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Speaker 1

00:00

Wow, this is awesome. OK, this place is full. All right, so good to meet all of you. My name is Travis Kalanick, co-founder, CEO of Uber.

Speaker 1

00:12

Let's see. So I do a lot of speaking because We're a technology company that is, we're in the trenches, we're in the cities. You know, more than half of our employees are not in San Francisco. I don't even remember the last time I spoke in San Francisco in front of an audience.

Speaker 1

00:32

Every time I go to speak somewhere, right, I look, I go on Google and I look at the roads. I look at architecture. I look at cool pictures I can put that are iconic. And I'm going to speak in Silicon Valley and I'm searching Google images and I can't find anything And so yeah, there you go.

Speaker 1

00:55

It's good to be here Anyways, I found a little something All right. So guys I'm guessing most people here at least know what Uber is, but for those of you who don't, I'm gonna go do a sort of a basic tour just really quick. It's an app on your iPhone that helps you get a car. Our motto is everyone's private driver.

Speaker 1

01:21

And so you open up the app and you see a bunch of cars that are near you. This is 1 of San Francisco. Car's 3 minutes away. And Jim will arrive in 2 minutes.

Speaker 1

01:34

He's rated at 4.8. And this is, of course, all screenshots from your app. When he arrives, you're told, you're notified. You can call the driver, of course, and if you're lucky, he'll open the door for you.

Speaker 1

01:48

When you're done, this is a short trip, $15, that's our minimum in San Francisco. Of course, we have lower cost options now. We have something called UberX. A couple days ago we launched Taxi in San Francisco.

Speaker 1

02:00

A lot of folks are like, you're doing taxis, you're the anti-taxi, what are you doing? We know what we're doing, but we'll get to that in just a second. All right, so some basics. Launched in June 2010, so We're just over 2 years old.

Speaker 1

02:17

We don't own cars. We don't employ drivers. A lot of people don't know that about us. They think we have all these assets.

Speaker 1

02:24

They think that we employ lots of drivers. We don't. We have 120 employees, most of which are not in San Francisco. We don't have a marketing spend.

Speaker 1

02:34

We're deployed in 17 cities. For some reason, there's 16 here. We actually just soft launched in Sydney a couple days ago. Actually, yesterday.

Speaker 1

02:45

Amsterdam is coming very, very shortly. And I think Minneapolis isn't on here. We did that a couple weeks ago. So quick numbers.

Speaker 1

02:57

Hundreds of thousands of hours driven per week. A very interesting engagement figure. 50% of all the people who have ever ridden on Uber have ridden in the last 30 days. And remember, when you ride, you're paying.

Speaker 1

03:11

So think about commerce. Think about a commerce site or a commerce app, where 50% of the people who've ever paid, paid in the last 30 days. Average person is paying about $105 a month. In San Francisco, it's a bit higher than that.

Speaker 1

03:26

Prices are probably a bit too high. I know some of you have felt that sting. We're doing 26% month over month growth. That's an average over the last now 16, 17 months.

Speaker 1

03:38

You go, okay, well, if you start really low, then you can grow really big. But we were pretty big 12 months ago, and if you do 26% month over month growth, that means in 12 months you're 16 times bigger than you were 12 months ago. So we're growing fast, and in fact, September over August was 29% month over month. So I'm gonna tell a little bit about our background, and then hopefully if I have enough time, get into some of the regulatory stuff, which I know none of you guys want to hear about.

Speaker 1

04:04

All right. So this, you can't see really well because of all the lights, but it's a romantic shot in front of the Eiffel Tower between, with me and my co-founder, Garrett Camp. Some of you guys may know him. He was the founder of StumbleUpon.

Speaker 1

04:17

It was in Paris at Le Web where we came up with this idea. Essentially, he said, look, I just wanna push a button and get a ride, and let's make it a classy ride. And that's kinda how we started. Paris, in many ways, is a sister city of San Francisco.

Speaker 1

04:32

Impossible to get a cab there. So this is something from the past. This is what we call hailing. I'm not sure if you guys have ever done that, but some people actually put their arm out to get a cab.

