Uber CEO Dara Khosrowshahi | Go Anywhere, Get Anything

Hi, everyone. Welcome to Gray Matter, the podcast from Greylock, where we share stories from company builders and business leaders. I'm Heather Mack, head of editorial at Greylock. In today's episode, we're sharing audio recorded during Greylock's new virtual speaker series, entitled Iconversations. As the name suggests, this series features innovative and brave culture makers, tech visionaries and industry icons who influence how we live, work and play. In our first event, Greylock General partner Reid Hoffman talked with Uber CEO Dara Khosrowshahi. Reid and Dara covered a wide range of topics, including Uber's shift from rides to food delivery during the pandemic, the company's M and A activity, and Uber's plans for the future. Enjoy.

Welcome everyone, to our very first Greylock's Iconversations, a virtual speaker series featuring the most innovative and brave culture makers, tech visionaries and other icons who are influencing how we live, work and play. Today, it is my great pleasure to introduce Uber CEO Dara Kosourshahi as our featured guest. Dara manages Uber's fast growing business in 63 countries around the world and leads a global team of more than 22,000 employees. Dara, thank you so much for being here.

Thank you for having me. It's an honor to be your first conversation. It's very cool.

The honor is ours. It's awesome. So today we're going to talk about a wide variety of topics, including Uber's pandemic shift from rides to food delivery, which includes a recent acquisition of Postmates and Drizly, how to think about balancing big bets with core businesses, what the recent sale of Uber ATG to Aurora means for the future of autonomous vehicles. Obviously, it's something Dara and I were working on somewhat together. How you think about M and A and why you're a big proponent of deal making and what you hope Uber looks like once the pandemic is behind us. For the folks who are here, questions in chat, they will be fed to me in an aggregated and other kinds of things version by our wonderful team who has put this all together. But let's start very early. Dara, you've been at the helm of Uber since 2017. Suffice it to say, a lot has happened at the company since then. I'm really eager to dive into all things Uber. But before we do that, let's spend a little time talking about how you got to where you are today and something we didn't cover on your Masters of Scale interview. You came to the US at the age 9 tell us your story.

Sure, absolutely. We're going very early. So I was born in Iran. My family came from a merchant family, and we had a big family business manufacturing pharmaceuticals, consumer goods, et cetera, and had a great life. And then in 1978, the Iranian Revolution happened. It was a religious revolution. And the folks who were associated with the Shah or the wealthy families, et cetera, were not safe and not welcome in Iran. We were lucky enough to have a uncle who lived in the US and we fled to the US to be safe and to some extent, to see if things would return to normal. And things did not return to normal. So to some extent, we became immigrants in the US and we were very lucky to come to the US During a time period when immigrants were welcome, even though we were coming from Iran. And relationships between Iran and the US Were very, very negative. So for me, my family really lost everything. My dad, who had worked his whole life to build up his business, lost it. He then had to go back to Iran for a number of years. But what we had was always family, right. And we had a great education and great opportunities in the US and we rebuilt a bunch of what we've lost. And for me, it's been, you know, I truly appreciate what we have in the United States, which is a second chance to rebuild, but also everything that comes with a culture where, hey, if you earn something, you can keep it. You're not going to lose it because of, you know, some powers that be taking away from you. You know, not having what Americans take it for granted make me even more thankful for everything that this country represents. So I was one of the lucky ones.

Yeah. And it's a great thing to be reminded of that, given, of course, all the turbulence we've been going through is that there's still stuff that we aspire to in very good ways here in the country. You mentioned your father, but also your mother had a lot of influence on you, and you haven't talked about your mother yet. So can you share a little bit of that with the folks here today?

Yeah, absolutely. So I'll start with my dad, which is. My dad went back to Iran to be at his father's deathbed. His. His dad was dying. He went to be with his father, and he was then detained in Iran for six years. He couldn't come back. So my mom had to get a job. She worked at a sales clerk at a fashion company called Celine. I still remember it. She used to shop at those kinds of places. She had to become sales clerk. So it was quite a change for her. And she had to raise three teenage boys. And she did it, you know, she. She got it done. And I think for me, you know, my family's always been a matriarchal family, like the women run the show. And my mom was, you know, a strong presence in my life. And I think the effect that she really had on me was she just set an expectation with the three sons, which is, you know, we've lost everything. I'm working here, you're getting an education. And without it being kind of this outward expectation, she had this quiet strength and determination that, you know, put us in her place and put us as boys to put our heads down, work really hard, because she was working harder than all of us, like working all day and then coming in, cooking for three boys at night, all that stuff. She was the only one raising us. And it really set the stage as to, you know, setting expectations and then really following through. And the kind of quiet leadership that she really showed during those years.

