tv The David Rubenstein Show Peer to Peer Conversations Bloomberg July 13, 2019 9:00am-9:30am EDT
david: after it did go public, it did go down by 11%. a record decline after an ipo. dara: i love how this interview is starting. i really appreciate that. david: how long will it be where there is no drivers? dara: the better thing than robots alone or humans alone is robots and humans working together. david: someone asked you to interview as the ceo of uber? did you say you already had a job? dara: at first, i said, no way. >> could you fix your tie, please? david: people would not recognize me if my tie was fixed.
ok. let's leave it this way. all right. i don't consider myself a journalist. nobody else would consider myself a journalist. i began to take on the life of an interviewer, even though i have a day job running a private equity firm. how do you define leadership? what is it that makes somebody tick? you have been the ceo of uber for how long now? dara: two years. david: do you enjoy it? dara: i love it. david: the company was not a public company when you came in. you have taken it public. you received a lot of publicity about the ipo. obviously you know that. the company has a higher market capitalization, roughly $72 billion. higher market capitalization than any company in american capitalism history except for
facebook, this short a time after the ipo. why are so many people criticizing you for having a $72 billion market cap? dara: i think there are many critics for a large company. that is a fact of life. what is different about some of the technology companies of our generation that are coming public, the so-called unicorns, is we have stayed private for longer. we have raised more money over a longer time. as a result, when we come public, we have bigger scale than companies who went public, let's say, the last generation of companies that went public, as well. my view is, we wanted to go public. we needed to make sure we are well-capitalized for the next five years and we achieved that. now the time is to put your head down and get the real work done. david: after the company did go
public, it did go down by about 11% which is a record decline after an ipo. did you think the investment bankers did not price it correctly? what do you think the problem was on the ipo? dara: i love how this interview is starting. [laughter] i appreciate that. i think that the timing of our ipo was very much aligned with the president's tariff wars the same day. we got caught up in a bit of a market swirl, and there is nothing you can do about that. what i tell the team is short-term, the market can be a voting machine but long-term, it is a weighing machine. and we are focused on the weighing. i am very confident that the market will appreciate it. david: how did you come here? did you take an uber?
dara: unfortunately, i need professional security. david: do you take uber from time to time? dara: we take ubers all over the place. absolutely. david: when you take an uber, do they know who you are? dara: it's about 50-50. david: on the ones that don't know you, do you make comments? dara: i make sure i am very polite. ask them how they are doing. i ask them if it is ok to make a phone call. i try to be as nice as i can because i'm trying to improve my uber rating. it is not as good as i want it to be. david: you said people should not slam the doors. is that a big problem? dara: if you are driving a car, and you've got 10, 20 passengers coming in, the car is an asset of yours. david: your company has roughly 22,000 employees but you have 3 million drivers. dara: almost 4 million. on a global basis.
david: you are in 63 countries, 585 cities? dara: you have been briefed effectively. impressive. david: in the u.s., is it increasing in terms of usage or is it going steady, going down? dara: it is increasing in every single market. the growth rates, we as a quarter,n teh lashe last we announced that in a exchange basis, we grew the bookings 41%. this is off of an impressive rate of bookings. almost 15 billion run rate on a quarterly basis, so the business is growing at big scale, impressive rates. david: last quarter when you hide your earnings announcement, you did lose $1 billion during the previous quarter. i'm sure you know this. dara: those are details that are important. david: how much longer can you lose $1 billion a quarter and keep going? dara: we have a significant amount of cash in the bank.
david: you've got $8 billion in the ipo and already have some money. dara: the company at this point is well-capitalized to keep investing. the markets we are going after, the transportation of people, food, freight -- they represent $16 trillion markets we are going after. if you look at even uber, the rideshare business itself, if you look at the audience in countries which we operate, typically we are addressing no more than 2% of the population of these countries. we think it is time to lean forward. the business itself can be quite profitable, we are confident of that. the next two, three, four years are going to be about growth and then we will flip it over. david: if i wanted to have a rideshare, why should i pick uber versus your competitors? lyft or via?
dara: we have lots of competitors that are very good at what they do. i think we typically in most markets, pretty much every market, we have the greatest number of drivers. we have the best liquidity. you are probably going to get the best e.t.a. the quickest driver to pick you up. the choices we have are impressive. in d.c., we have transit schedules right on the app. we want to move from a ride hailing app to your transportation partner. if you are trying to get from a to b, we will give you all the information we have to be able to get to a to b with a trade-off of time, convenience, and price. david: you have many different businesses. ridesharing is the one you are most famous for. actually, it is more profitable for you is uber eats. is that right?
