Speaker 1: From the heart of where innovation, money and power colli
Speaker 1: in Silicon Valley and beyond. This is Bloomberg Technology with
Speaker 1: Emily Jay. I'm Emily jan in Las Vegas for the
Speaker 1: retail event of the year, Shop Talk, where brands from
Speaker 1: around the world have gathered to talk about the future
Speaker 1: of commerce. I caught up with Uber CEO Dara Kazra
Speaker 1: Shah earlier to talk about everything from their vision to
Speaker 1: create a super app to Ukraine and inflation. Here's what
Speaker 1: he had to say. So, I understand this is your
Speaker 1: first shop Talk, this is my first shop Talk. Welcome,
Speaker 1: thank you, Thank you very much. Um. A few years ago,
Speaker 1: you wouldn't expect the CEO of Uber to be at
Speaker 1: a conference talking about the future of retail. Many things
Speaker 1: have changed in a few years. Indeed, so why are
Speaker 1: you here. Why do you believe Uber is the future
Speaker 1: of retail? Well, I don't think that we're the future
Speaker 1: of retail, but we can certainly help drive the future
Speaker 1: of retail. If you step back on demand has completely
Speaker 1: reshaped transportation, It's completely reshaped e commerce. You know, Amazon
Speaker 1: as kind of the the big player there and we
Speaker 1: are right in the middle of reshaping it. In terms
Speaker 1: of local commerce goes. It is happening right now, and
Speaker 1: we can be a force and essentially we can bring
Speaker 1: all of the fulfillment technology that we have on a
Speaker 1: local basis, pricing, matching, routing, etcetera, and use it to
Speaker 1: power our local merchant partners to essentially out Amazon Amazon
Speaker 1: on a local basis. So the goal is to be
Speaker 1: sort of an anti Amazon, Like, if you can get
Speaker 1: it there in two hours, that's a lot faster than
Speaker 1: two hours, which what Amazon is doing now. Correct. I
Speaker 1: think Amazon had an unfair advantage and they built a
Speaker 1: national essentially fulfillment network, a vertical fulfillment network, and create
Speaker 1: an incredible business as a result of it. And I
Speaker 1: think now you're seeing technologies like Shopify come in, the
Speaker 1: stripes come in, etcetera. We are think of us essentially
Speaker 1: as a local Shopify. We can help you power your
Speaker 1: local online commerce. And the Uber platform and the Uber
Speaker 1: audience is unrivaled in the world. So I think that
Speaker 1: not only can we use their technology to power local merchants,
Speaker 1: but we can bring to them an audience that no
Speaker 1: other player can. Shopify CEO Toby Luca told me, if
Speaker 1: Amazon is building an empire we're arming the rebels. How
Speaker 1: would you put it, We're arming the local rebels. So
Speaker 1: the question is how Amazon has has a huge advantage.
Speaker 1: They've got all of these gistics centers. You are barely
Speaker 1: cracking the grocery market, which is, you know, a pick
Speaker 1: and pack operational model, which is different than just picking
Speaker 1: up food and dropping it off. So tell me about
Speaker 1: the how well. I think the how is, First of all,
Speaker 1: the local logistics UH has been built out right. The
Speaker 1: boxers are there, are grocery partners. Our retail partners have
Speaker 1: built out an incredible infrastructure that they've invested in over many,
Speaker 1: many years. Our technology essentially allows that infrastructure to be
Speaker 1: tied into your local home. And for us, what's unique
Speaker 1: about us is that we're the only go get platform
Speaker 1: out of the world, and especially in a world that's
Speaker 1: opening up. Whether a consumer comes to your store and
Speaker 1: wants the shop in person, or whether that person wants
Speaker 1: to get that good delivered at home within an hour,
Speaker 1: we're neutral. We can power both and essentially we can
Speaker 1: be that omni channel partner for the local merch gents UH,
Speaker 1: and we do well whether the consumer comes to you
Speaker 1: or whether we use our delivery network and the largest
Speaker 1: set of couriers drivers in the world to get it
Speaker 1: to your home. Again, we're neutral and we can power
Speaker 1: both use cases. Now, Cousin Greg from Succession tells me
Speaker 1: that Uber can gets me a lot of things these days,
Speaker 1: including things that I shouldn't eat. Um, I believe we
Speaker 1: have a clip of cousin Greg. Let's take a listen
Speaker 1: to what he had to say. You can now get
Speaker 1: anything delivered with Uber eats. But take it from me,
Speaker 1: that doesn't mean you can eat anything. He gets. Burger
Speaker 1: that is a neat. Paper towels, don't eats. Bottle of vino,
Speaker 1: eats by drinking Nanna's eats every morning. Dog toy, don't
Speaker 1: eat unless you're a good boy. Toothpaste that's a stumper.
