Dara Khosrowshahi
Appearances
Acquired
Uber CEO Dara Khosrowshahi
God, I learned 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 some extent secondary. And so I think one of the lessons is like, hey, go after the larger market.
Acquired
Uber CEO Dara Khosrowshahi
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.
Acquired
Uber CEO Dara Khosrowshahi
The other area was that Expedia was probably more focused on building demand, kind of consumer demand, brand, etc. Booking was more supply-led.
Acquired
Uber CEO Dara Khosrowshahi
Totally. But 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 100 hotels in a market and you expand that to 200 hotels in the market, that market is also going to convert better.
Acquired
Uber CEO Dara Khosrowshahi
So not only do you build kind of a new segment of demand, but then if there's a search for hotel in Nice, Nice becomes a better product and convert more. If it can convert more, you can get more traffic from Google, et cetera. They play that optimization game like no one else.
Acquired
Uber CEO Dara Khosrowshahi
And for me, the biggest lesson as I came to Uber was Uber's a 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.
Acquired
Uber CEO Dara Khosrowshahi
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, et cetera.
Acquired
Uber CEO Dara Khosrowshahi
And it was a supply-led way of building the business, which definitely was a learning that I took from Booking.com.
Acquired
Uber CEO Dara Khosrowshahi
Exactly. And especially in the U.S., there's a much more... crossover between couriers who deliver food and then drivers who drive people, there's a much larger crossover. And we can actually use Eats almost as a recruitment tool.
Acquired
Uber CEO Dara Khosrowshahi
In that moment when someone says, I am interested in earning money, 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. There's a lot of steps, additional steps, background check, et cetera, that's required for driving.
Acquired
Uber CEO Dara Khosrowshahi
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.
Acquired
Uber CEO Dara Khosrowshahi
And as you build up the supply, the liquidity in the marketplace gets better. Surge comes down. Pricing gets better. ETA gets better. Your ability to price gets better. And the demand shows up to some extent.
Acquired
Uber CEO Dara Khosrowshahi
Well, I think that there's always a delay between inputs and outputs, right? Which is you can start changing the inputs in terms of how you build a system, et cetera. It takes a while for the outputs to become emergent.
Acquired
Uber CEO Dara Khosrowshahi
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, single earner team, et cetera. When Eats was small, it needed its own dedicated teams. Because if you had one team doing rides in Eats, all the attention would go to rides. Once we combined the teams,
Acquired
Uber CEO Dara Khosrowshahi
That allowed one technical team to really focus on the demand side. Eats is the recipient. So the rides business has most of the audience. And generally, we move more people from rides to eats. So it's an almost free process. customer acquisition tool for Eats.
Acquired
Uber CEO Dara Khosrowshahi
Yeah, we get more new customers from Arise than we do from Google, Meta, Instagram, you know, all of these other channels combined. It's pretty nice to own your own media. It's awesome. It's crazy. At a quarter of the cost. So it's like, it's a proprietary channel and it's cheaper. And then on the supply side... Do you like charge internally for... Totally.
Acquired
Uber CEO Dara Khosrowshahi
Exactly, exactly. We're going to have to start charging each other for plugs on it. We can tell you a little bit about an internal pricing mechanism. 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?
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Uber CEO Dara Khosrowshahi
So 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, et cetera.
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Uber CEO Dara Khosrowshahi
So 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.
Acquired
Uber CEO Dara Khosrowshahi
So to the question of 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 if Eats has this new customer acquisition source, every year, new customers for Eats account for less than 10% of the overall business, because it's a big repeat business. So in year one, hey, is it nice? Yeah, it's nice.
Acquired
Uber CEO Dara Khosrowshahi
But it doesn't really show up to investors, external investors. But then once, you know, it's 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
Acquired
Uber CEO Dara Khosrowshahi
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 ride side, there's proprietary supply coming over from eats again, compounding.
Acquired
Uber CEO Dara Khosrowshahi
Yes. I mean, it, it is, we are a supply led business at this point. Uh, Probably two years ago, we could have added 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
Acquired
Uber CEO Dara Khosrowshahi
is working more because the experience is better, earnings levels are 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.
Acquired
Uber CEO Dara Khosrowshahi
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, right?
Acquired
Uber CEO Dara Khosrowshahi
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.
