Pivot - Pivot Schooled #3: The Sharing Capitalists, with Uber CEO Dara Khosrowshahi and Gig Workers Collective co-founder Vanessa Bain

Episode Date: September 8, 2020

In this audio version of the third episode of our live video series Pivot Schooled, Kara Swisher and Scott Galloway talk about the future of the sharing economy, why restaurants are over-capitalized, and the shifting politics of labor laws as gig workers are squeezed by the pandemic. They talk to Gig Workers Collective co-founder Vanessa Bain about how policy makers and companies can better protect workers; then, Uber CEO Dara Khosrowshahi talks about why the company is fighting against classifying its workers as employees in California, the food delivery business, and whether the company is really committed to self-driving cars. Get your Pivot Schooled hats, mugs, shirts and more at PivotSchooled.com/Shop. Learn more about your ad choices. Visit podcastchoices.com/adchoices

Support for Pivot comes from Virgin Atlantic. Too many of us are so focused on getting to our destination that we forgot to embrace the journey. Well, when you fly Virgin Atlantic, that memorable trip begins right from the moment you check in. On board, you'll find everything you need to relax, recharge, or carry on working. Buy flat, private suites, fast Wi-Fi,

hours of entertainment, delicious dining, and warm, welcoming service that's designed around you. Check out virginatlantic.com for your next trip to London and beyond, and see for yourself how traveling for business can always be a pleasure. Hi, everyone. It's Cara. Today on the podcast feed, we're going to share an edited version of the third episode of Pivot School, our live video series. This episode was originally broadcast on Wednesday, August 26th, and the theme was The Sharing Capitalists. Our guests were Uber CEO Dara Khosrowshahi and the co-founder of the gig workers collective, Vanessa Bain. Later in the show,

we will also answer listener questions and make some predictions. By the time you're hearing this, we've already broadcast the fifth and final live episode of Pivot Schooled, but if you paid for a ticket, you can watch the video replays of all five episodes at PivotSchooled.com. But now, let's get Pivot Schooled about the sharing capitalists. Hello, everybody, and welcome to Pivot School, the third one. We're on the third one, Scott. I'm Kara Swisher. And I'm Scott Galloway, and I'm here to announce that I'm in serious discussions to acquire TikTok, Kara. It's time.

It's time. I mean, you realize, okay, so let's just take a moment, all right? Twitter stock down. Microsoft increases by the value of Boeing on the notion they might get TikTok. Oracle's only up $5 or $8 billion. Take every tech company in the top 30 most valuable or important tech companies. Take out the Chinese. Take out the monopolies that can't do it to raise antitrust vector. I think somewhere between a third and a half of those are going to have their investor relations departments leak to the press in serious conversations just to get another $3 to $10 billion in market cap. And by the way, you know who's going to end up acquiring them?

Microsoft. No one. You think the Chinese are going to sell a great internet company to the Americans? In 30 to 50-year terms. Yeah, right. Yeah, right. So, Oracle, what the hell? Honestly, seriously, this company.

Why? Give me an argument. I think it makes a lot of sense. Okay, why? It makes a lot of sense to have a Ryan Seacrest video of him dancing with your enterprise software solution. I think there's a perfect fit here. There is no fit. It makes absolutely no fucking sense.

You know what this is? Harry Olsen's a pal of the president. That's where, that's why. You know what this is? Do you know what fracturing is? Fracturing is when you go in and this nice cosmophotologist takes this laser staple gun

and staples a bolt of lightning into your face and then you convulse and about five minutes into it, you decide you'll stay ugly, and you run out of there. This is literally the ultimate Botox. Oracle is saying, we want to be young again, and we'll do something ridiculous to try and seem young again. It makes absolutely no sense. I don't think they're even serious about it.

Why wouldn't you? Why wouldn't you announce it and watch your stock go up three to five percent? Yeah, right. Okay. This is just a ridiculous way to sell a company. I'm sorry. But speaking of companies, there's so many different things. Apple, $2 trillion, Scott. What the heck? What do you think about that? $2 trillion valuation. Yeah, it's really wild, right? 35 years to get to a trillion and then 23 months to get to $2 trillion. There is, because of what I'll call economic, fiscal, and tax policies, that once you make the jump to light speed, it's much easier to go from $1 trillion to $2 trillion than I think it is from zero to a billion. It's just,

once you get to that scale, and what's really fascinating is that- I find that a big issue. I've never gone from one to the other. All right. But so what do you think about this? And does it mean? And who's the next two trillionaire? Who's the next one? Amazon? Well, I got this wrong. I thought Amazon would be the first to a trillion versus two trillion. It's been Apple both times.

The most interesting thing about Apple, and again, this comes back to my obsession with recurring revenue bundles, Apple's earnings have not increased. Between one trillion and two trillion, there's been no increase in earnings. The stock has been recast as a recurring revenue bundle because in that time, it's gone from 8% to 25% recurring revenue. Basically, they've taken a page out of the Amazon Prime notebook. And every corporation has a lesson here, and that is if it doesn't want to increase its revenues, but it wants to double its market cap, it just needs to move to a recurring revenue bundle. And no firm has made more progress against that standing start than Apple. So no increase in earnings, but double the stock price.

Rundle. So Rundle is the way to go. So we're going to start a Rundle and we're going to buy TikTok. Is that correct? We're going to have a Rundle for TikTok? Yeah, in that order. Okay. All right. But who is going to be the next $2 trillion? And by the way, Apple's right in the middle of a big fight with Fortnite and with its developers at the same time. So it's never looked more powerful, right powerful when everyone's saying it's too powerful. What's saying to this? I thought it was going to be Amazon.

Who do you think it's going to be? Amazon. It's Amazon and Apple, I think, and Amazon even more so. What's interesting is there's the Target, Walmart had record quarters. All these big companies are killing it during the pandemic. So I shouldn't really be using that metaphor. But it's really amazing how the big are just getting bigger. And at the same time, there's these countervailing forces like Fortnite or Basecamp or any other company talking about these big companies as if they're terrifying.

And so they're doing incredibly well in the stock market and terrifying other businesses in the process that nobody can catch up. percent. And everyone else, as you go down, as you go from big to small, it's literally, there's a correlation between returns and big. Everyone used to say big was bad. No, big is good in this economy. And also big tech monopolies. You want to be too big to fail, you want to be a big tech monopoly. And everyone else is dying. Seven companies are responsible for 99 percent of the recovery since March lows. So this is no longer the S&P 500. It's the S&P 7. The S&P 7. All right. We're going to be talking, of course, about the sharing capitalists, which, you know,

these companies haven't done quite as well as these other ones. But before we do that, just so you know, I did drop off my son at school, even though you thought that wasn't going to happen. But I'm sure I will be going to get him. But we dropped him off at the pile of food and things like that. And you were happy with the experience. You felt that NYU did a good job, right? I thought, you know, of course, just as we were doing it,

Notre Dame and UNC moved to remote after having welcomed students back. Now, it seemed like they were kind of sloppy. All those pictures looked a little frightening to me, the students wandering around, some of them with masks, some without. They were very strict. They have my son in a room, and they were good. They did a good, I have to say, I felt in general in New York City, I felt great about how New York was handling everything. And it seemed very locked down. People had masks. It was just an interesting time. And, you know, speaking of, we're going to be

talking to Dara Khosrowshahi, Ubers seemed to work really well. I had to use them there. We didn't want to go on public transit. We did have a car, but it was interesting. I think it's magical thinking that I think I'm not going to be picking him up, but I certainly wouldn't. I don't want to get anybody sick. So parents are having a really hard time with sending kids to school or not sending kids to school.

