Dara Khosrowshahi - Uber's Bet on AVs, AI, and Building a Super-App - [Invest Like the Best, EP.476]

25:33We're working on autonomous insurance as well. So we're building the entire ecosystem. them. So someone who builds a driver can get those cars in the road. And then we have all the supporting infrastructure. We are collecting data as we speak in the streets that we can feed to the model. And then when they hit markets, we've got instant demand for them. And what we're seeing is consumers love the product and AVs that are on our network are 30 % or more busy than let's say, 1P AVs who aren't using our network. That 30 % in terms of trip per vehicle per day, in terms of revenue per vehicle per day, can make a huge difference in terms of your ROI of investing in these expensive cars.

26:16What has surprised you most so far about the product of AVs? You get to see all this interesting, the 30 % thing makes me wonder about this question. What is interesting to you about the nature of the product and the physical cars themselves and the consumer experience versus the more traditional experience? So the one thing that is surprising in a different way is how quickly magic turns to normal. When I first experienced Uber, it was in New York City. I was at Expedia. I'm like, oh my God, this thing is absolutely magical. Push a button and a car shows up in five minutes. I say, you're like, where's my damn car?

26:52Yeah, exactly. You're like, it was six and a half minutes. I can't believe that. How dare they? And with AVs, you get in them and it's magical. The cars are nice. There's a sense of privacy, peace. You play your own music. And for the first two minutes, you're like, oh, my God, this is amazing. Look at what's happening. Then at three, here you are doing the same thing. So I think what's incredible is what's magical now is going to seem normal to all of us 10 years from now. And then it's about getting you from point A to B safely, efficiently, affordably. We want to make sure that these AVs aren't just available for rich people in the middle cities.

27:30We want to make sure that they're available everywhere. But I think this technology, the speed to market is going to be faster and the interactions are going to normalize faster than you think. I'm so interested by the whole build, partner, buy decision that I'm sure you're making a million ways every day. You've got these advantages. You've got all this capital, all this free cash flow. You can allocate all this infrastructure and, of course, the demand aggregation that you've already built, which are huge advantages for creating liquidity, et cetera. How do you think about partnering with companies like a Waymo or something that you could certainly see being a competitor in part of what you do?

28:00If they get a big enough network and the service is good enough, you know, people are always going to buy for huge markets. What is that like navigating in that specific example or in general right now with AVs, partnership versus having your own fleet? It's a coexistence that, frankly, I'm quite used to coming from the travel business. If you think about OTAs, these online travel agents, they compete with the Marriott, they compete with the Delta for the consumer. They compete with the independent hotel as well, all of whom are building a direct channel for the consumer, many of whom have loyalty programs.

28:31But at the same time, they want incremental consumers coming from the platforms because they have a big box to fill and they want to drive as much utilization of that box as possible. and the returns for a hotel that has 70 % of its rooms filled versus 90%, it's night and day. You will take the 90 % every single day. The same is true, for example, in Uber Eats. It's, we work with McDonald's, we work with Starbucks, we work with Chipotle. All of these companies, to some extent, also compete with Uber Eats as well. And the same will be true of a subset of AVs, which is a Waymo, of course they want to build their own brand and their own channel.

29:13But at the same time, we are able to drive more utilization for them when their cars are on our network. The same will be true of Azooks. The same will be true of Neuro, et cetera. So we're going to have some players, for example, a Wave who's focused on building one end-to-end model that they licensed to OEMs. And we will be responsible essentially for all the demand. So there are going to be lots of bottles, but I don't think it's going to be black or white, which is, do we only compete or do we only work together? We think there's going to be an amalgamation of business models. There already is in travel.

29:48There already is in food. Same thing will happen in transportation. What's your premortem for this going wrong? It's five years from now and Uber has screwed up this opportunity. What do you think the most likely reason for it is? I don't think it's necessarily an Uber thing. A big question for the industry. You've seen how powerful AI is, but at the same time, how unpopular it is with the general public. And folks like you and me in the corporate world, we're just amazed and we're driving utilization. The way that these AI models interact with the average person is, yes, search got a little bit better.

