EP 113: Dara Khosrowshahi (CEO, Uber) Lays Out the Path to Autonomous Vehicles

34:31I shift the gears a little bit to more of the operating rhythm of the business. I think Uber is one of the more operationally complex businesses out there. At least there's businesses with maybe more full-time employees. There's businesses with more revenue, but like the number of strategic considerations or operational considerations you have to factor in at any point in time, I think is on a short list. Hyper, hyper local business. Hyper local. It's human intensive. There's a lot of strategic moves that you need to think through at any given time. And so I realize we're coming off of earning season.

35:09So maybe the answer is a little different right now, But in general, how do you think about organizing your day or your time in such a – I'm sure there's an infinite number of things you can go spend time on. And so how does it get bubbled up to you to orient around? Yeah, it's not necessarily organizing a day, but I do have an operating rhythm in the business. And I do believe businesses having a rhythm that they move off of is very important. So we have regular monthly business reviews, technical reviews where we go full stack everything that we have shipped or shipping, etc. That's the rhythm that keeps the business going, weekly staff meetings around that.

35:49And then outside of that kind of skeleton, that machine that keeps going, I have certain areas that I deep dive on. AV is one, for example. Now the suburbs in the U.S. is another one. earners and are becoming much, much stronger business for earners or better product for earners coming out of COVID was another one. So then I'll pick a couple of different strategic areas that I go in very deeply, usually a weekly or again, monthly cadence with a team. And then I do spend a lot of time on one-on-ones, not necessarily with my directs, but especially skip levels, one or two levels down to get a better sense of what's going on in the business, build relationships with with the teams because i found that with companies companies or ceos often the trouble that they run into isn't with the things that they see coming but it's with the things that they don't see coming and uh the this operating rhythm kind of has it's a set of metrics that we're all familiar with that we're all trying to drive as one team and then i'm constantly meeting with lower levels of the organization to get a sense of what's really going on, what their opinions on, what's happening in parts of the organization that I don't necessarily have a view to on a regular basis.

37:10So famously, David Kaye was an Uber driver in San Francisco, right, for a while. You were going around. Was it David Kaye? Was that your name? David Kaye. I grew up being a Mets fan, so I was Dave Kingman. Oh, that's funny. That's funny. Where Dave Kaye came from. Oh, that's funny. So that's one example of going deep. I'm sure that helped inform a lot of your earner perspective. I mean, probably the totality of the business, but earner specifically was probably informed by that. On some of these other areas, like going into the suburbs, I assume, I don't know, do you live in the suburbs or are you in the city?

37:41I live in the suburbs now. Okay. So now you're - You kind of see it. Yeah, exactly. You're living it out there. Are there other ways that you found at like a practical level, kind of going into each of these areas and learning, I don't know, AV or something and really getting a feel for what that's like. Do you go spend a month in Scottsdale and ride around for a while? You know, I don't spend, I'm certainly not spending a month in Scottsdale, but I would say that I do take meetings, especially with companies that are smaller companies that I would say under normal course, if I had a perfectly logical hierarchy of where I should be spending my time someone might consider hey that's a waste of time and again it's a way for me to keep in touch to understand what's happening technically in the world out there uh and and i'd say 80 90 percent of time it is a waste of time but there's that 20 or 20 percent of time where those treasures come in uh and and you get significant benefits in in terms of what decision you make next.

38:47The cultural reset that happened when you took over as CEO is well trod ground. But I'd heard you say something recently about actually you went through a values exercise then and it was more listening oriented sort of distillation of the existing values within the company and sort of shining a light on the ones you wanted to magnify and maybe forcing out some of the ones you didn't. More recently, you went through another exercise of resetting it. So I guess that's two in seven years, once every seven years or so. How do you think about values within Uber? And how do you think about the two different approaches you've taken to what you did then versus what you've done more recently?

39:28Yeah, I think what I did very early on was to some extent a necessity because everyone thought and knew that we needed a cultural reset at the company. So if you need a culture where you say you've got to redefine the culture, I'm a big fan of Jeff Bezos. And there's a quote that he spoke about, which is, to some extent, the culture or values of the company, they set themselves. It's not up for management to kind of say thou shalt X. The company defines its own values, which then management articulates to the company. So early on, as an outsider who didn't really understand Uber, I just didn't think I would have a right to come and say, thou shalt have this value, etc.