And it seems like we should probably solve the problem and then open schools versus the other. But he wanted to go, so there he is. And he's promised to behave. Yeah, well, the good news is I'm almost entirely confident that the virus got the memo that we at colleges are so important that they should take, that the virus should take the fall off. And I'm sure that's going to happen, that The virus seems to be very courteous. And also, all the protocols in the world are being designed by 60-somethings that had no life and didn't lose their virginity until they were 35. They understand youth. They understand youth.

Well, my son is behaving. He tells me he's in his room with piles of food I bought for him. He's going to cook himself. Yeah, that ends with one word. Alcohol. Alcohol. Any kid who is distancing, there's something wrong with him. Any kid who distances in college, you should be more worried about that than the virus. Close campuses now. This is ridiculous. Anyway, sorry, Carol. I'm glad you were happy with NYU. I was very happy with NYU so far, and I've noticed they have a lot of activities that are all distant.

We'll see. We'll see. I'm sure I'll be picking them up. I'm sure I'll be driving back up to New York to pick them up. In any case, let us get on with the show, the sharing economy, because we've got a lot of things to talk about, especially we have the Uber CEO, Darko Shashahi, and others to talk about this issue of where we're going with this, and obviously COVID hits it hard. Just remember to send us video questions for next week's show about the big four, Amazon, Google, Facebook, and Apple. Click the big red button below to submit.

That is, of course, the topic of Scott's, one of his many books. Later in the show, we'll have, as I said, Uber CEO, Darko Shrowshahi, and co-founder of the gig workers collective, Vanessa Bain. But first, let's talk about today's topic, the sharing capitalists. So let's go into this. Let me just read a couple of things. The COVID-19 outbreak turned the economy upside down, as we just discussed, throwing most of the sharing economy into a tailspin. They're just returning to better results. But travel restrictions, social distance policies, and a decline in spending took direct hits at companies like Uber, Lyft, and Airbnb. It also made services like Instacart, Uber Eats, and Amazon Prime essential

services. And in many ways, their workers have become essential, obviously, but also sacrificial workers. Meanwhile, people across the globe have depended on some form of gig work, like driving passengers to the airport and saw their incomes dry up. Federal legislation made it so they could get unemployment insurance, but it was a process reported to be challenging and slow and accelerated. We already knew about this part of the tech world. Gig workers don't have the same safety nets as full-time employees, and this is a big, big topic. I just talked to someone who worked at the labor department once, and he was talking about the idea that it's no longer binary.

Labor is no longer binary that your employee or an independent contractor. So let's talk a little bit about this, Scott. So what kind of triaging do you think the executives inside these companies had to do? We will ask Dara, obviously, and what kind of decisions do they have to make to save their companies? And the same for workers, which we'll ask to talk to Vanessa about. Well, these companies are inherently sort of built for a crisis like this. Obviously, a lot of it's situational. If you're in transportation, such as Uber, you get hit hard. But the thing about Uber that's the reason why all the weather that's in addition to their cash pile is they can variabilize down their expenses. You talked about dropping Louis off at college college and the reason why we have made a terrible decision

that puts at risk the health of the commonwealth and into consensual hallucination with parents and kids that we can welcome them back is that our business model is high fixed costs and then very high variable costs and whereas a company like and it's very hard for us to variable eyes down. If we were to not bring students back for an entire year, we were to shut off all of our revenue sources, we could take our costs down maybe 10, maybe 20%. Whereas when Uber goes into a situation like this, their primary expense is the driver. So they can really variable eyes down their costs. And they can also, and this is probably the gangster move of the gig economy right now. And they can also, and this is probably the gangster move of the gig economy right now.

They said, okay, ride hailing is in trouble. Food delivery is skyrocketing. And they made this pretty gangster pivot with the acquisition in the delivery space. So, A, they're going to survive because they can variable eyes down. And then you have companies that are kind of equally lucky that the moon's lined up for like an Instacart where you're going to have home delivery of grocery go from 2% of a $750 billion industry to 20%. So they've had this force, you know, Hurricane Force 5 wins in their sales. But the gig economy is kind of set up to survive.

It's very elastic because they can variabilize down and up and down their cost structure. Of course, that's very, when you're talking variabilize, you're talking about people's lives, right? Okay, we're going to vary. You know, that's a heavy-duty business professor word to talk about suffering of people. And then secondly, you know,

you have other companies in that space, like Airbnb, who did use that term to me when I interviewed Brian Chesky, that we can bring costs up and down as they go. But it's still a practice thing. I just only started using ride sharing. I still haven't rented from Airbnb, and I did quite regularly,

mostly because I'm not traveling. I use it for a travel kind of thing. So who would be the winners and losers here then from your perspective, these delivery services? Because I think that's not going to change. I think that is here to stay, this idea of everything delivered. Oh, anything to do with home delivery is a big winner. I think Airbnb is a huge winner because they're entering, they come out of this

pandemic with a weakened incumbent industry. Whether it's Marriott or the Four Seasons, they're just not going to have the capital they're used to to reinvest in their properties, which will start this inextricable downward cycle. And then you're going to have more supply because more people are going to be looking to monetize their assets, their apartments. And I think people will become more accepting of Airbnb. And they have just this incredible moat of both local supply and global demand. I think Airbnb comes out of this probably the best IPO of 2020 or 2021 and becomes the most valuable company in hospitality on the day of the IPO. What happens to hotels in that scenario?

They get the shit kicked out of them. Business travel is not coming back to the same level. And even if leisure travel comes back, people are going to decide there's going to be so much more supply of people looking to monetize their second home in Nantucket or in Westwood, California, that they will offer incredible value. And people will say, okay, I can either stay at the Westin for $410, or I can get a nice two-bedroom apartment in a nice neighborhood with a nice lady who has a friend who comes over and does yoga with me. Airbnb is getting into services. I think Airbnb, bottom line, is just going to be a 10x better product and people are becoming more comfortable with it. I just think they run away

with it, Kara. I think they absolutely run away with it. And Instacart is kind of the one that is taking advantage of this incredible trope. And also, to be fair, and we'll talk about Dara, Dara's pivot to what looks like, I mean, overnight, they've gone from a ride-hailing company. Uber's no longer a ride-hailing company. It's a food delivery company. That's now a bigger business for them. If they go from a ride-hailing company to a food delivery company in about 90 days,

that's an incredible pivot. All right. Let's talk about the idea of work from home as COVID has accelerated this. I just interviewed, just a discussion with the CEO of Tata, which is one of the biggest Indian conglomerates. And he said that they've gone from 15% of their workforce to 90% work from home. And he's like, we're not going back, which was interesting. He just said, he's been talking about this a lot he's like we're sticking with that maybe people will come in occasionally but he thinks the entire world is going to be all work from home which means delivery services you know

that kind of stuff does do better like the concept and what doesn't do as well as say taking an uber to work or commuting or things like that um So I thought that was super, I was sort of surprised that he said that it's not going back in any way work from home. But then COVID-19, does it spell the end of urban mobility projects like Lime, City Bike, and the rest, and Scoot? Do people want to share anymore? I have recently been using them a lot, actually, which is interesting. And I don't have an issue. I wear gloves or I wash my hands or stuff like that. How do you look at those sharing businesses? I think that a product continues to do well.