Well, and actually having some familiar with your own leadership, I can see the parallels. Right. Given that we've worked together for a number of years, did the Masters of Scale interview. So it makes sense. And we're going to get to Uber. But so let's start with Expedia. Just one question for these folks. And, you know, you're not going to. You don't ever brag about yourself. So I'm going to a little. You know, you had an incredible career at Expedia and which you grew into one of the world's largest online travel companies. And in your time there, you oversaw a number of acquisitions that grew its offerings, and you aggressively invested in mobile. And now that's more than half of Expedia's traffic. And, you know, you were beloved by Expedia employees. I know that personally, not just from Glassdoor and the kind of high ratings. What were some of the key lessons during the time of Expedia? What insights would you say I still use? And I. And I mentor and teach other people on from the Expedia time.

Yeah, absolutely. And listen, I grew up at Expedia. I was there for 13 years. It was an incredible experience. I have some great friends there to this day, so I really have some fond memories. A couple of things that I learned from Expedia. One is we almost wound up. I was the CFO of a company called iac, which is still around, which was Expedia's parent company, but we almost wound up not buying Expedia. With September 11th so we had announced Expedia purchase. Then September 11th, the great tragedy, September 11th happened, I think it was 20 years ago and we had a material adverse change clause in the deal to pull out of the deal. And it was a disaster. Obviously it was a huge tragedy. But then the travel business completely halted. Everyone was on their back foot. There were real questions as to whether people would start traveling again, when, et cetera. And from that experience I learned the value of sticking with your convictions. And myself and Barry, you know, we had a conviction that the travel business to go from traditional travel agents and telephone based and physical based online. And at the time, you know, there was this enormous event, September 11, which halted all travel. But if you step back within the timeline, it was a blip, it was a nothing. And so if you believe in long term, big changes in terms of industries, then believe in your convictions and have strength in your convictions. And don't let short term, even huge short term events affect those convictions. Because when you pull out 10 or 20 years, they are literally blips on a graph. And I think I'm hoping Covid will be the same. You know, we'll see. You know, a second learning for me actually with Expedia was Expedia was a holding company of a bunch of different operations, you know, Expedia, Hotels.com, travelocity, et cetera. And our Expedia.com was our biggest problem asset. It was full service travel agency tech platform that was quite old and it was quite problematic. And I hired two presidents whom I had fired, who didn't work out. I'll be more polite. And I went to my board and said, listen, I'm over 2. If I hire the next one and that next one doesn't work out, you should fire me. Barry Diller, who was the chairman of the board, agreed. He's like, absolutely, we should and will fire you if you screw this one up. So I thought about it and went back to the board and I said, hey, I'll do it myself. So I was for a while the CEO of the parent, but then I went in and ran the Expedia subsidiary, which was the largest subsidiary. And that experience, and I, I wound up running it for four years. And that experience for me was actually the time at which I learned how to become an operator. Because before then, I'll be honest with you, I was more of a portfolio manager, capital allocator, buy stuff, sell stuff. But I never run anything. And I really learned how to run a technology company and how important and fundamental Having the kind of tech backend and the systems and the architecture that you need to move forward, how fundamental that is to the business and how you can be the most wonderful allocator in the world. But if you're a crappy operator, you're nowhere. So that experience taught me the operating chops. And then the last experience, I would tell you, is that because of the kind of experience with September 11, the financial crisis, etcetera, we actually weathered through a bunch of crises at Expedia. And we were forced to be very transparent with our employees regarding both the good and the bad. And we built a culture of being incredibly open, you know, every single quarter. After we announced our quarter, I got up in front of the company, I talked about the good and the bad, and I had just as many bad as I had good. Bothered a lot of people because no one wanted to be on the bad list. But that culture of transparency, I think created, you know, some of the, like the glassdoor reviews, et cetera. People knew that whether I had good things to say or bad things to say, they were true and they came from, you know, a real place. And that's something that I've taken with me, you know, step by step by step. And I've taken with me to Uber. And sometimes it's been pleasant, sometimes it's been unpleasant. But I think people know that if I say something, I mean what I'm saying.

One small question before we get to Uber. Barry Diller, right? Iconic person. Sometimes people like, you know, rave about him. I think you're one of the actually the killer dealer, like, you know, outcomes, which are the people who are like really positive, other people, sometimes critical, obviously a greater than life figure, awesomely smart, you know, historic career. What's the kind of like the key takeaway from your being part of the Diller crew?

I rave about him like he is my professional mentor. A couple of things about Barry that I'd say, first of all, a lot of people don't realize this about Barry. He is the best listener I have ever met in my life. You know, there are like courses on presentation skills, etc. There. Barry Diller should teach a course about listening. He truly listens to you. He wants to understand what you have to say. And he listens because Barry's ego is not about being right. His ego is about getting to the right answer. There is nothing he enjoys more than you taking him on and pushing him and pushing him and pushing him and changing his mind about something. He revels in that. And what I found is people who, you know, they've had incredibly successful careers, et cetera, they love being right. Barry loves being proven wrong. If he can, then learn something from it. And that is really valuable because people, you know, people have these biases to ignore signals that disagree with where they are. And. And I think that is what has allowed Barry to change over time and go through so many different careers and. And be. You know, he's been wrong plenty, but he's been right way more times than he's been wrong. And it's because he's always looking to learn, and he forces you to tell him what he doesn't want to hear, then he'll beat the shit out of you. But then, you know, that process of fighting to get to the ground truth and like, scratching three or four levels down gets you to a much better place. It's phenomenal. And, you know, he's. He remains a friend. And I've learned so much from him.

