Uber CEO Dara Khosrowshahi

1. 0:01 – 3:48

   Setting the stage: Uber’s post-IPO transformation and why Dara now

   1. DRDavid Rosenthal0:01

      So, uh, I came up here, we scheduled this time to record. What are, what are we talking about today?

   2. BGBen Gilbert0:06

      [exhales] I mean, we haven't talked about Uber in a while.

   3. DRDavid Rosenthal0:09

      Hmm, that's right. A lot has happened since we did the IPO episode.

   4. BGBen Gilbert0:14

      It's been, what, four years? That is crazy. All right. Yeah, let's do it. I ordered some food. I hope that's okay if, uh-

   5. DRDavid Rosenthal0:22

      Oh, yeah, yeah.

   6. BGBen Gilbert0:23

      Um, maybe we can eat [knocking] while we, uh, while we... [door opens] Oh, dear. Hey, did someone order Uber Eats? Oh, yeah, that's me. All right, cool. Um, got some wine in here. Oh, great. That's perfect. So can I join you guys?

   7. DRDavid Rosenthal0:39

      Sure.

   8. BGBen Gilbert0:39

      Actually, yeah, that'd be great.

   9. DRDavid Rosenthal0:41

      Yeah.

   10. BGBen Gilbert0:41

       Come on in.

   11. DRDavid Rosenthal0:41

       Come on in.

   12. SPSpeaker0:42

       Who got the truth? [singing] Is it you? Is it you? Is it you? Who got the truth now? Hmm. Is it you? Is it you? Is it you? Sit me down, say it straight, another story on the way. Who got the truth?

   13. BGBen Gilbert0:59

       Welcome to this episode of Acquired, the podcast about great technology companies and the stories and playbooks behind them. I'm Ben Gilbert.

   14. DRDavid Rosenthal1:07

       I'm David Rosenthal.

   15. BGBen Gilbert1:08

       And we are your hosts. Today's episode is an interview with Uber CEO, Dara Khosrowshahi, where he joins us from the Acquired home studio in Seattle. And it's been a while since we checked in on Uber. They've gone through quite the transformation since our 2019 episode on IPO day. In the past 12 months, they've done over $30 billion in revenue, up from just $10 billion two years ago.

   16. DRDavid Rosenthal1:32

       And that's not GMV, that's revenue.

   17. BGBen Gilbert1:34

       That is revenue. And they have two businesses, as many of you know, that complement each other nicely in Eats and Mobility, and they've divested anything hardware, international, or that's too far in the future or speculative. They're even doing something we couldn't imagine at IPO time, which is profitability. Now, it's very modest at this point, but we wouldn't have dreamed Uber could even get to break even back when they burned... David, what was it? $3 billion the year before the IPO.

   18. DRDavid Rosenthal2:02

       Yeah, I think it was the most capital burned before an IPO by any company in history up to that point.

   19. BGBen Gilbert2:09

       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 9/11 happened, how he first met Barry Diller at Allen & Company, and what the financial mechanics are actually like of replacing Uber's entire shareholder base, or close to it anyway, almost in its entirety, since joining the company.

   20. DRDavid Rosenthal2:42

       Yeah, not to mention the Uber CEO recruitment process, which I don't think Dara's talked about anywhere else before.

   21. BGBen Gilbert2:47

       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 we're actually covering on episodes. So you can join at acquired.fm/slack. Listen to our other episodes on our second show, ACQ2, like a great episode we just did with Jake saper from Emergence on AI moats in B2B SaaS. And without further ado, this show is not investment advice. David and I may have investments in the companies we discuss, and this show is for informational and entertainment purposes only. Onto our conversation with Dara. [glass clinking] Cheers. Dara.

   22. DKDara Khosrowshahi3:32

       Cheers.

   23. BGBen Gilbert3:33

       Welcome to Acquired.

   24. DKDara Khosrowshahi3:34

       Thank you very much. Happy to be here.

   25. BGBen Gilbert3:36

       Appreciate you, uh, swinging by the home studio on your way home from Expedia board meeting. Is that right?

   26. DKDara Khosrowshahi3:42

       Yes.

   27. BGBen Gilbert3:43

       How'd that go?

   28. DKDara Khosrowshahi3:45

       Uh, I can't tell you.

   29. BGBen Gilbert3:45

       Yeah, that's, uh, [laughing] that's the right answer. [laughing]

   30. DKDara Khosrowshahi3:47

       But it was a good board meeting.

2. 3:48 – 7:39

   Expedia’s defining moment: buying travel into the shock of 9/11

   1. BGBen Gilbert3:48

      Actually, Expedia is a good place to start. For folks who don't know about your pre-Uber background-

   2. DKDara Khosrowshahi3:55

      Mm-hmm.

   3. BGBen Gilbert3:55

      ... you were the CEO of Expedia from 2004 to 2017.

   4. DKDara Khosrowshahi4:00

      Yeah.

   5. BGBen Gilbert4:00

      Is that right?

   6. DKDara Khosrowshahi4:00

      Thirteen years.

   7. BGBen Gilbert4:01

      Thirteen years.

   8. DKDara Khosrowshahi4:02

      That's a long time.

   9. BGBen Gilbert4:04

      And when you became the CEO, your previous role was you were at IAC with Barry Diller, and you guys had bought a controlling interest in Expedia. You took it private. It was at Microsoft with Rich Barton. He spun it out, it went public. You made a bid to take it private, I think over, like, two tranches. There was, like, a controlling interest and then a full buyout.

   10. DKDara Khosrowshahi4:26

       Yeah, we bought Microsoft's stake. Microsoft decided it's, it's non-core, and we bought Microsoft's controlling stake, and Expedia was a public company, but we had a control position. And then at some point, we decided, "Hey, let's bring in the whole thing," because we loved what Rich and team were building.

   11. BGBen Gilbert4:44

       So this being Acquired and us wanting to dive into a story, there's one moment in particular that was pretty insane. The term sheet was signed for IAC to buy Expedia before September 11th-

   12. DKDara Khosrowshahi5:00

       Yeah

   13. BGBen Gilbert5:00

       ... like earlier in 2001. The deal hadn't closed yet. I think there was some kind of material adverse change clause that allowed-

   14. DKDara Khosrowshahi5:06

       MAT clause, they called it, yes. Correct.

   15. BGBen Gilbert5:07

       You were allowed to pull out of the deal.

   16. DKDara Khosrowshahi5:09

       Yes, yes. I mean, it... what could be more material than September 11th for travel?

   17. BGBen Gilbert5:14

       But you guys didn't. Like, take us through that.

   18. DKDara Khosrowshahi5:17

       Yeah, we, we didn't, and we knew we had the option to get out.

   19. BGBen Gilbert5:21

       Yeah.

   20. DKDara Khosrowshahi5:21

       And at the time, you know, one of the values of an option is time value, right? You don't want to exercise an option before the last, uh, moment that you can. And Rich called, I think, Barry at the time, and he said, "Listen, September 11th happened. Business obviously has fallen off a cliff. We think it'll come back, but I don't know." And he said, "The place is pretty unstable now because no one knows whether the deal is gonna go through or not go through. There's this MAT clause, so if you wanna get out, like, it's fine." Rich is very confident. He's a great entrepreneur. "It's fine if you wanna get out- [laughing]

   21. BGBen Gilbert6:00

       [laughing]

   22. DKDara Khosrowshahi6:00

       ... but just, like, let us know, you know-

   23. BGBen Gilbert6:02

       Yeah

   24. DKDara Khosrowshahi6:02

       ... if you, which, which way you wanna go."