I just think it's overcapitalized. I think it's going to be a great place to be a consumer. I think you're right, urban mobility. And I think consumers, or I'd like to think consumers like, you know, one of the questions we all have to ask personally and professionally is what we leave behind coming out of this pandemic. And I'd like to think that we as a society are deciding one of the things we'd like to leave behind is the level of emissions that we spew into the air.

And I think people, and not only that, I don't know, you were in New York. One of the really nice things about New York right now that I hope becomes a static feature is they're closing down streets and they're doing outdoor dining. And it's like, okay, let's replace internal combustion engines with a place for people to meet up and have coffee and eat. That seems to me to be a really good trade for an urban center to take away, to take

out cars. So I would flip the question back to, I think the space is overcapitalized. No one can compete with Uber that the marketplace has given the mother of all hall passes to, only second or third to Netflix and Amazon in terms of a company with a $50 billion market cap that hasn't made money. Most of the other mobility guys just can't compete. They don't have access to that level of cheap capital. But as a consumer, and I know you're a consumer, it's a great bargain. What do you think happens to all these little sharing companies, these mobility sharing companies in urban centers? I use them all the time.

And everybody, everyone around here is, all the cities are using them. They're very convenient. You know, I used, yesterday I used an Uber bike. Not an Uber bike. It was a Lyft bike. It was an electric bike, which was different from their city bikes, which are powered. I tried that.

They're great. They were great. I used a scooter this morning when I went to drop off a rental car, which are powered. I tried that. They're great. They were great. I used a scooter this morning when I went to drop off a rental car, which was interesting. And I use them all the time. Let me pivot to a thing. Countless restaurants have closed. Obviously, you were talking about what was happening in New York, which I thought was a great solution and made the city more lovely. And people were eating outside, all levels of restaurants, which was interesting, not just fancy ones. But there's shadow kitchens, food delivery, but there still is like restaurants. I've had four

or five in my neighborhood, which is a heavy restaurant area, closed, just closed, and are not coming back. How do you look at that? Well, this ghost kitchen, it seems like, quite frankly, it seems like a genius idea. And it feels like, just as everyone's been saying, we've been overstored for 20 years, we're over-restauranted. There's too many restaurants. And restaurants, to a certain extent, are kind of a passion play. And it's been subsidized by people who are putting their kids and their friends or investing in restaurants such that they can say they're an investor in a restaurant. That business has been overcapitalized and looking for a calling for a long time.

It's a shame because there's some fantastic restaurants and it'll diminish. for a calling for a long time. It's a shame because there's some fantastic restaurants and it'll diminish, it'll take, a lot of urban centers will lose a lot of character with these fantastic, Cafe Select just around the corner from me, amazing restaurant, booming, boarded up. The economics of these places just can't survive

two, three, four months without business. They just can't make it. So we're going to see, you could see, what is it, 20 to 40% of restaurants that aren't chains go away. And there was another interesting article in the New York Times saying that basically a ton of national retailers and restaurant chains have kind of given up on Manhattan. Now that'll readjust, rents will come way down, but basically people have said,

we just can't make this work in Manhattan. Yeah, I would agree with you. I think you're going to see many fewer, which will be wonder what happened to the urban landscape because you'll have all these boarded up areas and see if they'll be converted. Same thing with offices. But that's a different story about housing and stuff. employees. Uber and Lyft threatening to leave California by tomorrow, August 20th. The New York Times says that they may license their brands to fleet owners to avoid having to make drivers employees. Very quickly, because we've got to get to Vanessa. What do you think? I think Uber is hoping and Lyft are hoping that the consumer goodwill or the consumer addiction to these products leads them to weigh in on public officials and public officials back down, just as de Blasio backed down when he threatened to tax them or basically legislate them out of existence. I don't know if that goodwill is

still there. This strikes me as the mother of all, I'm taking my ball and going home move or power move and using drivers and their employees as human shields and using them as pawns. I think it's a low-budget move, and I hope that the government waves the middle finger at them and says, okay, close down. San Francisco and others are going to push on that. Anyway, that is a perfect introduction to our first friend of Pivot to talk about the future of innovation and the sharing economy. First up is the co-founder of the gig workers collective, Vanessa Bain. Come on on Vanessa.

Hey Vanessa, thanks for coming on. Hey, so first of all, I just want to say welcome to Pivot School. Thank you for joining us. Everyone in the audience, please use the Q and A box below to send questions for Vanessa, and we'll try to answer some of those before she goes. So let's start now. Why don't you explain, I want to get to the news of what's happening in California, obviously, and sort of your overall thing, but why don't you explain what the Gig Workers Collective is and what your main advocacy is right now. Sure, I'd be happy to. Gig Workers Collective is a worker-led, worker-organizing collective. And our primary work has been around Instacart

and Shipt. However, we aim to facilitate and foster all organizing in the gig economy. And so what is your focus? Because, you know, the gig economy is heavily ride sharing and other areas. What is, and delivery now with COVID-19. So talk a little bit about sort of what you're most focused in on right this second, including what's happening in California. Sure. So our primary focus is in grocery shopping and delivery apps like Instacart, Shipt, but also other delivery based gig work as well.

Obviously, rideshare is king in the gig economy in terms of the number of workers and the political power. But there's a lot of nuance involved in different types of work within the gig economy. And so it does make sense to sort of, you know, break it down into certain components like ride share versus delivery based work. So how do you do that? What are you thinking of the big issues are for you? For gig workers in terms of Instacart shipped, a lot of our issues are going to be distinct and different than Rideshare. What has happened with the grocery delivery business is that it's exploded during this pandemic, right? We've seen, you know, Rideshare drive off a cliff, but we've seen the explosion of, you know, Amazon shipped and Instacart really taking over even more of a market share in this area. So our risks are exposure in grocery stores, exposure when delivering to customers in terms

of the pandemic. And it's been something that companies have failed to meaningfully address. So during the COVID pandemic, a lot of our work has had to pivot to protecting workers and advocating for workers, even for things as simple as ensuring that our workforce has PPE, which companies fail to proactively provide, or ensuring that workers are actually receiving COVID-19 sick pay from these pay policies, which are generally speaking, nothing more than a cleverly crafted PR campaign on the part of the companies to make the general public and workers feel safer about the fact that we really actually are not protected in our workplace. But yeah, I mean, obviously, we have Prop 22 in California, that's, you know,

sort of pending. And it's, it's my goal to defeat that. And I know that it's the goal of many other workers to defeat that. Because unfortunately, the reality is, is that when these companies win, we lose as workers. So Vanessa, I look at Prop 22 and I see, okay, the total amount of money that has been raised by California labor groups to try and get people to vote no on Prop 22 is $867,000. And the amount of money that's going towards yes on Prop 22 is $111 million. And Cesar Chavez is one of my heroes.

It strikes me that whenever you have kind of a supply-demand imbalance, and there always typically is that favors the corporation versus the worker of medium and low-skilled workers, that the only thing that ever structurally helps here is unions. And I guess what I'm saying is say somebody buys into what you are trying to do. What is the call to arms to be effective to actually implement this stuff? Is it unionization? I mean, it just feels like you're outgunned. I'm trying to figure out how do we ship armaments to the, I don't know what the war analogy is, to the Afghanis or the South. I won't even go there because I'll offend a ton of people. But how do we help you win? Because it feels like you're just being overrun right now. I mean, we are out-resourced, right? The

one thing that I would say that we have that these companies don't is legitimate worker power. You know, they've mobilized to find astroturf types of activists to feature prominently in their Yes on 22 campaign. But the reality of it is, is that we're absolutely going to be outspent by astronomical proportions. We don't have, you know, the capital. We don't have the resources to be able to spend anywhere near what these companies are spending to get Prop 22 passed. But what we do have that they don't have is really, really, really dedicated workers that are willing to, you know, come on pivot schools and have these discussions or, you know, talk to journalists or talk to their fellow workers. And, you know, it's not just the money, it's also the access and asymmetry to access and workers. These companies can send a push notification and lobby their entire workforce and their entire consumer base. We don't have the ability to do that, right?

