1 00:00:02,080 --> 00:00:04,359 Speaker 1: There are no finish lines in the world of business, 2 00:00:04,400 --> 00:00:06,800 Speaker 1: but this is about as close as it gets. A 3 00:00:06,880 --> 00:00:09,920 Speaker 1: decade after a startup called uber Cab started out as 4 00:00:09,920 --> 00:00:13,600 Speaker 1: a black car service in San Francisco, Uber Technologies, Inc. 5 00:00:13,800 --> 00:00:16,079 Speaker 1: Is going public in one of the largest I p 6 00:00:16,239 --> 00:00:19,040 Speaker 1: O s of all time. Perhaps more than any other company, 7 00:00:19,400 --> 00:00:22,960 Speaker 1: Uber has come to embody the exuberance and the hubris 8 00:00:22,960 --> 00:00:27,720 Speaker 1: of today's tech titans. Uber's this generation startup disruptor. It 9 00:00:27,920 --> 00:00:32,400 Speaker 1: barreled into cities, decimated the global taxi industry, and burned 10 00:00:32,440 --> 00:00:36,400 Speaker 1: through billions of dollars in investor cash. Ubers twelve billion 11 00:00:36,440 --> 00:00:41,360 Speaker 1: dollar valuation is seventeen billion dollar valuation massive forty billion 12 00:00:41,400 --> 00:00:46,080 Speaker 1: dollar valuation. It also was embroiled in scandal. Uber came 13 00:00:46,120 --> 00:00:49,239 Speaker 1: to symbolize the worst of Silicon Valley excess, with a 14 00:00:49,280 --> 00:00:52,639 Speaker 1: complete disregard for regulations and a fierce win at all 15 00:00:52,680 --> 00:00:57,080 Speaker 1: costs mentality. Uber founder Travis Kalanik announced he's resigning as 16 00:00:57,160 --> 00:01:00,880 Speaker 1: CEO after five major investors to man did that he go? 17 00:01:01,200 --> 00:01:03,880 Speaker 1: It marks a stunning downturn for one of Silicon Valley's 18 00:01:04,040 --> 00:01:08,360 Speaker 1: highest flying startup. Former Expedient chief executive Dara Kasrosha he 19 00:01:08,480 --> 00:01:11,720 Speaker 1: took over this week he replaced Today. Uber says it's reformed, 20 00:01:12,000 --> 00:01:14,920 Speaker 1: it's been playing nice with city officials. The company's CEO 21 00:01:15,080 --> 00:01:18,840 Speaker 1: has met with prime ministers and presidents, and the company 22 00:01:18,880 --> 00:01:22,600 Speaker 1: is spending millions on new businesses. Perspectives that we had 23 00:01:22,600 --> 00:01:27,120 Speaker 1: so been anticipating has been disclosed. Uber a seeking evaluation 24 00:01:27,440 --> 00:01:31,000 Speaker 1: of eighties six billion dollars. That's about twenty eight percent 25 00:01:31,120 --> 00:01:35,400 Speaker 1: lower than the tw billion dollar targeting. This week, Uber 26 00:01:35,440 --> 00:01:42,040 Speaker 1: shares finally hit the public market. It's a moment that employees, investors, regulators, 27 00:01:42,080 --> 00:01:44,800 Speaker 1: and many journalists, including my friend Eric here, have been 28 00:01:44,800 --> 00:01:48,040 Speaker 1: waiting for. And it might also be the ultimate test 29 00:01:48,120 --> 00:01:50,440 Speaker 1: of whether the new world of the so called gig 30 00:01:50,480 --> 00:01:53,800 Speaker 1: economy can grow up and turn into a normal and 31 00:01:53,880 --> 00:01:57,840 Speaker 1: dare we say, even profitable business. I'm brad Stone and 32 00:01:57,880 --> 00:02:08,120 Speaker 1: I'm Eric newcomer, you're listening to decrypt it. So, Eric, 33 00:02:08,200 --> 00:02:11,600 Speaker 1: you have been covering Uber for Bloomberg Technology now for 34 00:02:11,639 --> 00:02:14,440 Speaker 1: almost four years. So personally, what does the I p 35 00:02:14,520 --> 00:02:17,120 Speaker 1: O mean for you? It sort of feels like Uber 36 00:02:17,240 --> 00:02:20,359 Speaker 1: is growing up and going away to college. So it's 37 00:02:20,360 --> 00:02:24,120 Speaker 1: this fascinating moment where it's going from this private, sort 38 00:02:24,120 --> 00:02:27,920 Speaker 1: of secretive company to this, you know, globally sort of 39 00:02:28,000 --> 00:02:33,000 Speaker 1: much more open and transparent machine. Brad, I mean you've 40 00:02:33,000 --> 00:02:35,800 Speaker 1: covered it, sort of, no less closely, wrote a book 41 00:02:35,960 --> 00:02:38,560 Speaker 1: on the topic. How how are you feeling right now? 42 00:02:38,639 --> 00:02:40,600 Speaker 1: You know? To me, I mean, the story of Uber 43 00:02:40,720 --> 00:02:42,720 Speaker 1: is like in part of the story of San Francisco 44 00:02:42,840 --> 00:02:46,000 Speaker 1: over the last decade, the story of getting around in cities. 45 00:02:46,080 --> 00:02:47,720 Speaker 1: I just spent a couple of days in l A. 46 00:02:47,840 --> 00:02:49,400 Speaker 1: You know, I don't rent a car when I go 47 00:02:49,720 --> 00:02:52,280 Speaker 1: to cities like l A anymore. It's such a remarkable 48 00:02:52,280 --> 00:02:56,079 Speaker 1: story of changes in urban transportation, changes in the global economy, 49 00:02:56,120 --> 00:02:59,119 Speaker 1: and then changes in the way people are working. Right now, 50 00:02:59,240 --> 00:03:01,680 Speaker 1: I think we need to to layout the two characters here. 51 00:03:01,720 --> 00:03:05,200 Speaker 1: We've got Travis Kalenik, you know, the co founder of Uber, 52 00:03:05,560 --> 00:03:09,360 Speaker 1: who defined sort of the image. He's the brash CEO 53 00:03:09,720 --> 00:03:15,880 Speaker 1: who is willing to ignore regulators, operating gray spaces, destroy competitors. 