Big Technology Podcast - Ex-Uber Chief Business Officer Emil Michael on Autonomous Driving, Saudi Arabia, and Uber’s Culture

Episode Date: December 2, 2020

Uber is facing a difficult moment amid the coronavirus pandemic. The service, built on the belief that people would forsake car ownership in favor of its ride hailing service, is watching many of its customers buy cars and stay home. The new trouble for Uber comes after the company worked to right itself after years of turbulence under ex-CEO Travis Kalanick’s leadership. Emil Michael, the former Uber chief business officer and confidant to Kalanick, joins the Big Technology Podcast to discuss Uber's business prospects, its culture, its current leadership, and its controversies.

Hello, Emile. Hey there. You ready to do this? I am. Okay. I'll just kick on the music and we can get going. Hello and welcome to the big technology podcast where we have cool, level-headed and nuanced conversations about the tech world with much less yelling.

Our guest today is a great one. it's Emil Michael, former chief business officer at Uber, who has amazing visibility into what's happened in the riot hailing industry, self-driving industry, and sort of what's going on with the Uber diaspora, the folks that have left and what they're up to now. But we're going to start talking a little bit about Uber's business and where it's going to go, where it is today, especially in the middle of the COVID-19 pandemic. Emil, welcome to the show. Thanks for having me. Good to be here.

great to have you so uh i guess like the first thing is i want to try to establish what your role was at uber for everybody listening in so you know from my understanding you were sort of like um you know sort of the chief deal maker for the company and um one of um Travis calenics uh you know right hand man if not his right hand man himself so you would you say that that's an accurate description yeah it was uh you know right hand man tends to be sort of uh independent of title, right, is who does the leader spend the most time with? He and I probably spent the most time together on various business problems in my scope and out of my scope. My day job was chief business officer, which included corporate development that was raising money, which

we raised a lot of at Uber, mergers and acquisitions, business development, so like the partnerships we did with credit card companies or car companies and so on. I ran our enterprise business, which was called Uber for business, sort of asked like a mini CEO. And I ran our China business of sort of the most senior exec at headquarters managing the China business, which is a big, big deal for us. Okay. So I want to talk about, so you have great visibility into the company. I want to talk a little bit about sort of the business you expected and then what it's looking like today, especially in the middle of the pandemic. And let's start there. Like a lot of people, I bought a car during this pandemic and I used to take Uber all the time. I don't take Uber anymore. And I don't know once this thing lets up if I'm going to start taking it again. And I kind of was, you know, I kind of was brought in on this whole idea along with many people that car ownership was dead and it was going to be more cost effective for me to take Uber's and ride a bike and take public transportation. And now, of course, you know, that whole thing is changing. So what's going on with the core?

Uber vision, do you think the idea of the end of car ownership is still something that is actually possible? And how long will this pandemic set us back if you believe that that's something that we're going to get to? How long is it going to take now? Because this is obviously a setback for the big Uber dream. Yeah. So let's think about Uber in two main parts, right? Their food delivery business and the ride handling business. And there's no doubt that in the last six months on the ride-hailing business. It's been decimated. And the question, you know, is, does your experience, is it going to replicate? Meaning, you're like, I wasn't, I didn't have a car, but now I need a car, and therefore I need Uber less. And that's going to go on for a long

term. And I think there is some degree of accuracy there, which is the people who got cars during the pandemic or moved out to the burbs, to the extent dense urban areas are going to lose population, you know, then there will be less Uber rides to take. You know, if you believe, though, that these urban areas maybe are temporarily getting depopulated and then people are going to come back into San Francisco and New York in these places, then it sort of might, it'll largely come back. But I do think, you know, the pandemic is going to have some long-term effects. And one of them is going to be that people, some segment of people are going to be more comfortable driving along the car than they were with a rider. And frankly, there's a counter effect, though, of people being less likely

to ride in subways and buses who might switch to Uber, but can't afford a car. So how that works out, it doesn't know, I don't know, but I do think there'll be some segment that it's probably a slight net negative. Interesting. I hadn't really thought about the idea that people might ditch public transportation for an Uber. Yeah. I mean, think about that. If you could afford it and you don't want to be in that kind of dense environment, your option is to, you know, bike, scooter, depending on the weather and, you know, distance or Uber, right? And to extent you can afford that, I think that you might substitute to public transport for Uber. Yeah. And, you know, we know that a lot of municipalities have just been walloped by the budget

shortfalls that they're going to have due to the pandemic. One of the things I've watched closely, I'm native New Yorker. I live in San Francisco now, but I've watched the effects of this thing do the fact that New York State spent so much money on coronavirus prevention, what that's going to mean downstream for the subway in New York City. And it does seem like it's going to have some pretty detrimental effects. So, you know, it's possible maybe Uber steps in there. Yeah.

Is that a better society for us if we're moving more towards relying on a private company than let's say the subway? You know, most big cities are dealing with traffic problems, so I don't think that helps in that respect to extent individual cars add more to climate change than mass transit. That's an issue. But then you still back to the fundamental question of can we prove to people that being in these environments is as safe as it was before. Like, we get a vaccine in 2021. That's widely distributed and very effective. Might people snap back to their old habits, which means you might sell your car.

