. That is the reason why Uber is 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, you're on your down. So I think everyone in San Francisco this morning was

the cheapest it's been in months. So pretty cool. Well, I'd specifically not thank you. Thank the invisible handout. Thank you, Mr. Market. 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 a media travel agency, you're bringing demand to your supply base, etc. And then you have to think about the travel ecosystem 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 market-based layer. You're not offering the airplanes. You're not making up the hotel rooms. Exactly. The drivers are providing the service, right? But it's

we're much more responsible end to end. But you're responsible for your customers. We have a very, very important responsibility to drive our community over 5 million people who are making earning or making side earnings on Uber. And then the responsibility in terms of regulators and governments, etc. That consideration set is just so much bigger. So from that standpoint, it's tough, but also

really interesting and satisfying in some ways. Was that ready for it? No. Is this one of those? If you knew you wouldn't have done it, but now you've done it and so all this value has been created and great. I'm so glad I did it. It was a friend of mine. I was like,

you know what I'm having fun? I love it. The job is too hard. 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,

we always talk like you don't come to Uber for easy. You don't come here for an easy job. It's complicated. It's hardcore. People wear their asses off. But you love it. And it's not fun. It's

any fun. But people love being at the company. That's something I didn't know. And then the dynamic real-time nature of the marketplace and how we balance the marketplace and the pricing, etc. is unique. It's Thursday night. There's a Taylor Swift concert, all hands on deck. We got to 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. I mean, Uber HQ doesn't, but there are off-scenes on the ground. And they're on the ground, city by city, work their ass off. And they are kind of where the rubber meets the road, so to speak, to use a transportation metaphor.

So David asks this interesting question that I want to dig a little deeper on, though. 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? Yeah. We'll come first. When did you first get content?

How did you enter the Uber orbit? So I was reading about the news just like everyone else was, right? It was just all over the place. Make with me. Yeah. And also everything going on. I would let to it, you know, the battle between Travis and

Benchmark and all that stuff. It was fascinating as an observer. I never, ever, ever imagined that. I would then play a part and a headhunter called me about this role. So not remember directly a headhunter.

Headhunter. Headhunter called me. It was a structured process. I'm like, no way. Like, no, thank you. Goodbye.

Happy to see you at all. Yeah. 13 years. I got my vision. I love working for Barry.

I love working for Barry. Like, it was, I was good. This is fun. Yeah. And then we, yeah, exactly. It was fun.

And then I was at the Sun Valley Conference, and I went to company Sun Valley Conference, and having drinks with Daniel Eck. And he said, all right, you know, did you get the call from a headhunter about the Uber job? I think you'd be perfect for the job. And I didn't know whether to headhunter why the headhunter called, turn out Daniel. I'm like, dude, why would I ever do that? Like, I'm happy. Like, why would I ever jump into that mess?

Daniel gave the headhunter your number. Yes. And I'm like, no way. He took off. And he looks, he looks at me like with those like piercing Scandinavian eyes.

Since when is life about having fun? It's about having impact. It's 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 can do this. So the next day, I called the headhunter 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 recruitment. It was pretty cool. And how long between then and when you accepted the job? God, I think it was about two months. It was over the summer.

Wow. And I did secret. Nobody knew. I told him, I said, listen, up front, 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 know, like the nanosecond 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 it didn't. So actually at that point, I called a Barry because I couldn't put there in a situation or myself in a situation.

And like I worked with him 13 years, probably 20 years in IC. And then even before as a banker, like he and I have an incredible relation. I was 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 and the loss of trust.

I called him up as a Barry, and I called me about Uber. I'm going to talk to them. And he's like, you're f and crazy. Hung up on me. And I told, I told, oh my God, I'm going to get fired.

And nothing. Dead silence. You weren't going to get fired because what was Barry going to do? Like step in and VCO himself? He was like, maybe he was.

Maybe he was. I didn't know. We worked together for a long time. Called him the next day. He said, uh, speaking as a 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 I heard that the other candidates were coming in to present as well. So this was a big day. And I told him. I think it was a Saturday or Sunday that I'm coming in and making presentation.

He said, show me the presentation. No. It was PowerPoint. So I showed him PowerPoint. And he actually helped me in the PowerPoint.

He's like, this is good. This is good. You have to add this page. 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 it was sticking.

