Uber CEO Dara Khosrowshahi

0:00 So Uh I came up here, we scheduled this time to record. What what are we talking about today? We haven't talked about Uber in a while. Mm, that's right. A lot has happened since we did the IPO episode. It's been What Four years?

0:17 That is crazy. All right. Yeah, let's do it. I ordered some food, I hope that's okay. Oh yeah. Um maybe we can eat while we uh dear Is someone order of greets? Oh yeah, that's me.

0:32 All right, cool. Um Doesn't want it here. Oh great. So try. Join you guys?

0:39 Actually, yeah, that'd be great. Come on in. Come on in. Who got the truth? Is it you, is it you, is it you? Who we got

0:48 No Is it you, is it you, is it you? Let me down Another story on the way

0:58 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.

1:20 They've gone through quite the transformation since our twenty nineteen episode on IPO Day. In the past twelve months, they've done over thirty billion dollars in revenue up from just ten billion two years ago. And that's not D M V, 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,

1:44 Or that's too far in the future or speculative. They're even doing something we couldn't imagine at IPO time, which is profitability. Now, it's very modest at this point, but we wouldn't have dreamed Uber could even get to break even. back when they burned David, what was it, three billion dollars the year before the IPO? Yeah, I think it was the most

2:04 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 dives into moments like buying Expedia right when nine eleven happened. how he first met Barry Diller at Allen and company.

2:32 And what the financial mechanics are actually like of replacing Uber's entire shareholder base. Or close to it anyway, almost in its entirety since joining the company. Yeah, not to mention the Uber CEO recruitment process, which I don't think Dar has talked about anywhere else before. No, I don't think so either. Well, if you are not already in the Slack, you totally should join. So many smart folks commenting on episodes and bringing new information after we record that we didn't find in the research because many of you work in the fields that were actually covering on episodes. So You can join at acquired.fm slash slack.

3:07 Listen to our other episodes on our second show, ACQ two, like a great episode we just did with Jake Saber from Emergence on AI motes in B to B SAS. And without further ado. This show is not investment advice. David and I may have investments, the companies we discuss. And this show is for informational and entertainment purposes only.

3:28 Onto our conversation with Dara. Cheers. Dara. Cheers. Welcome to Acquired. Thank you very much. Happy to be here.

3:36 Appreciate you uh swinging by the home studio on your way home from Expedia board meeting, is that right? Yes. How that go? Uh I can't tell you. Yeah, that's uh that's the right answer. But it was a good board, but 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 two thousand and

3:58 four to twenty seventeen, is that right? Thirteen years. Thirteen 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.

4:14 in Expedia you took it private. It was at Microsoft with Rich Barton, he spun it out, it went public. you made a bid to take it private, I think over like two tranches. There was like a controlling interest and then a full buyout. Yeah, we bought Microsoft stake. Microsoft decided it's it's non core. I mean about Microsoft controlling stake.

4:34 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 we're building. So this being acquired and us wanting to dive into a story

4:47 There's one moment in particular that was pretty insane. The Term sheet was signed. for IAC to buy Expedia.

4:58 before September eleventh, like earlier in two thousand and one, the deal hadn't closed yet. I think there was some kind of material adverse change clause that allowed claws, they called it, yes. You were allowed to pull out of the deal. Yes. Yes. I mean i what could be more material than September eleventh for travel.

5:14 But you guys didn't. Like take us through Yeah, we we didn't and we knew we had the option to get out. Yeah. And at the time

5:24 You know, one of the values of an option is time value, right? You don't want to exercise an option before the last uh moment that you can. And Rich called I think Barry at the time.

5:37 And he said listen. September eleventh happened. Business obviously has fallen off cliff. We think it'll come back, but I don't know. And he said.

5:47 the place is pretty unstable now because no one knows whether the deal's gonna go through or not go through. There's this MAC clause. So if you want to get out, like it's fine. Rich is very confident, he's a great entrepreneur. It's fine if you want to get out, but just like let us know. You know, if you which which way you want to go. God, he's good. And he's really good. Which really he just to your point about time value, he just wants you to make a decision and so he's like, we'll be fine. I can't imagine that if you're at the company, everyone's like, What's happening? Right? There's a future Uh companies. thrive on certainty, on kind of rhythm, et cetera. And it was a tough macro position to be in.

6:24 And then the micro position of what's gonna happen expedient. So I can imagine What he was going through. So we got together as a team, the IC team and all of us were kinda talking. And you know, there's no clear decision to be made there.

6:40 But very respected. What rich. asked for. And I remember the meeting we're like all having all these debates. And I think it was Barry who said it.

6:51 He said, You know, if there isn't travel There's a life. So like You know, everyone like looked at each other, we're like, Let's go for this. Let's let's do it. And right after that meeting Barry called Rich and said

7:02 Game on. No changes to deal at all, like exactly as No changes to the deal. It's like we're gonna do this. But Barry His passion is travel, right? And and I think he was right, which is

7:13 Just when you're in the center of the storm. It looks like Oh my God, life is gonna be over but things revert to norm. I mean you you look at like The pandemic and everyone's looking for all these long term changes. And everything reverts to norm. And I think that was the wisdom at the time, although when you're in the middle of

7:29 Craziness. 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.

7:39 Did you ever think you would uh Then live through another moment like that over the last year. No, I like this one to be finally the last one. Never want to go through something like that again. But it it made it made us strong as a company. Ultimately. Good for Uber the past couple of years.

7:54 Yeah, I I think the pandemic was incredibly painful in that sitting together as a team, eighty five percent of your mobility volume, which was the profit driver of the company falls off a cliff. And Other CEOs, you know, they lost a ton of business, but most of these businesses were profitable.

8:13 We were losing two and a half bill dollars. And then it just got Way worse. So it was a very tough situation to be in, and we Uh had to cut

8:23 a lot of overhead. We had to cut up businesses that we felt were core to the business. You really had to bet on what's core, what's non core. But Yeah it's was a huge accelerator as it relates to our Eats delivery business. And

8:37 I think That discipline in hindsight has been great. But I wouldn't want that as That shouldn't have been the

8:45 The precipitating factor. Yeah. All right. Before I let David bring us to today already, let's go back down memory lane. So how did you meet Barry Diller? So I met Barry Diller when I was an analyst. At Allen and Company, which was my first job out of college. It's an investment bank in New York City, specializes in the media and entertainment. Sector now much more tech. They've made the Pretty cool transition.

9:08 And I was a lowly analyst. And I got assigned to this deal. Where Barry Diller. Who at the time

9:19 was running QVC. He was a CO of QC, which is home shopping. And he had run Paramount and Fox studios before that? Correct. Pam first and then he ran Fox for Murdoch. And then he decided he wanted to be his his own boss. Mm-hmm. And at some point John Malone, I think, had control of QVC.

9:39 And Barry. got the job to run Q V C 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 for a a a kid like me. And so At the time.

9:56 Sumner Restone who was running Viacom. had come to an agreement to buy Paramount Pictures. Which was Barry's old home. Mm. And

10:06 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.

10:22 You know, so it was like the minnow Swallowing the Whale. Swallow the whale. It's like uh capsities. Capsides. Exactly. Exactly. And Uh I was the analyst on the deal. And It was a whole kind of bidding process, you know, Barry would bid and then Redstone would bid up, et cetera. Multiple steps. There was a Uh

10:43 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 negotiate a deal.

10:55 The person who I worked for the VP, etcetera. She got sick. And so I had to kind of step up. And

11:06 work with Barry directly, like making these pitches to Barry. You're still a couple years out of college at this point? I was like two, three years out of college. And at some point Barry's like You know, there are all these complicated numbers that you put together. And Barry want to know like who is the person running these numbers.

11:23 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.

