Uber CEO Unveils Plan to Make Rides Cheaper, Reveals Own Uber Rating, and Launches "Party Bus"

0:00Tonight on NBC, Jimmy Fallon and Bozma St John host the highly anticipated new competition show. I hired 10 creatives from all walks of life. They will be battling it out to see who can impress the world's biggest brands. This is a huge opportunity. This is the battle for the next big idea. This is not play play. We're spending millions of dollars. I'm so excited to embark on this adventure with all of you. Make the best I do win! On Brand with Jimmy Fallon. Series premiere tonight on NBC. Good Morning Brew Daily Show. I'm Neil Freiman. And I'm Toby Howell. Today is a special bonus episode of Morning Brew Daily.

0:38Uber CEO, Dara Khashrashahi, dropped by the studio. Yes, another Fortune 500 exec jumping on MBD for a surprise interview. We're making this a bit of a habit, Neil. Dara came straight from Uber's big annual product event, so he had a lot on his mind. He talked plans for making rides more affordable, cleaning up after Travis Kalanick, kicking Lyft's ass. That's a real quote, by the way. And how the Aeros Tour helped inspire Uber's latest innovation. It was a fantastic conversation. Now, let's ride.

1:12So, Dara, you just jumped off stage at your own event, but I want to start out by touching on something you said at another conference, South by Southwest, back in March. You said that Uber is a middle class or upper class product, but you wanted to get it to be more affordable for consumers. A lot of people listening to this may have had that moment where they opened the Uber app and they're like, whoa. How do the features you just announced at your GoGet event address those concerns? Well, we wanted to hit those concerns head on, especially in a world where everyone's talking about inflation and inflation is hitting everyone's pocketbooks.

1:47One of our goals as a company is like how do we keep working to actually reduce the price of our services? Like that's a goal for the company going forward. And for us, the key in terms of making Uber more affordable is sharing, right? And one of the lead products that unfortunately during the pandemic we had to retire was Uber Pool. And post-pandemic now, we've launched UberX Share again. You can get a discount if you pick UberX Share and you share your vehicle. But you get a deeper discount if you get matched up with somebody. So it's in your interest to get matched up. And we're kind of taking that sharing to the next level and the discounts to the next level.

2:30Today, we announced a really cool feature, which is schedule your shared ride. Because a lot of times I think a lot of people, they feel like, hey, if I can share, when am I going to get there? You know, they're worried about availability, if there's weather, et cetera. With this feature, night before, you can be like, hey, I got to be at work at 9 a.m. I'm going to schedule an UberX share at 8.15. We'll let you know if you're being matched or not, but you get a guaranteed discount, usually about 25 % off your Uber. And you get the best of both worlds, which is you have kind of the ease of, you know, knowing that you're going to get to work on time.

3:07At the same time, you can save money. And then one other product that I'm really excited about is actually Uber Shuttle. This is actually a product that we launched outside of the U.S. We've got it running in Egypt. We've got it running in India. And imagine it's an Uber bus, right? And it's just like a bus that doesn't suck, so to speak. You know when the bus is going to be there. And it brings all of the convenience and delight of an Uber. You can reserve a seat so that you know that you're guaranteed going from point A to B. But we're trying to get 10, 15, 20 people into one of these shuttles.

3:49Great for congestion. Good for the environment. your emission levels go down, but again, you save money. And we're introducing Uber Shuttle now in the US. We're going to introduce it for like airport rides or going to concerts, et cetera, and then we're going to expand it from there. But that's a pretty exciting product for us as well, which is again, for the consumer, you're saving money, but more importantly for cities, you're actually helping out with congestion, you're helping with the environment, and it hits all of these at the same time. So Uber's getting into the party bus business. Absolutely.

4:23Absolutely. How much of that was a reaction to what happened last summer with the Aeros tour and everyone kind of going to these concerts and sporting events like they hadn't been since before the pandemic? Very much so. Listen, I think like going to a concert, Uber is so convenient for going to a concert and leaving a concert, but it's kind of crazy, especially leaving a concert. Where's my pickup location, et cetera. Where's Uber getting matched? So we wanted to bring that experience of a great quality service. And I do think that these concert events, they're social events. One of the really cool thing is you're getting like-minded people together who want to have a great time together.