Yep. And by the way, part of my own experience, the first time I met Barry, he was part of ask.com was trying to figure out Google. And so someone had told him, you should talk to this guy Reid Hoffman. And so literally, I get this email saying, hey, I'm Barry Diller. I'd like to come by your office and talk to you. I'm like, sure. And that's part of that curiosity. And the. I was like, oh, we're talking about search. Great. Anyway, so I totally agree. So now onto the main event, which is on the Uber side. And so then we covered, obviously, some in the master's scale, but I think it's fine because this audience may or may not have listened to it and all the rest of the, you know, obviously Uber went through some pretty well documented challenges. I wrote about a little of them in on, you know, on LinkedIn, on the essay of pirates to admirals. And I think you have shown a masterful admiralty captain. But what did Uber look like when you first got there? Right. It's one of the things that I actually learned a lot from our Masters of Scale interview was you answering this question, because it added to my tool chest. So what was your first impressions and then what were the early initiatives that you prioritized?

Sure, absolutely. So when I got there, the difference for me between the external perception of Uber and then what I found internally was like, night and day. And, you know, it was a group of employees who truly believed in the mission of the company, who truly wanted to do good. And as I step back and I've had kind of the benefit of a bit of time since I've been running Uber is I think the biggest issue that happened with Uber was that Uber had always been a challenger. You know, like, this is a company that when they were founded, it wasn't just that they were competing against other companies, but like they were competing against industries and regulations and governments that wanted to essentially regulate them out of existence. So it was like the ultimate challenger company that had to fight for the right to fight, right? They had to fight for the right to compete. Then they had to compete and win as well. But they, you know, it was just fighting at so many levels. And I think the company didn't understand that at one point it went from challenger to incumbent. And when you become an incumbent and you have responsibilities, societal responsibilities, responsibilities to your drivers, couriers, et cetera, you have to act in a different way. And it was an incumbent that was still acting like a challenger. So, like using your metaphor, they become the Navy, but there are still a bunch of pirates running around, right? And they. And they didn't know that they were supposed to be in the Navy. And so I think part of it was having the company understand that the responsibility to shareholders, to, you know, governments, etc. Like, there was a different responsibility and a different way of method of operations. You know, the way that Travis had set up Uber was kind of vertical stacked, very loosely coupled efforts. Any GM was essentially a CEO of their own city. They could do whatever they wanted and, you know, let a thousand flowers bloom. And that is a great entrepreneurial setup. It is incredibly powering as it relates to these GMs or these mini CEOs. But it is not an environment for a Navy. It is not controlled in any way, coordinated in any way. So. So we had to move from kind of a, you know, completely decentralized system to a loosely coupled system that had some direction and had some standards and norms that everyone had to accept and understand and then, like, they could go out and continue to operate in an entrepreneurial manner. So for us, it required us, hey, let's set a new set of norms. And what we tried to do is create a bridge between some of the old stuff that was really cool. Like, we make big bold bets and we believe in ideas over hierarchy and then putting in some new norms, you know, celebrating differences, doing the right thing, etc. So creating a bridge between what was great about the old pirates and what the responsibilities that a Navy had to be responsible for. We had to create some functions that, for example, safety, which is Making sure that drivers who are on the system are safe, making sure that we do background checks, et cetera. Those kinds of functions were tail functions. They became real functions and priority functions that stop being afterthoughts. You can't have safety be an afterthought. You actually have to design systems from the beginning so that the system itself has safety in every part and every check of every single product that you build. So certain afterthoughts became forethoughts, and then you just had more tightly couple certain functions as well. Marketing, for example, government relations, you know, just how you build the product, organization, et cetera. You just had to more tightly couple it. But the talent was there. And like, I think the exercise of our kind of going to the company and identifying what are the norms that we treasured about where Uber was, because, you know, Uber 1.0 was not all bad. There were so many great things about it. And then what's the bridge that we have to follow in order to be smarter, be a little more tightly coupled, and be more responsible? That kind of magic took some time to get done, but I think we're well on our journey. And listen, I still want some pirate on us. Right? We still want to have some fun. And I think early on, we might have swung a little too far. And we're making sure that, hey, where can we push? And where can we make sure that the entrepreneurs and the many CEOs in our company can flourish, but flourish responsibly?

