♪ emily: 10 years ago, travis kalanick and garrett camp launched uber cab, an elite car service in san francisco. within five years, uber had a shortened name and completed one billion rides. two years after that, the number grew to five billion across 600 cities and 70 countries. it became one of the fastest growing start-ups ever. services ballooned to cover nearly all modes of transportation, carpool, helicopter, even water taxi. but all that growth came with many challenges. regulators and taxi drivers protested uber's expansion. this, on top of multiple

investigations for deceiving authorities, price transparency violations, bribery, and sexual harassment. investors pushed out kalanick , the once untouchable ceo and founder, and a 2017, former expedia ceo it. -- expedia ceo dara khosrowshahi was brought in to fix it. he's brought in new management, worked to rebuild trust and reputation. still, it hasn't been an entirely smooth ride. a big flashy i.p.o. sparked excitement, but ultimately, investors were not impressed. now the job is to prove them wrong. joining me on "bloomberg studio 1.0" at uber headquarters in downtown san francisco, uber c.e.o., dara khosrowshahi. it's been a long two years. two years ago, it was announced that you would be replacing former c.e.o. travis kalanick. and even you've admitted you were the unlikely dark horse, even accidental choice.

so two years later, did they make the right choice, and did you make the right choice? dara: i know i made the right choice and i hope they made the right choice. i'm confident that they did. you can never prepare yourself for a job like this, and uber is a once-in-a-generation company. but it's been a great two years for us. we have resolved all of the governance conflicts that the company had. there were many legal issues the company was involved with, as well. we have softbank in as a partner, and you want softbank to be behind you and a big partner and big investor, and we have a great investor base. we've taken the company public and the company revenue, gross bookings, have grown 75% since i joined. we now have a path to profitability, i believe. so while we've had bumps on the road, and every adventure has bumps on the road, i like where we are, and especially the position we're in now for the next few years. emily: there have been bumps on the road, and despite all the negative stories, uber, lyft, ridesharing companies have been

transformational. the big question for you is, can uber be as transformational over the next decade as it has over the last decade? dara: i think so. really what uber has done is brought transportation and opportunity, at this point, to what we believe is a small segment of the population. we have over four million driver partners all over the world, a huge number, which is unparalleled, but we want uber to be available to everybody, and we're going into the next step of introducing other transportation choices to uber. we've always gone with pool, but for example, we're testing buses in cairo now to even bring the price of uber down to the next level, one dollar, $1.50, et cetera. emily: can the uber be so transformational and stop losing money? the prices sound attractive but can you create a good business where the rides are a dollar, a dollar 50? dara: yes, you look at our rideshare business, it covered

our overhead less about $100 million. so the rideshare business itself is earning quite profitably, and we believe the profits of the rideshare business not only are going to grow top line but bottom line, as well. and then there are other businesses -- eats, autonomous, trait, et cetera, these are extraordinarily opportunities that we're funding, but i do believe we'll prove to our investors that we can take, on a serial basis, big parts of our business, turn them profitable, and use those parts of the business to fund investments in other areas. emily: there are execution issues. you just had your biggest quarterly loss ever, the stock is been trading below its ipo price more often than not, investors seem to love shorting it, you have hiring freezes on various teams, you fired some of your top hires have left, so how confident are you that uber can be profitable? dara: very confident. we reported a $5 billion loss from an accounting perspective, and from an accounting

perspective that's a lot, and in the real world, our ebitda loss, we're lower than q1 and we're on a good path in terms of ebitda losses, as well. but you're right. none of this will be easy and will take excellent execution from all of our teams, marketing, et cetera, and we'll demand our employees to be doing more with less and to execute incredibly effectively in order for us to grow the top line and bottom line, as well. emily: is pricing the main lever you pull to profitability or are there other drivers? dara: scale. scale. it's getting big when you've got over a billion rides per quarter and trips growing at 35% on a year on year basis. we think we can use technology to be more efficient. for example, instead of your having to email a call center

agent or call a call center agent if you have issues, you can do it in an app. these are technology innovations that allow customers to have a better experience and bring down costs at the same time, so the combination of growing top line over 30%, technology innovation to delight the customer and take costs down at the same time, and then good old-fashioned efficiency, making sure corporate costs don't grow as fast as our revenue is a formula to profitability. emily: uber's market cap is 50 some billion dollars. there was talk it could be $120 billion. your compensation is tied to that. can you still get there? dara: i believe we can. short term, right now, short term is nothing that we can do about the stock price. there's an old saying that short term the stock market is a voting machine, long term it's a weighing machine. i am very confident that this team can execute and create a very heavy company that can