   25. BGBen Gilbert6:04

       Ah, God, he's good.

   26. DKDara Khosrowshahi6:05

       And he's really good. And-

   27. DRDavid Rosenthal6:06

       Which really, he just... To your point about time value, he just wants you to make a decision, and so he's like-

   28. DKDara Khosrowshahi6:10

       You know-

   29. DRDavid Rosenthal6:10

       ... "Oh, we'll be fine!" But, like, how do you-

   30. DKDara Khosrowshahi6:11

       I do not, I can't imagine that if you're the company, everyone's like: What's happening, right?
3. 7:39 – 8:47

   From 9/11 to COVID: what crisis forced Uber to become

   1. DRDavid Rosenthal7:39

      Did you ever think you would, uh, then live through [laughing] another moment like that-

   2. DKDara Khosrowshahi7:42

      [laughing]

   3. DRDavid Rosenthal7:43

      - over the last couple years?

   4. DKDara Khosrowshahi7:43

      No, and I'd like this one to be finally-

   5. DRDavid Rosenthal7:45

      Yeah [laughing]

   6. DKDara Khosrowshahi7:45

      ... the last one. Never want to go through something like that again. But it, it made, it made us stronger as a company.

   7. DRDavid Rosenthal7:51

      Ultimately, good for Uber the past couple years?

   8. DKDara Khosrowshahi7:54

      Yeah, I, I think the pandemic was incredibly painful in that sitting together as a team, 85% of your mobility volume, which was the profit driver of the company, falls off a cliff. And other CEOs, you know, they lost a ton of business, but most of these businesses were profitable. We were losing $2.5 billion, and then it just got way worse. So it was a very tough situation to be in, and we, uh, had to cut a lot of overhead. We had to cut out businesses that we thought were core to the business. You really had to bet on what's core, what's non-core. But it was a huge accelerator as it relates to our Eats delivery business, and I think that discipline in hindsight has been great. But I wouldn't want that as... That shouldn't have been the kind of-

   9. DRDavid Rosenthal8:45

      The precipitating factor.

   10. DKDara Khosrowshahi8:46

       Yeah, exactly.

   11. DRDavid Rosenthal8:46

       Yeah.

   12. DKDara Khosrowshahi8:47

       Yeah.

4. 8:47 – 13:37

   Meeting Barry Diller: the Allen & Co ‘thrown in the deep end’ story

   1. BGBen Gilbert8:47

      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?

   2. DKDara Khosrowshahi8:54

      So I met Barry Diller when I was an analyst at Allen & Company, which was my first job out of college. It's an investment bank in New York City, specializes in the media and entertainment sector. Now, much more tech. They've made the pretty cool transition, and I was a lowly analyst. And I got assigned to this deal where Barry Diller, who at the time was running QVC... He was the CEO of QVC, which was home shopping.

   3. BGBen Gilbert9:23

      And he had run Paramount and Fox Studios-

   4. DKDara Khosrowshahi9:26

      Yes

   5. BGBen Gilbert9:26

      ... before that?

   6. DKDara Khosrowshahi9:27

      Correct. Paramount first, and then he ran Fox for Murdoch, and then he decided he wanted to be his, his own boss.

   7. BGBen Gilbert9:34

      Mm-hmm.

   8. DKDara Khosrowshahi9:35

      And at some point, John Malone, I think, had control of QVC, and Barry got the job to run QVC and have control because he wanted to be his own boss.

   9. DRDavid Rosenthal9:44

      Right.

   10. DKDara Khosrowshahi9:45

       And who can blame him for that?

   11. BGBen Gilbert9:46

       God, to be in the room with those two characters as they're-

   12. DKDara Khosrowshahi9:49

       Oh, yeah

   13. BGBen Gilbert9:49

       ... negotiating.

   14. DKDara Khosrowshahi9:50

       It was golden-

   15. BGBen Gilbert9:51

       [laughing]

   16. DKDara Khosrowshahi9:51

       ... for a, a kid like me. And so at the time, Sumner Redstone, who was running Viacom, had come to an agreement to buy Paramount Pictures, which was Barry's old home.

   17. BGBen Gilbert10:04

       Hmm.

   18. DKDara Khosrowshahi10:05

       And Barry thought that he was getting a steal, so he decided to go after Paramount in a hostile tender offer, to come in as kind of a third-party bidder.

   19. BGBen Gilbert10:18

       Hmm.

   20. DKDara Khosrowshahi10:19

       And it was a huge move because Paramount was bigger than QVC, you know, so it was like the minnow-

   21. BGBen Gilbert10:24

       Swallowing the whale.

   22. DKDara Khosrowshahi10:24

       Yeah, swallowing the whale.

   23. BGBen Gilbert10:25

       Yeah.

   24. DRDavid Rosenthal10:26

       It's like, uh-

   25. BGBen Gilbert10:27

       Cap Cities.

   26. DRDavid Rosenthal10:27

       Cap Cities, yeah.

   27. DKDara Khosrowshahi10:28

       Exactly. Exactly. And, uh, I was the analyst on the deal, and it, it was a whole kind of bidding process. You know, Barry would bid, and then Redstone would bid up, et cetera. It was multiple steps. There was a, a big court case that was pretty important in terms of did Barry have the right to come in and actually bid on this thing and break apart a negotiated deal? The person who I worked for, the VP, et cetera, she got sick, and so I had to kind of step up and work with Barry directly, like, making these pitches to Barry. And I still-

   28. DRDavid Rosenthal11:10

       You're a couple years out of college at this point?

   29. DKDara Khosrowshahi11:11

       I was, like, two, three years out of college. And at some point, Barry's like... You know, there are all these complicated numbers that you put together, and Barry wanted to know, like, "Who is the person running these numbers?" And he's like, "I wanna talk to the person running the numbers." Herbert Allen comes, and he's like, "Print out your model. Barry wants to talk." [laughing]

   30. DRDavid Rosenthal11:32

       [laughing]
5. 13:37 – 19:25

   Career philosophy: luck, openness, and not overplanning

   1. BGBen Gilbert13:37

      How did you find your way to Allen & Company? I know I'm just, like, pulling at threads, going backwards here, but-

   2. DKDara Khosrowshahi13:41

      Yeah. Uh, I was... Um, it was a very considered decision, which was I studied engineering in school, and I actually had a engineering management, um, job lined up at a, at a paint factory.

   3. BGBen Gilbert13:53

      [chuckles]

   4. DKDara Khosrowshahi13:53

      And then I fell in love with a commodity trader in New York City-

   5. BGBen Gilbert13:56

      Hmm.

   6. DKDara Khosrowshahi13:57

      ... and at the time I'm like: I need a job in New York City. What kind of job can I get? And it was investment banking. My brother worked there, uh-

   7. BGBen Gilbert14:05

      Still works there, right?

   8. DKDara Khosrowshahi14:06

      Uh, 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 Allen & Company- [laughing]

   9. BGBen Gilbert14:14

      [laughing]

   10. DKDara Khosrowshahi14:14

       ... a pretty cool career.

