Transcript: Uber CEO Dara Khosrowshahi’s Interview on People by WTF Podcast

So I think that was a smart way for them to break into the marketplace.

Rapido is not making money. So the real test of the business isn’t how fast you can grow if you’re spending, it’s actually how fast you can grow while you’re profitable. And I think Rapido is a long way away from that. But they’ve been innovative, they’ve been scrappy, they move fast, they’re building their brand there in the local market. So we’ve got a lot of respect for them and we intend to compete really hard with them.

Early Life and Family Background

NIKHIL KAMATH: Nice. So, Dara, this podcast that we do is largely focused around young want to be entrepreneurs in India and the spaces that you operate in, be it mobility, delivery, may I also say autonomous vehicles, electric vehicles, these are taking up significant mind share in the dialogue that’s happening back home.

So at the end of today, if I can arrive at some takeaways that one could use in India to build around, any of these sectors will be incredible. But maybe we start with you, the individual, and you give us a few minutes on where you began and how you arrived to where you are today.

DARA KHOSROWSHAHI: Yeah, absolutely. So I was born in Iran and during, when I was born in Iran, the Shah of Iran was really trying to modernize Iran very quickly. And I was part, I was very lucky to be a part of a family that was part of the industrialization of Iran.

There’s a. Our family ran a group, Albor’s group, and then within it, manufacturing companies like Tolidaru, which were manufacturing, we licensed pharmaceuticals from the west and then manufacture them in Iran and then distribute them in Iran and the Middle East. It was a big business. We were a very well known family.

My father was in charge of building out all the factories and our family was raised with assumption that we would then step into the family business and keep growing. And it was a really exciting time.

The Shah’s Iran and Political Change

NIKHIL KAMATH: To digress and ask her a question. Whenever I read about Iran’s history, when I talk to the young folk, the Shah’s time seems to have been this great time. What happened? Why did it change? Why did the regime change?

DARA KHOSROWSHAHI: Well, I think it was a great time for people who are lucky enough to participate in the modernization of Iran.

NIKHIL KAMATH: The fact is, was it like crony capitalism?

DARA KHOSROWSHAHI: I don’t know enough. But I think that to some extent, in hindsight and hindsight’s 20/20, I think the Shah tried to modernize too quickly. I think that he was too focused on building up military power. So in terms of the growth of GDP in Iran, a significant amount went to establishing Iran as the power center of the Middle east or the military power center of the Middle east versus the industrial power center of the Middle East.

And I think he didn’t bring along the outskirts, the people who lived in smaller cities. And part of his modernization left Islam behind. And Iran as a culture is much more ancient than Islam, but Islam is part of the society as well. And so his moving too fast, his focusing on military power versus his people, his focus on kind of the big cities versus everybody rhymes with maybe things that have happened here created a movement and an opportunity for the Islamic regime to come in.

So people tend to romanticize the past. Now. Do I think that the time under the Shah was a better time? Absolutely. I think what’s happened with the Islamic regime, there’s a regime that isn’t, I think, doing the Iranian people right and cares about things other than the benefit of the people there. And I think that is disappointing. And it’s been there for too long, in my opinion.

But every time has its good and it’s bad. And unfortunately, the Shah wasn’t able to follow through on a movement that had a lot of promise. And I think that the biggest promise in my estimation was the value of education and women went to college. The number of women graduates in Iran actually is higher than the number of men graduates. So there are a lot of seeds planted there that had a lot of promise.

And hopefully, hopefully, Iran can get out of, I think now, its obsession with Islam and think more about its people and building out for the good of the people, in concert with Islam, but not subjugated to Islam.

Living Between Two Worlds

NIKHIL KAMATH: Does it get in the way in any way today, the fact that your origins are there while the countries where you live today? And that might be in conflict?

DARA KHOSROWSHAHI: Not a conflict in my life. There’s a sadness in leaving your home country. I mean, my country’s now the United States and we got to rebuild in the US And I’m so thankful for it. But would I love to go back? I would.

But to some extent, the culture of Iran matches the Western culture. It’s a group of people who want to build. It’s a group of people who value education, who are ambitious. So I Don’t find it a conflict with who I am now, but there’s a part of me that I feel is incomplete and will be incomplete if I never am able to go back to Iran.

NIKHIL KAMATH: I have Iranian friends who live in India now.

DARA KHOSROWSHAHI: Yes.

NIKHIL KAMATH: And most of them mimic your emotion in thinking that here’s a land that had so much opportunity.

DARA KHOSROWSHAHI: Incredible.

NIKHIL KAMATH: But just religion seems to have caused so much harm than good in that particular geography, and it doesn’t have to. There are many things about religion that are beautiful, but again, I think what’s happened in Iran is it’s really unfair to the people there.

Religion and Spirituality

NIKHIL KAMATH: Are you religious, Dara?

DARA KHOSROWSHAHI: I’m not religious. I’d say I’m spiritual, but I’m not religious. I believe in the power of humanity, and I think religion plays to what makes us human and the relationships between us and the deep, deep good in all of us. And I think it’s beautiful.

Religions, the stories, the beliefs are beautiful. And so I describe myself more as spiritual, but for me, my belief is in the good of humanity at the very core.

NIKHIL KAMATH: Do you think that is what religion is? Stories. Great stories?

DARA KHOSROWSHAHI: I think yeah. If you kind of go through the. There’s an intellectual exercise, I heard, which is if all of our memory was wiped out and you rebuilt religions on Earth, there’s a high probability that the nature of those religions and the stories will be different. If you rebuilt science, the science will come out the same.

And so I do think that there are deep truths. There are deep human truths to religion, and those deep truths are unchanging, but each religion are definitely different ways of getting to those similar deep truths.

NIKHIL KAMATH: What is spirituality to you? A lot of people ask me if I’m spiritual, and I’m like, what is it? I’m trying to figure out what the word even means to begin with.

DARA KHOSROWSHAHI: I think it’s a great question for me. What spirituality means to me is a belief in the goodness of humanity, a belief in, you and I have so little in common in terms of where we came from and maybe our stories, but so much in common. We’ve sat together in five minutes, and there’s a connection there.

And I don’t think that connection is because of a logical construct that I’m here to speak to you on a podcast that are, I’m not faking it. Right? There’s a connection that we’re establishing now, having this discussion that, to me, is a spiritual connection. It’s not a logical construct. You’re not being Nice to me. Because you think you have to be and vice versa. Instantly you have that rapport.

And sometimes, by the way, you don’t. With certain people, that comes from a spiritual side. And that spirit can be captured for good and it can be captured for evil as well.

Human Connection and Genetic Logic

NIKHIL KAMATH: So in a way, we’re all connected somehow, like trees and roots.

DARA KHOSROWSHAHI: Literally. I don’t know. But yes, I do think there’s a deeper connection within humanity. And listen, there are some people who attribute that to perfectly logical causes. Right. The love that you have. Do you have family? Do you have brothers and sisters? Yeah. You know, there are certain people who would say that your what?

NIKHIL KAMATH: Do you have brother?

DARA KHOSROWSHAHI: Yeah. Your love for your brother is based on the genetic similarity of you two. So it’s actually, while you may ascertain that to a deep love that you have for family, it’s actually purely logically based on your existence as a bunch of genes who wants to continue those genes. And your brother has a genetic makeup that’s quite similar to you.

So what you view as familial love is actually adaptation that is feeding you that familial love. There is a logical explanation to all of this. I kind of choose to acknowledge that. But I view that the outcome of that is spirituality. Now, it may be based on genetic logic between all of us, but I think that outcome is beautiful.

And I’d rather keep it at the spiritual level versus, say, oh, it’s just us being gene machines that are trying to continue our genes indefinitely would make.

NIKHIL KAMATH: A case for liking people who are genetically similar to us as well, because we want similar genes. Appropriate.

DARA KHOSROWSHAHI: Yeah, absolutely. I feel a connection to Iran, a deep connection to Iran. Why? I came here when I was nine years old. We’re now back at history, right?

NIKHIL KAMATH: Yeah. I have to say one thing. I was in your old office yesterday.

DARA KHOSROWSHAHI: Yes.

