Dara Khosrowshahi

television show Peter Peer Conversations. They discussed the company, the future of transportation and self driving vehicles. You've been the CEO of Uber for how long now y years? And you enjoy it. I love it, Okay. So when you

came in, the company was not public company. You've taken the public and you've received a lot of publicity about the I p O. Obviously, you know that the company now I was a higher market capitalization roughly seventy two billion dollars something like that, higher market capitalization than any company in American capitalism history except for Facebook. This short time after um it's I P O. Why are you are so many people criticizing you for having a seventy

two billion dollar market cap. Well, I think that there are many critics out there, especially for the for large companies,

that that that's a fact of life. I do think that what's different about UH some of the technology companies of our generation that are coming public, the so called unicorns, is that we've actually stayed private for longer UH and we have raised more money over a long our perd of time, and as a result, when we come public, we generally have bigger scale than companies who went public, let's say the last generation of companies that that went public as well. But my view on this is we

wanted to go public. We needed to make sure that we are well capitalized for the next five years for the company, and we achieve that, and now the time is to put your head down and get the real

work done. After the company did go public, while I kind of pointed out that it is a very high market capitalization, UH so soon after UH It's I p O, it did go down by about eleven which is a record decline after an I p O. So did you think the investment bankers didn't price it correctly or what do you think the problem was on the I p O. You know, I love how this interview is starting. I really appreciate that. Um. I think that's actually the the timing of our I p O was very much aligned

with our president's tariff wars the same day. So I think we got caught up in a bit of a market swirl and there's nothing you can do about that. And what I tell the team is it's a short term the market can be a voting machine, but long term it's a weighing machine, and we are focused on the waging and I'm very confident that if we as a team execute, the market will appreciate it. By the way, how did you get here? You didn't take an Uber? Did you? Unfortunately, when I come here, I need some

professional secure Do you take Uber time of time? Yeah? This weekend with the family, we're taking Ubers all over the place. Absolutely. So when you take an uber um, that's just that's let's talk about the ride sharing part. You take an uber um? Do they know who you are? It's about fifty fifty and the ones that don't know you, you just give them comments on how good they are or not. How do you make sure They're are very polite and make sure that I don't slam the door,

ask them how they're doing. If I get on the phone call, I asked them, you know, is it okay to make a phone call, etcetera. So I try to be as nice as I can because I'm trying to improve my Uber ratings. Actually not as good as I've noticed. You have said before that people shouldn't slam the doors. Is that a big problem. Uh, it's if you're driving a car and you've got tens twenty passengers coming in the car is really an asset of yours, your cup

and he has roughly employees. Yes, all right, but you have three million more show drivers, almost four million drivers and couriers now on a global basis, you're in sixty three countries or and five cities or something like that. You have been briefed very effectively. Okay, impressive, all right? Today in the United States? Is it is it increasing in terms of users or is it going to study or is it going down? No, it's increasing in every

single market. So the growth rates are we as a company of the last quarter that we announced as a newly public company, we announced that on a foreign exchange neutral basis. We grew our bookings forty year on the year, and this is off of a pretty considerable base of bookings almost fifteen billion kind of run rate on a quarterly basis. So the business is growing at very big scale,

at pretty impressive rates. But last quarter when you had your earnings announcement, you did lose a billion dollars during the previous quarter. Yes, I'm sure you know this by those are details that are important, but you know so, um, how much longer can you lose a billion dollars a quarter and keep going? We have a very significant amount of cash in the bank. You've got eight billion dollars from the I p O. And you already had some money. Yeah,

we we already had some money. So the company at this point is incredibly well capitalized, uh to keep investing. And the markets that were going after the transportation of people, food trade, these are these markets represent sixteen trillion dollar markets that were going after all, right, and if you look at even Uber, the ride share business itself, when you look at our audience of the countries in which we operate, typically we are addressing no more than two

of the population of these countries. So we think it's time to lean forward. The business itself can be quite profitable. We're confident of that. But the next two three four years are going to be about growth, and then we'll flip it over as the market demands. So if I to the have a ride share, let's say, ready after this interview and go somewhere, why should I pick Uber versus your competitors, let's say Lift or V. I think we have lots of competitors who are very good at

