Recap of My Live Q&A With Uber CEO Dara Khosrowshahi

As part of Uber’s new driver app announcement that took place via Live Stream on Tuesday, I was invited to attend the event and sit with Uber’s CEO, Dara Khosrowshahi, afterward to ask a few questions.  Yes, I was as surprised as you are that Uber wanted me, a lowly blogger, to hop up on stage and chat with the CEO, but I was flattered at the opportunity and happy to participate.

There were no restrictions on the questions that I could ask, but unfortunately the Q&A was not live streamed. I have included a summary below though of the questions that I, along with other drivers, asked Dara and a paraphrase of each of his responses.

Before we get into the questions though, obviously there was a ton of hype and excitement around this event. Uber sent messages to drivers about a big ‘global announcement’ via the driver app, and since no Uber CEO has ever participated in any type of driver-focused event like this before, expectations were high.

Many drivers bookmarked this event on their calendar and some even pulled over and took a break from driving just so they could watch. But based on the hundreds of e-mails, comments and messages that came flooding in from drivers afterwards, most were extremely disappointed and upset that the announcement was ‘just a new driver app’.

Here are a few hot takes from some top Youtubers and our Facebook page:


The Rideshare Professor

The Apptrepreneur

Dara’s Keynote – Way Too Much Hype

When I think about the top issues that drivers care about, higher rates, Upfront Pricing, customer support and UberPOOL are at the top of the list. So Dara’s keynote got off to a great start and lines like this rang true to me:

We focused too much on growth and not enough on the people who were driving that growth. We called you partners, but we didn’t really treat you as partners.

He lost some credibility with drivers though by ignoring all of the major issues that drivers care about. Low pay, high expenses and Uber’s growing commission due to upfront pricing are consistently at the top of the list for driver pain points and a new driver app isn’t really what drivers have been asking for. That being said, I do think that it’s a welcome change and will offer some important improvements.

But it was kind of ironic to say that ‘we have been listening to you’ and that’s why we spent the past 18 months developing a new driver app.  I think listening to drivers and working with drivers to build new products in general is a smart move, but they have to be the products that drivers care most about.

You can watch the full keynote here:

My Questions to Dara

(Remember, I’m going to paraphrase the questions and Dara’s answers for clarity as there was often some banter in-between and back and forth for each question)

Harry: How important do you think it is for employees at Uber to actually go out and drive?

Dara: This is definitely important as 90-95% of our employees’ interactions with the Uber app happen from the rider’s side of things since each employee gets a monthly allotment of free ride credits.  We need to create more opportunities, on the product and engineering side, to drive more and get that first-hand experience.

And if we can’t drive more, due to our day job responsibilities, we need to talk more and listen to our drivers.  We need the drivers and riders to be on equal footing and in the past we have spent too much time on the rider’s side.

Harry: What do you think about driver earnings?  I think that’s probably the main thing I hear from drivers: they are not paid enough or they are quitting because they are not making enough money.  Is that something that’s on the roadmap?

DaraI think it’s very important, especially in a growing economy and with gas prices going up.  And we have done some experimentation in some cities around raising the per mile and per minute rate, but any time you do this, you have to be careful because when you raise prices, demand can go down.

But what’s really important is that we balance all this because we don’t always control earnings.  So we have to proceed very carefully when we think about changing time and distance rates, since the more you increase prices, the less demand there will be and then that could cause issues.

But we can’t be religious about that, we have to test things out and see if there are alternative methods or ways to boost income like tipping, for example.

HarrySo what’s the best way to explain that to a driver like me then? Because over the past few years, I’ve seen rates on Uber come down and I’m making less on a trip from Santa Monica to L.A.X. than I used to.

Dara: Really, what we want is for drivers to have less dead time waiting for your next trip, then you can have a win-win or what we call, higher utilization. If we can increase your utilization, then drivers will earn more and we don’t have to increase rates on riders.

Again, we have to be careful because when you raise rates significantly, demand can go down significantly and utilization can go down. So you may be earning more per trip, but you will be actually earning less over a day because you have fewer trips out there.

