In the podcast episode of Acquired, hosts Ben Gilbert and David Rosenthal dissect Uber's tumultuous journey, particularly focusing on the events leading up to and surrounding its IPO. They recount Uber's meteoric rise under the aggressive leadership of Travis Kalanick, its innovative disruption of the transportation industry, and its subsequent cultural and legal crises that ultimately led to Kalanick's resignation. With Dara Khosrowshahi stepping in as the new CEO, Uber aimed to rehabilitate its image, address its financial hemorrhaging, and go public. Despite the IPO's lackluster performance, the hosts highlight Uber's potential for growth, especially through its Uber Eats platform, while also acknowledging the challenges it faces in a highly competitive and fragmented global market.
"Welcome to season four, episode six of Acquired, the podcast about technology acquisitions and ipos. I'm Ben Gilbert. I'm David Rosenthal and we are your hosts."
The quote introduces the hosts and the episode, setting the stage for the discussion about Uber's IPO.
"Today we are diving into a company whose epic history is matched only by its epic operating losses, with over 3 billion last year, the largest of any company to ever go public."
This quote highlights Uber's significant financial losses despite its growth and market presence, which is a key point of discussion for the episode.
"So if you like acquired and you want to go deeper on company building topics, you should totally consider becoming an LP yourself."
The quote is a promotion for the podcast's premium content, encouraging listeners to become LPs for in-depth analysis and discussions.
"Pilot both sets up and operates your company's entire financial stack."
This quote explains Pilot's comprehensive financial services, which is relevant for startups looking to focus on their core business.
"Chadbourne, he jumps out of the cab, he runs away, but he's really pissed. And he's not just anybody."
This quote sets the historical context for the regulation of transportation, which is important for understanding the environment in which Uber later emerged.
"And this weird, interesting sort of shadow market develops in cities where these people are no longer regulated."
The quote describes the development of an alternative transportation market, setting the stage for Uber's eventual disruption of the industry.
"They got one big thing wrong, and that was that they worked within the existing system."
This quote explains the critical mistake made by early taxi app companies, which is crucial for understanding why Uber's approach was different and more successful.
"The only way to break the log jam is just kind of with somebody who doesn't know any better."
This quote captures the essence of the entrepreneurial spirit that led to Uber's creation, emphasizing the boldness required to disrupt a long-standing industry.
"He was watching Casino Royale. And there's this scene in Casino Royale where Bond summons his car with his phone. And this has happened in a bunch of Bond movies, but in the casino royale version of this, on his phone, he's watching on the screen, on a map as the car is coming to him."
The quote describes the moment of inspiration for Garrett Camp, which was a key factor in conceiving the idea that would eventually lead to the creation of Uber.
"At this point, he had already flipped the switch in his head to screw this taxi thing. I have a good amount of money. I'm just going to hire a black car whenever I want to go anywhere."
This quote explains Garrett's mindset shift away from taxis and towards private car services, setting the stage for the development of Uber.
"So Garrett was like, you know what? How bad can these guys be? So starts using it a little bit, and he finds they're actually not that bad."
The quote illustrates Garrett's realization that the black car industry was not as bad as its reputation suggested, which led him to consider it a viable alternative to taxis.
"He says, why don't I just put two and two together and build what I saw in the James Bond movie, marry it up with my friends who are the black car drivers and have a private driver service on my phone?"
The quote captures the moment Garrett conceptualized the idea of Uber, merging the cool factor from James Bond with the practical service of black car drivers.
"He says, uber, it means great things. It means greatness. And that's what he decides to call this service, Uber."
This quote reveals the origin of the name Uber, which Garrett associated with excellence and which became the brand's identity.
"His initial idea, though, he's got this network of drivers and he uses this. He has lots of other friends who are part of the kind of new Web 2.0 era entrepreneurs in San Francisco. He thinks they would like to use this too, this private driver network."
The quote outlines Garrett's initial business model for Uber, which included owning and operating a fleet of luxury vehicles for a private driver network.
"Travis is a guy who, right before he officially became the CEO of Uber, he gave a talk on YouTube that we'll link to and actually a couple listeners sent to us, which is really great. And he introduced himself in the talk. As he says, I like to think of myself as the wolf in Pulp Fiction."
This quote provides insight into Travis's personality and self-perception, which influenced his leadership style at Uber.
"The company ends up filing chapter eleven bankruptcy to get rid of the lawsuit, and then the assets of the company get sold out of bankruptcy. So the company is torched."
