Uber is the latest company to signal its willingness to accept cryptocurrencies as payment, but not until some major changes take place.
Companies across multiple industries have begun accepting crypto as payment. Tesla was one of the biggest companies to accept crypto before backtracking over environmental concerns. That view has been echoed by other organizations, such as Mozilla, which have stopped accepting crypto over the same issues.
According to Bloomberg, Uber CEO Dara Khosrowshahi said his company would also like to accept crypto “at some point,” before saying “this isn’t the right point.”
Uber is waiting until crypto transaction fees are lower, reducing its environmental impact.
“We’re having conversations all the time,” Khosrowshahi said. “As the exchange mechanism becomes less expensive and becomes more environmentally friendly, I think you will see us leaning into crypto a little bit more.”
Khosrowshahi’s statement is just the latest indication of the challenges crypto faces before it gains widespread adoption.
“Uber built a very anti-fragile business in regards to having the Eats business and having the Rides business,” says early Uber investor Jason Calacanis. “When the Ride’s business went down that kind of indicates people are staying home. When they stay home they use Uber Eats and increasingly Drizly, Cornershop, and Postmates. Watching the Uber team take on this challenge of the pandemic year has been really impressive.”
Early Uber investor Jason Calacanis says that unlike Lyft, Uber built a very anti-fragile business with the combination of Eats and Rides and has become relentlessly focused:
Uber Built A Very Anti-Fragile Business
What we’re really going to see here is that Uber built a very anti-fragile business in regards to having the Eats business and having the Rides business. When the Ride’s business went down that kind of indicates people are staying home. When they stay home they use Uber Eats and increasingly Drizly, Cornershop, and Postmates. People are ordering groceries. Watching the Uber team take on this challenge of the pandemic year has been really impressive.
It reminds me a lot of Disney and how they got focused around Disney+ as the center of the organization. They looked at what was happening in the pandemic and said parks are great, merch is great, movies are great, let’s just put everything into Disney+ and accelerate that. Look what happened to that company. I’ve got to give Dara Khosrowshahi a lot of credit. He got rid of a lot of the noise like self-driving cars which are a multi-decade kind of vision. He sold off the places where they weren’t going to be in first, second, or even third place. He did JVs and sold off those businesses like Russia and China, etc. That’s well documented.
The Space Can’t Have 50 Players Losing Money
They found a new really inspiring footing which is if Amazon is two-day delivery going to one-day, Uber’s is one-hour delivery going to 10-minute delivery. That is Travis Kalanick’s original vision for Uber. When I met with him when he was building the company and I was the third or fourth investor his vision was this is a logistic company. We took atoms in the world made them bits on the internet. Now we’re going to take bits on your phone, an app, and we’re going to move atoms in the real world. That was his original pitch. Here we are in decade two where I’m still own the same shares I’ve had since I bought them for a penny or whatever back in 2008 or 2009. I remain super bullish. I have a huge position in Uber and I’m going to hold it for the next decade.
It’s fairly obvious that there are acquisitions and consolidation that need to happen in the space in order for it to be profitable. The space can’t have 50 players losing money. We’ve watched Lyft, Postmates, Doordash, and everybody, say that we’re going to have to charge what this product is worth. We’re going to have to stop burning money. There’s no free VC money. The public markets are not down with lose money forever and grow. I think we found a happy medium here between what public market investors want, profits, and what private market investors want, growth.
Uber Has Become Relentlessly Focused
I think Dara has done an exceptional job. Some things will come from acquisitions but most of it has to be just relentless execution and focus. That is the inspiring part of what happened here. Uber has become relentlessly focused. Things that were coming in 10 or 20 years like self-driving in all likelihood will be a commodity business. In 10 or 20 years there’ll be five companies who have that technology. VTOLs are very fascinating and very interesting, but again that’s probably seven, eight, nine, or ten years off as a very niche product.
Uber Built A Very Anti-Fragile Business, Says Jason Calacanis
In a world first, Uber will treat its UK drivers as “workers” after losing its case before the UK Supreme Court.
In February, the UK Supreme Court ruled that Uber drivers were entitled to more protections than they enjoyed as contractors. “Worker” is a classification unique to the UK, providing more protections than a contractor, but not reaching the status of an employee. Uber has been fighting similar battles in multiple jurisdictions, but the UK case was the company’s first major loss.