11:32 So like had to print out my whole LBO model, bidding model, et cetera. Like holy shit. But you know, but it the only question in my mind was when am I gonna get fired, right? It's it's like this is a disaster. And and analysts is not supposed to talk to CEO. But Like in hindsight, I've seen this patterning with Barry, which is

11:54 He wants to get the real stuff. He doesn't want a version, an edited version of reality. Because then it's just an edited version. He wants to go to the source. And he wants to know, like, there are these numbers and I'm making

12:09 At the time one of the business decisions on my Professional life. based on like these pieces of paper. Who's responsible for this?

12:16 And I want them to explain it to me. Mm. 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.

12:28 truth because that helps them make better decisions. But then I met him and I remember thinking, hey, if if there's ever a person that I wanna work with, like I I wanna work for that person. Do you think there was something about you and the way you presented that made her balan

12:46 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 b betting on people. And not hierarchies, et cetera. I don't know, honestly.

13:03 I remember the advice that he gave me is bet on people, not on companies. And that was a patterning that he had through his whole career. He was very loyal. found a good person and then would bet on that person. And Barry's the same, which is like he'll throw a young person off the deep end. And you'll either sink or you swim.

13:19 He's selective in who he throws off, you know, what deep and et cetera. But both of them were willing to give opportunity outside of like regular scope or regular process, etcetera. And it shows.

13:33 You know, they they build incredible loyalty in terms of the people who know them. How did you find your way to Allen and Company? I know I'm just like pulling at threads going backwards here, but uh I was um it was a very considerate decision, which was I studied engineering in school and I actually had a engineering management um Job wind up at a 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.

14:03 My brother worked there. Uh still works there, right? Still works there. So I got the job and chased the woman of my dreams and broke up with her six months later, but you know, I got a job at Alama Company for a cool 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 then expand up and down the stack and then figure out how to add like fifteen other businesses and it would become this like

14:37 Beautiful conglomeration. I don't know. Totally lucky. By falling it down on a company. I really do think it was just

14:48 Things came together. And everyone's career who's successful. It's a combination of luck and opportunity and taking advantage of the opportunity and Yeah, I just got lucky. So that's like a nice Thing to say.

14:59 There are a lot of other people that Could have lucked their way into an Allen and company job and then not turned it into an incredible performance with one of the most important people where your model needs to hold weight, which is Barry Diller, in that exact crucible moment in time. What do you say to young people when they sort of ask you this question about

15:17 How much does luck have to do with it? And how should I be the most prepared? And how can I seize opportunities when they come up? I think I always tell people that The most common mistake that I see in young people is that they overplan their career. Yeah. I wanna do X or I wanna be vice president or I wanna make so much money by a certain time.

15:38 And when you overplan your career, you know, that there's this human bias, which is Agrees. with the plan that you have and ignore it everything else that doesn't agree. With it. So

15:51 My advice for young people is like don't overplant. You never know what opportunities are gonna come up. I plan to stay at Allen Company my whole life. It was my place. My brother wound up. being there. But

16:04 being open to possibilities, being open to opportunities, and then when you get that opportunity Going all in. You know, like it's just Don't hedge. If you're gonna be in something, go all in.

16:16 And Do what's required of you and then like fifty percent more, like blow people away. Uh and then you know, tomorrow maybe something else comes up and 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,'cause you never know. All right listeners.

16:33 Now is a great time to talk about a new partner of ours here on Acquired, Lagora. The agentic operating system that is redefining how the world's best legal teams work. Yep. It's sort of obvious that AI is gonna completely change the legal industry. I bet most of you listening have dropped a contract into some sort of AI chat bot out there. Legora took that insight and asked the question, what if you really built something with that power from the ground up for the legal industry? So the founders did exactly what great founders do. operate with obsessive customer focus.

17:08 They embedded inside a massive law firm. For months. They sat with the lawyers just watching how the work really gets done. And that's how you get features that customers love, like tabular review where you Drop in a folder of hundreds of contracts and it pulls every key term into a grid a lawyer can actually work with. Legor's bet here is interesting, since it lets each lawyer handle more complexity, any given person can increase the quality of their work and do higher value work. And this means that the pie can grow even as each individual task takes less time.

17:40 And they recently launched Lagora Agent, offering greater intelligence and performance. The agent lets lawyers set an objective. Then it can handle the planning and the execution and delivery of the final product. Legal teams get to maintain full control and transparency since they're still involved where judgment is required. And Lagora works where you already work. You can use it within Microsoft Word while redlining or drafting. The early Lagora numbers essentially speak for themselves. When they have a head to head pilot with their top competitor, they win 70% of the time. Legora now has over a hundred thousand lawyers on the platform from twelve hundred legal teams in fifty countries. And crazily, they went from one million To a hundred million in ARR.

18:27 In about Eighteen months. truly insane numbers. And that is the real test. Plenty of things demo well, but the question is whether a busy associate actually reaches for it during crunch time, or whether a partner trusts it before going into a conversation with a major client.

18:42 If your legal team wants to check it out, whether you're a law firm or you're in-house at a company, you can learn more at Lagora.com/slash acquired. And just tell'em that Ben and David sent you. Alright, so we're gonna catch back up to that Expedia era. thirteen years you have uh pretty wild competition with booking dot com. And I think

19:05 You learn a lot of lessons from watching booking just crush it. Top line profit margins, uh rate of expansion, everything about it. Booking built a hell of a company. Incredible. When you're on the expedia side of things. And then you get a fresh start at Uber.

19:22 How do you take those lessons with you and what did you learn? God, I learned so much. Um Booking was an execution machine. And their focus when we talked about focus was

19:34 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, and if you're a marketplace business.

19:50 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 build a global business first.

20:05 uh and just were an absolute execution machine. The other area was that Expedia was probably more focused on building demand, kind of consumer demand, brand, etcetera. Booking was more supply led. Especially in the States, nobody knew what booking. Totally. Totally. But it's like for for them

20:24 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 MetaSearch.

20:36 And If you have a hundred hotels in a market And you expand that to two hundred hotels on the market. that market is also going to convert better. So not only do you build kind of a new segment of demand

20:48 But then if there's a search for, you know Hotel in Nice. Nice becomes a better product, can 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.

21:02 And for me the biggest lesson as I came to Uber was Uber's marketplace business. very, very fragmented supply base, right? It's five point six million drivers and couriers who or earning on our platform.

21:17 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

21:30 I think generally we're doing really well and gained a bunch of category share versus lift coming out of the pandemic. was because we really focused on bringing those drivers back to the platform. building our service, etcetera, and it was a supply led way. Of building the business.

21:46 Which definitely was a learning that I took from booking dot com. With booking, the you can build a market uh of it, 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

22:02 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 drive people.

22:17 There's a much larger crossover. And we can actually use eats. Almost as uh The recruitment tool.

22:25 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.

22:38 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 w required for driving. Those steps don't necessarily need to be completed.

22:52 to deliver food. You can get people into uh the food ecosystem. They can start earning on the Uber platform. And then you can upsell them into additional opportunities, driving people, shopping, et cetera.

23:05 It it's a structural recruitment advantage we have in terms of building up supply. And as you build up the supply. Liquidity in the marketplace gets better, you know, surge comes down, pricing gets better, ETA gets better. Your ability to price.

23:19 Gets better. And The demand shows up. Some extent. So

23:24 Everything you just said, that's always been like the the story, the movie, right? It seems like in the past few years, though, especially relative to your competitors, It's actually become more of a reality. And I'm curious maybe You talked about booking being execution machines. Like what what does the Uber execution machine look like? Since the pandemic to

23:46 Maybe make that more of a reality. Well, I think that Th there's always a delay between Inputs and outputs. Right, which is you you can start changing the inputs in terms of

23:57 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 eats got to size.

24:08 to merge all the teams together, the technical teams together, the marketplace teams together. uh single earner team, etcetera. When east was small It needed its own dedicated teams. Because if you had one team doing

24:22 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.