Acquired
Uber CEO Dara Khosrowshahi
So while revenue and gross bookings are growing and unit volumes are strong, our supply base becomes more expensive. During softer economic times, you get more drivers coming into the platform. ETAs 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.
Acquired
Uber CEO Dara Khosrowshahi
So we accelerated trip growth, which is not something that you see at our scale, but it's some of this stuff working out.
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Uber CEO Dara Khosrowshahi
Yeah, if you ask our... top economist at Uber, he would say that we actually don't control the price to the consumer. That it's 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.
Acquired
Uber CEO Dara Khosrowshahi
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 taxis, et cetera. Right. There are 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.
Acquired
Uber CEO Dara Khosrowshahi
And then on the curbs and the cabulises and the flywheels. And by the way, we work with them. A lot of times we will connect through them as intermediaries, again, to wire up these taxis. And then we've gone from food to alcohol to groceries, et cetera. And then we have a freight business as well. So the more we wire up... You guys have boats now? I'm sorry? You have boats now?
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Uber CEO Dara Khosrowshahi
We have boats in Mykonos, which is pretty 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, you have to do it in a more and more efficient way.
Acquired
Uber CEO Dara Khosrowshahi
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 2 billion transactions a quarter,
Acquired
Uber CEO Dara Khosrowshahi
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, et cetera, 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%.
Acquired
Uber CEO Dara Khosrowshahi
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 run rate, it gets big. And again, it's compounding like every year, this machinery gets better.
Acquired
Uber CEO Dara Khosrowshahi
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? The bunch of retailers were having trouble hiring enough people, restauranters, et cetera. And then it did become more expensive to bring drivers into the Uber ecosystem. Earnings expectations have gone up.
Acquired
Uber CEO Dara Khosrowshahi
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, et cetera. So I think the catch up is a really healthy catch up. That is the reason why Ubers are more expensive now.
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Uber CEO Dara Khosrowshahi
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 are down. So again, it is a supply demand.
Acquired
Uber CEO Dara Khosrowshahi
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, et cetera. 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.
Acquired
Uber CEO Dara Khosrowshahi
Exactly. You're not, you know, making up the hotel rooms. Exactly. You know, the drivers are providing the service, right? But we're much more responsible end-to-end. but you're responsible for your customers. We have a very, very important responsibility to driver and courier community, these over 5 million people who are making an earning or making side earnings on Uber.
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Uber CEO Dara Khosrowshahi
And then the responsibility in terms of regulators and governments, et cetera, that consideration set is just so much bigger. So from that standpoint, it's
Acquired
Uber CEO Dara Khosrowshahi
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 has been created and like great i'm so glad i did it it was a friend of mine i was like hey are you having fun i'm like no i'm not having fun like I love it.
Acquired
Uber CEO Dara Khosrowshahi
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, you don't come to Uber for easy. You don't come here for an easy job. It's complicated. It's hardcore. People work their asses off. But you love it. And it's not fun. It ain't fun. But people love being at the company.
Acquired
Uber CEO Dara Khosrowshahi
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, et cetera, 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.
Acquired
Uber CEO Dara Khosrowshahi
Yeah, I mean, Uber HQ doesn't, but there are ops teams on the ground. And, you know, they're the heroes. Like, 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.
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Uber CEO Dara Khosrowshahi
I can't tell you. Yeah, that's the right answer. But it was a good board meeting.
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Uber CEO Dara Khosrowshahi
So I was reading about it on the news just like everyone else was, right? It was just all over the place. And it was crazy. Meg Whitman, Jeff Amell. It was a public. Everything going on and what led 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.
Acquired
Uber CEO Dara Khosrowshahi
And a headhunter called me about this role. So not a board member directly, a headhunter. Headhunter.
Acquired
Uber CEO Dara Khosrowshahi
Headhunter called me. It was a structured process. I'm like, no way. Like, no thank you. Goodbye. Happy in Seattle. Yeah, 13 years. I got my place on Wimpy. I love working for Barry. Like, I was good. This is fun. Yeah, exactly. It was fun. And then I was at the Sun Valley Conference, the Allen & Company Sun Valley Conference, and having drinks with Daniel Leck.