   11. BGBen Gilbert14:15

       Well, I- have you written her a thank you note? 'Cause you'd be running a paint factory otherwise.

   12. DKDara Khosrowshahi14:19

       I have not. That's a very good point. I owe it all to her.

   13. BGBen Gilbert14:22

       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-

   14. DKDara Khosrowshahi14:29

       [chuckles]

   15. BGBen Gilbert14:29

       ... buy all the other paint factories-

   16. DKDara Khosrowshahi14:31

       Yeah

   17. BGBen Gilbert14:31

       ... and then expand up and down the stack and then figure out how to add, like, 15 other businesses, and it would become this, like, beautiful conglomeration of something. I don't know.

   18. DKDara Khosrowshahi14:41

       You know, you could be right, or I could have just gotten sh- totally lucky by falling into Allen & Company. I really do think it was just things came together, and everyone's career who's successful, it's a combination of luck and opportunity and taking advantage of the opportunity, and I think I just got lucky.

   19. BGBen Gilbert14:56

       So that's, like, a nice thing to say. There are a lot of other people that could have lucked their way into an Allen & 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 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?

   20. DKDara Khosrowshahi15:24

       I think I always tell people that the most common mistake that I see in young people is that they overplan their career. And like, "Oh, I wanna do X, or I wanna be vice president, or I wanna make so much money by a certain time." And when you overplan your career, you know, there, there's this human bias, which is to look for signal that agrees with the plan that you have and ignore e- everything else that doesn't agree with it. So my advice for young people is, like, "Don't overplan." You never know what opportunities are gonna come up. I planned to stay at Allen & Company my whole life. It was my place. My brother wound up being there. But being open to possibilities, being open to opportunities, and then when you get that opportunity, going all in. You know, like, it's just... Don't hedge. If you're gonna be in something, go all in and do what's required of you and then, like, 50% more. Like, blow people away. 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.

   21. DRDavid Rosenthal16:32

       All right, listeners, for our first sponsor of this episode, we have a new member of the Acquired family that I am very excited about, Common Room. Common Room is the platform that ties community-led growth and product-led growth to revenue.

   22. BGBen Gilbert16:46

       Yes. Common Room solves a problem that tons of businesses have in this modern era. Let's say you have a free trial or a freemium product. Inevitably, you get a bunch of users posting on LinkedIn, GitHub, Slack, Discord, communities everywhere, for guidance and problem-solving about your product. And then, of course, on the other side of the house, you also have a CRM to understand interactions that your team actually has with customers. But none of these systems tie together, and that's where Common Room comes in. Common Room captures what is happening across your broader community and marries it with customer data from a HubSpot or a Salesforce and product data in your data warehouse, like Snowflake, so you can see it all in one place. And not only that, Common Room unifies customer identity across all these channels. So you can see, for instance, that that VP buyer at your highest priority account posted three times in your Slack community last week after your team resolved a GitHub issue for an engineer at the same account who recently signed up for your free trial. Who wouldn't wanna know that?

   23. DRDavid Rosenthal17:46

       Yes, I actually have a very fun personal story, too, to share about Common Room. After I stopped being a full-time VC to focus on Acquired, I didn't really think I was ever gonna invest again professionally, and then Linda, Common Room's founder and CEO, who's been a longtime friend, called me up, said she was starting a new company. She wanted me to be her first angel investor. Fast-forward and Common Room is now, I think, the single highest-returning investment that I have ever made, [chuckles] professionally or as an angel. They've now raised over $55 million from top firms like Madrona, Index, Greylock, and honestly, it gave me the confidence and conviction to then go start Kindergarten Ventures, where Nat and I have now raised and deployed almost $30 million. It's been so awesome just watching Common Room take off. Even in the past year, they went from a beta product to-... frankly, one of the most impressive customer rosters I've ever seen. They have the best product-led growth companies like Airtable, Atlassian, Asana, Figma, Notion, Webflow. They have developer-led companies like Snowflake, Databricks, Statsig, Replit, GitLab. These are all Common Room customers, as are a ton more companies.

   24. BGBen Gilbert18:54

       And it's a great Seattle success story. So if your go-to-market motion needs greater insight into who is talking about your product and what they are saying, and frankly, as you can tell from Common Room's customer list, basically every modern company does, head on over to commonroom.io/acquired for a twenty percent discount off their team plan for 2023, or when you get in touch with them, just tell them that Ben and David sent you. All right, so we're gonna catch back up to that Expedia era. Thirteen years,

6. 19:25 – 22:14

   Lessons from Booking vs. Expedia—then applied to Uber’s marketplace

   1. BGBen Gilbert19:25

      you have a pretty wild competition with Booking.com.

   2. DKDara Khosrowshahi19:29

      Mm-hmm.

   3. BGBen Gilbert19:29

      And I think 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.

   4. DKDara Khosrowshahi19:41

      Incredible.

   5. BGBen Gilbert19:42

      When you're on the Expedia side of things, and then you get a fresh start at Uber, how do you take those lessons with you, and what did you learn?

   6. DKDara Khosrowshahi19:50

      God, I learned so much. Um, Booking was an execution machine, and their focus, when we talked about focus, was hotels, hotels, hotels. And Expedia was much more... It started with air, right? And hotels was, to some extent, secondary. And so I think one of the lessons is like, hey, go after the larger market, and if you're a marketplace business, go after fragmentation of supply, which is, if you think about hotels, there are so many more hotels in the world than there are airlines. So I think they focused completely in the right area and built a global business first, uh, and just were an absolute execution machine. The other area was that Expedia was probably more focused on building demand, kind of consumer demand, brand, et cetera. Booking was more supply-led, and-

   7. DRDavid Rosenthal20:44

      Especially in the States, nobody knew what Booking was.

   8. DKDara Khosrowshahi20:46

      Totally, totally. But it's like, for, for them, it was about building up the hotel supply, and as you built up the hotel supply, every hotel became another piece of data that you could market through Google or metasearch.

   9. DRDavid Rosenthal21:00

      Mm-hmm.

   10. DKDara Khosrowshahi21:01

       And if you have a hundred hotels in a market, and you expand that to two hundred hotels in the market, that market is also gonna convert better.

   11. BGBen Gilbert21:10

       Hmm.

   12. DKDara Khosrowshahi21:10

       So not only do you build kind of a new segment of demand, but then if there's a search for, you know, hotel in Nice, Nice becomes a better product, 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.

   13. BGBen Gilbert21:26

       Hmm.

   14. DKDara Khosrowshahi21:27

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

   15. DRDavid Rosenthal21:42

       And a few million restaurants?

   16. DKDara Khosrowshahi21:44

       Yeah, close to a million restaurants. And for us, our growth is also supply-led. So if you think about post-pandemic and one of the reasons why I think generally we're doing really well and gaining a bunch of category share versus Lyft coming out of the pandemic, was because we really focused on bringing those drivers back to the platform, building our service, et cetera, and it was a supply-led way of building the business, which definitely was a learning that I took from Booking.com.