40:16It wouldn't speak truly to the company. So we ran an exercise that seemed like a good idea at the time, which is we asked a bunch of employees what are the values that they think the company should represent, both old and new. um we surfaced all that stuff up to senior management and we picked and chose the ones that we liked but it really reflected a bottoms up i would say sentiment in terms of in terms of culture it served its purpose but um it was boring right it was the typical stuff that you would see like you know what company doesn't believe in teamwork or something like that it was it was boring it was i found it to be at the time relatively uninspiring um there was one cultural norm that i pushed from the top down which is we do the right thing period uh that is the one that stuck four five years later i thought that finally i'd gotten to know the company i had been a part of the shaping of the culture of the company and i thought that i had a right with my team to talk about how we saw the company and what made the company different culturally than other average companies.

41:31So we came up with a new set of norms, you know, go get it, which is about like, yeah, we are aggressive as a company. We are going to go get it. It's during good days, bad days, et cetera. We believe in going after having a big target and going after those targets. We talk about being trip obsessed, which is we're not customer obsessed. the magic of uber happens when a rider and a driver both meet and you have a success and so there's a certain negotiation that has to happen between the two in order for that magic to happen within that trip so the set of norms that we have the values that we have i think are much more reflective of the company they reflect what's different about us uh and i think it's a great set of values that we live by you know you know every day hopefully at all levels of the company In terms of operating, you've very successfully gotten the company profitable over the course of the last couple of years.

42:25And it was something that I think a lot of people didn't think was entirely possible. And so you've clearly showed that. As we've moved to the more of this world of balancing efficiency and growth and more of a measured balance between the two versus maybe where we were a couple of years ago, Are there any operating lessons or tactics that you took in that that might be more broadly applicable, not necessarily shutting down XYZ business or something like that? Yeah, I think if there are a couple of little lessons that I would push forward is, you know, I actually think that in hindsight, the availability of ridiculous amounts of capital for Uber and or tech in general created a circumstance where the hard work of optimizing a business or the hard work of like retraining a model and driving two or three percent more efficiency out of the model.

43:21wasn't rewarded because a competitor could just throw a bunch of pile of money against a certain market and drown the hard work of a team of 10 engineers who had spent six months doing something. So I do think that there is the efficiency or the need to be able to do more with less. The discipline of not throwing a bunch of bodies at a problem actually helps you do better work so it's very very tempting to go and chase you know big targets big numbers etc and sometimes it is appropriate to throw a bunch of capital at an opportunity but you've got to be very careful when the abundance of capital actually takes away from the hard work to build a really really great service and that was happening you know i think and the technology sector etc and once the capital became scarce the premium went to people who were building great tag great code etc and frankly that's an area that i'm a lot more comfortable with it's something that i enjoy much more than raising a bunch of money and throwing it into marketplace so i think there's a caution which is focus on the real work and sometimes money gets in the way uh and sometimes it's necessary you got to be able to tell the difference between the two did that lead to culture or consideration of um i don't know measure twice and cut once or higher like a more measured hiring approach and be more disciplined on that side yeah definitely i mean we um i do think that i see this in companies all the time we were we were guilty of it which is to some extent management sometimes measures their self-worth based on the number of people on their team sure uh we actually we talk about i try to stop like actually prevent this which is you look at someone's promotion you know how many people are reporting to that person terrible it's the worst thing that you can do because then it becomes in the interest of the person to hire more people sure uh so we actually we've been flat flat as headcount for the past three years um we're encouraging managers the heroes are the ones who keep their headcount flat and do more with flat headcount etc so it's been a redefinition of the heroes and other people who have big teams other people who actually have smaller teams.

45:43And it's driven an operating discipline. I think the company's accomplished a lot more than we thought we could collectively. And it's been really, really cool to see. In terms of actually operationalizing that or codifying it into the organization, do you do any tactics to allow that to manifest in terms of not showing how many direct reports exist within an organization or celebrating, I guess, to that point, like, hey, Tim's doing this, but has kept the organization flat in doing that? Or are there any manifestations? I mean, I hate to say it, which is sometimes you just have to do dumbass things, which is don't even come to me asking for more headcount.