I don't know. It was just calculated. Yeah, it just shows you that. That is true personal loyalty. Yeah.

And there's an element to it too, where if he got to collaborate with you, then there was a chance you would stick around on the Expedia board and remain in front 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 a strange experience. Did you do anything to prepare for that? No, like usually my life is like stumbling something on the figure. You're so busy, dude. Yeah.

But it was, I once they're 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 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 tried to be helpful. 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. Like that's definitional.

And the, you know, a little bit about that. Yeah, exactly. There could be hesitancy at a board meeting, et cetera, 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 on, but it's working. I think it's working, but it's complicated.

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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 those sort of departing leadership? Well, I talked to Travis a couple times. I talked with Ryan and Gar who were the other founders.

I talked to a couple of other board members. I did financial diligence, et cetera. And for me, it was ultimately about opportunity. It's such an important company. I was telling people like, I like three things, right?

It's do you work with people whom you like and you can learn from? Can you use an individual and 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 were great folks there who have stayed, who were there before me and then new folks like Tony West and Nelson Che that we brought, et cetera. So the new team's a combination of new and all, which is great. And definitely, as a leadership team, we can have an impact on Uber. And Uber is a company that's unique in terms of its impact on the ground on the city. So it all checked off and the financials, it was still a really young company.

So the financials for me, the financials. 10 years end, right? Yeah, less than that, probably. It was just about 10 years. 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, you know, alternates 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 burden. Yeah, exactly. And so that was actually the advice that my dad gave me, like, when a company who's a verb asked you to run it, just say, yes. I'm like, all right. So sometimes you can overcomplicate things and it's like, hey, do you want to take a shot?

I want to take a shot. It's so funny you say turnaround. 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 it was losing a bunch of share to lift. Right. Yeah. So that was the...

Delete Uber. Yeah. The leader. Yeah. Moments, et cetera.

So 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, what's a tough competitor and a strong brand. Tell me if you agree with the statement, in the US, you no longer really have a formidable competitor in ride sharing. But in food delivery, you have a tremendously formidable competitor. I mean, lift is stronger than people give the credit for.

Yeah, it's definitely going through tough time. I mean, the new CEO is, you know, he's like moving. 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. Lift is such a great example of a story. We see over and over again on a choir and of like, it's never over till it's over. It's never over till it's over. Yeah.

It was over for lift. 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 US. We are focused on keeping share in the US and then gaining a bunch of share outside the US. And then over a period of time using the structural advantage. You know, one, build profit pools outside 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, I think about them.

I think about what you were saying about booking them just like being an execution machine. I'm curious from your perspective. I think it comes to 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 are 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. So 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 sacrifice in terms of selection in order to optimize for speed. As it turned out, one, the suburbs in terms of food are bigger than cities. Big families, etc.

Big demand, etc. So 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 2016 decision that everyone's still living with now. I mean, now we've corrected that. Yeah. But listen, I was running 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 were really good at urban and we were really good at fast and cheap. Right. And we now are much more focused about building out selection. As we built out selection in urban centers at category position versus door dashes, actually quite constructively strong, we are looking to break into the suburbs.

And there we got somewhere to do. And the suburbs are very, very strong position. It's kind of their profit pools, right? And then we're building our profit pools outside in international. And, you know, kind of the battle is happening in the big city.

Yeah, it's interesting. I would imagine the suburbs are so much more weighted to food delivery than rideshare. Totally. Now we are expanding rideshare 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 now specifically are aiming in certain suburbs and you know, you have to build out your career base, your restaurant supply, demand, all of it has to come together, which is difficult and boardaches. That's 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 the dots looking backwards and to use the Steve Jobs parlance, it just makes so much sense. This expanded and nationally leveraged the fact that you're sort of the leading global player, generate cash, use it to compete domestically, eats feeds rideshare, 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 ridesharing, Uber Eats and Freight and divesting everything else, all the autonomy, all of the self-driving cars, autonomy, what else did you guys invest in?

Like scooters. Bikes and scooters. Planes, right? Yeah, where did I go? Elevate, elevator.

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, et cetera.

Right? 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 three segments. And if you look at rides, we have a number of growth bets, which is there's this base business, Uber Act, which is like going to be 50% of our growth. Then about 15% of our growth are international countries where the business model, as we had it, wasn't legal.