Speaker 1

04:46

I don't know what's going on. It's a weird thing, but this is what we used to see in San Francisco, I went through that. When we first started actually, it wasn't about taking over the world. It wasn't about taking on corruption in every city around the world.

Speaker 1

05:00

It was actually just about being baller in San Francisco. And the only way to do it, the original idea was let's go buy 10 S-classes, let's hire 20 drivers, and let's get a parking garage. And I'm like, Garrett, we're not buying any cars, dude. And we're not signing any lease on a parking garage.

Speaker 1

05:22

But the idea of pushing a button and getting a ride in within minutes was a magical 1. And at the beginning, it was a lifestyle thing. It was S Classes for us and our 100 friends. And so that's where it started.

Speaker 1

05:33

In order to use the app, anybody could download it, but in order to use it, you had to have a special code that I gave you. And pretty soon the inbox was just getting full of people who wanted the code because our friends were telling their friends and then, you know, I searched on Google Images, this is my favorite thing, explosive viral growth on the internet and there you go. That was the best 1 I could find. We have this thing called Godview.

Speaker 1

06:00

This is an older version of God view. You can see much more of what's going on today, but I can't show you the new version of God view. It's too intense. But this is a screenshot of a Friday night very soon after we launched, maybe a few weeks or something like that.

Speaker 1

06:17

We had 4 trips going on at the same time. We were going nuts. We're like, there's 4 trips. There's like, we got trips going on.

Speaker 1

06:28

We got a dispatch, the green line at the top there, that's a dispatch. He shouldn't have his arm up, but he does. But he's got a little briefcase, which is cool. That's Friday night early on, and now this is 5 AM on a Monday.

Speaker 1

06:46

The eyeballs, by the way, you see some eyeballs every once in a while in there. That's somebody opening an app. So we see when people open apps. That helps us in demand prediction.

Speaker 1

06:56

Remember, we're a logistics company, or what I'd call, we were building an urban logistics fabric. So when you do something successful, not everybody's happy. And the older the industry you're tackling, the more Protected it is by government or by corruption or by both, the more they're going to be upset about what you do. We're making drivers' lives a hell of a lot better.

Speaker 1

07:24

They're making a lot more money. They're making ends meet. They're living their American dream, and Uber's helping them do that. Riders are getting around town much more efficiently.

Speaker 1

07:32

I'm not sure who hurts from this, other than a particular incumbent industry, which I won't mention. So a few metrics. Look, when I'm having a bad day, I just go to our overall revenue graph. This is a cool trick in Photoshop.

Speaker 1

07:57

If you take that image and you flip it, it's like a smile. Okay. All right. That's just gratuitous.

Speaker 1

08:06

Okay Look, we launched in Sanford Oh, by the way So this this is what? 26% month-over-month growth looks like and man a lot of times when I show this when I when I do presentations in cities We every time we launch in a city, we do this big launch event, sort of have some high rollers, and people who really make the city move, we sort of pay our respects to that city and do a really nice dinner. And these folks are always leaning to the left, looking for the access. When we first launched, first of all, a lot of people go, wow, it's successful, it's so obvious.

Speaker 1

08:41

I call it the palm to forehead moment when they learn about Uber. They're like, I had this idea, or I should have had this idea. When we first launched, guys, it wasn't easy getting our angel around. People thought we were crazy.

Speaker 1

08:56

Limos in San Francisco? What? But it took off, like I said, and so 1 of the interesting things before we went to our series A Or sorry, this is actually before our series B here Which we did in November of last year was is this a one-hit wonder or not? Is this only gonna work in San Francisco because it's so screwed up.

Speaker 1

09:18

And so we started launching in other cities and this is a revenue chart on a weekly, it's a weekly window, or what you could think of as like almost a moving average. Blue is San Francisco. Yellow is New York. This is early on.

Speaker 1

09:35

The brown is Seattle and the green there is Chicago. Now, obviously, we're way past that now. This was like sort of the first 100 days. But what we found is that every city we were rolling out, just, hey, we didn't know if it was going to work.