We don't have the ability to do that, right? So yeah, it's absolutely going to be an uphill battle. But I think that the public opinion is going to be on our side. And I think that, you know, the law as it exists today, AB5, is something that allows for flexibility and worker protections. And so what I would love to see is the enforcement of AP5. What about the idea that the companies, all the companies are putting out that this is the way people want to work. They like being independent contractors. They do these polls and show this. Talk about that idea and this idea of what an employee is is not binary anymore. It's not an employer. What has to happen and what would you like to see the companies do? If you could be running these companies, what would you put into place for the workers? Yeah. So, I mean, I think that part of the problem is with the methodology that these surveys are conducted with, right? If you ask virtually any worker, be it a gig worker or not a gig worker, would you rather work more independently or be bossed, right? The answer for I'm sure virtually every worker is going to be I would like to be able to work more independently. The reality is, is that we are not independent contractors.

We're told when, where, why and how to do the work that we do. told when, where, why, and how to do the work that we do. We may not be bound to a schedule, but again, nothing in existing law under employment would bind us to an inflexible schedule. That's simply not true. And I think companies know that flexibility is the one virtue that workers value above all other things. So they're weaponizing the only real intrinsic value of our work, which is flexibility against us. And, you know, I think it's shameful. The reality is that nothing in AB5 mandates how many or how few hours you can work, nothing in AB5 mandates that we would have to become full-time employees. And, you know, I've unfortunately encountered these arguments from people as high up as the CEO of Uber that are, you know, erroneous

and misleading and used to really weaponize, you know, workers against their own self-interest. What would you do? Oh, go ahead. Go ahead. Sure. There's a great study by Dr. Veena Dubal from UC Hastings called Uber Ambivalence. And it talks about sort of the way that these questions are framed and how they can be framed to manipulate the outcome of whether or not, you know, workers say they want to be independent contractors or employees. But the reality is that workers do want the benefits of employment, whether or not it's titled employment or not. So what would you do? What would you do? And then Scott might have another question and we'll get to an audience one. What would you have become a new kind of thing or what? Absolutely not. No, I think a third way is bullshit. I'm going to be really honest. It's categorically less than what you're entitled to under current law. And, you know, these companies have had two years now since Dynamex was decided. This is not, I mean, I know Uber is going around and acting like this is some sort of surprise that this injunction was issued against them. But the reality is, is that, you know, Dynamex has been the law of the land in

California for two years. AB5 was passed nearly a year ago. Nothing about this is surprising. And they can pivot all they want to food delivery. But the reality is that that's not profitable for them. They have never figured out a way to make food delivery profitable. They did find a way in select markets to make rideshare profitable. But they lose money on every single Uber Eats order. And Postmates has never been a profitable company. So they basically acquired a money pit. Um, what I would do is I would properly classify all employees, um, as employees. And I think that that's, what's necessary, not just for our ability to qualify for things like

minimum wage, hazard pay, um, you unemployment insurance, which, by the way, I haven't received. They owe me $10,000, over $10,000, because of the nature of my misclassification. So I think employees should absolutely be entitled to the full and robust protections and rights of employment. And anything less than that is doing a disservice to workers. Scott, and then I'm going to get to you. So, Vanessa, first off, I tend to agree with you that this whole third classification is, I don't think it's a genuine argument. I think it's usually just delay and obfuscation to try and figure out a way for legislators and academics to spend two years coming up with a third thing

that never happens. But we have a tendency, at least in big tech, to group them all and say that they're all the same person and behaving the same way. And that's just not true. In your interactions with the management teams across the entire gig economy, can you rank from sort of, from like, let's start the best? There's got to be some CEOs and some boards and some companies with shareholders that think, all right, we want to do right by our employees or maybe less bad. Can you sort of, can you disarticulate some of the biggest companies in the gig economy and say, these are people that I think are genuine about trying to do the right thing. And then others that you feel have been very disingenuous about workers' rights?

thing and then others that you feel have been very disingenuous about workers' rights? I mean, I can try. The reality is that I don't think any of the big companies in the gig economy are doing right by workers. I think that Uber obviously sort of is the prototype for how to exploit an entire workforce. And I think that all of these companies that have emerged after have followed in their footsteps. I will say, I think that there are a handful of companies that are especially egregious. I think Uber, obviously, is probably the number one offender. And they're able to have the impact that they have, because they they will, you know, they yield a significant amount of political power. But also, I mean, I think, you know, Instacart has been absolutely shameful. That's what the bulk of my work has been in

organizing around Instacart specific issues. And what you've seen is that this company, which is now profitable for the first time ever, is continuing to cut rates during a pandemic, continuing to fail to provide PPE to its workforce, and continuing to essentially treat this like its own personal Super Bowl. And, you know, to an extent, there's going to be a consolidation of power behind a handful of these companies. And those are primarily going to be the ones that are oriented and rooted in delivery service. Shipt is another example of one that is just especially egregious and has personally tried to smear organizers. They also have a corporate run Facebook group in which they control all communications

between their workforce. And it's heavily censored and heavily moderated. So, you know, there are a handful of companies that probably stick out to me as being some of the worst. But when it comes to being better than average, I wouldn't say that I could give anybody those accolades. Okay. Least bad.

Last question. Least bad. Who is the one that is least bad? I'm not going to give it to anyone. You know, I don't even know. I would say it's probably like wag or something like that. But then that's, even that's really dangerous, right? Wag?

Wow, you had to go deep for that one i really did yeah all right we got the memo we got it okay okay so two quick questions which you sort of already answered uh uh the survey the ride sharing guy says surveys of 60 percent buyers want flexibility so is there any other option besides making them full employees? You have just said no. There's no, that provides them flexibility and gets them the benefits. Is there a new way to do it at all or not at all? Employment provides us flexibility and all the benefits. Again, nothing in AB5 mandates that we have in flexible scheduling. Okay. And then lastly, Vanessa, and then we have one quick question from me. How can gig workers get more value from their good ratings and reviews and

other social proof? So a question from the audience. Yeah. Organizing. That's the answer. These companies are never going to give you anything that you don't fight for. So it doesn't matter how killer your ratings are. I was the fastest shopper in my zone for months and months and months when I started doing this. And my earnings still got cut by $100 a day when Instacart decided to take tipping out of the app. Our earnings are entirely at their mercy. So I think that build real worker power. That's how you're going to get more out of your job. All right.

Last question from me. We're talking to Dara Khosrowshahi in a minute. What specifically would you like to see him do next? I would like to see him be transparent. And I also would like to pose a specific question to him, which is what is the interest of Uber and email communications between Dr. Veena Debal and I, which they have used a Freedom of Information Act request, specifically emails between herself and myself and my fellow Instacart organizer.