NIKHIL KAMATH: And Alan and company. I was meeting somebody for something. And you know Bob Carey?

DARA KHOSROWSHAHI: Yes, I’ve met him. I don’t know Bob very well, but I’ve met him.

NIKHIL KAMATH: Yeah. So they were telling me, you should ask Dara. And I said, I’m meeting you the next day. And they were telling me, you should ask Dara. When he used to be here, he used to say he doesn’t believe in globalization. Is that because genes away from one geography become too far?

The Iranian Revolution and Coming to America

DARA KHOSROWSHAHI: Boy, that was Bob’s takeaway from. I don’t even remember that. I don’t know if I was trying to upset him or something like that. I don’t believe in globalization. I don’t know what that means or I don’t know what I meant at the time, but I do think that, again, you could. That connection I have with Iran, I believe is a spiritual connection.

I don’t know where it comes from because I’m so American. Right. I’ve lived the vast majority of my life as an American. I’ve been incredibly lucky to be here. But there’s a part of me that feels empty if I don’t go back. And, you know, that’s probably a spiritual connection. Again, you could put a genetic underlying cost to it. But I like the story of that being spirituality more.

NIKHIL KAMATH: I get that. Yeah, I think I feel that in India strongly. So year nine, you move here.

DARA KHOSROWSHAHI: So we had the Iranian revolution happen, the Islamic Revolution happen. Little story which is we were intending to stay at one point, but then I think the house across the street from us was related to the shah’s house. So some Revolutionary Guards jumped, wanted to go attack that house, and they jumped over, went through our garden. I think their guns went off. So shots went off, some bullets came through our house.

And at that point, my mom said, “We’re getting out of here.” So we went to the south of France. We were a wealthy family. We had a place there. And really the intent was to go to the south of France until things calmed down. Well, things never calmed down.

We happened to have an uncle who’s still alive now – he’s 101 years old. Uncle Nasrala, who lived in the U.S. He married Faith, an American woman, wonderful, wonderful auntie. And so we came to the US to stay with them. And then we knew we could never go back, and we started a life here. So I’ve been in the US ever since I was nine years old.

The Iranian Community in America

NIKHIL KAMATH: Iranians are quite wealthy. Whenever I go to. I realize this when I go to Beverly Hills, and everybody’s Iranian. Why is that?

DARA KHOSROWSHAHI: Well, I think the Iranians who were wealthy got to go, got to leave. And, you know, Iranians, there were a pretty entrepreneurial culture, and a lot of Iranians invested in real estate. You know, we came here in the late 1970s, 80s, and it was a good time to come to America and establish yourself and get into business in the US and my family did the same.

But it was really for the kids. I was only nine years old. I think children are able to adjust the change much more readily. You know, for us, America was this magic country where I went from three channels in Iran to 35 channels, cable. I couldn’t understand the language very well. But we adjusted really well and we always had our family around us.

But it was much harder for my parents. You know, my father, his whole life was business. And he took a shot at some entrepreneurial businesses. They didn’t work out. And without work, he kind of didn’t have a cause in his life. He went back to Iran because his father was dying. So I didn’t see him, I think, between the ages of 13 and 19 because they wouldn’t let him out of the country for those six years.

And my mom, who lived a life of absolute luxury, had to go back to work. She worked as a salesperson at Nordstrom Celine. And you know, it was a very, very difficult adjustment for them. But for the kids, we always had family. We got to go to private school and we got to have the kind of education that then afforded us the opportunities that we’ve taken advantage of since.

Education and Early Career

NIKHIL KAMATH: So you started school here where in America?

DARA KHOSROWSHAHI: In Westchester County, New York, about an hour of New York, at a wonderful school called Hackley School. And then I went to Brown University and studied engineering at Brown University. And then I was going to an engineering management program and I met a commodity trader, a woman in New York City who I completely fell in love with.

And I had to find a job in New York City. And the only jobs available in New York City were investment banking jobs. And so that’s how I got to Allen & Co. That you just talked about. And I worked at Allen and Company for I think it was eight years or so.

And one of my clients there was a gentleman named Barry Diller who’s this legendary figure in media and then very much within the Internet. And he was a client of mine. And I remember my intention was to stay at Allen & Co. forever. It is a great family run business. Really look out for your clients. You know, it’s not the kind of investment bank that’s looking for fees. They want to help you build a business. So I thought I was going to be there forever. But then I saw Barry. I said, “If I ever get a chance to work for that guy, I’ll take it in a second.”

Meeting Barry Diller

NIKHIL KAMATH: Why was that? Was Barry interesting or Expedia interesting?

DARA KHOSROWSHAHI: This was before Expedia. It was all Barry. He was. Every time he came into a room, the whole room would light up. It just the energy that he carried with him was extraordinary.

And I’ll tell you a little story of when we met, and it’s a lesson that I learned in business, was that he was bidding for, he was running a company called QVC, which was home shopping, bidding for Paramount, which was the company that he used to run. So it’s his coming home. And I was the little crappy analyst who was running his deal model.

And at one point, you know, the numbers started getting really high. He’s like, “I want to meet the person who built this deal model.” And, you know, usually with these investment banks, you have a managing director and a vice president and an associate, and he’s like, “No, I want to meet the person. I want this person to take me through the model.”

And so he comes in and I’m so nervous, I’m about to die. And he forced me to take him through every single line of this model so he could understand what he was doing. And the lesson that I learned from him was that every time, you know, the higher up you get in an organization, and it’s something that I really think about now, the more procured your version of what’s happening in the real world becomes.

You have a chief of staff who controls your schedule, and so all the information flow to you becomes controlled. And as the information flow comes up to you, it gets edited and edited and edited, and all the edges leave, and you essentially get access to the information that the organization wants you to have.

And the biggest mistakes that I see with businesses is not usually errors of judgment, but you just didn’t really know what was going on in the organization. And Barry went right to kind of the source. He didn’t want the edited. He didn’t want the smooth presentation, this or that, and so he wanted to get it to the source. You know, I did okay because then he hired me as his banker and I just fell in love with him.

Information Flow and AI

NIKHIL KAMATH: To everyone. Now, what happens to CEOs because of the management teams and so on and so forth to normal people? Is everybody, by virtue of using large language models today, getting a version that if they did it manually, they would have discovered that there are other versions possible?

DARA KHOSROWSHAHI: Definitely.

NIKHIL KAMATH: Is it making us all stupid?

DARA KHOSROWSHAHI: I mean, listen, it’s not making all of us stupid, but if you are lazy enough to just depend on that version of reality, because it’s a very easy version of reality available to you, then you could possibly be stupid. And so that’s a. Sometimes, as in organizations, you know, the organization takes over the flow of information up the organization, et cetera.

And one lesson that I learned from Barry is the way you fight that is to create these random matches, et cetera, to fight the organization’s need to package everything for you, because it’s the things that you don’t know that ultimately hit you on the side of the head that make you vulnerable.

And so it’s a very long winded story. But eventually, Barry lost that deal. He then started with, in partnership with John Malone, who’s another kind of legend in the entertainment industry, Home Shopping Network, and started rolling up some other assets. And at that point, he did a big deal with USA Networks. He didn’t have any staff to help him out. And at that point, he hired me to be his deal person, and I followed him.

Building the Online Travel Empire

So then we kind of took the. He was really. Barry was really interested in the intersection of entertainment with interactivity. And this is during the AOL days, et cetera. And we actually got lucky because we bought a company called Ticketmaster. I don’t know if Ticketmaster operates in India, but, you know, they were.

NIKHIL KAMATH: Talking about it, but I remember it.

DARA KHOSROWSHAHI: Yeah. And in the olden days, the way that Ticketmaster would sell tickets was either you would go to a tower record store and wait in line for the Madonna concert, or you would call Ticketmaster, call, call, call to get these tickets. And they did a deal with America Online, and whoosh, the volumes went online.

And so at that point, Diller and I were like, “Okay, what else looks like tickets?” It’s a virtual good, advanced ticketing, reserved seats. What else looks or rhymes with transactions happening either over the phone or, you know, across a desk. And because the transactions are virtual, you don’t have shipping costs, et cetera. We didn’t want to compete with Jeff Bezos. Let’s go after those companies that are offline, because we know all this stuff is going to move online.