Speaker 1

09:48

Every city we were rolling out got progressively better. Our operations side of the house got very efficient. And then the technology and the number of people who knew about us when we go in. We went into New York, we had 1,000 people with credit cards on file without a car on the ground.

Speaker 1

10:06

So this wasn't a one-hit wonder, and so we just started launching a ton of cities. We have this double rainbow of metrics. What does it mean? Remember, as liquidity goes up, this is people in the marketplace who are building a marketplace know what liquidity means.

Speaker 1

10:25

It means demand and supply go up together. If they don't, you don't have a marketplace. In our world, as liquidity goes up, the quality of the experience goes up, and dramatically, right? So our average pickup times in San Francisco are 2 minutes and 45 seconds.

Speaker 1

10:41

When we first started in New York, we were like 12-minute average pickup times, and let me tell you, you don't want to be delivering 12 minute pick up times to New Yorkers. They will kick your ass. So as it gets better, now we're right around 5 minutes in New York and that's kind of when they lose their minds. As more people use it, you go from the core user base to bigger, the engagement actually gets deeper.

Speaker 1

11:05

The number of rides per rider per month actually go up as we expand. This is a cool cohort graph, but who cares? The bottom line is that 50% of the people who have ever used still use, and we've seen that from the beginning. This is an interesting 1.

Speaker 1

11:24

This is San Francisco indexed revenue. So we're getting, there's lots of town cars in San Francisco, right? The number of town cars that there were in San Francisco before we got there was 600. There are now more cars dedicated to Uber than there were town cars in San Francisco when we got there.

Speaker 1

11:45

And so you're like, well, this thing's going to slow down. This train's going to slow down at some point. We indexed San Francisco revenue from last year, July 1st, through the end of the year, and looked at this year, July 1st, to where we are now. And it's tracking almost identical.

Speaker 1

12:01

So it's not slowing down anytime soon. And when you're talking about for a particular city, 20% month over month, that's really big growth, especially when the numbers are getting big. So on the operations side, I think a lot of us are techies. I'm an engineer by training.

Speaker 1

12:21

We know what product managers are. We know what that means. But when you're on the ground, when your technology touches people and it touches cities, What you have to do is have process managers. Process managers are similar to product managers.

Speaker 1

12:36

They manage the process that people do versus machines. And the roadmap for product has to dovetail with the roadmap for process, because any time we change anything that happens in a car, that's got to change the tech and vice versa. So there's really interesting roadmapping processes that we go through. Come on.

Speaker 1

12:58

This is supposed to be a picture of Europe. We're rolling out very big in Europe right now. So getting the operational expertise, and I think this just isn't talked a lot about in startups, is the operation side of the business. I think a lot of e-commerce companies see that.

Speaker 1

13:13

We see it on a very deep level because the rubber's actually meeting the road. But getting teams ready to roll out in Europe is something we've been spending time. We're in Paris and London right now. Like I said, we're going to be in Amsterdam very soon.

Speaker 1

13:25

And there's a whole host of other cities that are lined up in Europe, and that's going to be a big push end of this year all the way into the first half of next year. We have somebody in Asia ready to go. And Sydney's sort of our first city in Asia pack. And I can't wait to go to the launch party.

Speaker 1

13:46

OK. All right. So quality and choice. It was really interesting, right?

Speaker 1

13:51

We had this high-end thing. It costs about 50% more than a cab. And everybody said, oh, it's high-end. And everybody goes, wow, I'm going to do a low-cost Uber.

Speaker 1

14:01

There's a few companies out there. I can't remember their names. That decide they're going to be a low-cost Uber, and they clone our app. They flatter us by basically stealing all the pixels and copying them over to their app.

Speaker 1

14:20

Uber, FYI, Uber's gonna be a low-cost Uber. But it's about quality and choice, and what we see when we roll out a low-cost option, what we see is that, actually, engagement gets deeper because people have choice. They don't have to always get the expensive thing. So they start using it more often.