46:21And then, you know, I'm going to demand more from every single team. And somehow they have delivered. So it's great to see what people are capable of once you force it. And sometimes you got to force it. Yeah. Uber obviously operates, as we mentioned, it's a local business that's operating globally. Have there been any interesting examples or things that stand out in your mind about how Uber gets utilized in different cultures or countries or different product level considerations? Oh, tons of stuff. I'd say, like, for example, in India, Auto Tuck Tucks, these three wheelers, they're getting wired up all over the place.

46:56Like that's one of our fastest growing parts of the business. And that led us to starting to test two wheelers. You know, Uber motorcycle. Would you take a Uber motorcycle? I would if my wife did not know. There you go. It can be our secret. Exactly. You, me, and everyone listening. Yeah, exactly. So those three-wheelers turned into two-wheelers, and it's turned out to be our fastest growing segment of the business. Two-wheelers in Brazil on a standalone basis will be like our fifth or sixth largest country in the world. It's extraordinary how. So quite literally, if I'm in Brazil, I'm getting on and strapping on to whoever's.

47:34and you're zipping through traffic, et cetera. Yeah, wow. And it's 40, 50 % cheaper than an UberX and it's just caught on fire. Wow. There are all these really cool learnings that we learn from one market to the other. You know, one area that I'm very excited about is actually high capacity vehicles, call it Uber Bus. We launched it in Egypt originally, actually pre-COVID, had to close it down with COVID. But the idea of getting, you know, either share or getting 15, 20 people into a vehicle to help out with congestion, really lowering the cost of our service is also super, super interesting to me.

48:12And it's working in Mexico, Egypt, India, a bunch of markets. There's a lot to do in terms of the unit economics, but the promise I think is really, really exciting for us. Super cool. From a leadership standpoint, now Uber is how many people at this? About 30 ,000. 30 ,000. I apologize for asking that question. I knew it's a bad head count is not a proxy for flat for a while. Yeah, flat for a while. That's good. Yeah, congrats. So in terms of like leadership style, how do you feel? How would you describe how you are as a leader? It's I'd say the one thing that I would characterize about myself is that I really believe in transparency.

48:52I'm a very open leader. I will tell the company, you know, all hands like exactly what's going on. and and i've been you know there have been people who fall me on it well what if there's a leak and and for me i will take the risk of there being a leak in order for me to be truthful to my team because i think people are better kind of they they're better sensing bullshit than you think uh they are and if they see their leaders bullshitting them they're just going to bullshitted the leader right back yeah and i think the danger you know the higher up you go in an organization the less you really know what's going on in the organization i still remember like when i was young and i was getting promoted these friends of mine we were working together i got promoted all of a sudden they're like talking to me in paragraphs there's like a beginning a body a conclusion and they all of your communication changes you have when you have staff like they try to control who gets access to you etc it's a little bit what i was talking about like i'll take random meetings because i want random input coming coming into me and for me if you want an organization that is truthful that's being frank it's gotta start at the top so i'm very transparent and and you know part of transparency is like when there's good news you give them the good news but when there's bad news when there's effed up stuff you just say it and i think people really appreciate hearing it and it creates a model that then they bring into their everyday life if they're talking to a compatriot or they're talking to their boss, et cetera.

50:25That transparency for me is just, it's more fun. Like it's not fun BSing people and like, you know, reading from a prepared script. So it's how I like to operate. It's the kind of person I want to be. And I'm kind of that person at work and I like it more. Yeah. Yeah. It's hard to remember if you're, I don't have the best memory. And so if you need to shape some version of truth, it really does. I'm not a great liar. You just got to say what's going on. I have because I'll inevitably get caught in a lie if I don't say the honesty thing. That's a good lesson. Yeah, it is. Don't get caught. It's a forced one for me because I just can't lie from it.

51:02It's a good one to live your life by. Are there any ways at which you're a different CEO or leader today than you were at Expedia? I think that I am more technical. I came from a finance background. I was an engineer. And I do think that when I was at Expedia originally, I was running the hold co. And then I had to take over Expedia.com and I had to actually run the operations because I hired the wrong president. It didn't work out. So I actually had to get into the business. And I realized just how important co-base, the technical basis of any company is. It should be obvious. I carry that over to Uber now.