5:00So why not have a great time going to the concert and leaving the concert along with the act itself? And you've mentioned that people in other countries are way more comfortable and used to sharing cars with one another. Very much so. But in the United States, we kind of want to be in our little cubicle in our own box in a car. Do you think Americans will ever get used to or comfortable sharing cars with other people? I hope so. Like I grew up in Iran and I grew up in a big family and we went on vacations and like the kids would pile, you know, up on the floor, et cetera. Like there's no in a lot of countries outside of the U.S.

5:37personal space isn't a thing. and when I was a kid, I was like one of those kids who like got too close to you and made you feel very uncomfortable talking to you. So I learned to be an American, but I do think that that personal connection, families living together, sharing cars, et cetera, I'm hoping that we can bring some of that spirit to the U.S. because again, it's good for the pocketbook and I think it's also good for life. I've never sat next to someone as close to I'm sitting next to Toby right now. We don't commute to work together, but I have used Uber Share in the mornings. Even we commute to work very early in the morning, but I've done Uber Share.

6:13So it is definitely becoming just more of a part of my life. And then I think a lot of people's lives in the city. Talk to the person that you're with, or do you just like do your own thing? That's the big question. I feel like you read the vibe as soon as you step in the car. Like, is this a talker or is this not a talker? So far, it's been mostly not talkers because of the early AM, but I'm sure I'll get a talker one of these days. It's funny because I drive sometimes at Uber, and that's exactly what you're describing, which is driving, you say hi to the person, and you're like, how's your day going?

6:45And then you just have to read, which is they just want to say, I've had a good day, and then they want to get down to their work, or do they actually want to talk? So it's that awkward moment. Hopefully, you get that judgment right. It's like when you sit in an airplane seat and you look over at the person and you're like, Like, are we going to talk this whole time or am I just going to put my headphones? My headphones come on. Right. You lock in. Let's shift over to autonomous vehicles now. Tesla is, according to Elon, balls to the wall in pursuit of autonomous robo-taxis. Uber is a little less so.

7:14You sold off your self-driving division and are taking a partnership approach instead. Are you not as bullish or ballish, whatever you want to say, on autonomous vehicles as maybe Elon is? Well, listen, I think our approach is different, right? We sold off our autonomous division. We merged it with a company like Oro's who's building really, really great tech because we concluded that we want to be good at what we're doing. And that is building a network, building a brand, having the largest audience, 150 million people every single month that are coming, that are looking for some kind of transportation, people, things, et cetera.

7:52And that the systems that you build around that, matching, pricing, customer service, charging in every single currency known to mankind, dealing with things that inevitably go wrong, that's the value that we bring. And I think we can bring the same value to autonomous, right? And whether there is a human driving a vehicle or a robot that's driving a vehicle, what we're building is the largest network of demand in the world and a dispatch layer that dynamically can decide, hey, for this ride, we should dispatch a person. For this other ride, we may dispatch a robot, et cetera, and put it all together in a safe, reliable, predictable way.

8:39So I do think that autonomous is definitely a part of the future, but it is going to be gradual. There are definitely going to be bumps on the road. I think regulators are going to want to be involved every step of the way. And frankly, they should be involved every step of the way. So I am very, very optimistic here. And I think a future of humans and, you know, kind of a hybrid network of humans and robots is a better future in terms of transportation going forward. Do you have any projections or estimates about how much of your fleet is going to be autonomous at a certain date in the future?

9:20I do. And I can guarantee you it's going to be wrong. Let's hear it anyway. Every single projection has been wrong. I think that seven to ten years from now, it's safe to say that more than 10 percent of our network is going to be robots of some kind. How fast it scales depends on the technology first, obviously, but also depends on the acceptance of regulators, of populations, et cetera. And, you know, it's anyone's guess how fast this is going to happen. Are you at all nervous, though, that if robo-taxis do become widespread, that it has the potential to turn ride hailing into almost a commoditized service at a point?