dara: no, ridesharing is more profitable in most markets. it is the most mature part of the business. uber eats is 20%. it is growing over 100% on a year on year basis. we are now the largest food delivery player. we entered this business three years ago. david: as a revenue percentage, it is what percentage? dara: it is about 20% of our booking. david: how many cities? dara: eats is in 500 cities. david: what is the most popular food? dara: fried chicken is magic. [laughter] david: how do you keep the grease from kind of going through? dara: david, i'm covering that in my next monthly business review. i have not gotten to fried chicken grease yet. david: that is the most popular. a lot of people in the company own more stock than you. you are the ceo. do you think you are underpaid? was that a problem for you? dara: i would never claim that i am underpaid.
the united states, around the world or? dara: it is in about 25 cities. expanding mostly in the u.s. but in europe as well. david: you have one that is manufactured for you? is it different from scooters other companies use? dara: we are building one that is manufactured for us. the bike is manufactured by sn designed by us, totally proprietary. david: some people say they are dangerous. what do you say about that? dara: it is something we are watching carefully. we are working on technologies to modulate those issues. for example, when scooters get to very busy parts of town, we will slow them down. some of these scooters early on, they went as high as 20 miles per hour. now we are working with cities to find out how fast are responsible speeds. we encourage them to wear helmets. david: you have a new product which is teleconference. you have launched that in a couple of cities. dara: new york city, we have.
it is a service from downtown new york to jfk. david: is there great demand? dara: we will see. as you may know, going to jfk during rush hour hour is a mess. what we are trying to -- david: what does that cost to do if you want to go from downtown manhattan to jfk? dara: in the uber? about $200. if you are going from downtown new york to jfk with an uber black, it will cost close to $200 anyway. the magic of being able to do it in a helicopter is we are bringing in demand from thousands of users going to jfk and matching three or four users and putting them in the same vehicle. one of the keys in terms of traffic is that most people drive alone and that is a huge waste of our roads. it is a huge waste of gas, etc. we have a product where we match two or three or four riders into
one car. the uber copter is pool for the air. what you will see is the helicopters will be replaced by vertical power and landing. david: will they ever be driverless? dara: they will eventually be driverless. we are going to start with pilots. you can expect that in the aviation industry in general, they are taking a look at either computers assisting pilots more and more. there are controversies with that. or over a long period of time, going pilotless. david: let's talk about your driverless or autonomous business. you took a lot of people from carnegie mellon. you have said recently you think it is not going to happen so quickly as people have previously said.
how long will it be before your ride program, driver program is one where there is no drivers? dara: i think it will be 15-plus years. it will take a long time. there is a drama around robots replacing humans. i think the reality of life is that the better thing than humans and robots alone are humans and robots working together. robots are well designed for replacing repetitive predictable behaviors. most of driving is not either repetitive or predictable, but there are subsets of routes that are. what you see with our driverless program is, one, we will be incredibly careful. we will make sure safety comes first. we are building our driverless program -- by the way, we are working with third parties as well -- in a context of a network.
for example, in d.c., we have data scientists who know what are the 1% easiest trips in d.c. and an easy trip in d.c. maybe avoid a roundabout. stay away from airports. stay on areas that are well mapped. there are set of routes that are incredibly easy to drive. what you see with us is we will get the machines to do the simple stuff. and then we will have the humans do the difficult stuff. the two are going to coexist for 10, 15 years, a long period of time versus the drama of the press report. david: your 15-year answer was intended to be no drivers at all. you expect to have some within the next year or two. dara: the next five years. you will see some driverless vehicles out in the market in a limited way. david: you spun off your autonomous company to a separate company. why did you do that? dara: we created a company where
we were able to bring in some investors. toyota, a huge oem. we have a terrific partnership with toyota. and another toyota company very strong in manufacturing kits and sensors and other parts of the car. really bring them in which is about building these autonomous vehicles at scale. we brought in mazda and softbank as a financial partner as well. david: softbank is your biggest single investor. they went in at a valuation above or right where you are? dara: below. they got a decent deal. i think it will get more decent with time. david: when was the company first started? who actually started the company? dara: the company was started about nine years ago by garrett camp who is an entrepreneur and
still on the board. he is an unbelievably smart guy. he brought on travis. he is our former ceo and one of the founders as well. garrett and travis and ryan really teamed up to build this thing. david: many of the people there at the beginning own a lot of stock. a lot of people in the company own more stock than you do. you are the ceo. do you think you are underpaid? because you are taking it public and you do not own as much as some people working for you. is that a problem for you? dara: i would never claim i am underpaid. [laughter] david: did you tell gary barrett you are interviewing for this? dara: i did very early. the press was all over the place. david: you don't think you could have kept it a secret? dara: i have gary to thank for pretty much everything in my professional career. i could not bear the possibility of him hearing about this from some news report. he was the first person i called. ♪
david: you grew up not in the united states. where were you born? dara: i was born in iran. david: why did you leave iran? dara: i left in 1978. i was nine years old. this was when the iranian revolution happened. my family was an industrial family, well off. when the shah was overthrown, folks like my family were no longer welcome in iran. we went to france to wait until things calmed down and things never calmed down.