So that led us to, for example, travel. You know, in the olden days, you go to the travel agency or you would call a travel agent to book travel. That’s going to go online. So we started buying businesses that were either offline that were moving online, or some other early online travel companies like Expedia.

We went into the personals business, match.com in the olden days, you would call and be like, “Hi, I’m Dara, and I’m five, nine. I’m six foot two and this and that.” You know, you leave your profile online and someone else would think that profile, all this stuff went online.

So it was a really wonderful adventure of finding businesses that we thought would take advantage of this movement of offline to online travel was a huge category that we invested in. I went from being Barry’s deal person to being his chief financial officer. And then at one point the travel business, it had this incredible growth. But it hit some turbulence and at that point Barry needed a CEO and I was dumb enough to raise my hand. I said, “Hey, maybe I can run this thing.”

And that’s when I took over what became Expedia. And I ran Expedia for 13 years. Barry was always as chairman, I was the CEO of the company. And it was a great run. We had a great run together.

The Future of Travel Technology

NIKHIL KAMATH: How does travel change next? Dara? I think it’s an industry which has stagnated a bit in terms of how one books at least my experience online of booking a ticket a hotel hasn’t changed that much in the last few years.

Travel Industry Innovation and AI Agents

DARA KHOSROWSHAHI: Yeah, I don’t think that the travel industry has innovated that much. I think you’re exactly right and it frustrates me, which is like the booking experience looks quite similar. I think one obvious answer is the GenTech experience, which is can you actually get AI agents or LLM agents to book the travel for you to go to the various sites and compare prices, and book for you. So I think that part of the travel booking experience can be easier having agents work for you.

I think that the discovery part of the travel experience can get much, much better. This is, I think one area where LLMs today shine because if you thought probably 10 years ago, “I want to go someplace over the summer,” how you would figure out where to go, it would be you would maybe read a magazine or go online or talk to friends or you heard about something, the way to gather information or go to Google, which I think could be quite frustrating. You know, “luxury vacation in Europe,” like the results you get are trash in my opinion.

With LLMs now actually their ability to gather the information and bring you unexpected results, I think travel discovery is going to get much, much better and it’s much better today. Travel booking, I think agents can help you as well. And then I think one area that I think Uber’s really good at, that I think the experience can improve significantly is your in market experience.

You know, why is it that when you land and you take the Uber to your hotel, you even need to check in, right? We should, we have your phone, we know where you are, come into the room, you know, you’re. Why can’t it be you’re in room 3031E and just go up there, you already checked in and go in. You know, why do I need to sit there and have the perfectly nice person ask me if I had a nice flight and here’s my room. I think the in market experience is something that hasn’t been innovated on at all and it’s something that could improve as well.

NIKHIL KAMATH: Yeah. I’m able to today discover, say I’m coming to San Francisco.

DARA KHOSROWSHAHI: Yes.

NIKHIL KAMATH: And I want to figure out which hotel suits my needs. I can enter my taste each time and the agent will recommend something. But is there one place where I don’t have to think and an agent can do everything? I don’t think there’s one solve for it today.

DARA KHOSROWSHAHI: No. And there definitely isn’t one place today. I do think the cost of a bad decision in travel is very high.

NIKHIL KAMATH: Yeah.

DARA KHOSROWSHAHI: So I don’t think you’re going to get to a place and I’m certainly not going to get to a place where I tell an agent to find me a hotel in San Francisco and just book it and then, you know, on the day when I arrive there, I’m like, “where am I going?”

NIKHIL KAMATH: Yeah.

DARA KHOSROWSHAHI: But I think agents can do a great job of reducing, you know, that list that on Expedia you look at the 50 hotels and then you’re filtering for maybe where you’re looking or the class of hotels. It can collate. It can give you the three hotels that you’re most likely to like based on your historical experiences. So I think there’s this in between space and I think agents could do a great job in that in between space. But I think that final decision, at least for me, is going to be up to you. But that collation, that kind of bringing everything together, that’s a, that could be a very, very high utility.

Building in the Travel Space

NIKHIL KAMATH: If you had an idea to build something around travel, sitting on the board of Expedia and running Uber at the same time. Where do you build what.

DARA KHOSROWSHAHI: I think I would build? I would not go after the inspiration side because I think the inspiration side is going to be served really, really well by an OpenAI or a Google. They’re collecting all the information. They’re going to have lots of context about who you and I are and the way people get inspired. It’s so disperse that it’s going to be very difficult for you to build one service that services 70% of your inspiration. And I really do think that Google OpenAI other LLMs are going to just get better and better here, but I think the agentic search booking experience and then in market experience to make it a very smooth handoff from one experience to the other. I think that’s something that I would focus on with my Expedia and Uber hat on at the same time.

NIKHIL KAMATH: Something interesting to build though. A lot of opportunity here. It’s not solved for at all.

DARA KHOSROWSHAHI: Someone’s going to get it right. And I do think one challenge in terms of how the industry is constructed right now is that the OTAs, the booking.com, the expedias of the world, they are very self interested in making sure that you book within their supply base and at the same time outside of that supply base, they’re organizing a ton of content, prices, features and information. So there’s utility in that.

The ultimate solution is going to be an agent that can sit above it all and can kind of scour the Internet and scour all the booking services and then surface the results, which may be a mix and match of all of them for you based on your tastes. So I don’t know actually. And I hope it’s Expedia because I’m on the board and I love the company. I hope it’ll be Expedia who puts it all together. But there could be kind of an umbrella agent who is truly representing your interests versus Expedia’s interest. Now Expedia does a great job. They will maybe expand or they will, you know, over a period of time, amalgamate all the content on the web. So all the travel content on the web, booking content on the web. So that super agent doesn’t add much value.

Understanding User Taste and Preferences

NIKHIL KAMATH: When you have an umbrella agent, soon you’ll have another and then another.

DARA KHOSROWSHAHI: Yeah.

NIKHIL KAMATH: So will it come down to who is able to extrapolate your taste? And can someone’s taste be deciphered from past data, you think?

DARA KHOSROWSHAHI: I think it’s going to be a combination of past data. I think that you want an agent that will do some exploration for you. So for example, when we are showing you the restaurant that you’re likely to want to pick on, Uber eats. If all we show you is the ones that you’re most likely to or based on what you’ve done in the past, then we’re missing that surprise, we’re missing that explore. So you want an agent that’s a combination of explore and exploit. I think that’s going to be. So I don’t think it’s just going to be on your past taste, but it’ll be putting your past taste with other people who look like you and then surprising you with some new choices as well. I think that’s ultimately going to be the winner.

NIKHIL KAMATH: Ultimately, so much will come down to taste, right? In this world.

DARA KHOSROWSHAHI: Well, listen, taste, convenience, price, right? I mean, you and I may be lucky enough where taste is the overriding factor, but there may be context for you, right? If you’re coming to San Francisco and it’s midweek, you may want a cheap, decent place close to the Uber offices, right? And that’s a different context than if you are going to go to Napa for the weekend where you want an experience either for yourself or yourself and friends or loved ones. So I do think that it’s not as simple in terms of taste. It’s based on the context of what you’re solving for your objective function. And your objective function is going to change based on the context of what the goal of that trip is.

Defining Uber Today

NIKHIL KAMATH: So Dara, I was trying to define what Uber is today. You mentioned Barry and match.com?

DARA KHOSROWSHAHI: Yeah.

NIKHIL KAMATH: Are you match.com in a different way?

DARA KHOSROWSHAHI: I mean, to some extent we’re bringing obviously riders and drivers together and we’re trying to meet Match Eaters with our restaurant partners, with a courier. So there is some of that. But listen, I think one way that I think about it from a consumer standpoint, you know, Uber is different thing to Uber to different people for the consumer. I really want Uber to be like that operating system for your everyday life. You know, we make your everyday life a little bit easier. We give you a little bit of time and convenience back in terms of where you want to go, what you want to eat more and more, what you want, right? If you want that iPhone same day, we’ll do that for you.