As a result, Uber has agreed to pay some 70,000 UK drivers minimum wage, as well as provide vacation pay and access to a pension plan.
Writing an op-ed piece for The Evening Standard, CEO Dara Khosrowshahi outlined the company’s policy evolution:
Our thinking on this issue has evolved over time, and I will be the first to admit that we’ve struggled to identify solutions that work for Uber and for those who earn on our platform.
Following last month’s UK Supreme Court ruling, we could have continued to dispute drivers’ rights to any of these protections in court. Instead, we have decided to turn the page. Beginning today, Uber drivers in the UK will be treated as workers.
It remains to be seen if the UK case will serve as a template for other countries and jurisdictions, but Uber’s willingness to make changes certainly will undermine its arguments in future cases.
Uber is acquiring alcohol delivery startup Drizly, in a deal worth $1.1 billion.
Drizly is the nation’s leading alcohol delivery service, operating in over 1,400 cities around the country. The company’s reach is an impressive accomplishment given the patchwork of alcohol laws and regulations among various states.
Uber sees an opportunity to round out its food delivery service, offering the full dining experience in-home.
“Wherever you want to go and whatever you need to get, our goal at Uber is to make people’s lives a little bit easier. That’s why we’ve been branching into new categories like groceries, prescriptions and, now, alcohol. Cory and his amazing team have built Drizly into an incredible success story, profitably growing gross bookings more than 300 percent year-over-year. By bringing Drizly into the Uber family, we can accelerate that trajectory by exposing Drizly to the Uber audience and expanding its geographic presence into our global footprint in the years ahead,” said Uber CEO Dara Khosrowshahi.
“Drizly has spent the last 8 years building the infrastructure, technology, and partnerships to bring the consumer a shopping experience they deserve. It’s a proud day for the Drizly team as we recognize what we’ve accomplished to date but also with the humility that much remains to be done to fulfill our vision. With this in mind, we are thrilled to join a world-class Uber team whose platform will accelerate Drizly on its mission to be there when it matters—committed to life’s moments and the people who create them,” said Drizly co-founder and CEO Cory Rellas.
The deal is expected to close in the first half of 2021.
“The Uber Eats business continues to grow at unprecedented rates,” says Uber CEO Dara Khosrowshahi. “Revenue has almost tripled year on year. That business continues to accelerate. It looks like the Eats business is sticky. I wouldn’t count on the growth rates we are having now post-pandemic. However, I do think that you are going to have big growth rates off of a much larger base as a result of everything that has happened.”
Uber CEO Dara Khosrowshahi says that Uber Eats is growing at unprecedented rates during the pandemic and he expects the business to do well post-pandemic as well:
Uber Eats Growing At Unprecedented Rate
On the Uber Eats side, it is an entirely different story where the business continues to grow at unprecedented rates. Revenue has almost tripled year on year. That business continues to accelerate. When we look at Eats we are seeing some great trends. The monthly actives on Eats are up 70% on a year on year basis. The trips are up 110% on a year on year basis. New orders, orders per eater, or basket sizes, all of these trends are up double-digit.
We’ve taken a look at Eats’ performance in markets that are opening up such as New York City and we haven’t seen any kind of performance degradation in Eats. What that suggests to us is that there is a whole new class of consumer that’s experiencing the delight of being able to pick anything and have it delivered within 30 minutes and eat what you want how you want it. It looks like the Eats business is sticky. I wouldn’t count on the growth rates we are having now post-pandemic. However, I do think that you are going to have big growth rates off of a much larger base as a result of everything that has happened.
As Cities Open Up Uber Opens Up
It really is impossible to tell when the mobility business can come back. It depends entirely on the health situation on the ground. With markets that are opening up faster because of the health situation or the society, things are coming back. For example, we looked in New York City where the counts have been down relative to the rest of the country and in just October our volumes were 63% of pre-pandemic levels. This is materially higher than they were in the rest of the nation.
You have week-day use cases of the service outside of commute that is now at pre-pandemic levels or higher. As cities open up Uber opens up as well. We actually think that we can be a beneficiary of certain trends that we’re seeing.