Like, is that what's going to happen or not? If that happens, you know, then everything bounces back and won't be an issue. If not, then you might have more crowded cities from a car standpoint. Yeah, I mean, I can say just personally, I'm not selling mine. Like, I love the thing. And it was only a couple thousand dollars used from someone fleeing San Francisco. And man, it's really nice to have. your own. I'm sure. But I don't know how long that will last. Yeah. Okay. So, so even if people do

continue to take Uber, maybe in this alternative scenario, the other question is, can Uber become a profitable business? I mean, I guess it's been a question that's dogged the company for a long time. But they were, they were aiming for profitability this year, I believe. And, you know, they've cut losses a little bit, but they're still losing like a billion dollars a quarter. So how, I'm just actually curious from your perspective, how does a company like Uber lose money? I mean, so many people are paying it to, you know, take these rides. Where's all that money going? Yeah, there's a couple things.

So there's a big, big research and development spend on autonomous vehicles, something in order of $700, $800 million per year. And so you do that and the payback is not for five, seven, ten years. years, right? But the question is to the management team, do you still do that, knowing that you could get disrupted by Google's Waymo that far out, or do you stop doing that and sort of risk your future a bit? So that's sort of one place that the money spent and why it's a question. The second place the money is spent is like on employee stock comp. So when you look at these numbers, you do have to take out what sort of looks like cash coming off the balance sheet versus stock. A lot of Silicon Valley companies that pay their employees with stock of this stock compensation thing, which does have look, you know, looks scary when you compare it to a traditional company that doesn't quite do a lot of stock options. And then third, I don't know if you remember last quarter, but they showed a big loss because they had to write down their stakes in DD, the Andex, all the other investments that they made because ridehailing was sort of compromised all over the world. But that's sort of a paper loss, meaning they're still holding the same stock. it's valued less and next quarter or the quarter after when it goes back up they'll have a big gain to show right um so there's a lot of factors there and then the final factor is just

it was bloated um they laid off a lot of people this summer that they probably didn't need i don't think darrow took a hard look at the company's cost structure when he came in because he had other problems to deal with but he finally got to is the company over staff and they took a big chunk out of it this last summer. And maybe there's another round or two to go, but I do think this company can be profitable in 2021. Yeah. So the people, I did some research before this interview as I tend to do. And like the people that have, I've spoken with, you know, sort of I can sum up their sentiment where they said that Uber needs to price realistically, which will drive down demand and then cut staff, you know, leaving Uber looking a lot like a taxi business.

Does that seem like the right path to you or can it be something else? Yeah, I don't think that's accurate. I think that the price will certainly have to go up if they get more regulations passed like they did in New York, which they have to guarantee a certain wage or, you know, they lose the employee contractor issue. And that will impact demand. That's for sure. But those things aren't certain. And my understanding is it looks like Uber's going to win this ballot initiative in California.

Right, which is that it would have to treat their employees. Sorry, the people who, they call the drivers users of the technology. So they'd have to treat them as regular employees. That's what's on the ballot right now. And you think Uber's going to win their challenge. So it's the inverse, right? So AB5 passed in California says they must treat drivers as employees. the ballot initiative in November is trying to create an exception for ride share and delivery drivers.

Uh-huh. Okay. And so you think Uber is going to win that one? It seems that way. If you look, you know, the Chronicles, San Jose Mercury News all endorsed Uber's position on that. You know, the polling I've seen seems like that's going to win. And so that's what I, you know, that's what it seems like, yes. Okay.

And so potentially that. Yeah. So that potentially sort of reduces the increased cost of. employment versus contracting. But I think, yeah, they have to reduce staff to be efficient. I mean, one thing I looked to tell about the early days of Uber, when we launched the company, drivers didn't have smartphones. So we had to hire people to go out and physically give drivers smartphones, teach them out

of download an app, and sign them up for the service. And we had that in every city around the world. And what's happened since then is now you could recruit drivers online because they're online or on Facebook, they're on all these different platforms. You don't have physical people doing the same things that they did years ago. Same thing with consumers. We throw all these parties and knock on doors and try to stand outside nightclothes and get consumers to try Uber. That's sort of gone.

So a lot of the cost structure can be made more efficient. And I think they will. And I don't think it becomes like a taxi situation. Right. And, you know, I understand the move to try to treat independent contractors as employees, especially with regard to Uber wasn't perfect. and it might have caused, you know, more, I mean, there are always secondary effects to this stuff. The freelancers, for instance, like there were publications that were like, we have to fire our freelancers.

We can't do this. So, okay, let's say Uber does, you know, win this protest and the ballot initiative and actually say, okay, we can keep treating them as independent contractors or users of our technology or whatever. You know, it still sort of leaves essential problem, which that act was trying to get at in place, which is essentially saying we, end up having these drivers, you know, perform, you know, a tremendous amount of hard labor for a technology company. And, you know, through all this work, they end up making a few people rich at the tech company, making the company rich.

They don't really share in the benefit of it. And it's inherently, you know, destructive for our society. And I'm kind of curious what you think about that. Do you think that there's a way that, you know, Uber can operate where it does have, you know, a more equitable share between, you know, the people making millions of this? and then the drivers, and if there is a path to it, why hasn't it happened yet?