Yep. Well, before we get to the pandemic, there's a couple of the kind of culture, you know, kind of re Evolution stuff that you did that I want to highlight here because this is some of the stuff that I was learning from our Masters of Scale interview that got added to my tool chest. So one of them was, you know, your kind of classic view of a new phase of culture moving from pirate to navy is like, you know, Dara would show up and say, I'm the new. I'm the new sheriff in town. You know, like, here's my new rule book, and we're all gonna follow my new lead, and this is the new banner and so forth, and, you know, come kind of idiotically. That was kind of what I was expecting you to say when I asked you this question in Masters of Scale. And instead I got an answer to say, no, no, actually, in fact, was all these really talented people. There were all these really talented, important cultural principles. And so what we did is we did a survey to say, hey, what was most important to you? About Uber so that we could draw from that survey to make that the basis of the rebuild. And I was like, oh, it's so much smarter than the thing I was thinking, which is this hackneyed old, you know, kind of cliche point of view. So tell a little bit about what you did there, because I think that's really the playbook for not just quote unquote, you know, turnarounds or whatever, but like any new re evolution, is that rebasing to say it's part of who we are already and this is what we grow from. So talk a little bit about what you did and what you learned in doing that.

Yeah, and I think it partially came from, I think it was a Jeff Bezos saying, which is to some extent your company culture writes itself. And so for me, as the new person who had been running Expedia, who come in and say, I, you know, Uber's culture should be X, Y and Z. It was just, I was a foreigner, right? I was an alien coming into this entity. It wouldn't meet, you know, Uber. And Uber had an incredibly strong culture. And again, some of those, their, their cultures, their cultural norms got weaponized, but they came from a place of, I think, very much good intent. So we actually went and crowdsourced. Right. Hey, what do you think the cultural. What are your favorite cultural norms of, you know, Uber 1.0? What do you think the norm should be going forward? And I took that as input. And then, you know, I got to be the editor, right? So myself and the senior team then reduced the norms to eight norms that we have that were both a combination of the ones that were most popular with the crowd. And then some that, you know, I had an agenda. So, for example, we do the right thing, period, was one where, you know, I was putting my mark, but I wasn't kind of being, you know, the monarch saying we could do X, Y and Z, but I was also putting my mark in some ways. And that allowed us to bridge, you know, the cultural norms that we have now. And by the way, I tell the company, just like every company changes, our norms should change. If our norms don't change, I actually think I've failed. I think some people talk about cultural values are forever. I don't think that's true because companies have to change. You know, Uber was at that stage, one challenger. And as it became bigger and bigger and bigger, it had to change its culture. So the norms that we have were a combination of bottoms up and then some top down leaning. And again, you know, we don't have it perfect, but I think we got a little bit of Best of both worlds.

Yeah, totally agree. Like, one thing is everyone tends to be like, the whole cult of culture in Silicon Valley tends to be, you establish one and then you stay. Almost like the Ten Commandments. It's like, no, no, culture evolves. The question is, how do you grow the cultural interview? How does this person add to your culture? Not, not like, oh, no, no, no, you, you fit in a box or not. And that's one. And then the other part of it was kind of this question of it's not top down or bottom up. It's always a combination, right? And if you're doing it well, like, no, you can make the mistake of only doing top down. But like, no, no, the combination is where the real leadership happens. And I think those were among the things that I was like when we were doing our Masters of Scale interview. I was like, this is great. Now another part of the culture thing is also how you engaged in dialogue with the critics, right? So like Susan Fowler and said, hey, these are problems we need to solve, we're going to do it and we're going to engage because we want to show accountability, transparency, kind of trust building. So talk a little bit about how you did that as well. And it's kind of the early, because this was when Uber was kind of on its heels being attacked a lot for its kind of company culture.

Yeah, it really was. And listen, I think that you've got to take on your biggest critics then in order to understand where you have to go. And I think a lot of these criticisms is they came from a true place. So for me, actually, the most important partners that I had in this case were the ergs. Like, we had a set of employee resource groups, black at Uber, women at Uber, etc, who I had a, you know, a lot of long sessions and kind of tough sessions with, where I'd read everything, you know, I'd gone through the Holder Report. And so there's kind of this theoretical understanding that I had coming in, but sitting down with black at Uber, women at Uber, et cetera. And, you know, we talked for four hours about what was going on. And then I specifically asked them, hey, don't tell me what was wrong, tell me now what we should do. That dialogue then allowed me to kind of understand what the issues were and then I think also make sure that these team members felt heard and then putting together specific plans going forward on what we were going to do. And for me, it goes back to you know, when I talked about safety too, like inclusion and diversity didn't become afterthoughts. They were actually then system designs that we started, started with, we started with gender diversity and you know, now obviously we have diversity as far as race, et cetera, go. But I treated those areas of the business just like we, we treat other areas of the business, which is we set targets, we measure, we have programs against diversity, inclusion. And you know, I have discussions, I have reviews with my teams quarterly on diversity and inclusion, just like I do on, you know, customer acquisition, just like I do on retention. Like, it is another part of the business, a really important part of the business that we are driving operationally and it's a first order citizen rather than what I've seen it done with some other companies, which is, hey, you do all the stuff that you would normally do and then you check to make sure that you're doing the right thing. No, no, no, you actually, it's part of your systems at the very beginning. It's a first class citizen. It is hard, but, but we are absolutely making progress.

