tv The David Rubenstein Show Peer to Peer Conversations Bloomberg July 21, 2019 3:00am-3:31am EDT
david: after the company did go public, it did go down by 11%, which is a record decline after an ipo. dara: i love how this interview is starting. [laughter] dara: i really appreciate that. david: how long will it be before your program has no drivers? dara: the better thing than robots alone or humans alone is robots and humans working together. david: someone asked you to interview for the job as being the ceo of uber? is that right? and did you say you already had a job? dara: at first, i said, no way. >> would you fix your tie, please? david: people would not recognize me if my tie was fixed. but ok. let's leave it this way. all right.
♪ i don't consider myself a journalist. and nobody else would consider myself a journalist. i began to take on the life of being 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? ♪ david: you have been the ceo of uber for how long now? dara: two years. david: two years? and you enjoy it? dara: i love it. david: when you came in, the company was not a public company . you have taken it public. and you have received a lot of publicity about the ipo. obviously you know that. the company now has a higher market capitalization, roughly $72 billion. something like that. higher market capitalization than any company in american capitalism history, except for
facebook, this short a time after its ipo. why are so many people criticizing you for having a $72 billion market cap? dara: [laughter] i think there are many critics out there, especially for a large company. that is a fact of life. i think what the difference is about some of the technology companies of our generation that are coming public, the so-called unicorns, is that we have stayed private for longer. and we have raised more money over a longer period 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 went public, as well. but my view on this is, we wanted to go public. we needed to make sure we are well-capitalized for the next five years for the company, 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, while i kind of pointed market utilize very high capitalization so soon after its ipo, 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] dara: i appreciate that. i think that is actually the timing of our ipo was very much aligned with the president's tariff wars the same day. i think we got caught up in a bit of a market swirl, and there is nothing you can do about that. and 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. and i am very confident that the if we as a team execute, the market will appreciate it. david: how did you come here? you didn't take an uber, did you? dara: unfortunately, when i come
here i need professional security. david: do you take uber from time to time? dara: this weekend, the family is taking 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: and the ones that don't know you, do you give them comments on how good they are? dara: i make sure i am very polite. i make sure i don't slam the door. ask them how they are doing. if i get on a phone call, i ask them, is it ok to make a phone call? i try to be as nice as i can because i'm trying to improve my uber rating. [laughter] dara: 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 drivers
and careers -- and couriers 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: no, it is increasing in every single market. the growth rates, we as a company in the last quarter, we announced as a newly public company, we announced that on a n 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 very big scale, impressive rates. david: last quarter when you had your earnings announcement, you did lose $1 billion during the previous quarter. dara: yes. david: i'm sure you know this. dara: those are details that are important. [laughter] david: how much longer can you lose $1 billion a quarter and keep going? dara: we have a very significant
amount of cash in the bank. david: you've got $8 billion in the ipo and already have some money. dara: yeah, we already had some money. the company at this point is incredibly well-capitalized to keep investing. and the markets we are going after, the transportation of people, food, freight -- they se markets represent $16 trillion markets we are going after. if you look at even uber, the right chair business itself, when you look at the audience in countries in which we operate, typically we are addressing no more than 2% of the population of these countries. so, week think it is time to -- so, we think it is time to lean forward. the business itself can be quite profitable, we are confident of that. but the next two, three, four years are going to be about growth, and then we will flip it over as the market demands. david: if i wanted to have a right chair right after this interview, why should i pick uber versus your competitors? lyft or via? dara: we have lots of
competitors who are very good at what they do. i think we typically, in most markets, pretty much every market we operate, we have the greatest number of drivers on the market. we have the best liquidity. so you are probably going to get the best e.t.a. you will get the quickest driver to pick you up. the choices but we have are pretty impressive. for example, in d.c. now, we have transit schedules right on the app. we really want to move from a ride-hailing app to essentially your transportation partner. if you are trying to get from a to b, we will give you all the information we have, which many of our competitors do not do, to be able to get from a to b with a trade-off of time, convenience, and price. david: right now, you have many different businesses. ridesharing is the one you are most famous for. but actually, it is -- but actually, 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. the uber eats business is 20%. it is growing over 100% on a year on year basis. the run rate is now enormous. 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 now in over 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. [laughter] david: 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: it is. i would never claim that i am
and expanding mostly in the u.s., but we are expanding into europe pretty quickly as well. david: you have one that is manufactured for you? is it different from scooters that other companies use? dara: we are building a scooter that is manufactured for us. the bike is manufactured by sn us and designed by us. totally proprietary. david: some people say scooters are dangerous. what do you say about that? dara: it is something we are watching pretty 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 say, how fast do you think is a responsible speed? we encourage our riders to wear helmets. david: you have a new product which is teleconference. dara: yes. david: you have launched that in
a couple cities so far. dara: new york city, we have. it is 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 in new york city is a mess. and really what we are trying to -- david: what does that cost to do if you want to go from downtown manhattan to jfk? what does that cost? dara: in an uber copter? about $200. if you are going from downtown new york to jfk with an uber black, it is going to cost close to $200 anyway. the magic of being able to do it in a helicopter is that we are bringing in demand from are goingof users who to jfk, and matching three or four users and putting them in the same vehicle. one of the keys in terms of traffic is most people drive alone, and that is a huge waste of our roads. it is a huge waste of gas, etc.