So the attitude at the 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 tack, which is, well, what business model is legal? Let's adjust our business model to the country versus have the country adjust to the business model. And once you're in, you build trust within a country and you build a voice, et cetera, maybe then the business model can change over a period to benefit drivers, curios, et cetera. 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 to the business model to make sure that we're expanding 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, halibels, two-wheelers, three-wheelers, Uber for business, health, transportation, all of these different segments, that whole kind of the new best portfolio will be 35% of 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, et cetera. And one of the parts that I'm super excited about is we've always had kind of call it an integrated offering. If you think about eats, there's a

marketplace offering. You come to Uber Eats and Eats is bringing a demand. And then there's the fulfillment of that demand, right? My brainwind here and delivering it, right? That has nothing to do with demand necessarily, but it's a filament.

If these are two separate businesses, they got stapled together. Exactly. 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 a marketplace,

because they're Walmart, they have incredible brand, et cetera. But they use our fulfillment services. And more and more that our vision is we essentially want the local grocer to Amazon, Amazon. Every single local business can deliver same day, which is better the next day. 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 definitely how much of this goes back to the original 10 years ago, 15 years ago, Vision for Uber. It just takes a long to realize these things. It does. I mean, it's quite sick. It looks great on paper. And then real life is a lot more

difficult, right? Are there activities that you've thought about where you used to need to do something different or counter position in the market in order to be successful? Where now you sort of look around, you're like, actually, and this is where you're the incumbent. So there's a different strategy that we need to lean into as an incumbent. Our working with taxis was an interesting twist, right? Which is to some extent,

they have been definitely the competition or we have been the competition or the challenger to those incumbents. At some point, we became much bigger than taxi. But in the end, if you remove yourself from the emotions, et cetera, we're competing against X or Y, we're in the job of wiring up vehicles and drivers who want to drive people to places. And that includes taxi. Like they're four and a half million of them. And if you take the

hypothesis, which is the day's of old where you wave your arm to 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 Uber's when you get into the actual challenges, like for example, we launched taxi and the way that we matched generally Uber is one to one. So you 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, et cetera. What we found in taxi markets is that when we make the one to one match, if we weren't integrated into the taxi meter, and that's something that we'll build over per the 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 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. Just like the old taxi dispatch. There's a pickup on 54 Leonard Street. Yeah, he says, Joey says, yeah, I got that one. So like what's old becomes new, what's new becomes

old. But 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 Uber X, a taxi might show up. Is that a good

thing? Is that a good thing? It improves marketplace liquidity and things that seem very simple on the surface to actually make the magic happen and pushing a button in 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 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 Fidelity's 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 working.

But I'll tell you, when we're in the middle of it, it was tough. After the IPO, after the lockup, stayed, Travis sold all the shares. And those days, like those were not as... That was probably 15% of the company. I remember it was a lot.

There were moments when you remember that stock prices are a function of supply and demand. And when 15% of the company's outstanding shares hit the market all at once... Or 2% or 2%. Or 2%. Yeah, right. Like that's... I think in hindsight,

I think it was a good move by him because it created separation. He wanted to move on. And so in hindsight, I respect what he did. And in hindsight, I didn't see it at the time. I was like, pissed. And we were kind of like, oh my God, Travis is selling what does that mean?

And you know, everyone wants to create drama around Uber. So it's difficult as a leader to keep the team focused and believing because it's very easy to keep score based on the stock price. And the stock price is definitely moving in the wrong direction. And Travis, whether you like him or not, you respect him. He's a really smart person. He's a founder of the company.

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 loan 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 degree of the stakes involved for the whole ecosystem. Like this went beyond just the drama and the press. That's one level, right? But like the number of university endowments who threw 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 fund of funds where compensation had already been paid out as if this was a liquid security, but it's not a liquid security. And sovereign nations that were, not dependent, but paid attention to this. Were you aware of that? Did you feel that?

Oh, yeah. Obviously, benchmark and Travis were in this power struggle. But there was this heavy feel. Like when you talk to the benchmark folks, there's this responsibility, which is this was one of the hits of the century. Like this is a category defining company and investment.

And benchmarks had a lot of go with this. This one was a great one. And while I wouldn't say it was a probability, there was a much harder nonzero possibility that it could all go. It could all go poof. So I think that was a very, very heavy weight on benchmark and some of the other startups and so on. Which led to all events that ultimately led to like their bringing in an unknown outsider.