Harry: Uber gives a large discount to the rider on UberPOOL but it seems like drivers aren’t reaping much of the benefit. They are actually paid less per mile for UberPOOL than they are for regular UberX trips. That seems like an opportunity to actually pay drivers more. What are your thoughts on that?

Dara: Last year we added a pickup fee for the second rider on UberPOOL trips, but really we’re trying to make the experience less hard.  I won’t say pleasant because we know that POOL rides can be tough, but with products like POOL Express, we’re trying to reduce the number of turns you make, and ask the rider to do some walking so the experience for the driver becomes easier.

A big issue with POOL is that we as a company are heavily discounting POOL rides in order to build demand from riders.  We’re essentially subsidizing all POOL rides a LOT since we believe that POOL can eventually be a win-win. If you have two riders in your car, the riders can pay less each and the driver can make more.

Any time you’re building a new product, you have to discount early on to get people to use it and even though we lose a lot of money on POOL rides, we think that it’s going to pay off in the long run by reducing congestion and earning more for drivers.  And ultimately, it will reduce stress as well.

So I would think of POOL as a product early on its lifecycle, we understand it’s difficult and we’re working to make it easier.  And part of that is an increase in demand for POOL, because we think with increased demand, POOL can become a great product.

Driver Questions to Dara

Driver 1: Uber calls drivers ‘partners’ but TK’s (Travis Kalanick’s) vision was driverless cars, what’s your take on that?

Dara: We’re still developing driverless technology and as you know we took a big step back a couple weeks ago. But my view is that eventually, driverless cars are going to become a reality. But as that time approaches, the cost of taking a ride is going to decrease and Uber may become a true alternative to car ownership. Right now, Uber and Lyft only account for less than .5% of the miles driven in the U.S. but we have the potential to be 20-40% of miles driven.

And I strongly believe that some of those miles are going to be automated and some are still going to be driven by people. If you look at other industries, often times, people and machines work together. So in a future, where ridesharing has increased a ton, I think human drivers may still be driving 20-50% of the miles.

But even if it’s only 20%, that 20% is 20 times bigger than what we have today.  So long story short, I think drivers are always going to be part of the equation.

Driver 2: There used to be a program for silver drivers, gold drivers and platinum drivers. And it was an opportunity to make more money by decreasing Uber’s commission. Is something like that coming back?

Dara: I can’t commit to anything yet but we’re definitely looking into it and going to do something about it.  Right now, we don’t do much to help loyal drivers earn more and I belive if we can reward tenure and high ratings, that would be a good thing.

Ratings are important to us, and the number one determinant of our rider experience is how good are drivers are and what kind of service they perform.  So it’s definitely one of our goals to start rewarding tenure and rewarding high ratings in a positive fashion rather than just a negative fashion.  We are absolutely looking into that.

Driver 2: What are you doing about educating riders about the rating system? Because that’s a huge problem. I think they don’t realize that it’s, like — five stars it was just an okay ride and then four stars, I hated your guts.

Dara: We are looking at the fundamentals of the rating system because we’re aware of this problem and want to fix it.  We think there may be more than one way of rating, maybe riders rate you and they rate the car.

So we’re going to look at it and see if we can get more fidelity around the ratings instead of just having a single number.  We know that there’s some work that needs to be done here but the silver/gold/platinum driver issue is something we’re tackling first and then we’re going to look at ratings as well.

Driver 3Can we get stock options before the company goes public?

(This question got a lot of cheering and applause)

Dara: I don’t blame you for wanting stock options and it’s something we’ve talked about. I can’t make any promises but it is something we’ve talked about.

In general though, there’s a bigger theme, which is benefits. Full-time work usually gets you benefits like retirement benefits or health care, or options and I think as we move into a world that is more flexible, it’s not fair to have a society of haves and have nots just because of how you choose to work and whether you need the flexibility or not.

So I think it’s more than just options.  We need to figure out how to give benefits to this incredible community of drivers who help us.  And it’s going to be a tough issue, but it’s something we want to solve over the next five years.

Driver 4: [Holding up an ‘I (heart) Uber’ license plate] Does anyone want to buy this license plate off me?

(this is not a joke, a driver in the audience tried to sell his ‘I (heart) Uber’ license plate – maybe that’s why Uber didn’t want the event livestreamed lol)

Dara: …we’ll see what we can do.