The quote summarizes the outcome of Travis's first venture, Scour, which faced legal challenges and bankruptcy, setting a precedent for his future endeavors.
"And so he's like, this is all going through his head. He has the black cars. He sees casino Royale. He says, why don't I just put two and two together and build what I saw in the James Bond movie, marry it up with my friends who are the black car drivers and have a private driver service on my phone?"
The quote captures the moment when the Uber concept was further refined, combining practical business considerations with the initial inspiration from James Bond.
"This feels like a quote unquote homecoming for him after his experience at scour. And they had been really careful. And this is another point that has been completely lost in the last couple of years of Uber. They followed the rules."
This quote highlights the legal challenges Uber faced early on and Travis's decision to become CEO, driven by his previous experiences and the opportunity to navigate the regulatory landscape.
"I realized I was more passionate about this company than I was about her. I should probably find someone I like at least as much about my job."
This quote illustrates Travis's intense dedication to Uber, prioritizing it over his personal relationships.
"Because they're the best. It's not even a close call."
Travis's response to why he chose Benchmark highlights his confidence in Benchmark's capabilities as investors.
"If it's a city and it's big, we need to be there yesterday."
This quote captures the urgency and aggressiveness of Uber's expansion philosophy.
"We're a logistics company and...I want stuff brought to me."
Travis's quote reflects his broader vision for Uber, foreshadowing the inception of Uber Eats.
"You know where to come, you know where to find."
This quote implies the strategic foresight and investor relationships that played a role in Uber's fundraising.
"Uber and the regulators trying to shut down Lyft."
This quote indicates the competitive landscape and Uber's efforts to maintain its market position against new entrants like Lyft.
"That we can just blow away our competitors and crush them into oblivion."
This quote reflects Uber's aggressive strategy of outspending competitors to dominate the market.
"If they're just going to be the North American winner in ride-sharing, then they have to be the North American winner in other things."
This quote summarizes the strategic shift Uber had to make in response to the fragmented nature of the global ride-sharing market.
"This continued to be a case HR did not acknowledge. It did everything wrong, and it went up to senior levels of the company who continued to do everything wrong."
The quote highlights the systemic failure of Uber's HR department and senior management to address harassment issues within the company.
"They basically spent, I think it was $650,000,000 to acquire auto. Uber did. And it looked, and probably essentially was that they spent that money to acquire Google. Trade secrets."
This quote suggests that Uber's acquisition of Otto was primarily motivated by obtaining Google's trade secrets rather than Otto's own technology.
"Bloomberg publishes a video that has been leaked, a dash cam video from an Uber driver of Travis in this Uber with probably intoxicated on a night out on the town, getting into an argument with the Uber driver."
The quote describes an incident that further damaged Uber's public image, showing the CEO's disrespectful behavior towards an Uber driver.
"They illegally accessed the woman's medical records, basically stole the woman's medical records, and they wanted to confirm that she was indeed raped because the implication was Uber didn't believe that what she was saying was true."
This quote reveals the unethical lengths Uber went to in order to challenge the victim's claims, demonstrating a lack of empathy and proper conduct.
"On June 11, right after this, the holder report is issued to the Uber board. It's really bad."
The quote indicates the severity of the findings in the Holder Report, which documented extensive issues within Uber's leadership and culture.
"David Bonderman, co-founder of TPG, who is on the board from TPG's investment in Uber, is on stage alongside other board members, including Ariana Huffington, who I believe is the only female board member at this point in time at the company."
The quote sets the scene for a critical board meeting where a sexist comment by a board member highlighted the pervasive cultural issues within Uber.
"So they organize a group of the core investors, core venture investors in the company, benchmark, first round, Menlo, lowercase Capital. And then they get fidelity involved, too. They write a letter. They all sign a letter."
This quote explains the collective action taken by major investors to force a change in leadership at Uber, culminating in the resignation of the CEO.
"And it is Dara Kazrashahi. He had been the CEO of Expedia since 2005 and really is an incredible story and an incredible kind of choice to come out of all of this and lead the company."
The quote expresses the optimism surrounding Dara Khosrowshahi's appointment as CEO, given his successful track record and the fresh perspective he could bring to Uber.
"Uber priced its IPO at $45 a share towards the bottom of the range. Equal to an $82 billion market cap. Open trading today on Friday at $42 a share or a $76 billion market cap."
The quote details the initial public offering of Uber, highlighting the challenges it faced in the market and setting the stage for its future as a publicly-traded company.