Speaker 1: This game just got really hard. It's yeah, it's a neat,
Speaker 1: but it's a don't swallows that's my favorite camp fancy
Speaker 1: is that was that improvised or written? Did he just
Speaker 1: don't know? Apparently he's a very funny guy. Um, this
Speaker 1: is a big marketing campaign for you. I think if
Speaker 1: unless you've been living under a rock, you have seen
Speaker 1: one of these ads. How much did this campaign cost
Speaker 1: and is it paying off. Isn't driving people to the
Speaker 1: platform who didn't know about this whole don't eat things? Oh?
Speaker 1: Absolutely no. The awareness of Eats now not being not
Speaker 1: being just about food, but about being everything other than
Speaker 1: food as well has increased substantially within our audience. And
Speaker 1: if you step back, you know we are that kind
Speaker 1: of call it the the local operating system for every
Speaker 1: everyday life as a consumer. Wherever you want to go,
Speaker 1: whatever you want to get, we can get it to you.
Speaker 1: And what we found is we're able to transition from
Speaker 1: being a mobility only company we were eight to the
Speaker 1: food game. Right, we were not one of the early
Speaker 1: entrance in the food game. We now with Uber Eats
Speaker 1: are at a fifty billion dollar run rate and growth
Speaker 1: bookings were the biggest player in terms of food globally
Speaker 1: outside of China. And we're seeing the same kind of behavior,
Speaker 1: which is the Uber customer who said, oh you can
Speaker 1: take me someplace, Now you can give me my food.
Speaker 1: They're saying, oh, you can give me my groceries. Wow,
Speaker 1: you can get me dog food, etcetera. So we're seeing
Speaker 1: the behavior of our customers because of the frequency and
Speaker 1: the habits that were forming with them. We've got their identity.
Speaker 1: We already have their payments information. We probably know where
Speaker 1: you live. We have more drivers and couriers than anyone
Speaker 1: else because they are driving a courier just from a functional,
Speaker 1: everyday easy standpoint. Consumers are coming to a platform and
Speaker 1: they keep uh deepening their relationship with US. Earners have
Speaker 1: many more opportunities to earn and as merchants, you now
Speaker 1: have acts says to this incredible customer base. Whether you
Speaker 1: want to access it through the marketplace, whether you want
Speaker 1: to use our advertising platform, or if you just want
Speaker 1: to fulfillment platform, Hey give us local logistics, logistics and
Speaker 1: I want to sell through my own platform as well.
Speaker 1: We're completely flexible working anyway with merchants, and we take
Speaker 1: this very very seriously. So today you're announcing a new
Speaker 1: deal with BP, which gets you obviously BP of the
Speaker 1: BP also a network of convenience stores. What does this
Speaker 1: get you, Well, this is our first global convenience partnership
Speaker 1: with BP. We started working with them on a local
Speaker 1: basis and growing from there. We essentially now work with
Speaker 1: them in five different countries and we're going to be
Speaker 1: wiring up over the next two to three years. Three
Speaker 1: thousand BP convenience locations, and this is all about getting
Speaker 1: anything you want within thirty minutes, which is proving out
Speaker 1: to be a delightful experience. The the key in turn
Speaker 1: MS of that fast delightful experience is it gets you
Speaker 1: in the door for the appointment viewing. If you can
Speaker 1: get me ice cream, you know in fifteen minutes, you
Speaker 1: will have a much higher shot of than getting me
Speaker 1: the big basket shopping the appointment viewing, which is what
Speaker 1: corner Shop has done, and we're bringing onto the uberes platform.
Speaker 1: So could it get a deal for your drivers on gas?
Speaker 1: That's a big question. Well, you've seen us now uh
Speaker 1: introduce a searcharge in the US, and there are various
Speaker 1: different approaches that we are taking internationally as well. Um.
