Invest Like the Best with Patrick O'Shaughnessy
00:02:28 · Patrick O'Shaughnessy
[00:02:28] S0: My guest today is Dara Khazrashahi, the CEO of Uber. Before Uber, Dara ran Expedia for thirteen years. We start with why he took this job in 2017, and a big part of that story is Daniel Ek, who told him that life is not about happiness, it's about impact. We talk about what the chaos felt like on day one and how his family leaving Iran when he was nine shaped the way he handles pressure today. We spend most of our time on autonomous vehicles and Uber's role as the demand aggregator in a world of physical AI. Dara explains why Uber is a supply led company, what it will take to win, and why he expects many winners in AVs rather than just one. We also discussed Uber's $10,000,000,000 in free cash flow, the push towards a single app for everything, and what he has learned from Allen and Company, Barry Diller, and Reed Hastings. Please enjoy my great conversation with Dara Khajrashahi. So I think I have to begin with the story you were just telling me about how you took the job here, how you heard about it. And the reason I start there is because I wanna know what the company felt like to you when you showed up, how that's evolved, and then very importantly, what the current moment feels like, which I think is the most interesting question for the business possible. But I love the origins. So I would love to hear, how did you hear about this job in the first place? Yeah. What was the backstory?
00:03:39 · Dara Khosrowshahi
[00:03:39] S2: Yeah. So I've been at Expedia for thirteen years, CEO working with Barry Diller, and loved the experience, and I loved where I was. At the time, Uber was in the news all the time. Right? It was in the business news if you're interested. So obviously, I was reading about the situation at Uber. It seemed pretty chaotic and pretty difficult. And then a headhunter called me out of the blue and said, Are you interested in the Uber CEO job? And at the time I said, No effing way. Who would even think about it? At the time? And I had a considerably lower profile as you can imagine. So I kind of blew it off. I was at the Sun Valley conference, Allen and Company conference and was having a drink with Daniel Ek and my wife. And Daniel said, Hey, Dara, did a headhunter call you? I recommended you for the job. I thought you'd be great for the job. And I was like, Oh, that's why it happened. Like, what are you crazy? He said, Well, I think you'd great for the job. And I said, Listen, I've been at Expedia for thirteen years. I'm so happy with what I'm doing. And I remember Daniel looks at me and he's like, Dara, since when is life about happiness? Interesting comment. He's like, it's about impact. Uber is a company that has impact on the world. It's important. It's in trouble. Why wouldn't you take a shot at this? I think you'd be great. I think a lot of people come to Uber because of the impact that the company has on the world. We are shaping how the world moves. We're a huge part of people's lives. We've got over 10,000,000 couriers and drivers on the platform. And I just wanted to go to a place where I could make a difference. And I wanted to go to a place that was making a difference. When I started investment banking at Allen and Company, it was amazing. It was the best company in the world. But I was like, investment banking is really changing the world. So for me, it was about having impact at a company that was having fundamental impact in how people lived. We'd had a couple of beers and my wife was there, Sid, and she'd had a couple of beers and we talked about it. And the next morning, actually, in the parking lot, I remember calling the headhunter and I said, tell me more. So that's how it all started.