But I'm very curious to know what Uber's interest in emails between Instacart organizers and a university professor are. Okay. All right. We will ask Vanessa. We really appreciate you being here. This is Vanessa Bain. She is the co-founder of the Gig Workers Collective. We really appreciate you being here, and thank you so much. Thanks for fighting the good fight, Vanessa.

Thank you. Yeah, that's you. Union organizer, Scott Galloway. So what do you think of that? We're going to have Dara on in a second. What do you think about that reaction? And then we'll get to Dara. I think America is better when it has people who are defending the rights of workers and

willing to do it probably on little pay. And they're totally outgunned and they're fearless. So, look, I think we need, quite frankly, I think we need more Vanessas and less lobbyists in Washington. So, I like that we can give her voice. I think, quite frankly, she loses some credibility when she lumps them all into sort of, I don't know, they're all bad. It goes from bad to worse. I do think there are some CEOs of these companies that want to do the right thing and are trying and are willing to sacrifice shareholder value. So I think she would get more traction if she partnered with a couple who are trying to call on their better angels and be good actors. Being nice. But I'm glad she's there. I think we need her. Yeah. I like the angry. What do you think? I think it works. I think angry works. I think it does. I think these, for a long time, I felt like a lot of these workers, it's just,

I do think they've got to think beyond, I think all of employment needs to change. It's not binary and it's not, there are protections. I think everyone is going to be a different kind of employee. And that's, it's a bigger discussion we have to have as a country, which I think, I don't want to, I'm not both sides in it, but it's really a complex issue that we need to rethink. It's not the way it was. And it's, of course, been accelerated by COVID. Hey, it's Kara. We're listening to the third episode of Pivot School, which was broadcast live on Wednesday, August 26th. We're going to take a quick break now, but we'll be back after this. After this.

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This is Pivot School. Let's get back to the show and our second friend of Pivot interview, Uber CEO Dara Khosrowshahi. Now we're going to have a different perspective i believe i don't believe he's going to say solidarity right now um let's bring our second friend of pivot uber ceo dara kosher shahi hi dara hey no problem if it's cool that's scott there i don't know if you've heard of him he says some not nice things about you you don't remember hold on hold on it's cool. That's Scott there. I don't know if you've heard of him. He says some not nice things about you. Dara, you and I have met, but you don't remember. Hold on. Hold on.

It's time to talk about our favorite subject, Scott. You know, Dara, do you know who you and I met like 20 years ago? I do not know that. He doesn't remember. I'm not going to pretend to remember. It's like every woman I've ever met. I'm not going to pretend to remember. You were the CFO of Expedia.

You were the CFO of Expedia, and I was pitching you on some ridiculous travel startup I had. And you were very friendly and welcoming and very gracious. So good to see you again, Dara. I know that you've been thinking a lot about me and my startup. I've been listening a lot to you. I'm sorry things haven't worked out for you. I see you haven't gone up to anything in 20 years, man. Call me if you need some help.

Seriously, brother. All right. Okay. All right. We're going to go. All right, Scott. I'm so glad you didn't take Scott's company or idea. It's such a smart,

you're obviously, you've risen in my estimation by far. Anyway, we have a lot of questions for you, but if anyone in the audience has a question for Dara, put them in the Q&A box. We already have a lot of questions. So Dara, you've been all over the place lately with lots of ideas and a lot of actions. Let me just start. In your recent op-ed published in the New York Times, you said a majority of drivers don't want to be employees because they value flexibility, which Vanessa just discussed. Talk about this a little bit. And then secondly, you're going to close down in California tomorrow, is that correct? Tomorrow or the next day? Talk a little bit about what you've been up to thinking, like what you're trying to accomplish here. Sure, sure. So whether we close down or not is really up to the courts, and it's

totally out of our control at this point. And we will comply just as any company should and would. I think that for us, what we're trying to achieve is like the new way that you talked about, Kara. And I think you could definitely call us guilty. Well, why didn't you get there earlier? But we don't think that the answer to where we are now is to essentially go back 50 years. We actually do think that we can combine the best of both worlds. We actually do think that we can combine the best of both worlds. And it is the flexibility of employment. And there is a tradeoff between flexibility and employment. I'll talk about that. expenses, healthcare benefits, medical disability coverage, protection against discrimination, which anyone should have, and harassment and safety standards. We're trying to now lead to actually a better solution, which is the vast majority of our drivers, of drivers who drive on the platform and couriers, they value flexibility. They do not want employment, but they do want the protections associated with employment. And what Prop 22 is about is about starting to move into the best of both worlds. You've got flexibility, you're your own boss, you're your own CEO, but you do have these protections. And I might add that the surveys that indicate that

the vast majority of drivers who drive on Uber or Lyft don't want employment, these are actually surveys done by third parties. Like the Rideshare guy is a blog. I'd encourage people to go on it. I go on it all the time. It's very, very critical of Uber or Lyft. They're not wording anything in any specific way. And the latest survey that I looked at, 71% of drivers want to be independent contractors. 17% wanted to be employees. So these are not like surveys that we're doing and we're loading up with complex language to lead anyone in the wrong direction. But getting to the point she was making is, of course, everyone wants to be calling themselves independent, but is it really?

I mean, look at through this COVID crisis. It's just shown how unprotected many of these gig workers are at the same time accelerating the amount that we need in this economy. And I think, you know, I've called them, I think you've heard, sacrificial workers. You and I have discussed this. And them not having any, employment does have a set of rules that go with it that are very strict. This does not,

there's sort of, and then this COVID crisis has pointed out that they're under siege and also in danger and don't have anywhere to go since they aren't employees, even if they like flexibility, if they like not having a boss. Well, I think as far as safety goes, you're absolutely right. These are folks who have to leave their home to do their jobs unlike us, right? And what we've done is we have been leaders on the flexibility front. We committed $50 million to personal kind of equipment. We're shipping over 30 million masks to drivers and couriers either to their homes or they can come pick it up. We gave over 20 million of aid to drivers so that they didn't feel like they had to go earn if they were feeling sick. And we were the first across the board in the industry to do it. We require now drivers to take a selfie,

make sure they're wearing a mask. If a rider is not wearing a mask, we have essentially on the app feedback there. So I think on the safety front, we have stepped forward. We can keep innovating on the safety front. By the way, a lot of other folks copied us. I think socially you're right.

That's table stakes. You should do that, period. That's good for your business. It's not a favor for workers to do that. So the idea is they want more than that. Yeah, there's more than that for them. They can like one thing and also want other rights. Well, absolutely. So the table stakes we led on, and it is table stakes. And then what we're now

proposing actually is flexibility with benefits, with disability coverage, et cetera. And again, I'll say, did it take us too long to get there? Yeah, but we're here and we actually want to have a real dialogue as opposed to some of the dialogue that I'm hearing around. Scott? So first off, you may not know this about me, Kara. I'm a member of a union, the UAW. As a part-time professor, I pay union dues. So Dara, first off, Prop 22 has a clause in there that someone's stuck in that if it's passed, they'll need a seven-eighth supermajority vote to unionize, which is basically outlawing unions as I see it.

But I want to go meta for a second. I looked at the market cap of General Motors is $42 billion. They have 164,000 employees. That's $250,000 in market cap. And on average, their employees make $84,000 plus benefits, $427,190,000, $140,000 in market cap per employee, $89,000 plus benefits. Uber, $53 billion with 27,000 full-time employees at HQ. Do I have that number right? 27,000, that's what I found. Is that right? That's about right.

