Uber CEO on AI, Autonomous Vehicles, and the Future of Transportation

Every single year that I've been at Uber has been a challenge, and obviously the challenge and the opportunity now is the rise of AI. You don't just exist in the digital sphere, right? Our experiences are digital-first in terms of your interaction with our platform, but then they're delivered or fulfilled in the real world.

The rise of physical AI—autonomous vehicles, drones, and so on—is going to change how we interact with consumers in the real world. We think it's another trillion-dollar marketplace. It will change how society operates.

I think I have to begin with the story you were just telling me about how you took the job here, how you heard about it. The reason I start there is because I want to know what it was like—what the company felt like to you when you showed up and how that's evolved.

I'll ask all sorts of questions around this, and then, very importantly, what the current moment feels like, which I think is the most interesting question possible for the business. But I love the origins, so I would love to hear: How did you hear about this job in the first place? What was the backstory?

I've been at Expedia for 13 years. I was CEO, working with Barry Diller, and I loved the experience. I loved where I was. At the time, Uber was in the news all the time, right? It was in the news if you were interested in business, so obviously I was reading about the situation at Uber. It seemed pretty chaotic and pretty difficult.

Then a headhunter called me out of the blue and said, “Are you interested in the Uber CEO job?” At the time, I said, “No effing way. Who would even think about it?” I had a considerably lower profile, as you can imagine, so I kind of blew it off.

I was at the Sun Valley conference, the Allen & Company conference, having a drink with Daniel Ek and my wife, Sid. Daniel said, “Hey, Dara, did a headhunter call you? I recommended you for the job. I thought you'd be great for the job.” I was like, “Oh, that's why it happened. What? Are you crazy?”

He said, “Why? I think you'd be great for the job.” I said, “Listen, I've been at Expedia for 13 years. I'm so happy with what I'm doing.” I remember Daniel looking at me and saying, “Dara, since when is life about happiness?” Interesting comment. He said, “It's about impact. Uber is a company that has an impact on the world. It's important. It's in trouble. Why wouldn't you take a shot at this? I think you'd be great.”

I think a lot of people come to Uber because of the impact that the company has in the world. We are shaping how the world moves. We're a huge part of people's lives. We've got over 10 million couriers and drivers on the platform. I wanted to go to a place where I could make a difference, and I wanted to go to a place that was making a difference.

When I started investment banking at Allen & Company, it was amazing. It was the best company in the world. But I thought, “Is investment banking really changing the world?” For me, it was about having an impact at a company that was having a fundamental impact on how people live.

We'd had a couple of beers, and my wife was there, Sid, and she'd had a couple of beers as well. We talked about it. The next morning, actually in the parking lot, I remember calling the headhunter and saying, “Tell me more.” That's how it all started.

1. Bringing Order to Uber’s Chaos

Wow. Okay. You show up—there's a process, you take the job, and you show up. What was the impression on day 1 through day 10, or something like that? What did it feel like?

Complete chaos. Travis had not been the lead of the company for some period of time, and there was a group of executives—a committee, if you want to call it that—who had been running the company for a few months. Obviously, the company was in the public sphere in many bad ways. There were lots of things going on, both internally and externally, and the business itself was very dynamic and hugely competitive.

It would have been difficult enough if there hadn't been any of the external distractions going on. The business itself was fundamentally strong but was going through a lot of change and a lot of chaos, both in terms of the board and what the board wanted, the stability of the management team, and getting structure around the business as well.

With time, a lot of work, and working with my team, we were able to bring some order to the chaos, both externally and internally. It's turned out to be a great ride for me.

How did you do that? If you were teaching a college seminar or an HBS seminar on a leader bringing and establishing some order and structure in a chaotic situation, what is the how?

I think the most important how—because every situation is different—is simplifying the situation and breaking down what seems like an insurmountable problem into its component parts. It's vector mathematics, right? If you have a three-dimensional, complex interaction, you can just break it down to each dimension. If you solve each dimension and bring it all together, you can actually solve pretty complex issues and equations by breaking them into their component parts.

The same is true in business. When I got into Uber, there were very distinct areas that I had to take care of. At the board level, the board was fighting for control. You had a board that was focused on who was going to control the future of the company versus what the future of the company was going to be.

For example, we brought in a new chairman, Ron Sugar, who has become my partner through all of the years and really brought the board together. This isn't about who controls it. This is about the fate of the company.

I think the company lost trust with stakeholders, with regulators, and with the public. We first went on a listening tour to understand what the issues were, and then started listening and acting based on that input. We started communicating both internally and externally. The concerns of external stakeholders were just as important as our own concerns.

Then, with employees, it was about putting together the team. There was a lot of talent inside Uber, but there were some folks who were stuck in the old world who had to get off. There was an incredible talent base. Andrew McDonald, who is our president and COO, predated me and has come through many years. Many others have been with me since before day 1. Then we brought in new management team members like Tony West, who has been with me ever since.

2. Managing Stress, Immigrant Drive, and Going All In

If you focus on each distinct problem, what seems like chaos can become small, surmountable problems that you take on. You set initiatives against each of them, and over a period of time, things get better. You can't control what gets solved when, but over a period of time, things get better. I think things got better.

In situations like that—and I'm sure there have been many others at Expedia and since—what have you learned about managing your own stress so that you don't get personally overwhelmed by chaos?

I think I'm lucky. Sid, my wife, calls me a robot. I don't get stressed out by situations. We lost everything when we came here from Iran. We absolutely lost everything, and I saw it destroy my father.

How old were you?

I was 9 years old. We came to the States and got to stay with my uncle Nasi. The adjustment for us was not very difficult, but as I grew up, I observed my father. When I was a kid, he was kind of a giant of a man, but he became less giant because I was getting bigger as well.

He just lost that spark. He wasn't able to begin again here in the United States. He did his very best. He was an entrepreneur. He tried his hand at a lot of things, and I think that drove me, my brothers, and my family to rebuild.

Many immigrants have a chip on their shoulder, and I had a particularly big one. At the same time, I didn't want to be in the same situation, which is for work or fortune to break me as a person.