9:59Because a single vehicle can then toggle very easily between an Uber or the other apps out there. Is that part of the reason that you are maybe not going, I don't want to say boss of the wall again, at a time as vehicles? Does that ever kind of cross your mind over at Uber? Yeah, of course it does. And listen, I think that there's a benefit to it being commoditized, which is it's going to lower prices. It's going to make transportation available to multiples of the population that it is now. Like we started the conversation, which is making Uber not an upper-middle-class product, but making it—making on-demand transportation available to everyone everywhere.

10:39I think that as long as we get access to the content, right, as long as we're working with Waymo or with an Aurora or Wabi, et cetera, there are many different companies in addition to Tesla that are working on this technology. I think we're going to be more than fine. And I think that there will be certain circumstances where users will want to use a proprietary network, you know, a branded network. They may use Tesla. But I think because we bring the most demand and because of all the systems that we've built, we can be a big player in the space. Last question on Tesla, though. They just rolled out their own plans to build a ride-hailing app, Uber for Tesla is whatever you want to call it.

11:18Is that a competitor you take seriously? Does that make you nervous at all? Well, listen, you've got to take anything and everything that Tesla does seriously. And they are a big part of our fleet. We're trying to move our fleet over to EVs as quickly as possible. And at least in the US, Tesla is one of the most popular models. Outside of the US and Latin America, et cetera, they're like BYD models. They're incredible affordable models out there. But it would be a mistake not to take Tesla seriously. And I do think that if you think about, for example, Eats today, right? You've got huge brands like McDonald's, for example, that have their own audience, have their own brand and want to offer their service directly.

12:04So the McDonald's app is a really cool app, et cetera. It works well for the loyalists. At the same time, McDonald's wants to be on Eats as well, you know, because essentially they're able to get more volume into that restaurant, that square called a restaurant, and, you know, drive more profitability out of every single restaurant that they build. I think the same is going to be true of an autonomous vehicle. What we're seeing right now with our networks, with our partners, is we can just drive much more utilization. So an autonomous vehicle that is only getting demand through its own app generally has much lower utilization than a vehicle that can get demand from its own app and can get demand from Uber.

12:47So I think we're going to be a huge part just because we have such a big network everywhere. But we can be a complement, and there'll be some competition. I guess you'd call it competition, right? that's like the generally accepted term. I've not heard that one. Yeah, exactly. But thank you for my segue actually to EVs. A few years ago, you set a goal of having your fleet of cars in the US, Canada, and Europe to be all electric by 2030. I'm guessing that's probably not going to happen given the major slowdown in EV sales, but you can correct me. What's gone wrong with electric vehicles in the US?

13:18And do you have a new zero emissions target if you're not going to hit this one? Well, it's still a target out there, But I'll be frank, it's going to be tough to hit the target based on the circumstances that we're seeing now. And I do think that EV adoption has been a challenge right now. It looks like hybrids are going to be around for much longer than, let's say, some folks thought that they're going to be around. And I think that there's just the natural human nervousness about charging, timing, range anxiety. And I think there was this early kind of rush onto EVs by folks like myself. I own a Tesla.

13:57I love the Tesla, right? But at the same time, to get everyone else convinced to go to an EV is going to take some work. And I do think that affordability is a big issue, which is our, you know, the most popular car on the network on Uber is a used Prius. So it's these, our drivers want affordable, dependable vehicles. Tesla's doing a great job in the U.S. There are many other models outside of the U.S., but we need more of them. We need these EVs to be cheaper. And we also need the charging infrastructure to go in more quickly and to be more dependable. Because especially for us, our drivers' time is money.

14:38At the same time, if there's any population on earth, you want to go electric, you want it to be an Uber driver. The average Uber driver is driving five times the number of miles than the average driver. So it's actually not about – a lot of people talk about like how many vehicles are sold. It's actually not about the number of vehicles sold. It's how many miles are traveled on EVs. So we're pushing forward. We're subsidizing out of our own pockets. We're investing$800 million in this transition. Uber's fleet is moving electric about five times faster than the general fleet of cars out there.

15:19But to hit 2030 based on what we see now is going to be a real challenge, and we need everybody's help to do so. I like that. It's not just about cars sold. It's about miles driven. Totally. Uber drivers are driving a lot of miles. I want to dig into the situation that's unfolding in Minnesota right now. You and Lyft have threatened to leave Minneapolis by July 1st because of a new minimum wage law for drivers. Take us through why Uber is threatening to make such a drastic decision in a major market like Minneapolis. Yeah, listen. First of all, we don't want to leave Minneapolis at all. And the issue that we have right now is the legislation, as it's written, makes ride sharing way too expensive.