For our driver and courier partners, we are a source of work and a source of earnings based on your own needs now. And you’re going to balance your needs based on the commercial objectives as well. If your need is that I don’t want to give rides at 2am in the morning, you may not make much money. So there’s a combination of the marketplace combines what when you want to work with, commit with the realities of the commercial objectives. Hey, 9pm Friday night, you may not want to work, but it’s a great time to work in San Francisco.

And then for restaurant partners, you know, we’re a trusted partner and bringing a source of demand in terms of delivery and now retail and groceries, that’s only going to grow. You know what we see as the convenience that we offer in terms of delivery of starting food now, but everything. That convenience is absolutely dynamite. It’s something that people want all over the world and as they experience it, more and more people want it.

The Travel Adapter Story

NIKHIL KAMATH: This is funny, but I got in last evening.

DARA KHOSROWSHAHI: Hope you took an Uber.

NIKHIL KAMATH: No, I have a driver here but I wanted an adapter. I’m using a couple of laptops which have India plug points and I needed a travel adapter and at 8:30pm I was trying to like ideate my hotel didn’t have one.

DARA KHOSROWSHAHI: Sure.

NIKHIL KAMATH: Target Best Buy shuts down at 8pm Walgreens had one store which was open up until 10pm I tried to download Instacart on my phone which said I couldn’t do it unless I have a US number.

DARA KHOSROWSHAHI: Oh yeah, sure.

NIKHIL KAMATH: Yeah.

DARA KHOSROWSHAHI: So did you try Eats?

NIKHIL KAMATH: Does Uber Eats have travel adapters? Yeah.

DARA KHOSROWSHAHI: Yes.

NIKHIL KAMATH: And can I have an international?

DARA KHOSROWSHAHI: That’s one of the issues with actually the name. Right. When we got out of. When we wanted to expand from food to grocery and other items, we actually tested as Uber Eats, the right name with consumers and we found that consumers thought that it would carry, you know, like it’s. And you’ve seen a lot of our branding. Well, you may not have seen it because in India we don’t have Uber Eats, unfortunately.

NIKHIL KAMATH: You sold it in 2020, right?

DARA KHOSROWSHAHI: Yes, yes, we partnered there. We didn’t think we could win in India and we wanted to really focus on mobility. But Eats now has groceries, got retail and I’ll bet you you could have found that travel adapter. So lesson learned for you next time. And by the way, Eats is now available on the on the rides app too.

The Zomato Deal and Investment Philosophy

NIKHIL KAMATH: Nice. You sold Uber Eats to Zomato for 400, 500 million. I think you had a 10% equity in Zomato intern.

DARA KHOSROWSHAHI: They got a great deal.

NIKHIL KAMATH: Yeah. And then you got out of Zomato altogether as well.

DARA KHOSROWSHAHI: Yes.

NIKHIL KAMATH: Which is called Eternal Now. I didn’t know that they changed the name of the company. Why is that? Why did you get out? What did you understand or learn about the Indian market?

DARA KHOSROWSHAHI: We got out not because of some deep thought as it relates to Indian market, but my belief that we’re not a holding company, we’re not an investment company. That is not my core competency to take Uber investors capital and invest it really well. My competency is to build a big operating business that over a period of time grows top line, brings in lots of consumers all over the world and ultimately throws off a lot of profitability and we can build a share price. My skill in terms of investment is not going to be a significant factor in the value creation here, so I believe in kind of sticking Could I have had a wonderful intellectual time on trying to determine if I should sell Zomato now or later or 10 years from now? Sure, but that’s not my core competence. I like to stick to my core competence.

NIKHIL KAMATH: Would you buy Zomato today?

DARA KHOSROWSHAHI: I don’t know. I haven’t looked at it actually. Right. Yeah. I mean they’ve done a great job. The food delivery business and now the instant grocery business in like Blinkit, I’ve heard is actually larger than the core Zomato business was. Right?

NIKHIL KAMATH: Growing faster.

DARA KHOSROWSHAHI: Yeah, yeah, very much so.

Competition and Market Strategy

NIKHIL KAMATH: So Uber is about 57% mobility, 30% delivery for today. I’m going to ignore freight because I think it’s growing at the lowest pace as well.

DARA KHOSROWSHAHI: I get it.

NIKHIL KAMATH: And I’m going to be a 20 year old boy or girl in India trying to build a business in either mobility, delivery, quick commerce, and maybe we get advice from Dara as to what to build and what the opportunities are.

DARA KHOSROWSHAHI: Oh, that’s a. Well, first I’d say don’t try to build anything against Uber because we’ll kick your ass and you can buy us later.

NIKHIL KAMATH: How big are network effects? Because you’re already in so many markets and so big, I’m guessing it’s very hard to service a customer who wants to hire a Uber at 3am unless you have network.

DARA KHOSROWSHAHI: Yeah, the network effects are very, very significant now. And so I do think that to invest in and build the required liquidity on both sides of the market is going to be very, very difficult.

Now the network effects to some extent can be local. Right. So the liquidity that we have in Bangalore may be different from the liquidity that we have in Hyderabad. So I do think that there’s an opportunity and maybe Rapido took advantage of that opportunity of building out services in smaller cities and then building out liquidity in a way that’s not quite as expensive because you’re not trying to take on all of India, but go city by city by city and then get into larger cities.

They started with, I think, two wheelers and three wheelers, they’re trying to get into autos, etc. So I think if you find a niche where you believe that you can build liquid supply and demand on a local basis and then you can rinse and repeat that over and over again. It’s essentially what Travis did with Uber when he founded it. That is something that could work. And if you get large enough, maybe then it might be a different segment, let’s say Intercity, for example, or some other segment that isn’t particularly well served by the Ubers of the world or the Zomatos of the world or some of the other players. Then maybe that you can build something that could either compete with them or could be bought by them.

Leadership Style and Authenticity

NIKHIL KAMATH: That’s an interesting insight. I watched a bunch of your interviews and I’m sorry, no, they were actually really nice. Thank you, Travis. They say that in society today, as a leader, you’re either awe inspiring, dogmatic, or you’re somebody who builds consensus is more relatable per se. Have you had to project a more relatable image because you have to overcompensate for what Travis was projecting?

DARA KHOSROWSHAHI: One thing that I really believe in is I don’t think it works if you’re trying to be someone other than who you are. You know, people come to me and they ask me for leadership advice, and the first piece of advice that I give them is be true to yourself. Because the minute you’re not true to yourself, people will smell that a mile off. If you’re not authentic, you know, this is where that people mean authentic, et cetera, what does it mean? It’s just be true to who you are.

I am the youngest brother of a really big family. We have thousands of cousins around. And in Iran, community and family is so important. Nobody’s the star. And if you’re the star, you’re going to be put in your place. You know, I’m a fancy, fancy CEO here, but when I go to my family, I’m just one of the younger cousins, and I’m no big deal, and I love it. It’s such a relief to be that person who I just. That’s my comfort zone.

So I tend to be more collaborative. You know, when I played sports, I would play defense. I always played team sports. I didn’t want to win as an individual. I love the feeling of winning as a team. I don’t want to be there celebrating by myself. I want to celebrate with my team. So that is who I am. And maybe that’s one of the reasons why I wound up here.

And actually, my challenge as a leader is to get out of that collaborative mode sometimes and to really drive. And for example, I’ll give you a little story, and it’s a funny story, but it just taught me a lot. We were during COVID in the U.S. COVID was devastating to our business. Mobility was 90% of our business, and by far, you know, the profitable piece of the business. And overnight, we lost 80, 85% of our volume. Couldn’t be worse.

And we went from. We were already losing 2 billion a year. We went from losing 2 billion a year to losing 4 billion a year. It was a disaster. And it became very clear that we had to undergo layoffs. Not a fun time. I never thought I’d come to Uber to lay off thousands of people.

And me being me, I was talking to my team. “What do you think we should do? What are the levels? Where should we.” I didn’t want to do a peanut butter kind of a layoff, et cetera. I wanted to be focused, and I would do meeting after meeting after meeting with my team, because I wanted them all included, and I want to hear what they had say.

And Nelson Che, my CFO at the time, we were talking, and he was like, “Dara, you know, we have a lot of respect for you, and you’re a really good person, and we’ve talked about this a lot. Why don’t you just tell us what you want to do? Because you tell us what you want to do, we’re right behind you.”