I was able to separate the two. Do I want to do well? Absolutely. Am I going to give it every inch that I've got? Absolutely. But in the end, I know who I am, and I'm always going to be that same person. I'm not going to let the chaos of the world affect me mentally.

What have been the chapters of the chip? How has the chip on your shoulder evolved? What satisfied it early on, and how has what satisfied it changed? Or is the chip still there?

It's never satisfied. I don't know what it is. I always wanted to do well in school and sports. For me, I just believe in being all in on anything that you do. When I'm with my kids, I'm with my family. I don't have this thing around.

I'm not checking messages. I'm not getting distracted. I believe that if you're going to do something, whether that's work, sports, or your personal life, you should just go all in, get rid of the distractions, and I think you'll lead a happier, more effective life.

Do you think that chip is roughly the same today as it was when you were younger?

Yeah, it's core. I don't know whether I would have been the same person—the counterfactual—if I were in Iran, but I know my family is awfully competitive. A lot of Iranian immigrants have come here to the US and to many parts of the world and have been extraordinarily successful.

And yes, of course, starting from behind, knowing that you're starting from behind, and having the desire to get ahead again absolutely plays a part in your life. How do you think about this? Again, the selfish question, because I have kids who are growing up fast. My guess is you wouldn't press the red button to undo the experience you had because it made you who you are.

Totally.

And so I think about this a lot as it relates to kids who maybe aren't going to have an experience like that that might shape them in a similar way. How do you think about that as a dad?

God, I'm figuring it out as we go. I think being a parent is so humbling, but I think we're doing our kids a disservice by giving them too much and being around too much. I don't know about you as a kid, but on the weekends, my mom would be like, “Get out of here and come back for dinner. Figure it out.”

I think this kind of helicopter parenting, being around your kids all the time—it's understandable. You want to love your kids. You want to know that they're absolutely loved and appreciated. But it's the challenges in life that form you, and it's overcoming these challenges that gives humans a profound satisfaction.

If you as a parent are overcoming these challenges for your kids, you're actually doing them a disservice long term, whereas short term you think that you're doing them a favor. You're giving them an easier life. A happy life is not necessarily an easy life.

For me, it is a challenge because I love my kids, but Sid and I co-parent in a way in which we're not going to do everything for the kids. They come home, they're responsible for their homework. They've got to learn how to make it in this world themselves, within the scope of the family, which will prepare them for the outside world, which, as you know, can throw you a lot of curveballs.

Yeah.

Speaking of curveballs and challenges, if we zoom all the way to today, it seems to me from the outside like this is the most interesting time to be running this business because the opportunity is so massive. The threats are real. The new entrants are fascinating. AVs—we'll talk a lot about those, I'm sure. What does it feel like running this business today? What feels like the central question to answer as the leader of the business?

Every single year that I've been at Uber has been a challenge, and there have been so many answers to questions. We interact with the world in so many ways. Obviously, the challenge and the opportunity now is the rise of AI, both as an internal tool and in how we build.

What's different about Uber from many other companies is that we don't just exist in the digital sphere. Our experiences encompass digital-first interaction with our platform, but then they're delivered or fulfilled in the real world, where all kinds of things happen.

You've got a deterministic structure in terms of the interaction with the app, but then probabilistic outcomes, and we always have to deal with those outcomes and the things that go wrong in the real world: traffic, a driver canceling, or your food being late. We've always used AI tools in that probabilistic world to build out our system, for much longer than most companies out there.

But now, with the onset of AI in the digital world, there's the ability to build much larger models that know much more about you, can anticipate what you want more accurately, can really drive utilization, and can drive how people work and make an engineer into a super engineer. Then there's the rise of physical AI—autonomous vehicles, drones, and so forth—and how they are going to change how we interact with consumers in the real world.

I've never, ever seen a pace of change so fast, and it's incredibly exciting.

What's your mandate to your team, given how fast things are changing and how much more each person can now do?

I'm not a top-down driver, so to speak. We have a bottom-up culture. I want people inventing all over the company. I don't want to be that single point of failure. Obviously, the CEO is important for the company, so I hesitate to drive mandates.

AI adoption at the company, just because we are kind of an AI-native company, or ML-native company, in terms of where the technology has come from, has been occurring in all parts of the business. Whether it's engineers and how they scope projects, how they build, debugging, on-call, or platform migrations, all of that now has enormous AI adoption—from our legal team to our marketing team. It's happening everywhere.

Where I come in is that I'm pushing the teams to fundamentally use the power of AI to rebuild systems and processes from the bottom up. It could be a decent first step to take a process and have AI optimize 20% or 30% of it in terms of speed, effectiveness, or cost. But to rebuild it from the ground up, that's much harder, and that's where I'm coming in and really pushing the teams to think about processes from a first-principles standpoint and the impact of AI on those.

What's the most amazing thing you've seen someone do with the technology at Uber?

The most amazing thing that I've seen is the impact showing up in all kinds of random corners of the company. What we're seeing now is that we've got developers in India who all of a sudden are driving 10 times the code commits that they used to. They're using autonomous agents all over the place.

The uptake of the tools that we're seeing is not at all predictable in terms of who is racing ahead with this new technology versus what we typically saw. I think you're going to have very, very unpredictable patterns within the company. It's up to us to find it, and it's up to us to promote those individuals who are the rebels inside the company. We want the rebels to win here.

One of the interesting questions today is: What is the actual latent demand for intelligence? It's still a weird question.

Yeah. I'm curious if you've had an experience like me where, at first, you're telling your team, “Burn tokens. Let's use as much intelligence as possible,” and then there's a moment where you're like, “Wow, this is expensive.” Intelligence is expensive. How do you think about the trade-off? It seems like an unbridled good to have more intelligence, but right now it's quite costly.

We're dealing with it now, actually. We blew through our AI budget in a quarter for the whole year, essentially, and it is forcing us to adjust. We're going to meter headcount increases because, to the extent that my engineers are getting much more efficient, their throughput is increasing. They're becoming superhuman in terms of their output.