Speaker 1

14:40

People who maybe wouldn't start with the black car products start with taxi or what we call UberX. And then it's date night and they want to improve, you know, they want to impress their lady or they just need a comfortable ride and it it goes from there, so This was a well choice a beautiful thing. Let's keep moving Taxi we did in Chicago in April We now have a few cities. We're in Boston, Toronto, Chicago, San Francisco.

Speaker 1

15:07

We were in New York, but we're not anymore. Don't get me started. Fair enough. We'll get to that at the end.

Speaker 1

15:18

We did Uber X, which is sort of like a low-end Uber, and we did this in July in San Francisco and New York, and that's where it's basically 30% cheaper, all hybrid fleet, At least in SF, we're starting to diversify a little bit out of hybrids because we can't get the partners to buy cars fast enough. But the thing is, is you push a button and a car appears in 5 minutes, and that feels magical. But how you make that happen is actually very complex. So we have a math department here.

Speaker 1

15:50

I like to tell them, I say, look, guys, you're in charge of our margins. Because they need to get the pickup times really low, but the utilization really high. How do you do that? Well, you do that through a lot of math, but let's start with our math department.

Speaker 1

16:06

Okay, that's not my math department. But we have 2 nuclear physicists on staff, a computational neuroscientist, a machine learning expert, and a few other guys, they're killing it. And some of the things they do, they do demand prediction, congestion prediction, supply matching, supply positioning, smart dispatch algorithms, dynamic pricing. Friday and Saturday night are special nights.

Speaker 1

16:36

We sometimes get really big waves of demand that you can't really get enough cars to do anything about, so you have a marketplace-oriented sort of dynamic pricing element that clears the market. It gets more cars on the road and sort of lassos in sort of uncontrollable demand. You can't see these pictures really well because of the lights, but they're pretty. These are some heat maps of cities.

Speaker 1

17:00

This is DC right here, but you guys probably can't see it. This is Manhattan. Can't you tell? Anyways, these are useless.

Speaker 1

17:09

I'll just keep going. OK, all right. This right here is what drivers see. This is our supply positioning.

Speaker 1

17:16

So in our company, when math goes operational, that becomes... How am I doing on time, by the way? I have no timing here. 8 minutes left.

Speaker 1

17:28

All right. 8 minutes left. All right. This is going to suck.

Speaker 1

17:30

All right. So supply positioning, right? We have a heat map of demand, but basically we're predicting demand 20 minutes ahead of time. The problem is that if I gave the heat map to drivers, they'll all go to the same spot.

Speaker 1

17:45

And then that'll be bad for a lot of people who aren't in that hot spot. So what we do is we say, here's the heat map of demand, our prediction for 20 minutes ahead of time. But where is the supply right now? That's anti-heat.

Speaker 1

17:56

That sucks the heat out of the map. What's left over is residual heat, underserved demand. And we do that on a neighborhood-by-neighborhood basis. We'll ultimately go continuous on it.

Speaker 1

18:06

The math is very tricky and complex and computationally intensive. But that gives you a sense of some of the things we do. That's in-car. You don't see it because once you get in the car, he's on trip and he doesn't see that map anymore.

Speaker 1

18:17

Dynamic pricing. I talked a little bit about that already. We have 1 of our nuclear physicist guys is a big San Francisco Giants fan. Clearly, we have to look at events in the city because that affects demand in a big way.

Speaker 1

18:32

When the Giants play, of course demand is huge. When the Giants win, it's much huger than when they lose. Because people want to go out in style, you know? They want to go to the bars, they're just feeling good.

Speaker 1

18:45

Actually, what's interesting is in Boston, when they lose, when the Red Sox lose, we actually have bigger demand. No joke. Here's what's really interesting. It's not enough to make money yet.

Speaker 1

18:59

I just gave away the punchline. But basically, that huge uptick in demand when the San Francisco Giants win starts about 3 hours before the game begins. Uber Vegas is going to take on a whole new meaning. Okay.