Yeah, I think there's absolutely a third way, and there should be a third way, not just for Uber drivers, but for all independent contractors. I'm going to give you some examples. I think in the Bound initiative, Uber's also proposing to create benefit pools for drivers so that they're supplementing sort of things that they might not get as an independent contractor, at all. Because remember, a lot of the thing that people forget is something like 70% of Uber drivers drive less than 10 hours a week. And then half of them drive not only for Uber, but for Lyft or Instacart or DoorDash, whatever. So it's hard to consider them an employee of any one of these

companies or even of one company if they were 10 hours a week. Because typically this is a filler for drivers. It's not, it used to be that there was a lot of full-time drivers. That regime is totally over. So the question is, how can you give them benefits that are split from a cost standpoint amongst the various activities that this driver does in their life? And I think there's a way there. When we hired David Plath in 2014 and 15, this was his mission. It was his vision that we tried to promote very early on.

So it was always something that the company was thinking about doing, knowing that it was, you know, you'd have to be fair to employees. You want them to be happy. You need them to have a field that they couldn't take sick days and stuff. on. So there is a middle ground. And I think no one's reached it. Maybe this California thing causes the legislature and the companies to compromise and find this third way. So do you think, I mean, we've tried the private sector doing it on its own. We've sort of now seen what it looks like through the public sector. Do you believe it's industry that should

drive this change or do you think there's a role for the government to play? I think there's a role for the government because, and industry, but the government, I mean, for sure, because one of the things that happened after World War II when we started attaching health care to your job, it skewed the whole way we think about benefits for humans, right? I think we're one of the only countries in the world that sort of so closely attaches those things. Whereas, you know, if you're leaving a job or moving a job, why are you switching your health care insurance? There's no logic for that, right? So this third way that I think we ought to think about, which probably has to be have government involvement is can you create? create systems that are independent of employment that provide benefits for folks.

And I think that does require, you know, some cooperation, but it does require some change from government as well. Okay. Yeah. And we'll see if we'll see the one issue here is that, you know, government is so weak. And, you know, as watching it with the tech giants, I don't think that they've really been a very big, you know, deterrent for the tech giants to act in ways they probably I shouldn't. And so I wonder what will happen with the Uber situation. But I guess that, you know, we can go on this, down this line for a while. And, you know, well, it seems like you might have something else to say about it. So go ahead. Yeah. I mean, I'd say that, you know, I remember early on, we were asked a question of do we support Obamacare? And regardless, forget the ideology of it, the notion that one could buy in to health care at a cost that sort of pooled.

And that doesn't take a, it doesn't matter what your job is, is an example of how you separate benefits from employment. And if you can do that with other categories, you know, with retirement benefits and so on, I do think that's a better overall model for the average person in this country. Yeah. I mean, I'm with you. That would be something that would work very well for the business that I'm trying to run. So I'd be on board with it. Okay. I want to talk a little bit, you know, as we round out this first segment about your relationship with Travis. So I don't know if this was in the Mike Isaac book or somewhere else. Or maybe it's, you know, some people close to Uber told me.

But, you know, I heard that in Vegas in 2015. There was this, you know, concert with Beyonce that she ended up making a lot of money on and that you got in front of the company and just said, Travis Clannock is my best friend. And I'm curious what your relationship is like with him today. he and I worked we were working at Uber I mean we were doing 80, 90 hour weeks because it was so intense

the growth pace were on and he is one of my best friends still who's at my wedding and we're close friends today for sure and what's his well I guess the one thing that folks really would want to know about him is you know does he have this grand

plan to come back and take over Uber again because it certainly seem like he was making some maneuvers that might set the ground for that, but, you know, while he was leaving. No, he is deeply involved in his next business. He's happy. He's building something he believes in. I think he's, you know, he sold all his stock. He's up the board. He's moved on from that experience. So I don't think you're going to see that happening. Okay. And what do you think about him? Anyway, I just to let the mind wander a bit, you think you'll ever create a competitive to Uber or do you think he's going to stay in this other industry?

I mean, I think he believes that this other industry is bigger than Uber. And do you want to tell us a little bit more about what he's doing? Yeah, I mean, at a very high level, he's creating what's called cloud kitchens, which are built to optimize the preparation and delivery of food. And if you believe in the thesis, that people are going to cook less, have food delivery more than it's happening in China, something like something like 20% of all meals in China are delivered. In the U.S., it's like 2 or 3%.

So if you believe that we're going to follow that trend, then he's making this sort of economic bet that these restaurants are going to want these very efficient, cheaper places to cook food that are optimized around a city that can be done with fast delivery. so if anything it's kind of a real estate play and that's chasing a trend on food delivery and I think that's you know he thinks it's a bigger idea there's certainly more revenue in food than there is in transportation so I think that's that's the rough sketch of it yeah do you think do you think Uber ends up making more money on Uber eats than driving at a certain point um it's a great question I I still think the ride healing business is bigger than the food

delivery business because when people relying on Uber like you did before you got your car, you were taking it every single day, potentially multiple times a day. The food delivery business, people are not typically ordering food multiple times a day from Uber eats. They're pretty good doing a couple of times a week. So I still think they're less of a habit. It's just less of an everyday habit, less of a reliance, if you will. Right.