16:02and we have really, really good data on pricing and what happens to demand when prices go up and when prices go down as well. And we've seen an example of this, for example, in Seattle. Seattle passed some regulations for both ride share and delivery and as the driver and courier earnings in Seattle, for example, went up per delivery, the price of food went up. We had to pass that on to consumers. And the situation that you have in Seattle now is that the number of orders in the market are down 45%. Couriers are making more money per delivery, but they have to wait 50 % more time between deliveries.

16:44They're not nearly as busy as they used to be. And as a result, about 30 % of couriers have left the marketplace. We're hopeful that Seattle is actually going to learn from their mistakes. And we're hoping that the dialogue that we have with Minneapolis and Minnesota allows them to kind of learn from some of these mistakes and get to the right place, which is driver earnings that are healthy, protections for drivers as it relates to earnings minimums and guarantees, but a price that's affordable. That's what we want. Lyft is your main rival, but at the same time, they seem to be always in your corner when you're in these fights with regulators.

17:24To what extent are you kind of happy that Lyft exists to give you strength in numbers? Well, I think that Lyft, I think competition makes you better as a company. And Lyft is a tough competitor on the ground. We have a lot of respect for them. But in the end, the bigger competitor for Lyft and ourselves is personal car ownership. Like that's what we, while on a daily basis, we compete against each other. You know, on an annual basis, we're trying, we're both competing against personal car ownership. And so sometimes our interests are aligned in these kinds of issues, and we work together. And then we go try to kick each other's ass the next day.

18:02Competition, co-op. Yeah. I do want to talk about another almost competitor out there for you. You recently inked a deal with Instacart to put Uber Eats on the Instacart app. You were trying to build a grocery delivery business, and you partner up with someone who is maybe on the surface a bit of a competitor. How did that decision come about? Well, they're very much of a competitor, Instacart. And it actually came about originally because we built an Uber Eats web view on our Uber Mobility app. So if you open up Uber, there's actually a little Eats tab, and you can order Eats on Uber. Originally, we did it to introduce more people to Eats.

18:40We're the number two player in the U.S., and we want to promote Uber Eats' brand with Uber, and it was working out really well. And the design spec was, hey, get someone to order on Uber Eats on the Uber app. and then as they're tracking their ride, et cetera, get them to download Uber Eats. The friction that the download of Uber Eats introduced kind of created a drop-off in usage. So the engineering team decided to build a much more robust experience on the Uber app for Uber Eats. And the experience is great now. Like it is really, really good. Sometimes I find myself using it as well. I didn't know there was an Uber Eats app.

19:17I just use it in Uber. Yeah, exactly. And almost like 10 % of use is now just on Uber, which is pretty extraordinary. And we had certain discussions with Instacart. Instacart wants a food product. Whereas grocery, building out grocery for us, while it's a challenge, it's not as much of a challenge because the marketplace isn't that fragmented. Like we introduced Costco, which is 15%, 20 % of the market with one player, admittedly a huge player and a great player. So while we could build out our own grocery offering on Uber Eats and are doing so, I think it's a much bigger challenge for Instacart to bring on a million restaurants onto their platform.

20:03And so we thought there was a win-win there, which is we could take the technical infrastructure that we built for Uber, put it on Uber Eats. Sorry, put it on Instacart. It looks great. It feels great. It's rolling out now in test and so far so good. It's going to expand. The area of the business where we think we have the most growth ahead of us is actually suburbs. Uber is like a big city operation, but in the suburbs, Uber Eats penetration isn't nearly as much as it is in the cities. And lo and behold, Instacart has great audience in the suburbs. The crossover between Instacart's audience and actually DoorDash is much higher than it is with Uber Eats.