and we have a product called pool where we match two or three or four riders into one car. and essentially, our uber copter is pool for the air. and what you will see is the se helicopters will be replaced by a generation of electrically powered, vertical takeoff and landing. david: will they ever be driverless? dara: they will eventually be driverless. but we are absolutely going to start with pilots. i think it is not safer way to go. you can expect that in the aviation industry in general, they are absolutely 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. dara: yes, we did. david: their robotics department. 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, or your driver program, is one where there is no drivers? dara: no drivers, i think it will be 15-plus years. i think it will take a long time. there is this drama around robots replacing humans. and i think the reality of life is that the better thing than n humans alone and robots alone are humans and robots working together. robots are very well designed for replacing repetitive, predictable behaviors. most of driving is not either repetitive or predictable, but there is a subset of routes that are. what you see with our driverless program is, one, we will be incredibly careful and we will make sure safety absolutely comes first. but we are building our driverless program -- by the way, we are working with third parties as well -- within 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. avoid an unprotected left turn. stay away from airports. stay on areas that are well mapped. there are a set of routes that are incredibly easy to drive. with us as faree as our driverless 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 10, 15 years, a long period of time, versus the drama of the press report. david: your 15-year answer was intended to mean no drivers at all. but you expect to have some driverless or autonomous vehicles within the next year or two, or three or four? 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 or driverless part of your company to a separate
company. why did you do that? dara: we created a company where we were able to bring in some investors. and some partners. know hugeo is, as you , a 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. toyota wasbring in about building these autonomous vehicles at scale. then we also brought in mazda and softbank as a financial partner as well. david: softbank is your biggest single investor. dara: yes. david: they went in at a valuation that is above or right where you currently are? dara: below. softbank got a decent deal. i think it will get more decent with time. david: when was the company actually first started? and who actually started the company? dara: the company was started years ago, and it was
started by garrett camp, who is an entrepreneur and still on the board. he is an unbelievably smart guy. so he brought on travis. -- travis kalanick, who 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. in fact, 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. as you know, 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. and i could not bear the possibility of him hearing about this from some news report. so, 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: ok. and why did you leave iran? dara: i left iran in 1978. i was nine years old. and this was when the iranian revolution happened. my family was an industrial family, well off. and when the shah was overthrown, folks like my family were no longer welcome in iran. so, we left iran and we went to france actually to wait until things calmed down and things
never calmed down. and then we went from france to irvington, new york. where we stayed at my uncle's house because we had no other place to stay. david: we went to high school in -- dara: in tarrytown, new york. david: and then you went to brown. dara: yes, i studied bioelectrical engineering at brown, and then threw it all away to become an investment banker in new york city. so, go figure. david: you didn't want to go into private equity. the higher calling of investment banking was good enough? dara: you know, it was a question of how evil i wanted to be. [laughter] dara: 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 all of a sudden you go to work for barry diller. how did he know of you? dara: i was a grunt analyst on a deal for him. barry diller, he was bidding
against a big battle on 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. and i got to know barry over that period of time. i thought to myself, if i ever have the chance to work for that person, i want to work for that person. and i got the chance eventually. david: you went to work for him. then ultimately, one of the companies he owned was expedia. dara: yes. david: did he own it before you joined? dara: i went to work for him as the deal person. and so, we did a bunch of deals and brought in companies in the travel space. we bought both hotels.com and expedia. and they were part of the family to some extent because the deals i did when i came in. david: you became the ceo of expedia. dara: i did, yes. david: 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 expedia at the time decided -- this stuff happens very 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. barry, can you find a replacement? david: you were not the first choice? dara: i have no idea, i never asked him. but i raised my hand and he said yes. david: at one point, the expedia 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, and maybe going to get $180 million in theoretical value at some point, 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: yeah. at first when i got called, i
said, no way. but then 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. and i decided in this case, this is a once-in-a-lifetime opportunity. david: did you tell barry diller you were interviewing for this? dara: i did. i did very early. as you know, the press was all over the place. david: you don't think you could have kept 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. so, he was the first person that i called. he was pretty unhappy at the beginning. but then, he called me back. we had a series of conversations. he called me back and he said, i understand why you are doing this. let me know how i can be helpful.
and he was genuinely helpful as we went along this journey, and we are where we are now. david: he did not remind you of the $180 million in stock options? [laughter] david: he didn't remind you of that? dara: he understood the reason was not necessarily monetary. david: when you came in, you were replacing travis kalanick. he was one of the founders and one of the biggest shareholders, but he was still on your board. dara: yes. david: was it awkward to be the ceo replacing somebody on the board? was that easy to do? dara: listen, i feel the same way. i am on the board of expedia. rand i am the former ceo. -- and i am the former ceo. there is a new ceo who i picked who is the board ceo. and i will tell you, being a former ceo, it is little weird sitting there and having someone else do something differently with your baby. because i think uber feels like travis' baby. and expedia felt like mine. and it is a little weird. but 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. for me. is it weird? yes. but are we in a situation where we are respectful and comfortable and is he there for me when i need his advice? yes. david: what is the biggest challenge you see the company facing? dara: the biggest challenge we have is a common challenge with some of the large technology companies out there. there is an increasing regulatory burden that is coming on some of the tech companies. some of it deserved. david: let's suppose i have some extra money and wanted to buy into a company like yours. why should i buy your -- dara: i think you have some extra money, don't you? [laughter] david: never have enough, but why should i buy your stock? is it likely to go up from where it is? and 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 at 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. and i will 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. david: to summarize, 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 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 are coming back for more, we want to be there. we want to be there to feed you. and we want to be your everyday utility in your use. and we will do so in a
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