Live on Bloomberg TV

00:00But after the company did go public it did go down by about 11 percent which is a record decline after an IPO. You know I love how this interview started. I really appreciate that. How long will it be before your driver program is one where there's no drivers. The better thing that humans alone and robots alone are robots and humans working together. Somebody asked you to interview for the job of being the CEO of movers. That's right . Yes. And did you say I already have a job or. Yeah. At first when I got called I said no way would you fix your time please. People wouldn't recognize me if my tie was fixed but it just seemed so sweet. All right . I don't consider myself a journalist and nobody else to 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. You've been the CEO of Uber for how long now. Two years four years. And you enjoy it. I love it. So when you came in the company was not a public company. You've taken the Michael McKee. Yes. Yes. And you've received a lot of publicity about the IPO. Obviously you know that the company now has a higher market capitalization roughly 72 billion dollars something like that higher market capitalization than any company in American capitalism history except for Facebook . This short time after its IPO why are we are so many people criticizing you for having a 72 billion dollar market cap. Well I think that there are many critics out there especially for the four large companies that that's a fact of life. I do think that what's different about 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 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 that we are well capitalized for the next five years for the company and we achieved that. And now the time is to put your head down and get the real work done. But after the company did go public while I kind of pointed out that appears a very high market capitalization so soon after its IPO it did go down by about 11 percent which is a record decline after an IPO. So did you think the investment bankers didn't price it correctly or what do you think the problem was on the IPO. You know I love how this interview starting. I really appreciate that. I think that's actually the the timing of our IPO was very much aligned with the 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 weighing and I'm very confident that if we as a team execute the market we'll make reshape it. 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. I'm in time yeah this weekend with the family we're taking Uber is all over the place. Absolutely. So when you take an Uber Dax such let's talk about the ride sharing part you take it Uber. Do they know who you are. It's about 50/50. 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 that I'm very polite. I make sure that I don't slam the door ask them how they're doing. If I get on a phone call I ask them you know is it OK to make phone call etc.. So I try to be as nice as I can because I'm trying to improve my uber rating. Your company has roughly twenty two thousand employees. Yes. All right. But you have three million more so drivers almost four million drivers and couriers now on a global basis. You're in 63 countries sir. Yes. And five hundred eighty five cities or something like that. You have been briefed very effectively. OK. Impressive. All right . Today in the United States is it is it increasing in terms of use seats or is it going steady or is it going down. No it's increasing in every single market. So the growth rates are we as a company the last quarter that we announced as a newly public company we announced that on a foreign exchange annual basis we grew our bookings 41 percent year on year and this is off of a pretty considerable base of bookings almost 15 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. But those are details that are important you know. So how much longer can you lose a billion dollars a quarter and keep going. We have very significant amount of cash in the bank. You've got eight billion dollars in the IPO and you already had some money. Yeah we. We already had some money so the company at this point is incredibly well capitalized to keep investing in and the markets that were going after the transportation of people food freight. These are these markets represent 16 trillion dollar markets that we're 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 2 percent 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 gonna be about growth. And then we'll flip it over whereas the market demands. So if I wanted to have a ride share let's say right after this interview and go somewhere. Why should I pick Uber versus your competitors. Let's say lifter visa. I think we have lots of competitors who are very good 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 on the market. So we've got the best liquidity so you're probably going to get the best EDTA so you'll get the quickest driver to pick you up. The choices that we have are pretty impressive . So for example in DC now we have transit schedules around 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 going to 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. And then if you look at what we've done on the safety front which is for example having a safety center right on the app you can have a lot of the one track you. 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 each is that right. Uber each is more profitable. No ridesharing is is more profitable. In most markets it's the more mature part of the business the uber each business is now about 20 percent of our business it's growing over 100 percent on a year on year basis the run rate is enormous. We're now the largest food delivery Player X China . Now we enter this business three years ago as a revenue percentage right now it's what percentage of it's about 20 percent of our Seattle kings. How many cities is that it eats is now in over 500 cities. What's the most popular food that on your overreach. 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 monthly business review. I haven't gone to fried chicken grease I work. That's the most popular. Yeah. A lot of people the company own more stock than you do. You're the CEO. Yes they're underpaid. Was that a problem for you. It is. I would never claimed that I'm underpaid 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 is all over the United States and around the world or it's in about 25 cities now and expanding mostly in the U.S. but we're expanding into Europe pretty quickly as well. You have a scooter that's manufactured just for you is it. How is it different than the scooters that 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 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. Some of these scooters early on they went as as high as 20 miles an hour. Now we're working with cities to say hey how fast do you think is a responsible speed. We encourage our riders to wear helmets. Now you have a new product which is helicopters. Yes yes go off there. OK . Now you've launched that in a couple cities of New York City so far we have. Yes and it's a service from downtown New York to JFK which is a great demand for that. Well see we'll. As as you may know going to JFK during rush hour in your city is is a mess. And really what what we are trying to Dax what to do if you want to go from downtown Manhattan to JFK what is a Newburgh copter. Yes about 200 bucks which is actually fairly if you take if you're going from downtown New York to JFK with an Uber Black it's going to cost close to 200 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 four 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 etc.. Right. And we have a protocol pool while we're match two or three or four different riders into one car and essentially our uber copter is is pool for the air and we'll you'll see is that these helicopters are going to be replaced by a generation of electrically powered vertical take off 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 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 some controversies with that or over a long long period of time going driverless now or pilotless. Let's talk about your driverless or autonomous business. Yes. You took a lot of people from Carnegie Mellon . Yes we did 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 