There's a cost to that, and it's a significant cost. At the same time, we're kind of metering the increase in headcount.

So my view right now is: drive adoption and encourage usage across the company. We do believe in efficiency here. We've got over $10 billion in free cash flow, which is great, but it's on well over 10 billion trips a year.

We're not a high-margin business. We want to really drive efficiency in order to lower prices for riders, give more earnings to our earners, et cetera. So I do think it's a combination for us right now of encouraging adoption, but then driving efficiency.

The way that I put it is, we're using the more expensive models to explore. Let's try a new interaction here. Obviously, these frontier models, whether it's an OpenAI model or a cloud model, are terrific, and they're great to experiment against. Once we scale some of these experiences and interactions, we'll look to bring in more efficient models that are more efficient on a token basis or open source, and again lower cost. So exploration is go, go, go, but efficiency and scaling is something that we're also talking about.

You're one of the few companies, among many amazing companies with amazing leaders, that are in this sort of AI-meets-the-physical-world zone. You've got a scaled brand and distribution. You're an aggregator of demand in many ways, and I have so many questions about this.

I guess the first one is just what that is like. How do you think about that challenge, that problem, that opportunity, as one of the small handful of companies that sort of has the right to win in how that new technology links up to the physical world?

Totally. I think the first is that there's an enormous opportunity in—it's boring, but it's wonderfully boring—which is just building larger models. Our feed models and our search models are probably 10,000 times bigger than our older models, and they're just able to take much more data about you and make predictions about what you're going to search for. Now we have universal search. For example, if you search for something, it's not just classified as rides, Eats, or grocery; we can show you everything that we have available across our services.

So, first, the tooling has gotten better, the capabilities have gotten better, and today, when you take an Uber ride, we can guess where you're going 3/4 of the time. It's just a one-tap interaction that can only improve based on these larger models.

As it relates to the real world, we can anticipate what's happening in the real world much more effectively now. Then the form factor with which you operate is going to change as well, and more and more—it's going to take a while—you'll have drones getting your food to your home or you'll have AVs delivering you from point A to point B. So everything is changing about it. Some of it is an immediate opportunity now, but we think there's a ton of opportunity going forward.

What do you think has to be true for Uber to win the demand-aggregator top slot in AVs specifically?

Supply.

We are a supply company. The more drivers we have in the marketplace, the more restaurants that we're wiring up for you, the more latent demand that we have. And it's one of the lessons that I learned when I came from Expedia to Uber.

At Expedia, we were really focused on demand: How many consumers can we get to the website, et cetera? We were a demand-first company, and then we would build out hotel inventory and flight inventory in response to demand. At Uber, everything is upside down.

One of our very significant growth opportunities right now is building out our service not just in the big cities but in the sparse markets, in all of the suburbs of the world and smaller cities of the world—not the top 10 cities in a country, but the next 50 cities, the next 200 cities in the country. The first thing we do is actually go out and recruit drivers, merchants, restaurants, grocers, and couriers, and then the demand just shows up.

I don't mean it's that easy, but the biggest opportunity and challenge we have is making sure that we secure every single supply, every single car out there that's going to take you from point A to B, every single restaurant, every single retailer, every single grocer. If we do that, the demand will take care of itself.

3. How Uber Plans to Win in Autonomous Vehicles

In AV specifically, what does that feel like? We're obviously just at the very early, early part of the S-curve. I'm sure that if the answer is supply, you want to just be the demand aggregator with the most supply. What does that feel like? What does the state of AVs feel like to you?

It's very early, but it's moving very fast. We've got over 30 partnerships now with incredible partners like likely Waymo, likely Nuro, Lucid, and NVIDIA, which is building not just compute and sensors but also a software driver, as well as companies like likely Waabi, likely WeRide, and likely Pony.ai.

Just like you're seeing in the foundation-model space, there isn't going to be a single winner. There are going to be many players in foundation models, and there'll be smaller open-source models as well. We're seeing the same kind of acceleration in the development of AVs.

As a result, we want to be your go-to-market solution for companies that are building out these digital drivers. We're allowing these companies to really focus on building the driver, while we build services around them. We're going out and securing depots and charging infrastructure in cities in which we see the regulatory landscape moving in the right way. We're working with fleet partners and securing financing. We just announced a $1 billion financing line with likely Santander for EV fleets and AV fleets.

We're working on autonomous insurance as well. So we're building the entire ecosystem so someone who builds a driver can get those cars on the road, and then we have all the supporting infrastructure. We're collecting data as we speak in the streets that we can feed to the model, and then when they hit the market, we've got instant demand for them.

What we're seeing is consumers love the product, and AVs that are on our network are 30% or more busy than, let's say, AVs that aren't using our network. That 30%, in terms of trips per vehicle per day and revenue per vehicle per day, can make a huge difference in terms of your ROI of investing in these expensive cars.

What has surprised you most so far about the product of AVs? The 30% thing makes me wonder about this question. What is interesting to you about the nature of the product and the physical cars themselves and the consumer experience versus the more traditional experience?

The one thing that is surprising, in a different way, is how quickly magic turns to normal, right? When I first experienced Uber, it was in New York City. I was at Expedia, and I was like, “Oh my God, this thing is absolutely magical.” You push a button and a car shows up in 5 minutes. The next day, you're like, “Where's my damn car?”

Yeah, exactly. You're like, “It was 6 1/2 minutes. I can't believe that. How dare they?”

And with AVs, you get in them and it's magical. The cars are nice. There's a sense of privacy and peace. You play your own music. For the first 2 minutes, you're like, “Oh my God, this is amazing. Look at what's happening.” And then, minute 3, here you are, doing the same thing.

I think what's incredible is that what's magical now is going to seem normal to all of us 10 years from now. In the end, it's about getting you from point A to point B safely, efficiently, affordably. We want to make sure that these AVs aren't just available for rich people in the big cities. We want to make sure that they're available everywhere. But I think this technology, the speed to market, is going to be fast, and the interactions are going to normalize faster than you think.