24:42 So it's a It's a almost free Customer acquisition tool for for Eats. Customer acquisition. channel for eats, right? Yeah, we we get more new customers from Arise than we do from Google, Meta, Instagram.

25:00 You know, all of these other channels combined. At at a quarter of the cost. So it's like It's it's a proprietary channel and it's cheaper. And then I'm do you do you like charge internally for Totally. Oh, yeah. Well it's an it's an even advertising business, right? So it's an ad unit like any other. Exactly. Exactly. And

25:21 We're gonna have to start charging each other for plugs on the We can tell you a little bit about internal pricing mechanisms. But 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.

25:40 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, et cetera. So there's a

25:52 There's a 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

26:08 That experience. So to the question of like why is it happening now? Is one It looks great on paper, but then to build the machinery to actually do it effectively takes time.

26:20 And then, you know, if Eats has this new customer acquisition Uh source. Every year. New customers for each account for Less than ten percent of the business.

26:31 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.

26:43 But then once, you know, it's uh The the saying compounding is the seventh wonder of the world or 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.

27:00 What we're doing is essentially our margins are growing faster than our competition because we have a bunch of proprietary traffic that's coming over. And then on the Right side. There's proprietary supply coming over from Eats, again compounding.

27:14 Is it still that um Supply acquisition cost is Bigger than demand acquisition cost for you guys. Yes. Yeah. Yes. I mean it it it is we are a supply led business at this point. Um Probably two years ago we could have added

27:29 uh twenty five percent more drivers and couriers into the platform, they would all be like super busy instantly. Right now our supply generally is growing faster than demand because it's catching up to demand. And the average driver who's on the platform is working more because the experience is better, earnings levels are are are pretty are really good. So at this point probably supply is still trailing demand by

27:53 You know, five percent or so. But the marketplace is now getting to a point where it's balanced. But the it's that compounding that really starts working. I was reading through the most recent earnings and you have a chart where on average over the last five years or so.

28:07 Drivers make more money per hour. Mm-hmm. 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 wanna like

28:26 Make sure that we don't sort of flo the the supply side of the marketplace. No. Because one of our core philosophies is this an open platform. And if

28:39 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? 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 our marketplace.

29:00 Which is during really good times. It becomes harder for us to recruit drivers. So the cost of supply goes up. So while revenue and gross bookings are growing and Yeah, volumes are strong. Our supply base becomes more expensive.

29:16 During softer economic times, you get more drivers coming into the platform. ETA's come down. Prices come down. the price becomes cheaper.

29:26 So actually are unit volumes accelerate. So if you look like our Q one unit volumes They grew twenty four percent versus nineteen percent in Q four. So we accelerated. You know, trip.

29:37 Growth. Which is not something that you see at our scale. But it's it's some of this stuff working out. Right. So it's sort of the invisible hand of the market theory that sort of self regulates this for you. Yeah, it's not a theory, it happens. Yeah, I guess like yeah. It's it it's this very cool experiment. Yeah. Economists like to talk about like things in theory, but like you actually have a one of the largest data sets in human history of you know, people doing work and other people

30:01 Consuming services. Yeah, if you 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 labour.

30:17 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 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.

30:37 Yes. I mean certainly I think in twenty whenever we did the IPO episode, Uber had lost like close to three billion dollars the year before going public. In history. Attributed to Ben Gilbert at the time. But now of magnitude, that's true. Uh depending on what profitability metric you look at, you guys are a a break even or slightly positive business. and increasingly getting more profitable and looking like a self sustaining business.

31:09 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 centrally wire up

31:21 every form of transportation of whether it's people or things, and you know, it's increasingly People and then shared, uh, 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 gonna wire up. Every single taxi in the world. Right. And then on the curbs and the cabuluses and the uh flywheels. And by the way, we work with them, right? A a lot of times we will connect through them as interior, again to wire up these taxis.

31:49 And then we've gone from food to uh alcohol to groceries, etc. then we have a freight uh business as well. So the more we wire up The more demand. I'm sorry. You have boats now, I guess. We have boats in Mikinaos, which is pretty cool. We have the uh boats on the Thames too. It's just like if if it moves and it carries people and things, we're gonna wire it up.

32:11 and make it available on demand. That usually brings in the demand for transportation, et cetera. And then it's like math. You have to do it in a more more efficient way. I think one of the secret sauces that we have is

32:26 We have a very large and capable Marketplace team. These are ML engineers who are building other systems that

32:38 Match. Price. All of this connectivity. And when you're you know working over

32:47 uh an ecosystem of two billion transactions a quarter the data sets that that we have, the experimentation that we can do in terms of what's the most optimal match. How do you price etc.? It's just a bigger database than anyone else. So

33:03 Every year when I can't speak to how our competitors are matching and pricing. But every year matching and pricing probably improves by five percent a year. So you improve your the marketplace throughput by about five percent.

33:19 Everything else being the same. And that's like free growth. And when it's on top of You know, call it a hundred and twenty, hundred and thirty billion dollar run rate. It gets big and again it's compounding, like every year this machinery gets better. So then uh just to make sure I'm understanding right, the reason why'cause that you talk to anybody and and they're like you're like, Oh, what should I ask Dara? And they're like, Ask them why Ubers are more expensive than they used to be. And I'm like,'Cause it's 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

33:50 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's 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 We're having trouble hiring enough people.

34:10 Uh restaurant, et cetera. 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 kinda step back.

34:24 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. Now in this environment

34:41 Where we are adding supply faster than demand because the supply is really coming into the marketplace. Prices in Uber now, year on year. Or down. Hm. So airport in San Francisco this morning was the cheapest it's been in months.

34:55 So thank you. Well, specifically not thank you, thank the invisible hand at work. Thank you, Mr. Mark. Exactly. How has the complexity of Uber relative to Expedia. matched up with your expectations coming in.

35:13 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.

35:27 It is like Expedia. travel agency, you're bringing demand to your supply base, et cetera. And and you have to think about the travel ecosystem. But with Uber, Uber's like A Incredibly important.

35:39 Service. to the cities of the world. And also expedient. You weren't Providing the service. Yes. You were a dem a marketplace layer. You're not operating the airplanes. Exactly. You're not, you know, making up the hotel rooms. Exactly. You know, the drivers are providing the service, right? But it's

35:56 were much more responsible end to end. But you know, you're responsible for your customers. We have a very, very important responsibility to driver and courier community these

36:08 over five million people who are making an earning or making kind of a side earnings on on Uber. And then the responsibility in terms of like regulators and governments, et cetera. That

36:20 consideration set is is just it's so much bigger. So from that standpoint it's Tough but also really interesting and satisfying in some ways. Were you ready for it?

36:33 Was I ready for it? Yeah. No. I had no idea. Is this one of those like if you knew you wouldn't have done it, but now you've done it and so all this value's been created and like great. I'm so glad I did it. It it was a a friend of mine was like, Hey, are you having fun? I'm like No, I'm not having fun. Like I love it. You know, like the job is too hard to like it's not fun. But

36:53 It's so Cool. It's such an interesting space. you really feel like you're having impact. Everyone at Uber, like it we always talk like you don't come to Uber for easy.

37:06 Like you don't come here for an easy job. It's complicated, it's hardcore. People work their asses off. But like you love it. And and it's not fun. Like it ain't fun.

37:17 But People Love being at the company. That's something I didn't know. And then and then the The dynamic ріm neчі.

37:26 of the marketplace and how we balance the marketplace and the pricing, et cetera. is unique. Right it it's Thursday night. There's a Taylor Swift концert. All hands on deck.

37:38 We gotta figure Things have that operational nature, but how It does uh Uber HQ plan for Taylor concerts.

37:48 Ahead of time is there happening. Yeah, I mean Uber HQ doesn't, but there are ops teams on the ground. Yes. And you know, they're they're the heroes. Like they're on the ground city by city. work their ass off and and they they are They are kinda Where the rubber.