Okay. Okay. I see. So just back to the Travis thing, I think what he's done is like help build the infrastructure. Now he's building a business on the infrastructure, which is pretty interesting. All right. Let's move to the current leadership. You know, another thing that I had and found out in conversations with folks who pay a close attention to Uber is that, you know, people who are pro Travis who've been around Travis tend to not like Dara, the current CEO of Uber, someone who pays close to attention. of the company told me this, they said of Dara, he's a suit. He's a hired suit. And I'm sure you remember how obsessed with Travis people are and his fire energy was the lifeblood of Uber. They don't love Dara. What's your reaction to that? I mean, they're so different stylistically. And I remember at some point Dara had said, I couldn't have started this business. You needed a Travis to start a business like this. So he even acknowledged that, you know, the strengths that Travis had in sort of disruption and innovating and so on were things that he didn't have or weren't his sweet spot. And I think the vast majority of the people who were looking for that kind of mission-oriented experience that was generated around innovation and hypergrowth are not at the company anymore.

you know dora inspires more stability and you know more diplomacy and I think the company is sort of cultures orienting toward that right so so I think it's natural to have people say well I prefer this or that you know I'm a startup innovator person or I'm a want stability diplomacy person And that feels, you know, sort of natural and predictable. Right. Okay. All right. I'm going to read between the lines there and say, all right.

Maybe that person wasn't so far off. The one of the things that Dara did also was sort of come in and, you know, basically put the former leadership of the company on blast and, you know, spend his first while making apologies for the stuff that, you know, you guys were doing. what do you think about that you know that was disappointing um it may have been something he had to do just because the the environment around the company was so intense and he had to give people confidence that it was going to take a different path i think you know as it played out since then you know a lot of the stuff has proven to be more smoke than fire and so i think

you had a little harder core than he needed to on that stuff. And then as a result, he lost a lot of great employees who were in the company and knew it wasn't a bad company. It had problems, but it was a good company fundamentally because they didn't agree with that. And I think it didn't allow the old management and the new management to cooperate as much as we might have, which meant the business lost some steam that it didn't have to lose. So I wasn't a fan of that. Okay. Now, the other side of it is, you know, a lot of folks would say, you know, he was sort of right to do it.

You know, I don't think anyone who lives in the Bay, you know, has gone too long without like speaking with an Uber employee who, you know, did complain a little bit about sort of the environment. So, yeah, I sort of would love to hear your thoughts on what happened there. Yeah. Look, 90% of the people, 9-0, employees of Uber who were there in the early days, love the place. And whatever problems they said it had, they said it was the best experience of their life. And they didn't experience sort of any of the problems that were out in the press. That doesn't mean, you know, 10% is still a lot or 5% is even still a lot, right? But I think the company got mischaracterized because it was early on in this cycle that we're in now. And companies are having to account for all the things that happen inside the companies.

That sort of swept all industries since 2017. for a good reason. But Uber was sort of in the front end of that and therefore it took a lot more heat than it probably would have if the same things happened now. So there's no doubt that there was things that could have been fixed,

but this wasn't a bad company and most of the people, the vast majority of people inside the company would agree with me on it. Okay. So would you say the problem was the, do you think the problem was like some of the bad elements of the culture

was the problem, the coverage, just to get you on record? No, no, I don't, I wouldn't sort of, disclaim, you know, full responsibility. And here's the reason is the company was growing so fast that unless you are also building the infrastructure of the company at the same pace, and by infrastructure, I mean HR, legal, training for managers, the things that solidify a company, unless you're building them as fast as you're building the business, that misalignment

is going to cause problems. Right. So you have young people with Nigeria responsibility who haven't been trained as well as they should have, that's a problem, right? So those were real issues. That being said, I do think the press magnified them to a degree where if you were on the outside and you compare to an outsider's view who was just reading that versus the people on the inside, it was like two different companies. Yeah, we did, you know, I guess you and I could go on about this for a long time. I did just have Eric Newcomer on on the show last week from Bloomberg to talk a little bit about this, so if people want some more, you know, a more journalism-focused conversation, I would say, go listen to that part and sort of can supplement what we're

discussing here. And we're also going to get a little bit more into reporting and the reporting on Uber, you know, in the second segment. But I guess like the last question of this segment is, is that sort of what you would say to, you know, people working in startups today when it comes to culture, make sure to grow, like, the positive elements of culture, you know, put some guardrails on early so you don't end up in a similar situation. Would that be your advice? Yeah, I mean, look, the, the, what I call on Twitter today is that when your company building has to track your business building, you know, that is, so there are companies that take a long time to grow, and they're slow and the pace is different, and you could build things

incrementally to match that for companies that are in hypergrowth. It's a super unique situation and you cannot ignore the company building parts of that or you're going to have problems. So yeah, absolutely I would tell younger people who are in the situation about that mistake and have correct for it. Okay, great. That's a great place to leave this first segment. We're going to come back right after this to talk a little bit about self-driving and some of the other controversies that Uber has hit into, and Emil already appreciate your graciousness and asking these questions. I'm looking forward to the second segment. So we will be back right after this. Hey, everyone. Let me tell you about The Hustle Daily Show, a podcast filled with