And I was like, “My God, sometimes collaboration, et cetera, talking about things doesn’t help.” And as a leader, you have to go from collaboration, from peacetime collaboration mode to wartime. I am the leader. I’m the general. I’m going to make a decision mode.

And there, I didn’t sleep that much that night. But the next day, I got everyone together. I’m like, “Here’s what we’re going to do. We cut deep in operations, we cut less deep on tech.” It was very, very difficult. But we went and everyone was behind me. And while it was a really, really difficult time, to some extent that brought the team together, it allowed Uber Eats to grow to incredible levels. And I think it made us a better company. I would never, ever want to go through that again, but made us a better company.

So for me, my general comfort zone is collaboration. Working with the team, listening to the team. But then what I’ve learned is there are certain circumstances where you have to switch your modes. And so I’ll switch from collaboration to decision. “Here’s what we’re going to do.” And because my team sees me listening, collaborating, most of the time, I think they give me credit when I say, “All right, we’re going to go this way.” So it’s who I am.

David vs. Goliath Dynamics

NIKHIL KAMATH: I’ve been noticing I might be wrong in this. In a David versus Goliath world, David seems to have started winning quite often, which kind of doesn’t make sense because we are largely a trust deficit planet. But a lot of people I know, I think it’s weirdly correlated to affluence. Want to pick the smaller guy, the smaller brand, individuals over corporations in such a world, I get that relatable makes a lot more sense than awe inspiring, dogmatic. But how does a company like Uber, which is 40 plus billion in revenue and millions of rides and employees and all of that, how do you evolve to project the David image while you already have all of this?

DARA KHOSROWSHAHI: I do think that there is. First of all, I feel like David when we’re competing in technology world of trillion dollar plus companies, right. So while we may be a larger company, I don’t feel like we’re a big company at Uber. We’ve done well as a company, but I think there’s so much more that we can do. So I see our shortcomings much more than our accomplishments. And I think that there is, it’s part of the culture of the company which is not to overestimate ourselves and to act like a disruptor, et cetera.

NIKHIL KAMATH: Do you do that consciously project vulnerability? Goliath doesn’t look like.

DARA KHOSROWSHAHI: I think it’s kind of who I am. It goes back to my family. My father was a really modest person and he would. The minute I kind of thought I was hot shit, I don’t know if I’m allowed to say that, you know, he put me, you know, he would just throw me in my place. So I think part of it is who I am. I think part of it is where Uber came from. Remember we were the upstarts. This company wouldn’t exist if we weren’t challenging the status quo.

NIKHIL KAMATH: But how do you continue to look like the upstart tomorrow if the world picks the.

DARA KHOSROWSHAHI: I hope so. Now I would tell you that internally I do. We are upstarts. And I want to have that upstart mentality here. We do have to recognize the power that we have. And I do think that’s a mistake that Uber made early on, which is we had to fight for our lives. But then at some point, you know, we did get large. We had incredible impact in the cities in which we operated with in. And that does come with responsibility.

And so I do think there’s this weird kind of dualism about our identity, which is internally, we want to feel like upstarts all the time. Every single day we’re fighting for our lives. We hire from a lot of big tech companies and we say, “Come here, you’re going to work your ass off. You’ll probably make a little bit less money, but you’re going to the work that you do. Can truly an individual engineer Uber can have huge effect across the company.” And that. That is really cool.

And at the same time, the effect that you have on the company also has an effect on society too, because we are big. And so there’s this dualism that you have to keep within Uber, which is within these walls. We’re going to act like a startup, but outside of the walls and discussions we have with regulators and discussions that we have with our drivers, our couriers, our restaurants, recognize we’re a big company. And that does come with responsibility. And it means that just because you can do something doesn’t mean you should.

Internal Competition and Growth Tactics

NIKHIL KAMATH: This is some advice I want personally. At some point, Uber had different teams attaching different cities for market share. And these teams almost competed with each other. And net net, it seemed to work well for Uber. I tend to do this very organically with people I have. I don’t know if it’s good in the long run or bad, but I make them compete with each other.

DARA KHOSROWSHAHI: Sure.

NIKHIL KAMATH: What have you learned? Does it work?

DARA KHOSROWSHAHI: It works as a growth tactic, but it doesn’t scale. So to some extent what you want to do is you want to have these humans and teams compete against each other to hack your way into the best solution possible. Then after they get to that best solution possible, you then have to come in and automate that solution through algo, through engineering, et cetera. And then what was the frontier becomes a part of the core and then you move to the next frontier. So that’s kind of the design spec that we have.

You know, the team is actually very, very entrepreneurial. You know, Uber teams to some extent was an amalgamation of a bunch of technologies that we built. And our CPO Sachin, who kind of had, he’s obsessed with that idea, is that, “Well, we have a bunch of safety functionality here. We can put together teams with our safest drivers. We have tracking functionality here. I’m going to put this whole thing together and hack together what you call this teens solution.”

And you hack it, you move quickly, you see if this product market fit. And then once you see the signal that this product market fit, you do have to systematize it. Because if you don’t systematize it, you can’t scale. So you have to have both muscles within the organization.

NIKHIL KAMATH: But it’s a good way to discover something fast.

DARA KHOSROWSHAHI: Totally. You don’t want to the signal. We don’t do this anymore. But at Expedia in the olden days, we put a button on the website just to see if there’s demand for that button and someone will click it and be like, “Oh, I’m sorry, it’s not working right now.” And we’re just doing it to collect signal. That’s the biggest hack possible. Right? So. And once you see that product market fit, you got to, you got to build behind it. And some companies make the mistake of not building behind it and you can get away with it for a while, but at some point the system falls apart.

Praising Competition

NIKHIL KAMATH: When you speak about DoorDash or when you spoke about Zomato right now, you complimented them, praised them. I heard you on interview speaking about how DoorDash went after the suburbs and you guys missed out. You praising competition. Is that a way to appear more David in a David versus Goliath world? Again.

Competition and Market Dynamics

DARA KHOSROWSHAHI: It’s not an act. I think DoorDash is a really great company. I don’t like them, but they make us better and they’re a worthy competitor, global competitor. They’re beating us right now in the US but not for long. And we’re beating them outside the US and the two companies going against each other makes both companies better and actually builds a better service for consumers and couriers and restaurants all over the world.

I think the humility that we talked about before, I think that actually creates a strength because you’re curious, you’re not overconfident. You don’t think like you’re the best in the world. You’re curious about what others are doing. And for me, it motivates me and drives me to be better. You know, if I say DoorDash is a good competitor and they are a good competitor, that’s motivation for me and my team to be better.

NIKHIL KAMATH: You said outside US you’re beating them and they’re beating you here. Does India…

DARA KHOSROWSHAHI: Not for long though.

NIKHIL KAMATH: Does India as a market matter? Dara, you once observed when you were there that Indians are very demanding and they don’t want to pay for anything.

The Importance of India

DARA KHOSROWSHAHI: That comment cost me. It matters hugely for us, right? India is now our third largest market in terms of mobility trips. We’ve got I think over 1.4 million now. Drivers, auto, two wheelers, three wheelers and four wheelers in India. The growth there is spectacular.

I think India is already one of the great countries in the world. But if you look at it as a share of GDP, it’s only going to increase. The leadership there is amazing. And so much of our talent pool, not just in India but all over the world, comes from Indian descent as well. So India is, it is a absolute must win for Uber. Not just tomorrow, but ten years from now.

Starting a Business: Market Size and Strategy

NIKHIL KAMATH: I’m going to go back to being a 20 year old who’s starting a business in this industry.

DARA KHOSROWSHAHI: You know, I’d say don’t start one in this industry, go try something else.

NIKHIL KAMATH: How do I recognize the opportunity versus TAM, the total addressable market. If I want to start quick commerce in India and the cost of delivery is say 20 rupees or 30 rupees or 50 rupees. If the total addressable market that can afford a product like that in India be 20 million people or 50 million people, where is the number? Right. A lot of the spend, a lot of consumption in India is still going towards groceries, as much as 50, 60%. So how do I justify to myself that my business idea is sound, that I’m going to charge 50 rupees a delivery? How many people do I model for? Where does that fit come across? Geographies?