00:05:44 · Patrick O'Shaughnessy, Dara Khosrowshahi
[00:05:44] S0: Wow. Okay. So you show up. There's a process. What is the impression on day one through 10 or something like this? Like, what did it feel like? [00:05:51] S2: Complete chaos. Travis had not been at the lead of the company for some period of time. And there was a group of executives, a committee, if you want to call that, who had been running the company for a few months. Obviously, the company was in the public sphere in many, many bad ways. So lots of things going on both internally, externally. The business itself was very dynamic, hugely competitive. So it would have been difficult enough if there weren't any of the external distractions going on coming into the business, which I think fundamentally was strong, but was going through a lot of change. It was just a lot of chaos, both in terms of the board and what the board wanted in terms of the stability of the management team, and then getting structure around the business as well. But with time and with a lot of work and working with my team, we were able to bring some order to the chaos, both externally and internally. And it's turned out to be a great ride. [00:06:53] S0: How did you do that? You were teaching a college seminar or something, an HBS seminar on a leader bringing and establishing some order and structure in a chaotic situation. What is
00:07:04 · Dara Khosrowshahi
[00:07:04] S2: the how? The most important how is simplifying the situation and breaking down what seems like an unassailable problem into its component parts. Vector mathematics. If you have a three-dimensional complex interaction, you can just break it down to each dimension. And if you solve each dimension and you bring it all together, you can actually solve pretty complex issues and equations into its component parts. And the same is true in business. When I got into Uber, there were very distinct areas that I had to take care of. One, at the board level, the board was fighting for control. And you had a board that was focused on who's going to control the future of the company versus what the future of the company was going to be. And so, for example, we brought in a new chairman, Ron Sugar, who has become my partners through all of the years and really brought the board together. This isn't about who controls it. This is about the fate of the company. I think the company lost trust with stakeholders, with regulators, with the public. So we went out and first went on a listening tour to understand what the issues were and then started listening, started acting based on that impact and started communicating both internally and externally, which is the concerns of stakeholders externally were just as important as our own concerns as well. And then with employees, it's putting together a team. And there was a lot of talent inside of Uber, but there were some folks who kind of were stuck in the old world who had to get off. And then there was an incredible talent base. Andrew McDonald, who is our President and COO, predated me and has come through many, many years. Many others have been with me since before day one and then bringing in new management members like a Tony West as well, who's been with me ever since. So I think if you focus on each distinct problem, what seems like chaos can become small surmountable problems that you take on. You set initiatives against each of them and over a period of time, you can't control what gets solved when. But over a period of time, things get better. And I think things got better.
00:09:15 · Patrick O'Shaughnessy, Dara Khosrowshahi
[00:09:15] S0: In situations like that, and I'm sure there's been many others at Expedia and Sense, what have you [00:09:19] S2: learned about managing your own stress so that you don't get personally overwhelmed by chaos? I think I'm lucky. Sid, my wife calls me a robot, which is I don't get stressed out by situations. We lost everything when we came here from Iran, and I saw destroy my father. How old were you? I was nine years old. My father built, along with his family, an incredible family business. We came here. We lost everything. But then we rebuilt. And I think for whatever reason, it just doesn't help. Overthinking things doesn't help. It only makes things worse. And I'm able to approach things from an engineering mindset. I studied engineering school, which is, what are the problems? Let me list them. And let me have an approach to solving each of them, test and learn. And not everything improved in a linear path. But being stressed out, what's the point of it? Who cares? [00:10:12] S0: Can you say a little bit more about what that experience was like, watching your dad go through that at that young age?
00:10:12 · Patrick O'Shaughnessy, Dara Khosrowshahi
[00:10:12] S0: Can you say a little bit more about what that experience was like, watching your dad go through that at that young age? [00:10:17] S2: For us, we came to The States. We got to stay with my uncle Nasi. The adjustment for us was not very difficult. But as I grew up, I observed my father who, when I was a kid, he was kind of a giant of a man become less trying because I was getting bigger as well. And he just lost that spark. He wasn't able to begin again here in The US. He did his very best. He was an entrepreneur. He tried his hand at a lot of things. And I think that one, it drove myself and my brothers and my family to rebuild. Many immigrants have a chip on our shoulder and I had a particularly big one. But at the same time, I didn't want to be in the same situation, which is for work, for fortune to break me as a person. I was able to separate the two, which is, yeah, do I want to do well? Absolutely. Am I going to give it every inch that I've got? Absolutely. But in the end, know who I am and I'm always going to be that same person. I'm not going to let the chaos of the world affect me mentally. [00:11:20] S0: What have been the chapters of the chip? How has the chip on the shoulder evolved? Like, what satisfied it early on, and how has what satisfied it changed, or is the chip still