Speaker 1: You know, we look at the cost of driving for
Speaker 1: our drivers or couriers who use our platform pretty seriously
Speaker 1: and we will look to offset those costs either through
Speaker 1: a pass through like the fuel searcharge, which goes a
Speaker 1: hundred percent to drivers and couriers, or through deals with merchants.
Speaker 1: And you can bet that we're having discussions with PP
Speaker 1: as well. Okay, so that could happen. Of course it
Speaker 1: could happen, and I would say, it's not only in
Speaker 1: terms of fuel, but it's also thinking about electrification, how
Speaker 1: you know, the um recharging evs on a local basis
Speaker 1: as well as going to be an area. So we're
Speaker 1: having all of these discussions with many players around the globe.
Speaker 1: So let's talk about these gas prices seven dollars over
Speaker 1: seven dollars in southern California. How much higher are you
Speaker 1: prepared for them to go? And how long do you
Speaker 1: think this is going to last? You can't know, one
Speaker 1: can predict the future, but I do think that we're
Speaker 1: certainly hoping that the worst of gas prices is behind us,
Speaker 1: and we will look to be a partner with drivers,
Speaker 1: with couriers, and with merchants, because in the end, it
Speaker 1: is in our interests for people to move around in
Speaker 1: the cities. While inflation is serious and real, we haven't
Speaker 1: had we haven't seen it have any kind of a
Speaker 1: material effect on business. People are getting now tons of
Speaker 1: people here, people are ordering, it's, etcetera. So we've done
Speaker 1: our part in order to lessen the financial bite on
Speaker 1: our earners and we'll see where we go from there. Still,
Speaker 1: you've got drivers who say it's not enough. They were
Speaker 1: already struggling to make ends meet. This really hurts and
Speaker 1: this searcharges. I understand it goes through May eleventh. What
Speaker 1: happens after May eleventh? I think it depends. It depends
Speaker 1: on where fuel prices are. Hopefully, if these terrible events
Speaker 1: in Ukraine resolve themselves, we will have some relief. But
Speaker 1: we're definitely gonna look at it, and if we don't
Speaker 1: see relief, then we'll determine how to go forward. It's
Speaker 1: in our interest for our earners to earn a good,
Speaker 1: flexible living that they're satisfied with. You know, you are
Speaker 1: also the CEO of Expedia in an earlier era. I mean,
Speaker 1: what is your assessment of the scale of Obviously we're
Speaker 1: facing massive geopolitical uncertainty, a humanitarian cry. What's your assessment
Speaker 1: of the economic crisis that we're facing with inflation is
Speaker 1: at fourty year highs? Inflation is is uh real? And
Speaker 1: I think anyone who says that it is going to
Speaker 1: go away, I think it's kidding themselves. At this point, UM,
Speaker 1: we haven't seen any signs of inflation abating. You know,
Speaker 1: I think that it's first of all, it is in
Speaker 1: everyone's humanitarian interest to UM make this conflict, come to
Speaker 1: an end, come to a peaceful end. I think if
Speaker 1: we are successful there and the early signal seems to
Speaker 1: be good, uh, then I think the set up for
Speaker 1: worldwide economic growth is actually really strong. Right. The reopening
Speaker 1: is a real Consumers are spending. They have been flushed
Speaker 1: with government essentially subsidies. We have to now replace those
Speaker 1: government subsidies with economic subsidies, and that means local economic activity.
Speaker 1: The more people get out there, the more the aonomic
Speaker 1: subsidies kind of take over, so to speak, and we
Speaker 1: can grow the economy, not at the rates that we
Speaker 1: have let's say last year, but at rates above inflation.
Speaker 1: That's certainly the goal, and we can be a part
Speaker 1: of that. What kind of activity are you seeing? If
Speaker 1: you know we're not just facing gas prices, but inflation
Speaker 1: and ongoing pandemic. How is that impacting prices, rides, deliveries,
Speaker 1: and demand. So activity at this point is very robust,
Speaker 1: that's it. At higher prices, but we're seeing and if
Speaker 1: you look at our commerce business, we're seeing essentially best
Speaker 1: months ever. Even in our mobility business continues to hit
Speaker 1: post pandemic records, and the same for a delivery business.
