Uber, One Year Later with Dara Khosrowshahi (Uber) | Disrupt SF (Day 2)
6:41PM Sep 6, 2018
Megan Rose Dickey
Alright, well, our next guest is someone that I'm sure you've read his name many times, and I'm sure you cannot say it as well as I can. I am very proud to welcome to our stage Uber CEO, Dara Khosrowshahi. And your moderator Megan Rose Dickey. Please, welcome them.
You got your your camera crew.
Amazing. Very cool.
So in the days of Uber 1.0 as some are calling it the the ethos was, you know, do whatever it takes to get ahead. Nothing else really matters. And now with you in charge, and Uber co-founder, Travis Kalanick out, seems things seem to be going a little bit differently. What's it been like doing the right thing?
So far, so good. I've been on, I've had the job for about a year and you know we do. Every company goes through different stages in its life. And we, you know, what Travis and team did was they built an incredible, important company. And the board brought me on to change direction, change strategy, etc. And for me, it's pretty easy. If you say, do the right thing.
Ultimately, we, our growth is going to be a function of our own innovation, what we invent, what we build, but it's also going to be based on the relationships that we have with our driver partners and the cities that we work with.
And ultimately, when you have a service that's as important as Uber in terms of how we touch people on an everyday basis, how many people that we have, who are making money on our platform the way that they want to, you have to take into account actively, the needs of your partners and you have to treat them like partners.
And I think this is just the kind of continuation of the company getting into its next stage of growth. So it's been a year so far so good. But we got lots and lots of work and lots of stuff to build ahead of us.
Would you say this year has been better or worse than you thought it'd be?
I had no freakin clue what I was getting into. So I didn't have any predisposed notions. But what amazes me about the company is how many people we touch how many cities we touch. And and what's different about us than a lot of other digital companies is that we are a digital company that is organizing the physical world.
You know, you push a button and a car shows up, you push a button and a Big Mac shows up within 30 minutes. And the physical world is a lot messier than the digital world. This collide of the physical and the digital is messy, it's unpredictable.
It's tough to organize and it's also more fundamental so the dialogues that we have to have with governments, regulators, etc. is something that I expected. But you never really can anticipate what it's like until you're in the middle of it. So it's been a great ride and and I'm learning as I go along.
So Uber has recently gotten into bikes and scooters and just recently in San Francisco, the the MTA decided that it would give permits to skip and and scoot
What was what was that like for you? How, how much of an effect is that going to have on your scooter strategy?
It's listen we weren't happy about the result of that process. Now, the good news is that we've got a bunch of jump bikes on the street now. So we have connectivity into the SF market. But you do have to put things into perspective, which is we are a global company. We're in 600 plus cities all around the world, the largest single city for example, that we operate in on a trips basis is Sao Paulo.
So while we are you we weren't happy with the SF decision. Hopefully we can be in SF. I think that we're doing a really, really good job on the bike front etc.
What I found is that over a long period of time local regulators do the right thing for the people living in their street and I think that if we continue to prove ourselves and in terms of being a great provider, being a quality provider, being able to drive very high utility and utilization of our assets on the street, we will get there in SF and most other cities that we operate in.
It's these early days when you're thrashing. But the good news for us is SF said no, there are 599 other cities for us to target and we think a fair amount of them are going to say yes.
Are you going to appeal the process in San Francisco or just kind of accept the No?
That's a TBD I think the team is working on it. But you know, we got plenty of cities to work in we got and we are in the business of both bikes and scooters, both through partnership and through proprietary means as well. And this is the advantage that we have in building a platform. You know, one of the big changes that we want to make is that take Uber from being just a ride hailing company to moving over to be a mobility company and transportation company.