20:49So this was a win-win, which is we can continue building grocery on Uber Eats. Instacart gets kind of a more fulsome offering as well. And we get that suburban mom who is worth a lot. We got Uber Eats branding on the Instacart app. So we think it's going to be a partnership that works out for everybody. We just learned the word co-optition. Co-optition. I'm seeing it everywhere. It's everywhere. Let's talk surge pricing. So Uber and other ride-sharing companies have had surge pricing for years. We just accept this as a fact of life. But when other industries try to get into the game as well, I'm thinking Wendy's and fast food.

21:25These British pubs are also introducing surge pricing. Consumers push back like crazy. So do you think surge pricing will be ever accepted beyond ride sharing and headlines and airlines? I think it's debatable. I think that people understand with Uber and surge pricing predated me. It's a great innovation, is that Uber is surge pricing in order to improve reliability. OK, so with surge pricing, we're essentially pushing a bunch of those dollars to drivers to get drivers to come out and match elevated demand. So the goal of surge pricing isn't to make more money. The goal of surge pricing is actually to balance marketplace demand.

22:14And I think where consumers – I've seen consumers push back, which is with Wendy's or some of these players, if the goal is just to make more money, that kind of doesn't make sense, so to speak. So there is – it is interesting that consumers over a long period of time in travel cases, et cetera, accept this idea of matching supply and demand in a dynamic way. I'm very happy that they do so in Uber because it is key, key, key to driving reliability on the network and matching supply and demand in kind of a temporal way and a place-based way, right? Where if there's a Taylor Swift concert, we got to put Surge in a particular place at a particular time.

22:53Hopefully, we'll get lots of shuttles there. But it serves a customer ultimately. You know who just came to mind is we've been talking about Starbucks and they've been struggling a little bit because in their morning rush hour, people are waiting so long to have their orders fulfilled. They just leave. So it looks like, I don't know, Howard Schultz, tune into this podcast right now. Yeah, he had some things to say then. Yeah, maybe some. But that would just be to make more money. They can't build more Starbucks at a time because they're charging more. And that's the beauty of Uber, right? We can actually shape supply to match demand, and often we're shaping supply in advance because we've got more data than anyone else, and we understand how a market is going to work under certain circumstances.

23:35It is a unique proposition that we've got going on. So Toby and I really want to talk about this ad business. Uber recently got into the ads business, and it's on track to do more than$1 billion in revenue this year. there's this recurring joke on Twitter, I don't know if you've seen it, that over time, every tech company becomes an advertising company. Do you agree with that? It certainly seems to be the way forward, and certainly retailers, right? So I do think that if you look at overall trends, more and more of advertising money is going to that point of purchase. And the point of purchase at Uber, and especially Uber Eats, is very, very powerful.

24:13So So we had a billion-dollar goal. We're going to beat it this year thanks to a really great job for the teams. And, you know, ads on the Uber app allows essentially restaurants to meet our audience based on their needs. You know, if they want more audience during certain times, they can turn on ads. The return on their ad spend is seven to eight times, so it's a great return. It is perfectly trackable. They can turn it on or turn it off. And it's a great product that's growing very, very quickly, and we're quite optimistic about it. We were kind of joking around a little bit. Not a joke. Okay, not a joke.

24:52Have you ever considered a cheaper option where UberX consumers are just kind of inundated with ads, kind of like Netflix introduced their ad-supported tier that is a cheaper option? So maybe there's just a world where you're surrounded by ads, but it's your cheapest ride yet? You know, it seems like a world that would suck. It would suck. I don't want to advocate it. I was just wondering whether you guys had thought about it. You know, I mean, the way that we think about ads, for example, in mobility is typically how do we get more dollars in the pockets of the driver? So, for example, we're building a tablets business and tablet ads that, you know, hopefully aren't annoying like that are surrounding you.

25:33But the goal is there essentially to get the advertising dollars and allow drivers who have a tablet in their car to make more money. That's really our design spec. And at this point, we want to be pretty religious about the customer experience. When I hear tablet in a car, annoying is definitely the first thing that comes to mind. If we're playing on that, Morning Brew Daily right there. It's good entertainment. Yeah, exactly. There we go. 4 a.m. tablet ride. It's going to be awesome. I'm hitting mute on that as soon as I get in. Give us some credit. Sorry. So you do have an ads business now, but you also have a bunch of other different businesses kind of on the periphery of rides and eats, Uber package, rental cars, freight.