Approximately? That's about right. So about $2 million. $2 million in market cap, around 15 or 20 times the market capitalization of traditional automobile manufacturers. And then there's the non-employees, the 4 million drivers. That's the number I got, 4 million. And I looked at so many, there's so many different studies, conflicting studies of how much Uber

drivers make. And I erred towards the higher end, the part-time guys after expenses make between $9 and $12 an hour. Obviously, flexibility is a huge point of compensation. And then full-time riders, because I guess there's an economies of scale, get $38,000 without benefits. So it strikes me that if you have these large organizations that are employing six or seven times as many people at three times the salary, but they only have a tenth of the market cap. It strikes me that Uber, at the end of the day, is literally ground zero for income inequality, that it's figured out a way to have this two-class system. There's the employees at HQ that skew younger, skew college-educated, probably skew more white, quite frankly,

and they make, call it with compensation and equity compensation and benefits, I would bet between $150,000 and $250,000. And then the $4 million, kind of what I'll call the other part, the other side of the tracks, makes substantially less. And this arbitrage is amazing for shareholders. I want to acknowledge that. And shareholder growth is really important. But when we're thinking larger about our society, aren't you really ground zero for income inequality? That's a loaded question. Yeah, thank you for that question. I think that it starts with a false premise in that drivers and couriers who use our system are employees, all right? They're not employees.

We don't tell them what to do. They can decide when to work, et cetera. This idea that, oh, you can have flexibility employment at the same time. It's just false on the face of it. Yes, it's not illegal for someone to give someone full flexibility. But like a barista can't come into a coffee shop anytime he or she wants to show up. Can't say I'm only going to make, you know, lattes and I'm not going to make a regular coffee drink. Can't take a two-hour break during rush and can't then go work at another coffee

shop that's closer to home on their way home. So just because it's legal doesn't mean it actually works. The reason why flexibility works on our system is that someone who wants to earn, and we consider drivers and couriers customers, when they want to earn, they can push a button, they can do it at their own discretion, anytime they want or not want. And their interests are aligned in that there are some who want to maximize earnings. And by the way, the study that's based on actual earnings on Uber and Lyft, the most scientific study out there, talks about drivers in Seattle making 23 bucks an hour after expenses. It's 35% more than taxi drivers. It's based on actual data versus survey data. All these other studies are based on survey data. It's not the real stuff. This is actual data that cannot, you know, people

find the results inconvenient, but they're actually based on real data versus survey data. And just like the person who came before me said, you can really mess around with survey data. And just like the person who came before me said, you can really mess around with survey data. So you've got the interest of the driver is aligned with what they're doing. If they want to be maximally productive, they have to give up some flexibility. They've got to work center of the city. They've got to work at rush hour. And those drivers make much more. If they value flexibility, they want to work at 2 a.m., wherever they want, they want to be close to home, they will sacrifice earnings. And by the way, the more you drive, there's actually a premium to experience. Your earnings go up by 14%, 15%.

You understand the system. You know how to play the game, et cetera. The minute that you flip to employment, then the company has to underwrite their earnings. It becomes my job to make sure that drivers are efficient. It makes an only drive in the middle of the city, only drive during peak hours, et cetera. And I have to control essentially what that employee does in order to, for me to have an arbitrage between what I pay them and how productive they are.

So the two just don't get along and don't are completely different things. Drivers and couriers can earn pushing a button. We, over the lifetime of our business uh of the amount of dollars that have come into the platform over 80 go directly to drivers and couriers uh it doesn't go to some you know offshore entity it's actually you're recirculating earnings in society usually locally in a city usually from people who are wealthier in the middle of the city to people who aren't. And this kind of work is needed. And oh, by the way, people can ditch their cars and on the customer side, you can have something that's convenient. So we ain't GM. We don't want to be GM, much respect to them. We're marketplace. And there's a place in society for that. People are

earning on the platform and people are using the platform to get around. And I think that's a net positive. So tomorrow you're going to say that employee versus contractor bill is the deadline. Are you in discussions right now or are you just, what will happen tomorrow? Well, we're definitely in discussions. What will happen tomorrow is the judge essentially determines whether there's a stay between so that we can be heard in court on the appeal. there's the court case and hopefully in November, Prop 22 we will get voters to vote along with what

71% of drivers want which is a better way. So you will shut down this service in California? We're trying to figure out what to do and we have, there's a black car service that we have that's based on fleets etc. and we are trying to figure out exactly what we do going forward.

But the mainline Uber service, it just won't be available because it's based on a completely different model. Is that a disservice to workers? Right. Is that a disservice to the workers? Why did you make this decision? Of course it is. I mean, it's not up to us. The decision is a court decision.

Kara, we can't go out and hire 50,000 people overnight. All of our model, everything that we have built is based on actually this platform that brings earners and brings people who want transportation and delivery together. You can't flip that stuff over overnight. It'll take time, and we're going to figure out a way to be in California. We want to be in California. But if the court case comes in, then we'll have to shut down. And we got the best engineers in the world figuring out how we can rebuild this thing. If we do have to go to employment model, what's going to happen is we will then, again, have to underwrite driver productivity. There'll be far fewer drivers employed. So my guess is 70, 80% of people who use Uber for

flexibility, they drove five to 10 hours, et cetera. They will not be able to earn. The prices are going to go up. They're going to go up less than like city center. So I think SF, you know, prices will go up by 20 something percent, smaller cities are going to go way up. Well, I've never thought the prices were right. But the prices are right because there are people who value flexibility. There are people who take responsibility. Our drivers know exactly what they're doing and they, they understand our system. They game our system, et cetera. And they earn our system the way that they want to. And I think that's a good thing, and we want to take it to the next step. All right.

So higher prices, et cetera. That's what we're worried about. Okay, I'm going to ask you one more quick question, then we'll get to the audience. Higher prices, let's work. Okay. We bought Postmates earlier this year for more than $2.5 billion. Talk about the restaurants, and then we'll get to some audience questions and one more if Scott has another one. Yeah, I think on the restaurant side, listen, what you guys were

talking about as far as these restaurants closing down, it's tragic. It's horrible. They're incredible employers. We are going out and signing up as many restaurants as we want. We are providing now pickup service. We allow restaurants to use their own couriers if they want to or use us as well. And right now we're lifeline for a lot of restaurants out there and frankly, not enough restaurants out there. So we want to go all in and we are going all in on delivery. It's a 30 billion run rate, not including Postmates and not including Corner Shop. So it's a big part of our business and it's a lifeline for a lot of small businesses. And we think it's a big,

big positive for society. Are you taking too much of the money? A lot of restaurants complain about that. And are you headed for an Apple-like fight with restaurant owners? So our revenue margins, which is essentially our take net of career costs in that business, is about 13%. Apple's is a heck of a lot higher than that. So we've talked about 15% being the call it take at maturity. And I think that's a fair take rate. The cost of delivery, the cost of couriers, et cetera, it's a significant cost. And we're trying to reduce that

with like technology batching, having one courier deliver two or more dinners. So technology will slowly bring the cost down, but we think a 13% take now and a 15% take later, it's pretty fair. Scott, do you have a final question? Then we'll ask two questions from the audience. Mine is more around Dara.

You and I are about the same age. Actually, you're five years younger, but that's the same age. We've got the same age. Actually, you're five years younger, but that's the same age. We've got the same hairstyle. Where do you want to be in five years, boss? You're economically secure. You've kind of rung the bell professionally. Do you want to build a trillion-dollar market cap company? Do you see this as an opportunity to try and prove Vanessa wrong and lift these 4 million drivers up and give them a better wage? Like, what, you know, where do you want to be in five years? I don't spend that much time thinking about five years. I'm like, tomorrow is overwhelming enough in COVID.