7. 22:14 – 27:39

   Making the Uber flywheel real: merging teams, internal ‘media,’ and compounding

   1. DRDavid Rosenthal22:14

      With Booking, like, you can build a market, uh, of a, say, a geography for hotels, and then use that to build a vertical. You can do the same thing at Uber in a way that your competitors on both sides of the business can't, right? Because you can cross-market-

   2. DKDara Khosrowshahi22:29

      Exactly

   3. DRDavid Rosenthal22:30

      ... rides and Eats.

   4. DKDara Khosrowshahi22:31

      Exactly. And especially in the US, there's a much more crossover between couriers who deliver food and then drivers who drive people. There's a much larger crossover, and we can actually use Eats almost as a recruitment tool. In that moment when someone says, "I am interested in earning money, you know, gig money, on-demand, et cetera, with all the flexibility, freedom, et cetera," the faster you can get that person earning money, the higher the conversion rate. And because of Eats, you don't need to get your car inspected. You know, there's a lot of steps, additional steps, background check, et cetera, that's required for driving. Those steps don't necessarily need to be completed to deliver food. You can get people into, 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. It, it's a structural recruitment advantage we have in terms of building up supply, and as you build up the supply, the liquidity in the marketplace gets better, you know, surge come down, pricing gets better, ETA gets better, your ability to price gets better, and the demand shows up to some extent.

   5. DRDavid Rosenthal23:48

      So everything you just said, that's always been, like, the, the story-

   6. DKDara Khosrowshahi23:52

      Yeah

   7. DRDavid Rosenthal23:52

      ... right?

   8. DKDara Khosrowshahi23:53

      Yeah.

   9. DRDavid Rosenthal23:54

      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. [chuckles] Like, what, what does the Uber execution machine look like since the pandemic to maybe make that more of a reality?

   10. DKDara Khosrowshahi24:13

       Well, I think that there's always a delay between inputs and outputs, right? Which is you, you can start changing the inputs in terms of how you build a system, 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, to merge all the teams together, the technical teams together, the marketplace teams together, uh, single earner team, et cetera. When Eats was small-... it needed its own dedicated teams, because if you had one team doing rides and Eats, like, all the attention would go to rides. Once we combined the teams, that allowed, you know, one technical team to really focus on the demand side. Eats is the recipient. You know, so the rides business has most of the audience, and generally, we move more people from rides to Eats. So it's a, it's a almost free customer acquisition tool for, for Eats.

   11. BGBen Gilbert25:13

       It's your largest customer acquisition channel for Eats, right?

   12. DKDara Khosrowshahi25:18

       Yeah, we, we get more new customers from rides than we do from Google, Meta, Instagram, you know, all of these other channels combined.

   13. SPSpeaker25:27

       It's pretty nice to own your own media.

   14. DKDara Khosrowshahi25:28

       It's awesome, yeah!

   15. BGBen Gilbert25:29

       It's crazy.

   16. DKDara Khosrowshahi25:29

       At, at a quarter of the cost. So it's like, it's, it's a proprietary channel, and it's cheaper, and then on the supply side-

   17. SPSpeaker25:35

       Do you, do you, like, charge internally for-

   18. DKDara Khosrowshahi25:37

       Totally.

   19. SPSpeaker25:38

       [laughing] Oh, I love it.

   20. DKDara Khosrowshahi25:39

       Oh, yeah, yeah, totally, totally.

   21. BGBen Gilbert25:40

       Well, it's an, it's an even advertising business, right?

   22. SPSpeaker25:41

       Yeah.

   23. BGBen Gilbert25:41

       So it's an ad unit like any other.

   24. DKDara Khosrowshahi25:43

       Exactly, exactly. And, and so, and it-

   25. SPSpeaker25:46

       We're gonna have to start charging each other for-

   26. BGBen Gilbert25:48

       Stop

   27. SPSpeaker25:48

       ... plugs on the... Okay. [laughing]

   28. DKDara Khosrowshahi25:50

       [laughing] We can tell you a little about our internal pricing mechanisms.

   29. SPSpeaker25:53

       [laughing]

   30. DKDara Khosrowshahi25:53

       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, 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, 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 wanna screw up that experience. So to the question of, like, why is it happening now? Is one, it looks great on paper, but then to build the machinery to actually do it effectively takes time. And then, you know, if Eats has this new customer acquisition, uh, source, every year, new customers for Eats account for less than 10% of the business, of the overall business-
8. 27:39 – 35:28

   Pricing, labor, and the ‘invisible hand’: how Uber balances the marketplace

   1. SPSpeaker27:39

      Is it still that, um, supply acquisition cost is bigger than demand acquisition cost for you guys?

   2. DKDara Khosrowshahi27:45

      Yes.

   3. SPSpeaker27:46

      Yeah.

   4. DKDara Khosrowshahi27:46

      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, uh, 25% more drivers and couriers into the platform. They would all be, like, super busy instantly. Right now, our supply generally is growing faster than demand because it's catching up to demand, and the average driver who's on the platform is working more because the experience is better, earnings levels are, are, are pretty- are really good. So at this point, probably supply is still trailing demand by, you know, 5% 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.

   5. BGBen Gilbert28:26

      I was reading through the most recent earnings, and you have a chart where on average, over the last five years or so, drivers make more money per hour.

   6. DKDara Khosrowshahi28:33

      Mm-hmm.

   7. BGBen Gilbert28:34

      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, 'cause you have a whole ton of new drivers coming on, would you guys sort of gate it and be like, "Hey, we wanna, like, make sure that w- we don't sort of flood the, the supply side of the marketplace?"

   8. DKDara Khosrowshahi28:56

      No, uh, because one of our core philosophies is this is an open platform, and if your background check comes in okay, et cetera, then you can have access to earnings opportunities. That's a core belief for us. The economics take care of themselves, right? When you look at mid-cycle, long-cycle, if earnings come down on the platform, then it becomes a less attractive platform to drivers-

   9. BGBen Gilbert29:20

      Mm

   10. DKDara Khosrowshahi29:20

       ... and they will do something else. There is this countercyclicality about our marketplace, which is during really good times, it becomes harder for us to recruit drivers, so the cost of supply goes up. So while revenue and gross bookings are growing and unit volumes are strong, our supply base becomes more expensive. During softer economic times, you get more drivers coming into the platform, ETAs come down, prices come down, the price becomes cheaper, so actually, our unit volumes accelerate. So if you look, like, our Q1 unit volumes, they grew 24% versus 19% in Q4.

   11. BGBen Gilbert29:59

       Mm.

   12. DKDara Khosrowshahi29:59

       So we accelerated, you know, trip growth, which is not something that you see at our scale, but it's, it's some of this stuff working out.

   13. BGBen Gilbert30:07

       Right. So it's sort of the invisible hand of the market theory that sort of self-regulates this for you.

   14. DKDara Khosrowshahi30:12

       Yeah, it's not a theory. It happens.

   15. BGBen Gilbert30:13

       Yeah, I guess like, yeah. [laughing]

   16. DKDara Khosrowshahi30:14

       [laughing] It's, it's this very cool experiment.

   17. SPSpeaker30:16

       Yeah.

   18. BGBen Gilbert30:17

       Economists like to talk about, like, things in theory, but, like, you actually have a, one of the largest data sets in human history of, you know, people doing work and other people consuming services.

   19. DKDara Khosrowshahi30:27

       Y- 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 labor the marketplace sets based on the supply of labor coming in and the demand-... for transportation.

   20. DRDavid Rosenthal30:49

       Hmm.