DARA KHOSROWSHAHI: I say you’re way overthinking it. You know, businesses never, businesses that succeed are always adapting and adjusting and adjusting. So what I tell you is figure out if there’s product market fit in that narrow segment, call it the 50. And by the way, if it’s narrow, that’s great because then the big players are probably not going to come after it. It’s a segment where you can add value and a segment where you can own. And then if you establish product market fit and you build a business there, then you can go to the next area, to the next area, to the next area.

NIKHIL KAMATH: But if my market size is only 20 million people, who can afford it, still build it, build it.

DARA KHOSROWSHAHI: As long as there’s product market fit in terms of unit economics, that makes sense. And once you get to those 20 million people, you’re going to find an adjacency to get into and then you’ll find another adjacency and you’ll find another.

NIKHIL KAMATH: But then I’m competing with people like you who already are sitting on the network effects.

DARA KHOSROWSHAHI: Yeah, but the big TAMs are going to be taking. So actually specifically you should go after the small TAMs and the small opportunities where you can create a network effect without enormous investments either in technology or development or monies. You actually specifically should go after the small TAMs and then work your way into the adjacencies.

Over a period of time I wasn’t around, but at the time when Uber Eats was conceived of, I think it was Jason Droege and Travis. They were driving around a bunch of cars with burritos in the trunk of that car. It was a manifestation of mobility, a very close manifestation. And you look at where delivery has gone and how large it’s become, you know, I don’t think they would have ever predicted that. So you just get one step to the next step. To the next step.

I don’t believe in overthinking TAM any. TAMs are, you build those for IR and you build those to raise money. You may want to create this wonderful dramatic TAM to go raise a couple million bucks. But that’s not what should be processed into your mind. It should be, can I build a service that has eventually strong unit economics that then I can build on top of?

Quick Commerce and Labor Costs

NIKHIL KAMATH: Quick Commerce seems to have sidestepped the US for a long time. I think you went to big box retail and then you went to another thing altogether. Not necessarily competing on I will deliver in six minutes, I will deliver in seven, and I will deliver in eight. Why is that?

DARA KHOSROWSHAHI: Because the cost of labor in the US is too high. So that’s my take, which is with Quick Commerce, you can’t automate that much because the cost of the automation doesn’t bear out in a small box. So you have to use human labor. And so in markets where the cost of human labor is not there and the concentration of customers isn’t there, you get a fail.

Which is, for example, let’s say in the U.S. I think that Gopuff is making a good run at it. But you look at the development of that market versus Blinkit or some of the other developing markets, it is absolutely working much, much better in lower cost labor markets than it is in high cost labor markets.

NIKHIL KAMATH: Is there an arbitrage there because your drivers are not essentially employees? Is there a labor cost arbitrage because they’re gig workers, they run their own cars, they don’t need to be paid benefits, insurance.

DARA KHOSROWSHAHI: Yeah, there’s a trade off there, right, which is we can’t tell our drivers when and when to work. Right. So imagine if Starbucks is hiring a barista. They don’t go to the barista, “Hey, show up whenever you want to and we’ll pay you however much a Starbucks Barista makes per hour.”

So you could call it a labor arbitrage. I call it a trade off, which is the driver and the courier can decide when and where they want to work. That creates cost for us. We then have to build liquidity of supply and demand and sometimes we will use incentives and, or algorithms. For example, surge are circumstances when demand exceeds supply. And in those cases we have to actually raise prices for that demand in order to attract enough drivers to get out into the market to pick out, to pick up everyone you know, arriving at 7pm on a Thursday night at the airport or when the Warriors game is done.

So it’s not an arbitrage mechanism, it is a trade off. That also is an enormous benefit to certain people who don’t want to work on a schedule, who want to work less than 40 hours a week. 70% of our drivers and couriers are working less than 20 hours a week. So it is a unique product market fit that we found. It works for drivers and couriers, it works for us. We have to build very complex systems in order to make it work. And I think overall, when you look at society, it’s good for society, it’s a service both for the drivers and for customers that works. And I think more and more societies are appreciating that.

Autonomous Vehicles: Technology and Timeline

NIKHIL KAMATH: You’ve spoken about autonomous vehicles a bunch of times and I don’t know if it’ll happen sooner or later than you…

DARA KHOSROWSHAHI: Predict, but everyone’s been wrong so far, so who knows? Well, I mean the predictions generally of autonomous and when it’s going to be ready for market. This is a problem that Waymo has been working on probably for 15, 20 years and it’s proven out to be a much more difficult prompt solve than anyone expected. But finally it’s working now. I mean the, the Waymo product is spectacular and there are others building out the products as well.

NIKHIL KAMATH: I was at a junction last evening and there was a fire truck behind a Waymo.

DARA KHOSROWSHAHI: Interesting.

NIKHIL KAMATH: And I, I didn’t, I couldn’t…

DARA KHOSROWSHAHI: Sirens on.

NIKHIL KAMATH: The sirens were on and the Waymo actually did this interesting maneuver where it went right, stopped there, waited for the fire truck to go. It was incredible.

DARA KHOSROWSHAHI: Yeah, perfect.

NIKHIL KAMATH: What do you think wins? Waymo’s tech or Tesla’s cameras, lidar radar?

DARA KHOSROWSHAHI: I personally believe that autonomous vehicles have to have superhuman levels of safety. I don’t think it’s good enough for them to be better than humans. They have to be multiple times better than humans. And Waymo’s certainly proven that that’s possible. So why not take that shot.

I think in the near term it’s going to be very difficult and Elon would tell me I’m wrong and never bet against them, but it’s my instinct that in the near term it’s going to be very difficult to build a camera only product that has superhuman level safety. And again now at some point, will it be possible? Quite possibly, yes. But if you can have instrumentation that includes cameras and lidar and the cost of lidar, you know, solid state lidar now is 400, 500 bucks. Why not include lidar as well in order to achieve superhuman safety?

So possible. Yeah, it will be possible. I don’t know when, but is the possible the better product? I’m not sure I would. All of our partners that we’re working with now are using a combination of camera, radar and lidar. And you know, I personally think that’s, that’s the right solution, but I could be proven wrong.

The Future of Work and Autonomous Vehicles

NIKHIL KAMATH: What happens to Uber’s earners when if autonomous become safer and cheaper? One could argue that putting a human behind a wheel is a disservice because you’re putting somebody at risk at that point. What happens to all the earners who are working with Uber?

DARA KHOSROWSHAHI: I think it’s not just earners. Then why should humans drive? Right. Society would be, I think there are about a million auto related fatalities in the world, so why not save those lives? I think that it’s an inevitability for that to happen. So it’s not just drivers, but also all drivers, whether professional or not, wouldn’t drive anymore. And I think that would be a good outcome for society.

I do think we have time. How much between. I think It’s a good 20 years because right now the drivers, the autonomous drivers are safer but much more expensive, even in developed markets that have high labor costs. So for autonomous to come into India is going to take a long time in terms of cost of hardware coming down. So 20 years I’m describing as the end state. Within 10 years you’re going to see a significant number of autonomous vehicles, especially in developed markets. And I think that’s a very good thing in terms of safety.

And what we’re trying to do is make sure we communicate with our drivers appropriately. And it’s very, very small at this point. It’s a teeny, teeny part of rides in any market. And we’re actively looking to create other work opportunities for those drivers as well. So for example, I’m actually going to go to a meeting later today of a new group that we built Uber AI solutions that is using our gig workers and then other specialist workers as well, for, you know, AI labeling, translation, all kinds of needs and products that actually serve these AI models, some of which may be autonomous or not, that ultimately are going to be doing a bunch more of the manual work, not just driving, but the manual work that many workers do today.

NIKHIL KAMATH: I was having this debate with a friend of mine back in India and they were like, autonomous for India with the cows and dogs and cars and all of that. But when you think about it, if a computer has a reaction time which is faster than a human, an autonomous vehicle should do better with more arbitrary things like this at play.

DARA KHOSROWSHAHI: Totally. I think it’s just a question of training and if. If autonomous vehicles can figure out New York City traffic, you know, India traffic is harder, but it’s only an issue of training on additional data sets and improving the capabilities there.