we went from france to irvington, new york. we stayed at my uncle's house. we had no other place to stay. david: we went to high school in -- dara: tarrytown, new york. david: and then you went to brown. dara: i studied bioelectrical engineering at brown and threw it all away to become an investment banker in new york city. go figure. david: you didn't want to go into private equity. the higher calling of investment banking was good enough? dara: it was a question of how evil i wanted to be. i wanted to be a little less evil. [applause] david: you could have gone into hedge funds. dara: that is the ultimate. i would have had horns. david: you are minding your own business in allen company, and then you go to work for barry diller. how did he know of you? dara: i was a grunt analyst on a deal for him.
he was bidding against -- a big battle in wall street. he was bidding for paramount. it was a back-and-forth. it was an unfriendly bid. he was not wanted. but we put up a big fight. i got to know barry over that time. i thought to myself, if i ever have the chance to work for that person, i want to work for that person. i got the chance eventually. david: you went to work for him. ultimately, one of the companies he owned was expedia. did he own it before you joined? dara: i went to work for him as the deal person. we brought in companies in the travel space. we bought hotels.com and expedia. they were part of the family to some extent because the deals i did. david: you became the ceo of expedia. did you have experience? why did he think you would be good at being ceo?
dara: he was desperate. we were in a situation where one of the founders of expedia who was running it decided -- this stuff happens naturally -- founding a company, building a company is different from managing it. and moving it into a mature state. this person decided, i am not up for the ceo gig anymore. can you find a replacement? david: you are not the first choice? dara: i have no idea, i never asked him. i raised my hand and he said yes. david: the board gave you stock options worth $180 million. dara: i guess they did based on theoretical value. david: and then all of a sudden, while you are doing a good job, somebody asked you to interview for the job of being the ceo of uber. is that right? dara: yeah. david: did you say, i already have a job? dara: at first when i got called, i said, no way.
i talked to a couple of friends. you don't get too many chances as a professional or otherwise to work at and especially lead a company that i think is a part of how we live life. in this case, this is a once-in-a-lifetime opportunity. david: did you tell barry diller you were interviewing? dara: i did very early. as you know, the press was all over the place. david: you couldn't keep it a secret, i guess? dara: i couldn't. i have barry to thank for pretty much everything in my professional career, and i could not bear the possibility of his hearing about this from some news report. he was the first person that i called. he was pretty unhappy at the beginning. then, he called me back. we had a series of conversations. he said, i understand why you are doing this. let me know how i can be helpful. he was genuinely helpful.
we are where we are now. david: he did not remind you of the $180 million in stock options? [laughter] dara: he understood the reason was not necessarily monetary. david: you are replacing travis kalanick. one of the founders and one of the biggest shareholders, but he was still on your board. was it awkward to be the ceo replacing somebody on the board? was that easy to do? dara: yeah, i feel the same way. i am on the board of expedia. i am the former ceo. there is a new ceo who i picked who is the board ceo. being a former ceo, it is little weird sitting there and having someone else do something differently with your baby. uber feels like travis' baby. expedia felt like mine. it is a little weird. you know what? you are respectful. you get out of the way.
you give the ceo support, and i think travis has done the same. is it weird? yes. are we in a situation where we are respectful and comfortable and he's there for me when i need his advice? yes. david: what is the biggest challenge you see the company facing? dara: a common challenge with some of the large technology companies out there. there is an increasing regulatory burden coming on some of the tech companies. some of it deserved. david: let's suppose i have extra money and wanted to buy into a company like yours. why should i -- dara: i think you have some extra money, don't you? david: never have enough, but why should i buy your stock? is it likely to go up? why would it outperform some of your competitors? dara: i have no idea where it is going next week or next month. but over a long period of time,
we are the cusp of a transportation revolution. we are the player that is global. we are the player that is multiproduct in terms of moving people, food, things. we have a much larger scope than any of the other players out there. i will tell you, many of our competitors and ourselves are going to do great. this is about replacing car ownership. this is about redefining how cities are shaped. this is about shaping how people move in urban centers. david: what would you like the average person who is listening to know about uber and its future? dara: i think what i want you to know is we essentially want to be your partner in terms of your everyday life in a city. when you want to go to work, we want to be there. when you come back, we want to be there. we want to be there to feed you. we want to be your everyday utility in your use. we will do so in a responsible way.
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