   21. DKDara Khosrowshahi30:49

       And so there's this, you know, people say, like, "Uber's setting prices?" He'd say, "We're not setting prices."

   22. DRDavid Rosenthal30:54

       Hmm.

   23. DKDara Khosrowshahi30:54

       "The marketplace is setting its own price."

   24. BGBen Gilbert30:56

       So what do you do then? Like, you have to have some leverage at your disposal. You're getting a lot more profitable.

   25. DKDara Khosrowshahi31:02

       Yes.

   26. BGBen Gilbert31:02

       I mean, certainly, I think in '20... Whenever we did the IPO episode, Uber had lost, like, close to $3 billion the year before going public.

   27. DRDavid Rosenthal31:09

       You said in the, in the episode that it was the most that a company had ever lost before going public in history. [chuckles]

   28. BGBen Gilbert31:15

       Yes.

   29. DRDavid Rosenthal31:15

       I don't know if that's true, but, uh-

   30. BGBen Gilbert31:17

       Well-
9. 35:28 – 38:31

   Uber’s true complexity vs. Expedia: multi-stakeholder, real-time operations

   1. DRDavid Rosenthal35:28

      How has the complexity of Uber relative to Expedia matched up with your expectations coming in?

   2. DKDara Khosrowshahi35:38

      So there's complexity in terms of all of the stakeholders that you have to think about, and that's like... It's a difference between chess and, like, four-dimensional chess. It is like Expedia travel agency. You're bringing demand to your supply base, et cetera, and then you have to think about the travel ecosystem. But with Uber, Uber is, like, a incredibly important service to the cities of the world.

   3. DRDavid Rosenthal36:07

      And also, Expedia, you weren't providing the service.

   4. DKDara Khosrowshahi36:10

      Yes.

   5. DRDavid Rosenthal36:10

      You were a-

   6. DKDara Khosrowshahi36:10

      We, we were demand-

   7. DRDavid Rosenthal36:11

      A de- a marketplace layer

   8. DKDara Khosrowshahi36:13

      ... aggregator. Exactly.

   9. DRDavid Rosenthal36:13

      You're not operating the airplanes. [chuckles]

   10. DKDara Khosrowshahi36:15

       Exactly.

   11. DRDavid Rosenthal36:15

       You're not, you know, making up the hotel rooms.

   12. DKDara Khosrowshahi36:18

       Exactly. You know, the drivers are providing the service, right? But it's... We're much more responsible end to end. But, you know, you're responsible for your customers. We have a very, very important responsibility to driver and courier community, these over 5 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 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. Um-

   13. DRDavid Rosenthal36:56

       Were you ready for it?

   14. DKDara Khosrowshahi36:57

       Was I ready for it?

   15. DRDavid Rosenthal36:58

       Yeah.

   16. DKDara Khosrowshahi36:59

       No. [laughing] I had no idea.

   17. DRDavid Rosenthal37:00

       Is this one of those-

   18. DKDara Khosrowshahi37:01

       I had no idea

   19. DRDavid Rosenthal37:01

       ... like, y- 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?

   20. DKDara Khosrowshahi37:06

       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." [laughing]

   21. DRDavid Rosenthal37:12

       [laughing]

   22. DKDara Khosrowshahi37:12

       Like, I love it.

   23. DRDavid Rosenthal37:14

       Yeah, yeah.

   24. DKDara Khosrowshahi37:14

       You know, like, the job is too hard-

   25. DRDavid Rosenthal37:16

       Yeah

   26. DKDara Khosrowshahi37:16

       ... to, like... It's not fun, but it's so cool. It's such an interesting space. You really feel like you're having impact. Everyone at Uber, like, i- we always talk, like, you don't come to Uber for easy. Like, you don't come here for an easy job. It's complicated. It's hardcore. People work their asses off, but, like, you love it. And, and it's not fun. Like, it ain't fun, but people love being at the company. That's something I didn't know. And then, and then the, the dynamic real-time nature of the marketplace and how we balance the marketplace and the pricing, et cetera, i- is unique, right? It- it's Thursday night, there's a Taylor Swift concert. All hands on deck. We gotta figure things out. That operational nature, but how dynamic and fast it is.

   27. DRDavid Rosenthal38:08

       Does, uh, Uber HQ plan for Taylor concerts ahead of time-

   28. DKDara Khosrowshahi38:13

       Uber-

   29. DRDavid Rosenthal38:13

       ... as they're happening?

   30. DKDara Khosrowshahi38:14

       Yeah, I mean, Uber HQ doesn't, but there are ops teams on the ground.
10. 38:31 – 55:24

    How Dara became Uber CEO: headhunter call, Daniel Ek push, and Barry’s help

    1. BGBen Gilbert38:31

       So, uh, David asked this interesting question that I wanna dig a little bit deeper on, the, 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, in a very short time?

    2. DRDavid Rosenthal38:47

       Yeah, I wanna get a little-

    3. DKDara Khosrowshahi38:48

       Yeah.

    4. DRDavid Rosenthal38:48

       Well, let's cover the... First, when did you first get contacted about it?

    5. DKDara Khosrowshahi38:51

       Yeah, that's a good place to start.

    6. DRDavid Rosenthal38:51

       Like, how did you... How did you enter the Uber orbit?

    7. DKDara Khosrowshahi38:55

       So, um, I was reading about it in the news, just like everyone else was, right? It was just all over the place, and it was, it was-

    8. DRDavid Rosenthal39:03

       Meg Whitman

    9. DKDara Khosrowshahi39:03

       ... crazy.

    10. DRDavid Rosenthal39:03

        Jeff Immelt. It was a public, uh-

    11. DKDara Khosrowshahi39:06

        Yeah, and also e- everything going on-

    12. DRDavid Rosenthal39:07

        Yeah

    13. DKDara Khosrowshahi39:07

        ... and what led to it, you know, the, the, the battle between Travis and Benchmark and all that stuff, it was, it was fascinating as an observer. I never, ever, ever imagined that [chuckles] I would then play a part.

    14. DRDavid Rosenthal39:20

        [laughing]

    15. DKDara Khosrowshahi39:21

        And a headhunter called me about this role, and I-

    16. BGBen Gilbert39:27

        So not a board member directly, a headhunter.

    17. DKDara Khosrowshahi39:29

        Headhunter. Headhunter.

    18. BGBen Gilbert39:30

        Whoa!

    19. DRDavid Rosenthal39:30

        Wow.

    20. DKDara Khosrowshahi39:30

        Headhunter called me. It was a structured process, and I'm like: No way. Like, uh, no thank you, goodbye.

    21. DRDavid Rosenthal39:37

        [chuckles] Happy in Seattle.

    22. DKDara Khosrowshahi39:39

        And...

    23. DRDavid Rosenthal39:39

        Everything's great.

    24. DKDara Khosrowshahi39:39

        Yeah, 13 years. I love working-

    25. BGBen Gilbert39:41

        I got my place on Wimby. [laughing]

    26. DKDara Khosrowshahi39:43

        Yeah, [chuckles] I love working for Barry. Like, it was... I, I was good.