30:21But if it's driving up, or I think it's going to drive up my electricity costs, or if it's going to cost my cousin's job, that doesn't feel that good. And I think the same will be true of AVs, which is it's terrific technology. It is going to be safer than human beings. But how does it interact with emergency service providers? How do we make sure that the technology is available to everybody, not just the wealthy? We've got to have these dialogues with regulators, with real people living in cities, with our drivers whose earnings may get affected. Now, drivers in Austin and Atlanta, where we have two big partnerships with Waymo, drivers on the Uber platform, they're making more money.

31:04The number of drivers joining the platform is increasing because it looks like AVs are actually adding incremental demand to the platform. So we have good news early, but we've got to communicate and we've got to go at the pace that society is prepared for us to move. Otherwise, there will be a backlash and you're kind of seeing in some of the public perception out there. I'm sure your answer is something like not on my watch, but if I were to assume that the public out of your control thing is solved, can you imagine what the same premortem answer would be through something that you do control?

31:37I think it's what I said, access to supply. And that's why we have a partnership with basically every AV provider, whether it's in mobility or delivery or even freight. We need access to supply and we're investing time, we're investing capital. And I think we're in a great position to make sure that we are the largest amalgamator of AV supply, just like we are the largest amalgamator of transportation services around the world. We now assume the success scenario where Uber is the clear demand aggregator winner of AVs. What does that unlock, do you think, on the other side of that, whether that's consumer experiences or other things that aren't currently possible?

32:17We think it's another trillion-dollar marketplace. We think that over a long period of time, as we see the cost of AV software come down, and usually we see the cost of hardware come down. This is universal, but usually 30 % to 40 % per generation. We think the lucid midsize that they are building for us and Neuro together, it'll be a$60 ,000,$70 ,000 car. At those kinds of prices, you can actually bring the cost of transportation down for the population. And what we see is as we bring the cost of our services down, demand goes up. Uber was introduced early on. People were sizing the market based on the taxi market.

32:56We're multiple times bigger than the taxi market. And I see the same potential with AV, both in terms of the cost of transportation, reliability, safety, all of which are going to improve. And then think about delivery. If delivery is done with a drone and instead of a 25-minute to 30-minute delivery, you get habituated. The magic is a 10 to 15-minute delivery. Cheaper, faster, better. It will change how society operates. Do you think there should be some sort of Foxconn-like business for AVs? The stat I heard in San Francisco, someone asked me the quiz question of how many Waymos do you think are driving around?

33:35And I overestimated it by some crazy percentage. I was really surprised by that. And so it seems like you can be hyper-efficient with these things, which is cool. But the downside of that is maybe you can't hit your amount of production to get this cost down and all this sort of thing. Should there be a Foxconn contract manufacturer type thing for AVs? It's happening as we speak. Many of the OEMs, the traditional OEMs that we're talking to, are now seeing that L4 driving is absolutely a reality that is much closer than they think. And in seeing the services and how popular they are with consumers, they are investing in L4-ready systems.

34:12So I think you'll see the traditional players get there over the next two to four years. Right now, the cars are being manufactured in the hundreds and the thousands. It'll get to the tens of thousands. It'll get to the hundreds of thousands. Each of these vehicles probably drives three to four times what a human does. So the efficiency and efficacy of one AV vehicle is substantially higher than a human based on how much humans drive as well. And then we are seeing newer generation companies coming in, all the Foxcons. Now, the Foxcons exist in China. The Chinese players in terms of their capabilities and bill of materials is incredibly, incredibly impressive.

34:53And we need that kind of a low cost player in the Western hemisphere. It's being worked on, but we're not there yet. The Chinese capabilities in terms of manufacturing, both in terms of quality and cost at this point is unrivaled. Can you teach me about drones? I'll never forget that Amazon video from like 10 years ago where it feels like, oh, my God, the future is happening. It's coming. My drone is going to be my sandwich in five minutes or whatever. And no drone has yet to show up at my house. What's the story with the technology? I've let you zip line very closely. I think that's a really interesting company.