54 00:03:16,200 --> 00:03:18,560 Speaker 1: Travis still owns a good percentage of the company, right, 55 00:03:18,560 --> 00:03:21,320 Speaker 1: how wealthy will he get in the next week, Well, 56 00:03:21,320 --> 00:03:23,919 Speaker 1: it depends how much it's worth. But he owns nine 57 00:03:23,960 --> 00:03:26,600 Speaker 1: percent of the company, so that's pretty easy math. If 58 00:03:26,639 --> 00:03:30,320 Speaker 1: it's worth a hundred billion, dollars. That's about nine billion dollars. 59 00:03:30,440 --> 00:03:33,800 Speaker 1: But he's going to be a multi multibillionaire because of 60 00:03:33,919 --> 00:03:36,760 Speaker 1: his role in creating uber okay. And now his successor, 61 00:03:36,840 --> 00:03:39,960 Speaker 1: Dara Kazra Shahi. How much does he own? And and 62 00:03:40,040 --> 00:03:42,840 Speaker 1: describe him and how is he different from Travis? Dara 63 00:03:42,920 --> 00:03:46,760 Speaker 1: is the professional CEO. He was hired after all of 64 00:03:46,800 --> 00:03:52,120 Speaker 1: Travis's shenanigans. Travis gets ousted in and then Dara is 65 00:03:52,160 --> 00:03:55,560 Speaker 1: the dark horse candidate who the board picks from Expedia 66 00:03:56,000 --> 00:03:58,760 Speaker 1: to sort of stabilize the company. Dar is going to 67 00:03:58,840 --> 00:04:03,480 Speaker 1: be far less wealthy. His compensation is largely tied to 68 00:04:03,760 --> 00:04:07,600 Speaker 1: getting the Uber worth billion, So how much he actually 69 00:04:07,600 --> 00:04:10,520 Speaker 1: makes off this whole thing will depend on his success 70 00:04:10,560 --> 00:04:14,680 Speaker 1: at getting the company to sustain a really atmospheric valuation 71 00:04:14,760 --> 00:04:17,360 Speaker 1: for a significant amount of time. How do you think 72 00:04:17,440 --> 00:04:19,680 Speaker 1: Dara has done? Oh? I mean from a from a 73 00:04:20,640 --> 00:04:24,640 Speaker 1: public image perspective, it's been remarkable, right, not not only 74 00:04:24,680 --> 00:04:26,919 Speaker 1: the press attention that Uber gets, but the way in 75 00:04:26,920 --> 00:04:30,279 Speaker 1: which regulators and cities like London and New York City 76 00:04:30,760 --> 00:04:33,960 Speaker 1: you are, I think are more willing to come to 77 00:04:34,000 --> 00:04:36,960 Speaker 1: the table uh and talk to Uber and create some 78 00:04:37,040 --> 00:04:39,359 Speaker 1: kind of sensible rules. I mean, the bottom line is 79 00:04:39,400 --> 00:04:41,799 Speaker 1: that for me at least, and tell me if you disagree, 80 00:04:41,839 --> 00:04:44,720 Speaker 1: and some certainly do, that Uber has been good for 81 00:04:44,760 --> 00:04:47,719 Speaker 1: cities there there have been negative impacts, like you know, 82 00:04:47,800 --> 00:04:51,720 Speaker 1: increase congestion. But but but by and large, they've increased 83 00:04:51,880 --> 00:04:54,839 Speaker 1: an opportunity for drivers, and they have solved a massive 84 00:04:54,880 --> 00:04:57,479 Speaker 1: taxi shortage and a lot of cities. And yet, you know, 85 00:04:57,520 --> 00:05:01,560 Speaker 1: because of Travis's reputation, because of the companies early orientation 86 00:05:01,600 --> 00:05:06,919 Speaker 1: towards breaking rules or not negotiating and launching without permission, 87 00:05:07,600 --> 00:05:09,960 Speaker 1: Uber just got this bad reputation. I think Dara has 88 00:05:10,000 --> 00:05:12,320 Speaker 1: helped that quite a bit. I think on the optics front, 89 00:05:12,720 --> 00:05:16,040 Speaker 1: there's no question he's turned things around. The only caveat 90 00:05:16,080 --> 00:05:18,320 Speaker 1: I think I'd give it is just, you know, the 91 00:05:18,440 --> 00:05:22,160 Speaker 1: status of drivers, that they're independent contractors and not workers, 92 00:05:22,680 --> 00:05:25,160 Speaker 1: that they don't have a lot of visibility into how 93 00:05:25,240 --> 00:05:27,360 Speaker 1: much money they make. I think if you had to 94 00:05:27,400 --> 00:05:30,200 Speaker 1: think of the sins of Uber's business model sort of 95 00:05:30,760 --> 00:05:35,000 Speaker 1: establishing the gig economy, that ethical question is alive today 96 00:05:35,080 --> 00:05:38,320 Speaker 1: just as much as it ever was. You know, Eric, 97 00:05:38,440 --> 00:05:40,520 Speaker 1: when I told you I was ubering around l A 98 00:05:40,600 --> 00:05:43,080 Speaker 1: yesterday and I talked in preparation for this, I talked 99 00:05:43,080 --> 00:05:46,160 Speaker 1: to every