We have invested in safety such as digital mask verification. We also have the No Mask No Rides advertising campaigns. People are feeling safer using Uber. Our reliability and predictability are absolutely unrivaled. While we look at share and we always want to make sure that we are competitive really what we focus on is the reliability of the service and safety of our drivers and hopefully coming back as the health situation improves.
Vaccine Could Radically Improve Bookings
There is a pretty consistent improvement in the mobility business as you go month to month to month. This is one of the benefits of having a truly global business. Within that steady improvement, there are all sorts of ups and downs. Hong Kong has had some openings and closings. Obviously, Europe is now going through another shutdown. US case counts are moving up. The individual curves are not smooth. But when you look at our global portfolio it smooths out.
We are seeing a month to month improvement. For example, if you look at our last quarter overall gross bookings were down 50%. In September, the last month of the quarter, they were down only 44%. You just see this kind of consistent improvement. We think that the consistent improvement will continue into next year. We think a vaccine could radically improve the slope of that improvement.
Uber CEO Dara Khosrowshahi Says ‘Eats’ Growing At Unprecedented Rate
If there was a time to lean into delivery, this is the time. We’re going to be the global leader in that business. We’re going to expand beyond food into other categories such as groceries and pharmacy, essentially powering world commerce.
Uber CEO Dara Khosrowshahi discusses how Uber Eats is going to ‘essentially power world commerce’ in a Zoom call with the Wall Street Journal:
If there was a time to lean into delivery, this is the time,” We’re going to be the global leader in that business. We’re going to expand beyond food into other categories such as groceries and pharmacy, essentially powering world commerce.
The food delivery business is profitable in certain countries. For example, two of our top five international markets are profitable today and were profitable last quarter. The profitability really depends on how hard we are leaning in toward expanding supply and acquiring customers. The perspective that we have on this business is that even though it’s growing it’s actually very early in its development.
For example, Japan is a huge market potential for us and one of our leading growth markets. Less than ten percent of restaurants in Japan are signed up to use Uber Eats as a delivery service. When you have a situation where your penetration is ten percent of the ultimate market size you lean in as a company.
We are fortunate in that we’ve got very strong balance sheets, over $7 billion in cash and available capital. That allows us to lean into certain businesses. If there was a time to lean into delivery, this is the time. We’re going to be the global leader in that business. We’re going to expand beyond food into other categories such as groceries and pharmacy, essentially powering world commerce.
We will have to essentially shut down Uber until the voters decide.
Reclassifying drivers from contractors to employees is unfortunate.
You would just get a much smaller service at much higher prices.
The vast majority of our drivers don’t want to be full-time workers.
Really unfortunate at a historical time of unemployment in California.
It would put vast swaths of our drivers out of work.
It would take away transportation from hundreds of thousands of Californians.
Our labor laws are hopelessly outdated.
It’s essentially how Uber started, kind of a black car service with few cars.
We can’t go out and hire ten of thousands of people directly overnight.
We would focus on the center of cities versus smaller cities or suburbs.
“We think the ruling by a California judge was unfortunate on reclassifying drivers from contractors to employees,” says Uber CEO Dara Khosrowshahi. “We think we (already) comply with the laws. But if the judge and a court finds that we are not and they don’t give us a stay to get to November then we will have to essentially shut down Uber until the voters decide.”
Dara Khosrowshahi, CEO of Uber, discusses a court ruling requiring Uber to classify Uber drivers as full-time workers. Khosrowshahi says that this will force Uber to become a much small black car service focused on city centers and with much higher prices for rides. Essentially the service would no longer exist in California suburbs and rural areas:
Vast Majority of Uber Drivers Want To Remain As Contractors
We think the ruling (in California) was unfortunate (on reclassifying drivers from contractors to employees). We obviously respect the law and the judge. We do have about eight days now where there is a stay. We are going to go back to the court and appeal the ruling and hope that the court reconsiders. If the court doesn’t reconsider then in California, it’s hard to believe we will be able to switch our model to full-time employment quickly, so I think Uber will shut down for a while. Really, the big question is in November with Prop. 22, we have a proposition out there that puts forward what we believe is the best of both worlds.