Acquired
Uber CEO Dara Khosrowshahi
And he's like, Dara, you know, did you get the call from that headhunter about the Uber job? I think you'd be perfect for the job. And I didn't know what the headhunter, why the headhunter called. Turned 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? So Daniel gave the headhunter your number. Yes.
Acquired
Uber CEO Dara Khosrowshahi
No way. And 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. 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.
Acquired
Uber CEO Dara Khosrowshahi
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.
Acquired
Uber CEO Dara Khosrowshahi
God, I think it was about two months. It was over the summer. Wow. How do you keep it secret? Nobody knew. I told them, 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 to know, the nanosecond it shows up in the news, I'm out of here. But I had to be realistic that it could show up in the news.
Acquired
Uber CEO Dara Khosrowshahi
It's amazing that it didn't. So actually, at that point, I called up Barry. because I couldn't put Barry in a situation or myself in a situation. I've worked with him 13 years, probably 20 years at IEC, and then even before as a banker. He and I have an incredible relationship. I owe so much to him.
Acquired
Uber CEO Dara Khosrowshahi
I couldn't take the risk of his seeing it in the press and the consequences of that and the loss of trust. So I called him up. I said, Barry, head on and call me about Uber. I'm going to talk to them. And he's like, you're effing crazy, hung up on me. I told Seth, like, oh, my God, I'm going to get fired. And nothing. Dead silence.
Acquired
Uber CEO Dara Khosrowshahi
He wasn't going to. He could. Maybe he would. I didn't know. We worked together for a long time. Call him the next day. He said... 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. Because we weren't in the news, it was like we gossip about it.
Acquired
Uber CEO Dara Khosrowshahi
It's like, oh, did you hear 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.
Acquired
Uber CEO Dara Khosrowshahi
And I told him, I think it was a Saturday or Sunday, that I'm coming in, making a presentation. He's like, show me the presentation. 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 shows you the kind of person he is, which is...
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Uber CEO Dara Khosrowshahi
He put friendship in that case over his own business interests. Maybe it was sick of me. I don't know. But it was calculated. Yeah, it just shows you that that is true personal loyalty.
Acquired
Uber CEO Dara Khosrowshahi
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.
Acquired
Uber CEO Dara Khosrowshahi
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.
Acquired
Uber CEO Dara Khosrowshahi
I talked to Barry about it, and it's ultimately up to him. And I think he decided that he wanted me there, and I try to be helpful. But I think it's absolutely right, which is the job of the new CEO, to some extent, is to be the CEO and do something different from the old CEO. That's definitional. And You know a little bit about that. Yeah, exactly.
Acquired
Uber CEO Dara Khosrowshahi
There could be hesitancy at a board meeting, et cetera, because the old person's there. And so I think on a net-net, I trust that 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.
Acquired
Uber CEO Dara Khosrowshahi
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.
Acquired
Uber CEO Dara Khosrowshahi
Well, I talked to Travis a couple of 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, et cetera. And for me, it was ultimately about the opportunity. It's such an important company. I always tell people, I look for three things, right? It's, do you work with people whom you like and you can learn from?
Acquired
Uber CEO Dara Khosrowshahi
Can you use an individual and 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've been 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.
Acquired
Uber CEO Dara Khosrowshahi
So the new team's like a combination of new and old, 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 and the city. So it all checked off, and the financials, you know, it was still a really young company. So the financials for me, yeah, could I do deal with this?
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Uber CEO Dara Khosrowshahi
Even though it was 10 years in, right? Yeah, less than that, probably, yeah. It was just about 10 years. Okay, yeah, there you go. You know better than I do.
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Uber CEO Dara Khosrowshahi
All turnarounds 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 a really, really hard time.
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Uber CEO Dara Khosrowshahi
Yeah, exactly. And so that was actually 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. Sometimes you can overcomplicate things. And it's like, hey, do you want to take a shot? I want to take a shot.
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Uber CEO Dara Khosrowshahi
And it was losing a bunch of share to Lyft. Right. Delete Uber? Yeah, delete Uber 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 what's a tough competitor and a strong brand.
Acquired
Uber CEO Dara Khosrowshahi
I think Lyft is stronger than people give it 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 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.
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Uber CEO Dara Khosrowshahi
And then they came back. And then it was not over. And now they're having a tough time. We'll see. But DoorDash is a tough competitor. 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.