driver. There was one guy who was a 100 00:05:46,240 --> 00:05:49,120 Speaker 1: nursing student and he was driving in the margins of 101 00:05:49,160 --> 00:05:52,920 Speaker 1: his time in between classes. There was another guy who 102 00:05:52,920 --> 00:05:55,080 Speaker 1: was a parking attendant who was doing this some days 103 00:05:55,120 --> 00:05:57,839 Speaker 1: after work to earn some extra money. So to me, 104 00:05:58,440 --> 00:06:00,960 Speaker 1: you know, it's created a new kind of opportunity. It's 105 00:06:01,000 --> 00:06:05,040 Speaker 1: probably been a poor full time job, but um, you know, 106 00:06:05,080 --> 00:06:07,320 Speaker 1: but without some of the protections that kind of normal 107 00:06:07,400 --> 00:06:13,240 Speaker 1: full time labor has so eric Before we go any further, explain, 108 00:06:13,320 --> 00:06:16,880 Speaker 1: explain to me the significance of this I P O moment. Right. 109 00:06:17,040 --> 00:06:20,039 Speaker 1: Uber has never had any problems raising capital, So why 110 00:06:20,120 --> 00:06:22,839 Speaker 1: do this at all? Right, for most companies, you go 111 00:06:23,000 --> 00:06:25,960 Speaker 1: public because you need a massive amount of money to 112 00:06:26,160 --> 00:06:28,880 Speaker 1: make the next leap, to really say, okay, we're going 113 00:06:28,920 --> 00:06:32,560 Speaker 1: to deliver what we've been doing on a much larger scale. 114 00:06:32,839 --> 00:06:35,680 Speaker 1: They've raised like twenty billion dollars on the private markets, 115 00:06:35,680 --> 00:06:39,480 Speaker 1: which is an obscene amount of money. It's more about 116 00:06:39,839 --> 00:06:43,039 Speaker 1: letting those existing shareholders that they've sold to be able 117 00:06:43,080 --> 00:06:45,840 Speaker 1: to trade shares in a public market. So letting some 118 00:06:45,880 --> 00:06:49,200 Speaker 1: people sell their stakes, it's allowing different people to come 119 00:06:49,240 --> 00:06:51,640 Speaker 1: in and invest in Uber. And I think it just 120 00:06:51,760 --> 00:06:54,359 Speaker 1: also is going to force them to operate with a 121 00:06:54,360 --> 00:06:57,719 Speaker 1: little more quarterly rigor, right and and and they have 122 00:06:57,880 --> 00:07:00,400 Speaker 1: been operating in a quasi public manner. I mean, you've 123 00:07:00,400 --> 00:07:04,400 Speaker 1: been getting a lot of those quarterly financial statements. But certainly, uh, 124 00:07:04,720 --> 00:07:07,680 Speaker 1: the wider world, as you say, retail investors will now 125 00:07:07,720 --> 00:07:09,960 Speaker 1: be watching closely. And the one thing that they will 126 00:07:10,040 --> 00:07:13,920 Speaker 1: be looking for is whether this company can ever make 127 00:07:14,240 --> 00:07:17,440 Speaker 1: any money? Right, So, how how's that looking? So if 128 00:07:17,440 --> 00:07:20,480 Speaker 1: you let's think about Uber his losses for a second, 129 00:07:20,640 --> 00:07:22,960 Speaker 1: if you're talking about money out the door, they're losing 130 00:07:23,360 --> 00:07:26,480 Speaker 1: ten billion dollars over the last three years. So it's 131 00:07:26,560 --> 00:07:29,040 Speaker 1: a huge amount of money just to set the stage. 132 00:07:29,480 --> 00:07:31,960 Speaker 1: And so then the question is can they outgrow it? 133 00:07:32,000 --> 00:07:35,520 Speaker 1: Can they keep finding new ways to drive the revenue 134 00:07:35,600 --> 00:07:37,920 Speaker 1: up so that somehow this could sort of be a 135 00:07:37,920 --> 00:07:42,000 Speaker 1: profitable business. But Eric that the court transaction that underlies 136 00:07:42,080 --> 00:07:44,400 Speaker 1: Uber the ride, I mean, there's so there's no reason 137 00:07:44,520 --> 00:07:47,520 Speaker 1: that that should be unprofitable, right, right. I was rereading 138 00:07:47,560 --> 00:07:51,840 Speaker 1: Garrett Camp, the other co founder of Uber's original slide deck, 139 00:07:51,880 --> 00:07:54,840 Speaker 1: when he was planning Uber out, and he was said 140 00:07:54,880 --> 00:07:58,400 Speaker 1: it was designed to be profitable, you know, and it 141 00:07:58,440 --> 00:08:00,840 Speaker 1: seems so intuitive. Ubers take in the percentage of the 142 00:08:00,920 --> 00:08:04,520 Speaker 1: fair that should be pure profit. That's a great business. 143 00:08:04,560 --> 00:08:09,360 Speaker 1: That's why everybody loved Uber. The problem has been one competition. 144 00:08:09,520 --> 00:08:12,280 Speaker 1: People are happy to switch between Lift and Uber, so 145 00:08:12,320 --> 00:08:15,840 Speaker 1: when they're discounting, those discounts can be very expensive between 146 00:08:15,880 --> 00:08:18,840 Speaker 1: the two companies. So that's been a major source of costs. 147 00:08:19,080 --> 00:08:21,440 Speaker 1: But then there are other things. You know, Uber is 148 00:08:21,480 --> 00:08:24,280 Speaker 1: now a company allowing people to move around the world. 