And the other highlights are dashboard and everything else. It isn't. You hire a chief diversity officer and say, great, you sit there and give speeches. It's like, no, no, it's integrated into the businesses, into the, into the goals, into the dashboards, into what you're doing. Exactly as you're illustrating, our chief diversity.

Officer is as metric driven as you would see. She's great.

Is there anything in particular given obviously last year and the Black Lives Matter movement, which I think is obviously in most of our views, I think including yours was like past due, given the notion have an equally and free society and have the opportunity. Is there anything in particular you've been adding in on the, the work on the kind of, the racial and tech pipeline for this? Because that's something that we all in Silicon Valley need to do.

Yeah, I think, I think what we had not done to be fair is we were very internally focused and we were focused on kind of our employee base, what it looked like, promotions, recruiting, all the kind of internal stuff that we did. We weren't focused as much on external. How do we actually build a service that is fair? So we look at inclusive design, you know, how do we build product from the ground up that are inclusive. We've made, you know, commitments as it relates to black owned businesses, black owned restaurants, et cetera. So what we hadn't really focused on is Uber as a service and making sure that, you know, not only are we inclusive Internally, but. Or inclusive externally. We've made a number of commitments as it relates to restaurants, couriers, et cetera, that we're driving right now. Each one of them have business owners. I again, do quarterly reviews with them. And I think it was a learning moment for us, which is it's not just about what we look at internally, but it's how does a service look like to the world and how do we make sure that we serve all of our constituencies?

So one of the questions we've gotten from the chat, which I think this might be a good place, I know that he's asked you this question directly, so it won't be a total surprise. Mark Pincus, how do you build, you know, rebuild trust and trust in Uber, the brand trust in Uber as a part of society? What are the things you're doing to directly and proactively do that? And then what are the things that you would advise other people and similar. Similar experience of building that trust through experience.

Yeah. I think it starts with transparency. And I think there's a saying like trust leaves in a gallop, but comes. Comes back on a crawl. Right. It's still a process for us to continue to build trust. But. But some examples that I'll give you is we published a safety report last year, and it was a systematic and complete view of everything that happens on Uber. And all incidents measured, classified, it was audited. We had all kinds of folks come in. And obviously the trickiest thing is women's safety and unfortunate events that happen on Uber because we're such a big platform. I was terrified when we released that safety report, but it was so comprehensive and it was completely transparent. And we really had brought in women's alliance groups, victims alliance group, et cetera, as far as how we classified the events and what we were doing about it. And because I had the safety team working like our, you know, zero is the right number as far as sexual assaults on Uber. But we were through a bunch of work bringing the incident rates down. You know, our. We're still the only company in the world who's ever published a safety report. I'll pick on our competitor, Lyft. They said they would. They haven't. I have no idea why. But, you know, those kinds of actions are what is necessary for the public to start to trust you again. Another example I would give you is, you know, at the height of the pandemic, we actually came out with a marketing campaign, which was a marketing campaign, don't use Uber. You know, only use Uber when necessary. Because we determined that, hey, it's more important for some society stay safe than Uber's business to come back. It was the first pitch I'd ever had from a marketing team of, hey, we're. This is a genius campaign for you not to use Uber. But it was actually, it was a really smart campaign because again, we were making a statement, hey, think twice are putting selfies, you know, selfie technology on having to wear masks, et cetera. These were, you actually have to take action that potentially hurts your business, but truly is good for society. And if you keep doing that over a long period of time, you can rebuild trust. I think we're halfway there. I don't think we're all the way there. But you know, just continuing to act and do the right thing over a period of time I think, I think will get us there.

You foreshadowed the pandemic a little bit in our earlier discussion of Expedia because obviously the question is an asteroid hits. It was 9, 11 in the case of Expedia. It's Covid in the case of Uber, which are really the, you know, the times where these things get really tough and very difficult. And I think that the marketing campaign is right because it's saying part of trust is we care about you and your health more than we care about what our quarterly earnings are. Right. And we'll be tangible. We're going to spend money telling you.

That we paid drivers for 14 days to not drive if they felt sick or they had a sick person at home. Again, like it's insane for short term business, but it completely makes sense for long term in your brand.

So walk us through a little bit of. We're now kind of at a year anniversary for the asteroid having hit for the US business anyway. Probably a little bit more uneven in other areas of the world and you are in 63 countries. Walk us a little bit through the. Oh God, we have this asteroid. What are we going to do?