38:03 meets the road, so to speak, to use a to use a transportation metaphor. So David asked this interesting question that I want to dig a little bit deeper on, th the 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.

38:21 In a very short time. When did you first get contacted about it? Like how did you how did you enter the Uber orbit? So um I was reading about the news just like everyone else was, right? It was just All over the place. And it was it was

38:38 Meg Whitman F M L. Everything going on on what led to it, you know, the the It was It was fascinating as an observer. I never, ever, ever imagined that. I would then play a part. And

38:57 A headhunter called me. About This role. So not a board member directly, a headhunter. Oh Headhunter called me. It was a

39:07 Structure process. I'm like, no way. Like Yeah. No thank you. Goodbye. Happy in Seattle. Yeah, 13 years. I got my voice on Wendy. I love working for Barry. Like it was I I was good. This is fun. Yeah. And then and then we exactly it was fun.

39:25 And then I I was at the Sun Valley Conference, the Allen and Company Sun Valley Conference, and Um Having drinks with Daniel Eck. And he's like, Dor, you know, did you get the call from

39:38 And Headhunter about the Uber job. Uh, I think you'd be perfect for the job. And I didn't know what the Headhunter why the Headhunter called. Turn out Daniel. I'm like, dude, why would I ever do that? Like I'm happy. Like why would I ever

39:53 Jump into that mess. So Daniel gave the head hunter your number. Yes. And and I'm like no way. No way.

40:01 And he looks he looks at me like With those like Uh. Since when is life about having fun?

40:10 It's about having impact. This is important. Like You can do this. And I'd had a couple of drinks and the alcohol was flowing and we were having fun and my wife says like Yeah, you can do this And I'm like, Yeah, I can do this So uh the next day I called the headhunter back and I said let's

40:28 Hawk. And the next step was for me to meet a board member and we had dinner And he was very charming. Uh and he kinda started the the recruitment. It was pretty cool. And how long between then and when you accepted the job?

40:43 God. I I think it was about two months, it was over the summer. Uh How did you keep it secret? Nobody knew. I told them, I I said, listen, up front Um I have a job and it's a great job.

40:57 So The nano second that my name shows up in the news. I'm Out of here.

41:05 So I just want you to know like 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. It's amazing that that it didn't. So actually

41:16 At that point I called a Barry. Because I couldn't put they're in a situation or myself in a situation, like I I'd work with them. Thirteen years, probably twenty years at I C, and then even before as a banker, like

41:30 He and I have an incredible relationship. I owe like so much to him. I couldn't take the risk of his seeing it. In the press. And you know. The the consequences of that.

41:41 Um and and the and the and the Loss of trust. So I called him up. As a Barry How don't call me about Uber. Um

41:50 I'm gonna talk to them. And he's like You're acting crazy hung up on me. I told I just say like, Oh my god, I'm gonna get fired. Uh and

42:00 Nothing. Dead silence. You weren't gonna get fired because w what was Barry gonna do? Like step in and be CEO himself? I I didn't know. We we worked together for a long time. Calm the next day. He said

42:16 Uh Speaking as the chairman of Expedia, it would be a real mistake. But speaking as a friend I understand why you're interested. I would be too.

42:29 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. It's like oh did you hear like Meg is this? And so it was a fun thing that we gossiped about, but

42:44 He actually there was a Plenty of time when I had to make a presentation. to the Uber board. This was like my big presentation and and I heard that the other candidates were coming in to present as well. So this was a big day. And I told him, I think it was a Saturday or Sunday that I'm coming in making presentation. He's like, Show me the presentation. Yeah. It was a PowerPoint.

43:03 So I show them PowerPoint. And he actually helped me in the PowerPoint. He's like, This is good, this is good, you have to add uh this page. Uh it's just it shows you

43:14 The kind of person he is, which is he put friendship in that case over His own business interests. Maybe maybe it was sick of me, I don't know. But it was calculated. Yeah, it it just shows you the personal loyalty. Yeah. And there's an element to it too, where if he got to collaborate with you on it, then there was a chance you would stick around on the Expedia board and and remain a friend of the company even though you're not in the seat. Yes. And I still am on the board. It's you know, I love the company. But it's weird being on the board as a former CEO.

43:45 Like it's a it's a strange experience. Did you do anything to prepare for that? No, like usually my life it's like stumble into something and then figure it out. You're also a busy dude. Yeah. But it was I wanted to stay on the board, I wanted to help and You know, the company's going through its own journey now. So Hopefully to greatness. Did you consider I mean this sort of famously was an issue in the Microsoft transition and um has been an issue in the Disney transition. Did you consider

44:09 Hey, actually maybe it would be better for the company if I didn't serve on the board just to give enough space for new leadership. I talked to Barry about it and it's ultimately up to him. Right. And I think he decided that he wanted me there and I try to be helpful. But but I think it's absolutely right, which is It's Yeah, the job of the new COVID.

44:29 to some extent is To be the CEO and do something different from The old CEO. Like that's definitional. And

44:38 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 trust that Barry's judgment.

44:51 It it does feel weird sometimes. Because I've moved on, but It's working. I think it's working, but it's complicated. I bet.

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46:27 We're huge fans of Vanta over here, and literally hundreds of acquired listeners have become Vanta customers at their companies over the years. So you can get$1,000 off Vanta at vanta.com slash acquired. That's V-A-N-T-A.com slash acquired for a thousand dollars off. And just tell them. That Ben and David sent you. Alright, so back to the reverse diligence question. Yes. What did you get to learn?

46:51 about Uber and I mean to directly ask, did you get to talk to Travis? Like did you get to talk to any of the sort of departing leadership? Well, I talked to Travis a couple of times. I talked with Ryan and Garrett, who were the other founders. I talked to couple of other board members. I did. financial diligence, et cetera.

47:09 And you know, for me it it was ultimately about the opportunity. It's such an important company. I always tell people like I look for three things, right? It's Do you work with people whom you like and you can learn from? Um can you as an individual make And impact.

47:24 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. Mm.

47:33 And as it turned out, there have been like great folks there who have stayed. who were there before me and then new folks like Uh, you know, Tony West and Nelson Che that we brought, et cetera. So the new team's like a combination of new and all, which is great. And definitionally As a leadership team, we can have an impact on Uber, and Uber is a company that it's unique in terms of its impact on the ground in the city. So

47:56 It all checked off and the financials It you know, it it was still a really young company. So the financials for me yeah that I do diligence. Yeah. Well less than that, probably Yeah, probably it was just about ten years. Okay. Yeah. There you go. You know better than I do. I imagine you had to have been feeling like

48:17 God, if we can make this work. The opportunity here is just like absolutely you know. All turn arounds are hard. Tech turnarounds are especially hard. But I think Uber had A global position.

48:32 A talent pool. A brand that was absolutely exceptional. that was just going through a really, really hard time. It was a verb. Yeah, exactly. And so that that was actually advice that my dad

48:44 When a company who's a verb asks you to run it. Just say yes. Yeah. I'm like all right. So sometimes you can overcomplicate things and it's like hey, do you do you want to take a shot?

48:53 I want to take 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

49:07 ten 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.

49:18 So it it is a turnaround in that sense. And I was losing a bunch of share to lift. Right. And so that that was delete over. Yeah. Deleted over. Yeah. Moments, etcetera.

49:30 So that that was a tough thing, which is You're burning a bunch of cash and at the same time you're losing category position to You know, well it's a tough competitor and and a strong brand. Tell me if you agree with this statement.

49:45 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 think lift 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

50:03 moving. He's he's making moves, he's super aggressive. We'll see where that ends up. I feel way better. today than I did five years ago. But I wouldn't count them out.

50:15 Lift is such a great example of a story we see over and over again on Acquired of like it's never over till it's over. It's never over till it's over. It was over for Lift. Yeah. And then they 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

50:36 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 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.