149 00:08:24,640 --> 00:08:27,600 Speaker 1: The risk that somebody dies or other forms of injury 150 00:08:27,920 --> 00:08:31,200 Speaker 1: makes their insurance costs super high. So turns out there 151 00:08:31,240 --> 00:08:33,560 Speaker 1: actually all these sort of embedded costs to how you 152 00:08:33,640 --> 00:08:36,120 Speaker 1: run that business. And I would imagine that the hope 153 00:08:36,240 --> 00:08:38,760 Speaker 1: is that this business will get more profitable over time 154 00:08:38,760 --> 00:08:42,240 Speaker 1: because either you know, some rivals will will go out 155 00:08:42,240 --> 00:08:44,520 Speaker 1: of business or leave the market so they'll be able 156 00:08:44,520 --> 00:08:47,120 Speaker 1: to raise fares, or that they'll kind of grow into 157 00:08:47,520 --> 00:08:49,920 Speaker 1: into greater scale. And so I guess that raises the 158 00:08:50,000 --> 00:08:52,720 Speaker 1: question like how much growth is left. I mean, you 159 00:08:52,800 --> 00:08:55,520 Speaker 1: look at a city like San Francisco or l A 160 00:08:55,720 --> 00:08:57,240 Speaker 1: or a lot of cities around the world, and you think, 161 00:08:57,360 --> 00:08:59,400 Speaker 1: you know, you can't really put too many more cards 162 00:08:59,400 --> 00:09:01,720 Speaker 1: on the road of traffic is already pretty bad. So 163 00:09:01,760 --> 00:09:04,439 Speaker 1: how how much runway is there left for Uber? Uber? 164 00:09:04,480 --> 00:09:06,800 Speaker 1: You know, and it's s one plays a sort of 165 00:09:06,800 --> 00:09:10,680 Speaker 1: funny word game, right. They talk about the serviceable addressable 166 00:09:10,720 --> 00:09:14,560 Speaker 1: market and the total addressable market. In the serviceable addressable market, 167 00:09:14,600 --> 00:09:17,320 Speaker 1: that's like competition with lift there dominate everywhere all over 168 00:09:17,320 --> 00:09:19,440 Speaker 1: the world. They say, Okay, we have more than six 169 00:09:20,800 --> 00:09:22,720 Speaker 1: of the market share, but then when it comes to 170 00:09:22,720 --> 00:09:25,560 Speaker 1: total addressable market, they talk about it, you know, having 171 00:09:25,679 --> 00:09:29,040 Speaker 1: less than one percent, because their point is transportation itself 172 00:09:29,120 --> 00:09:31,800 Speaker 1: is huge and ride sharing is just at the beginning 173 00:09:32,400 --> 00:09:34,880 Speaker 1: of that disruption. So what you're saying is the company 174 00:09:34,960 --> 00:09:37,959 Speaker 1: is selling investors on a story that's much bigger than 175 00:09:38,080 --> 00:09:48,719 Speaker 1: ride hailing. Let's talk about that next. Okay, Erica, So 176 00:09:48,800 --> 00:09:52,800 Speaker 1: let's talk about Uber's future. You know, Uber is pitching 177 00:09:53,440 --> 00:09:56,840 Speaker 1: this business as being much greater than ride hailing. So 178 00:09:56,960 --> 00:09:59,760 Speaker 1: what what does the Uber of tomorrow look like? Well, 179 00:09:59,760 --> 00:10:01,920 Speaker 1: we know it has food delivery, and that's an area 180 00:10:01,920 --> 00:10:05,120 Speaker 1: where Uber has been super successful. I mean, the growth 181 00:10:05,679 --> 00:10:08,200 Speaker 1: is more than year over a year, and that's what 182 00:10:08,320 --> 00:10:13,120 Speaker 1: excites investors. It's long had an autonomous car research project. 183 00:10:13,160 --> 00:10:15,960 Speaker 1: That's a bucket. There are scooters and electric bikes, and 184 00:10:16,000 --> 00:10:20,360 Speaker 1: then there's this logistics business which is basically helping trucking 185 00:10:20,400 --> 00:10:23,760 Speaker 1: companies and getting freight delivered all over the United States. 186 00:10:23,760 --> 00:10:26,240 Speaker 1: So those are sort of the categories we know today. 187 00:10:26,400 --> 00:10:29,200 Speaker 1: You didn't mention the flying cars. Oh yeah, the flying cars. 188 00:10:29,400 --> 00:10:31,080 Speaker 1: It sounds like a joke, but of course they do 189 00:10:31,240 --> 00:10:34,559 Speaker 1: have a research effort in flying cars, but it's more 190 00:10:34,600 --> 00:10:39,080 Speaker 1: partnering with outside helicopter sort of companies, so they're trying 191 00:10:39,080 --> 00:10:41,280 Speaker 1: to spend less money there. But you know, the future 192 00:10:41,360 --> 00:10:44,840 Speaker 1: is everywhere to Uber and even flying cars. And do 193 00:10:44,920 --> 00:10:46,920 Speaker 1: we what do we know about these new businesses, like 194 00:10:46,920 --> 00:10:49,480 Speaker 1: how promising do they look? You know, we can see 195 00:10:49,520 --> 00:10:53,559 Speaker 1: growth on uber eats. I I do think, you know, 196 00:10:53,920 --> 00:10:56,840 Speaker 1: it's again an area where Uber is able to show, okay, 197 00:10:56,880 --> 00:10:59,400 Speaker 1: we can tack on new things. But it's hard to 198 00:10:59,480 --> 00:11:04,720 Speaker 1: understand how uber eats sort of operates profitably in the future, right. 