never be denied. emily: so, when? how long does it take -- dara: i think it's in the next couple of quarters are going to show a road map to investors but it will take years. this is not a short-term game. but i believe we can demonstrate progress. for example, i talked about our net revenue growth accelerating the second half of the year. usually, company like ours, you don't see revenue growth accelerates. i talked about our revenue growth accelerating in the second half of the year beyond 30%, and we've always been consistent in saying that the bottom line, ebitda, will continue to develop in a positive matter. emily: we're in the midst of escalating trade tensions. how exposed is uber if the economy falters? dara: our company is much more tied in to the consumer, and the consumer, right now in the u.s., is very strong. we're a very global company. the majority of our transactions actually are outside of the u.s., so we really look at global growth, to the extent that global growth slows down. that could be a negative for us.

although, if global growth slows down, we'll have more driver partners also wanting to come on the platform because we expose very, very flexible labor opportunities. so i do think that the growth of the company is such that we'll be relatively resistant to any macro slowdown, and we're not seeing any slowdown with the u.s. consumer as of yet. emily: what's plan b, if we're in a full-blown trade war? we've heard of investing in vietnam or brazil? dara: we're an asset-light company, so we don't have to buy cars, et cetera. we'll be wary and make sure that our driver partners can source vehicles in an economic way. many of them source vehicles through second-hand. they'll source used vehicles, so to speak. so, i don't think this trade war -- we certainly haven't felt it -- in small parts of the business where we're importing bikes, for example, there's some additional expense, but it's not having a material effect on the company, and we're confident about growth over the next few quarters, trade war or no trade war.

emily: you've asked people to think about uber like amazon. amazon was an online bookstore before they did all this other stuff. what if now is not the right time to do this? what if now is the right time to focus on the core? dara: we have been in the ridesharing business for a long time, as well. and that business is developing and its profitability is developing. we're the top player in every market in which we compete and generally we're either holding share or taking share in those market places so we have a core business that provides the framework for us to build multi-billion dollar opportunities, and i think it will be criminal if we don't take advantage of that. you are seeing more and more apps and companies that are building ecosystems, super apps, so to speak, especially in the east, for example, in china. emily: right. you have grab trying to do a super app, 10 cent. is that the way to think about the future? dara: the super apps are winning and we can be the super app of

transportation, so to speak, that allows us to acquire customers at much cheaper rates than our competitors and allows us to keep customers because we have a deeper relationship with them, and we think if you can acquire customers and keep them longer, it's a winning formula. emily: uber eats is what, 20%-30% of the business? dara: yes and growing quickly. bookings grew over 90% year on year. we're the largest global player out there and we continue in the category of food, we believe can be as large or even larger than the ridesharing category, so we love that business and continue to invest in it. emily: there are so many competitors that do exactly what you do in this market and other markets. what if you're just subsidizing our meals and you don't win the market share and this is a giant hungry money pit? dara: so early on i think people could have accused the rides business of the same.

it turns out that the rides business, you see it with ourselves and lyft, it is moving towards a path of profitability. as you build these businesses when the potential is so big, there is subsidization that goes into the marketplace to create efficiencies. you need to get eaters, couriers, and you need to sign up restaurants and there is investment early on. there will always be competition in big categories. we have the advantage because we have hundreds of millions of consumers on the ride side that we can introduce to our brand, and let them know that there's more to uber than just riding, but there's eating and other areas that you can enjoy. emily: some of the businesses we hear less about, like scooters. haven't heard a lot about scooters lately. what's the likelihood you pull out of some of these businesses? dara: every business is going to have to execute and carry its weight, so to speak. we're a big believer in micromobility. it's in the early days. we believe in electric bikes.