business, tech news, and original stories to keep you in the loop on what's trending. More than two million professionals read the Hustle's daily email for its irreverent and informative takes on business and tech news. Now they have a day. Daily podcast called The Hustle Daily Show, where their team of writers break down the biggest business headlines in 15 minutes or less and explain why you should care about them. So, search for The Hustle Daily Show and your favorite podcast app, like the one you're using right now. All right, and we're back here for the second segment of the Big Technology podcast with

former chief business officer Uber, Emil Michael. Let's kick off starting a little bit, talking a little bit about self-driving cars. So obviously, like when we were hearing the Uber story back in 2016, 2017, the idea was that eventually the company would become, you know, an amazing business because they would have the network, right? The technology to be able to call the cars and all those cars would be autonomous. And so you'd be able to, you know, if you're Uber, you would have the interface where people would tap in to get their rides and you'd have the technology to be able to deliver them those rides. And I think today, we haven't heard a lot about the self-driving program at Uber. You mentioned it's $800 million. I mean, correct me if I'm wrong, but somewhere around there, item on the balance sheet

that's contributing to the company's unprofitability. So from your perspective, is it just taking longer or do you think Uber is giving up on self-driving cars? Is that dream still alive? How should we think about that? I think it's just, it's just taking longer. I always was on the cynical side of the timelines on self-driving. Like I always, when we were investing in this in 2014-15, my view was like it's going to take till 2025 or longer to have a material number of cars on the road.

And I was, you know, I'm not a technologist. So, you know, I was just looking at it from a combination of regulatory, what I understood with the technology, and so on. And I still think that they may be too soon even. So I think everyone made this mistake. GM Cruz made this mistake. Waymo made this mistake. I don't know if you remember Waymo was saying that they're going to have a self-driving car

service launched by 2017. Cruz said that it was going to have it by 18. So the whole industry, I think, was just wrong in how fast this was going to move. Why were they so wrong? Yeah. You know, I think that it's a great question. I think that people thought the components were going to advance faster than they did, more Moore's Law-oriented.

And it just didn't turn out that way because unlike a microchip, which just gets faster, faster, faster, the thing with self-driving cars is like you have to count for infinite situations. A kid crossing the street, a plastic bag twirling in the air that looks like a rock, what happens in rain, incline, and so on. And just the sheer enormity of the situations just make it a much harder problem to solve. Then the public's tolerance for mistakes is not high, right? When there was a fatality, that shut the industry down for six, nine months. So, you know, it's just going to take a long time to get the tech right, to get people comfortable, that there are going to be errors.

and is that okay? And then the regulations to follow it. What did you hear about when, what did you, sorry, what did you feel like when you heard about the fact that there was someone that was killed by a self-driving car? Is that something that you expected to happen eventually or did that catch you off guard?

I, you know, I was gone from the company by then. But, you know, it was sad. I, you know, I guess you expect these things to happen, but the way it happened was just tragic and you put names to faces or sort of names to these statistics and it's it's sad I you know so I didn't you know I wasn't in the guts of it to know how it happened or why until way way after but you know the thing you have to think about is driving cars by with humans kills in a million people a year worldwide so you have to yeah kills all yes so at some level you have to believe that

that we're doing net better for the world by doing the self-driving thing, even though it's imperfect. But that's still hard when you see an individual case. Yeah. And I wonder if Uber will continue to do this. It is now much longer time horizon. Obviously, it's, you know, you have to make the ethical calculation about doing it after having a situation like that. But I do hear your point on that, on that front. And, you know, it seems like there are other programs that are advancing beyond it. And for me, I wonder, you know, obviously it was a core part of Uber's business back in the day, but I wonder how long that they're going to hold on to this for.

So you've been close to it. You understand the strategy. Where's it going to go from here? I mean, I think there's, I think there's going to be four or five efforts. I'm self-driving that all have a shot at winning summer all of the market. Waymo clearly is far ahead. of anyone in the industry. You have the GM cruise effort, which is material and is well funded and has the benefit

of being attached to an automaker so that in theory you could take the software and put it in the hardware more easily. And you have Uber's effort. Those are three big efforts in the United States that all have a shot. And then you have something going on in China. The rest of the efforts around the world are relatively minor. So it is not crazy for somebody to continue investing in these four efforts. it could be that a consortium develops and continues investing in Uber's effort.

And they all, you know, a consortium of automakers benefit from that. As you probably read, Toyota invested in that. And I'm guessing they did that because they want access to the tech. So I do think you just have to get other people to help finance it because it's a worthwhile effort. And they could easily be still one of the main players. Okay. So interesting. So it might just end up being something that either spins out or does some partnership.