    27. DRDavid Rosenthal39:46

        This is fun. [laughing]

    28. DKDara Khosrowshahi39:46

        Yeah, and then, and then we- [chuckles] Yeah, exactly. It was fun. And then I, I was at the Sun Valley Conference, the Allen & Company Sun Valley Conference, and, um, having drinks with Daniel Ek, and he's like, "Dara, you know, did you get the call from that headhunter about the Uber job? Uh, I think you'd be perfect for the job." And I didn't know where the headhunter, why the headhunter called. Turned out Daniel. I'm like, "Dude, why would I ever do that? Like, I'm happy. Like, why, why would I ever jump into that mess?"

    29. BGBen Gilbert40:19

        So Daniel gave the headhunter your number?

    30. DKDara Khosrowshahi40:22

        Yes, [laughing] and, and I'm like, "No way."
11. 55:24 – 59:06

    Strategy at entry: not a grand vision—an operating plan to reach profitability

    1. BGBen Gilbert55:24

       What of today's strategy was in your pitch to the board when you were joining as CEO, and what is an emergent thing that's happened while you're in the seat?

    2. DKDara Khosrowshahi55:34

       So the pitch to the board was really different in that it wasn't- [chuckles] ... about strategy.

    3. BGBen Gilbert55:40

       Huh.

    4. DKDara Khosrowshahi55:40

       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 at Expedia. I think now things have changed, which is we have become much more focused on those, on those three segments.

    5. BGBen Gilbert55:59

       Yeah.

    6. DKDara Khosrowshahi56:00

       And if you look at rides, we have a number of growth bets, which is there's this base business, UberX, which is, like, gonna be 50% of our growth. Then about 15% of our growth are international countries where the business model as we had it wasn't legal. So the attitude at the time was, "Well, if our business model isn't legal, then, like, we're not coming in until we're invited in." And we took a different tack, which is, "Well, what business model is legal? And let's adjust our business model to the country versus have the country adjust to the business model."

    7. BGBen Gilbert56:35

       Mm.

    8. DKDara Khosrowshahi56:35

       And once you're in, you, and you build trust within a country, and you build a voice, et cetera, maybe then the business model can change over a period to benefit, you know, drivers, couriers, et cetera. So like, we're in Germany, we're in Spain, we're in Japan, we're in Korea, we're in Turkey. There's a bunch of countries that we're expanding into with tweaks to the business model to make sure that we're expanding to, into those countries the right way. And then there's a whole host of new bets that we're making in terms of transportation: Taxi, which is huge, low-cost, hailables, two-wheelers, three-wheelers, Uber for Business, health, uh, transportation, um, all of these different segments. That whole kind of the new bets portfolio will be 35% of our growth.

    9. BGBen Gilbert57:21

       Mm.

    10. DKDara Khosrowshahi57:21

        So if we do it right, we will... 50% of our growth will come from these new initiatives that really didn't exist. And then on the Eats side, obviously, it was about food and kind of the general expansion of that business, but it's really about getting into the other categories, getting into grocery, liquor, et cetera. And one of the parts that I'm super excited about is we've always had kind of, 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, right? The, my bringing wine here and- [laughing] ... delivering it, right?

    11. DRDavid Rosenthal58:01

        Thank you.

    12. DKDara Khosrowshahi58:02

        That is-

    13. DRDavid Rosenthal58:02

        This is delicious, by the way.

    14. DKDara Khosrowshahi58:03

        That has nothing to do with demand necessarily, but it's fulfillment.

    15. DRDavid Rosenthal58:05

        Yeah, these are two separate businesses that got stapled together.

    16. DKDara Khosrowshahi58:08

        Exactly. So, so we have now we're separating the tech stack.

    17. DRDavid Rosenthal58:12

        Mm.

    18. DKDara Khosrowshahi58:13

        Right? So that now we can offer- we can go to merchants and say, "If you want marketplace, great, but if you want fulfillment, we can offer you fulfillment in a separable way." So, for example, Walmart isn't in our marketplace, because they're Walmart, they have an incredible brand, et cetera, but they use our fulfillment services. And more and more, that, our vision is we essentially want the local grocer to out-Amazon Amazon. Like, every single local business can deliver same day, which is better the next day. Um, if we can connect that to marketplace, that's great, but that can also be a separate part of our business that can, uh, grow and thrive.

    19. DRDavid Rosenthal58:51

        It's so funny how much of this, you know, goes back to, like, the original 10 years ago, 15 years ago vision for Uber. It just takes so long to realize these things.

    20. DKDara Khosrowshahi59:00

        It does. I mean, the vision-

    21. DRDavid Rosenthal59:01

        Like, it's complex. Like-

    22. DKDara Khosrowshahi59:01

        It, it looks great on paper-

    23. DRDavid Rosenthal59:03

        Yeah

    24. DKDara Khosrowshahi59:03

        ... and then, you know, real life is a lot more difficult, right?

12. 59:06 – 1:02:04

    Incumbent shift: partnering with taxis and adapting the product to old workflows

    1. BGBen Gilbert59:06

       Are there activities that you've sort of thought about w- where you, you used to need to do something different or counterposition the market in order to be successful, where now you sort of look around, and you're like, "Eh, actually, in this area, we're the incumbent, so there's a different strategy that we need to lean into as an incumbent"?

    2. DKDara Khosrowshahi59:24

       Our working with taxis was, was an interesting twist-

    3. BGBen Gilbert59:27

       Mm.

    4. DKDara Khosrowshahi59:28

       Right? Which is to some extent, they have been definitionally the competition, or we have been the competition or the, um, challenger to those incumbents. Um, at some point, we became much bigger than taxi, but in the end, if you remove yourself from the emotions, et cetera, and, you know, we're competing against X or Y, we're in the job of wiring up, you know, vehicles and drivers who wanna drive people to places, and that includes taxi. 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, 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 Taxi, and the way that we match generally Uber is one-to-one. So you, uh, hail for an Uber, we will match you, we'll make an offer to a specific driver, driver says yes, driver comes pick you up, 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. And if the acceptance rate is lower, you might wait for a long time to get matched, 'cause we're gonna come, send offer, offer, offer, offer before you get a match. So the team built a technology blast dispatch, which is instead of a one-to-one match, it's a, you know, we'll make a dispatch to 10 different taxis. One of them accepts.

    5. DRDavid Rosenthal1:01:04

       This is [chuckles] just like the old taxi dispatch system.

    6. DKDara Khosrowshahi1:01:06

       Totally.

    7. DRDavid Rosenthal1:01:07

       [chuckles] Literally.

    8. DKDara Khosrowshahi1:01:07

       Totally. Like, who's... You know, there's a pickup on 54 Leonard Street-

    9. DRDavid Rosenthal1:01:11

       Yeah, yeah, yeah [chuckles]

    10. DKDara Khosrowshahi1:01:12

        ... and someone says, Joey says, "Yes."

    11. DRDavid Rosenthal1:01:13

        I got that one. [chuckles]

    12. DKDara Khosrowshahi1:01:14

        Right? Yeah, I got that one.

    13. DRDavid Rosenthal1:01:15

        [laughing]

    14. DKDara Khosrowshahi1:01:15

        So, like, what's, what's old becomes new-

    15. DRDavid Rosenthal1:01:17

        Mm

    16. DKDara Khosrowshahi1:01:17

        ... what's new becomes old. But it- what's been interesting is there's a simple idea-... but then building out the tech infrastructure to be able to fit to that particular market becomes a challenge, but also it's an opportunity, which is now for some of our competitors to copy that. One is, it's taking a lot of tuning to actually get that experience to be excellent. Um, there are some markets where we're mixing demand. You know, you might, uh, click for an UberX, a taxi might show up, right?