you're right . Right. Program or your driver program is one where there's no drivers no drivers. I think it over the it'll be 15 plus years . I don't 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 are robots and humans working together. OK. And so robots are very well designed for replacing repetitive 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 that one we're going to be incredibly careful and we're going to make sure that safety absolutely comes first. But we are building our driverless 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 1 percent easiest trips in D.C. an easy trip in D.C. may maybe avoid a roundabout avoid an unprotected left turns 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 we'll you'll see with us as far 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 for a long period of time versus kind of let's say the drama that that the press with your 15 year answer was worth it was intended to mean no drivers at all but you expect to have some driverless or autonomous vehicles in a year or two or three or four I think within the next five years I've hear some driverless 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 driverless 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 Toyota who is as you know a huge OEM and we have a terrific partnership with Toyota den so which is a Toyota Company as well that is very strong in manufacturing kits and sensors and other parts of the car and really bring in Toyota and denser was about building these autonomous vehicles at scale . And then we also brought in Masa and SoftBank as a financial planner as well Softbank is your biggest single investor still . Yes. And they went in at a valuation that is above or right where you currently are below Softbank got a decent deal. And I think it will get more decent with time. So one 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 the board . He's he's unbelievably smart guy. So he brought on Travis Kalanick who is our former CEO and one of the founders as well . And so Garrett and Travis and then another one of our founders Ryan really teamed up to build this thing. How many of the people who were there at the beginning and on a lot of stock in fact a lot of people the company owe more stock than you do . You're the CEO. Yes you. 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. It is . I would never claim that I'm underpaid. If you didn't tell Barry Diller 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 kept a secret. I guess 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 of the news report. So he was the first person that called all right. Let's talk about how you came to the position now . You grew up not in the United States. Where were you born. I was born in Iran actually. OK. And why did you leave Iran. I left Iran in 1978. I was nine years old and this was with 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 calm 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 no other place to stay. So you went to high school in Iran in Tarrytown New York CAC school and then you went to Brown . Yes I studied bio electrical engineering at Brown and then threw it all away to be an investment banker in New York City . So go figure. So you were Allan and company for many years . Yes. And you didn't want to go into private equity the higher calling in investment banking was good enough. You know I it was a question of just how evil I wanted to be. And I wanted to be a little less evil are you put it on hedge funds. That's the ultimate. OK . Without that I would have had horns. OK so you're minding your own business an Allen Company and then all of a sudden you've got to work for Barry Diller Barry Diller. Yes. How did he know of you. I was a grunt analyst on a deal for Barry Diller . Barry Diller was this was he was bidding against Sumner Redstone as a big battle in Wall Street. He was bidding against Sumner Redstone for Paramount. It was a back and forth. It was it was a unfriendly bid. He was a 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 have the chance to work for that person I want to work for that person. And I got the chance eventually. All right. So you went to work for him . Yes. And then ultimately one of the companies he owned was Expedia. Yes. And the owner before you join or you. I was . So 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're a part of the family. And they were part of the family to some extent because of the deals that we did when I came in. All right. So you became a CEO of Expedia idea. Yes. And did you have any experience in being a CEO. Why did he think you'd be good at being a CEO. He was desperate. So we. We were in a situation where 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 and company is different from managing it and moving it into a mature state. And this person decided that hey I'm not up for the CEO gig anymore . BARRIE can you find a replacement. And you're not quite sure . You know I have no idea I never asked them 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 180 million dollars. I guess they did based on theoretical values. OK . And then all of a sudden while you're doing a very good job running it and maybe going to get 180 million on theoretical value at some point somebody asked you to interview for the job of being the CEO of Hoover's right. Yes and did you say I already have a job or . Yeah. At first when I got a call that said No way. But then I talked to a couple of friends and you know you don't get too many chances as a professional or otherwise to to work at an especially lead a company that I think is a part of how we live life. And then I decided that in this case this is a once in a lifetime opportunity. So did you tell Barry Diller you were interviewing for this. I did. I did very early as you know the the press was all over the place. You don't think you kept it secret. I guess. Yeah I couldn't. Barry I 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 I called. He was pretty unhappy at the beginning but then he called me back. We had a series of conversations you call 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 you know we are where we are now. And he did remind you of one hundred eighty million dollars in stock. He did remind you of that . He understood that the reason why I would do this was not necessarily monetary. So when you came in you were replacing Travis Kalanick who was one of the founders and a big shareholder one of the biggest shareholders. But he still was on your board. Yes. So was it 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 this 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 Tristram 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're respectful you get out 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 of a company facing the biggest challenge 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 that is coming on some of the tech company. Some of it deserved . Let's suppose I have some extra money and I want to buy into a company like yours. Why should I buy you think you have some extra money. Don't you never have enough. But 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 multi product 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. It's in urban centers that summarize what would you like the average person who is listening to know about Hoover 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 come back to work. 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 responsible way. This is a company that wants to be great but wants to do good for the world as well. And we know we had a lot of work ahead of us .

No schedule data available.

The David Rubenstein Show: Uber CEO Dara Khosrowshahi

Uber CEO Dara Khosrowshahi talks about taking the company public, the future of driverless cars, expansion plans and whether or not he takes an Uber. He appears on the latest episode of "The David Rubenstein Show: Peer-to-Peer Conversations." The interview was recorded on June 11 at The Economic Club in Washington. (Source: Bloomberg)

More From TV Shows
All episodes and clips

Bloomberg Markets
"Bloomberg Markets" is focused on bringing you the most important global business and breaking markets news and information as it happens.
More episodes and clips