35:24It seems obvious and yet it hasn't happened. And I'm curious if you could teach us why that is. The biggest issue is battery density and the ability of essentially battery to lift itself and then lift the payload and what that payload looks like. And then the requisite range and recharging needs of those drones as well. Joby is building drones for people. That's happening. And I think drones for food and other grocery are going to start hitting real scale over the next two to five years. It is going to cost more than a human delivery to start with. But the ramp of the technology in terms of payloads being larger, in terms of being able to operate in whatever weather there is, and then being able to very, very accurately get you a payload right in front of your house, all of it is moving in the right direction.

36:17So is it going to be a big part of our lives two years from now? No. But five to 10 years from now, it's going to become more and more normal. I'm always really interested in the regional differences as well. I'm curious what you've learned watching AV start to happen in the US versus Europe versus the Mideast and anywhere else that you've had the experience. What is regional differences teaching you? Middle East is going fast. So the Middle East, especially if you look at Abu Dhabi, Dubai, Saudi Arabia, they are on it. The regulators are very entrepreneurial. They want to lean into new technology.

36:50So you're going to see those services. They are happening today. No vehicle operators in Abu Dhabi, Dubai. The U.S. is certainly happening. The Californias of the world, Texas of the world. But we want to make sure kind of the right discussions are happening at a regulatory level. It's going to take longer in New York. It's going to take longer in a Boston, for example. And Europe is starting to happen. We are starting commercial robo-taxi in Europe. And I think we will have pilots, for example, in London before the end of the year. So Europe is starting to recognize that they can't be left behind.

37:24European OEMs certainly are a huge player in terms of manufacturing capability and employment in Europe as well. So Europe is cashing up. Another interesting US versus international story with Uber has been, as you've gone international with Uber Eats specifically, you've actually won or gotten to the number one position more often. I'm curious what the US experience in that category has taught you that's impacted how you approach strategy when going to an international market. The basics are the same. You've got to get selection right. You've got to sign up your merchants. And when I look at the serviceable, addressable market in the cities in which we operate, probably signed up around 40 to 50 % of the restaurants and or merchants that can be on our platform.

38:09So it's about getting a selection and then making sure that you've got the right reliability. Every time when you order something, we get it right. We don't make mistakes. We deliver it to you within 30 minutes. And for us, our magic sauce is cross-platform. We started with mobility and we are now able to increasingly upsell the mobility customer, the delivery product, whether or not they want to use it on Uber Eats or they actually, when you open your mobility app now on Uber, you're going to see Eats right there. And about 13 % of Eats bookings are actually coming from the mobility business.

38:44In larger international markets and the U.S., you've got to get the basics right, but the platform for us is a structural advantage we have versus other model line players. We get a bunch of free customers from our mobility business, and then we have our Uber One membership program, 50 million members now, growing 50 % year on year. Every company has a membership program, but the way I look at it is we're kind of like Netflix. For the same price, you get more content than anyone else. You get discounts on mobility, you get search protection, you get free delivery, you get no fees on groceries, $60 more, now you're getting 10 % back on your hotel.

39:22So if we can build this loyalty program that is just bigger than anyone else's, and we have this cross-platform magic, we think we can get to the number one position and at the same time have higher margins than our competitors and we're proving it out and market after market after market so much of the story is being good at getting the supply what does excellence look like there what makes the best parts of uber that do this the best what makes them stand out what is the key to being great aggregating supply i think honestly we're okay at it i think we can get a lot better at it. I think one is I want to get more of our team members to put themselves in the shoes of our suppliers, to drive more, to go stand behind the counter of a restaurant.

40:07All of our employees are crazy users of Uber Eats and Uber Rides, but we don't put ourselves in the shoes of our merchants. After COVID, partially because I was going freaking crazy at home, but partially because I wanted to understand, well, what does a driver courier experience feel like? I bought an e-bike and started delivering food in San Francisco. And our drivers and couriers and merchants are on our platform much longer than the typical consumer. Typical consumer, you're in, you're out, maybe use us once a day, twice a day, hopefully three times a day. But the interaction is like 30-second interaction.