we believe in electric scooters. and, increasingly, i think the mayors of the large cities, all around the world, are going to want to be interested in ways of moving people around that don't pollute, that don't create traffic, and we believe micromobility can be part of the solution. emily: would you curtail international expansion in the short term? dara: every part of our business has to fight for money, and if they're not deserving money, they're not going to get it. so believe me, internally, there's lots of creative destruction, there's lots of competition, and if one part of our business isn't carrying its own weight, we will pull back. listen, we pulled back out of china and we turned what was a $2 billion investment in cash into what can be a $10-plus billion stake in didi, a very big ridesharing business in china, as well. so, we are -- in the end, we're looking to build a business. we want to build it the right way, in alignment with our partner society, et cetera. but if something's not working,

we believe we've demonstrated the discipline to make the right call at the right time. ♪ dara: every management has their faults. i've got my faults. but the fact is they built a great company, and now they've handed it to me, and i've got to take that great company and make it even greater. ♪ emily: when we last visited,

there was a driver protest outside. democratic candidate pete buttigieg was out there with them. he said gig is another word for jobs. that means you're a worker and ought to be protected as a worker. there is support for legislation that would force companies like uber that rely on contract drivers and delivery people to make them full-time. why shouldn't they be full-time? dara: because they don't want to be full-time. emily: some do. dara: some do. more than half of our drivers in the u.s., for example, drive less than 10 hours with us a week.

now listen, right now california has a historic opportunity. we're at the table. we are having these discussions and we want to the get to a solution. we're offering $21 minimum an hour when you're driving on a platform. we're offering benefits, and we're offering a voice as far as how you're going to be treated going forward. $21 an hour compares to $12 an hour minimum wage. ok? this is real money, and these are real rides, and you get the flexibility that every single uber driver or courier wants because they can come into the market when they want to or out. this is an historic opportunity to i think revolutionize the gig economy, and i don't think gig is a type of work. to say there's only one way to work and everyone needs to be full-time, et cetera, i don't think that's correct, because it takes away flexibility and flexibility is absolutely something that all of our drivers prize. emily: and can you give them flexibility and give drivers and riders safety at the same time?

dara: if the legislature works in the interest of making something happen, absolutely. and you know that we're making very significant investments in safety, as far as the safety center, tracking your ride, et cetera, and we believe we are the leader in safety as far as transportation goes in the world and will continue to invest aggressively there. emily: we're going to talk a little bit more about the future, but before we go there, i want to talk more about the past. the uber you took over had some toxic cultural issues. illegal payoffs to police officers, violence, sexual assaults, even murder on the platform, angry taxi drivers and a management team that turned a blind eye to much of it in the name of growth at all costs, so-called brilliant jerks, if you will. and yet there are some people who say that leadership was bolder, brasher, bigger thinking, maybe better. how do you respond to that? dara: i think time will tell, and i think you need different

kinds of management for different times in the development of a company. listen, the management -- every management has their faults. i've got my faults and every management team at the time has their faults, but the fact is they built a great company, and they've handed it to me, and i've got to take that great company and make it even greater. i think i'm up to the job. and while they made their mistakes, the fact is they built a great brand that had weaknesses and has incredible strengths. it's my job to take it to the next level. emily: anthony levandowski, the guy who ran the trucking business that uber bought, was just charged with stealing technology from google, stealing trade secrets. what do you make of those charges? dara: i wasn't here when we brought anthony on board, but what i do know is that we went to incredible depths to make sure that any information that anthony might have acquired from google, and it sure looked like he did, didn't make it over to

our company. that was our responsibility, and i think we were incredibly diligent in making sure that we were not guilty of anything that could be nefarious one way or the other. we think when you build, you have to build the right way. anthony is talented. it didn't work out but i think we did the right thing. emily: the person who was here, and who spearheaded that acquisition, which which might cost uber $100 million, is still on the board, travis kalanick. i asked you this on i.p.o. day. do you question travis' position on the board? dara: i think that -- i am going to live in the here and now. travis has an incredible amount of historical knowledge about the company. he's incredibly bright, as are our other board members, and i use him at the board -- he's a very strong adviser, and his background on the company is incredibly useful, and i think he's supportive.