Speaker 1

19:15

So I'm going to really speed through here. And this sucks because there's so much cool regulatory stuff I could have talked about. But giving riders high fives, look, transportation is thought of as a boring space, it's boring. Well, until you push a button and a car magically appears.

Speaker 1

19:32

But we basically have lots of people who love us and how do we get them to tell that story over and over again? Give them an excuse to tell the Uber story. So we do a lot of creative things. I think a lot of you guys have seen that.

Speaker 1

19:46

But look, Valentine's Day, we distribute tens of thousands of roses to thousands of drivers. Every girl who got in a car after 4 p.m. Was handed a rose by the driver. That's a strong move, fellas.

Speaker 1

20:01

I call it, I call this scaling romance. Okay. On President's Day in DC, we did what we call an Ubercade. Okay, Escalade, town car, escalade, American flags all the way down.

Speaker 1

20:21

1 out of every 20 people that push the button, an Ubercade rolls up. The driver has an earpiece that makes him look like Secret Service. And as you're driving through town, kids are like waving. They're like knocking on the window.

Speaker 1

20:45

We did something in South by Southwest. We got pedicabs, because you don't do a town car in South by, that's just douchey, like don't do that. But a pedicab, let's do this, right? So we did that, That's cool, 100 pedicabs, you push a button, pedicab takes you where we want to go.

Speaker 1

21:04

But we took 10 of those pedicabs and we outfitted them with these containers that could hold Texas barbecue. So we did on-demand Texas barbecue, you push the button, and a cow would come to you on the mat. We did ice cream in July, and every time we roll out a city, we do what's called rider 0, the first person to get in an Uber when we soft launch. This used to be an organic thing that just happened, and then my city team started getting excited about it.

Speaker 1

21:35

This is Edward Norton taking the first Uber in Los Angeles to go surfing. So we give riders high fives, but we give drivers hugs. And that's because, look, the riders, you know, date night goes well, they get to their business meeting on time, or they're not stranded a certain part of town, but For a driver who's scrapping who maybe has a few hours in the morning and 1 or 2 hours in the evening or in the afternoon booked filling out that time with a consistent revenue stream helps him make ends meet. And so you go from just barely making ends meet to really making a living and then investing in your business.

Speaker 1

22:13

We have drivers who've gone from 1 car to 15. Each of those cars grossing more than a hundred grand a year. So these guys are living their American dream. This is Riyad.

Speaker 1

22:25

He actually was hustling 1 of our engineers early on. Our engineers were getting unlimited Uber. He's like, I got it. We're cool.

Speaker 1

22:32

But why don't you come join Uber? He did. He's the highest performing driver on the system. He makes 20% to 30% more per hour, most productive driver on the system, than all the other drivers.

Speaker 1

22:42

He also is the highest rated driver. We still haven't figured out how he does what he does. He now has 5 cars on the system. He recently had his first born son, named his son after our engineer.

Speaker 1

22:55

That's not funny, like that's for real. All right, this is Honey. He's a comedian, been in the city for about 25 years. He, or he thinks of himself as a comedian.

Speaker 1

23:06

Every time I get in the car, he tells me he used to be a Chippendales dancer. This is Steve Aziz, and guys, just somebody signal when I'm running out of time. I have no idea. I'll go over and spend an hour up here if you let me.

Speaker 1

23:17

2 minutes, okay. All right. Steve Aziz has 15, or sorry, 20 cars on the system. He started with 1.

Speaker 1

23:26

He's got 5 kids, told me he had a 6 going, and a 6 on the way. That's funny. I said, Steve, 6 kids, you're crazy. What are you doing?

Speaker 1

23:36

That's nuts. You've got a business to run. He's like, I've got to keep the Uber fleet growing. His son there doesn't look too happy to be part of the Uber fleet.

Speaker 1

23:47

Well, I could talk about regulation. I'd spend a couple minutes. The bottom line is, and I can't go through a bunch of slides because I really don't have the time. Well, I don't know.