I'm so interested in the whole build-partner-buy decision. I'm sure you're making it in a million ways every day. You've got these advantages: all this capital, all this free cash that you can allocate, all this infrastructure, and, of course, the demand aggregation that you've already built. Those are huge advantages for creating liquidity, et cetera.

How do you think about partnering with a company like Waymo, which you could certainly see being a competitor in part of what you do if it gets a big enough network and the service is good enough? People are always going to buy for huge markets. What is that like—navigating either that specific example or, in general, AV partnerships versus having your own fleet?

It's a coexistence that, frankly, I'm quite used to, coming from the travel business. If you think about OTAs, these online travel agents, they compete with Marriott, they compete with Delta for the consumer, and they compete with an independent hotel as well—all of whom are building a direct channel for the consumer, many of whom have loyalty programs, et cetera.

But at the same time, they want incremental consumers coming from the platforms because they have a big box to fill, and they want to drive as much utilization of that box as possible. The returns for a hotel that has 70% of its rooms filled versus 90%—it's night and day, right? You will take 90% every single day.

The same is true, for example, in Uber Eats. We work with McDonald's, Starbucks, and Chipotle. All of these companies, to some extent, also compete with Uber Eats. The same will be true of a subset of AVs, such as likely Waymo.

Of course they want to build their own brand and their own channel, but at the same time, we're able to drive more utilization for them when their cars are on our network. The same will be true of likely Zoox; the same will be true of likely Nuro, et cetera. So we're going to have some players—for example, likely Wayve is focused on building one end-to-end model that they license to OEMs—and we will be responsible, essentially, for all the demand.

There are going to be lots of models, but I don't think it's going to be black or white: Do we only compete, or do we only work together? We think there's going to be an amalgamation of business models. There already is in travel; there already is in food. The same thing will happen in transportation.

What's your premortem for this going wrong? If it's 5 years from now and Uber has screwed up this opportunity, what do you think the most likely reason for it is?

I don't think it's necessarily an Uber thing. I think it's a big question for the industry. You've seen how powerful AI is, but at the same time, how unpopular it is with the general public. Folks like you and me in the corporate world, we're just amazed, and we're driving utilization.

The way these AI models interact with the average person is: Search got a little bit better. But if it's driving up—or I think it's going to drive up—my electricity cost, or if it's going to cost my cousin's job, that doesn't feel that good. And I think the same will be true of AVs. It's terrific technology. It is going to be safer than human beings, but how does it interact with emergency service providers?

How do we make sure that the technology is available to everybody, not just the wealthy? We've got to have these dialogues with regulators, with real people living in cities, and with our drivers whose earnings may get affected. Now, drivers in Austin and Atlanta, where we have 2 big partnerships with Waymo—drivers on the Uber platform—they're making more money. The number of drivers joining the platform is increasing because it looks like AVs are actually adding incremental demand to the platform.

So we have good news early, but we've got to communicate, and we've got to go at the pace that society is prepared for us to move. Otherwise, there will be a backlash, and you're kind of seeing it in some of the public perception out there.

I'm sure your answer is something like, “Not on my watch.” But if I were to assume that the public—the out-of-your-control thing—is solved, can you imagine what the same premortem answer would be through something that you do control?

Access to supply. That's why we have a partnership with basically every AV provider, whether it's in mobility or delivery or even freight. We need access to supply, and we're investing time; we're investing capital. I think we're in a great position to make sure that we are the largest aggregator of AV supply, just like we are the largest aggregator of transportation services around the world.

4. The Trillion-Dollar AV Opportunity

If we now assume the success scenario, where Uber is the clear demand-aggregator winner of AVs, what does that unlock, do you think, on the other side of that—whether that's consumer experiences or other things that aren't currently possible?

We think it's another trillion-dollar marketplace. We think that, over a long period of time, as we see the cost of AV software come down—and usually we see the cost of hardware come down; I mean, this is universal, but usually 30% to 40% per generation—we think the Lucid midsize that they are building for us and likely Nuro together would be a $60,000–$70,000 car.

At those kinds of prices, you can actually bring the cost of transportation down for the population.

What we see is, as we bring the cost of our services down, demand goes up. When Uber was introduced early on, people were sizing the market based on the taxi market. We're multiple times bigger than the taxi market. I see the same potential with AVs, both in terms of the cost of transportation, reliability, and safety, all of which are going to improve.

And then think about delivery. If delivery is done with a drone, and instead of a 25- to 30-minute delivery you get habituated to a 10- to 15-minute delivery—cheaper, faster, better—it will change how society operates.

Do you think there should be some sort of Foxcon-like business for AVs? One of the interesting things—the stat I heard in San Francisco—someone asked me the quiz question of how many Waymos I thought were driving around, and I overestimated it by some crazy percentage. I was really surprised by that, and so it seems like you can be hyper-efficient with these things, which is cool, but the downside of that is maybe you can't hit the amount of production to get this cost down and all this sort of thing. Should there be a Foxconn contract-manufacturer type thing for it?

It's happening as we speak. Many of the OEMs, the traditional OEMs that we're talking to, are now seeing that L4 driving is absolutely a reality that's much closer than they think and seeing the services and how popular they are with consumers. They are investing in L4-ready systems.

I think you'll see the traditional players get there over the next 2 to 4 years. Right now, the cars are being manufactured in the hundreds and the thousands. It'll get to the tens of thousands. It'll get to the hundreds of thousands. Each of these vehicles probably drives 3 to 4 times what a human does.

So the efficiency and efficacy of 1 AV vehicle is substantially higher than a human, based on how much humans drive as well.

And then we're seeing newer-generation companies coming in called the Foxcons. The Foxcons exist in China. The Chinese players, in terms of their capabilities and bill of materials, are incredibly impressive, and we need that kind of low-cost player in the Western Hemisphere. That is being worked on, but we're not there yet. The Chinese capabilities in terms of manufacturing, both in terms of quality and cost, at this point are unrivaled.

Can you teach me about drones? I'll never forget that Amazon video from 10 years ago where it feels like, oh my God, the future's happening. It's coming. My drone's going to bring me my sandwich in 5 minutes or whatever, and no drone has yet to show up at my house. What's the story with the technology? I've watched Zipline very closely. I think that's a really interesting company. It seems obvious, and yet it hasn't happened, and I'm curious if you could teach us why that is.