40:44A driver will have our app open six hours, eight hours, 10 hours a day. And as a result, the premium that we have to put on quality, making sure everything goes right, like a P95 bug happened to consumers once a month maybe for a loyal consumer. A P95 bug is happening every single week for a driver who's on the app six hours a day. We are getting much better. We've got to put ourselves in the shoes of our merchant partners, of our delivery partners. I learned so much delivering food those couple of years in San Francisco, driving people in my Tesla in San Francisco. I think that's what it takes to be a better builder and be better at amalgamating supply, so to speak.

41:28We have a value at our company, which is building with heart. I'm an engineer at heart. I'm very numerical in how I look at things, but there's a craft to building. There's a humanity in our service. And we have to make sure that we keep building with heart. And I think we can get better there. What surprised you most when you were doing the deliveries, all that experience? How hard it was. Going into the restaurant, figuring out where to pick up, making sure that you got your orders right. About 50 % of orders are batched. So actually you pick up two deliveries, sometimes at the same restaurant or another restaurant, and just making sure that you get everything right.

42:03There's a reason why things go wrong in the real world. There's a lot to process for couriers, for drivers, and then you have to deal with real work traffic as well. So just all of the things that you have to process for a consumer, you push a button, car shows up, you push a button, your food shows up. It's all easy. But for that driver and courier, there's a lot more going on and processing everything can be a challenge. The thing that you said is interesting is the membership concept, 50 million people. It feels like this is the feature every big business with lots of people on it would want.

42:32And some of them have been great stories in business history, Costco and Amazon. What does each side get out of a great membership program? And how much do you have to tweak and design that thing versus it being kind of straightforward of what people want? We've been at it for a while. The ideal membership program is one where essentially you have a fixed cost base. So a Netflix is investing a certain amount in programming and the cost of selling a membership is customer acquisition and there is no cost for the services that you render. There's no variable cost for the services you render. The benefits of membership programs, travel membership programs are often upgrades to rooms that were empty anyway or upgrades to seats that were empty anyway.

43:16So those membership programs are ideal and that's why membership started in the travel business and entertainment, for example, as well. Cable is a membership program, if you want to call it that. It becomes much more challenging if the cost to serve is a variable cost. And I think Amazon is the first one that took that on, which is the cost of an Amazon Prime membership is higher the more you use that membership. And Amazon was able to walk through this valley of despair as many people in the public markets didn't understand what it was doing and the losses kept increasing, but they understood the unit economics of membership and they stuck with it and they were able to brave through those early days.

43:58And I took a lot of inspiration from that example in the early days of Uber One. And when we acquire a member, you're less profitable. We're essentially trading. We're making a prediction, which is you're going to spend more on our platform, even though your first transaction, second transaction, third transaction is going to be much less profitable because we're giving you back a bunch of money. Over the lifetime, you will be more profitable. And we're seeing that. So the membership program took some time to get up to speed. It is solidly profitable now, but the first year of membership is a year where we lose money on you, but we're going to make money on you two, three, four years from now.

44:32The next leg of hooking this platform up to the entire world is hotels. That's so interesting that you've gone full circle. Walk us through the decision logic here. I have a question behind the question, which is how you decide to do these big things in the first place. When we started the conversation with, we used to have this bets board at Spotify. There's all these different ways that capital allocators decide what to bet on. I'd like to talk about that strategy as well. But starting with hotels, why do it in the first place? What was your thinking? We tend to be pretty data-oriented. And what we've seen, and it's relatively obvious, is that people who travel a lot tend to use Uber a lot.

45:06We're available in over 70 countries. What's the first thing that you do when you land at an airport often is you open up your Uber app. Just last year, we completed one and a half billion trips for people outside of their home city. About 15 % of our trips are to and from airports. So we can identify travelers. It was a use case that was a headline use case. And we started thinking to ourselves, hey, what more can we do for the travelers? And what differentiates Uber from some of the other places, again, it's not just about the booking experience, but it's about delivering that experience in a reliable way in the real world.