what at what they do. I think we typically in most markets and pretty much every market that we operate, we have the greatest number of drivers out of the market, so we've got the best liquidity, so you're probably going to get the best e t A so you'll get the quickest driver to to pick you up. The choices

that we have are pretty impressive. So for example, in in d C, now we have transit schedules right on the app, So we really want to move from a ride hailing app to essentially your transportation partner, so that if you're trying to get from A to B, we're gonna give you all the information that you have, which many of our competitors don't do. To be able to get from A to B with a tradeoff of time, convenience, and price as well. So right now you have many

different businesses. Ride sharing is the one that you're most famous for, but actually it's more profitable I think for you is Uber eats? Is that right? Uber Eats is more profitable now. Ride sharing is is more profitable in most markets. It's it's the more mature part of the business. The Uber eats business is now about twenty percent of our business. It's growing over a hundred percent on a year.

On your basis, the run rate is is enormous. We're now the largest UH food delivery player ex China, and we entered this business three years ago as a revenue percentage. Right now it's what percentage of you it's about of our booking. How many cities that in eats is now in over five hundred cities. What's the most popular food that on your Uber eats? Fried chicken is magic fried chicken? And how do you keep the grease from kind of going through? I mean they just David, I'm covering that

in my next next monthly business review. I haven't gone to fried chicken grease? Okay, that's the most popular. Yeah, let's talk about some of your other businesses over here. You have, I guess, your scooter business and your electric bike business. So the scooter business um is all over the United States and around the world. Are Uh, it's in about twenty five cities now and expanding mostly in the US, but we're spending into Europe pretty quickly as well.

You have your scooter that's manufactured just for you, is it? There's it different than the scooters and other companies use. We are building a scooter that's manufactured just for us. The bike is manufactured just by us, and it's designed by us, totally proprietary. Now, some people say scooters are dangerous. What do you say about that? I think that that is It's something that we're watching pretty carefully. Uh, and

we are working on technologies to modulate those issues. So, for example, when scooters get too very busy parts of town, we will slow them down. Uh. Some of these scooters early on, they went as as high as twenty miles an hour. Now we're working with cities to say, hey, how asked do you think is a responsible speed. We encourage our writers to our helmets. Now you have a

new product which is helicopters. Yes, yes, Okay, now you've launched that in a couple of cities, so from New York City so far we have yes, and it's a service from downtown New York to JFK. Are great demand for that. What we'll see um as as you may know, going to JFK during rush hour in New York City is a mess. Uh And and really what we are trying to what is that to do? If you want to go from downtown Manhattan to JFK, what is that

an ubercopter? Yes, about two ducks, which is actually fairly if you take if you're going from downtown New York to JFK within uber black, it's going to cost close to two dollars anyway. So the magic about being able to do it in a helicopter is that we're bringing in demand from thousands of users who are going to JFK, and we're matching three or for users and we're putting

them in the same vehicle. So one of the keys in terms of traffic is most people drive alone, and that's a that's a huge waste of our roads, is a huge waste of gas, etcetera. And we have a protocol pool while we're matched two or three or four different riders into one car. And essentially our ubercopter is pool for the air. And what you'll see is that these helicopters are going to be replaced by a generation of electrically powered vertical takeoff and landing. Now will they

ever be driverless? They will eventually be driverless, but we are absolutely going to start with pilots. I think it's a safer way to go, but I think you you can expect that in the aviation industry in general, UM they are absolutely taking a look at either computers assisting pilots more and more. There are some controversies with that or over a long long period of time, uh, going driverlesss or pilotless. Let's talk about your driverless or autonomous business. Yeah,

you took a lot of people from Carnegie Mellon. Yes we didn't out of the robotics department. And you have said recently that you think it's not going to happen so quickly as people have previously said. How long will it be before your UM ride ride program or your driver program is one where there's no drivers, no drivers. I think it'll be it'll be fifteen plus years. I

think it will take a long time. So I think there's this drama around robots replacing humans, and I think the reality of life is that the better thing that humans alone and robots alone or robots and humans working together, okay, And and and so robots are very well designed for replacing repetitive um predictable behaviors. Most of driving is not either repetitive or predictable, but there's a subset of routes