The biggest issue is just battery density and the ability of essentially a battery to lift itself and then lift the payload, what that payload looks like, and then the requisite range and recharging needs of those drones as well. Joby is building drones for people; that's happening. I think drones for food and other groceries are going to start hitting real scale over the next 2 to 5 years.

It is going to cost more than a human delivery to start with. But the ramp of the technology—in terms of payloads being larger, in terms of being able to operate in whatever weather there is, and then being able to very accurately get you a payload right in front of your house—all of it is moving in the right direction. So, is it going to be a big part of our lives 2 years from now? No.

5. Drones, Robotaxis, and Global Adoption

But 5 to 10 years from now, it's going to become more and more normal. I'm always really interested in the regional differences as well. I'm curious what you've learned watching AVs start to happen in the US versus Europe versus the Middle East, and anywhere else that you've had the experience. What are regional differences teaching you? The Middle East is going fast. Yeah.

So, the Middle East, especially if you look at Abu Dhabi, Dubai, and Saudi Arabia, they're on it. The regulators are very entrepreneurial. They want to lean into new technology. So you're going to see those services; they're happening today.

AV operations in Abu Dhabi, Dubai, Europe, and the US are certainly happening—the Californias of the world, the Texases of the world—but we want to make sure the right discussions are happening at a regulatory level. It's going to take longer in a New York; it's going to take longer in a Boston, for example. Europe is starting to happen, so we are starting commercial robo-taxi operations in Europe, and I think we will have pilots, for example, in London before the end of the year.

6. Uber Eats, Uber One, and Aggregating Supply

Europe is starting to recognize that it can't be left behind. The European OEMs certainly are a huge player in terms of manufacturing capability and employment in Europe as well. So Europe is catching up.

Another interesting US-versus-international story with Uber has been, as you've gone international with Uber Eats specifically, you've actually won or gotten to the number-one position more often. I'm curious what the US experience in that category has taught you that's impacted how you approach strategy when going to an international market.

The basics are the same, right? You've got to get selection right. You've got to sign up your merchants, and when I look at the serviceable addressable market in the cities in which we operate, we've probably signed up around 40% to 50% of the restaurants and/or merchants that can be on our platform.

So it's about getting selection and then making sure that you've got the right reliability: Every time you order something, we get it right. We don't make mistakes. We deliver it to you within 30 minutes.

For us, our magic sauce is cross-platform, right? We started with mobility, and we are now able to increasingly upsell the mobility customer the delivery product, whether or not they want to use it on Uber Eats. When you open your mobility app now on Uber, you're going to see Eats right there.

About 13% of Eats bookings are actually coming from the mobility business. In larger international markets and the US, you've got to get the basics right, but the platform is a structural advantage we have versus other monoline players. We get a bunch of free customers from our mobility business.

Then we have an Uber One membership program: 50 million members now, growing 50% year over year. Every company has a membership program, but the way I look at it is we're kind of like Netflix. For the same price, you get more content than anyone else. You get discounts on mobility, surge protection, free delivery, no fees on groceries of $60 or more, and now you're getting 10% back on your hotel.

So, if we can build this loyalty program that's just bigger than anyone else's, and we have this cross-platform magic, we think we can get to the number-one position and, at the same time, have higher margins than our competitors. We're proving it out in market after market after market.

So much of the story is being good at getting the supply. What does excellence look like there? What makes the best parts of Uber that do this the best stand out? What is the key to being great at aggregating supply?

I think, honestly, we're okay at it. I think we can get a lot better at it. One thing is that I want to get more of our team members to put themselves in the shoes of our suppliers—to drive more, to stand behind the counter of a restaurant. All of our employees are crazy users of Uber Eats and Uber rides, but we don't necessarily put ourselves in the shoes of our merchants.

I bought an e-bike and started delivering food in San Francisco after COVID, partially because I was going freaking crazy at home, but partially because I wanted to understand: What does a driver or courier experience feel like? Our drivers, couriers, and merchants are on our platform much longer than the typical consumer. The typical consumer—you’re in, you’re out. Maybe you use us once a day, twice a day, hopefully 3 times a day, but the interaction is like a 30-second interaction.

A driver will have her app open 6 hours, 8 hours, 10 hours a day. As a result, we have to put a premium on quality and make sure everything goes right. A P95 bug happens to consumers once a month, maybe, for a loyal consumer. A P95 bug is happening every single week for a driver who's on the app 6 hours a day.

We are getting much better. We've got to put ourselves in the shoes of our merchant partners and our delivery partners. I learned so much delivering food, as well as during those couple of years driving people in my Tesla in San Francisco. I think that's what it takes to be a better builder and to be better at aggregating supply, so to speak.

We have a value at our company, which is “building with heart.” I'm an engineer at heart. I'm very numerical in how I look at things, but there's a craft to building. There's a humanity in our service, and we have to make sure that we keep building with heart. I think we can get better.

What surprised you most when you were doing the deliveries, with all that experience?

How hard it was. It was just going into the restaurant, figuring out where to pick up, and making sure that you got your orders right. About 50% of orders are batched, so sometimes you pick up 2 deliveries at the same restaurant or another restaurant, and you have to make sure that you get everything right.

There's a reason why things go wrong in the real world. There's a lot to process for couriers and drivers, and then you have to deal with real-world traffic as well. For a consumer, you push a button and a car shows up. You push a button and your food shows up. It's all easy, but for that driver and courier, there's a lot more going on, and processing everything can be a challenge.

The thing you said that's interesting is the membership concept: 50 million people. It feels like this is a feature every big business with lots of people on it would want. Some of them have been great stories in business history—Costco and Amazon. What does each side get out of a great membership program? How much do you have to tweak and design that thing versus it being straightforward, based on what people want?

We've been at it for a while. The ideal membership program is one where you essentially have a fixed cost base. Netflix is investing a certain amount in programming, and the cost of selling a membership is customer acquisition. There is no cost for the services that you render; there's no variable cost for the services you render.