45:43We also go much deeper into the fulfillment stack than let's say the typical online travel agent. We decided as you're able to target more, et cetera, let's look at other travel products. We've started with trains. We've launched it in the UK and Spain. And we saw the same thing that we've seen over and over again, which is the more you interact with our platform, the more services you have, the more you interact with those services, the more you come back. So more content meant more retention. And so we said, well, what content can we find in travel? It was very natural for us to go into hotels.

46:16It's a high value decision that you're making. We went out there, talked to the various travel companies to make sure that we had the best supply in the business. And we happened to make a deal with Expedia, my old company. And we're essentially giving the vast majority of the economics of that deal back to Uber One members. The design spec of hotels is, again, how can I make sure that as a person, your life is more deeply integrated with our services? 10 % off hotels, 20 % off, 10 ,000 hotels. That's a great deal that you're not going to find elsewhere. And it's another reason for you to join Uber One.

46:52What's the idealized end state of that part of your business, five years hence or 10 years hence? For me, the idealized end state is obviously we want to bring a lot of value to you as it relates to the booking experience, but I want the value to carry into the market. You book a hotel in San Francisco. We go through your email if you open up for us and we already collect your information on your flight. We pre-book an Uber to the airport. We pre-book an Uber from the airport to your hotel because we already know where you're staying. And ideally, when you get to the hotel, we know you're approaching the hotel.

47:27Either we give the front desk a heads up that you're going to be there. Patrick is going to be there and know you, or we allow you to completely bypass the front desk, go to your room. Maybe you can use your Uber app as a key. I want to bring some in-market magic to you as part of your travel experience. We're already part of your experience in-city. The richer we can make that experience, the better. We're starting with the booking. We've got to start someplace. But that's the Uber magic I want to bring to you. I have the same pre-mortem question, which was, if this doesn't work, why would that be the case?

47:58What would have to go wrong? I'd say two things. One is we have debated in the past whether or not people's interaction models with their service can change from on demand to planned. People get very wed, like our brand has always been known as on demand, push a button, get a car, push a button, get your delivery. There was a question mark, could we go from on demand to planned? And we started moving in that direction with actually Uber Reserve. In the olden days, Uber Reserve, actually, we allowed you to reserve a car, but it was kind of an on-demand dispatch to try to get you that car when you expected it to be there.

48:34We have changed the back end to really drive reliability 99 plus percent. So we're pre-booking with a driver. The driver accepts, makes sure the driver is there before reserve, et cetera. And reserve now is over$5 billion run rate. It didn't exist five, six years ago. If we gave a tangible benefit, in this case, higher reliability for higher price, clearly we were able to move both demand and supply. Drivers want to pre-commit to your trip. So that gave us the opening to say, wow, this pre-commit thing is another angle that we can explore and travel became natural for us. So I think the question is, is reserving your ride just fundamentally different from thinking about your vacation two or three months from now?

49:21Can we stretch that pre-commit and can we stretch a brand in that temporal direction? I think it's an open question. I think we can. We're giving you great deals to make that plan on Uber, but it's not a slam dunk. Your finance team isn't losing money on big mistakes. It's leaking through a thousand tiny decisions nobody's watching. Ramp puts guardrails on spending before it happens. Real-time limits, automatic rules, zero firefighting. Try it at ramp.com slash invest. As your business grows, Vanta scales with you, automating compliance and giving you a single source of truth for security and risk.

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50:34They've helped firms 5x in scale, enabling faster growth, smarter operations, and a competitive edge. Visit RidgelineApps.com to see what they can unlock for your firm. What have you learned about marketing excellence? Two sources of the question. One is just marketing Uber in general. But the second is, as you do more and more stuff, making sure that even your customers know that it exists. Before preparing for this, I didn't know that this was a thing that existed. So it's an interesting question about how you do both the brand staying top of everyone's mind, but also the very tactical specific.