    17. DRDavid Rosenthal1:01:49

        Mm.

    18. DKDara Khosrowshahi1:01:49

        Is that a good thing? Is that a bad thing? It improves marketplace liquidity, and things that seem very simple on the surface to actually make the magic happen of pushing a button and 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.

13. 1:02:04 – 1:13:27

    Rebuilding the shareholder base and the SoftBank governance reset

    1. DRDavid Rosenthal1:02:04

       That is cool. I have another, uh, sort of corporate structure question-

    2. DKDara Khosrowshahi1:02:09

       Uh-oh. Okay

    3. DRDavid Rosenthal1:02:09

       ... 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. I'm sure there's some people that still hold their shares from-

    4. DKDara Khosrowshahi1:02:23

       Yeah, yeah

    5. DRDavid Rosenthal1:02:24

       ... those early days, but what is that like at the scale of a $70, $80 billion market cap company turning over a shareholder base in its entirety?

    6. DKDara Khosrowshahi1:02:34

       Very painful. [laughing]

    7. DRDavid Rosenthal1:02:37

       [laughing]

    8. DKDara Khosrowshahi1:02:38

       It was the displacement in terms of shareholders, it was tough, right? And, and there's a certain cohort of shareholders going after hypergrowth, et cetera, especially in this marketplace, where it's much more about disciplined growth, profitable growth, et cetera, that that changeover has been difficult. But we now have a set of shareholders, like the Fidelities of the world, Capital, Morgan Stanley, et cetera, that have the capacity to own a lot of shares, way more than they do today, and there's a consistency about it. As we keep delivering, they keep upping their stake, and we're now seeing a stock price that generally is, 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 stage, Travis sold all his shares.

    9. DRDavid Rosenthal1:03:27

       Oof.

    10. DKDara Khosrowshahi1:03:28

        And those days, like, those were not happy days.

    11. DRDavid Rosenthal1:03:30

        That was-

    12. DKDara Khosrowshahi1:03:31

        I'll tell you

    13. DRDavid Rosenthal1:03:31

        ... what, probably s- 15% of the company?

    14. DKDara Khosrowshahi1:03:34

        I don't remember if it was 15-

    15. DRDavid Rosenthal1:03:35

        Something like that

    16. DKDara Khosrowshahi1:03:35

        ... it was a lot. Yeah.

    17. DRDavid Rosenthal1:03:36

        There are moments when you remember that stock prices are a function of supply and demand.

    18. DKDara Khosrowshahi1:03:41

        Totally.

    19. DRDavid Rosenthal1:03:42

        And when 15% of a company's outstanding shares hit the market all at once, like, oof-

    20. DKDara Khosrowshahi1:03:45

        Or 2%.

    21. DRDavid Rosenthal1:03:46

        Or 1%.

    22. DKDara Khosrowshahi1:03:47

        Or 2%, yeah.

    23. DRDavid Rosenthal1:03:47

        Or what... Yeah, right, like that's-

    24. DKDara Khosrowshahi1:03:48

        Yeah.

    25. DRDavid Rosenthal1:03:49

        Oof, wow!

    26. DKDara Khosrowshahi1:03:49

        I mean, the, the, like, I, I think in hindsight, um, I think it was a good move by him because it created separation. He wanted to move on, and so I, in hindsight, I respect what he did, and in hindsight, like, I didn't see it at the time. I was, like, pissed, right?

    27. DRDavid Rosenthal1:04:08

        Like, dude, come on. [chuckles]

    28. DKDara Khosrowshahi1:04:09

        And people were panicking, "Oh, my God, Travis is selling. What does that mean?" Et cetera. Like, and, 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-

    29. DRDavid Rosenthal1:04:21

        Right

    30. DKDara Khosrowshahi1:04:22

        ... because it's very easy to keep score based on the stock price, and the stock price was def- definitely moving in the wrong direction. And Travis, y- you know, whether you liked him or not, you respect him. He's a really smart person, and he's the founder of the company. Like, that was a tough time. But I think we're now in a good place, which is the shareholding is moving from either some of the startup folks or hedge funds to fundamental long-only players, who hopefully they'll be shareholders for the next 10 years.
14. 1:13:27 – 1:28:39

    Leadership in public: Dara’s Twitter style, NYT board lessons, and autonomy realism

    1. BGBen Gilbert1:13:27

       a free week trial that is coming up soon. So you can go to pitchbook.com/acquired to get all the details and just tell them that you heard about them from Ben and David at Acquired.... I'm very curious about how you operate your Twitter account. On the one extreme, there's like an Elon Musk type, uh, operating a Twitter account, where there's-

    2. DKDara Khosrowshahi1:13:45

       There's only one Elon Musk type operating a Twitter [laughing]

    3. DRDavid Rosenthal1:13:48

       [laughing] Yeah.

    4. BGBen Gilbert1:13:48

       Like, there is no type.

    5. DKDara Khosrowshahi1:13:49

       There are... Yeah. [chuckles] It, it's a singular point.

    6. BGBen Gilbert1:13:53

       There is one in, I don't know how many Mdaos they have, but one in some hundred million, uh, data point of tweeting whatever comes to your mind, no matter the consequences, and-

    7. DRDavid Rosenthal1:14:03

       So much so that he bought the company.

    8. BGBen Gilbert1:14:05

       Yes. And then on the complete other side, there's, like, Barack Obama and Tim Cook, and I'd say you're, like, one click in from the Barack Obama, Tim Cook. And I'm curious, like-

    9. DKDara Khosrowshahi1:14:14

       I'm gonna consider that a compliment.

    10. BGBen Gilbert1:14:16

        Yeah. [laughing]

    11. DKDara Khosrowshahi1:14:16

        Why, thank you. [laughing]

    12. BGBen Gilbert1:14:17

        Like, y- you definitely operate your public persona w- with sort of a head of state grace, and I'm curious if you ever think about letting it fly a little bit more, or do you have a full drafts folder? Like, how-

    13. DKDara Khosrowshahi1:14:32

        [chuckles]

    14. BGBen Gilbert1:14:32

        Do you ever wish you could express yourself a little more?

    15. DKDara Khosrowshahi1:14:33

        What- the, the what I really think-

    16. BGBen Gilbert1:14:35

        Yeah. [chuckles]

    17. DKDara Khosrowshahi1:14:35

        ... uh, Twitter feed?

    18. BGBen Gilbert1:14:36

        Do you have a burner account? [laughing]

    19. DKDara Khosrowshahi1:14:38

        [laughing] So I tweet mostly myself. There's some stuff that folks say, "We did this." The... 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 wanna keep it entertaining, but at the same time, I'm not using Twitter to express myself. I'd rather have a long-form discussion like this. Like, this is, to me, much more interesting, and so Twitter, tweets can be taken out of context, et cetera. So, like, I'm, I'm, I'm not there to stir the pot.

    20. BGBen Gilbert1:15:10

        Right.

    21. DKDara Khosrowshahi1:15:10

        Um, so maybe that's what comes out in terms of my Twitter persona. I'll, I'll take Obama-esque or Clinton-esque.

