The Exchanges

Q How do you think about effective budgeting then, having been through what you've been through with this kind of blowing through it in four months with the difficulty of budgeting and it's both acknowledging that?

A Well, I, I think what you have to do is you, you have to, um, you have to create combined pools of budgets and then Let the people that you trust allocate where they see our higher ROI. So if you're talking about, you know, our, our CTO, I think it would be totally reasonable for Dara to say, you know, your, your headcount budget is X. Our compute budget is Y. Just add X and Y together and then spend it as you see fit. And so if you want to spend relatively more, more money on compute, on inference, on whatever, because you believe that's the highest ROI, Do that, but it means you have less for heads. If you actually think it's more efficient to just add more engineers, because there's sort of a compounding value to the new and novel products they will build, or it's not just about, you know, throughput, then do that. But like, if you make, if you combine the pools, I think, I think that's an interesting approach. The other thing I'd say is like, Remember, like even at the beginning of this year, the idea that you would be doing things like smart routing internally in terms of which models you're using for which tasks, the idea that you would like not only publish a AI usage leaderboard, but also a associated cost leaderboard, just so people were aware. The idea that you might choose different models for different tasks from the outset or give different levels of employees diff…

AI assessment note: “you have to create combined pools of budgets and then Let the people”

Q Other than time, what is the one inhibitor to getting to five hundred million users? You mentioned two hundred million.

A I mean, I would say, like, our, our IR team is not going to love this answer because I would say price, um, and the reason our IR team won't love that answer is because when you start talking about Price in the context of public markets. People are like, oh, you're going to get into a price war and like margins are going to come down and like it's a less attractive business. But that's not really what I mean. What I mean by price is when you think about the businesses we operate, um, primarily, you know, mobility and delivery. The vast majority of the transactions and delivery of things, or the vast majority of the transactions in transportation broadly, happen at a price point that is like way lower than our core products, right? Like taking an UberX to and from work every day in New York City for like, 35 bucks a direction, that's still a luxury product, right? The vast majority of transportation in New York City is not happening at that price point. And so, If we want to get to five hundred million users and we want to go from people using us on average, you know, six times a month to using us on average, 25 times a month, that average cost of that transaction has to come down. And so how do you get that down? There's all sorts of ways in doing that. You have more modes that are cheaper. You can get trains on Uber here in London. You have alternative modes like bikes and sco…

AI assessment note: “I would say price... If we want to get to five hundred million users”

Q You said there about dollar leverage, putting in dollars to what you get out. What is the single most efficient dollar in to dollar out business for you today?

A I think membership is the most efficient long-term consumer lever that we've got. Uh, and the reason for that is, like, ultimately we are looking at, like, IGB as a critical input metric for any dollar I deploy. Incremental gross bookings. Think of it as incremental revenue, right? Like if I put a dollar of incentive into the market, if I give Harry a dollar and I give a million other consumers a dollar discount, how much incremental revenue do I get back at that? And by the way, like the ROI on that is different because ROI is like, if I get two dollars of revenue back from Harry by offering you a dollar, Um, you might be like, okay, that's great. That's a, you know, a two to one ratio, but actually we only make seven and a half percent of your dollar from a profit margin perspective. So you're still negative ROI, but you make those sorts of investments to grow the platform over time because, you know, I've increased Harry's engagement and then your LTV goes up over time. So, um, we're, we're typically looking at like a very baseline IGB type or incremental revenue type metric for any, any, uh, any dollar we're putting into the marketplace. Membership just gets better over time. The reason it gets better over time is, you know, if Harry becomes a member, not only do you ride more next month, but actually that cohort of members we acquired in that month tends to ride more over …

AI assessment note: “I think membership is the most efficient long-term consumer lever that we've got.”

Q I think that's fair. They've had a little bit more head start than you. When you look at that chasm between you, What do you not have that you would need to have to reach their dominance?