51:08We have this cool new thing now that you should try. Totally. The surface that we have on this phone is very limited. And I've changed my mind on this. Originally, I had the hypothesis, which is the marketing team's job is to get as many people onto the apps as possible. And then it's a product team's job to surface the right product to you at the right time. And a small example of that is with Reserve, now we offer the ability for you to order a hot coffee and the driver goes out and picks up the coffee wherever. And then it's kind of cool. You have a cup of coffee. If you're on the way to the airport, the goal isn't to get you coffee on that ride.

51:47The goal is to make you understand that you can get coffee on Uber and or other stuff. It's not about the ride. It's about the lifetime value, the interaction, the introduction of a new service, not in a way that feels like an upsell to you, but feels delightful. This is really cool. Uber knows me. why not do more with that? All of the different interactions that you can drive on the app. I have always been much more product let's let's build this from a product let standpoint. And the job of marketing is just to get people to the app. But my marketing team who told me I was an idiot and I loved it.

52:22They are building out storylines, Uber teens, getting your kid from their game home and the human interaction of when your kid comes home, either if they did well in that game or not well in that game. There are very human stories that are part of Uber in every way. Our marketing team are telling the stories about teens, about a reserve, about grocery delivery and the convenience then. And those stories are helping people realize that Uber isn't just about getting a ride. It's about giving you your time back across a broad array of services on a local basis. What do you think is more likely in seven years that I do that, whatever the next great version of that coffee thing is, or that I just type into my Uber text, I want a car at this time and I want a coffee.

53:09I think you'll be talking to your Uber, right? Do people have apps in seven years? I think you're going to have apps because there are many circumstances where the communication back to you is much more efficient in the written word or in pictures. It's not compelling, say you're Uber six minutes away, seeing the picture and being able to track the car. So I think the inbound interaction is going to move more and more away from apps. I think people are going to use apps, but the inbound interaction is going to be much more unstructured. And AI makes it possible. You historically built UIs for a specific interaction based on optimizing for the overall average.

53:44Our booking experience on Uber, it may not be optimized to you exactly, but it's optimized to overall averages through lots of iteration, lots of testing. And there's only one way in. Now, we're going to personalize it. So when you land in a city, Uber is going to be different for you than when you're going to work. but the interaction that agents are going to make possible through AI and through words are going to be incredible. Think about the people that have influenced you the most. What did you learn from Barry Diller? He's incredible. He's been my business mentor and in many ways a personal mentor as well.

54:15I'd say that the thing that I learned from Barry is the value of getting the truth from the source material. The way that I first met Barry, I was an analyst at Allen & Company working on the LBO model for Paramount. There was a hostile tender offer, Viacom and Paramount. I was building out the LBO model, right? Yeah, exactly. And Barry didn't want to talk to the MD or the VP or the associate. He's like, who built the model? I'm going to talk to that guy because if I'm going to raise billions of dollars in debt, I want to know I'm good for it. And I just remember, I was like sweating. I was so nervous.

54:52I'm like trying to print out this model and I took him through it. And he wanted to hear straight from the source. And every time I've witnessed them and I worked for him for 20 plus years, it's the filtering that gets the edge out of the story or out of the situation. And it's often the edge that gives you an edge, not the average. Everyone is going to have the same reaction to the average. It's what's that 20 percent? What's that P95 situation? Barry always insisted on going to the source, getting unfiltered data. It was sometimes unpleasant. It took more time. But getting to the ground truth would help his decision making and would allow him to give that edge to kind of go against the grain.

55:38And I've taken that with me. I've seen in larger companies, most people who run companies, they're smart, they're capable, they're driven. And the failure most that I see with most companies is that the higher up your organization, often you get a very thin layer of what's going on. Yeah. And everything has been processed for you. Like my schedule today, it's determined by a bunch of well-meaning people who want to give me the best information and have me use my time in the best way. But it's processed. And so it's very important for you to cut through that process sometimes and get to that ground truth.

56:14truth you've got to create some randomness in your interactions in your information flow and Barry often painfully drove to that source and it's always for me been very very important part of how I manage which is the best way to get to the truth is first of all as a leader tell the truth I'm brutally frank with my team what's going on what's it good what's it bad what's okay where do I not know the answers and that helps me then get that truth back from them sometimes requires me to dig and that can be unpleasant both for me and the team. But getting to the ground truth, I think is something that I learned for Barry and it's always stuck with me.