51:47So I spent a lot of time with my teams, not just kind of at the UI level or even kind of marketplace algorithmic level, but at the very base of like, what are the, you know, open source databases that we're using here or there? Because if you build that technical stack in the right way, if you hire really good engineers, product managers, et cetera, it makes everything else in the business a lot more easy. so I just spent a lot more time at that part of the business than I used to. So you started your career at Allen & Company, obviously technical degree from Brown originally, but Allen & Company, and then you went straight to IAC after that, right, and rose up within finance originally?

52:30Yeah, I was a deal person, and then I became CFO, and then eventually became the CEO of Expedia. Was there a point in time along that journey that you realized maybe being a CEO would be something that you wanted to do? Not really. I'm not a big planner. The reason why I got out of finance was because I like working on teams and I wanted to work at a company and I want to build something. So Barry Diller was a client and I also thought if there's one person I want to work for, Barry Diller. Extraordinary person, great mentor of mine. So he was at HSN. He was buying USA Networks. He needed a lot of help.

53:11And he offered me a job and I took it. And increasingly, I just became more interested in the operational side of the job. But it wasn't like I want to be X or Y. It was just what is it that interested me and kind of moving one step forward to an area of interest. I actually want one of the pieces of advice I give to young people now that I'm an old person is like don't over plan your career. I see people making mistakes all the time when they're like I need to make this much money or I need to be this title by X time. And if and humans are always looking for signal that agrees with the bias, the kind of established path that they have and they ignore signal that doesn't agree with it.

53:59And so by being so focused on going in this direction, you're going to miss all this other opportunity that was presented to you. So for me, like, you know, I thought I was going to be a banker for life, but I saw this person I wanted to work with. I was lucky enough for him to give me an opportunity. It's never been about my wanting to be a CEO. Like, I kind of stumbled my way there. It's been a great stumble. Don't get me wrong. I love the job, but it's never been kind of a planned activity for me. Did you, what time horizons do you think you're able to think in terms of like the career considerations and things like that?

54:34I'm sure it changed from early to later. For me, it's just generally what is it that interests me? Like for me, it was, I was an engineer. I wanted to get back to engineering. I was really interested in technology. Originally, I was a media banker, but we saw things moving to the technical side. Barry really believed in e-commerce. So I just kind of like, you know, and again, I didn't put a timeframe on it. It was actually not defined by time, but it was defined in direction. And ultimately, it took me, you know, to where I am today. Thank God. I get the feeling one of the points in listening to old interviews when you left Expedia, one point of pride, I think, and appreciation from the aforementioned Barry Diller was that you left the ranks with capable people that were going to be able to take over your role and responsibility, I guess.

55:23One, is that a fair characterization, something that you were proud of within Expedia? And then two, how do you think about mentorship and development of leadership ranks? Yeah, I think, listen, the test of a CEO is often not just how the company performs when they're CEO, but how the company performs afterwards. So there's a great Expedia alumni network. We're friends, etc. And there are tons of people who've done extraordinarily well, both at Expedia and outside of Expedia. And the same is true with Uber as well. I tell you, I'm not a big believer in formal mentorship programs. I think people learn by doing.

56:03You can read all you want. You can take courses, et cetera. You learn by doing. And for me, giving people opportunities to make a mark, to be ambitious, to stretch themselves beyond where they thought they were going to go, that's what gives me satisfaction. and also works out for the people who I happen to quote unquote mentor, I guess. Yeah. How do you think about the balance then in that case of empowerment and also the flip side, which is like, I don't know, your decisioning or your ownership of individual things? Yeah, I'm a big believer in empowerment. So I empower teams now. I empower teams and then I measure.

56:47So I'm very numerical and I insist on teams to measure themselves based on KPIs, et cetera. You don't want KPIs to get in the way of common sense, but as long as you're hitting your KPIs and as long as you're thinking not just about optimizing your own part of the business, where you're able to under-optimize your own part of the business to optimize the full business, you're able to make those kinds of trade-offs. I'm going to let you run until you need some help. For a fairly gregarious leader, I think, I've heard you describe yourself as introverted. Yeah, I'm going to go lock myself up. I appreciate you doing this.