But listen, I think that there's this unbelievable disconnect between technology and the real world. Uh, and I look at Uber and we're the one company that can make that connection. We're building technology for the real world for 4 million people who can earn. And if they can earn, and by the way, we're going to get better and more efficient and hopefully take down our take rates. So more and more people can earn and more and more people can get a higher percentage of their labor and their effort. Right.

That is really cool. is not looking at diversity theoretically, but has an unbelievably diverse user base in every way and with whom we connect. And we can be that tech company that can be that great tech company that's not disconnected from the world, that's not sitting at home on videos all the time, that's on the ground building amazing technology to make people's lives better in cities and where the money stays in the city and doesn't go to some offshore account. If I can be a part of that story, it's awesome.

And the tech, it's fun. It's hard. And it's a fight. But I actually think we can make that tech company that can build the bridge to real people and the real world. Speaking of real people, workers, why is there not a driver representative on Uber's board or within the Uber's executive team? Would that help the company be held accountable by those who drive? All tech companies, I think, should have a driver. Why don't you do that, though?

We have driver forms all the time. No, I think, should have a police officer. Why don't you do that, though? We have drug reforms all the time. No, I want them on the board. I actually think it's pretty cool. I want two of them. I actually think, listen, we've moved forward on the board right now as far as diversity, et cetera. The board is like a really, really great board. I do think that the German model where you have employee representatives and you have kind of a different board, I think that's a cool model. I think, listen, our system, right?

Are you announcing that here? Yes, great. We're so excited. Why not? I would be supportive. I would be supportive, honestly. Now, we are in discussions with drivers and couriers, understanding what they want. We build for them. The product team drives, and they're building for drivers and couriers understanding what they want we build for them

the product team drives and and they're building for drivers and couriers um i do think that we have the system that's optimized uh you know it's called capitalism barry diller who's my my mentor he always said there's power in a name like it's not called laborism. It's not called socialism. It's capitalism. And it's a system that's built to maximize shareholder value and capital. And if that's the only input, then you're going to keep getting the same results going forward that you got going backward. So these kinds of systemic changes, I'm game for. I don't want yesterday's, you know, capitalism 20 years ago to be the same 20 years from now. I got that.

You said that in the passive voice when you actually have an active power to do so. Just FYI. Just you can actually put it. All right. We'd like to see that. I would like to see that. Okay. All right.

Last question here. All right. Game on. You know how much I poke you on these things. I think that would be great. When will we see an acceleration and automated and driverless customer interactions? That was a big area of investment earlier. Where are you on driverless cars at this moment? great team that can, the advantage that we have is essentially we can automate the simplest, shortest, let's say least value routes relative to the difficulty because we have all that data in our network. I think it's still going to be three to five years from now. And, but the technology is getting better and it's being built in our being able to grow it inside of our network.

I think it's a huge advantage that is under. Are you going to rely on others? Are you going to rely on others? Is it going to be your technology? Because that's a big investment for a small company. We do think that there's advantage in building some of this tech in-house because, again, we can build it to suit for the network, but we will absolutely also work with third parties on the tech.

Ultimately, just like we want any car on the network, we're going to want any robot driver on the network as well. Scott, do you have anything final? Anything else? Yeah, it feels to me like Uber has pulled off. We talked about this earlier, Dara. Uber has pulled off, assuming it's successful, what will appear to be one of the great pivots. You're no longer really a ride-hailing company.

You're a food delivery company. Is that accurate? Well, I'd like to be both. To me, if we can build a real logistics network that gets people from point A to point B, that brings anything, commerce, from point B to A, that's a really powerful proposition. So what's the third leg of that stool? Do you get into last mile delivery? I predicted incorrectly seven years ago that Uber would take on Amazon Prime Fulfillment, that you would be in the business of last mile.

What's the third leg? If it's ride hailing, and there might not be a third leg, if it's ride hailing and food delivery, is there a third leg and what is that? It's ride hailing is going to turn into mobility. So any way getting point A to B, it might be our drivers who use our network. It might be taxi cabs. It might be mass transit. Any way you want to get from point A to B, all the information, real time payments done, incredibly smooth. And then on the delivery side, it's going to go from food. We're already in groceries.

And essentially, we're going into every other local commerce category. So Amazon is going to have a huge business. And they've gone from three days to two days to one day, et cetera. We're going to go from 30 minutes, you know, five minutes for rides to 30 minutes and extend. And we want to build that real-time logistics local engine. And again, it's about people and things. And the frequency that we have with customers, it's going to be pretty incredible.

All right, Dara, we really appreciate it. We wish we had more time. There's so many areas to talk about, including scooters and stuff like that. We appreciate you being here. And again, we're so excited for your employee representation on the board. We're a driver representative. It's going to be great. I'm excited when you announce

that like next week. And we'll see what happens this week in California and how that goes. So this is going to be a big week for you, I think. And we, no. Okay. But, but okay. We're wishing someone luck, Dara. We are wishing people luck. It's a better way. It's a better way. It's a better way. Actually, let's wish for something that drivers want. I think it's your way. It's a way.

It's a way. I'm not going to pick it. Okay. I want drivers to get paid well and be protected. I'd love you to have a great business altogether. How's that? I'd like everybody to win. Yes.

All right. Okay. All right, Dara. We really appreciate it. Thank you so much for coming on. Thank you. Thanks, Dara. Bye. All right. Now. All right, Dara. We really appreciate it. Thank you so much for coming on. Thanks, Sarah. Bye. All right.

Now it's time for listener mail. First, we have a video question from Susan in France. Let's watch. Hi, Karen. Scott. Sue, Verona Begina calling in from north of Paris in Trois-Lits-Bois, France. And I know that you guys are usually following GAFA and consumer-related tech, but wondering what you think about the aeronautics and space industry,

especially given what's happening with COVID and the investments coming in from the European Union on the order of 17 billion euros for especially green initiatives in the sector. Would love to hear your points of view. And I'm loving the webcast. Thank you. Scott, would you like to start?

No, I don't. The aerospace industry going green? What is she talking about? No, I think she's like two different things. She thinks she's asking two different questions. One is about aeronautics and space industry. It is obviously going private. That is really pretty much what's happened here, is that the privatization of everything, including, by the way, the sharing economy.

Dara very quietly talked about paying for everything, but I think his goal is to pay, you get on a subway, you pay using Uber, that they become a payments company. So I do think just like that, the aeronautics industry, whether it's Elon Musk or others, Elon just got this massive defense contract. I'm going to be talking to him about it soon. But he has broken into the field of defense contractors and the continued privatization of this area is obvious. They will also have better outfits per Virgin Galactic and that. In any case, I think there should be more investment in this area, in my opinion. As to climate tech, I think, as I've said, we should be doing a lot more of it in this country. We are not investing in the same way other governments are, and we're missing a massive opportunity.