that are. So what you'll see with our driverless program is at one, we're going to be incredibly careful and

we're gonna make sure safety absolutely comes first. But we are building our driver list program, and by the way, we're working with third parties as well, within a context of a network where for example, in d C, we are data scientists know what are the one percent easiest trips in d C UH And an easy trip in d C may may be avoid a round about, avoid an unprotected left turn, stay away, let's say, from the airports,

stay on areas that are very very well mapped. There are a set of routes that are incredibly easy to drive. And what you'll see with us as far as our driver list program is we will get the machines to do the simple stuff, and then we will have the humans do the difficult stuff, and the two are going to coexist for ten fifteen years, for long period of time, versus kind of the let's say the drama that the

that the press work. Your fifteen year answer was intended to mean no drivers at all, but you expect to have some driverless or autonomous vehicles uh in a year or two or three or four. Within the next five years, you can see some driver list vehicles out in the markets. And again I think it's going to be in a very very limited way. Now, you spun off your autonomous or driver lists part of your company to a separate company.

Why did you do that? We created a separate company that where we were able to bring in some investors and some partners, UH Toyota, who is as you know, a huge O E. M. And we have a terrific partnership with Toyota Denso, which is a Toyota company as well that is very strong in manufacturing kits and sensors and other parts of the car. Um and really bringing in Toyota and Denso was about building these autonomous vehicles at scale. And then we also brought in um Masa

and soft Bank as a financial partner as well. SoftBank is your biggest single investor still yes, And they went in at evaluation that is above or right where you currently are below. SoftBank got a decent and I think it will get more decent with time. So when was the company actually first started and who actually started the company? The company was started about nine years ago and it was started by Garrett Camp who is an entrepreneur. He's

still on a board. He's he's unbelievably smart guy. Uh So he brought on Travis Kalenik, who is our former CEO and one of the founders as well. And so Garrett and Travis and then another one of our founds Ryan really teamed up to build this thing. How many of the people who were there at the beginning, And um, I've on a lot of stock, in fact, a lot of people in the company, oh more stock than you do.

You're the CEO. You think you're underpaid because you know you're you've taken a public and you don't own as much stock as some people working for you. Is that a problem for you? Uh? It is? I would never claim that I'm underpaid. You grew up not in the United States. Where were you born? I was born in Iran, actually okay, And uh, why did you leave Iran? I after Iran in I was nine years old and this

was with when the Iranian Revolution happened. Uh. My family was an industrial family while off and when the show was overthrown. Uh, folks like my family were no longer welcoming Iran. So we left Iran and we went to France actually to wait until things calmed down. And things never calmed down. Uh. And then we went from France to Irvington, New York, where we stayed in my uncle's house because we had no no other place to stay. So you went to high school in in uh, in Terrytown,

New York. Happy school. And then you went to Brown. Yes, I studied bioelectrical engineering and Brown and then threw it all the way to be an investment banker in New York City. So go figure. So you were at Alan and Company for the years, and uh, you didn't want to go into private equity. The higher calling of investment banking was good enough. You know. It was a question of just how evil I wanted to be, and I wanted to be. It's a little less either, Okay, all right, Okay,

you could have gone to hedge funds everywhere, that's the ultimate. Okay, Well, well that I would have had horns. Okay. So you're minding your own business and alan company, and then all of a sudden you've got to work for Barry Barry Diller. Yes, how did he know of you? I was a grunt analyst on a deal for Barry Dealer. Barry Dealer was this was he was bidding against some of their red Stone. It was a big battle in in Wall Street. He was bidding against some of the rest for Paramount. It

was a back and forth, it was. It was an unfriendly bid he was. He was not wanted, but we put up a big fight. And I got to know Barry over that period of time, and I thought to myself, you know, if I ever had the chance to work for that person, I want to work for that person. And and I got the chance eventually. All right, So you went to work for him? Yes? And then ultimately um one of the companies he owned was Expedia, Yes, and the own it before you joined or you I was,