50:54 over a period of time to hopefully gain category position against DoorDash. But they're a tough competitor. We we respect them. We don't like them, but we respect them. I mean I when I think about them, I think about what you were saying about booking them just like being an execution machine. Uh 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. Uh and

51:22 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 suburbs is much lower.

51:33 So we want to leverage a customer base that was an urban customer base. So we went after the urban restaurants, et cetera. And Uber was about cheap and fast. Mm. Right. So the if you think about it, if what you're trying to do is optimize for speed, let's say delivery in fifteen or twenty minutes.

51:51 the radius of restaurants that you can deliver from Yeah, smaller. So you make a You make a sacrifice in terms of selection. In order to optimize for speed. As it turned out.

52:03 One. the suburbs in terms of food. Or bigger. Uh then. Big families, et cetera, big demand, et cetera. So we

52:14 Біка з арбан байсі. We didn't look at the overall market. We're like, what's our market? How how can we leverage our demand, et cetera. That I think in hindsight was a mistake. And this is like a twenty thirteen to sixteen decision that everyone's still sort of living with now. I mean now we've corrected that. Yeah. But listen, it w it was uh I was running the s same playbook twenty eighteen, twenty nineteen too. So I I don't wanna blame it on oh this is

52:39 You know, it it was happening all along. It's it's just like usually you focus on the things that you're good at. And we are really good at urban and we're really good at Fast and cheap. All right. And Uh we now

52:50 are much more focused about building out selection. uh as we built out selection in urban centers at category position versus door dashes actually. quite constructive, really strong. We are looking to break into the suburbs.

53:04 Uh and there we got some work to do. And and the suburbs are a very, very strong position. It's kind of their profit pools. Right. And then we're building our profit pools outside and international. And you know, kind of uh the battle is happening in the big cities. Yeah, it's interesting. I uh I would imagine the suburbs There are so much more weighted to food delivery than rideshare.

53:28 Totally. Yeah. Totally. Now we are expanding Raj Aaron to 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.

53:41 We we now specifically are aiming in certain suburbs and You know, you have to build out Courier base, your restaurant supply, demand, so all of it has to come together, which is difficult, and DoorDash has done a good job. Yeah.

53:55 Not the end of the story, though. I'm curious uh There's so much of this strategy that If you connect the s the dots looking backwards and the to use the Steve Jobs parlance. It just makes so much sense.

54:06 this uh expand internationally, leverage the fact that you're sort of the leading global player, generate cash, use it to compete domestically. Eats feeds ride sharing, which feeds eat 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.

54:26 And divesting. Everything else, all the autonomy, All of the self self driving cars is autonomy. What else did you guys dive as well? International bikes and scooters. Planes, right? Where uh a V elevate. Yeah, elevate. 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?

54:50 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 it was presenting myself as a mature operator. And my track record.

55:09 At Expedia. I think now. Things have changed, which is we have become much more focused on those on those three segments. And if you look at rides we have a number of growth bets, which is there's this base business, Uber X, which is like gonna be fifty percent of our growth.

55:25 then about fifteen percent 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 illegal, then like

55:38 We're not coming in until we're invited in. 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. Mm-hmm.

55:51 And once you're in You and you build trust within a country, and you build a voice, etc. maybe then the business model can change over a period to Benefit. you know, drivers, couriers, et cetera. So like

56:05 We're in Germany, we're in Spain, we're in Japan, we're in Korea, we're in Turkey. There's a bunch of countries that we're expanding into with tweaks of the business model to make sure that we're expanding to into those countries the right way. And then there's a whole host of new bets that we're making in terms of transportation. Taxi.

56:22 Which is huge. Low cost. Hailables, two wheelers, three wheelers. Uber for business. Health uh transportation.

56:31 Um All of these different segments. that whole kind of the new best portfolio will be thirty five percent of our growth. Mm-hmm. So If we do it right.

56:40 We will fifty percent of our growth will come from these new initiatives that really didn't exist. And then on the east 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

56:59 We've always had kind of um call it an integrated offering. If you think about eats There's a marketplace offering. You come to Uber Eats and Eats is bringing you demand. And then there's the fulfillment of that demand.

57:13 Right. Uh My bringing wine here and delivering it, right? Thank you. That's delicious. That has nothing to do with demand necessarily, but it's fulfillment. Yeah, these are two separate businesses that got stapled together. Exactly. So So we have now we're separating the tech stack. Right. So that now we can offer, we can go to merchants to say

57:33 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.

57:46 But they use our fulfillment services. And more and more that our vision is we centrally want The local grocer to out Amazon Amazon like every single local business. can deliver same day, which is better the next day.

58:01 Um, if we can connect that to marketplace, that's great. But that can also be a separate part of our business that can uh grow and thrive. It's so funny how much of this, you know, goes back to like the original ten years ago, 15 years ago vision for Uber. It just takes so long to realize these things. It looks great on paper and then, you know, real life is a lot more difficult, right? Are there activities that you've sort of thought about where you

58:26 you used to need to do something different or counter position the market in order to be successful, where now you sort of look around and you're like, Uh actually in this area we're the incumbent. So there's a different strategy that we need to lean into as an incumbent. our working with taxis was was an interesting twist, right? Which is to some extent They have been definitionally the competition, or we have been the competition or the

58:51 um challenger to those incumbents. Um, at some point we became much bigger than taxi. But In the end, if you remove yourself from the emotions, et cetera, and you know, we're competing against X or Y. were the job of wiring up

59:06 you know, vehicles and drivers who want to drive people to places and that includes Tassie, like There are four and a half million of them. And if you take the hypothesis which is the the days of old where you wave your arm to, you know, wave a taxi down like Things are are changing.

59:23 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 we launched Axi And

59:35 The way that we match generally Uber is one to one. So You Uh Hail for an Uber. We will match you, we'll make an offer to a specific driver.

59:45 Driver says yes, driver comes pick you up, et cetera. 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.

1:00:02 And if the acceptance rate is lower. You might wait for a long time to get matched'cause we're gonna go send it. Offer, offer, offer, offer before you get a match. So the team built a technology blast dispatch.

1:00:13 Which is instead of a one to one match. It's a you know, we'll make uh dispatch to ten different tassis. There's a pickup on fifty four Leonard Street and someone says Joey says yes. I got that one. Yeah, I got that one. So like what's what's old becomes new, what's new becomes old.

1:00:35 But it what's been interesting is there's a simple idea. But then building out the tech infrastructure to be able to fit to that particular market. Becomes a challenge. But also it's an opportunity which is now for some of our competitors to copy that.

1:00:52 One is it's taking a lot of tuning. to actually get that experience to be excellent. um there are some markets where we're mixing demand. You know, you might uh click for an Uber X, a taxi might show up. Right. Is that a good thing, is that a bad thing, it improves marketplace liquidity.

1:01:08 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. That is cool.

1:01:22 I have another um sort of corporate structure question that I'm I'm curious about. I think You guys between when you took the job and today turned over basically the entire Uber shareholder base.

1:01:37 I'm sure there's some people that still hold their shares from those early days, but What is that like at the scale of a 70, 80 billion dollar market cap company? turning over a shareholder base in its entirety. Very painful.

1:01:54 It was the displacement in terms of shareholders. It was tough. Right, and 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, etc.

1:02:07 That that Changeover has been difficult. But We now have a set of shareholders like the Fidelities of the World, Capital, Morgan Stanley, etcetera. that have the capacity to

1:02:20 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

1:02:30 We're now seeing a stock price that generally is is working. But I'll tell you, when we're in the middle of it, like it was it was tough. You know, after the IPO After the uh lock up. Stay Travis sold all his shares.

1:02:43 Both. And those days, like those were not early days. What probably fifteen percent of the company? I remember it was fifteen. It was a lot. There are moments when you remember. Yeah.

1:02:54 Stock prices are a function of supply and demand. And when fifteen percent of a company's outstanding shares hit the market all at once. Or two percent. Or two percent. Yeah, right. Like that's I mean that I think in hindsight. Um

1:03:11 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 Pest.