Speaker 1: So we are benefiting from a secular trend right, more
Speaker 1: people want more on demand local services and or transportation.
Speaker 1: So I think as an entity, we are benefiting from
Speaker 1: secular tail winds and habits moving over to our platform. Uh.
Speaker 1: That probably maybe hiding some weakness, but within our business
Speaker 1: and within our ecosystem, we're not seeing any kind of weakness. Uh,
Speaker 1: And we think our merchant partners can benefit from that. Now,
Speaker 1: a lot of people don't may not realize that eats
Speaker 1: and rides are almost the same size, and they seem
Speaker 1: to be growing in tandem two point four versus two
Speaker 1: point three billion dollars as of the fourth quarter. With
Speaker 1: this bet on retail, do you see eats and donat
Speaker 1: becoming bigger than rides? And how much bigger that is? Actually,
Speaker 1: that is absolutely the goal. So so four perspective. Our
Speaker 1: Uber ees business four years ago was that a forty
Speaker 1: was that a four billion dollar gross bookings run rate.
Speaker 1: It's now at a fifty billion dollar plus gross bookings
Speaker 1: run rate, and only four years our retail business gross
Speaker 1: ring retail business, Corner Shop and our new verticals are
Speaker 1: at a four billion dollar run rate. So I've told
Speaker 1: my team four years from now, you better be a
Speaker 1: fifty otherwise the CEO is going to be very disappointed.
Speaker 1: Name of you. So that that business and the uber
Speaker 1: the eats mainline food business continues to grow. But just
Speaker 1: for perspective, we added over a hundred and twenty thousand
Speaker 1: UH non food merchants in the US just this uh
Speaker 1: this last year. So as we add, what we see
Speaker 1: is as we get more merchants connected into our platform
Speaker 1: and the content is there, the ease of use of
Speaker 1: our platform from rides to food to now donates um
Speaker 1: takes over and consumers start to go back and forth
Speaker 1: throughout the platform. And is it bigger than rides? Ultimately?
Speaker 1: I know these are your two children, but you're asking
Speaker 1: me to choose to my two children. Uh, they certainly
Speaker 1: have a chance of being bigger than rides. If you
Speaker 1: look at the total addressable market of food and local commerce,
Speaker 1: they are bigger than mobility. But it's going to be
Speaker 1: a great race and I win either way. UM, what
Speaker 1: are the unit economics of retail and how are they
Speaker 1: different from food and grocery? And what are you learning
Speaker 1: from all of these other you know, logistical initiatives that
Speaker 1: you've had to this point. So generally, we're able to
Speaker 1: make the unit economics work more so than our competitors
Speaker 1: because the cost of customer acquisition for us is essentially
Speaker 1: zero because we have the largest global audience out there,
Speaker 1: and we already have built a logistics commerce ecosystem that's
Speaker 1: highly efficient against our competitors. So on the retail side,
Speaker 1: early on, our unit costs are or our unit profitability
Speaker 1: is going to be early on, Diminimus, We're not looking
Speaker 1: to make money here. We're looking to partner up with
Speaker 1: our merchants and essentially get you our audience as quickly
Speaker 1: as possible and drive your logistics costs as low as possible.
Speaker 1: This then erode some of the profitability aggress that delivery
Speaker 1: has made. We are essentially the growth and the incremental
Speaker 1: profitability from our mobility and our heats business are more
Speaker 1: than enough to pay for the investments that we're making
Speaker 1: in retail. Uh So, overall, what we talked about with
Speaker 1: investors is a target of five billion dollars and ebida
Speaker 1: in um within the scope of the growth right beyond
Speaker 1: that being significant, so we can invest and we can
Speaker 1: grow both top line and bottom line at the same time.
Speaker 1: So there still seem to be questions about the longer
Speaker 1: term sustainability of the delivery model. Uber shares are down,
Speaker 1: Door too, shares are down. Instat Cart just dropped its
Speaker 1: valuation from billion dollars. Is there going to be consolidation here?
Speaker 1: And I know there are even many more competitors globally,
Speaker 1: but can all of these companies survive? I think there
Speaker 1: will be consolidation. I mean four perspective. There isn't a
Speaker 1: single mobility or deliver replayer outside of the US that's profitable.