A From my perspective, we need to put more consumer value into the membership program. So today, ah, I think especially if you're a mobility rider, so on, typically on mobility you're getting like five percent cash back, right, is, is our standard, standard sort of offer. The consumer comprehension of that is still relatively low. Like for a membership program as big as we are, I think there's still a lot of people who have Uber One and don't actually fully realize the benefits they're getting on mobility. The other thing we need to do is like, We're looking for, for features that are sort of high perceived value, low cost, right? Like that's the sweet spot of any membership type program or rewards program for, for example. Uh, with our business, that's tough because I don't have a lot of free to give away on the platform, right? If I want to give you a ride because you're a loyal member, either through a membership program or a rewards program, I still got to pay the driver to provide that ride, right? I don't, it's not like a hotel where you might have excess inventory, and so your marginal cost of giving away a room night is pretty low. Um, the beauty of our model is we're primarily a variable cost model, right? It means when demand drops, great, our costs scale down with it, but it also means that we just don't have a fixed capacity to give away, and so it just makes the chal…

AI assessment note: “we need to put more consumer value into the membership program”

Q Do you have a crazy story, like story time for the girls?

A So in, in China, the, the crazy thing was you'd be negotiating And, and to be clear, like, others were running the negotiation. I was, we were running the business. But the, the sort of mandate behind the scenes of the negotiation was like, we got to push on investment because like, give you leverage at the table, right? So if, if one side saw the other was gaining share as you were negotiating this deal, it kind of gave you relative strength. And this was happening like day by day. And both sides were just so well capitalized, right? I mean, Travis used to have a saying, which is like, we need to raise more money than all our competitors in the world combined. Because the basis for competition for rideshare, which is like product market fit was clear. So it was just a land grab at that point and money helped you solve the land grab. And so we had raised immense amounts of capital on the other hand, like so had Didi, right? And, and, and the notion that we were going to be able to raise more than everyone in the world combined, it was just never going to happen, um, past a certain point because you had players like SoftBank investing in the market as well. And, you know, You remember those days, like that was free money era, and Uber was best in the world at capitalizing the free money era, but there were many others that were good at it as well, and ran the same playbook as us…

AI assessment note: “we were burning fifty two million a week in China, just on price subsidies”

Q Well, that's interesting. Where do you land on that? Like, cause I, I was talking about this was really smart people. Um, and they talk about kind of agents and how agents will route you to provider and you have no customer loyalty. How do you think about the disaggregation of UI and an agent led decision making?

A So this is, this is where I think there's some interesting questions about. What information do you provide to the various consumer front ends, uh, either from the frontier labs or others? Because at some point, maybe you're giving away that, that front end of the consumer experience in a way that is non-strategic. So, you know, I don't want to be aggregated on price, right? I, I, I, you know, we've not participated historically in the aggregation apps where some, you know, somebody will come to us and pitch and say, hey, you know, give us, give us, um, APIs that give us real-time info on Every car, every Uber car in the network, um, uh, what the price of that ride is, whatever other characteristics you can feed us, and because we're going to build an app, and then we're also going to put Lyft in there, and we're going to put other providers in there, and then that'll be incremental business for you. I've been against that. I mean, I, I want to be the front end. I want people to start at the Uber app for the Uber experience. Um, and I think today we, we win that front, uh, that, that first look with two hundred million consumers and growing, uh, every month. So there's a real question there. Like, and, and we were, we've been worried and discussing, like, hey, you know, if I, if somebody gonna just put into chat GPT or Claude, like, you know, get me, get me my usual Uber. Um, a…

AI assessment note: “I want to be the front end. I want people to start at the Uber app”

Q What's your biggest takeaway from working with Dara on the flip side?

A I think that the most impactful quote I've heard from Dara that I think speaks to who he is, is management comes from an org chart. Leadership comes from the heart. And, and what he means by that is we can create rules and structures and hierarchy, and we can try to follow what the bureaucracy says. But at the end of the day, We have leaders at all level of the company that are the ones who actually push the company forward, and those are the people who are leading with both the head and the heart, and those are the people that build followership, and that's exactly who Dara is. He, he will not ask you to do anything he wouldn't do himself. He's the first one over the fence. He's the first one on the plane to go where the company needs him. Low ego, lots of heart, he pushes, But it generally comes from a good place, which makes people want to be successful for him, and makes people want to say, like, what do you need me to do? And that's really powerful.