But it seems like from that answer, you don't really believe that it's just going to be Uber going at it alone for too much longer. I just think the cash cost of it is enormous. And if you're Uber and you're running a network of cars, you want several automakers to have the software in their car. So you actually want people who have access to your technology. Unlike if you're Raymond, you're like, I'm going to run the whole closed system. I'm going to do it all myself. it's a different business model and I think if Uber does it the right way

it's a superior business model to have a lot of the auto companies dependent on their self-driving tech but to do that they need their contribution from a financial standpoint to make it through the seven, ten years it's going to take to get there. Right. And I don't doubt that this will change the way that our cities operate

and the way that we get around at some point. That's the question is what point that will be and so that's sort of interesting of your business to decide to make a bet on it and try to figure out where the time horizon is that where it makes sense for you. So interesting lessons for Uber and yeah, we'll see where it goes on that front. Last point about self-driving cars is obviously there's been news that Anthony Lewandowski who was at Google and, you know, got busted for bringing some

trade secrets over to Uber is now going to go to prison for, I think, a year and a half once the coronavirus pandemic has subsided for his role in doing that. I just want to like, you know, you obviously work closely with the guy and we're in the company at the time. What's your take on all of this? And, you know, is he the one that should be, you know, going to prison for this? And, you know, are there other repercussions should there be, you know,

are there things we're not seeing about it that we should be looking for? I mean, I think it's actually much more simple than that. My understanding of what he was convicted of was taking, stuff from Google that he shouldn't have, right? So there's never been proof that that came over to Uber as far as I know there was never intent at all for any of that to come over to Uber. So let's separate that piece. What he did at, and when he admitted to doing at Google was the problem and the challenge that or the reason he's going to spend jail time. So, you know, had we known that that was going to happen, obviously, that wouldn't have been something that

would be okay with us, right, because of the magnitude of that. So that, you know, that's a good example of the press muddling the issue and trying, you know, and sort of inflating Uber into it. Well, it was actually an individual's action at his prior company. Right. And look, I mean, there's a reason why I kind of think these conversations are a good way for us to sort of get to the bottom of stuff. Like, you know, I don't know. I don't think I'm going to be right 100% of the time and we can talk about things, you know, with some nuance. So I appreciate you, you know, being able to go back and forth on it. But let's just play. So let's just do some game theory for a little bit. Or I don't even know if that's the right term for it. But if you're this guy and you're taking these trade secrets from Google and you're going to work for a company that has a really important self-driving car, you know, initiative, like what's the point of taking the trade secrets? from Google if you're not going to go, you know, apply them to your, to your next job. And, you know, I know it's a game of speculation, but is there any, like, I guess, like, logically, you know, you think about motive or you think about, you know, what the use is in

terms of stuff like this. So was he just, like, kind of getting a kick on downloading stuff off the Google server? I mean, maybe. You know, I, the only thing I could speculate on is that Google owed him a whole bunch of money from some acquisition that they did and maybe he wasn't sure he was going to get it and this was some way of making sure he had something to hold them accountable to that. But, you know, there was no,

Uber didn't need their stuff. Their stuff was like irrelevant to us. Like we have a, Uber was building something totally different. And we wanted Anthony's brain, but we didn't want his work product or Google's work product. Right. Okay. And as far as I know, they never found anything anywhere right so that sounds like you downloaded something and then

threw it away or never used it so um and this only came up years later so or a year later right since the acquisition was done so i you know that's my only guess is to to motivation okay all right that's fair um let's another i guess we can just kind of go do some like we can roll through some other controversial things. You're handling them with extreme grace, and I appreciate that. Saudi Arabia, you know, I mean, you know the question that's coming, but, you know, as far as we know U.S. intelligence agencies say they've intended to kill an American or U.S. journalist and Jamal Khashoggi. We know that they're accused by the FBI or people close to the Saudi royal family are accused by the FBI of trying to log into Twitter systems and, you know, get data from dissidents,

you know, pass it back along. And they invested billions of dollars into Uber. And I think there's someone, they have someone on the board. Isn't there, is there a certain point where Silicon Valley will throw up its hands and say, you guys got a lot of money, but, you know, we don't really want to do business with you anymore? Um, well, let's first get, you get to facts, a timeline sort of consistent, which is we took the investment from Saudi in 2016. And so these events that you're talking about happened after that. Happened after, no doubt about it. That being said, you know, the broader question is what the Silicon Valley, really any company that's seeking foreign investment do.

It's a really hard question because in some ways, one can make the argument that, you know, government has in the world, every big government, sort of has their things that they do, right? Like look at Chinese and the Uyghurs, what Russians are Rupert to do, look with political opponents. And then, you know, Brazil of the corruption and the Petrobas, like every country has their thing. So do we just, is there, it's a gray zone for what one does unless you want the world's economic clock to stop ticking. that being said you know is it better if Saudi makes an investment in American

companies that investment results in money that money goes back to the Saudi people to improve their lives right which was the theory if you remember the public investment fund of Saudi the idea was like to transition the company from oil wealth to other forms of wealth because that regime was going away and so we thought

the way we thought about it when we took the Saudi money is we could be a change agent and help convince them that women should be allowed to drive. And that was a major part of our discussions with them and our major, we made it known that that's what we were supporting and we thought that, you know, Uber could be an advocate for that and we weren't and it happened soon after they invested in us. So you have this sort of area of like, is there a clear answer?

Should we be black and white or should we, you know, look at the positives and negatives and how do we make sure that some things don't have or happen again? And it's just, it's a really hard question. Yeah. Yeah, it's a perspective that I hadn't heard before. It's an interesting one. But there have been so many people who have said, you know, oh, we can change the Saudis.