Speaker 1: So a lot of them are making promises about being profitable,
Speaker 1: but they're not profitable. We are, on an Ibada basis
Speaker 1: profitable outside of the US and globally, both in mobility
Speaker 1: and with a delivery business. So we have gone to
Speaker 1: that profitably. We have a scale in an audience that
Speaker 1: no one else has, and we made their early investments
Speaker 1: in globalizing. Unlike other companies. It's very expensive early onto
Speaker 1: to globalize. Uh. So there will be consolidation. Uh. And
Speaker 1: I think because of our size and scope, were you know,
Speaker 1: a few yards ahead of the competition at this point.
Speaker 1: Uber has rapid delivery exposure through go Puff. Can rapid
Speaker 1: delivery for retail exist? And how might Uber get into it.
Speaker 1: Absolutely so. We are for example, partnering of with Carrefour
Speaker 1: in France to power rapid delivery. I think rapid delivery
Speaker 1: should be a part of every local grocery players offerings.
Speaker 1: UM it can be set up, we think, in a
Speaker 1: capital light way and we can essentially help our local
Speaker 1: partners power local delivery in a very very light way,
Speaker 1: and we can get that thirty minutes delivery time that is,
Speaker 1: you know, the delight meter up at a level that
Speaker 1: matches competition. Absolutely, the delight meter. I like it. Um.
Speaker 1: Amazon has streamlined their logistics operation with the help of robotics,
Speaker 1: and I know that Uber walked away sold it's sold
Speaker 1: itself driving car business, but still has a stake very much.
Speaker 1: Do you see a role for robotics here for robotic
Speaker 1: delivery help? Absolutely so. Uh. We think that the first
Speaker 1: probably use case that you're going to see in scale
Speaker 1: is going to be in trucking. Highway driving is a
Speaker 1: lot easier to solve than let's a city driving, and Aurora,
Speaker 1: whom we're partnered with, is very much focused on that
Speaker 1: kind of driving. And then you will see essentially that
Speaker 1: kind of automation find its way into other parts of
Speaker 1: the ecosystem. Same thing with grocery. Right now, automation makes
Speaker 1: sense uh in larger essential um warehouses and over perdo time,
Speaker 1: as it becomes more economical, you see automation make its
Speaker 1: way into essentially every day. So what does that mean
Speaker 1: for drivers? What it means for drivers is that you're
Speaker 1: gonna have robot drivers and you're gonna have people drivers.
Speaker 1: And what you see with automation is that automation takes
Speaker 1: care of the simple, repeatable, low value tasks and humans
Speaker 1: can focus on the more complex, high value tasks as well.
Speaker 1: That will be true in our logistics ecosystem as well.
Speaker 1: There's this drama or the robot's going to replace people
Speaker 1: over and over again. Robots augment people and we think
Speaker 1: that will be true and transportation, and it will be
Speaker 1: true in logistics as well. So here's a big question.
Speaker 1: It's still called Uber eats. It's if you're delivering stuff
Speaker 1: that you don't eat as well. Do we need a
Speaker 1: new name? It's working, but you know, we're going to
Speaker 1: think about it certainly that this actually the big air
Speaker 1: campaign was a big test, right is can the eats
Speaker 1: brand expand? And right now the signal that we're hearing
Speaker 1: is a very very loud yes. So do you? I
Speaker 1: mean Uber eats and donates? Does that work? Uh? Uber
Speaker 1: eats and be careful don Maybe you'll have to ask
Speaker 1: cousin grab um. So give us as we close, give
Speaker 1: us the vision five years out, how will Uber be
Speaker 1: different five years out? Essentially, we are going to build
Speaker 1: that local operating system for everyday life. Anywhere you want
Speaker 1: to go, whether you want to use an Uber or
Speaker 1: you want to use a taxi, or you want to
Speaker 1: use a bus, or you want to use subway, will
Speaker 1: get you the best way there, will identify the best way,
Speaker 1: make it absolutely smooth and delightful. Anything you want to get,
Speaker 1: whether it's food or groceries or pet food or makeup,
Speaker 1: essentially you will be able to get in your home
Speaker 1: as well. And we will open up our technology so
Speaker 1: that our merchant partners can plug into that OS anyway
Speaker 1: they want. All right, we'll have to catch up again
Speaker 1: five years out of times before, hopefully Dara Kasra Shai, everyone,
Speaker 1: thank you