Name: Uber CEO Dara Khosrowshahi discusses the company's post-pandemic plan
Uploaded: 2020-05-17
Duration: 8 min 15 s
Description: Uber debuted at 228 on this year's Fortune 500.

[MUSIC PLAYING] ADAM LASHINKY: Thanks for making time to do this. I appreciate it. Uber is going to be in the Fortune 500 for the first time this year, based on your 2019 revenues and the fact that you're a public company for the first time. Do you have a sense that the crisis is so bad, from a financial perspective, it's wiped out so much of your and other people's businesses, that you almost are going into a period of a reset? DARA KHOSROWSHAHI: I do think that we have to be prepared for any eventuality. And I think what no one can predict is the timing of a comeback and the volatility of the world afterwards. And the great news, if you can call it that, for us is our IPO raised a substantial amount of capital. We have $9-plus billion of cash on the books, so our company is going to be a very strong continuing enterprise regardless of how long this takes. That said, our Rides business is down substantially, along with local commerce in every single city. The silver lining for us is that our Eats business-- we've started delivery business. The delivery of things to homes has grown very quickly in that category. It looks like it's going to be a structurally larger category. And between now and then we have to relook at all of our assumptions. That is the duty of leadership of the company, it's a duty of a board, and we're making sure that we are prepared for the world as it's going to be three months from now or 12 months from now, versus the world of yesterday. ADAM LASHINKY: Right now almost everything you deliver to homes are prepared food from restaurants via Uber Eats, but you're clearly-- you're experimenting again, by the way, with delivering other things, so talk about how broad and how big you see that becoming. DARA KHOSROWSHAHI: One area that we're certainly expanding into and we planned on expanding into prior to COVID was the delivery of grocery to home. We announced the deal to acquire a company called Cornershop that has operated in Chile and expanding globally. And so Cornershop is going to be a part of our family but the addressable audience, the total market size of Cornershop, just got bigger. Separate from that, we had in the past tested a model called UberRUSH which is, really, delivery of anything to the home. We saw incredible signal in terms of pre-packaged food, restaurant food, and we decided to go deep in that category, but this is an opportunity for us to go broader as well. We have an incredible infrastructure. We have a huge base of drivers and couriers who are very comfortable earning on our platform. And we do think that we are very well positioned to expand beyond food into other categories, both through M&A-- Cornershop-- and organically. And we have really stood up these businesses incredibly quickly. And what's great about us is not only can we move fast, but we can move globally and we can scale in a way that no one else can. ADAM LASHINKY: UberRUSH is something that Uber tried and decided didn't work and stopped. What gives you the confidence that you can do it after having failed once? Before your time, right? DARA KHOSROWSHAHI: Yeah, it was before our time. And the way I describe it is, we saw that food worked so we decided to go all in to food. A big part of strategy isn't just about what you're going to do, but it's also about what you're going to stop doing. And I think that decision to say, oh, this RUSH thing is pretty cool but this delivery thing is bigger, let's go all in on delivery and really focus, was absolutely the right decision at the time. ADAM LASHINKY: Do you have the same core belief in Uber owning its own self-driving car technology? DARA KHOSROWSHAHI: Yeah, I think that the self-driving car technology will make transportation safer. And I think that automation and automation through MI and ML are macro global trends that are going to continue for some period of time. And we are in the business of moving things. And investing in automation of that category, I think, is fundamental to what we do. One advantage that we have over everyone else is that we have a transportation network as we're building now this automation, so we don't have to solve for every single use case. We can take the simplest problems and solve it. And I think that's a structural advantage we have over some of the other players who are investing in the space. ADAM LASHINKY: Coming into the year, your Comfort product was a growing product that you were pleased with. From a tonal perspective that's looking even better. And I would argue that the Pool product is looking worse. People aren't going to be excited about getting in a car with strangers anytime soon. Fair statements, both? DARA KHOSROWSHAHI: It's certainly a fair speculation. Any kind of product where you have more than one person, if they're not in a family, et cetera, who are coming close to each other, whether it's transportation or offices, you have to ask fundamental questions about-- we are investing very deeply in safety. We want to make sure we're the world's best transportation platform and the world's safest transportation platform, and the definition of safety just changed. So for example, we are distributing masks to our drivers. We're reminding even our riders during this period to leave the house only if they have to. And I think as we look at our portfolio product going forward, we are going to do so in a way that's safety first. ADAM LASHINKY: And can you tell me a little bit about the origin of the ad campaign? There have been other companies in the past that have sort of cleverly and compassionately said, don't use our product, but could you just tell me specifically how it came up? DARA KHOSROWSHAHI: Jill Hazelbaker, who's responsible for communications and marketing, and Thomas Ranese, who is responsible for offline marketing, they said, hey, listen. We have to talk to you about something that's unusual. We're going to ask people not to use our service. And I said, well, I'm not sure that's a really good idea. But once I heard the messaging and once I heard the idea, we were all in. These are times when you take risks. And I think it was a risky campaign, but it was a message that should have been told and should have been heard. And I think from that standpoint it's worked out well. ADAM LASHINKY: As a country, as a society, we are talking about what it looks like to come out of the crisis. So what are you seeing? What steps are you taking? And how are you planning for it? DARA KHOSROWSHAHI: The immediate work is making sure we're there for communities, we're there for our earners. We talked to our investors relatively early about a scenario where the Rides business on a global basis was down 80%, and I think that scenario generally has borne out, on average, on a global basis. We're seeing some markets like Hong Kong and Taiwan come back, but it's an uneven comeback based on corona bouncing back or going back. So we know that we're going to be here. We know that the delivery business is going to be a big business and a bigger business. We have to look at every single dollar we spend to make sure that our spend is getting a return and we've got the right cost base to make it to the other side and to be profitable on the other side of this. We have been lucky enough as a category-- this has been a category where penetration has only increased, and it's increased significantly-- that we just grown much faster than economy. So you haven't seen a correlation between our growth and economic growth. I think it's a question as to what happens with mass transit. Do you have other categories of transportation moving into ours? The focus is what does a safe trip look like, and what are the categories of travel inside of a city that are first going to come back, and how do we make sure that we're priced right and we build the right product with the right information in this new world of ours. 

Uber CEO Dara Khosrowshahi discusses the company's post-pandemic plan

Uber CEO Dara Khosrowshahi. Image by Akio Kon—Bloomberg via Getty Images.

Magazine

Uber made its Fortune 500 debut at 228 on this year's list.

Uber CEO discusses the company's post-pandemic plan

Uber debuted at 228 on this year's Fortune 500.