57:31You can lay down after this. We'll let you take a nap. I guess you do a great job of rallying to the occasion on this. Is that something that you've had to train and learn over time? Or is it something that you were just naturally able to flip the switch on when the lights came on? I think that one thing that I'm good at is focus, right? If when I'm working, I'm all in on work. I don't get distracted. When I'm at home with the kids, I'm with the kids. I'm not constantly checking my phones, et cetera. So like the thing that I believe in, if you're going to do something like go all in, don't half ass it.

58:12And the fact is that as a leader, whether it's something public like this, maybe public like this, or when you're getting up in front of your employee base, don't half ass it. You only get so many chances. So I'll go all in. And then, you know, if I need to lock myself up afterwards, I will. It is taxing for me, so to speak. but it's part of the job and I do get satisfaction from a job done well so to speak so I go all in whatever I do I go all in are you any tactics or anything you do with so you're not checking your phone all the time or is there anything that I mean do you do you have any methods for people that maybe are addicted to their phones in some ways you know it's funny I actually think it was it was a byproduct uh when i was working at allen and company originally my first job was at a trading desk yeah uh and then when i become a banker the trading desk kind of the action around and understanding what was going on the markets it was fun and it gave me a little bit of differentiation against these other banks who are quite bankers who are quite academic so i stayed on the trading desk and so i had to do all the spreadsheet work with these traders like yelling around me and throwing things at me, et cetera, because I was being hazed, of course, in those days.

59:30It was kind of what you did. So it just forced me to really focus. So it's just like, it's, I don't know how you do it. It's necessity is usually the mother of invention, I guess they say. And for me, it's just something that I grew up with. I don't know how to recreate it. Sorry. Go work on a trading desk and code on a trading desk. Yeah. Let them shout over you and all that. But we've referenced Barry Diller a few different times on this. I guess I'm sure there's countless lessons that you've taken away or things you sort of learned from him along the way. Is there anything that particularly stands out as a lesson that you took from Barry?

1:00:08I think for me with Barry, and I kind of learned everything in my career from him. I'm incredibly thankful to him. But the thing that stood out, has always stood out to me with Barry is that I've never seen anyone who is as interested as he is in getting to the right answer versus being right there's nothing that he enjoyed more than being challenged like if he had one viewpoint you came in you pushed him hard he will push back really hard you know people i find that people who are like really accomplished in life they tend to talk a lot more barry's an unbelievable listener and there's nothing that he likes more if you prove him wrong and he's going to go at it it is not going to be fun for you to prove him wrong about that by the way most of the time he's right but his ego and his value is about getting to the right answer not about being right and i think that is so valuable you know he's a person who's reinvented himself over and over and over again and it's because he's a great listener and he wants to get to the right answer and so it's really taught me like i i love being wrong because it means that i'm learning something every single time i like having people in my organization who sometimes are troublemakers you know like organizations are very very hard-coated to get along and that that temptation causes organizations often to reject people who are contra thinkers etc and people confuse the idea of kind of agreeing on a cause versus agreeing they're two different things you and i can disagree about something and we can have like a really really rough time going at it but we're united in a cause we're trying to get to the best idea there and what barry was always willing to live with is a lot of constructive conflict sometimes pretty unpleasant conflict but it got you to the right answer and that's something that i've taken through my career in terms of how i operate but it's also created a circumstance where at work i don't want a bunch of people who agree with each other it's boring but often you don't get to the right answer and it can create more difficulty like there's this um these studies done which is diverse teams tend to perform better but they don't think that they're performing better because it's not fun it's not fun arguing pushing each other etc but you do get to the right answer and you know it's a long-winded way of saying you know barry's obsession with the right answer despite or sometimes because of conflict is something that's been just a huge learning for me yeah it's conflict it's very um humans are wired to uh to avoid conflict yeah i think and so and organizations you know you can have individual humans the the humans that like conflict they tend to be lone wolves etc they don't tend to operate better in larger organizations so the larger the organization gets we're 30 000 people the more kind of uh the easier it becomes to create like-minded areas that avoid that kind of conflict.