So I went to work for him as the deal person. Uh. And so we did a bunch of deals and brought in companies in the travel space. We bought both Hotels dot Com and Expedia. Uh. And they were part of the family, and they were part of the family to some sent because of the deals that we did when I came in. All right, so you became the CEO of Expedia. I did, yes. And did you have any experience in being a c O? Why did he think you'd be good at being a c O? Um? He

was desperate? Okay, so h we we were in a situation where um, one of the founders of Expedia, who was running speedy at the time, decided And this kind of stuff happens very naturally, which is founding a company. Building a company is different from managing it and moving it into a mature state. Uh. And Uh, this person decided that, Hey, I'm not up for the CEO gig anymore, Barry, can you find a replacement? Um? And you were not

the first. Uh. You know, I have no idea. I've never asked him, but I raised my hand and he said yes. All right. And one point, the Expedia board gave you, I guess some stock options that were worth a hundred eighty million dollars. I guess they did based on theoretical values. Okay, And then all of a sudden, while you're doing a very good job running it and maybe gonna get a hundred eighty million on theoretical value, at some point, Um, somebody asked you to interview for

the job of being the CEO of Ubers. And did you say I already have a job or yeah? At first, when I got called that, I said no way. But then I I talked to a couple of friends, and and you know, you don't get too many chances as a professional or otherwise too to work at and especially lead a company that I think is a part of how we live life. And I just saw it in that in this case, this is a once in a life opportunity. Did you tell Barry Dealer you were interviewing

for this? I did. I did very early. As you know, the press was all over the place. You don't think you could have kept a secret? I guess yeah, I couldn't. Barry. Um, I have Barry to thank for pretty much everything in my professional career. Uh, And I could not bear the possibility of his hearing about this from some news report. Uh so he was the first person that called UM. He was pretty unhappy at the beginning, but then he

called me back. We had a series of conversation. He called me back and he said, listen, I understand why you're doing this. Let me know how I can be helpful. And he was genuinely helpful as we went along this journey, and and uh, you know, we are where we are now. And he didn't remind you of the hundred eighty million dollars in stockhoferce. He didn't PERMANI of that or um. He understood that the reason why I would do this

was not necessarily monetary. So when you came in, you were replacing Travis Kalenik, who was one of the founders and a big careholder, one of the biggest shareholders, but he still was on your board. Yes, So was that awkward to be the CEO replacing somebody who's still on the board a big shareholder. Was that easy to do or not? Yeah, listen, I'm I'm the I feel the

same way. I'm on the board of Expedia and I'm the former CEO and there's a new CEO who actually I picked Marco Christram, Who's Who's who's the board CEO? And I'll tell you being a former CEO, it's a little weird sitting there and having someone else do something differently with your baby, because I think Uber feels like Travis's baby and Expedia felt like mine, And it's a

little weird. But you know what. You you're respectful, you get out of the way, you give the CEO support, and I think Travis has done the same for me. So it's is it weird, yes? But are we in a situation where we're respectful and comfortable and is he there for me when I need his advice? Yes? And what's the biggest challenge you currently see the company facing?

Maybe the biggest challenge that that we have is a is a common challenge that you see with some of the large technology companies out there, which is there is an increasing regulatory burden uh that is coming on some of the tech company some of it deserved. Let's suppose I have some extra money and I wanted to buy into a company like yours. Why should I buy you? I think you have some extra money, don't you never have enough? But well, why should I buy your stock?

Is it likely to go up from where it is, and why is it likely to outperform some of your competitors. I have no idea where it's going next week or next month, but over a long period of time, we are at the cusp of a transportation revolution. We are we We are the player that's global. We're the player that is multiproduct in terms of moving people, food, things with our freight business as well. We have a much larger scope than any of the other players out there.

And I tell you that ourselves and many of our competitors are going to do great because this is about replacing car ownership. This is about redefining how cities are shaped. This is about shaping how people move in urban centers. The summarize, what would you like the average person who's listening to know about Uber and his future? I think what what I want you to know is that 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're coming back to work, we want to be there. Uh. We want to be there to feed you uh. And we want to be your everyday utility uh in your use and we will do so in a responsible way. Uh. This is a company that wants to be great, but wants to do good for the world as well. Uh, and we know we had a lot of work ahead of us. That was Uber CEO dar kasro Shah. He speaking to Carlisle Group co founder David Rubenstein.