AI assessment note: “management comes from an org chart. Leadership comes from the heart.”

Q Do you do like a Google Labs? Like, go on, try some, try Gmail, Paul Buchite. Do you know what I mean?

A Yeah, I mean, we do. We try to set up structures to solve this problem. Um, I mean, it's like a class of, a classic innovator's dilemma problem, right? Which is like the thing you've already built is so big that it just swallows up your organizational capacity to do anything else. And even if you're able to stand up other businesses, it's impossible for those businesses to get the resourcing, attention, distribution, marketing dollars, engineering capacity, whatever it is, it just gets swallowed up by the whole. And, and part of it is just even management focused, right? Like it's very hard to focus on the new thing. When you've got this like, two hundred and twenty five billion dollar blob that you've got to manage over here. So, how do you solve that? I mean, we, we, we run a program called Growth Bets, which is, you know, intended very much to incubate new businesses within Uber.

AI assessment note: “we run a program called Growth Bets, which is... intended very much to incubate”

Q One way to bring down price is to remove cost. And one way to remove cost is to think about, um, robo-taxis autonomous. Um, you said before it was existential. Um, Why is it existential, and how, how do you think about that, and how it changes the business forever?

A I mean, it's existential because at the end of the day, it's a better product than our core product in many use cases, and I think those use cases grow over time, and eventually it's better in all use cases. You can quibble along the edges on like current autonomous vehicle experiences, right? In most cases, it is, it is going to be slower than a human driver. The pickup point may not be right in front of your door as you would get with a human driver. Uh, it's not going to work in all weather conditions, all geographies, all pickup points. Like you, you can quibble on that today, but I think increasingly over time, autonomy is not only going to be safe, it's going to be safer. And I think it's going to be a better experience because people like the in-car experience, the in-car experience of having privacy and being able to, um, work or sleep or talk with your partner or whatever it is you want to do, like that is better and people prefer that for the most part. So when you have a better product that is only going to get better over time and autonomy is as bad as it's ever going to be today, right? And every single day it's going to get better. Um, then that's going to be the business, and that's going to be how people get around, and if Uber, uh, doesn't have autonomy on our platform, and we will, uh, we will, we will, we are investing actively and aggressively to bring it to…

AI assessment note: “it's existential because at the end of the day, it's a better product”

Q Is it the largest investment that you make?

A It is. I, I mean, I, I think it kind of depends how you define it a little bit. Like, if you look at our autonomy investments, we are making a mix of equity investments in companies, Vehicle commit, purchase commitments, building out autonomous infrastructure, building out data collect fleet. Like there's a lot of different ways we're spreading the dollars. Um, and, and we're pretty confident in the ROI and those dollars long term. So yeah, it's the largest single sort of standalone investment we, we make. Now don't be, you know, don't get me wrong with at a PNL our size, we're moving billions of dollars around every month, but yes, it's the largest single area of investment.

AI assessment note: “It is... yes, it's the largest single area of investment.”

Q When you think about size of companies in terms of people, will you have more or less people in five years?

A I think it's interesting because I'm, I am tempted to say, I think we'll have less. And I think one of the reasons I'm tempted to say that is when you look at the largest teams from like a numbers of people perspective, You do have a sort of disproportionate head count in like more producing type functions, right? Um, whether it's customer support, whether it's, uh, sales, uh, or even sort of content production or analytics where you're producing reports and dashboards and these sorts of things. And I think, you know, those sorts of functions lend themselves well To first augmentation by AI and eventually I think, um, at least partial replacement by AI. And so I'm tempted to say less. The reason I won't emphatically state that is because I think that's sort of been proven wrong the last few years as AI's rolled out and employment in companies continues to grow and, uh, you find new and different ways.

AI assessment note: “I am tempted to say, I think we'll have less.”

Q Some of my friends who are old Uberites, who I'm sure you know, but I'll keep them out, um, say, if Travis were here, we'd be number one in food. Is that true? I love Dara. I don't know Travis.