The vast majority of our drivers, a 4-1 ratio, want flexibility, and don’t want to be full-time workers. With Prop. 22 drivers can continue to have the flexibility that they have but they can enjoy the protections, benefit fund, an earning standard so that they have the protections that many people associate with full-time work. We are hoping that in November the California voters can speak. We are confident that this better way which is kind of the best of both worlds will be the way going forward for California.
We Will Shut Down Until The Voters Decide In November
In California, we have changed our model substantially. For example, riders in California pay drivers directly. Drivers can set their own price as an independent contractor would. Drivers have all the flexibility to decide whether or not they want to take a ride or not. We think we (already) comply with the laws. But if the judge and a court finds that we are not and they don’t give us a stay to get to November then we will have to essentially shut down Uber until the voters decide.
It would be really unfortunate at a historical time of unemployment in California. It would put vast swaths of our drivers out of work without the opportunity to earn. It would take away transportation from hundreds of thousands of Californians. It would be really really unfortunate. Obviously we would look to comply with the law long-term and we’re hoping the law gives us the best of both worlds. Our labor laws are hopelessly outdated. You’ve got the haves and have-nots and you can have actually a better way.
Smaller Service, Higher Prices, Only Focused On Big City Centers
Hopefully, the courts will reconsider. By no means do we want this to happen. If they don’t we are going to have to work to move to a full-time model. It’s essentially how Uber started, kind of a black car service with very few cars on the road and much higher prices. So we will look to flip to a full-time model but this is a model that we built over ten years. We can’t go out and hire ten of thousands of people directly overnight. It would take a significant amount of time to switch over. We have teams thinking about it and working on it. We don’t think it’s the likely outcome by the way and we would look to get back on the road as quickly as possible.
You would just get a much smaller service, much higher prices, and probably a service that’s focused on the center of cities versus a bunch of the smaller cities or the suburbs that we operate in right now. That’s the reality. It’s not a game of chicken or one way or the other. It’s really up to the courts and we are going to comply with the law. We will look to get going but it will be a very very different service once we get going.
Uber CEO: Will Shut Down In California Until Voters Decide
“There’s a lot of crazies out here in Arizona,” said Uber driver Randy Clarke in a very interesting online chat with Uber CEO Dara Khosrowshahi. “I just wish you guys had some sort of way for us to put our rules of our vehicle on the app so the passengers know what to expect beforehand.”
“For example, in January this guy came into my car trying to get into the front seat. I don’t like to allow people in the front seat when I’m driving alone at 11 o’clock at night. He gets mad after I cancel the ride he jumps in the back and argues with me, calls me the N-word, slams the door and leaves. What that guy did was bad and disgusting, definitely not good.”
https://youtu.be/kRpbHp8UbaQ
“But if there was a way for him to know that I don’t allow people in the front seat when I’m driving with them alone I’m sure he would have just canceled there and then.”
Then Uber driver Randy Clarke gave Uber’s CEO a suggestion. “I just wish there was a way for us to upload dashcam footage directly to you guys. Sometimes I get to run around and they transfer me to safety and support. There needs to also be some sort of way for Uber to somehow encourage the footage in case something was to happen.”
Randy added, “I think a lot of drivers are afraid of the dashcam policy you guys have in where we can’t put the footage out or we get deactivated. In my situation, I was like whatever happens happens. I showed people the footage and lo and behold he was a guy who owned a business in my community and he got a lot of crap for that.”
“Dashcams Is Technology That We’re Working On,” Says Uber CEO Dara Khosrowshahi
“Well he sounds like he deserves a lot of crap for that,” said Uber CEO Dara Khosrowshahi. “Dashcams and in general taping rides, etc. is actually technology that we’re working on. There’s this fine balance with privacy concerns. You guys know with TikTok and all that stuff, privacy is rightfully a huge thing.”
“Most drivers are like you, good people that are totally open to dashcams,” says Khosrowshahi. “Hey take the footage, I have nothing to hide, this is part of my profession, I act well and I treat my riders well so they don’t have a problem. I think a lot of riders when they’re in the car they do expect privacy and they’re nervous about the balance of safety and privacy. Safety’s super important as well. They’re both important. So we’re trying to work on technologies that balance the two.”