Like that. Those are some heavy decisions to make. I wasn't there. I was kind of at the tail end of all that drama. But then you had to deal with the shareholder base turnover, which was like the real the unwinding of those that expectation. Well, one cool kind of, it wasn't cool at the time.

But one really interesting kind of dynamic that played out when I got in was there's all this stuff happening. Like it's had to go to London TFL. They revoked our license and they had been at data breach and we had to deal with that. And just like, it was craziness, right? And at the same time, SoftBank was looking to invest in the company, right? And this is the Vision Fund days and, you know,

SoftBank, the only way that came in was heavy. Like there was no, there's no like this would be a good asset. And the issue that we had to deal with was one where benchmark and Travis and the founders, they all had high vote shares. And they both wanted to control 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 MOSF 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, they wanted to invest in Uber because it was top-run, top-tech, et cetera. But at the same time, none of the shareholders wanted to sell because there was this game of chicken, whoever sold might lose control, et cetera. And so we had 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 share. I think it's actually the only time when tech company, they blew up all of the high votes. And so every, we literally had to go shareholder, shareholder, like Ben said, he would say, yes, and George, like everybody. And if anyone said no, none of it would work. And SoftBank would go to a game to call pink, which would be a disaster. So that

was a really interesting kind of, it was like all or none. And in the end, we got everyone including Travis, benchmark, everyone agreed to essentially switch over high vote to low vote. And that won a got SoftBank in, but it stopped the power struggle because then no one could control a 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 we did it for SoftBank, but in hindsight, it was a really important move, which is, okay, no more board control. This is no longer going to be a control company. Let's go build.

This was an $80 billion prisoner's dilemma. Because if anyone said, actually, I'm going to move my own self-interest here, actually long-term, it was a firm. Everything would have blown up. And you might have had a lift who was getting category position against us with a $10 billion investment from SoftBank. It was actually at 15.

And some secondary and some primary. It would have been like 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 talk to everyone and then he was like, kind of bringing the end as a nice guy and, you know, sale the nice things. And, but you know, in the end, like it works. Wow. It was a big move. And everybody, everybody converted, which is pretty awesome.

Wow. This is like a little bit of echoes of, you know, some of the redstone and your early, you know, good training. Good training, right. Good training. Like I love the operating side of the business, the tech, etc. Like that's the

stuff that I love. But I have to say that investment banking background that I had helped. Like even the concept of, hey, how do we get out of this issue? The way to get out of this control issue is everyone blows up the shares. And everyone's like, wait, like that'll work.

Like that could work. Show them up. No, they're like going after like starting a call, people. Wow. It was awesome.

Cool. Humility is great and all, but, 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 out to the next battle. All right, listeners, now is a great time to talk about one of our favorite companies, Lagora, the agent operating system for legal work.

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A demo is one thing, but what matters most is an associate who reaches for it at two in the morning during a closing or whether a general counsel trusts what it says before the board meeting. So if your legal team wants to check it out, whether you're at a firm or in-house, go to lagora.com slash acquired and be sure to tell them that Ben and David sent you. I'm very curious about how you operate your Twitter account. On the one extreme, there's like an Elon Musk type operating in Twitter account where there's only one Elon Musk type operating in Twitter. It's a singular point.

There is one in, I don't know how many m'd end that was they have, but one in some hundred million data point of tweeting, whatever comes to your mind, no matter the consequences. So much so that you 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. Even consider that compliment. Thank you. Yeah. 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, do you have a full drafts folder? Do you ever wish you would express yourself a little more? The one I really think? Yeah. Twitter feed?

Do you have a burner account? So I tweet mostly myself, there's some stuff that folks say we did this. It's me, like I'm going to have someone running the account. And you know, I mix 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 I'm not there to stir the pot. Right.

So maybe that's what comes out in terms of my Twitter persona. I'll take it by my Oscar. Yeah. That's quite a compliment. All right.

Next, we're kind of 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 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 a pretty extraordinary learning organization. And they want to be as like the tech person. And I was coming from Speedy and optimization, all that stuff.

And their capacity to learn like a super traditional company, capacity to learn was pretty awesome. 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 have a traffic? You know, can we have the connection between cost and traffic?