    22. DRDavid Rosenthal1:15:17

        Tim Cook, it works for him.

    23. DKDara Khosrowshahi1:15:18

        Tim Cook. Yeah, like, that's, that's quite a compliment.

    24. BGBen Gilbert1:15:21

        All right, next, I'd c- ... 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.

    25. DKDara Khosrowshahi1:15:28

        Yes.

    26. BGBen Gilbert1:15:29

        What are some of your biggest learnings from being involved with that company?

    27. DKDara Khosrowshahi1:15:32

        It was, um, definitely my favorite board to be on. It was a really interesting time at The New York Times because they were really becoming a top technical company in terms of being a publisher. Like, it's at a pretty extraordinary learning organization, and they wanted me as, like, the tech person, and I was coming from Expedia and, you know, optimization, all that stuff, and their capacity to learn... Like, super traditional company, capacity to learn was pretty awesome. Um, one of the fascinating parts about the company, and it's both a superpower or it could be a weakness, is total separation of Church and state in terms of content and business. Right? So, like, when I asked, "Well, what's the cost of certain kinds of content, and then how much traffic? You know, can we have the connection between cost of content and traffic?" It was like: "No, you cannot ask that question-

    28. BGBen Gilbert1:16:29

        Huh

    29. DKDara Khosrowshahi1:16:30

        ... because the content is separate." So it's, it's just a fascinating organization, and the bet that they made on subscriptions was amazing. Um, it was not obvious, because the advertising business was much bigger at the time, but it was an enterprise bet based on a core identity of the company, which is, "We believe in quality content." And I thought that was one of the most impressive bets, because it was totally not obvious at the time. Like, all, every single news organization, et cetera, was advertising, advertising. This is the BuzzFeed days, right? It was quick content, et cetera. But I, I think that w- the bet that they made in quality was very much a bet on, uh, their identity that wasn't backed up by data and certainly wasn't backed up by their financials. But the company went all in, and, uh, they've really benefited.

    30. BGBen Gilbert1:17:26

        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-
15. 1:28:39 – 1:37:40

    Closing message: building the world’s best earner platform with higher duty of care

    1. BGBen Gilbert1:28:39

       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.

    2. DKDara Khosrowshahi1:28:45

       Mm-hmm.

    3. BGBen Gilbert1:28:46

       So anybody that's still listening appreciates nuance.

    4. DKDara Khosrowshahi1:28:49

       [chuckles]

    5. BGBen Gilbert1:28:49

       And so if there's something that you feel is often misunderstood or that you wanna 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 wanna talk about.

    6. DKDara Khosrowshahi1:29:08

       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 w-we ultimately, the future of the business as it stands now, depends on our building the best platform for earners, and it goes to like the take rate, right? If the take rate goes up too much, then we're taking too much of the service, et cetera. A- and the fact is that I think Uber was guilty of taking earners for granted because when I first came in, and for much of the company, like we were in a state of oversupply. We had too many drivers. It goes-- and instead of gating them, et cetera, we just didn't really invest in the driver experience and the courier experience the way that we should've. And then the way that we organized the company around the earner experience w-was pretty standard in terms of a B2C business, right? There's a team, you know, there's a team that runs the Uber app, there's a team that runs the Eats app, and the team that runs the Driver app, and you do all the typical stuff, which is analytics and measurements and A/B test, et cetera, in order to optimize throughput in the marketplace, et cetera. But like as we step back, you know, we don't A/B test what the 401k match should be for employees, right? Like, it was equivalent. Some of the experimentation that we were doing on the earner side is like, you know, yeah, should we match a three percent or six percent? And let's look at employee turnover. Cool experiment, maybe you could optimize, but when you're building a product that people are making a living off of or are earning money that they have to earn with, there's a different duty of care.

    7. BGBen Gilbert1:30:52

       Mm.

    8. DKDara Khosrowshahi1:30:53

       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 four hours, five hours, six hours with the 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 techy, et cetera, you know, one is like the P95 experience. Usually, like you build... You don't look at P50 'cause averages lie, and then you look at P95, well, that's the worst experience. Well-

    9. DRDavid Rosenthal1:31:30

       The probability percentages.

    10. DKDara Khosrowshahi1:31:31

        Yeah, the probability percentages. You know, drivers, an average driver who's driving a week, experience like a P95 circumstance every single week, multiple times a week, 'cause they spend a lot more time on the app.

    11. BGBen Gilbert1:31:42

        Mm.

    12. DKDara Khosrowshahi1:31:43

        So there's been a pretty important culture change of the company, which is like higher duty of care, actually slowing down in terms of how we build for earners, being a lot more humble, listening to them, their experience, et cetera.... the fact is that when you have five point six million earners on the platform, there's this marketplace which is, it works for some earners, and it doesn't, right? So there's always gonna be ten percent, which is like half a million people, who are not happy with the experience, but we've gotta make sure that ninety percent are, and we're getting more, uh, people who like the experience into the platform. But because of where we came from, it's actually pretty new muscle for us to, like, build this earner experience. And, 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 this sense, which is like tech is out of touch with the real world, and it's a lot like tech is, you know, you're building for the virtual world. And, and Uber is unique in that it's a technology company that, like, built for the real world, and the impact that we have, especially as it relates to earners, is like, it's real people. And so what I would be most proud of, one is there's a practical reality, which is if we build a company that is-- has the best product and experience for earners, we're gonna win long term.

    13. DRDavid Rosenthal1:33:14

        Yep.

    14. DKDara Khosrowshahi1:33:15

        But if we're that technology company that's, like, very much connected, not with the elite, but with, you know, an earner base and the broad population, not just in San Francisco, but all over the world, like, that, that's a company to be proud of. But at the same time, it's like we-- I think the, the muscle we've been developing in the last two to three years, we have a long way to go.

    15. DRDavid Rosenthal1:33:39

        Is Uber the largest earner platform in the world?

    16. DKDara Khosrowshahi1:33:44

        Yeah, I think we're the largest source of work anywhere by far, and growing pretty fast.

    17. BGBen Gilbert1:33:50

        That's a crazy statement.

    18. DRDavid Rosenthal1:33:51

        Yeah.

    19. DKDara Khosrowshahi1:33:51

        Yeah.

    20. BGBen Gilbert1:33:52

        'Cause the largest companies who-- like, even if, if you just look at employees-

    21. DRDavid Rosenthal1:33:57

        Walmart

    22. BGBen Gilbert1:33:57

        ... companies that employ people employ max, like, two million?

    23. DRDavid Rosenthal1:34:01

        Max, yeah.

    24. DKDara Khosrowshahi1:34:02

        Yeah.

    25. BGBen Gilbert1:34:02

        And Uber has how many earners on the platform?

    26. DKDara Khosrowshahi1:34:04

        Five point six million, uh, you know, as of the last quarter. It's growing.

    27. BGBen Gilbert1:34:08

        What is the-

    28. DKDara Khosrowshahi1:34:08

        That's a lot of earners.

    29. BGBen Gilbert1:34:10

        What does the federal government employ? It's, like, on par with... It's gotta be on par with that.

    30. DKDara Khosrowshahi1:34:15

        Now, a lot-- the vast majority are-

Episode duration: 1:37:40