I still remember we had an off site, a management offsite planned. It was early March and like the team in Asia saw the trends as it relates to Covid and we just canceled the whole thing and kind of repurposed it into our Covid relief action. Like, how do we take this thing on? There's a saying which is never let a good crisis go to waste. For us, when we saw what Covid represented, which was a complete disaster. And listen, it's within the context of there were profitable companies who obviously took a hit on their business. We were a company that was losing $2 billion a year that whose mainline business, our mobility business found itself down 80%. So it was a complete disaster for us. So I knew that we couldn't take incremental action on this thing. We had to take hardcore action. So I sat down with my team and we very clearly delineated what do we consider core to the business and what do we consider non core. And one of the areas where we got lucky was that we had made in my first two years at Uber, we made a big bet on Uber Eats. And while the mobility business was way down, Uber Eats started absolutely exploding. And so one of the great assets that we had was we have this incredible growth vector of our business get way, way bigger. And that allowed us to say, hey, let's double down on this delivery thing. Well, if you're going to double down on a delivery thing, you can't do everything at once, especially within Covid. So what we said is let's take anything that we're doing that we consider non core. And we were like in bikes and scooters, we were in developing autonomous technology, we were in Uber Elevate. We were thinking about building a payments business. All of our non core activity we said that hey, instead of building it ourselves, let's build it with partnerships. So obviously one great partner that we found was Aurora and we merged ATG into Aurora, et cetera. But essentially we decided, here's the stuff that we're going to do, which is mobility and deliver. Here's the stuff that we're going to do through partnership that allowed us to lower our cost base pretty significantly. On the other side we decided to lean into delivery in a big way. So we bought Postmates, we had bought Corner Shop as it relates to grocery. We recently announced Drizly as well. So we doubled down in this area that we found there's just this enormous acceleration of on demand local commerce. And so we doubled down on, on that side of the business. And then the other part is like good old fashioned cost cutting, which you know, I'll say sucks, but it's something that we had to do. We laid off ultimately 25% of our workforce, some of which were associated with these non core activities, some of which were associated with projects that no longer made the cut. We were, you know, working on a bunch of payment stuff. They make the cut that team got cut. And the combination of kind of focusing on the core, essentially cost cutting where it was necessary and then doubling down on the delivery business actually has us in a really, really good spot now. We're going to 2021. We got a delivery business that is, you know, it's at a 45 plus billion dollar run rate now, a mobility business that's poised to come back and a P and L that's actually very, very tight. So I'm optimistic. But I'll tell you, 2020 sucked.

Yeah, yeah. You were in one of the ones that was like, there were a few that were accelerated. It was like digital transformation. Hey, we were doing stuff through online zoom teams, et cetera already. And then there were stuff like. No, no, we're about how people do stuff together. That's much more painful in a pandemic because it's like, look, people first, humanity first, health and safety first. And the business has to take back seat or the trunk.

Exactly right.

So let's talk a little bit about M and A. So. Cause among your many skills. Cause you're. What is it? I think baseball has this metaphor of five tool athletes. And I think you're a five tool CEO. M&A is one of those tools, whatever the number of tools is. It's one of the things obviously with iac experience with Expedia. And so as part of this transformation, you didn't just go, okay, we need to do these things with partners and we'll come back to Aurora and ATG and those things. But also we needed to make some acquisitions to show it up. What was the decision look like and what, and what did the execution look.

Like as it relates to m and a? 1 is I think that M and A has to be a part of the tool chest of any company. But it can't be. You know, if I were to say, like the growth of the company, 80% always has to be organic. 20 can be M and A. Any company that leans too hard on M and A is going to start chasing dumb deals. So our focus on M and A was twofold, which is in the mobility business. There were certain areas where we wanted to consolidate. So for example, Careem in the Middle east. And then there were certain areas where we were looking for capability that we wanted to add on to our ecosystem. And what we do have is we operate in 63 countries, we have a huge audience of 100 million monthly active users using either our mobility services or our delivery services. So where we saw teams that had built verticals, usually on a local basis, we could go out and, and where those verticals were quite idiosyncratic, we could buy that vertical capability and then we could blow it out all around the world. So corner Shop. On the grocery side, we thought grocery is a great, you know, vertical for us to go after they're in Latin America. We know that the US Is very competitive, but Latin America is there for the taking. And we have a. With Corner Shop, a team that is very, very strong in execution. On the. On the grocery side, we could have built it ourselves in three years, or we could have brought it in house and essentially expanded on a global basis at an accelerated pace. So usually kind of what I tell the team is there's consolidation, and consolidation is definitely worth something. And a cream in Middle east was more along the lines of consolidation. And then there's capability. The acquisition of Cornershop, the acquisition of Drizly, those were more about capability. And then buying a capability and then extending it across the footprint and the audience that we've got. And you got to be very clear about which it is, because if it's about consolidation, you've got to have a very, very strong integration plan. If it's about capability, you almost don't integrate. And the integration is about audience, and it's about geographic extension. And you want the teams that built the service to continue to be able to build the service and innovate on that specific service.

Yep, absolutely. So let's go to the other part of it. Cause part of the whole strategy is more of this partner with this. And part, of course, your own experience is, hey, look, we can find partners versus close us down, still use this to a massive strategic advantage. You know, I guess I'll leave it to you for your side, because obviously Greylock's an investor in Aurora, and this is one of the things we were working together. But what made you decide, okay, atg, Aurora, this is the right thing for Uber to do. This is the right thing that's going to create the following kinds of things in the world. What was your thought pattern there? And then describe a little bit about whatever we can be public about, because you probably know this better than I do about the strategy of it.