And really what what we're trying to do is dis aggregate car ownership, right. It's it's cars are it's a, it's a, it's an incredible piece of engineering that is used for multiple use cases, right? It's it's going to work taking your kids to school, maybe not this crowd, but trust me, you'll get there getting groceries going out to dinner, etc. And so you have to build this one piece of engineering that could do all of these multiple tasks and it didn't make sense to have purpose build vehicles for each of these users.
cases. But you. When you get to dense environments like a city, you get to service architecture and services that are constantly available, you know, on your phone, you can actually start to desegregate each of those use cases. And so for example, in San Francisco, if you are
going to point five miles, you want to get to a place 2.5 miles away, and you're going alone, you shouldn't take a car that's bad for the city. It's not the right decision for you to make. And the advantage that we have is that we have an incredible audience who's telling us where they're coming from, where they want to goto and we can then pick for that audience. And by the way, the audience is going to, you know, the individual user is going to make their choice. We can optimize for them as the how's it that you want to travel the 2.4 miles, 2.5 miles and in our case, we're going to want to get you on a jump bike. It's good for the city. The city has less traffic, it's probably better for the user because it's a healthy way to get around them. You might be able to
get there faster and overall it increases engagement with our platform and bit by bit by bit we can start desegregating the car and move into a complete service environment. You know, the tech behind that the the routing algorithms that you have to build what you offer to the users is actually really cool complex math that our engineers are pretty excited to build out this morning
Lyft announced it's bringing it scooters to Denver. Yeah. When when will Uber deploy its first batch of scooters?
Well, we have a partnership with lime and we will integrate lime into our choices in lime isn't many, many cities. And obviously we continue to expand jump pretty aggressively. It's in Sacramento and a bunch of other cities and we will look to deploy our own scooters. We haven't specifically talked about where we're going to do it or when we're
going to do it. But we did get a license from Santa Monica. So you can expect to see
Uber or jump scooters in Santa Monica sooner rather than later.
Okay. So they would be
Uber's jump scooters or would they be lime scooters branded with Uber?
Probably combination of Yes. All the above. Okay. Right. And listen, that's the, that's the advantage that we have in building a platform. Ultimately, we want, what we're going to optimize for is the customer experience. And we want the customer to come to Uber to have as many choices as possible. And some of them we're going to serve. But then third parties and trusted partners in lime is a terrific company will be there to serve the customers well, and we're going to worry about kind of the monetization later to some extent, my philosophy on this stuff is you got to be willing to cannibalize yourself. You've got to be solving for the customer and over a period of time that's going to pay back. So what we have with our platform strategy is essentially the optionality around all the
These choices and we've announced, for example, on the product, you'll see a mood switcher that allows users to be able to essentially switch from a car mode to a scooter mode or to bike mode or rental car mode, etc.
So I guess what's the, what's the benefit of having, you know, lime or Uber branded lime scooters versus your own Uber scooters versus your own jumped scooters? I mean, why not? Just if you already have this partnership with lime, why then create your own
I think we are going to be testing and learning at this point. Right. So I think we're gonna have a long relationship with lime and and I'd say you're looking at Amazon, right? Amazon is selling its own product but always has marketplace product available and I think that as long as you've got that marketplace product, it's a price check. It's a quality check and ultimately if you are increasing choice for the consumer consumers like to
It's and are having lime scooters and jump bikes, etc on our app is only going to give our consumers more choice. And what we've seen, for example, on SF San Francisco is that Uber users who are using jump bikes, they tend to take Uber's less often during rush hour. So they taking less cars on during rush hour, but their engagement with the platform has increased significantly 15% during those hours. So you've got higher engagement with a platform with a more kind of a higher breadth of use. And that is the beginning of this aggregating car ownership, which is the ultimate goal. And I don't think there's any other company in the world who's positioned to create all these services either proprietary or through third party the way that we are
and so you mentioned that just maybe 10 minutes ago or so you announced mode switch switch. Yeah, the more about on techcrunch.com and I could envision you adding autonomous autonomous cars into that. So yeah, your traditional ride hailing you have your bikes or scooters you have Uber rent, and then it could just be, Oh, hell hell an autonomous ride.
Yes, absolutely and. And we will have a combination of the user declaring what they're looking for. And then we will also look at your patterns, you know, there may be a route, that's a, that's a complex route that includes three unprotected left turns, and we may not suggest autonomous for you, right. When autonomous technology becomes mature. But if it's a pretty simple route, it's in an area that has been properly mapped. It's right turns only it's pretty easy will say, hey, autonomous can be a choice for you. So I think there's this drama around is it autonomous or is it people and the reality is people and computers together are the thing right even you've seen some car manufacturers try to over automate and going all the way to automation which doesn't work people and computer
actually work better than each of them work on a standalone basis. And we are having the capability of bringing in autonomous technology, third party technology line, our own product all together to create a hybrid. And then it'll be our AI and intelligence in our engineers
picking out the use cases that we present to the consumer in a way that optimize it for the consumer. And we think as long as you're optimizing for the consumer, you're not thinking about your own revenue, etc. over a long period of time, people are going to form habits that tend to be aligned with companies that are thinking of of consumer first, and that's exactly where we're aiming as a company.