199 00:11:04,760 --> 00:11:07,760 Speaker 1: I don't know if there's enough information to really model 200 00:11:07,800 --> 00:11:09,600 Speaker 1: out their business model. You just sort of have to 201 00:11:09,640 --> 00:11:14,079 Speaker 1: trust that sort of people's way of eating is changing 202 00:11:14,160 --> 00:11:16,720 Speaker 1: and that there's a reason that all these food delivery 203 00:11:16,760 --> 00:11:19,520 Speaker 1: companies are growing at once. Looking at food delivery, I 204 00:11:19,520 --> 00:11:21,760 Speaker 1: mean there's so many companies. There's door Dash, which has 205 00:11:21,800 --> 00:11:24,959 Speaker 1: grown out of nowhere, there's still Postmates and caviare, and 206 00:11:25,040 --> 00:11:29,040 Speaker 1: then there's already public crubhub. Do you think you know, 207 00:11:29,080 --> 00:11:32,920 Speaker 1: in startups, usually it's the focus competitor that's seen as 208 00:11:32,920 --> 00:11:35,520 Speaker 1: having the advantage. Do you think Uber's sort of platform 209 00:11:35,559 --> 00:11:38,760 Speaker 1: approach will actually help it in food delivery? You know, 210 00:11:39,000 --> 00:11:40,760 Speaker 1: another way to ask that is like, how are they 211 00:11:40,840 --> 00:11:45,280 Speaker 1: leveraging their their current strength to get into the new market. Well, 212 00:11:45,320 --> 00:11:47,760 Speaker 1: you know, on the consumer side, it's a different app, right, 213 00:11:47,800 --> 00:11:49,760 Speaker 1: So it's not like there's a convenience that you're an 214 00:11:49,840 --> 00:11:52,319 Speaker 1: Uber user. You're gonna be an Uber Eats customer also, 215 00:11:52,800 --> 00:11:55,880 Speaker 1: And on the driver's side, I feel like the advantage 216 00:11:55,920 --> 00:11:59,000 Speaker 1: is more illusory. I think the drivers that are are 217 00:11:59,040 --> 00:12:02,480 Speaker 1: delivering for uber it's are different than most of the time, 218 00:12:02,520 --> 00:12:04,800 Speaker 1: it seems to me, than the drivers that are taking passengers, 219 00:12:04,840 --> 00:12:07,320 Speaker 1: you know, to and from the airport. So I don't 220 00:12:07,320 --> 00:12:09,679 Speaker 1: know what advantage that they have. I think at one 221 00:12:09,720 --> 00:12:12,000 Speaker 1: point they had this sensibility that you know, they were 222 00:12:12,000 --> 00:12:15,000 Speaker 1: going to like have more prepared meals or a smaller 223 00:12:15,040 --> 00:12:18,280 Speaker 1: selection and to deliver faster. That's kind of gone away, 224 00:12:18,559 --> 00:12:20,520 Speaker 1: So I think they're kind of now just trying to 225 00:12:20,559 --> 00:12:23,360 Speaker 1: compete with more focused competitors in the market that those 226 00:12:23,440 --> 00:12:27,760 Speaker 1: rivals know a little bit better now. Uber also brings 227 00:12:27,840 --> 00:12:31,040 Speaker 1: up the Amazon comparison, as everyone does these days, and says, 228 00:12:31,080 --> 00:12:34,080 Speaker 1: you know, cars are to us what books are to Amazon. 229 00:12:34,200 --> 00:12:36,800 Speaker 1: And I don't know, I find that to be problematic 230 00:12:36,880 --> 00:12:40,160 Speaker 1: as well. I mean, Amazon had, you know, one customer 231 00:12:40,200 --> 00:12:42,760 Speaker 1: that was buying things from it, and on the back 232 00:12:42,840 --> 00:12:46,120 Speaker 1: end of distribution system, these the warehouses where they could 233 00:12:46,120 --> 00:12:49,839 Speaker 1: apply technology to deliver more efficiently. And and yes, the 234 00:12:49,880 --> 00:12:52,600 Speaker 1: warehouses were stocked with books, but it wasn't a huge 235 00:12:52,679 --> 00:12:55,959 Speaker 1: leap to put toys and CD ROMs and and uh 236 00:12:55,960 --> 00:12:58,959 Speaker 1: and then ultimately clothes and jewelry and those same facilities. 237 00:12:58,960 --> 00:13:01,400 Speaker 1: But you know, as I say, Uber, it's a it's 238 00:13:01,400 --> 00:13:03,920 Speaker 1: a different customer, it's a different app, you know. And 239 00:13:03,960 --> 00:13:05,880 Speaker 1: then and then on the on the back end, the 240 00:13:05,960 --> 00:13:09,480 Speaker 1: kind of different driver with different important things about you know, 241 00:13:09,600 --> 00:13:12,560 Speaker 1: speed and keeping food warm and getting it to the 242 00:13:12,559 --> 00:13:15,360 Speaker 1: customer quickly. So I don't know, does the Amazon comparison 243 00:13:15,360 --> 00:13:18,040 Speaker 1: hold water to you? Right? I think you draw a 244 00:13:18,040 --> 00:13:22,280 Speaker 1: smart comparison. I mean, Amazon lost so much money because 245 00:13:22,280 --> 00:13:26,120 Speaker 1: it's building up all this infrastructure, it has these warehouses, 246 00:13:26,160 --> 00:13:28,560 Speaker 1: but then when it's done with them, it has this 247 00:13:28,640 --> 00:13:31,560 