ultimately, now, we're a public company, and the shareholders are going to get to pick their own board, and that governance process will take care of itself going forward. emily: so you talk to him often? dara: i talk to him usually during board meetings and once in a while offline, absolutely. emily: but, he's on the board for now? dara: he's on the board for now and will be on the board tomorrow. ♪ dara: fast forward 10-15 years from now, autonomous is going to be a huge part of how people get around. it will be cheaper, it will be safer. why not invest now to make that happen? ♪ emily: let's talk about the

future, then. to those who say that uber is a ridesharing and food delivery company, what is uber's next big idea? dara: i think that the ideas that we have right now in this building are plenty big ideas. we've got ridesharing, we've got food delivery, we have micromobility, we've got

autonomous. we've got freight revolutionizing how truckers move around and how shippers ship product all over the world. we've got elevate, as well. we have an enormous number of big ideas, and now it's execution time. emily: so where do you think most of the technological innovation happening at uber? dara: it is happening all over. what is unique about our business is that we are a combination of the digital and the physical and the two coming together in unique ways. so we have very interesting, for example, machine learning algorithms that are looking at live supply and demand in a city, what riders are looking for and where they're located, and then giving our drivers guidelines as to where to go in order to meet that demand. this matching of supply and demand in a dynamic way, and the pricing that we have, is something that's unique. we continue to innovate there, and then we innovate in in very, very different spots, such as elevate, as to how we can bring

together different modes of transportation and tie them together, walking, driving, to a helicopter, for example, now, to j.f.k. emily: you're in charge of not just visualizing the future of transportation but trying to get there and create that future. when you look into the future, what does the future of transportation look like? dara: we think we can bring it together. i believe we can have that singular app where, every morning when you wake up, any way you want to get from point a to point b, we can give you the information that is relevant to you with live pricing, inventory, et cetera. we now have mass transit in the app, so we're going to tell you mass transit, you can take a subway, you can take a bus, you can take an uber, a pool, and if it is a long enough trip you can take an elevate, as well. we are uniquely positioned to have all that information together, and we can do the same thing for transportation, the same thing for local commerce, and with eats restaurants are only the beginning, and we can do the same thing for logistics.

no other company in the world is positioned to solve local transportation, local commerce, and logistics, as well, and i think we're in a spearhead position to do so. emily: where's uber in five years, 10 years? dara: with so much innovation and change going on, i have a hard time predicting, for you, what's going to happen in the next year, but i do think what you will see us is increasingly going into multimodal modes of transportation. we are going to open up our marketplace to third-party transportation providers, because we're not going to do it all ourselves. i think we're going to be much deeper partners with the cities in which we operate. we want to bring demand to public transit, as well. we're going to have a much better enterprise solution, as well, both in terms of businesses and health and what you will see with eats is moving beyond the category of just restaurants, although that's a very, very category, into other categories of commerce, as well. it's going to be a pretty

exciting time, not just for the next year or five years but for the next 10 years here. and it's really up to the the teams here. it's my job to bring together the talent who can help me envision that 10-year future. emily: does the future of profitability, does profitability depend on self-driving car technology, or are those things separate? dara: i think we can get to profitability before self-driving, for example, becomes the majority of trips, but i think that if you look forward and if you want to bring safety on the road, increase it, because the number of people who die in accidents in the u.s. and abroad -- there's just no reason to have that many people hurt. most accidents are caused by human error, and we can avoid that with computers and technologies and at the same time take the cost more mile down pretty significantly. so, fast forward 10-15 years from now, autonomous will be a huge part of how people get around. it will be cheaper. it will be safer.

why not invest now to make that happen? emily: but can you get profitability without self-driving technology? dara: 15 years from now, no. any transportation company that doesn't have self-driving as part of its strategy, and that's why we have a.t.g. we can build out our self-driving technology specifically to serve our network, and that's a huge advantage that we have, but any company 15 years from now in the transportation space that doesn't have strong self-driving strategy, whether they build it themselves or they work with someone, won't be around for long. emily: i'm asking you to think big, big picture now, but in the history of silicon valley, in the uber pantheon, how are we going to look back on today, your two-year uberversary? dara: you will say every great company has to go through tough times. you look at facebook, amazon even five years after their i.p.o, all of them went through periods where companies are tested.

this is the moment where the mettle of uber is tested, and i'm very confident that we're going to come out of this stronger than we ever have been before. emily: dara khosrowshahi, thank you so much for joining us here on studio 1.0. dara: thank you very much. ♪ devices are like doorways

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♪ carol: welcome to "bloomberg businessweek." i'm carol massar. jason: i'm jason kelley. carol: this week, building on the franchise of bloomberg businessweek magazine and its ranking of the top programs, we went to one of the top schools in the world. jason: we got to have class outside over at columbia business school. we heard from faculty driving the program. carol: so much fun on college watch, we also talked with