56:52What did you learn from the Allens, both the second and the third? Herbert Allen, very, very early on, he always told me that he makes bets on people, not companies. And you see that with the Allens, like they're so loyal, they build friendships and then they stay with those friendships. And Herbert always told me companies can do well during periods or companies can do poorly during periods, but great people always stay great. and I'm going to make a bet on people. I'm like 20 something. I'm like, yes, sir, Mr. Allen. It's a great learning that has kind of soaked into me 30 years too late. Regardless of the circumstance, I made a bet on Barry.

57:26I was going to stay at Allen & Company for all my life, but he was the one guy that I told myself, if I have an opportunity to work with that one person, and it was nuts. My salary was gone. I went through this completely entrepreneurial new entity that he was building, but I bet on a person and in my life, my bets on people and those personal bets are probably the best ones I make. Daniel Eck has this thing that he's famous for, which is that he would go shadow. I think he might still do it. Go shadow CEOs of companies for long periods of time and watch how they operate and work. So if I were to go ask the same question I'm asking you about Barry and the Allens, but ask the question about you, what do you think if I were to shadow you for a couple of weeks, I would take away from how you prosecute your life.

58:10What do you think the ingredients that I could take away for my own recipe? What do you think I'd write down? I think number one is the transparency that I talked about. I want the truth from everybody. And I tell the truth. I'm very, very open to the company, whatever level that I talk to. I have a lot of fun working with our product leads and engineers. That is the best part of my job. The last thing I say is you see a lot of random interactions. I don't want to have too structured a day. I don't want to meet with just my direct reports. I build out random interactions within the company so that I get that information as well.

58:46It's the same that I say, like, I look for the troublemakers in the company. As companies get larger, there's always this incentive for people to get along. You have a single culture. Everyone is true to the culture of the company. there are processes that get built, there are certain ways of interacting, and certainly the troublemakers often get chased away. I want to find those troublemakers and I want to bring them in because every company is like an organism. Organisms evolved by mutating. And companies that don't mutate, that just sit and with a single process, with a single information flow, those are the companies that die.

59:23So I'm looking for those mutations. I'm looking for those troublemakers constantly. And that requires random interactions that are less efficient than the structured processes that have been put in front of me. But it's those random interactions that often give me the best signal that sometimes I may not act on it, but I'll take it in. At some point, if the signal becomes strong enough, I'll move. That's a cool idea that the troublemakers are the mutations. Companies need to change. And by the way, with AI now, the rate of change inside companies in terms of how information flows, in terms of how we work every single day, the rate of change has accelerated by 5x.

59:58And it's the companies that are comfortable with that change that are going to adapt to this new reality. And the companies that are like, hey, we do things a certain way, they're going to have a hard time. One of my favorite charts from this era of business has been the time series of CapEx of the big technology companies, where it all looks like this, except for Apple that just looks like this. They basically haven't changed. They've decided not to play the specific game. And the debate around Uber early on was like, well, these guys ever make any money. They're losing money on all these rides, blah, blah, blah.

1:00:28Now you've got$10 billion plus free cashflow. So you're a capital allocator and you have to make a decision of what to do with this money in this high rate of change environment. How do you prosecute that decision? You've done big buybacks. You've authorized really big buybacks before, which traditionally have done really good things for shareholder value and things like this through business history. But now you have all of these opportunities to spend money to expand demand, to get new supply, to use these new technologies. How do you weigh the trade-off between old school stuff like buybacks and free cashflow generation and share reduction and things like that with just, wow, this is the most interesting investing?

1:01:02I guess I'm asking, are you Amazon or are you Apple? Somewhere in between. And I'd say capital allocation, I think is more of an art versus a science. You can read papers on it, but I think you have to use your judgment over your life. And my view is that my priority is first organic investment and growth. Uber Eats, when I joined, was doing under a billion dollars in gross bookings. It's over a hundred billion now. That took an enormous amount of organic investment. Now the company has cashflow beyond that organic investment. And the math is simple, which is you want to make sure that your costs grow slower than your revenue and good things happen over a long period of time.