NIKHIL KAMATH: Yeah, and I don’t want to be unfair with this question of what happens in 20 years to earners, if. Even if it takes 20 years, because I could extrapolate the same thing for so many industries where AI will disrupt their jobs in 20 years. Yeah, it’s a societal issue, but what happens to society?

The Future of Work and Automation

DARA KHOSROWSHAHI: What has happened to society repeatedly and repeatedly is that the workforce is adjusted over and over again. Every single time when more of manufacturing was automated, there’s always this drama of, “Oh my God, what happens to the people?” And people figure it out.

People usually then go to higher value types of labor and unemployment rate. Our world has more automation today than it ever has been, and unemployment rates are at historical lows in most developed countries.

I think the question is whether or not this is a unique time and circumstance where the change is going to happen faster than it ever has before. And based on the rate of technological change there, there’s reason to believe that, yeah, maybe this time may happen faster than societies historically have been able to adjust to change. I don’t know that yet.

I don’t think it’s a problem for Uber. It’s a problem for. Well, it is a potential issue for Uber and it could be a real problem, but it’s a big societal problem that we all have to take on. But there’s also opportunity there. How can we educate our workforce and bring to them opportunities that ultimately allow them to live the kinds of life that they want to. Our building Uber AI solutions is one small step in that direction, but believe me, we don’t have all the answers.

NIKHIL KAMATH: Do you suspect Dara that you might lose access to data like you have now. If tomorrow, say Elon saying that Tesla will not need Uber or even Waymo. I’m guessing a lot of the data is controlled by the hardware and less by who booked the Waymo.

DARA KHOSROWSHAHI: Well, I think that we actually now have. We’re collecting data using lucid cars in a bunch of cities as well. So I think for Uber, data is not going to be a problem and we will have data capture capabilities. We’ll work with our partners to capture data as well and then provide them to our partners all over the world. And based on the growth that we see, our access to data is only going to increase.

Ghost Kitchens and the Restaurant Revolution

NIKHIL KAMATH: Travis is doing Ghost Kitchens.

DARA KHOSROWSHAHI: Yes.

NIKHIL KAMATH: I watched an interview of his where he was speaking about how this could change how we eat. Any view on that? Do you think that’s going to happen?

DARA KHOSROWSHAHI: I think it’s inevitable. I think it’ll take time. Change in the real world really takes time. But I’ve been super impressed with what Travis has done with Ghost Kitchens and now he’s working on robotics as well to automate more of the cooking process and bringing healthy, natural food to more people with less labor. That’s really, really cool.

And he’s a terrific partner of ours. We work with cloud kitchens all over the world. They’re a big partner. And Travis is an entrepreneur that you should not underestimate.

NIKHIL KAMATH: Any view on what could happen to restaurants, Dara? I know a bunch of them large chains back home who constantly complain about the 15 to 30% they end up paying delivery operators and they talk about how it’s unsustainable. Add to that you have the data and you start dark kitchens. Or what Travis is doing, what happens to an old school restaurant business?

DARA KHOSROWSHAHI: Well, I think an old school restaurant business that can’t adjust is going to suffer. They’re going to lose share. And so I think it’s the job of the old school restaurant business to become a new school restaurant business.

NIKHIL KAMATH: How do they do that?

DARA KHOSROWSHAHI: Well, I think if you break down what restaurants do is there’s a component which is food, right? Giving you great food that you enjoy. And there’s another component which is hospitality, which is come to this restaurant and there’s an environment that you might enjoy, et cetera. And there’s the mood, there’s the romance of a restaurant as well.

I think that what you will. There are certain restaurants where the hospitality part of the offerings is not quite as, is not as significant. It’s McDonald’s is more about the food than it is about going sitting in McDonald’s and enjoying the seating there. It is about the food and the brand and affordable food available quickly to so many people.

And so I do think that those, depending on the kind of food that you’re providing, if it’s about the food, then you will have to make this transition to either drive through or delivery because you’re not adding much value in terms of hospitality. And in those kinds of circumstances, what Cloud kitchens offers you, which is a more industrialized way of still providing really healthy food to someone. And the hospitality there is, “Well, I want to eat it at home. I love my home.” That is essentially where that system is going to go.

And yes, will it take share from the classic restaurant business? It will, but it’s also actually extending the share of restaurant eating or restaurant food as a percentage of overall food consumption. If you look at restaurant sales, restaurant sales are growing faster than grocery sales because these restaurants are providing a better product more affordably, more conveniently.

And then I do think that there will be certain restaurants where that hospitality that the third place that Starbucks was so good at. I think Brian Nichols is trying to bring in the feel that part of it is still, I think, going to sing the romance of going to a restaurant. And so I think that those two, the utility and the romance are going to be separable. And you as a restaurateur have to understand where you want to be, because I think the middle is going to be a difficult place to live. But the restaurant industry is adjusting, just like every single industry has to adjust. You’ve got to change in order to keep up with the times.

The Future of Advertising and Brand Building

NIKHIL KAMATH: So, Dara, you talk about ads on Uber.

DARA KHOSROWSHAHI: Yes.

NIKHIL KAMATH: And I have found this, even with myself, that when I’m searching for something today, I don’t use Google anymore. I end up using Perplexity or OpenAI or someone like that.

DARA KHOSROWSHAHI: Sure.

NIKHIL KAMATH: If I want to build a brand tomorrow and I want to market and nobody’s landing on Google Ads, what happens to the world of ads? How does a brand get built? How do I get the word out that I’ve started this new T shirt company?

DARA KHOSROWSHAHI: Well, I think that those surfaces for a brand to truly get built are there in terms of Instagram and TikTok and Facebook. So the Google Ad world, the Perplexity ad world, et cetera, are built for searches based on intent. And so I think that that medium is about growing brands, not establishing or inventing brands, but I actually think that the surface area for brand new brands to grow and thrive, it’s actually greater than it ever has been.

I’ll tell you a little story of my niece, Liliana. She’s incredible. She studied humanities, loves fashion, loves golf, built, wanted to build a new golf brand which is fun, great, fashionable clothes for women. She went on, she used Midjourney, taught herself how to use Midjourney, designed all of the designs on Midjourney, then went out and sourced her clothing with, I think it’s some Chinese players and Indian players and I think a couple of other places got the clothing and now she is building this Lillehammer brand and using TikTok and using Instagram as her distribution mechanisms and also going to these traditional golf clubs, et cetera.

She could not have done that 10 years ago. So I actually think this is a magical time with the tools that you have at your arsenal and the manufacturing prowess all around the world at your disposal. It’s a great time to build brands and I think the surfaces are there. As long as you have a story, you’ve got a personality and you have something distinctive to add.

NIKHIL KAMATH: You’re saying social media is still the go to place?

DARA KHOSROWSHAHI: Oh, yeah. Now, would Liliana have, would she do well on Google? No, but that’s not the surface, that’s a surface, let’s say for Lululemon, not her.

Immigration and Labor Markets

NIKHIL KAMATH: With the current president’s immigration policies, do you think labor cost for your earners will go up significantly?

DARA KHOSROWSHAHI: The cost of labor will not go up directly because I think the vast majority of drivers, couriers, etcetera are legal in terms of their immigration status. But to some extent we compete with the labor market in terms of the rates that our drivers want to make per hour. So I think in an indirect way it could have an effect on us, but I don’t think it’ll have a direct effect on us.

Chinese EV Innovation and Competition

NIKHIL KAMATH: So, Dara, I have a fund back home in India and I spent.

DARA KHOSROWSHAHI: You have a fund?

NIKHIL KAMATH: I have a fund, yeah.

DARA KHOSROWSHAHI: Like a private equity fund?

NIKHIL KAMATH: Sure.

DARA KHOSROWSHAHI: How’s it doing?

NIKHIL KAMATH: It’s doing decent. I think I spent a lot of the last couple of years buying into the transition into electric mobility. So we got everything from electric scooters to trucks to buses. We even did an electric flying taxi investment recently.

DARA KHOSROWSHAHI: All over the world or in India specifically?

NIKHIL KAMATH: A little bit all over the world, but more focused on that region. Have you seen Chinese electric vehicles, by the way? They’re incredible, right?