So there there was a report in the information a couple of weeks ago. Or maybe we could go about Uber's considering divesting the self driving car unit you said yesterday to Reuters that not now
but it's a true that investors are kind of nudging you to divest the unit.
I think I've got lots of investors with lots of different opinions. Happily, I've got a board of directors and, and we discuss these with with a board of directors right now, the the total focus of the company is as it relates to autonomous is how do we get back on the road in a safe as manner possible. That's the focus. And I think that we're we're building an enormous asset of incredible value with autonomous there are very few companies in the world that have the operational of a software capability that we have. And the advantage that we have in building autonomous under the same roof as a network is pretty incredible that we are also combining with partnerships with companies like Toyota and will also work with third parties in bringing their autonomous technology as well. So it's not just about our internal autonomous technology. We think that's the right strategy to kind of bridge the gap between a world where
You got human drivers, and now you're introducing these personal electric vehicles, autonomous technology will come in that kind of a hybrid mode, we think is the is the right mode for at least the next 10 years, how we monetize our autonomous technology, etc. We're going to have all the options of the world and we're creating big, big value there. And I think those kinds of decisions can wait for the next you know, for the foreseeable future autonomous is in house and we're working to work as hard as we can to develop that technology
there was unfortunately of course the the fatal crash earlier this year. I mean, how big of a wake up call was that
I was enormous. It was an enormous wake up call for the company and and, you know, you
you think about these possibilities theoretically, and, you know, real life just hits you in the face. So, we instantly took the took our cars off the road, it was absolutely the right thing to do. And we have been fundamentally rethinking
Our building process testing process
simulation process testing and track process all of it we're essentially rebuilding from the ground up I actually think we're going to be a better company for it but we are taking this stuff as seriously as a situation demands it
is I know that so Uber's self driving car permit expired in in California and you decided not to renew it when do you think you might apply for a renewal of that permit
we were focused on getting back on the road and I think we're gonna get back on the road sometime this year where we do it how we do it is is is something that we will disclose when the time comes okay sounds good I
and so also i mean i think this is probably not news to anyone at this point but it was gonna go public next year
Yes, that's still that's still the case knock knock over this is me
I'm not yeah maybe plastic but so with with going public I mean, there's there's already a fair amount of scrutiny on Uber and when you enter the public market investors are kind of thinking in these three month periods and three month period called quarters. Right? And so, but a couple weeks ago, I mean, Uber kind of you announced your your q2 results there were there was a significant number of losses. How are you going to measure it
in the billions? Yes.
Right. Yeah. How are you going to please investors?
I think that
investors are not as short term as people make them out to be. I think the public markets is willing to pay for growth and is willing to pay very big value for growth and the market size that we're dealing with in replacing car ownership. The transportation market that we're going after is $6 trillion.
And we're, you know, doing close to $50 billion in gross bookings. So the size of The market ahead of us and the growth ahead of us is extraordinary. And within Uber, we've got the base ride sharing business that continues to grow. That's cool global that now we're gaining share on our competition. And really we are the unrivaled global leader in ride sharing. We've got the eats business, which is now the largest delivery platform in the world outside of China. And then we got businesses like bikes and scooters and freight. And if you look at eats and bikes and freight and you track these three businesses in the early days, and and you know, I'd say he says in the middle days against Uber x and the growth of Uber x, we've got three businesses that kind of look like Uber x,
right. And the Uber business Uber x business, which is the largest part of Uber like there have been few companies in the world that have been able to grow at those rates and scale at those rates.