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Uber CEO Dara Khosrowshahi
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.
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Uber CEO Dara Khosrowshahi
I think it comes to these company biases, 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, et cetera. The business in the suburbs is much lower. So we want to leverage a customer base that was an urban customer base. So we went after the
Acquired
Uber CEO Dara Khosrowshahi
urban restaurants, et cetera, and Uber was about cheap and fast, right? 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.
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Uber CEO Dara Khosrowshahi
Yes, yes. I mean, what could be more material than September 11th for travel?
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Uber CEO Dara Khosrowshahi
As it turned out, one, the suburbs in terms of food are bigger than cities. A lot of families in the suburbs. 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.
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Uber CEO Dara Khosrowshahi
I mean, now we've corrected that. Yeah. But listen, it was, I was running this 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?
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Uber CEO Dara Khosrowshahi
And we now are much more focused about building out selection. As we built out selection in urban centers, our category position versus DoorDash is actually quite constructive, really strong. We are looking to break into the suburbs. And there we got some work to do. And the suburbs are a very, very strong position. It's kind of their profit pools.
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Uber CEO Dara Khosrowshahi
And then we're building our profit pools outside and international. And kind of the battle is happening in the big cities. Yeah, it's interesting.
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Uber CEO Dara Khosrowshahi
Totally. Now, we are expanding rideshare into the suburbs now. And it's a pretty fast-growing part of our business. So maybe 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 have to build out your courier base, your restaurant supply, demand. So all of it has to come together, which is difficult.
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Uber CEO Dara Khosrowshahi
And at the time, one of the values of an option is time value, right? You don't want to exercise an option before the last 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.
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Uber CEO Dara Khosrowshahi
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. It was presenting myself as a mature operator, right? and my track record at Expedia, I think now things have changed, which is we have become much more focused on those three segments.
Acquired
Uber CEO Dara Khosrowshahi
And if you look at rides, we have a number of growth bets, which is there's this base business, UberX, which is 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 isn't legal, then we're not coming in until we're invited in.
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Uber CEO Dara Khosrowshahi
And we took a different tack, which is, 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 and 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, couriers, et cetera.
Acquired
Uber CEO Dara Khosrowshahi
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.
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Uber CEO Dara Khosrowshahi
low-cost, hailables, two-wheelers, three-wheelers, Uber for business, health, transportation, 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, 50% of our growth will come from these new initiatives that really didn't exist.
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Uber CEO Dara Khosrowshahi
And then on the Eats 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.
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Uber CEO Dara Khosrowshahi
You come to Uber Eats and Eats is bringing you demand. And then there's the fulfillment of that demand, right? My bringing wine here and delivering it, right? Thank you. This is delicious, by the way. That has nothing to do with demand necessarily, but it's fulfillment. These are two separate businesses that got stapled together. Exactly. So we have now, we're separating the tech stack, right?
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Uber CEO Dara Khosrowshahi
So that now we can offer, we can go to merchants and 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, et cetera, but they use our fulfillment services.
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Uber CEO Dara Khosrowshahi
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. 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.
Acquired
Uber CEO Dara Khosrowshahi
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. It's fine if you want to get out, but just let us know. You know, which way you want to go. God, he's good. And he's really good.
Acquired
Uber CEO Dara Khosrowshahi
It does. It's complex. It looks great on paper, and then real life is a lot more difficult, right? Yeah.
Acquired
Uber CEO Dara Khosrowshahi
Our working with taxis was an interesting twist, right? Which is to some extent, They have been definitionally the competition, or we have been the competition or the challenger to those incumbents. At some point, we became much bigger than taxi.
Acquired
Uber CEO Dara Khosrowshahi
But in the end, if you remove yourself from the emotions, et cetera, and 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. There are four and a half million of them, And if you take the hypothesis, which is the days of old where you wave your arm to wave a taxi down, like things are changing.
Acquired
Uber CEO Dara Khosrowshahi
then it was a move that was obvious. But at the same time, like the beauty of Uber is 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 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.
Acquired
Uber CEO Dara Khosrowshahi
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.
Acquired
Uber CEO Dara Khosrowshahi
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 accepts.
Acquired
Uber CEO Dara Khosrowshahi
Totally. Like who's, 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 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.