So I think, first of all, from my sense, I've always viewed autonomous as a capability that we wanted to make sure we secured. Secured for our network. Okay. And. And the reason why we originally went into autonomous is because we had competitors, Waymo and Cruise, for example, who previously, you know, we'll see what happens going forward, had stated that not only did they want to build a capability, but then they wanted to build a network on top of it. So we weren't sure that we could actually go out and secure that content. You know, Ultimately, just like I want every driver and every driver in the world to be able to sign up for Uber, I want every robot driver to be able to sign up for Uber. So we wanted to make sure that we had access to the content. So I came in with a point of view which is Uber's future is not based on building autonomous capability, it's based on making sure that we have access to the best autonomous capability out there. So I was always open minded about what we wanted to do. And as it relates to autonomous technology, which is going to take some time to commercialize, it was my opinion that the most important factor was team. How do you actually go out and build the best team out there? And with atg, we had a really strong team where we were very, very strong on was the data that we had as it related to our understanding what are the needs that you need to, what are the skill sets that you have to build for an autonomous driver and how do we think about the commercialization and how do we think about actually scaling this business once you build the autonomous technology? I met Chris a bunch of times and I knew him from, you know, the Wonderful Allen & Co. Events, etc. I had a lot of respect for him. And Chris and I got talking and we came onto a conclusion which is, hey, if you actually put ATG and Aurora together, that specific combination of skill set, and by the way, the teams really knew each other very well. You know, Chris's deep, deep experience and a great team that he had complemented by the ATG team with data from Uber on kind of what's the easy stuff, what's a hard stuff, how do you commercialize and then how do you scale and some of the relationships that we had with vehicle providers, you just build a thing that would be very, very valuable and you know, it was a bit of a win win as it related to that deal and Aurora now, you know, I'm on the board, you're on the board, it's a big investment for us. But Aurora can focus on just one thing, which is to build autonomous capability. And within Uber, ATG, you know, Uber was 90% about network, 10% of building autonomous tech. And if there's one player who's thinking 100% of the time about doing something versus 10%, I'll bet on the hundred. So that ultimately led to the conclusion of putting the teams together. And I'm super, super optimistic about what Aura is going to build.

As am I. I think one of the signs of a great deal is both sides Being pleasantly surprised once they look under the hood of the other side, they go, wait. Is like, we got this. This all makes sense, you know, peanut butter and chocolate in concept. But let's look at it and go, oh, that's better than I thought. And I think that's been the experience on both sides so far. So I completely, obviously agree. All right, so let's shift to another area. Unless there's anything else on any of the other kind of partnerships.

No, I think. I think the biggest one was obviously ATG and Aurora. We. We replayed the hand and some of the other partnerships and we're pretty optimistic about it. But the thinking was similar, the strategic thinking.

Yep. So let's go to regulation. You know, obviously one of the things that's generally happening in the world is we're getting more tech nationalism. We're getting, you know, kind of questions where, you know, people are realizing that technology is becoming infrastructure in various ways. Obviously the thing that's most often discoursed in media is information and truth and ecosystems. That's a, you know, obviously different ecosystem. But, you know, Uber is infrastructure too. It's logistics infrastructure. It's human infrastructure that plays the jobs. So say a little bit about your. What the new Uber strategy with DAR is kind of like, here's how we engage with regulation, here's what we anticipate coming. You know, here's what we think the right balance is for understanding. Because the mistake I always feel with tech lashes, tech's part of the solution. It's like part of what we can get better. So don't focus on that. No, don't focus on the. Do this. This would be really good. But anyways, tell me your version of this and how you think about it.