1:03:24 Right. And people were panicking. Oh my God, Travis is selling, what does that mean? Et cetera like And you know there's this Everyone wants to create drama around Uber, so it 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 definitely moving in the wrong direction.

1:03:44 And Travis. You know, whether you liked him or not, you respect him. He's a really smart person, he's a founder of the company. Like that was a tough time. But

1:03:53 I think we're now in a good place, which is the shareholding is moving from Either some of the start up folks Or hedge funds.

1:04:01 to fundamental long only players. who hopefully they'll be shareholders for the next ten years. one of the things that we heard from many people as we were researching that time period was just the Immense

1:04:17 uh degree of the stakes involved for the whole ecosystem. Like this went beyond just The drama in the press. That's one level, right? But like The number of university endowments

1:04:29 who through the venture funds that were invested in Uber had large portions of their whole university endowment that were dependent on the private m mark of Uber. And 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. Sovereign nations that were, you know, not dependent, but like paid attention to this. Sure. Were you aware of that? Did you feel that? Oh yeah.

1:04:57 Obviously Benchmark and Travis were in this power struggle. But there there was this um 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

1:05:13 category defining Um. Company and investment. And Benchmarks had a lot of good ones, but this this one was a great one. And

1:05:23 While I wouldn't say it was a probability There was A much higher than non zero. uh possibility That it could all

1:05:32 Go poof. So I think that was a very, very heavy weight. uh on benchmark and and some of the other startups, etc.

1:05:45 all the vents that ultimately led to like they're bringing in an unknown outsider like that. Th those are some heavy decisions to make. I wasn't there. I was kinda Yeah. At the tail end of all that drama and But then you had to deal with the shareholder based turnover, which was like the real the unwinding of those that expectation. Well one one cool kind of um It wasn't cool at the time, but but one.

1:06:09 really interesting kind of dynamic that that played out w when I got in was There's all this stuff happening. Like it's I had to go to London T F L, they revoked our license and there had been a data breach and we had to deal with that and just like It was craziness, right? And at the same time

1:06:28 Softbank was looking to invest in the company. Right, and this is the vision fun days. And You know, Softbank, the only way they came in was heavy. Like there's no there's no tick toilet. Let's talk. Yeah.

1:06:42 And um the the issue that we had to deal with. was one where Benchmark and Travis and and the founders They all had high vote shares.

1:06:55 And They both wanted to control the company. And if you sold your shares. they would flip into low vote.

1:07:03 Game of chicken, which is Softbank wanted in. And in typical masa fashion. It was like hey If you don't let us invest in you.

1:07:13 We're gonna invest in that pink company. Right. And it's billions of dollars. And so we had to get Softbank in it, they want to invest in Uber because it was a top brand, had top tech, et cetera. But the same time, none of the shareholders want to sell.

1:07:30 Because there's this game of chicken, whoever sold might lose control, et cetera. And so we have to go around to all of the high vote. shareholders and we literally had to like get everyone to agree to blow up the high vote shares. I think it's it's it's actually the only time when Tech uh tech company like

1:07:49 All of the high vault. And so every like we literally have to go shareholder, shareholder, and like Ben said he would say yes and George like like everybody and if anyone said no None of it will work and

1:08:02 No, Southbank would go to game to You know, Club Pink, which will be a disaster. Wow. So that was a really interesting kinda This it was like all or none. Right. And in the end we got everyone including Travis, Benchmark, everyone

1:08:18 agree to essentially switch over high vote to low vote. And that when it got Softbank in But it stopped the power struggle because then no one could control the company. And that was actually a real secondary benefit, which is Then it became like

1:08:33 How do we build a great company versus who's gonna get control and who's gonna have more impact. That that like We did it for SoftBank. But in hindsight, it was a really important move, which is Okay, no more board control, like this is no longer gonna be control company. Let's go build.

1:08:49 This was an eighty billion dollar prisoner's dilemma. Yeah. Yeah. Because if anyone's Said actually um

1:08:58 I'm gonna move in my own self interest here. Actually long term. It blows up everybody. Everything would have blown up and and and you might have had a lift who was Getting category position against us. With a ten billion dollar investment from SouthBank.

1:09:12 It was actually, I think, fifteen. Alright. And some secondary and some primary. Wow. It it would have been like that. That would be Maybe it would have been life or death, who who the hell knows? And I mean Uber had raised

1:09:26 the most money of any company, any start up at that point. It it was just It was a very, very high stakes game and It it was we had a The old person Cam who Like did

1:09:37 heroes work like just talk to everyone and then he would like kinda bring me in as a nice guy and you know, say all the nice things and but it you know, in in the end in the end, like it worked. It w it was a big move. And everybody everybody converted, which is pretty awesome. Wow. This is like a little bit of echoes of uh, you know, Sumner Redstone and your early uh you know uh training. It's good training. Like I I love the

1:10:03 the operating side of the business, the tech, et cetera, like that's the stuff that I love, but I would just say the investment banking background that I had help like e even the concept of Hey, how do we get out of this issue? The way to get out this controller shows everyone blows up the shares and everyone's like

1:10:18 Wait. Like that'll work? Yeah, like that could work. No, then like going after like starting to call people. Wow.

1:10:26 It was awesome. It was cool. Uh. You know, w were you proud of yourself? When that Went through.

1:10:34 No, because the next day there was another crisis. Like it was like You know, breathe for two minutes, you know, drink more wine and then off to the next battle. All right listeners. Now is a great time to thank our longtime friend of the show, ServiceNow. If you are running a large enterprise, AI agents are likely spread across every team, and deploying them is uh no longer the hard part.

1:10:56 Yeah. The hard part is knowing what permissions they have, what employees are using them for, or what decisions AI is making. AI security for an enterprise at scale is not a small concern. Like the risks Are real. Exactly. And the challenge with AI is governing it, securing it, measuring it, and making sure that it actually delivers value. That is why Service Now built the AI control tower. Yep. AI control tower gives enterprises a single place to see, manage, govern, and optimize AI across the entire business. And it works with

1:11:29 Any AI, not just theirs. Every device on your network, every permission across every system. Every AI agent visible and secure in one place. And ServiceNow can do this because they've spent more than twenty years building the operational backbone of the enterprise, the workflows, governance, approval, security controls, and institutional knowledge that power how work actually gets done across IT, HR, customer service, finance, and security. already runs more than a hundred billion workflows annually and trillions of transactions for more than eighty five percent of the Fortune five hundred. So when companies need a place to govern AI at enterprise scale, they're building on a platform at the center of how their business already operates.

1:12:11 And in a future, that isn't going to be one AI, it's going to be thousands of AI agents working across every function of the company. But the question is, Who's managing them all? So if you're trying to turn AI ambition into real business outcomes and make it work safely, securely at scale, go check out service now.com slash acquired and 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 uh operating a Twitter account where is there's only one Elon Musk type operating Twitter.

1:12:45 It's it's a singular point. There is one in I don't know how many M Dows they have, but one in some hundred million uh data point of tweeting whatever comes to your mind no matter the consequences. And so much so that he bought the company. Yes. And then on the complete other side, there's like Barack Obama and Tim Cook. And I'd say you're like

1:13:05 One click in from the Barack Obama Tim Cook. Like y you definitely operate your public persona Okay. with sort of a head of state grace. And I'm curious if you

1:13:19 Ever think about Like ha do you ever wish you could express yourself a little more I really think Twitter feed. Do you have a burner account? So I tweet mostly myself. There's some stuff that folks say we did this. Uh

1:13:38 It's it's me, like I don't have someone running the account. And you know. I mix it up with some personal stuff and then some business stuff'cause Um you want to keep it entertaining. But at the same time, I'm not using Twitter to

1:13:51 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, et cetera. So like I'm I'm I'm not there to stir the pot. Right.