It was like, no, you cannot ask that question because the content is separate. So it's just a fascinating organization and the bet that they made on subscriptions was amazing. It was not obvious because advertising business was much bigger at 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, et cetera, was advertising advertising. This is the bus fee days, right? It was quick content, et cetera. But 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 they 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? 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 content business bets because they know that the content is going to win. Absolutely. A little bit like Netflix too.

It's like quality content focused on subscriptions. Now they are going to advertising, right? So you can't have forever strategy or be so dogmatic as to not to understand that market's changed 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 time's also made a very explicit bet on scale of quality content.

You could argue maybe whilst we journal, but other than maybe them, maybe the post, maybe nobody else has aggregated quality content at scale. Globally, people might think of the political stuff or the new stuff. No. 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, et cetera, which is if there's going to be a top global brand for quality news, that should be the new term. Why would it not be the New York Times? They're very clear about that and they're quite determined to cheat. Then I think they're doing a great job.

Yeah, and it's interesting. Like the company's called the New York Times and it's a global, it really was in a way that in video and with Netflix, I think it was a more easier leap to make for news. I think it was really a unique leap at the times made. Well, it will be interesting to see which as they, Netflix is building Korean content that then extends globally. New York Times isn't necessarily doing that.

It's English language content that is relevant to the world, but is probably relevant, especially international to sub-segment. It's higher end consumer, et cetera, who can't afford the price, but again, it's been an absolute win of a strategy and it's been a tough business. 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. More lightning round.

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 the year? How close are we? Oh, that is an unanswerable question.

It is because there's the last 2% of use cases, the tail use cases. It's unknowable what will take to get past that last 2%. And there's this pretty interesting philosophical question, which is, how safe does a robot have to be in the US and in their 40,000 deaths as a result of car access? Let's say that robot cars are 10 times safer. I think highway accidents are one of the top two or three causes of death in the United States, period.

So like something 10 times safer? Yeah, if you're 10 times safer, fast forward, 25 years from now, like who knows what will be. 4,000 deaths a year. So a little more than 10 a day. And if you have four companies that are responsible for the marketplace, five companies, and they're 10 deaths a day, like a good day is, hey, we only have one fatality.

That's a good day. 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. Does it have to be 100 times better?

That maybe that's not good enough. So from a societal standpoint, of course, if it's 100 times better, we should go forward with it. But that would 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'm called forgiving, but they understand humans are human and humans make mistakes.

You must have experience with this already with the United States. We had this unbelievably unfortunate circumstance in Phoenix, and it caused us to completely redesign how we built for safety first, et cetera. 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 is like building this demand that we're connecting demand to supply in a dynamic way, et cetera. And we now get to work with a bunch of partners and like Waymo's a partner, a Roar's partner, so we get to work with a much larger ecosystem. But I think the question of that lasts 2%.

And then what is society ready? What safety will society under right to? Those two questions are, for me, unanswerable. My instinct is that you will see small scale, continued experiments 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, I want to ask, given both your job and you and I both live in San Francisco, something crazy has happened in the past six, eight months that it's now happening in San Francisco. We went from a for 15 years, everybody's been like, yeah, some driving cars are tapping tomorrow. And I'm like, yeah, yeah, yeah. Have you ever taken a ride in? I haven't.

Every day you walk down the street and you're like, there's cars going by with no driver in the seat. It's pretty fun. And it's become just so commonplace that I don't even think about it anymore, but then friends come visit and they're like, what's going on here? Yeah. But still the service for certain originations and destinations, it works.

The pickup, again, 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 we're fill rate, which is the percentage of times 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, et cetera. And there's a lot of work that goes into that for any singular ride share 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 lamas of the world, the world, et cetera, mobilize to work with us so that you have this kind of hybrid transition state where you can still have this 98% coverage everywhere, no matter what weather it is, et cetera.

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 Uber Eats or Uber, the transportation business, which one would you rather own? Well, so it's a transportation business.

It's a transportation. It's just transportation. You can't ask me that. Choose between your children. Like, is it Georgia or is it Donnie?

You're like, come on, you can't be serious. You could own a business in a 20% take rate or a 30% take rate. Which one would you rather own? So I will answer somewhat seriously, which is 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, minimizing the take rate, which is taking as much of that dollar and giving it to drivers and couriers.