Acquired
Uber CEO Dara Khosrowshahi
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 might click for an UberX, a taxi might show up. Is that a good thing? Is that a bad thing? It improves marketplace liquidity.
Acquired
Uber CEO Dara Khosrowshahi
And things that seem very simple on the surface, to actually make the magic happen of pushing a button and a 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.
Acquired
Uber CEO Dara Khosrowshahi
It was the displacement in terms of shareholders. It was tough, right? And there's a certain cohort of shareholders going after hyper growth, et cetera, especially in this marketplace where it's much more about discipline growth, profitable growth, et cetera, that that changeover has been difficult
Acquired
Uber CEO Dara Khosrowshahi
I do. I can't imagine that if you're at the company, everyone's like, what's happening, right? There's a future. Companies thrive on certainty, on kind of rhythm, et cetera. And it was a tough macro position to be in. And then the micro position of what's going to happen at Expedia. So I can imagine what he was going through.
Acquired
Uber CEO Dara Khosrowshahi
But we now have a set of shareholders like the Fidelities of the World, Capital, Morgan Stanley, et cetera, 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.
Acquired
Uber CEO Dara Khosrowshahi
And those days, like, those were not heavy days. That was probably 15% of the company? I don't remember if it was 15%.
Acquired
Uber CEO Dara Khosrowshahi
Like, that's, wow. Like, I think in hindsight. I think it was a good move by him because it created separation. He wanted to move on. And so I, 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 people were panicking. Oh, my God, Travis is selling. What does that mean? Et cetera.
Acquired
Uber CEO Dara Khosrowshahi
And, you know, everyone wants to create drama around Uber. So 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 price is 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.
Acquired
Uber CEO Dara Khosrowshahi
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.
Acquired
Uber CEO Dara Khosrowshahi
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 good ones, but this one was a great one. And while I wouldn't say it was a probability,
Acquired
Uber CEO Dara Khosrowshahi
there was a much higher than non-zero 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, et cetera, 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.
Acquired
Uber CEO Dara Khosrowshahi
So we got together as a team, the IAC 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 meeting, 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 isn't life. So like, you know, everyone like looked at each other.
Acquired
Uber CEO Dara Khosrowshahi
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 was all this stuff happening. I had to go to London, TFL. They revoked our license, and there had been a data breach, and we had to deal with that. It was craziness, right? And at the same time, SoftBank was looking to invest in the company.
Acquired
Uber CEO Dara Khosrowshahi
And this is the Vision Fund days. And, you know, SoftBank, the only way they came in was heavy. Like, there was no tick-tock. There's no lightness of being with Masa.
Acquired
Uber CEO Dara Khosrowshahi
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 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.
Acquired
Uber CEO Dara Khosrowshahi
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 wanted to invest in Uber because it was a top brand, had top tech, et cetera. But at the same time, none of the shareholders wanted to sell because there was this game of chicken.
Acquired
Uber CEO Dara Khosrowshahi
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 get everyone to agree to blow up the high vote shares. I think it's actually the only time when a tech company, 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.
Acquired
Uber CEO Dara Khosrowshahi
And George, like, everybody. And if anyone said no, none of it would work. And, you know, South Bank would go to, you know, Club Pink, which would be a disaster. Wow. So that was a really interesting kind of... 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.
Acquired
Uber CEO Dara Khosrowshahi
And that, one, it 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? We did it for SoftBank.
Acquired
Uber CEO Dara Khosrowshahi
But in hindsight, it was a really important move, which is, okay, no more board control. Like, this is no longer going to be a control company. Let's go build.
Acquired
Uber CEO Dara Khosrowshahi
Everything would have blown up. And you might have had a Lyft who was gaining category position against us with a $10 billion investment from SoftBank. That's right.
Acquired
Uber CEO Dara Khosrowshahi
It was actually, I think, $15. Wow. 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.
Acquired
Uber CEO Dara Khosrowshahi
And it was, we had a deal person, Cam, who like did heroes work, like just talk to everyone. And then he would like kind of bring me in as a nice guy and everything. Say all the nice things. But in the end, it worked. It was a big move. And everybody converted, which is pretty awesome.
Acquired
Uber CEO Dara Khosrowshahi
We're like, let's go for this. Let's do it. And right after that meeting, Barry called Rich and said, game on.