1:14:04 Um, so maybe that's what comes out in terms of My Twitter persona. I'll I'll take Obama esque or Clint Esque. Yeah, like that's That's quite a compliment. All right.

1:14:16 Next I could we're kind of in like a lightning round here. So next random lightning round topic. You were on the board of the New York Times. Yes. What are some of your biggest learnings from being involved with that company? It was um

1:14:29 Definitely my Favorite board to be on. It was a really interesting time at the New York Times because They were really becoming

1:14:40 A top technical company in terms of being a publisher. Like it's at a pretty extraordinary learning organization. And they wanted me as like the tech person. I was coming from Speedy and You know, optimization, all that stuff and

1:14:53 their capacity to learn like super traditional company. capacity to learn was pretty awesome. Um One of the fascinating parts about the company and it's both a superpower or could be a weakness is

1:15:06 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.

1:15:18 Can we have a connection between content and traffic? It was like No, you cannot ask that question. Because the content is separate. So it it's it's just a fascinating organization and the bet that they made on subscriptions was amazing. Um, it was not obvious.

1:15:35 because the advertising business was much bigger the Time. But it was a 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

1:15:52 Every single news organization, et cetera, was advertising, advertising. This is The BuzzFe days, right? It was quick content, etc. But I I think that The bet that they made And quality.

1:16:06 was very much a bet on a their identity. That wasn't Backed up by data. And certainly wasn't backed up by Their financials.

1:16:15 But the company went all in and Uh they've really benefited. Do you think that could have happened in a company that wasn't family controlled? Like did that have something to do With how they could make a bet like that without the data.

1:16:30 To support it. Yeah. I think they're very sure. of that core, the quality of the content that they're building. And that

1:16:38 allows them to make those kinds of business bets because in the end they know that the content is gonna win. Absolutely. Little bit like Netflix too. It's like quality content. focus on subscriptions now they are going to the advertising, right? So you can't have a forever strategy or be so Dogmatic.

1:16:55 as to not to understand that markets change strategies have to change at the time, but it was absolutely the right bet at the right time. Well I'm curious how much this was an explicit boardroom conversation. The Times also made a very explicit bet on scale. Of quality content.

1:17:10 You could argue maybe Wall Street Journal. But Other than maybe them. Maybe, maybe the post, maybe. Nobody else has aggregated quality content.

1:17:21 At scale. globally, you know, people might think of the the political stuff or the news stuff, but like the New York Times company covers Every vertical, every geography. has at least twice as many reporters employed as any other news organization in the world, I think. How much was that a discussion in the boardroom?

1:17:42 There was absolutely a view. of the management and the board agreed and 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.

1:17:57 News? That should be the New York Times. Like why why would it not be the New York Times? Um they're very clear out about that and they're and they're quite determined. to achieve that I think they're they're doing a great job. Yeah, and it's interesting, right? Like the company's called The New York. Yeah. Times.

1:18:12 And yet it's a global you know, it it it really was a In a way that you know, in in video and with Netflix, I think it was a more an easier leap to make. For news, I think it was really a unique leap that the that the Times made. Well it will be interesting to see, which is they you know, Netflix is is building Like

1:18:31 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 it's probably relevant, especially international to sub segment, right? It's it's higher end consumer, et cetera, who can't afford the price, but

1:18:51 Again, it's been an absolute winner of a strategy and what's been a tough business. Yeah. I mean there's a graveyard in the middle between the independent publisher with a low cost structure and the New York Times and there's not much in between. The middle is where you go to die. Yeah. More lightning round. Uh I remember hearing in twenty thirteen that it was cool that I was in twenty thirteen,'cause twenty fourteen, one year away, was gonna be the year of self driving cars. And here we are in twenty twenty three.

1:19:17 Is next year the year? How close are we? Oh that is a it's an unanswerable question. The last Two percent.

1:19:27 of use cases, the tail use cases. Um it it's unknowable what it'll take to get past that last two percent. And Uh there's this pretty interesting philosophical question, which is How safe does a robot have to be?

1:19:43 In the US, I think there are forty thousand deaths as a result of Car accidents. Леса робок карс. But ten times safer. So And I think highway accidents are one of the top two or three causes of death in the United States, period. Period.

1:19:59 So like something ten times safer. Yeah. If you're ten times safer. You know, fast forward. twenty five years from now, like who who knows what it'll be.

1:20:08 Four thousand deaths a year. Right. So Little more than ten a day. And like if you have Four companies.

1:20:16 That are responsible for for the marketplace. Five five companies, right? And there are ten deaths a day. Like a good day. is hey, we only had one fatality. That's a good day.

1:20:27 Like it's just I can't imagine that. And so there's this Well, does it have to be ten times better? I don't think that's good enough.

1:20:36 They have to be a hundred times better. That maybe that's not good enough. So like From a societal standpoint, of course, if it's a hundred times better. Uh, we should go forward with it, but that'll mean there are four hundred fatales a year, one every single day. And

1:20:51 I don't know how society would deal with us. Society is very I'll call forgiving, but like they understand humans are human and humans Make mistakes. I think you must have experience with this already with the right. I mean, we we had this un unbelievably unfortunate circumstance in in Phoenix, and it caused us to completely We

1:21:11 design how we build for safety first, et cetera. Ultimately because of the pandemic. We decide to get out of self driving, which I think. Is It was a good decision because our core skill set of like

1:21:24 building this demand now, we're connecting uh demand to supply in a dynamic way, et cetera. And we now get to work with a bunch of partners and like Wamo'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 that last two percent

1:21:41 And then what is society ready? Іноват safety will society Underwrite two. Mm-hmm. You know?

1:21:51 are Formi unanserable май instinct іz. That you will see small scale. continued ex uh experiments kinda get bigger over the next five years. But it's gonna take a good ten years for it to be a material part of

1:22:05 our network or transportation at large. Well that's a guess. I'm curious too, also uh I wanna ask. Given both your

1:22:13 Job. And uh y you and I both live in San Francisco. Something crazy has happened in the past six, eight months that like It's now happening. In San Francisco. Like we went from a

1:22:26 For fifteen years everybody's been like Yeah, self driving cars, it's happening tomorrow and like Yeah yeah yeah yeah But like Have you ever taken a ride on one? I haven't yet, but like 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 extraordinary. And it's it's become just so commonplace that like I don't even think about it anymore, but then friends come visit and they're like, Well What what's going on here? Yeah. But still like the the service for certain originations and destinations, it works. the the pickup, you know, again, it's it's okay for a human driver. to double park for a pickup?

1:22:57 Not okay for a robot. So they there's like Again, when you get into the detail, if if you look at our ride share service, for example. If our fulfill rate Which is the percentage of time someone asks for a ride and then there's a car available. If that's less than call in ninety eight percent.

1:23:14 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

1:23:26 singular ride chair provider to provide that kind of coverage is gonna be really, really difficult. Which why ultimately we think the better solution is for the Waymo's of the world, Aurora's of the world, etcetera. mobilized to work with us so that you you have this kind of hybrid

1:23:44 Transition state. Where you can still have this ninety eight percent coverage. Everywhere, no matter what weather it is, et cetera. But we have the smart kind of Switching layer.

1:23:54 Sometimes a human should come pick you up, sometimes a robot should come pick you up. But the transition's gonna take a while. But it's it is happening. It's cool. Alright, last lightning round question, and then I have a closing

1:24:05 segment. If you could only own Uber Eats or Uber the transportation business. Which one would you rather own? Also, East is a transportation business.

1:24:17 You can't ask me to like like choose between your children. Like is it George or is it Donny? Like Come on, you can't be serious. You could own a business with a twenty percent take rate or a business with a thirty percent take rate. Which one would you rather own? So

1:24:36 I I I will answer uh somewhat seriously, which is um High take rates are dangerous. So Our job as a company is to grow volume as much as we can as fast as we can.