A No, and look, like the reality is, I think anyone who operates anything that says, if X were this, this would be different. Like, you know, it's a little bit of that, like in the arena quote, like if you're not in the arena, it's easy to sit on the sidelines and say, oh, if, if I were in the arena or if so-and-so were in the arena, it would be different. And it's fair to have that opinion. But when you're operating a business, it's hard, and you have trade-offs to make, and you get things wrong, and you get things right, and you don't get credit for the things you get right. You certainly feel the blame and take the blame for the things you get wrong. So, I don't know that there's an alternative history. Like, DoorDash is an excellent company. I think Tony's a tremendous entrepreneur and founder. They operate really well. They move quickly. They're aggressive. They take risk. They're well capitalized. Like, We have lots of competitors.

AI assessment note: “No, and look, like the reality is, I think anyone who operates anything”

Q Can I ask you, when you fast forward five years time, what percent of rides will be human driven versus robo taxi driven?

A It's, it's so hard to predict. I mean, for a few reasons. One is our, the denominator is huge here, right? We're doing like three hundred million trips a week, uh, on our core platforms. That is just massive scale. So we do a few million trips in AVs on that platform today a month, but it's just such a small part of the business that it's going to grow triple digit percentage months on months and months and months, and it will still be A relatively tiny drop of the overall bucket. The second thing it makes it hard to predict is our human-driven business is going to keep growing, right? And so, um, you know, we, we found, like, even in the largest AV markets, where today we don't have AVs, like San Francisco and LA, our human-driven business is growing faster than the rest of the US. So, it's hard for me to know what the, it's a moving target. The third piece is Uber's so global, right? In mobility, we operate across 75 countries, Two of our large, three largest countries by volume are India and Brazil. You know, the average fare in Brazil is like, Three 54 bucks USD and India it's two 53 bucks or something like that. It's, it's going to be decades until the cost of autonomy compresses to the point where it compete with that cost of human labor. And those markets make up the majority of our trips. And so if you want to say, when will the majority of trips at Uber be autonomous? …

AI assessment note: “it will still be A relatively tiny drop of the overall bucket.”

Q What did you genuinely believe was the right thing for the company, and it turned out you were wrong?

A Uh, I mean, the first thing I say is, like, I, I am wrong every single day. Um, big things and small things, right? I actually love the, I think it's a Bezos quote, which is, if you want to be right most of the time, you got to change your mind a lot, or something, something to that effect, right? Which is effectively, like, you're going to be wrong a lot, and actually the people who are successful over time Are willing to change their mind. So I think that's true. So I'm wrong a lot. This is probably the most common Running debate that Dara and I will have as I think of his tenure as CEO, which is, and, and thematically it's like the tension between short-term levers and long-term levers for the business. So like a short-term lever for Ridehill is like price, right? Um, every dollar that we can put back into lower pricing, I think is valuable. Even, uh, even if long-term there may be other things you want to do, like acquire new users or build a membership program, Or build new business units. You should be weighing those investments versus I could just put a dollar back into price. And so I think I have been too short termist on certain issues like membership, Uber, Uber one, for example, I was running the mobility business. You're smiling.

AI assessment note: “I have been too short termist on certain issues like membership, Uber, Uber one”

Q Um, can you participate though if you won't give them the data?

A Well, I think that's always a negotiation or discussion around, like, how much do you need? Where's the trends? Like, there's a, there's 15 different flavors to this, right? The transaction can originate in different channels and then end in the Uber app. You have to define who has responsibilities for things along the way. What is the, so if you, if you go into ChatGPT and say, or even this hotel booking example, what happens if the hotel needs to send Harry a message because, uh, you asked for early check-in and they can't give it to you? Is that back through the AI? Is that coming directly from the hotel? Who bears the cost of that? Like these sort of like, there's operational elements to the experience that needs to be sorted. And I'm not saying this can't get sorted, but it's not as simple as the, you shouldn't picture the experience that goes right as the sort of archetype of what this usually looks like, because it's the experience that goes wrong or requires some level of management that needs to be solved for.

AI assessment note: “that's always a negotiation or discussion around, like, how much do you need?”

Q Can I ask you, who do you think is a bigger threat, Waymo or Tesla?