We've got actually four of them in one portfolio. So I think when we tell that story to investors and the street, we're going to find plenty of investors who want that kind of growth opportunity in a market as large as the $6 trillion transportation market. And if there's a an investor who is obsessed with quarterly results, probably not the right right investor for us. But if there's an investor that is interested in a company that is revolutionizing transportation, and is by far the best position in terms of the assets under portfolio along with autonomous technology as well then we're the one to invest them. So I think we're gonna find plenty of investors and the public market. There's a lot of work to do. There's a lot of discipline that you have to bring into play. But listen, I was a public market CEO for 1314 years. I understand the gig there.
Yeah, yeah, you definitely have experienced there and But still, I mean, so Uber has recently brought on a CFO COO And yeah, I kind of just want to change the pace a bit, because
there was there was New York Times report about your CEO Barney Harford, making some allegedly making some racially insensitive comments toward toward some employees. Was that was that news to you? Or were you hearing about it the first time when you when you read that story
I had heard of certain issues and listen it was a learning moment for all of us and you have to take these moments and learn and more importantly change and improve as a company
and this issue of representation of women in the workforce at all level underrepresented people and the work force at all levels
bias sees that make their way into both how you build products but but how you help people develop their careers. These are real issues that we're dealing with at every single company. is dealing with and I'm learning every day about them.
So we are, you know, working that there's a process that they are. I think Barney wrote an apology, a really heartfelt apology letter to to the company
he and I both have learned a lot from this and the real question is like what are we doing about it right and my whole team now has undergone training as it relates to by CS we are learning as we go. And the most important thing for me is awareness and then measurement and results. And we are now measuring representation across the company looking at our recruiting processes, looking at how we promote our employees and what those promotion rates look like. And I'm already seeing results there numerical results as far as the company improving as its representation of women and underrepresented people at the company, but more importantly at all levels of the company. And that's what I'm going to focus
On now, and I think Listen, was the New York Times article fun? No, it was a shitty day. But the question is, how do we learn from it? And I think we're going to be a better company. We would have been a better company anyway. But we've taken this as a learning moment. And Goddammit, we're improving.
And I just want to briefly quote Ellen Pao and quickly and so for those unfamiliar with Ellen Pao, she's an investor currently with project include, I guess, entered the mainstream when she sued Kleiner Perkins Caulfield for gender discrimination. So, in response to the New York Times article, she said, quote, if the CEO wanted to fix Uber's culture, why did he hire Barney as CEO dar work with Harford for years, this behavior can be news to him, is he clueless or does he just not care? How do you respond to that
and what I respond to that as I've known Barney for years and years and years, and he's an incredible person.
And he cares. And I don't think that a comment that might have been taken as insensitive and happened to report by large news organizations should mark a person. I don't think that's fair. And I'm sure I've said things that have been insensitive and you take that as a learning moment. And the question is, does a person want to change does a person wants to improve? Does a person understand when they did something wrong, and then change behaviors. And I've known Barney for years and that's why I stand 100% behind them. And I'll say it again. I've made a lot of mistakes in my life as well. Listen, I saw in my last job I observed as we were going through this when I wanted a beer after work. Usually I had a beer with one of the guys
and because I was comfortable because it was you know, it was a person who look like me a person with whom I could be
more casual, and I could have a conversation
these guys worked for me. They were getting access to me that was not fair. And that could have shown up in a New York Times article and that could have marked me that's not who I am. You know, I learned, I corrected, I'm aware. And the question is, what do you do? This is an issue that everyone is fighting and I will tell you Varney takes it personally. And he is a champion and he will be a champion as it relates to these matters. He's one of the good people.
Okay. And so about a year ago, I was actually sitting up here, well, different venue. But with Bozeman, St. John Uber's now former
chief brand officer yes she has since left remember speaking to her when she left and you know we kind of joke like oh like what happened like did anything horrible happen and she said no, but about him. virtue later this report comes out. I think it was a Reuters. About how Leanne horn z former SVP of people, am I giving that title right. Yes. Okay. So, yeah. It's a Leanne horn z
out of people. Chief HR. Oh, yeah.
So made made some comments directed toward not only Bozeman, but also toward toward Bernard Coleman. I mean, what is, of course, Leon has since left, but I mean, what does that say about some of the diversity efforts at Uber?
I think you've got to, I would say, that judge of diversity efforts at Uber based absolutely something that I expect to execute on here.