My Impression of Dara

If we separate the botched ‘announcement’ from the actual live event for a moment, I think Uber’s CEO deserves a lot of credit for participating in this event. I don’t think this really came through in the live stream, but you could tell he genuinely wanted to be there at the event, talking with drivers and answering their questions.

The Q&A was only supposed to last 30 minutes, with 10 minutes of questions from me and 20 minutes of questions from drivers, but at the 30 minute mark, Dara was on a roll and kept on taking questions from the audience for another 15 minutes.

After the event was over, I expected him to slip out a back door, but he stuck around and took selfies with drivers, answered drivers’ questions one on one and was pulling in his people to help resolve issues.

I was happy with the questions I asked Dara, but the only thing I regret was not pushing Dara a little harder on his answer to my question about raising rates for drivers.

Dara’s answer that raising rates can affect demand and lower a driver’s utilization has been Uber’s M.O. for years, and I’ve always found it to be a terrible explanation since drivers don’t feel a 7% drop in utilization the same way as seeing the per mile rate go down by 10 cents or the standard trip from downtown to the bars pay them less than it used to.

What I should have asked at that point is why has Uber then raised the booking fee twice in the past year and continues to take more from the fare with upfront pricing if raising rates affects demand so much? But since I was a little nervous (and just plain forgot), I didn’t ask that and we moved on to UberPOOL.

In general, I thought he handled all the other questions well and while I was disappointed that Uber didn’t show our Q&A on the live stream (even though they accidentally teased it), I think it would be a good move to release the footage since we talked about a lot of the issues that drivers care about, and I was surprised by how well Dara answered all of the questions.

Even though he’s only been CEO of the company for 6 months and is working on many different facets of the business (the day before, it had been announced that Uber acquired JUMP for $200 million), he had an intimate knowledge of driver products and features.

My Analysis of the New Driver App

I like the new Uber driver app, but as I mentioned earlier, I don’t think an app redesign was anywhere near the top of the list when it comes to what drivers care about. But if Uber was going to do the Uber driver app anyway, I think this re-design could have been way more meaningful if it was tied to features that would positively impact a driver’s bottom line – like being able to see where a rider is headed.

Imagine Uber releases a new app and drivers can now ‘see where the rider is headed’ upon acceptance two times a day – similar to the destination filter. Well, then this new driver app just became a whole lot more interesting.

The status bar is another missed opportunity for this, since today, more experienced and higher rated drivers are not valued anymore than brand new drivers.  It would have been great if Uber released the status bar and told us that the best drivers would be eligible for inside information, like which areas to avoid (i.e. wherever there are lots of minimum fares) or if they got notifications during the day that told us which areas tend to have long airport rides.

Not only would this help drivers increase their earnings, but it would also give status to these veteran drivers and set goals for the rest of us.

The new Uber driver app is a good thing for drivers, but I suspect that most drivers won’t appreciate all the work that went into creating it and say, next time just pay us more.

PS – The Live Event

Oh, and in case you were wondering what the venue for the live event looked like, here are some pictures.  Uber definitely went all out for the event and had a couple coffee stations, lots of bite-sized breakfast items and around 50-60 Uber employees there for moral support, explaining how the new Uber driver app works and providing general support to drivers (this was a nice touch). It kind of felt like a cool techy iPhone launch event, but the only problem was that the new product was just a pair of headphones and not the actual iPhone.

I talked with a lot of the drivers in attendance and, to be honest, they were pretty psyched to be there. For the drivers in attendance, it was a cool experience to be a part of and having the CEO there definitely made it feel exclusive.  A lot of drivers left the event pretty happy and although I had a feeling what the comments from drivers not in attendance would look like, it was still interesting to see how much disparity there was from drivers who were there vs. not there.

Uber definitely tapped into something with the live event, and I think it was a smashing success for the 200 drivers in attendance, but scaling that to everyone else is going to be the challenge for next time.

Drivers, if you had 10 minutes on stage with Dara, what 3 questions would you have asked him? What do you think about his responses?  Did I ask tough enough questions?

-Harry @ RSG