A That, that's, uh, yeah, I mean, I, I don't know how many spicy takes I want to have here, but I think there's going to be more than two winners. Do I think Waymo and Tesla will ultimately be winners? Yes, I do. Um, I don't know who, who's going to bet against either of those, but I think there will be more winners. I also think even in a world of, of strong winners, like a very natural question or often feedback we get from investors or smart types who follow our business is like, So yeah, I believe that there will be a few players that get to autonomy, and I think they're ultimately going to work with you guys, but they're going to have such strong leverage in the market that your share of every dollar is going to get squeezed, and so I just don't know, even in a world where you have access to autonomy, like, you know, how are your margins going to look? Because today you guys benefit from fragmentation, and that's true. I think it's a true statement, but there's a couple counterpoints to that. One is, If you look at delivery as a sort of comparable vertical here, McDonald's and Starbucks also are strong leaders in their individual verticals. They've spent billions building out fixed assets in terms of stores and that all the infrastructure that goes into their supply chain. They have one P channels. You can walk in the front door of McDonald's. You can order through the McDon…

AI assessment note: “I don't know how many spicy takes I want to have here”

Q Yeah. I pretend like, you know, it's story time. What's the wildest story for me about China?

A So I was only like sort of over China for a few months before we ultimately did the deal with Didi. And like even just those few months were like, I felt like I lived years, right? Just seeing the deal process play out, All the regular emotional highs and lows that come with the deal process, but also then the specific, you know, China specific, Travis specific, like it was just crazy. And ultimately we got a successful outcome that I think, you know, folks would say like most Western companies did not have this, even though we didn't win, even though we took the silver medal in China, um, I think we got a better outcome than the vast majority of Western companies and vast majority of Western technology companies that try to do business in China.

AI assessment note: “Just seeing the deal process play out, All the regular emotional highs and lows”

Q The, the... Was Postmates a good acquisition? Because that seemed like a bit of a nuts one, to be honest. Like, they were running out of cash. It was a, it was a challenge business. When I saw that, I was like, whew, they've got balls at Uber.

A I, I mean, look, I think it's, it's, um, we, we've, we've, in my opinion, I think we probably get a harder, uh, A harder rep on M&A than is deserved, because in many cases a deal that from the outside, like, You question, or you're not sure what you got out of it, like actually leaps forward internal capabilities that you, you didn't know. You learn things from the acquisition, you get good talent, you see where you have gaps, et cetera. Um, I think in the case of Postmates, and again, this is where I like, I'm a sideline observer, right? I could sit here and tell you that was the greatest deal in the world or no, we shouldn't have done it. But the reality is like, I wasn't in the game at that time on the delivery side. So I don't actually know the answer to that. But, um, Postmates has a strong brand, a strong follower, a followership. And some strong geographic pockets, and I think we've been able to build on those.

AI assessment note: “I wasn't in the game at that time... So I don't actually know”

Q Yeah, terrifying. Um, is that evidence of incredibly effective tools, or is that evidence of a desperate need for guardrails?

A I firmly believe multiple things can be true at once, so let's come to that. Let me give a little bit of backstory on this, because Uber had two big AI headlines in the first half of this year. Um, I think both of which caught at least the people involved by surprise. One was Praveen, um, was speaking at an event and, you know, generated this headline by saying we were through our, our AI budget in the first few months of the year. Praveen's our CTO. Um, and then I did another podcast and said, um, you know, uh, it was hard to draw a direct line from our AI spend through to useful consumer features. And both of those comments Like caught fire in a way that I think neither of us expected, right? Praveen wasn't making a comment about like runaway spend, like we're going to bankrupt ourselves. He was just saying like, you know, effectively, like it's, it's hard to predict usage. Uses have been more than I thought. We've been trying to drive usage and here we are blowing through a budget, but you're setting a budget number in like November for a tool that's growing vertical in terms of usage. Of course, it's hard to like pinpoint where you're going to be. And then my comment, honestly, first of all, it wasn't insightful at all. Like it was like, Held up as this insight, either as if you, it sort of showed to me the power of people reinforcing their preconceived notions, like taking…

AI assessment note: “I firmly believe multiple things can be true at once, so let's come to that.”