Okay. And then so so back in the day when, when Eric Holder for me, former Attorney General, I made some recommendations. Uber. One of those recommendations was to promote Bernard Coleman, the the Global Head of diversity and inclusion to Chief Diversity Officer, instead of Uber went with Bo young leaf from Mars.
Why, why did you how'd you land on that decision? Why not follow The recommendation and promote Bernard
I think Bo was the right person and I think will prove it out that she's the right person Bo is incredible Bernard has been an incredible contributor for the company I think will continue to be a great contributor but I'd say judge us based on what bow on we do. And I think we absolutely made the right choice.
And so now now that Leanne's gone the chief chief people officer whatever she is, is Bo reporting directly to you.
Bow is going to report to the chief people officer of the company. Okay. And I am looking for a new chief people officer and that was actually another recommendation where that the the head of diversity report to me and to me diversity inclusion have to be a core part of everything that the company does has to be a core part of your people strategy. And I want Bo and my chief people officer working together fundamentally not just on the diversity of the bit.
of the company, but also on the core culture. Like we're really trying to shift the culture of the company going forward. So Bo is going to report into our chief people officer. And she and I more than month, they are constantly having exchanges on how things are going. And I think that's the optimal structure which is open, open communication with me working directly with the CEO but part of the core strategy of the company because I do think that this is one of the things that we have to execute on.
Okay. And just since we're a little low on time, I just want to get I just want to talk about Uber's long term vision admit and because I mean, you have traditional ride hailing you have eats you have freight you have elevated you have bikes and scooters and Uber, right? Lots of stuff. Lots of things going on. As of today. Your your core business is traditional ride hailing 10 years from now what do you think your core business will be?
I think our core business will be getting you from point A to B you know, we want to be the Amazon of transportation any way
that you want to either move around or you want to get or move things or food in an urban destination, we want you to come to Uber. And we think because we've got a global scope because we've got an unrivaled audience and because of our technology, we're going to be able to offer to the consumer more choice and the right choice at the right price for anyone getting from one point in their city to another point. And ultimately, hopefully, 10 years from now, no one in the audience is going to own a car.
But do you think it'll be through ride hailing or like I guess
it's going to be I I, I'm actually very, very bullish on personal individual electric vehicles. Okay, so I think a lot of people talk about the scooters. And that's kind of this corruption obsession, that's v1. And we actually created a whole new organization new mobility organization under Rachel Holt who ran operations in the US so it's a very, very you know Rachel together
huge job to take on a huge job. And it is all about figuring out whether as a service or as a principle where individual electric transportation goes. And in cities and individual transportation in cities should not be through cars, it should be through something else. And we want to be a part of figuring out what that mode is. And we want to absolutely be a leader in that mode as well. So my guess is 10 years from now ride ride hailing is going to be less than 50% of her business in terms of transactions. I think eats is going to be enormous. And I think ride hailing is going to be enormous but you're going to have a lot of we've got to deconstruct that car just like the cable bundle is being D bundled by a bunch of different services, we've got to D bundle and deconstruct the car and that to some extent is a big part of our mission going forward
and yeah, I guess just yeah. elevators maybe a good note. Yeah. And I'm going to future thinking I mean, how how realistic Is that that you're that you're really going to launch? Or because I think what 2020 you want to start testing?
Yeah. Listen, it's, um, the, the,
the true innovators and early days, they're the ones that you call crazy. So we have to be willing to kind of be called crazy during those days. But, but it goes to 50% of the world's population lives in cities. Right now. It's going to go to two thirds of the world's population, which is this incredible demographic trend, which is because companies like ours, but it's a huge problem for cities and cities are not going to be able to continue to build infrastructure the way that they have in the past. And so the two solutions are either use data and we are we have more data than anyone on it in order to get people on the right types of vehicles or just like cities went vertical residential construction has gone vertical commercial construction has gone vertical, you actually have to go vertical and go into three dimensions with transportation and you know, it may be
ground or maybe overground we're making a big bet on overground and with battery technology, and rotor technology, etc. We think it's doable and the next five to 10 years, absolutely at scale.
Okay, quick question for those in the audience. How many of you would ride and an Uber air in the next five to 10 years? Raise your hand.
All right. Well, get to work.