Acquired
Uber CEO Dara Khosrowshahi
It was good training. I love the operating side of the business, the tech, et cetera. That's the stuff that I love. But I have to say the investment banking background that I had 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 I was like, wait, like that'll work? We're like, yeah, like that could work.
Acquired
Uber CEO Dara Khosrowshahi
Show me the bottom. No, then like going after, like starting to call people. Wow. It was awesome. It was cool.
Acquired
Uber CEO Dara Khosrowshahi
No, because the next day there was another crisis. It was like, breathe for two minutes, drink more wine, and then off to the next battle.
Acquired
Uber CEO Dara Khosrowshahi
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.
Acquired
Uber CEO Dara Khosrowshahi
So I tweet mostly myself. There's some stuff that folks say, we did this. It's me. Like, I don't have someone running the account. And 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. This is, to me, much more interesting.
Acquired
Uber CEO Dara Khosrowshahi
And so Twitter tweets can be taken out of context, et cetera. So I'm not there to stir the pot. So maybe that's what comes out in terms of my Twitter persona. I'll take Obama-esque or Clint-esque.
Acquired
Uber CEO Dara Khosrowshahi
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.
Acquired
Uber CEO Dara Khosrowshahi
Like it's at a pretty extraordinary learning organization and they wanted me as like the tech person and I was coming from Expedia and, you know, optimization, all that stuff and their capacity to learn like super traditional company capacity to learn was pretty awesome. One of the fascinating parts about the company and it's both,
Acquired
Uber CEO Dara Khosrowshahi
And I think that was the wisdom at the time, although when you're in the middle of... It sure doesn't feel calm. But after that, we said we're in. It got Rich the stability that he wanted. And in hindsight, it was a genius decision.
Acquired
Uber CEO Dara Khosrowshahi
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 of content and traffic? It was like, no, you cannot ask that question because the content is separate.
Acquired
Uber CEO Dara Khosrowshahi
So it's just a fascinating organization. And the bet that they made on subscriptions was amazing. It was not obvious because the 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.
Acquired
Uber CEO Dara Khosrowshahi
Every single news organization, et cetera, was advertising, advertising. This is the BuzzFeed 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've really benefited.
Acquired
Uber CEO Dara Khosrowshahi
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?
Acquired
Uber CEO Dara Khosrowshahi
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.
Acquired
Uber CEO Dara Khosrowshahi
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 York Times. Why would it not be the New York Times? They were very clear-eyed about that, and they're quite determined to achieve that.
Acquired
Uber CEO Dara Khosrowshahi
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 strong as a company. Ultimately, good for Uber 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 a cliff. And...
Acquired
Uber CEO Dara Khosrowshahi
Well, it will be interesting to see, which is they... Netflix is building...
Acquired
Uber CEO Dara Khosrowshahi
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
Acquired
Uber CEO Dara Khosrowshahi
That is an unanswerable question. It is because there's the last 2% of use cases, the tail use cases. It's unknowable what it'll 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, I think there are 40,000 deaths as a result of car accidents. Let's say that robot cars are 10 times safer
Acquired
Uber CEO Dara Khosrowshahi
Yeah. If you're 10 times safer, you know, fast forward 25 years from now, like who knows what it will be, 4,000 deaths a year, right? So a little more than 10 a day. And like if you have four companies... that are responsible for the marketplace, five companies, right? And there are 10 deaths a day. Like a good day is, hey, we only had one fatality. That's a good day.
Acquired
Uber CEO Dara Khosrowshahi
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. Does it have to be a hundred times better? Maybe that's not good enough. So like from a societal standpoint, of course, if it's a hundred times better, We should go forward with it, but that would mean there are 400 fatalities a year, one every single day.
Acquired
Uber CEO Dara Khosrowshahi
And I don't know how society would deal with that. Society is very, I don't want to call it forgiving, but they understand humans are human and humans make mistakes.