The benefits of membership programs—travel membership programs, often—are upgrades to rooms that were empty anyway or upgrades to seats that were empty anyway. Those membership programs are ideal, and that's why membership started in the travel business and in entertainment as well. Cable was a membership program, if you want to call it that.

It becomes much more challenging if the cost to serve is a variable cost. I think Amazon is the first one that took that on. The cost of an Amazon Prime membership is higher the more you use that membership.

Amazon was able to work through this kind of valley of despair. Many people in the public markets didn't understand what it was doing, and the losses kept increasing, but they understood the unit economics of membership. They stuck with it, were able to brave through those early days, and I took a lot of inspiration from that example.

In the early days of Uber One, when we acquire a member, you're less profitable. We're essentially trading. We're making a prediction, which is: you're going to spend more on our platform, even though your first transaction, second transaction, and third transaction are going to be much less profitable because we're giving you back a bunch of money. Over the lifetime, you will be more profitable, and we're seeing that.

The membership program took some time to get up to speed. It is solidly profitable now, but the first year of membership is a year where we lose money on you. We're going to make money on you 2, 3, and 4 years from now.

7. Hotels, Travel, Marketing, and the Future of the Uber App

The next leg of hooking this platform up to the entire world is hotels. It's so interesting that you've gone back to your Expedia days. Full circle.

Walk us through the decision logic here. I have a question behind the question, which is how you decide to do these big things in the first place. Daniel Ek, who we started the conversation with, used to have this bets board at Spotify. There are all these different ways that capital allocators decide what to bet on. I'd like to talk about that strategy as well, but starting with hotels: Why do it in the first place? What was your thinking?

We tend to be pretty data-oriented, and what we've seen—and it's relatively obvious—is that people who travel a lot tend to use Uber a lot. We're available in over 70 countries. What's the first thing that you do when you land at an airport? Often, you open up your Uber app.

Just last year, we completed 1.5 billion trips for people outside of their home city. About 15% of our trips are to and from airports. We could identify travelers. It was a headline use case, and we started thinking to ourselves, “Hey, what more could we do for travelers?”

What differentiates Uber from some of the other places, again, is that it's not just about the booking experience; it's about delivering that experience in a reliable way in the real world. We also go much deeper into the fulfillment stack than, let's say, the typical online travel agent.

We decided, as you're able to target more, et cetera, let's look at other travel products. We started with trains. We launched it in the UK and Spain, and we saw the same thing that we've seen over and over again: The more you interact with our platform, the more services you have; the more you interact with those services, the more you come back.

More content meant more retention. So we said, “What content can we find in travel?” It was very natural for us to go into hotels. It's a high-value decision that you're making. We went out there and talked to the various travel companies to make sure that we had the best supply in the business, and we happened to make a deal with Expedia, my old company. We're essentially giving the vast majority of the economics of that deal back to Uber One members.

The design spec of hotels is, again, how can I make sure that you, as a person, have your life more deeply integrated with our services? 10% off hotels, 20% off 10,000 hotels. That's a great deal that you're not going to find elsewhere, and it's another reason for you to join Uber One.

What's the idealized end state of that part of your business like 5 years hence or 10 years hence?

For me, the idealized end state is obviously that we want to bring a lot of value to you as it relates to the booking experience, but I want the value to carry into the market. You book a hotel in San Francisco, and we offer you—we go through your email if you open it up for us—and we already collect your information on your flight. We pre-book an Uber to the airport. We pre-book an Uber from the airport to your hotel because we already know where you're staying.

Ideally, when you get to the hotel, we know you're approaching the hotel. Either we give the front desk a heads-up that you're going to be there, or perhaps AI is going to be there and know you, or we allow you to completely bypass the front desk, go to your room, and maybe use your Uber app as a key. The magic I want to bring is some in-market magic to you as part of your travel experience. We're already part of your experience in the city. The richer we can make that experience, the better.

We're starting with a booking. We've got to start someplace. But that's the Uber magic I want to bring. To the same pre-mortem question, which was: if this doesn't work, why would that be the case? We have debated in the past whether or not people's interaction models with our service can change from on-demand to planned.

People get very wed to our brand. It's always been known as on-demand: push a button, get a car; push a button, get your delivery, et cetera. There was a question mark: could we go from on-demand to planned? We started moving in that direction with Uber Reserve.

In the olden days, with Uber Reserve, we allowed you to reserve a car, but it was kind of an on-demand dispatch to try to get you that car when you expected it to be there. We have changed the back end to really drive reliability—99-plus percent—so we're pre-booking with the driver. The driver accepts, and we make sure the driver is there before the reserve. Uber Reserve is now over a $5 billion run rate. It didn't exist 5 or 6 years ago.

Clearly, we were able to move both demand and supply. Drivers will pre-commit to your trip. That gave us the opening to say, “Wow, this pre-commit thing is another angle that we can explore,” and travel became natural for us. I think the question is: is reserving your ride just fundamentally different from thinking about your vacation 2 or 3 months from now? Can we stretch that pre-commit, and can we stretch a brand in that temporal direction? I think it's an open question. I think we can. We're giving you great deals to make that plan on Uber, but it's not a slam dunk.

What have you learned about marketing excellence? There are 2 sources to the question. One is just marketing Uber in general.

Yes.

But the second is, as you do more and more stuff, making sure that even your customers know that it exists. Before preparing for this, I didn't know that this was a thing that existed. So it's an interesting question about how you do both: the brand staying top of everyone's mind, but also the very tactical, specific, “We have this cool new thing now that you should try.”

Totally. The surface that we have on this phone is very limited, and I've changed my mind on this. Originally, I had the hypothesis that the marketing team's job is to get as many people onto the apps as possible, and then it's the product team's job to surface the right product to you at the right time.

A small example of that is, with Uber Reserve, we offer the ability for you to order hot coffee, and the driver goes out and picks up the coffee wherever. It's kind of cool—you have a cup of coffee if you're on the way to the airport.