Speaker 1: great advantage over competitors and it can use them to 248 00:13:31,640 --> 00:13:35,240 Speaker 1: beat them and other products. So the question for Uber 249 00:13:35,360 --> 00:13:38,320 Speaker 1: is just does it have that same sort of situation 250 00:13:38,360 --> 00:13:41,520 Speaker 1: you talked about drivers. How much is a driver base 251 00:13:41,600 --> 00:13:45,280 Speaker 1: for one product useful for another. I'd say somewhat, and 252 00:13:45,320 --> 00:13:47,840 Speaker 1: I think honestly Uber would agree that to some degree 253 00:13:47,840 --> 00:13:51,040 Speaker 1: they're different drivers. What Uber would really argue is it's 254 00:13:51,080 --> 00:13:55,599 Speaker 1: a technological advantage that they're a logistics expert, and I 255 00:13:56,280 --> 00:13:59,200 Speaker 1: that's not the best mode in the world, just sort 256 00:13:59,200 --> 00:14:07,880 Speaker 1: of an s furtise versus an actual network effect. Okay, well, 257 00:14:07,920 --> 00:14:11,480 Speaker 1: so let's talk about the big day Thursday, trading begins 258 00:14:11,559 --> 00:14:14,960 Speaker 1: actually on Friday. What do we know about how excited 259 00:14:15,000 --> 00:14:18,160 Speaker 1: the market is for this listing, Well, they're excited at 260 00:14:18,160 --> 00:14:22,160 Speaker 1: a price. Uber set a conservative sort of range that 261 00:14:22,160 --> 00:14:25,280 Speaker 1: would value the company at eight to ninety billion, and 262 00:14:25,280 --> 00:14:28,880 Speaker 1: we've reported that certainly within that range at the low end, 263 00:14:28,880 --> 00:14:32,560 Speaker 1: there's plenty of appetite to buy the eight to ten 264 00:14:32,600 --> 00:14:36,000 Speaker 1: billion dollars worth of shares that would get Uber public. 265 00:14:36,080 --> 00:14:39,080 Speaker 1: And so now we're in this sort of gamesmanship phase 266 00:14:39,560 --> 00:14:43,360 Speaker 1: where Uber tries to read the markets and decide whether 267 00:14:43,400 --> 00:14:45,600 Speaker 1: they should raise the price, whether they should keep it 268 00:14:45,600 --> 00:14:48,680 Speaker 1: where it is, because of course I p O is, 269 00:14:48,760 --> 00:14:52,200 Speaker 1: unlike any other financial event, have this very perverse goal, 270 00:14:52,320 --> 00:14:55,720 Speaker 1: which is you want to go public below the price 271 00:14:55,760 --> 00:14:58,160 Speaker 1: you actually think you're worth, so that all those sort 272 00:14:58,160 --> 00:15:02,040 Speaker 1: of fidelities of the world euro prices get some sort 273 00:15:02,040 --> 00:15:05,720 Speaker 1: of get out or so boost when it starts trading, 274 00:15:06,120 --> 00:15:08,360 Speaker 1: and that gives them the return to keep them sort 275 00:15:08,400 --> 00:15:11,240 Speaker 1: of convicted on your stock. And so it's this weird 276 00:15:11,720 --> 00:15:15,480 Speaker 1: marketing game to show that early trading boost and and 277 00:15:15,520 --> 00:15:17,520 Speaker 1: so they're sort of in the process of figuring that 278 00:15:17,560 --> 00:15:20,200 Speaker 1: out right now. And it also seems like a referendum 279 00:15:20,280 --> 00:15:23,040 Speaker 1: on everything that has happened in Silicon valid and the 280 00:15:23,080 --> 00:15:26,280 Speaker 1: private capital markets over the last ten years. I mean, 281 00:15:26,280 --> 00:15:29,640 Speaker 1: the valuation of Uber was insane. So the last private 282 00:15:29,680 --> 00:15:33,760 Speaker 1: valuation was seventy six billion dollars, right, But then investors 283 00:15:33,800 --> 00:15:36,080 Speaker 1: went and said, and you know, pitched this idea that 284 00:15:36,160 --> 00:15:38,400 Speaker 1: Uber could be worth over a hundred billion dollars. But 285 00:15:38,480 --> 00:15:40,400 Speaker 1: let's just say it ends at around you know, the 286 00:15:40,520 --> 00:15:43,320 Speaker 1: day ends, and Uber is worth about ninety billion. I mean, 287 00:15:43,360 --> 00:15:46,120 Speaker 1: what does does it suggest that investors are are convicted 288 00:15:46,160 --> 00:15:48,800 Speaker 1: about the long term opportunity? Yes, I think we have 289 00:15:48,920 --> 00:15:52,720 Speaker 1: to zoom out and say, wow, at nine billion, you know, 290 00:15:52,880 --> 00:15:56,040 Speaker 1: it's worth more than General Motors. It's worth more than 291 00:15:56,680 --> 00:16:01,200 Speaker 1: tons of major American come and ease. Right when you 292 00:16:01,240 --> 00:16:03,960 Speaker 1: back out, it's still a remarkable business story that this 293 00:16:04,080 --> 00:16:08,760 Speaker 1: was all built and basically the last decade. Okay, so 294 00:16:08,800 --> 00:16:12,040 Speaker 1: we're as journalists and it's Bloomberg journalists. We do not 295 00:16:12,160 --> 00:16:15,480 Speaker 1: get to invest in these companies, and we certainly don't 296 00:16:15,480 --> 00:16:17,560 Speaker 1: get paid for giving investment advice. But I just have 297 00:16:17,600 --> 00:16:20,520 Speaker 1: to raise the hypothetical, Eric, would you be a buyer 298 00:16:20,800 --> 00:16:23,880 Speaker 1: at a valuation at ninety billion buyer of Uber stock? 