Khosrowshahi added, “Every single state statute, by the way, is different. So you can’t have one solution. You’ve got to have a state-by-state solution that works for everybody. I really would like to get something that bridges that and balances safety and privacy, but it’s a lot of work to do so. The tech teams are totally working on it. So one day Randy we’re gonna get you that magic!”
“There are solutions you can imagine where we don’t take the dashcam footage but we only take it if you tell us that there’s an issue It’s in the cloud someplace and no one has access to it. We want to do it the right way because we should not be inappropriately watching someone if we don’t have to. It’s only for those exceptional circumstances.”
“Exactly,” says driver Randy. Some people do it for clout while others just want to do it just to make sure it doesn’t happen again. So I totally understand that.”
In a call to investors, Uber CEO Dara Khosrowshahi has said the company is losing significant business because of the coronavirus, but has enough funds on hand.
According to Business Insider, Khosrowshahi told investors the hardest hit areas have seen a 60-70% decline in rides, and that could go as high as 80% for the year. In spite of that, the CEO said the company has $10 billion in unrestricted cash.
“We have plenty of liquidity on the books which positions us to come out of this crisis strong and capable,” Khosrowshahi said.
Another bright spot is Uber Eats, the company’s food delivery service. As people forgo restaurants, Uber Eats is seeing growth in even the worst hit areas. Between the news that Uber has enough cash to survive the crisis, and news its food delivery service is growing, the company’s stock was up as much as 43% Thursday.
Uber should serve as an example for other companies. Between having enough cash to weather a storm, and diversifying into a disruptive business, the company seems well-positioned to survive any temporary hit to its core business.
“Scale is the primary driver toward profitability,” says Uber CEO Dara Khosrowshahi. “It’s getting big. We’ve got over a billion rides per quarter and we’ve got trips growing at 35 percent on a year on year basis. It’s a combination of growing top-line over 35 percent, technology innovation to delight the customer and take costs down at the same time, and then good old fashioned efficiency, making sure that our corporate costs don’t grow as fast as our revenue. All of those together give you a formula to get to profitability.”
Dara Khosrowshahi, CEO of Uber Technologies Inc., discusses how Uber can continue to be transformational and ultimately be profitable in an interview on Bloomberg Technology:
Uber Can Continue To Be Transformational
We have resolved all of the governance conflicts that the company had. There were many legal issues that the company was involved with. We have SoftBank as a partner and you want SoftBank to be behind you and a big partner and a big investor. We have a great investor base. We’ve taken the company public and company’s revenue, gross bookings, have grown 75 percent since I joined. We now have a path to profitability. So while we’ve had bumps on the road, and every adventure has bumps on the road, I like where we are. I especially like the position we are in now for the next two years.
I think Uber (can continue to be transformational over the next decade). Really what Uber has done is brought transportation and opportunity at this point to what we believe is just a small segment of the population. We’ve got over four million driver-partners all over the world which is a huge number. It is unparalleled. But we want Uber to be available to everybody. What we are doing now is going into the next step of introducing other transportation choices to Uber. We’ve always gone with pool, but for example, we are testing busses in Cairo now to even bring the price of Uber down to the next level, a dollar or a buck fifty, etc.
The Rideshare Business Itself Is Turning Quite Profitable
We are introducing bikes and scooters for personal electric mobility. Essentially, anyway that you want to get around your city we are going to be there for you. It will be mostly Uber goods but we will also have other third parties such as transit, such as one of our partners Lime as well. Any way that you want to get around we want Uber to be there. And if you want food, if you want even local commerce which I think we will power or even Uber Eats or some of our other services will be there for you as well.
If you look at our rideshare business, it covered our overhead less than about $100 million. The rideshare business itself is turning quite profitable. We believe that the profits in the rideshare business are not only going to grow top-line but we believe we are going to grow the bottom-line as well. Then there are other businesses, Eats, autonomous, freight, etc. These are extraordinary opportunities that we are funding. I do believe that we are going to prove to our investors that we can take on a serial basis big parts of our business, turn them profitable, and use those parts of our business to fund investments in other areas.