Or, you know, I remember NBS coming in and doing his tour of all the tech companies. And, you know, people were like, oh, Saudi Arabia has changed. And I think Thomas Friedman wrote this whole big column with that same vision. It doesn't seem like it's happened in the way that. people have anticipated. So just put yourself, let's say you put yourself in that position of, you know, being able to take an investment like that. You know, today, you know, let's say we were to flip the timeline. Would you still do business with them? I mean, I, you know, I, if I, I believe generally that if the, if the company or a country that you're taking money from is actually

going to use the potential gain in that to help their people, I think that's, you know, a that's a big deal to me. I was born in Egypt and I grew up speaking Arabic as my first language. My parents immigrated because they wanted a better life. So I kind of know what life's like in the Middle East. And, you know, I have a lot of sympathy for what people are going through there and what they went through in the last couple decades with a lot of dictators and so on. And if I believe that the money was going to go back, it was going to help improve their lives. You know, it would be something I would strongly consider and have to weigh against sort of, sort of the things that happened in the last couple of years.

Okay. All right. So sort of inconclusive now. I mean, you know, it's, it depends on the regime. Like now, if you said, would you take money from North Korea? Of course not, right? There's sort of a line that you draw because you know the money is not going back to help anybody except the regime, right?

Yeah. Yeah, that's true. Okay. Let's leave it on, leave it there for now. we're going to go to a break. We now know, no money for North Korea, go into Amoskis. So we're making progress here. And we'll be back talking a little bit about the startup ecosystem that has emerged around

former Uber employees and Emile's rolling in and where he sees it going. So hang in there and we'll be back right after this break. Okay, we're back for our third and final segment here with Emil Michael, the former chief business officer at Uber. We've had a great conversation so far. We've talked a lot about Uber's business and self-driving cars. Some of the controversies that Uber has been close to, whether that's Anthony Lewandowski, one of their former employees, you know, being sentenced to prison for taking trade secrets from Google or their connection with Saudi Arabia and sort of the calculations with taking money from a country like that. Let's kind of talk a little bit. I'll spend

our last few minutes together talking about the startups that are emerging from the Uber ecosystem because living in the Bay Area, I can tell you that there have been so many of them, that you start to see these, you know, Uber employees, I guess folks who are early on, you know, ended up taking, maybe making some money on the IPO and starting companies and many of them are still in stealth, but a few interesting ones are cottage, which, you know, sort of build grandma houses in the back of the or in-law houses in the back of, you know, people's houses and Red Circle, which is the podcast app that I use to host and do dynamic insertion, which I should say, you know, introduced us for the purpose of this or to get together for this interview,

full disclosure. And then there's, you know, bullet coffee and others. You know, and also I heard that you, Emile host a quarterly meeting of Uber alumni to talk a little bit about what's going on and startup land and, you know, sort of compare notes and help each other. So just give us like a quick, you know, 10,000 foot view of sort of why there's been such a, you know, impressive or, you know, enthusiastic group of founders that have come out of Uber and sort of what, what's the stuff that they're working on? What does it say about the future of our economy? Yeah, I love talking about this team.

I mean, you know, if you put yourself back into the early days of Uber, you know, one of, if not the most exciting company in the world in terms of its ambition, its speed of deployment, it's sort of how global it was, and so on. So it attracted a really energetic group of people. And we were really relentless about hiring the best people we could find all the time. I mean, I think Travis and Ryan Graves interviewed people, everyone in the company until it got to like 500 or 1,000 people, something like that. try to keep, you know, the level of talent really high. So it's natural that you'll have this diaspora of great talent.

And what made Uber different maybe than some of the other tech companies is that because we deployed people in every city, we had more employees than average than the average tech company, like early on, right? Because they were doing like things like I was saying, like handing out votes to drivers. They were doing things in the cities they live in. So you have this, you know, big employee base relative to other tech. companies that was, that was attracted to the place because of the speed and energy it had and because of its big mission. And then the hiring bar was high. So it's natural that you'd have people who are ambitious and going out there doing

interesting things. So I think, you know, people, you know, had a lot of criticism in 2017 about where we, you know, promoting leaders of different stripes. And I will tell people today, I still think there will be more female Fortune 500 CEOs coming out of Uber than any other tech company. in the valley. The P&Ls they got, the responsibilities they got early in their career were incredible, unable to get in any other type of company. And so I think you'll see leaders who are building their own companies and leaders who are going to join other companies and become

sea level folks there. And this is going to happen all over the world. Are they mostly doing transportation related startups? Because there's like, it seems to be this sort of divide between them. Some of them want to stay in transportation. it seems like you're still bullish on the transportation space. And others are like, I don't want to be anywhere near that stuff anymore. So what's your perspective on it? I think a lot of them went into the food delivery part of transportation. A lot of former Uber employees at DoorDash and Rappi in some of the other food