299 00:16:25,200 --> 00:16:27,640 Speaker 1: It's funny. I know Uber super well, But to me, 300 00:16:27,880 --> 00:16:31,440 Speaker 1: an investment in Uber is an investment on the macro 301 00:16:31,560 --> 00:16:34,920 Speaker 1: economic environment and tolerance for companies with tons of debt, 302 00:16:35,160 --> 00:16:39,040 Speaker 1: and that is a subject which I know very little about. Uh. 303 00:16:39,400 --> 00:16:41,440 Speaker 1: It feels like at some point there's going to be 304 00:16:41,920 --> 00:16:45,440 Speaker 1: a reckoning over what to do about the fact that 305 00:16:45,520 --> 00:16:49,280 Speaker 1: Uber loses so much money and to eventually value a company, 306 00:16:49,280 --> 00:16:51,400 Speaker 1: you have to turn a profit, and so I just 307 00:16:51,440 --> 00:16:55,200 Speaker 1: wouldn't want to be exposed to the uncertainty that at 308 00:16:55,240 --> 00:16:58,200 Speaker 1: some point there's gonna be a market correction, and people 309 00:16:58,640 --> 00:17:02,760 Speaker 1: want to be companies that can kick off cash because 310 00:17:02,800 --> 00:17:04,960 Speaker 1: that's what they know is safe. I don't know, Brad, 311 00:17:05,000 --> 00:17:07,080 Speaker 1: what do you think about it? You know, I, first 312 00:17:07,080 --> 00:17:09,199 Speaker 1: of all, I really do think that this over the 313 00:17:09,240 --> 00:17:12,480 Speaker 1: long term, that this transportation market will be one with 314 00:17:12,600 --> 00:17:15,639 Speaker 1: the application of of AI, you know, not just to 315 00:17:16,080 --> 00:17:19,199 Speaker 1: you know, to create autonomous cars, but more efficient you know, 316 00:17:19,359 --> 00:17:22,920 Speaker 1: routes and you know better better maps. And I think, 317 00:17:23,280 --> 00:17:25,640 Speaker 1: you know, I think that actually other companies are maybe 318 00:17:25,640 --> 00:17:28,760 Speaker 1: a little better situated. It's no longer a founder lead company. 319 00:17:29,160 --> 00:17:31,560 Speaker 1: You know, DARO is very incentivized to get the company 320 00:17:31,600 --> 00:17:33,800 Speaker 1: through the I p O. Yeah, just a sees on 321 00:17:33,840 --> 00:17:36,000 Speaker 1: that point. I mean, that is the funny thing. Right, 322 00:17:36,040 --> 00:17:38,720 Speaker 1: So if you go public a hundred billion dollars, to 323 00:17:38,760 --> 00:17:41,160 Speaker 1: be a good investment, you have to have a story 324 00:17:41,320 --> 00:17:43,120 Speaker 1: to be a two in or billion dollar company, right 325 00:17:43,119 --> 00:17:47,240 Speaker 1: because it's about growth. You need sort of new product 326 00:17:47,280 --> 00:17:50,199 Speaker 1: ideas to keep understanding where it's going to go. And 327 00:17:50,240 --> 00:17:54,520 Speaker 1: I think that the vision that Uber is the next Google, right, 328 00:17:54,560 --> 00:17:56,480 Speaker 1: I mean, do you I guess that's what I was saying. Yeah, Like, 329 00:17:56,520 --> 00:17:59,080 Speaker 1: I don't know, you know, will this be an inventive 330 00:17:59,119 --> 00:18:02,040 Speaker 1: company over the term. I mean I think that you know, 331 00:18:02,119 --> 00:18:06,240 Speaker 1: that's often fueled by like the entrepreneurship inside the company. 332 00:18:06,320 --> 00:18:08,679 Speaker 1: And you know, say what you want about Travis, you know, 333 00:18:08,720 --> 00:18:11,399 Speaker 1: and some of the early co founders and engineers, but 334 00:18:11,600 --> 00:18:14,560 Speaker 1: they had that and because of circumstances, because they got 335 00:18:14,680 --> 00:18:17,680 Speaker 1: very wealthy very quickly, they've kind of cycled out. So 336 00:18:17,960 --> 00:18:20,359 Speaker 1: I guess I'm not convinced that in five years and 337 00:18:20,400 --> 00:18:22,639 Speaker 1: ten years it continues to be a company that's inventing 338 00:18:22,640 --> 00:18:24,639 Speaker 1: new things. And then one other point, you know, there 339 00:18:24,640 --> 00:18:27,320 Speaker 1: are things here that probably limit their growth, which is 340 00:18:27,359 --> 00:18:30,639 Speaker 1: like the tolerance of cities for more traffic, you know, 341 00:18:30,800 --> 00:18:33,119 Speaker 1: like to put more cars on the road in the 342 00:18:33,160 --> 00:18:36,040 Speaker 1: biggest markets you know, New York and l A and 343 00:18:36,160 --> 00:18:39,360 Speaker 1: Paris and London. You know, we're going to congestion pricing, 344 00:18:39,440 --> 00:18:41,200 Speaker 1: you know, we're going to fewer cars on the road 345 00:18:41,240 --> 00:18:44,520 Speaker 1: and not more. And so in their biggest business, ride sharing. 