Scott, I don't know how you feel about climate change tech or things like that. Well, I just think the best and brightest used to go to work for NASA. Now they go to work for hedge funds and Tesla. And it strikes me that NASA would have been a great place to get return on investment in terms of the American brand. I remember when I was a kid ordering Franklin Mint special coins of the space shuttle and of, you know, the Soyuz docking and what seemed like extraordinarily bilateral cooperation. blocking in what seemed like extraordinarily bilateral cooperation. It feels like we've kind of, I don't want to say we've given up on science, but we've somewhat, you know, we've defunded all of our institutions. And what would, I think, be really exciting is if we decided that it was a government that was going to commit to winning the space race. And if you look at the other side, big tech has to go after the biggest industries in the world in order to maintain their unquenchable thirst to increase their top line. They've kind of increased their top line about three quarters of a trillion dollars over the

next five years to maintain their stock velocity. And there's only a few industries they can go after, education, healthcare, and then the biggest industry, government. And you see Palantir going into government. You see the Jedi contract cloud selling. So you're going to see these companies start to say, okay, we're not only selling into government, but we can be better at government. I think you will absolutely see big tech start to take over large swaths of the government because we have decided, yeah, we've decided that they're smarter than the government. And the problem is they're profit motivated and you can never make the requisite investments in highways and dams and trains up and down the eastern seaboard if you're totally profit motivated. So I think it's an unhealthy thing, but unfortunately, we're going to see more of it. OK, we have two questions from the audience.

One is, what do you make of Dara's final comment about being a logistics business or something when we asked him about the food delivery service? Do you think you asked if he was going to take on Amazon or had previously abandoned it? Do you think they are going to take on Amazon? They don't really have the warehouses and things like that. I don't see that happening. But what do you think? Yeah, it strikes me that the thing I picked up, the reason I love these, the reason I love listening to your interviews is occasionally you find an unscripted moment of tone or inflection or whatever it is or pause and you think, okay, I've got some insight there. The insight I took from that interview with Dara was the following.

They made a huge investment and they were in the space race of driverless cars. What I took from his body language watching him is they are going to exit that space race, that they are going to make some minimal investments, try and incorporate other people's technology, but they are going to have to pull a Satya Nadella and say, okay, it's time to be grownups. We can't be in phones. We can't be in social. We need to focus on what we're good at. And the thing is he can't be, in my opinion, you can't be transparent about this because there's probably still a lot of people working with Carnegie Mellon on driverless. But the bottom line is he doesn't have the deep pockets of Google or Waymo or Tesla. And I think he's going to basically say, we're going to let other people, we're going to free ride off of other people's tech. But I think what I took from that interview is that Uber is

getting out of self-driving technology as well as to big capital investments are leading the pack there. Well, when he first got there, there was the accident. Someone was killed. And I think it's a very difficult area. And it sort of has to be left to the big spenders. It is. And Travis is the one that put them in that business in a big way and was very into it and answered that famous question of me that he wants to get rid of the drivers, which I think would have solved, in his mind, their problems. So yeah, I do. I agree with you. I think would have solved, in his mind, their problems. So yeah, I do. I agree with you. I think they have to sort of be a platform and then let everyone be on it, that kind of thing, as a platform play, if that's the case. Or someone of these companies buys Uber, and then they become the reservation system, one or the other.

Hey, it's Kara, interrupting myself to tell you that we had some technical difficulties in this live broadcast. Scott's internet broke right before we got to predictions. He was able to rejoin after a few minutes, but let's jump ahead to our special guest prediction from former Facebook advisor, Roger McNamee. Okay. We have a video. We have a special guest who sent a video with their prediction. Let's play it. Kara, Scott, I have just got the inside skinny. The Trump administration has finally figured out how it's going to prosecute the antitrust case against Apple, Google, Facebook, and Amazon, and solve the problem with TikTok all in one thing. Facebook and Amazon and solve the problem with TikTok all in one thing.

They're going to condemn the four CEOs to spend a year on TikTok as dance instructors. Okay. That was Roger McNamee. Oh, that was funny. Okay, Roger. I don't want them to be dance instructors on TikTok. That would ruin the service. All right.

So Scott coming back, people? Is he coming back at all or is it just me here? Oh, we got him back. Wait. What a thrill. We did that on purpose just to create a little scarcity around the luxury brand. Do you possibly have good internet? Can you plug it into the wall, this kind of thing? Is that possible for you? No. I don't know. I'll communicate with my string and tip. Well, my prediction I made earlier, and that is you're going to see a bunch of companies leak a rumor that they're being acquired or they're in talks to acquire TikTok. And basically, President Xi Jinping will pull a Sheryl Sandberg and act very earnest and do nothing. And he's 81 days out or 78 days out from the election. So they'll pretend to entertain these talks.

He's going to sell to no one. The Chinese, our superpower as a species is cooperation. European superpower is an appreciation for life and art. American superpower is our optimism. The Chinese superpower is their long-term thinking. And they win here. So you're going to see a bunch of, there's going to be a half a dozen companies, quote unquote, in serious talks to acquire TikTok. TikTok will not be acquired by an American firm. Oh, OK. So they're going to wait them out.

They're going to wait them out. Right. Because, you know, it's still January. He's still. Well, he's still president until January. So he can do things like he can still be do whatever. How is he going to ban TikTok from the United States? And all of that, if you look at the swing states, there's somewhere between one and three million TikTok users in every swing state. Does he really want to cement his position as the boomer? Yeah, the Chinese, I don't think the Chinese are going to blink on this one. Wait it out. Okay. Let me ask you a quick question before we go. The DNC convention, I really loved the roll call. It was charming. It was fantastic. I thought, did you watch it? All the little states doing their little number, the guy from the calamari guys, the guy in Iowa was hysterical. Did you, I like this better. I like these

conventions just like this. I think it's nice, quick and entertaining and fast. What do you think? Yeah, I'm really, I'm really, I mean, it's, it's, it's interesting to see how people are innovating. I thought I, quite frankly, I thought this played pretty well to the Democrats' strengths. I thought some of the speeches felt very cooked and rehearsed. And you obviously don't have the electricity. But just as, you know, we would love to be in some windowless ballroom at an Arizona hotel doing this live, we're doing this. And I thought the DNC, I thought it was very interesting to see the innovation. I was upset that AOC didn't have more time, but look, I thought it was,

I would give them a B plus, but this is a difficult environment to score an A in right now. What did you think? What did you think were the highlights? I thought it was quite good. I like Michelle Obama's total shade. That was a fantastic. When we go high, she goes with a knife to the heart. I thought that she was great. I think certain people shone and others didn't, but nobody was terrible, and that was charming, the way they did it. I think they'll never go back to conventions again. I don't know why you would. Really?

You think this is it? Yes. It was Twitter moments or Instagram moments or whatever. It was very well done. By the way, Karl Rove even complimented that they stayed on message. And, you know, it was already a long infomercial, so this was a really good

infomercial. Like, well done. I like Kasich, too. I think Kasich may be in the cabinet. I think they should have given AOC a lot more time. AOC deserves a lot more time. She's incredibly telegenic and smart and is great in these mediums. And what she says does well on Twitter, et cetera. But I thought Michelle Obama was probably the star of all of it.

And they kept Clinton from talking too much. Anyway, Scott, I think he's gone away again. So we're going to be—goodbye, Scott. I'm here. Oh, there you are. Oh, now I just hear your voice. Oh, my God. It's like a godlike Scott.

I'm much more handsome when it's just my voice. Three down, two to go. Next week's Thunder for China. Gangster Professor Tim Wu. This guy is literally... And there he goes. All right. Right?

You're gone, Scott. Yes, we can't hear you. Cut Scott off. Everybody, thank you so much for coming. We'll be back next week. Thank you everyone who joined us live for Pivot School. Remember that if you pay for a ticket to the live show, Thank you so much for coming. We'll be back next week.