But I'm talking about like founders though, like people starting new companies. I don't, I mean, I don't think that there's going to be a lot of success in starting new transportation companies um you know i haven't seen like you know there was some there were like oh we transport kids or we do these um you know straight line shots down fifth avenue and these you know SUVs i just i don't you know i'm not optimistic about those things um so i think the the more innovative stuff you'll see is is outside the transportation sector from the the Uber people, but what you will see is that they will be way more unafraid of doing operational work than the average software company will be. If that means you have to go to a city and use

hustle to start a business because you have to talk to real people or you have to do things on the ground, they're less afraid of that because they live that, right? And they're very optimistic about their ability to drop into a city and create a new business. business as opposed to sort of sitting at home and writing code. So I think some of the things that require logistics outside of transportation are going to be things that they gravitate toward. Okay. And so do you want to tell us like a few that you find interesting and sort of what they say about the market? I mean, assuming you're able to speak about them. But I'm curious where you think things are going in this world. Yeah. I think you'll, like I said, the biggest

Theospora has been to other food delivery companies. That's one sort of category that I think still growing tremendously and had tremendous tailwinds from COVID. I think a lot of the software you're going to see software development, startups coming out of Uber or things like Red Circle that you're involved or things that are around autonomous, you know, how to automate certain things, not just cars, but maybe things on a smaller level. I sort of saw a robotic coffee company that was started. to have from people from Uber. So I think you're going to see a lot of that. There was a couple of companies that are starting to work on maps and how to make maps more rich for the self-driving future.

So you see they're kind of all over the place, to be honest. It's not like you know, you got PayPal and a bunch of those people went into payments, you know, Kufur Boy and so on. I think this is going to be more widespread in their domain than, you know, the average startup that succeeded in the valley. Yeah. So there's going to be like an Uber Mafia that might do like similar to the PayPal Mafia that they do like logistic stuff. That'll be interesting.

That'd be interesting. But the question is can they get over the hump, right? Because we're in the middle of like a pretty devastating moment for business. I would imagine if you're a new company, you're having a hell of a time right now. How many of them would you say are just going to get wiped out by this pandemic? There's a light side to the business environment in this pandemic, which is. is if you're doing anything enterprise software, you're getting way more of a look than you did, you know, a year ago.

Because we're all working from our homes and we need the technology to connect us. Yes, that's right. And the rise of Zoom and the market caps that they've been able to achieve, sort of people are like, oh, my God, there's a lot in enterprise software that hasn't been done yet. And that's number one. Number two, fundraising is getting in some ways easier because it's all done by Zoom. So if you're an entrepreneur, you could probably talk to 20 VCs when you used to only be able. to have the time to talk to five because you'd be traveling up and down Sandhill and doing all

these things. So that's another thing. And then third, there's still the world, the investment is a wash in money with low interest rates. So it has to find somewhere to go. And it's obviously going into our stock market, which is why it's surprisingly high, but it's also going into startups. So I do think some will get crushed, companies that are doing like lending to small businesses, like cabbage or, you know, things like that or just that are just sort of counter to where COVID's hitting or will lose. But I think there's a lot of new stuff that's going to come out of this as well. Great. Okay. We're just about out of time. I want to ask you one last question, which is sort of going to bring it all full circle. I'd love to know a little bit about like your

personal habits right now in the middle of the pandemic. Are you taking Uber? Are you taking it as much as you used to? Do you find, did you buy a car or do you finding yourself driving more? Like what is your, you know, personal relationship to the technology that you help build? Yes. Well, um, I had, yeah, I got married in 18, 2018. So, you know, I was 45. So I'll wait until to late in life. So more what I've been doing from Uber is sort of catching up to what a normal person might is that. So I had my first kid, my daughter on February 7th, right before shit hit the fan in, uh, COVID. So, uh, good time. Yeah, it's good time. So since I've been like an adorning dad in there for every sort of milestone.

Like everyone else, when I'm doing business calls, advising companies are doing my board meetings. I'm on Zoom all the time. I'm trying now to move to half Zoom and half audio, just so I can pace a little bit and not have sort of the, it gets super exhausting to look at someone's face on Zoom all day every day. Yeah, definitely. Okay, but tell us a little bit more about the car stuff, though. Yeah, yeah. it's on your phone and how are you getting around yeah i live in i live in uh in uh in miami beach

and i live on you know uh an island connected to the main part of miami beach and i've car i've uh the car i got from california which i never got rid of and i bought another one when we had the kids so we could have babysit and and so on so i'm not been in ubers in the last few months for sure you know have it needed to because mostly we've been quarantined and then when we go out, you know, we're taking our daughter to pediatrician or something, you know, it's much more if you have your own babysit, to be honest. Yeah, totally, totally. I mean, I hear you. I'm all in the personal call revolution now, too. So I'm with you on that. Thank you so much. Yeah, yeah. I know. Unfortunately, the circumstances

are what they are. But thank you so much. This has been a, you know, great conversation. You're really rolled with the punches and we're able to, you know, talk about some of some tough stuff that's been in the headlines with a cool head and talking about it with nuance. And I appreciate that very much. Great. Thanks for giving an opportunity. So thank you for coming on. All right. Take care. All right, you too. And everybody out there, thank you so much for listening. I just recently dug into our statistics and it looks like many of you are listening all the way to the end. So if you're still here with us, I appreciate that. If you've enjoyed today's episode, I encourage you to subscribe and rate. This will help, you know, make sure that we're in your app for the next show and also

give us some help with discoverability to make sure other people can find us. So thanks again for listening and we will see you next week here on the Big Technology podcast.