1:24:51 And Make your shareholders. Happy enough. minimizing the take rate. which is taking as much of that dollar and and giving it to drivers and couriers.

1:25:03 Like last quarter Gross bookings grew. Um you know, over twenty two percent or so, which is really good. The

1:25:11 money that drivers and couriers, including tips made on the platform Group by thirty percent. higher. And at the same time we're able to Expand our margins brief. Free casual positive. So

1:25:23 Like the design spec that we're building is How do you like torture the organization? 'Cause sometimes it is torture, like Watch every single nickel on die be incredibly efficient everything that you do. Automate everything.

1:25:36 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.com and one thing that we learn. When I started Expedia, Expedia's take a rate was twenty five percent. And booking's take rate was fifteen.

1:25:51 And over like A torturous thirteen years. We took expedient as take rate from twenty five percent to the teens. It was like seventeen, I think, or so when when I left. And those are like pure margin dollars that you're taking out? Like there's no

1:26:06 goodness that comes out of it. And so there's it's just really hard work to do. And as a result, we're pretty hardcore. Which is Any quarter I can deliver anything on the bottom line.

1:26:20 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. You gotta keep take rate low. And you gotta do the hard work too. be able to keep take rate low. So

1:26:33 I'd say I take the twenty percent take rate business. Like it's it's more lasting. The growth can go on for much, much longer. Yeah. I asked in a tongue in cheek way, but I completely understand that and see the Um it's the NZS capital thing. It's the do you want a business with you? Uh Bill Gurley wrote that blog post years ago about a rate too far. Right. Yeah. Exactly right. You build more durability by leaving more on the table for your ecosystem partners.

1:26:58 Or maybe more accurately, you make yourself too vulnerable. If you Yeah, and it's two and out of the room, right? Uh fat pig slaughtered, right? Yeah, yeah. Uh pigs get fat, hogs get slaughtered. Exactly. Hogs and like you can't You don't want to put yourself in that position.

1:27:15 It's very tempting. It's very, very easy. There's just temptation, obviously this quarterly kinda 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 We really, really culturally try to resist that notion.

1:27:33 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

1:27:47 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? And I don't know if it's m misunderstood, but but it's certainly something that that's top of mind for us is that We ultimately the future of the business as it stands now.

1:28:13 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, et cetera. And the fact is that

1:28:26 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 to and instead of gating him, et cetera. We just did really invest in the driver experience and the courier experience. the way that we should have.

1:28:45 And then the way that we organize the company around the earner experience w was pretty standard in terms of a B to C business, right? There's a team Yeah, there's a team that runs the Uber app, there's a team that runs the Eats app, and then a team that runs the driver app. And you do all the typical stuff, which is Analytics and measurements and A B tests, et cetera.

1:29:05 In order to Optimize throughput in the marketplace, etcetera. But like as we step back. You know, we don't A B test. what the four oh one K match should be for employees.

1:29:20 Right, like it was the equivalent some of the experimentation that we were doing on the earner side is like You know, yeah, should we match a three percent or six percent and let's look at employee turnover. Cool experiment. Maybe you could optimize. But when you're building a product

1:29:37 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. Mm.

1:29:47 And the amount of time that they're spending on the app. Most of Uber employees myself too, like Order rides all the time, order eats all the time, you know, you get in, get out, et cetera. But A driver will be spending

1:30:00 Four hours, five hours, six hours with app every single day. So The consequence of like all this coming together and our building for drivers the way that we essentially build for consumers, which is like pretty cool and techie, et cetera. You know, one is like the P ninety five experience. Usually you're like you build

1:30:19 Don't look at P fifty because the average is live, and then you look at P ninety five, well, that's the worst experience. Well the the probability percentages. Yeah, the probability percentages. You know, drivers an average driver who's driving a week experienced like a P ninety five circumstance. Every single week, multiple times a week,'cause they spend a lot more time on that. So there's been a pretty important culture change of the company. Which is

1:30:42 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, etcetera. The fact is that when you have five point six million earners on the platform

1:30:58 There's a marketplace wishes it works for some earners and it doesn't. Right. So there's always gonna be ten percent, which is like Half a million people who are not happy with experience. We gotta make sure that ninety percent are and we're getting more

1:31:11 uh people who like the experience into the platform. But Because of Where we came from. It's actually pretty new muscle for us.

1:31:20 To like build this. earner experience and and I do think like as I step back and I think about like what am I gonna 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

1:31:39 out of touch with the real world. And it's a lot like tech is You know, you you're building for the virtual world and And Uber is unique in that it's a technology company

1:31:50 that like built for the real world And the impact that we have Especially as it relates to earners, it's like It's real people. And so What I would be most proud of one is there's a practical reality, which is if we build a company that is

1:32:05 has the best product and experience for earners, we're gonna win long term. Yeah. But if we're that technology company that's like very much connected. Not

1:32:14 With the elite? But with you know, at earner base and the broad population. Not just in San Francisco, but all over the world. Like That that's a company to be proud of.

1:32:27 But at the same time, it's like we I think that the muscle we've been developing in the last two to three years, we have a long way to go. Is Uber the largest I don't know. platform in the world.

1:32:41 Anywhere by far. And growing pretty fast. That's a crazy statement. Yeah. 'Cause the largest Companies who like even if if you just look at employees, companies that employ people employ max like two million. Max, yeah. Yeah.

1:32:56 And Uber has how many earners on the platform? Five point six million a You know, as of the last quarter it's growing. What does the federal government employ? It's like on par with It's gotta be on par with that. No, a lot the vast majority are

1:33:11 I know they're quite part time, yeah. But it's still the scope is pretty extraordinary. Wow. And it's everywhere. So cool. Well thank you, Dara.

1:33:20 You're very welcome. It was a pleasure. Thank you for treating me to the wine. Well no, I mean you you treated us and and I'm glad you decided to stay after dropping it off. You gave me a good tip, it all worked out. All right listeners.

1:33:34 Now is a great time to talk about one of our favorite companies, Statseg. 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.

1:33:56 It's basically trivial to build and deploy your app constantly. The real advantage is how quickly you learn what changes actually created value for customers. And how fast you can use that signal to guide what you ship next. This is where StatsIG comes in. It brings experimentation, feature flags and product analytics into one unified system so teams can ship safely, test rigorously, and directly link what they changed to how users actually behaved. So if you want to make learning your competitive advantage, whether you're building new AI experiences or just evolving your existing core product, go to statsig.com slash acquired to get started. Ah, David, that was a blast.

1:34:35 So fun. Funny if 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 uh Dara brought us. I know.

1:34:48 Listeners, you can tell us if you liked that bit 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

1:35:11 where our differentiation is in the market of content out there today. And I don't know, it's just a blast. Sam and Sean are really fun to talk to. So If you are interested in hearing that, you can click the link in the show notes to specifically go to that episode. Or search any podcast player for my first million. They also did episodes recently with couple friends of the show, David Senra from the Founders podcast.

1:35:34 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.

1:35:51 figuring out things like where is the defensibility in AI for B2B SaaS companies. Or you know, our interview with the CEO of Angelus talking about how they're deploying AI at their company. I know AI is a buzzword, but like It is just dominating how every company is making moves these days. And it's great to talk to the protagonists.

1:36:11 Who are actually in the arena right now making all of these moves. So that's on ACQ two. Check out the Slack. It's where we're talking about this episode and every other acquire.fm slash Slack. And if you want to come closer into the kitchen.

1:36:24 And uh be a part of what David and I are building here. Become an LP. Acquire.fm slash LP. Current benefits include once a season, you guys will pick an episode. y'all picked Lockheed Martin, which is shaping up to be one of our biggest episodes ever. So thank you. And uh I had a blast researching that one. So thanks to our LPs. And David, we got to schedule an L P call here in this month or so. Get it on the books. Yep.

1:36:47 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, is it you Who got the truth now?

1:36:58 Oh.

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