The goal isn't to get you coffee on that ride. The goal is to make you understand that you can get coffee on Uber and/or other stuff, right? It's not about the ride. It's about the lifetime value, the interaction, the introduction of a new service, not in a way that feels like an upsell to you—

—but feels delightful. This is really cool. Uber knows me. Why not do more with them? All of the different iterations that you can drive on the app.

I've always been much more product. Let's build this from a product standpoint, and the job of marketing is just to get people to the app. But my marketing team, who told me I was an idiot—and I loved it—they are building out storylines.

Uber Teens is getting your kid from their game home and the human interaction of when your kid comes home, either if they did well in that game or not well in that game. There are very human stories that are part of Uber in every way. Our marketing team is telling the stories about Uber Teens, about Uber Reserve, about grocery delivery, and the convenience there. Those stories are helping people realize that Uber isn't just about getting a ride. It's about giving you your time back across a broad array of services on a local basis.

What do you think is more likely in 7 years: that I do whatever the next great version of that coffee thing is, or that I just type into my Uber app, “I want a car at this time, and I want a coffee”?

I think you'll be talking to your apps in 7 years. I think you're going to have apps because there are certain circumstances—many circumstances—where the communication back to you is much more efficient in the written word or in pictures. It's not compelling to say, “Your Uber is 6 minutes away,” when you can see the picture and track the car.

So I think the input interaction is going to move more and more away from apps. I think people are going to use apps, but the input interaction is going to be much more unstructured, and AI makes it possible. You historically built UIs for a specific interaction based on optimizing for the overall average. Our booking experience on Uber may not be optimized to you exactly, but it's optimized to overall averages through lots of iteration and lots of testing. There's only 1 way in.

Now we're going to personalize it. When you land in a city, Uber is going to be different for you than when you're going to work. But the interaction that agents are going to make possible through AI and through words is going to be incredible.

8. Lessons from Barry Diller, Capital Allocation, and Leadership

And think about the people that have influenced you the most. What did you learn from Barry Diller?

He's incredible. He's been my business mentor and, in many ways, a personal mentor as well. I'd say that the thing that I learned from Barry is the value of getting the truth from the source material.

The way that I first met Barry, I was actually an analyst at Allen Company working on the LBO model for Paramount. There was a hostile tender offer by Viacom for Paramount. I was building out the LBO, right?

Yeah, exactly.

Barry didn't want to talk to the MD, or the VP, or the associate. He was like, “Who built the model?”

“I'm going to talk to that guy, because if I'm going to raise billions of dollars in debt, I want to know I'm good for it.”

I just remember I was sweating. I was so nervous. I was trying to print out this model, and I took him through it. He wanted to hear straight from the source.

Every time I've witnessed him—and I worked for him for 20-plus years—the filtering gets the edge out of the story or out of the situation. It's often the edge that gives you an edge. It's not the average. Everyone is going to have the same reaction to the average. It's what's that 20%? What's that P95 situation, et cetera?

Barry always insisted on going to the source and getting unfiltered data. It was sometimes unpleasant. It took more time, but getting to the ground truth would help his decision-making and would allow him to get that edge to go against the grain. I've taken that with me.

I've seen in larger companies that most people who run companies are smart, capable, and driven. The failure modes that I see with most companies are that, the higher up your organization you are, you often get a very thin layer of what's going on. Everything has been processed for you.

My schedule today is determined by a bunch of well-meaning people who want to get me the best information and have me use my time in the best way, but it's processed. It's very important for you to cut through that process sometimes and get to that ground truth. You've got to create some randomness in your interactions and your information flow.

Barry often painfully drove to that source, and it's always been, for me, a very important part of how I manage. The best way to get to the truth is, first of all, as a leader, tell the truth.

Yeah.

So I'm brutally frank with my team. What's going on? What's good? What's bad? What's okay? Where do I not know the answers? That helps me then get that truth back from them. Sometimes it requires me to dig, and that can be unpleasant both for me and the team. But getting to the ground truth, I think, is something that I learned from Barry, and it's always stuck with me.

What did you learn from the Allens, both the second and the third?

Uh-huh. So many, I’d say. Herbert Allen, very, very early on, always told me that he makes bets on people, not companies. You see that with the Allens: they’re so loyal, they build friendships, and then they stay with those friendships. Herbert always told me, “Companies can do well during periods, or companies can do poorly during periods, but great people always stay great, and I’m going to make a bet on people.” I’m 20-something, and I’m like, “Yes, sir, Mr. Allen.”

That has been a great learning that has kind of soaked into me, like 30 years later, regardless of the circumstance. I made a bet on Barry. I was going to stay at a company for all my life, but he was the one guy that I told myself, “If I have an opportunity to work with that one person…” And it was nuts. My salary was gone; it went through this completely entrepreneurial new entity that he was building. But I bet on a person, and in my life, my bets on people and those personal bets are probably the best ones I’ve made.

Daniel Ek has this thing that he’s famous for, which is that he would go shadow—I think he might still do it—CEOs of companies for long periods of time and watch how they operate and work. So, if I were to go ask the same question I’m asking you about Barry and the Allens, but ask the question about you, what do you think, if I were to shadow you for a couple of weeks, I would take away from how you prosecute your life?

What do you think the ingredients that I could take away for my own recipe are? What do you think I’d write?

I think number 1 is the transparency that I talked about. I want the truth from everybody. I tell the truth. I’m very, very open with the company, at whatever level of the company that I talk to. I have a lot of fun working with our product leads and engineers. That is the best part of my job.

The last thing I’d say is, you see a lot of random interactions. I don’t want to have too structured a day. I don’t want to meet with just my direct reports. I build out random interactions within the company so that I get that information as well. It’s like I look for the troublemakers in the company.

As companies get larger, there’s always this incentive for people to get along. You have a single culture. Everyone is true to the culture of the company. There are processes that get built. There are certain ways of interacting, and certainly the troublemakers often get chased away.

I want to find those troublemakers and I want to bring them in, because every company is like an organism, right? Organisms evolve by mutating. Companies that don’t mutate, that just sit with a single process and a single information flow, are the companies that die. So I’m looking for those mutations. I’m looking for those troublemakers constantly.