Our Formula To Profitability
I’m very confident that Uber can be profitable. I think the losses that we reported, it was a $5 billion loss from an accounting perspective. If you live in an accounting world that’s a big loss. I live in the real world. Actually, in the real world or EBITDA losses of $656 million were lower than Q1 and were on a good path in terms of our EBITDA losses as well. None of this is going to be easy. All of this is going to take great execution from all of our teams, marketing, technology, etc. We are going to be demanding our employees to be doing even more with less and to execute incredibly effectively in order for us to grow the top-line and the bottom-line as well.
Scale (is the primary driver toward profitability). It’s getting big. We’ve got over a billion rides per quarter and we’ve got trips growing at 35 percent on a year on year basis. We think we can use technology to be much more efficient. For example, instead of you now having to email a call center agent or call a call center agent if you have issues, you can just do it in the app. These are technology innovations that allow customers to have a better experience and at the same time they bring down costs. It’s a combination of growing top-line over 35 percent, technology innovation to delight the customer and take costs down at the same time, and then good old fashioned efficiency, making sure that our corporate costs don’t grow as fast as our revenue. All of those together give you a formula to get to profitability.
Uber CEO Dara Khosrowshahi: Our Formula To Profitability
“Not only do we expect to hit cashflow break-even, but we expect this business to be very profitable at maturity,” says Uber CEO Dara Khosrowshahi. “I think that going forward our spending declines as a percent of revenue. So when you’re growing trips 35 percent year on year your spending is going to increase. But we’re going to get leverage on the marketing line and we’re definitely going to get fixed cost leverage going forward.”
Dara Khosrowshahi, CEO of Uber, discusses the company’s latest quarterly results and predicts that Uber will ultimately be very profitable in an interview on CNBC:
Uber Is Much More Than a Rideshare Company Now
The IPO for us is a once in a lifetime moment. It was a really important moment for the company. Some of what we did like the driver appreciation award, almost $300 million that we put in the hands of over a million drivers globally were really important for us to do. It created a messy P&L from an accounting standpoint. I think it is hiding underlying trends that are actually very healthy for the company. If you look at trends for the company which is going to matter long-term, you have got gross bookings over $16 billion growing 37 percent on a year on year basis. You’ve got trip volume, and trips are units, growing 35 percent year on year. You’ve got audience, monthly active platform customers, now over 100 million, growing 30 percent. The actual revenue growth excluding the driver appreciation award was up 26 percent.
What I did tell our investors is to expect that to accelerate into the back half of the year. The back half of the year you are going to see if trends stay the same, revenue growth in excess of 30 percent. When you look at profitability, we beat our own internal targets and we beat Street targets as well. We came in at a loss of $656 million. It’s still a big loss but the losses are improving and the take rates are improving. If you back out some of those one-time expenses, we went from a loss of $800 million to a loss of $656 million. We got much more efficient on the marketing front. We actually took marketing as a percentage down while we were still growing the top line over 30 percent as well. This is much more than a rideshare company now, it’s a transportation company.
We Expect This Business To Be Very Profitable At Maturity
We are in a situation as far as the network effect of the company where we don’t need to increase the marketing and incentives. We can go in with loyalty plans both for riders and drivers that are going to add to leverage and ultimately profitability of the company. This is a marketplace company that has over 20 percent revenue margins and revenue margins are increasing year on year. Not only do we expect to hit cashflow break-even, but we expect this business to be very profitable at maturity.
I think that going forward our spending declines as a percent of revenue. So when you’re growing trips 35 percent year on year your spending is going to increase. But we’re going to get leverage on the marketing line and we’re definitely going to get fixed cost leverage going forward. I think that this quarter proved that out and we have to keep hitting our marks in the next couple of quarters. It’s a super-competitive marketplace but we are confident. We like what we saw operationally this quarter.
Uber CEO Dara Khosrowshahi: We Expect This Business To Be Very Profitable at Maturity
“Autonomous driving is coming no matter what,” says Says SoftBank CEO Masayoshi Son. “That’s the destiny of where technology is going to drive us.” He adds: “When autonomous driving comes the cost of providing the service will dramatically get more efficient. It will also dramatically reduce the rate of accidents compared to human driving accidents. I think autonomous driving will be definitely coming very very soon.”
I Definitely Believe Uber is Going to Grow Exponentially
I would like SoftBank to remain invested in Uber as long as possible. Of course, it all depends on the share price (after their IPO). Sometimes the share price goes up too high too quickly and then we have to harvest a little bit. It all depends on the market conditions. But do I believe the company is going to grow exponentially? I definitely believe so.