Speaker 1

24:00

Let's just go until somebody stops me. This is a New York City medallion. That's the license to basically own and operate a single taxi in New York. The number of taxis or medallions in New York, it's the blue bar there, the dark blue.

Speaker 1

24:13

It's basically been flat since 1946. The same number of taxis that were in the city in 1946 is the same number of taxis that are out there today. That value of that medallion is worth about a million dollars a pop. There are 13,000 medallions in the city of New York.

Speaker 1

24:32

So you have $13 billion directed at keeping Uber from being successful. DC, we had a really interesting situation. We went there, by the way, as far as we could tell, we were totally legal, white glove legal. Nicest laws in the country in terms of sedans in DC.

Speaker 1

24:50

But DC taxi commissioner goes out there and says Uber's not legal because they charge by time and distance. And let's just say that was real. Why is charging by distance evil? I don't understand.

Speaker 1

25:04

I don't get it. But he said, look, you're charging by time and distance, you're not allowed. Well, we looked at the law. Law says sedan, a four-hire vehicle designed to carry fewer than 6 passengers, which charges for service on the basis of time and mileage.

Speaker 1

25:17

Like what are you talking about? He's going in public forums, Washington Post, et cetera. We go to the attorney general in the District of Columbia and that's what he tells us. So when you read about the crazy stuff we're doing in the cities, and I've got to close this down because somebody's going to have the hook and they're going to take me off here.

Speaker 1

25:40

But when you read about the crazy stuff that we're doing in the cities, know that it is corrupt out there. Know that we are highly, highly disruptive and what you read in the papers isn't always true. And the bottom line is that in order to be in this business, in order to be this disruptive to what's going on, you have to have, You have to be willing to fight and you can't be shy. So that gives you a little bit about it.

Speaker 1

26:11

Basically, they tried to put a floor on our prices, I'll leave it at this 1, this last 1 here. They put a floor on our prices, tried to pass what they call the Uber Amendment, make our prices 5 times out of a taxi. They rolled the amendment out July 10th. It was a Monday, sorry, July 9th.

Speaker 1

26:30

The vote on the bill was the 10th, sorry. They put the bill out on the 9th, that was a Monday at 4 p.m. To vote on at 11 a.m. The next day, 18 hours, most of which are gonna be sleeping.

Speaker 1

26:41

I wrote an email to our consumers, letting them know that they're about to do this. And by the way, the rationale was to ensure that basically we don't compete. If a CEO of a company said something like this, they'd be in jail, but if you corrupt your politicians and then push those laws down, it's totally legal. Anyways, We did something called Life, Liberty, and the Pursuit of Uberness.

Speaker 1

27:03

Uber DC love is a hashtag. 18 hours later, we had 50,000 original emails. These weren't robo emails that went to city council people telling them not to vote for it. 37,000 tweets, 104 million social media impressions and we won.

Speaker 1

27:21

And... Applause As you might imagine, there wasn't a lot of sleep during that time, but it was so short it maybe didn't matter. So anyways guys, I think the bottom line, I've got so much stuff, Vegas by the way, gambling and prostitution are legal in Vegas, but Uber is not. I got so much stuff, I probably have to end this.

Speaker 1

27:49

I'll just end with just a couple more slides here, guys, and I'm sorry about this. Look, technology's wiring up the core services in city life, right? Airbnb, us, a bunch of other companies, they're changing not just tech, not just your Twitter app. They're changing how you live.

Speaker 1

28:04

But that change used to happen over decades, it's now happening over months. Quality of life is not red, it's not blue, it's just people, right? Cities that resist are gonna feel backwards And there are cities we're not in, they feel backwards. A lot of our customers who are used to this go to other cities, it doesn't work.

Speaker 1

28:24

So I ask the mayors, what are you protecting? Who are you protecting? They don't even realize, they just don't even realize that they're protecting, they think the taxi industry, they think drivers, no, you're actually screwing over drivers. So cities need transportation alternatives, but they need modern, accountable, convenient, stylish, and efficient ones.

Speaker 1

28:43

We're out there in a city near you guys, and look, I appreciate being here it's a lot of fun.