1:03:27Are there tactics that you use to tease out some of that intellectual rigor now today? Like, I assume, I don't know, one of them in a room speaking last or something. But do you ever try to steel man the other argument or probe people to make the counter to points? Is there anything you can do to manifest some of these things? You know, one is that within our org and a lot of orgs, when people are having disagreements in big groups, it's like, hey, let's take it on the side. Let's have another meeting. Take it offline. yeah take it offline thank you no you actually want to model it in front of in front of the group it's harder to do people don't like it uh but i try to push it like no no we're gonna have the conversation right here right now let's do it and then the other that i was talking about which is doing these skip levels etc it creates trust sure you tell people what's going on and i'll tell them everything um and they tend to tell me what's on their mind as well and that helps me kind of set the stage as to what my next agenda is.

1:04:25For folks that don't know, Ron Sugar is the chairman of Uber? Yes. And can you give his quick background? And then I'd be curious, same question of what you've learned from him. Yeah, he was CEO of Northrop Grumman Defense Company, incredible company. Very, how big is Northrop Grumman now? $100 billion plus or something? I mean, it's huge. is 200 billion huge and he's on the board of amgen uh apple um uh chevron incredible exposure to first-rate companies were so lucky that he wanted to be the chairman of or accepted to be the chairman of uber as well and for me you know i had worked when i was working in expedia barry i had worked at a control board um and ron has really taught me the importance of board governance and also kind of thinking long term as it relates to how you build a business, even within the circumstances of Uber, which is, you know, has had so many ups and downs through the years, just solid, solid person.

1:05:30Hey, don't worry about what's happening next month. Let's talk about what's going to happen the next three to five years as it relates to strategy and the board. Yeah, it's impressive to be able to think that far in advance. Well, you know, he's a little more removed from the daily operations of the business and that has its benefits. Do you guys still talk every week? Every week. You have a scheduled standing hour-long talk. Yeah, that's when I was talking about the rhythm of the business. There's a rhythm that I have with Ron. I'd say probably two-thirds of the time it's just he's giving me advice on what he thinks.

1:06:00And then one-third of the times we shape how we're going to communicate to the board, what's the next agenda, et cetera. So most of the time he's giving me and then I'll feed him a little bit too. Well, I probed on Twitter for questions before this. And one of the ones I got, which I thought was an interesting one, is so you're seven years in. You've stabilized the business. It's grown in well past Bill Gurley's prediction of, what did he say,$100 billion valuation in the next couple of years. He maybe was off on the time he predicted, but it's gotten there. We've gotten there. Yeah, yeah, yeah.

1:06:36So you've proved the fullness of time. You've proven, Bill, correct on that. I guess what keeps you doing this now, seven years in? Oh, just for me, and I think almost anyone who comes to Uber comes because of the impact that you can have on how people live every day in the cities of the world, right? This is a company. It's a verb. It's so much a part of how we move around our lives. what we eat, et cetera, that impact on the real world is something that I find incredibly satisfying. And then to the discussion that we were having earlier, building global technical platforms that can scale but can adjust to all the complications of real life.

1:07:27It's just the prom space, the technical spaces, it's just so freaking cool. so i just when i'm geeking out with engineers or the marketplace engineers like i am so happy i remember a friend of mine is like are you having fun i'm like no i'm not having fun it's too hard a job to have fun and i guess in some ways like once the job becomes fun i think i'm out of here uh it's really hard it's really demanding but the impact that we're having on the world and the way people care about the company is something that feeds me um and i'm just really lucky to be here and hopefully they'll keep me around for a while would barry now admit that you made the right call yeah i i think so seven years later uh you know he he was actually i'll tell you a little story supportive right he was eventually he helped me like he i don't think he wanted me to leave at least that that's what he told me so i hope that's true but as a friend um he was helpful in my consideration on what to do and it just goes to you know the kind of person that yeah very magnanimous.

1:08:31Yeah. Amazing. Well, Dara, thanks for doing this. Thank you for having me. It was great. It was really cool. Thank you for joining us on this episode of The Logan Bartlett Show with Uber CEO Dara Khazra-Shahi. If you enjoyed this conversation, we'd love for you to subscribe on whatever podcast platform you're listening to us on, as well as share with anyone else that you think might find it interesting. We'll see you back here with another great guest next week on The Logan Bartlett Show. Have a great weekend, everyone.

1:09:00Thank you.