I’m very respectful (of our) dialogue with the new management (led by Uber CEO Dara Khosrowshahi). He’s very very smart and very well balanced. He can be very offensive (strategically) in increasing the business and he can also be very cost-efficient (and good with) employee morale and so on.
Travis Kalanick is a Pioneer
I respect that but at the same time, I also have to mention that I respect (Uber co-founder and former CEO) Travis (Kalanick) tremendously. He’s one of the best entrepreneurs. He is a pioneer. When you pioneer a new frontier you have to have the energy, the passion, and out-of-the-box thinking. His aggressive is one of the best. Potentially, I would love to support him in his new ventures. It all depends on the price. But I have tremendous respect for him.
Autonomous Driving is Coming No Matter What, Says SoftBank CEO
Autonomous is an enormous technology, says Uber CEO Dara Khosrowshahi. Following the unfortunate accident that happened last year in Arizona, Uber took a retreat from autonomous vehicles. However, Uber has taken that time to rebuild how they are building that product.
“It will bring huge strides in safety, and huge strides in making transportation available to more people around the world,” says Khosrowshahi. “Anytime you have a technology that is as earth-shaking as autonomous, it doesn’t come easy.”
Dara Khosrowshahi, CEO of Uber, discusses their short-term retreat from autonomous vehicles and the growth and profitability of Uber going forward in an interview on CNBC at Davos 2019:
Autonomous is an Enormous Technology
We certainly took a retreat (from autonomous vehicles) based on the accident that happened that last year. We took that opportunity to really rebuild how we built product. But I do think that autonomous is an enormous technology. It will bring huge strides in safety, and huge strides in making transportation available to more people around the world. Anytime you have a technology that is as earth-shaking as autonomous, it doesn’t come easy.
If there’s one thing that Uber is about it’s about innovation risk. I don’t think it’s a have-to, it’s we want to be at the forefront. We want to be at the forefront of building out autonomous technology in a live network. We don’t need to build it for every single circumstance. We don’t need to build it for bad weather. We don’t need to build it for if they’re accidents, etc. We can build autonomous and launch it for simple situations one step at a time.
I think that the timeline (of launching autonomous) has proven to be more difficult than we thought. I think that regulation is going to play a big part in that introduction. I do think that because we run a live network the problem that we’re solving for us is going to be simpler than than anyone else. We are completely open to partnering with third-party autonomous because ultimately we believe in the technology. We want to be a part of it. It’s a great opportunity, but ultimately we think this will be good for society.
We Want to Build Sustainable Profitable Growth
What we want to build is sustainable growth that can be profitable. Sometimes near-term, for example, if you look at one of our largest and fastest growing businesses UberEats, home delivery of food. It delivers from over 200,000 restaurants in under 30 minutes. It’s a magical experience.
We have had cities in which the Eats product has become profitable. but essentially once we saw that program working we’re accelerating city launches and early cities early on are unprofitable. But we know that the model is sustainably profitable over a long period of time. So we think about near-term growth with long term profits.
Growth Now in Concert with City Regulators
I think that one area that we can control is making sure that our growth is now in concert with regulators the cities in which we operate. I think that in the past, and to some extent was a strength, but it’s not something that is sustainable, we grew just purely based on consumer demand.
We didn’t necessarily take the time to have a dialogue with society, with regulators, and with cities as to growth that serves all of the constituencies. We’re having that dialogue now. It sometimes causes complexity in our model and sometimes causes us to pause, but it creates a lasting model.
What’s special about Uber is we’re part of life in the cities. Were a huge labor force etc., so we have got to take that time and have that dialogue. In the majority of municipalities, their goal is to improve life for their citizens and life with Uber, life with UberEats, life with Jump Bikes is better. It’s really a question of how we can achieve our goals but be respectful of some of the limits that they put on us.
This Isn’t About Privacy, These Are People’s Lives
What was happening was that my teams and operating teams, the folks on the ground in Mexico, in Brazil, and in the US, they all came to me and said, “Listen with the numbers getting this big and with our platform getting as large we have to take responsibility for the platform.” I’ve got to give credit to my operators. This wasn’t like the moral CEO coming down.