Acquired
Uber CEO Dara Khosrowshahi
Listen, we had this unbelievably unfortunate circumstance in Phoenix, and it caused us to completely redesign how we built for safety first, etc. Ultimately, because of the pandemic, we decided to get out of self-driving, which I think it was a good decision because our core skill set is building this demand network, connecting demand to supply in a dynamic way, etc.,
Acquired
Uber CEO Dara Khosrowshahi
And we now get to work with a bunch of partners and like Waymo's a partner, Aurora's a partner, et cetera. So we get to work with a much larger ecosystem. But I think the question of that last 2%, And then what is society ready, you know, what safety will society underwrite to? Those two questions, you know, are for me unanswerable.
Acquired
Uber CEO Dara Khosrowshahi
Other CEOs, you know, they lost a ton of business, but most of these businesses were profitable. We were losing $2.5 billion, 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 core to the business. You really had to bet on what's core, what's non-core.
Acquired
Uber CEO Dara Khosrowshahi
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.
Acquired
Uber CEO Dara Khosrowshahi
But still, like the service for certain originations and destinations, it works. The pickup, you know, 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 our fulfill rate,
Acquired
Uber CEO Dara Khosrowshahi
which is the percentage of time someone asks for a ride and then there's a car available. If that's less than call it 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.
Acquired
Uber CEO Dara Khosrowshahi
For any singular ride share provider to provide that kind of coverage is gonna be really, really difficult, which why ultimately we think the better solution is for the Waymos of the world, Auroras of 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,
Acquired
Uber CEO Dara Khosrowshahi
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's 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 also eats is a transportation business
Acquired
Uber CEO Dara Khosrowshahi
You're like, choose between your children. Like, is it George or is it Donnie? Like, come on. You can't be serious.
Acquired
Uber CEO Dara Khosrowshahi
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. Like last quarter, gross bookings grew over 22% or so, which is really good.
Acquired
Uber CEO Dara Khosrowshahi
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, be free cash flow positive. So the design spec that we're building is, how do you torture the organization? Because sometimes it is torture.
Acquired
Uber CEO Dara Khosrowshahi
But it was a huge accelerator as it relates to our Eats 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 precipitating factor. All right.
Acquired
Uber CEO Dara Khosrowshahi
Watch every single nickel and dime, 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 Booking.com and one thing that we learned, when I started Expedia, Expedia's take rate was 25% and Booking's take rate was 15.
Acquired
Uber CEO Dara Khosrowshahi
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 it's just really hard work to do.
Acquired
Uber CEO Dara Khosrowshahi
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 it's too easy. It's too tempting.
Acquired
Uber CEO Dara Khosrowshahi
And so we're very hardcore about like, no, no, no. We got to keep take rate low. And you got to do the hard work to be able to keep take rate low. So I'd say I take the 20% take rate business. Yeah. Like, it's more lasting. The growth can go on for much, much longer.
Acquired
Uber CEO Dara Khosrowshahi
And it takes oxygen out of the room, right? It's like what's it saying? Fat pigs get slaughtered, right?
Acquired
Uber CEO Dara Khosrowshahi
Yes, 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, this quarterly kind of treadmill that you're on, et cetera. And there's like you can make someone happy by increasing take rate and throwing it to the bottom line. And we really, really culturally try to resist that notion.
Acquired
Uber CEO Dara Khosrowshahi
And 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 profit. the service, et cetera.
Acquired
Uber CEO Dara Khosrowshahi
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, we were in a state of oversupply. We had too many drivers. And instead of gating them, et cetera, we just didn't really invest in the driver experience and the courier experience the way that we should have.
Acquired
Uber CEO Dara Khosrowshahi
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.
Acquired
Uber CEO Dara Khosrowshahi
And you do all the typical stuff, which is analytics and measurements and A-B tests, et cetera, in order to optimize throughput in the marketplace, et cetera. But like, as we step back, We don't A-B test what the 401k match should be for employees. It was equivalent. Some of the experimentation that we were doing on the earner side is like, yeah, should we match a 3% or 6%?
Acquired
Uber CEO Dara Khosrowshahi
So I met Barry Diller when I was an analyst at Allen & 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.
Acquired
Uber CEO Dara Khosrowshahi
And let's look at employee turnover. Cool experiment. Maybe you could optimize that. 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.
Acquired
Uber CEO Dara Khosrowshahi
You get in, get out, et cetera. But a driver will be spending four hours, five hours, six hours with the app every single day. So the consequence of all of this coming together and our building for drivers the way that we essentially build for consumers, which is pretty cool and techie, et cetera, You know, one is like the P95 experience.