I'm still kind of new to the highly regulated industry thing, but I will tell you what's one of the weird things about Uber is that as a technology company, we've been regulated from the very start. And in some ways, actually, we have wanted regulation. In 2013, California was the only place that had regulations on ride sharing. And in a weird way, we've actually been going country by country and state by state, etc, working with government to regulate ride share, because often it was in this unregulated gray zone where we could operate. The government didn't tell us not to operate. And it was just like, well, can we? Or can we? So one unusual step here is I think a lot of companies will, like, want to avoid regulation. We're like, no, please regulate us so that we understand the rules. Of the road and we can operate freely in a green zone. And that progress has been, you know, we were, I'd say when I came on, we were still unregulated. And 50% of the places, it was kind of this gray zone and we become regulated. And that's a good thing because the crazy creates a safe environment for our drivers to drive in, couriers to take food in. I think the second area for me, like a real learning, is that we've got to lean in here, like regulation. I think a lot of companies, you know, they don't want to be regulated because it slows you down, etc. But the impetus behind regulation comes from a real place. And for us, kind of the, the most important area right now is independent contractors. And what that means and what's become very clear is that there are really cool things about being an independent contractor. You've got flexibility. And, you know, with Proposition 22 in California, I think our drivers are very clear. The majority of drivers don't want to be employees, they want to be flexible, etc. But I do think that the expectation, and our expectation should be, yes, you can give flexibility, but there are certain protections, health care protections, minimum earnings protections, etc, that should also come with the benefit of flexible work. That is not either or. And I'll tell you, like we were tempted in the past of saying, you know, let's just leave this and hopefully nothing happens, etc. That's not good enough. So I think on independent contractor, for example, we're leaning in and we're seeing and it's going to cost us, but we think while short term it's going to cost us long term, it's a better way, which is there's a system that is going to provide maximum flexibility and should provide some protections, not as many protections as you would being an employee because it's different, because you lose all kinds of flexibility, but some protections that are important to society and are important to people, etc. So we're leaning in on IC Plus. You know, we're having those conversations in the US and I wrote kind of a white paper in Europe as well. Like, this is something I know it's going to cost me, but I think it will create a better solution and a more permanent solution for us. And then the other area that I would just point out along the regulatory front is we're leaning in environmentally and we made a commitment by 2030, we're going to be essentially all electric in the U.S. europe, Canada, 2040, all over the world. And again, it's like that's not something that is great for us near term as it relates to economics. But if I'm going to be a gas guzzler, then every single mayor in every single city, their goal is going to be to have less cars and less of Uber. So why don't I lean in and actually have a program where we do go all electric, where we create economics for drivers. And for example, I've introduced Uber Green. You know, drivers who drive hybrids and drive electric make more money. So there's, there's an economic flywheel for my drivers to be able to make the transition to electric. And it puts me, you know, kind of on the path of where the cities and the mayors of kind of the big cities want, want to go on, rather than my fighting it. So sometimes companies fight it, fight it, fight it. And when you should actually understand where the regulatory impetus is coming from and then be a part of the change, it hurts short term. But long term, I'm convinced it's the right way to go.

So one of the questions that's being upvoted in the chat a bunch is a question from Grelock's own Corinne Riley, which I, by the way, I think is a fascinating question. You could spend the entire interview on this question and we only have five minutes left. But it is what it is, which is how do you internally manage the process of exploring new bets while maintaining discipline, of shutting them down when need be? Like selling Uber Eats, Uber pool, et cetera. What's the process and investment decision making that you run?

What we do is every business can come up with new concepts that they want to sponsor. We then challenge a team to write essentially a very short business plan, like three pager, on how big the marketplace is, what the investment is, and we want it to essentially be able to launch within six months. And you know, Uber, everything was originally that became Uber Eats. Obviously Uber Eats is a huge part of the business that we started leaning into. But for example, we are now we built out, it's not something big yet. High capacity vehicles, right, which is the equivalent of Uber Bus, our pricing algorithms, routing algorithms. Instead of fixed routes, et cetera and fixed schedules, you should be able to build a better bus network. That came from one of these little concept papers. And we're now running high capacity vehicles in Cairo and it's a really, really promising parts of the business. So they come as ideas, they get small pieces of funding and then if they show signal, they get kind of B round, C rounds, etc until they grow up to be a part of the core. I don't think we perfected it, but we're creating an environment where some of these ideas can eventually turn into big bets.

Yep. And, you know, obviously Silicon Valley, heritage, entrepreneurship, et cetera. So, last question. What does Uber look like post pandemic? What's the way in which the pandemic has forged Uber in the crisis? And then the heat of the, of the thing and coming out of the pandemic, what does the new Uber look like?

The way I think about the new Uber is we want to be the one hour company. If Amazon owns next day, we want to own next hour. Any place you want to go, anything you want to get within the next hour, Uber is going to be there for you. And by the way, whether it's a car or a bus or a subway or a bike or scooter, we're going to have an open marketplace. And it's not just food. It'll be grocery, pharmacy, alcohol packages, your Apple, iPhone, anything that you want to get, we're going to be there for you. It'll all be underlined by a membership program. So if, like prime is the best next day membership program, TAS is going to be the next hour program. Anywhere you want to go, anything you want to get, we're going to be there for you.

Well, I have complete confidence and I agree with your next hour as a strategic framework. And Dara, as always, it's a pleasure. I always look forward to talking to you because I learned stuff. It was true in Masters of Scale. It's true today. It's been amazing. Thank you for joining us.

You're very welcome. It's a real pleasure. Thanks, Reid.

Ciao. I think we just hang up now, so thanks, everyone.

Take care.

That concludes this episode of Gray Matter. If you enjoyed this interview and want to hear others, please hit subscribe. You'll be able to catch up on Gray Matter episodes you may have missed, like Sarah Guoa's recent interview with New York Times cybersecurity reporter Nicole Perlroth. You also get new episodes delivered directly to you, including the new ones recorded with future iconversation speakers like Melody Hobson, Brian Chesky, and J.J. abrams. You can subscribe to graymatter@soundcloud.com greylockpartners on Spotify or wherever you get your podcasts. You can also find new episodes and blog posts every week on greylock.com and of course, you can follow us on Twitter reylockvc. I'm Heather Mack and thanks for listening.