1:01:43And I think for me, because I came from banking, I'm very comfortable with the power of compounding. And so the first thing is you just have to get your core metrics right, starting with the user metrics, get to the financial metrics, make sure your expenses, unless there's a long-term benefit or growing slower than your revenue, duh. And when it comes to excess capital today, our priorities are going to be keep building the services that we're building now, invest in algorithms, invest in more engineers we are hiring, and then really invest in the new realities of AV, whether it's investments in our partners or it's making commits to tens of thousands of AV vehicles, those commitments will be financialized.

1:02:29We just announced the deal with Santander, for example, to finance both EVs and AVs, but we've got to be the ones developing the market. So we are going to make those capital commitments. And the fortunate thing in all this is we've got plenty of cash left over for buybacks, but I prioritize growth. I prioritize innovation over buybacks. If you're building the company right, you'll do both. You strike me as a very confident, but not cocky person and leader. What, if anything, are you insecure about in the business or as a leader right now? I'm not insecure, so to speak, but I'm curious. Again, I'll go back to Barry.

1:03:09I found in my life that the more successful you are, the more you tend to talk and the less you tend to listen. Totally. I see executives who they don't want to be talked back to because they view, don't you know who I am? I've got authority and authority doesn't mean that you're right. but so many people do. And Barry's the opposite. If you get into an argument with him and, oh my God, it's going to be unpleasant, but you bang it out. And at the end of that conversation, minority of time, but sometimes it happens, he realizes he's wrong. He's delighted. He lights up because he just learned. What kind of a world is an interesting world if you're right all the time?

1:03:48The magic happens when you learn. So for me, it's not that I'm not confident. I'm confident. I'm comfortable in my own skin, but I'm a learning creature. And for me, the delight comes from learning. And often that learning has to come with pain and the pain of being wrong, the pain of hearing something that you don't want to hear, the pain of something unexpected happening today or tomorrow or the next day. That's what gets me going. And if I'm not wrong, if I'm not making mistakes, it's just not very interesting. I've loved the Barry story so much. Is there anyone else that comes to mind as someone that's just heavily influenced your way of thinking or behaving?

1:04:26I'm a bit of a student of business, came from my investment banking background. I just love how companies shape themselves. But I'd say one CEO who I really admire is Reed, who built Netflix into the company that it is. He is so logical. I think I watched him talking with you a while ago. he is so logical and structured in his thinking, but at the same time, he's an engineer, but then once in a while, he's a gambler. And some of those don't work. Like he was talking about some of the gambles that didn't work. So I find that there's a superpower in being structured in your thinking, but then not too structured in that you're always going with a flow to be able to, again, listen to the troublemakers and have those wild ideas outside of the conventional wisdom, those two often go together.

1:05:16You need a crazy scientist to do so. Reed is anything but a crazy scientist, but he has innovated in a very structured, deliberate way. And I love what he did with his company. And as a person, I just love how he thinks. So you're a student of businesses. And I think Uber is just one of the most interesting business stories by all accounts, the way that Travis willed this thing into existence as just like a breakdown walls entrepreneur. And then the way that you've matured it into this behemoth of a business and all these exciting new things. It's so cool to hear about. First and I love doing this with you.

1:05:46When I have these conversations, I asked everyone the same traditional closing question. What is the kindest thing that someone's done for you? I guess it's Sid, my wife, taking me in. We talked about my origin, where I came from and having a chip on the shoulder. And until I met her, I was always living the life that I thought I was supposed to. And I was always the person who I thought you wanted me to be. When I met her and observed her, she was always the same person with me, with the kids, with her friends, or the Sun Valley Conference where there are like these unbelievably accomplished billionaires around.

1:06:21She was always the same core person. She never change who she was. And meeting her and seeing her operate, I think finally allowed me to be the person I want to be versus the person I thought I was supposed to be. And that was a gift and a kindness that I could never replace. I have a shockingly similar experience with my wife. It's a beautiful place to end. Thanks so much for your time. You bet.

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