Last quarter, gross bookings grew 22% or so, which is really good. The money that drivers and couriers, including tips made on the platform grew by 30% higher and at the same time, we were able to expand our margins pretty for the 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 dime, be incredibly efficient and everything that you do, automate everything, get fraud out of the system, et cetera, so that you can actually operate a business at scale at the lowest take rate possible.

Like talking about booking a common one thing that we learn. When I started Expedia, Expedia's take rate was 25% and booking state 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 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 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, no, no, we gotta keep take rate low. And you gotta do the hard work to be able to take rate low. So I take the 20% take rate business. Like it's more lasting. The growth can go on for much, much longer.

Yeah. I asked it in a 20-week way, but I completely understand that and see the, it's the NCS capital thing. It's the do you want to build really really bad one? Those two years ago, by the rate too far. Right.

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. Yeah, it's just too in the other room. Right.

It's like, what's it's saying? Fabpix gets louder, right? Yeah, yeah. I think that bad hugs gets louder. Exactly.

And you don't want to put yourself in that position. It's very tempting. It's very, very easy. There's this temptation, obviously, that's quarterly, kind of treadmill that you're on, etc. And there's like, you can make someone happy by increasing take rate and flooring into the bottom line.

And 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 it's certainly something that's top of mind for us is that we ultimately, the future of the business as it stands now depends on our building 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 them, etc.

We just didn't really invest in the driver experience and the courier experience the way that we should have. And then the way that we organized the company around the earner experience was pretty standard in terms of a B2C business, right? There's a team that runs the Uber app, there's a team that runs the e-tap and the team that runs the driver app. And you do all the typical stuff, which is analytics and measurements and AB tests, etc. in order to optimize throughput in the marketplace, etc.

But like as we step back, you know, we don't AB test what the 401K match should be for employees, right? And the equivalent sum of the experimentation that we were doing on the earner side is like, you know, yeah, should we match a 3% or 6% 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 or 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 four drivers, the way that we essentially build for consumers, which is like pretty cool and techy, etc. You know, one is like the P95 experience, usually like you build, you know, look at P50 because averages lie and then you look at P95. Well, that's the worst experience.

Well, the problem is the probability percentage. Yeah, the probability percentage is, you know, drivers, an average driver who's driving a week experience like 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 doesn't. Right?

So there's always going to be 10%, which is like half a million people who are not happy with experience. We've got to make sure that 90% are and we're getting more 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 Uber is unique in that it's a technology company that 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 like a practical reality, which is that we build a company that has the best product 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 elite, but with you know, at earner base and the broad population, not just in San Francisco, but all over the world, like that's a company to be proud of.

But at the same time, it's like, I think the muscle we've been developing in the last two to three years, we have a long way to go. Is Uber the largest, or 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. 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. And Uber has how many earners on the platform? 5.6 million, you know, as of the last quarter is growing. 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 quite part-time. Yeah.

But it's still the scope is pretty strong. Wow. And it's everywhere. It's cool. Well, thank you, Dara.

You're very welcome. It was a pleasure. Thank you for treating me to the wine. Well, no, I mean, you treated us and I'm glad you decided to stay after dropping it off. You gave me a good tip.

It all worked out. All right, listeners, now is a great time to talk about one of our favorite companies, Statsig. Yes, there is a reason why the best product teams rely on Statsig, whether they are iterating on their core product features or shipping AI-powered experiences at scale. Yep. In the crazy speed of today's AI world, shipping fast is just table stakes now.

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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 wine that taught us.

I know. Listeners, can you tell us if you liked that better or not? Or if it was too campy? 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 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 a couple of friends of the show, David Senra from the founders podcast and actually David, one of you and my favorite YouTubers, 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 SaaS companies or our interview with the CEO of Angelus talking about how they're deploying AI at their company. I know AI is a buzzword, but 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 acquired.fm slash slack. And if you want to come closer into the kitchen and be a part of what David and I are building here, becoming an LP, acquired.fm slash LP. Current benefits include once a season, you guys will pick an episode, the 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 to schedule an LP call here this month or so. Get on the books. Yep. Without listeners, thanks so much. And we'll see you next time.

We'll see you next time. Who got the truth? Is it you? Is it you? Who got the truth now?

Huh.