This isn’t about privacy, these are people’s lives. We’ve got to invest in safety even if it causes short-term pain and growth. We came together as a team and we’re building technology, we’re making sure that the background checks, etc., all of that is being done. We have a 911 button just in case something happens. There’s a whole host of activity going into safety and it came from the team.
Salesforce is booming and the reason is that virtually every company in the world is going through a huge digital transformation, according to Salesforce co-CEO Marc Benioff. “The reason why is every company that we’re dealing with is going through a huge digital transformation and every digital transformation begins and ends with the customer,” says Benioff.
Marc Benioff, co-Founder, Chairman, and co-CEO of Salesforce, recently discussed the companies latest financial results and explained how the digital transformation is powering their continued massive growth in an interview with Jim Cramer on CNBC:
Fastest Growing Enterprise Software Company of All Time
We see hitting our big goal which is $22 to $23 billion in revenue within two fiscal years. By fiscal year 2022. Now here we are we’re giving fiscal year 2020 guidance for the first time at $16 billion. Salesforce remains the fastest growing enterprise software company of all time and that’s incredible. I don’t think the company has ever been stronger or been in a better position.
These revenue numbers are incredible and way beyond our expectations for the quarter It’s awesome. We had a great quarter, the third quarter was phenomenal. We’re giving phenomenal guidance for the fourth quarter and certainly, we’re all praying and hoping to improve on that by the way and now we can see a strong fiscal year ahead in fiscal year 2020 as well.
Every Digital Transformation Begins and Ends with the Customer
I don’t think the company has ever been stronger or been in a better position. The reason why is every company that we’re dealing with is going through a huge digital transformation and every digital transformation begins and ends with the customer.
Just look at one of the largest deals we did this quarter, it’s a nine-figure deal with one of the largest banks in the world and they’re just rebuilding how they deal with their customers. That’s an amazing story for us just to see everybody go through this transformation. It’s everything that is customer facing for one of the top five financial institutions in the world.
Another one that I can give you the actual name for that is doing something just as exciting is Citibank. Michael Corbat has done a fantastic job as CEO of Citibank. We’ve been working on the retail transformation there and this quarter they opened the door for us and now we’re doing the wealth transformation as well. We couldn’t be more excited about everything that Citibank is doing.
Every Company is Transforming Their Customer Relationship
Every company is transforming their relationship with their customer. We’re going from a world where if you don’t have a digital one-on-one relationship with your customer you’re just not going to be that successful. You can look at some of the huge successes that we’ve had in the quarter. One of the stories that I love is Uber. Uber has a tremendous need to have a relationship not only with you the consumer but also with the driver and their own internal operations. As we’ve been able to improve our relationship with Dara Khosrowshahi and other executives in the company, we’ve seen them really transform their relationships with their customers.
Apple has been a great opportunity for us, we’ve worked on that for so long. Of course, we all use our Apple products all the time at Salesforce. Now we have a strategic alliance with Apple and we’re encouraging our customers to do what we do which is take their information on the road. All of our products work natively now on iOS. We have the ability to automate every enterprise around that incredible platform and we see customers doing that.
ServiceMaster Building a 360-Degree View of the Customer
Another great story during the quarter was ServiceMaster. This is a company that has a lot of brands such as Terminix and many others. This is a huge field service operation but it’s also the integration of their call center, their contact center. They’re trying to build a 360-degree view of the customer, so of course, you’re working with their technicians in the field and they need to have a strong institutional memory of you back in headquarters. That’s a digital transformation that is so exciting for so many companies where they protect their homes.
Who’s Not Going Through a Customer Transformation?
We’re the largest and most important CRM company in the world. We’re number one in CRM by market share and revenue and by revenue growth. It’s a big industry and all the players are doing well because every company is going through this customer transformation. Who’s not going through a customer transformation? Everywhere I go in the world this is happening and it’s been going on and it’s not going to stop anytime soon.
It’s about sales, it’s about service, it’s about marketing, it’s about commerce, it’s about analytics, it’s about applications, it’s about good building community, or in the case of one of the great customers that we have, DuPont, it’s about integration. We had this fantastic acquisition this year, MuleSoft, the ability to integrate everything together. This is so important for us and so many of our customers.