That requires random interactions. They’re less efficient than the structured processes that have been put in front of me, but it’s those random interactions that often give me the best signal. Sometimes I may not act on it, but I’ll take it in, and at some point, if the signal becomes strong enough, I’ll move.

That’s a cool idea: that the troublemakers are the mutations. Companies need to change. By the way, with AI now, the rate of change inside companies—in terms of how information flows, in terms of how we work every single day—has accelerated by 5×. It’s the companies that are comfortable with that change that are going to adapt to this new reality. The companies that are like, “Hey, we do things a certain way,” are going to have a hard time.

One of my favorite charts from this era of business has been the time series of capex of the big technology companies, where it all looks like this except for Apple, which just looks like this. They basically haven’t changed. They’ve decided not to play this specific game.

And the debate around Uber early on was like, “Will these guys ever make any money?” They were losing money on all these rides, blah, blah, blah. Now you’ve got $10 billion-plus of free cash flow. So you’re a capital allocator, and you have to make a decision about what to do with this money in this high-rate-of-change environment. How do you prosecute that decision?

You’ve done big buybacks. You’ve authorized really big buybacks before, which traditionally have done really good things for shareholder value and things like that throughout business history. But now you have all these opportunities to spend money to expand demand, to get new supply, to use these new technologies. How do you weigh the trade-off between old-school stuff like buybacks, free-cash-flow generation, and share reduction with, “Wow, this is the most interesting investing”? I guess I’m asking: are you Amazon or are you Apple?

Somewhere in between. I’d say capital allocation, I think, is more of an art versus a science. You can read papers on it, but I think you have to use your judgment in real life. My view is that my priority is first organic investment and growth. Uber Eats, when I joined, was doing under $1 billion in gross bookings. That’s over $100 billion now.

That’s crazy.

That took an enormous amount of organic investment. Now the company’s got cash flow beyond that organic investment. The math is simple: you want to make sure that your costs grow slower than your revenue, and good things happen over a long period of time. Because I came from banking, I’m very comfortable with the power of compounding. The first thing is, you just have to get your core metrics right, starting with the user metrics, then get to the financial metrics, and make sure your expenses, unless there’s a long-term benefit, are growing slower than your revenue. Duh.

When it comes to excess capital today, our priorities are going to be to keep building the services that we’re building now, invest in algorithms, and invest in more engineers. We are hiring, and then we’re really going to invest in the new realities of AV, whether it’s investments in our partners or making commitments to tens of thousands of AV vehicles. Those commitments will be financialized. We just announced the deal with likely Santander, for example, to finance both EVs and AVs. But we’ve got to be the ones developing the market, so we are going to make those capital commitments. The fortunate thing in all this is we’ve got plenty of cash left over for buybacks, but I prioritize growth. I prioritize innovation over buybacks. If you’re building the company right, you’ll do both.

You strike me as a very confident but not cocky person and leader. What, if anything, are you insecure about in the business or as a leader right now?

I’m not insecure, so to speak, because again, what good does it do? But I’m curious. I think, again, I’ll go back to Barry. I found in my life that the more successful you are, the more you tend to talk and the less you tend to listen, right?

Totally.

I see executives who don’t want to be talked back to because they think, “Don’t you know who I am? I’ve got authority,” et cetera. Authority doesn’t mean that you’re right. But so many people do, and Barry’s the opposite. If you get into an argument with him, oh my God, it’s going to be unpleasant. But you bang it out, and at the end of that conversation, the majority of the time—but sometimes it happens—he realizes he’s wrong.

He’s delighted. He lights up because he just learned.

What kind of an interesting world is it if you’re right all the time? The magic happens when you learn. For me, it’s not that I’m not confident. I’m confident. I’m comfortable in my own skin, but I’m a learning creature. For me, the delight comes from learning. Often that learning has to come with pain.

The pain of being wrong, the pain of hearing something that you don’t want to hear, the pain of something unexpected happening today or tomorrow or the next day. That’s what gets me going. If I’m not wrong, if I’m not making mistakes, it’s just not very interesting.

Yeah. I’ve loved the Barry story so much. Is there anyone else that comes to mind as someone who’s heavily influenced your way of thinking or behaving?

I’m a bit of a student of business. It kind of came from my investment banking background. I just love how companies shape themselves. I’d say one CEO who I really admire is Reed Hastings, who built Netflix into the company that it is. He is so logical. I think I watched him talking with you a while ago. He is so logical and structured in his thinking, but at the same time, he’s an engineer, and once in a while he’s a gambler. Some of those don’t work, like you were talking about some of the gambles that didn’t work.

I find that there’s a superpower in being structured in your thinking, but then not too structured, so that you’re able to listen to the troublemakers and have those wild ideas outside of conventional wisdom. Those two often go together. You need kind of a crazy scientist to do so. Reed is anything but a crazy scientist, but he has innovated in a very structured, deliberate way. I love what he did with his company, and as a person, I just love how he thinks.

So, you’re a student of businesses, and I think Uber is just such—it’s one of the most interesting business stories. By all accounts, the way that Travis Kalanick willed this thing into existence as just like a break-down-walls entrepreneur, and then the way that you’ve matured it into this behemoth of a business and all these exciting new things.

It's so cool to hear about it firsthand. I love doing this with you. When I have these conversations, I ask everyone the same traditional closing question: What is the kindest thing that someone's done for you?

I guess it's Sid, my wife, taking me in. We talked about my origin, where I came from, and having a chip on my shoulder. Until I met her, I was always living the life that I thought I was supposed to, and I was always the person who I thought you wanted me to be.

When I met her and observed her, she was always the same person with me, with the kids, with her friends, or at the Sun Valley Conference, where there are these unbelievably accomplished billionaires around. She was always the same core person. She never changed who she was.

Meeting her and seeing her operate, I think, finally allowed me to be the person I want to be versus the person I thought I was supposed to be. That was a gift and a kindness that I could never replace.

I have a shockingly similar experience with my wife. It's a beautiful place to end. Thanks so much for your time.

Thanks.