DARA KHOSROWSHAHI: They are unbelievable. It is the innovation coming out of the Chinese OEM and EV business. I’ve never seen anything like it. It’s extraordinary.

NIKHIL KAMATH: Why though? Why are they so far ahead of everyone else now?

DARA KHOSROWSHAHI: Because of the competition I think there’s this belief, I’d say from the US and a lot of western countries that China is a planned economy. Okay? And China is a planned economy from a strategic standpoint. And for example, they want to get into manufacturing EVs, et cetera. And so while that comes top down from the government, then actually the way these industries grow is every Chinese significant city or province, et cetera, wants their own EV company to succeed.

So in China now there are over 100 OEMs in China, well over 100. And so then there’s this bottoms up competition that’s based on the top down strategy that the government sets. So you have the kind of the best of both worlds which is you have industrial policy. But then the winners aren’t who’s buddies with the President, the winners are who wins in a brutal competitive environment.

So the winners coming out of China, the Geelys of the world, the BYDs, they’ve been through the wringer. And so it really is survival of fittest. And the innovation that we see and the speed of development there, it’s extraordinary.

NIKHIL KAMATH: In a free market, can anyone compete in catch up? No tariffs, nothing.

DARA KHOSROWSHAHI: In a free market can anyone catch up to China? Of course people can catch up. I think that when you look at the Korean manufacturers, there’s a ton of talent there. But I think if you look at my expectation is overall share, especially in the EV sector on a Global basis of EVs is going China’s way for a while. But individual innovative OEMs, they’re going to do fine.

NIKHIL KAMATH: So say I’m a scooter company in India. I don’t have the scale that Chinese manufacturers or OEMs have today. How do I compete? Because they’re building it 100 scale that I am.

DARA KHOSROWSHAHI: I mean, listen, I don’t know enough about the Indian industrial sector but, but based on the innovation that I see out of India and the talent, there’s got to be a way to compete. What I see out of India, it’s very, very special. I think that especially in IT industries, India really has risen. And I think manufacturing is still somewhat nascent relative to the size and potential of India. But there’s no doubt we’ll get there.

EV Adoption Challenges

NIKHIL KAMATH: I had this thesis that all vehicles will be electric by X amount of time adoption seems to slow down.

DARA KHOSROWSHAHI: Why is that? Subsidies are going away.

NIKHIL KAMATH: Yeah, so subsidies are going away now.

DARA KHOSROWSHAHI: I do think that in Europe and China, it’s definitely happening. I do think that it requires substantial investment over a long period of time in the infrastructure charging infrastructure of cities. And so the societies that have continued to make way there, you are seeing the product, you’re seeing EV penetration continue to improve.

And within Uber, we are moving to EVs five times faster than the general public. So EVs inside of the Uber system are definitely increasing. And from my standpoint, I’m hoping that we continue to increase the penetration of EVs and the next driver that you want switching from a combustion engine to an EV is actually Uber driver, because the average Uber driver is driving four to five times the mileage of the average driver.

So we continue to push it. We’re still quite committed to moving over to as much sustainable, both packaging for our restaurants and EVs, but I would say that it’s gotten much harder over the past two years.

NIKHIL KAMATH: So if I make the bet today by investing capital in the assumption that all vehicles will be ev, do you think it’s still a fair bet?

Investment Advice and Market Opportunities

DARA KHOSROWSHAHI: Yes, it’s a better technology. But it’s a question of you might want to pick where you’re investing.

NIKHIL KAMATH: Give me some advice. Where should I?

DARA KHOSROWSHAHI: Well, China. No, there’s too much competition, but I think that there’s still potential in Europe. And I look at the investments going into the charging infrastructure of local cities. That’s a signal that I would look for.

The Name Game

NIKHIL KAMATH: With everything you’re building, Dara, funnily enough, I had to tell you this. There is a really popular wrestler in India with the name Dara Singh. I don’t know if I should call you Dara because that’s how we call it in India, or Dara as Dara.

DARA KHOSROWSHAHI: Come on, guys. Is he bigger than I am?

NIKHIL KAMATH: I think so.

DARA KHOSROWSHAHI: I find that surprising.

NIKHIL KAMATH: I’ve never met him, but I suspect he is. He’s much bigger than me too.

The Future of Super Apps

NIKHIL KAMATH: With everything you’re building, Dara, is there a super app coming? Is that the eventual outcome?

DARA KHOSROWSHAHI: I think that super apps seem to be particularly relevant in Asia and China. They’ve been quite successful there. They’ve had less success in Western markets. So I don’t know if we will get to what you would call a super app, but we certainly want to be a connected family of apps.

So if you go on Uber now, Uber mobility, we have UberEats available to you. And people are transacting billions of dollars of UberEats on the Uber mobility app. And then on Eats, obviously we have grocery, we have retail. You’ll know next time you need a travel adapter.

And so we have, I think, an ecosystem that is making it increasingly easier for you to work from surface to surface or with a membership plan, Uber One that gives you discounts on both. So I absolutely know that we are building this local ecosystem, that local OS of yours.

Whether the physical manifestation is a super app or not, I don’t know. And the way I view it is I’m going to let our engineers and our product folks innovate, come up with the next idea and then we’ll go one step in front of the other to get to that outcome.

NIKHIL KAMATH: I was thinking about this and I did a little bit of research. Super apps tend to work in societies without as much rebellion in more…

DARA KHOSROWSHAHI: As much what?

NIKHIL KAMATH: Rebellion? Yes, in pseudo socialist societies, in more capitalistic ones. Everybody wants to bet on the new guy, the young guy, the same David versus Goliath argument.

DARA KHOSROWSHAHI: I mean I think there might be some of that, but there’s also phone storage and capabilities. Having a separate app for all these different services, maybe that’s a lot. And I think in some of the more developed markets people will pay for that last 10 or 20% of fine tuning that maybe a super app doesn’t.

So I don’t know whether it’s societal or it’s a competition for society or technology coming together. It definitely hasn’t worked in the west though.

Career Advice for Young Entrepreneurs

NIKHIL KAMATH: Last question. Dara, you have been a successful investment banker, a two time CEO, Expedia, Uber, sometimes joining midway and really scaling the company. If you were me, a 20 year old boy or girl in India and you had to start afresh, what would you build today and who would you build it with? Who would your co-founder be?

DARA KHOSROWSHAHI: So I always think people should know their own limits. I am not a startup person. That’s not my skill. I’m a scale person. I’m not the person to start with an idea fresh. And I have enormous respect for those rebels who think that they can do it on their own.

My advice would be, I’ve always said when I give career advice to people is I look for three things. One is I want to work for people who I like and I can learn from. Second is I want to go to a place where I as an individual can make a difference. And third, I want to make a difference at a place that matters in the world, is making a difference in the world.

And actually, that’s why investment banking, for me, great people, I thought I was pretty good, but it wasn’t… I didn’t get that jazz. I wasn’t changing the world. And so then when I saw Barry, I’m like, “Great. I want to work for him.” And we were really on this path of changing the world and hopefully helped it with travel as well.

And I was really, I thought I was going to run Expedia for as long as Barry would help me. But then for me, Uber, the thing that really excited me was how important Uber was to the world and the difference, hopefully, that I could make as a CEO.

I think a lot of young people, they think too much about how much money they’re going to make or this or that. It’s like, work for people who you love or respect. Make a difference and try to work at a place that’s making a difference, and the rest takes care of itself.

Closing

NIKHIL KAMATH: Thank you, Dara. This was a lot of fun.

DARA KHOSROWSHAHI: Thank you.

NIKHIL KAMATH: Hopefully we do it again sometime soon.

DARA KHOSROWSHAHI: I think that’d be great.

NIKHIL KAMATH: Thank you.

DARA KHOSROWSHAHI: Thank you.

NIKHIL KAMATH: How did you hurt your hand?

DARA KHOSROWSHAHI: I was at camp with my kids, and my son Hugo is a keeper, and I used to be a keeper in high school as well, so I thought it was a good idea to play keeper against him and all the other camp counselors. And I got carried away, and I dove to make him proud, so I took this one for my boy.

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