346 00:18:44,560 --> 00:18:46,320 Speaker 1: You know, it's like you're gonna have to grow in 347 00:18:46,359 --> 00:18:48,560 Speaker 1: the smaller cities and the suburbs. What do you think 348 00:18:48,560 --> 00:18:51,200 Speaker 1: it means for other companies and for Silicon Valley overall? 349 00:18:51,680 --> 00:18:54,560 Speaker 1: If the c I p O goes well, the music 350 00:18:54,640 --> 00:18:58,320 Speaker 1: keeps playing, you know, the party keeps going. Uber worked, 351 00:18:58,600 --> 00:19:03,640 Speaker 1: the doubters were raw, the way Silicon Valley does business works, 352 00:19:03,680 --> 00:19:08,600 Speaker 1: and that the technology is still transforming the world. You know, 353 00:19:09,040 --> 00:19:11,840 Speaker 1: right now Weber is looking like a success story for 354 00:19:11,880 --> 00:19:15,520 Speaker 1: Silicon Valley. So, Eric, last question. Uber is going public 355 00:19:15,560 --> 00:19:18,879 Speaker 1: on Friday, but the more important day might be in 356 00:19:18,960 --> 00:19:23,320 Speaker 1: three months time when it announces their first quarterly report 357 00:19:23,480 --> 00:19:25,760 Speaker 1: as a public company. So what what do you think 358 00:19:25,800 --> 00:19:28,200 Speaker 1: then they will be like and and and what will 359 00:19:28,200 --> 00:19:30,960 Speaker 1: investors be looking for? And is it different than the 360 00:19:31,000 --> 00:19:33,400 Speaker 1: way people have been evaluating this company for the last 361 00:19:33,440 --> 00:19:36,320 Speaker 1: ten years? You know, Then we get into this world 362 00:19:36,320 --> 00:19:39,399 Speaker 1: where people are judging Uber relative to past performance. It's 363 00:19:39,440 --> 00:19:43,960 Speaker 1: all about expectations, you know. It starts this quarterly machine 364 00:19:44,119 --> 00:19:48,320 Speaker 1: of did they increase revenue, how's the ride sharing business doing, 365 00:19:48,359 --> 00:19:51,399 Speaker 1: how is uber Eats doing, how are the losses? You know, 366 00:19:51,480 --> 00:19:55,880 Speaker 1: then we really have a much more sort of established 367 00:19:55,920 --> 00:19:58,040 Speaker 1: framework for what it's worth. And then it's how well 368 00:19:58,040 --> 00:20:03,520 Speaker 1: can I execute on that so this is a long journey, um, 369 00:20:03,560 --> 00:20:05,880 Speaker 1: and can you imagine, you know, if if the stock 370 00:20:05,920 --> 00:20:08,639 Speaker 1: performance isn't great and then we get like active ast 371 00:20:08,680 --> 00:20:12,840 Speaker 1: shareholders and the whole drama around this company starts again. 372 00:20:13,640 --> 00:20:16,280 Speaker 1: That will make your life more interesting. It's funny to imagine. 373 00:20:16,320 --> 00:20:19,960 Speaker 1: It's hard to guess who would be a more steady 374 00:20:20,000 --> 00:20:24,200 Speaker 1: hand than our you know, I mean the dream journalist situation, 375 00:20:24,240 --> 00:20:27,920 Speaker 1: of course, is Travis Kalanick saying this company is not 376 00:20:28,080 --> 00:20:31,240 Speaker 1: the exciting one that I created, and you should put 377 00:20:31,280 --> 00:20:33,160 Speaker 1: me back in the chair. But I think right now 378 00:20:33,200 --> 00:20:36,520 Speaker 1: his reputation is too much in tatters for that to happen. 379 00:20:36,600 --> 00:20:38,520 Speaker 1: And yet you have to imagine, though, that he is 380 00:20:38,520 --> 00:20:40,639 Speaker 1: plotting his comeback, right, I mean, that's got to be 381 00:20:40,640 --> 00:20:43,640 Speaker 1: in the cards. I would not count Travis out yet 382 00:20:43,720 --> 00:20:47,560 Speaker 1: he wants that comeback story one way or another. Well. 383 00:20:47,680 --> 00:20:49,920 Speaker 1: I look forward to following the Uber journey as a 384 00:20:49,960 --> 00:20:52,399 Speaker 1: public company, and Eric, I look forward to reading your 385 00:20:52,440 --> 00:20:59,000 Speaker 1: stories about it. Thanks, and that's it for this week's 386 00:20:59,000 --> 00:21:01,840 Speaker 1: episode of decrypt It. Thanks for listening. If you have 387 00:21:01,920 --> 00:21:04,040 Speaker 1: a story to share, I'd love to hear it. You 388 00:21:04,080 --> 00:21:06,720 Speaker 1: can write to us at decrypted at bloomberg dot net. 389 00:21:07,080 --> 00:21:10,640 Speaker 1: Or I'm on Twitter at Eric Newcomer and I'm at 390 00:21:10,680 --> 00:21:13,520 Speaker 1: brad Stone And please help us spread the word about 391 00:21:13,520 --> 00:21:16,160 Speaker 1: our new season by leaving us a rating or submitting 392 00:21:16,160 --> 00:21:19,879 Speaker 1: a comment in your favorite podcast app. This episode was 393 00:21:19,920 --> 00:21:23,280 Speaker 1: produced by Peo Gedcary and Lindsay crowd Awell. Our story 394 00:21:23,400 --> 00:21:26,760 Speaker 1: editor was Anne Vandermay. Thank you also to Emily Busso 395 00:21:26,880 --> 00:21:30,840 Speaker 1: and Aki Edo. Francesco Levi is head of Bloomberg Podcast. 396 00:21:31,160 --> 00:21:32,240 Speaker 1: We'll see you next week.