Acquired
Uber CEO Dara Khosrowshahi
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.
Acquired
Uber CEO Dara Khosrowshahi
Yeah, the probability percentages. You know, drivers, an average driver who's driving a week experienced, like, a P95 circumstance every single week, multiple times a week, because they spent a lot more time on the app.
Acquired
Uber CEO Dara Khosrowshahi
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, et cetera. 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.
Acquired
Uber CEO Dara Khosrowshahi
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, 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 build this earner experience.
Acquired
Uber CEO Dara Khosrowshahi
And I do think as I step back and I think about what am I going to be proud of at the company, and 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
Acquired
Uber CEO Dara Khosrowshahi
And Uber is unique in that it's a technology company that's built for the real world. And the impact that we have, especially as it relates to earners, 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 has the best product and experience for earners, we're going to win long term.
Acquired
Uber CEO Dara Khosrowshahi
But if we're that technology company that's very much connected Not with the elite, but with an earner base and the broad population, not just in San Francisco, but all over the world. That's a company to be proud of. But at the same time, 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 earner platform in the world?
Acquired
Uber CEO Dara Khosrowshahi
And I got assigned to this deal where Barry Diller, who at the time was running QVC, he was the CEO of QVC, which was home shopping.
Acquired
Uber CEO Dara Khosrowshahi
Yeah, I think we're the largest source of work anywhere by far. And growing pretty fast. That's a crazy statement.
Acquired
Uber CEO Dara Khosrowshahi
Now, the vast majority are quite part-time, but it's still, the scope is pretty extraordinary.
Acquired
Uber CEO Dara Khosrowshahi
You're very welcome. It was a pleasure. Thank you for treating me to the wine.
Acquired
Uber CEO Dara Khosrowshahi
Yes, correct. Paramount 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 QVC and have control because he wanted to be his own boss. And who can blame him for that?
Acquired
Uber CEO Dara Khosrowshahi
It was golden for a kid like me. And so at the time, Sumner Restone, 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.
Acquired
Uber CEO Dara Khosrowshahi
So it was like the minnow- Swallowing the whale. Yeah, swallowing the whale. It's like Cap Cities.
Acquired
Uber CEO Dara Khosrowshahi
Exactly, exactly. And I was the analyst on the deal. And it was a whole kind of bidding process. Barry would bid, and then Redstone would bid up, et cetera. 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?
Acquired
Uber CEO Dara Khosrowshahi
The person who I worked for, the VP, et cetera, she got sick. And so I had to kind of step up and work with Barry directly, like making these pitches to Barry.
Acquired
Uber CEO Dara Khosrowshahi
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 wanted 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.
Acquired
Uber CEO Dara Khosrowshahi
So I had to print out my whole LBO model, bidding model, et cetera.
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Uber CEO Dara Khosrowshahi
But the only question in my mind was, when am I going to get fired, right? It's like, this is a disaster. An analyst is not supposed to talk to a CEO. But 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.
Acquired
Uber CEO Dara Khosrowshahi
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.
Acquired
Uber CEO Dara Khosrowshahi
But it was also, it's part of Barry's process, which is get the unvarnished truth because that helps him 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.
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Uber CEO Dara Khosrowshahi
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.
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Uber CEO Dara Khosrowshahi
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 or regular process, et cetera. And it shows. They build incredible loyalty in terms of the people who know them.
Acquired
Uber CEO Dara Khosrowshahi
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, right?
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Uber CEO Dara Khosrowshahi
Still works there. So I got the job and chased the woman of my dreams and broke up with her six months later. But I got a job at Allen & Company, a pretty cool career.
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Uber CEO Dara Khosrowshahi
You know, you could be right or I could have just gotten totally lucky by falling into Allen & 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 that opportunity. And I just got lucky.
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Uber CEO Dara Khosrowshahi
I think I always tell people that The most common mistake that I see in young people is that they overplan 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.
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Uber CEO Dara Khosrowshahi
And when you overplan your career, you know, 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 & Company my whole life. It was my place.
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Uber CEO Dara Khosrowshahi
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.
Acquired
Uber CEO Dara Khosrowshahi
But like while you're in, you go all in. But at the same time, like keep your eyes open because you never know.