- Travis Kalanick, CEO of Uber, speaks at an event and introduces Uber as an app that helps users get a car.
- Uber does not own cars or employ drivers, but connects users with nearby drivers through the app.
- Uber has experienced significant growth and is deployed in 17 cities.
- The average person using Uber pays about $105 per month.
- Uber has faced opposition from established industries, but has improved the lives of drivers and made transportation more efficient for riders.
- Uber's revenue has shown consistent growth and success in multiple cities.

- The speaker discusses the growth and success of Uber in various cities.
- They highlight the importance of liquidity in building a marketplace and how it improves the quality of the experience.
- The speaker mentions the expansion of Uber in Europe and Asia.
- They emphasize the importance of operational expertise in the success of the business.
- The speaker discusses the introduction of low-cost options and how it increases engagement.
- They mention the use of complex mathematical algorithms to improve pickup times and utilization.
- The speaker briefly talks about dynamic pricing and how it is influenced by events and sports games.
- They mention creative marketing strategies, such as distributing roses on Valentine's Day.

- The speaker discusses various innovative marketing strategies used by Uber, such as Ubercade and on-demand food delivery.
- The success of Uber is attributed to the positive impact it has on both riders and drivers, allowing drivers to make a living and invest in their business.
- The speaker highlights the challenges faced by Uber in dealing with regulations and opposition from the taxi industry.
- The speaker emphasizes the need for modern and efficient transportation alternatives in cities.

- Travis Kalanick, CEO of Uber, introduces Uber as an app that connects users with nearby drivers to get a car.
- Uber has experienced significant growth and is available in 17 cities.
- The average Uber user pays about $105 per month.
- Uber has faced opposition from established industries but has improved the lives of drivers and made transportation more efficient for riders.
- Uber's revenue has consistently grown and succeeded in multiple cities.
- The speaker discusses Uber's growth, liquidity, operational expertise, low-cost options, mathematical algorithms, dynamic pricing, and creative marketing strategies.
- The success of Uber is attributed to its positive impact on both riders and drivers.
- Uber faces challenges with regulations and opposition from the taxi industry.
- There is a need for modern and efficient transportation alternatives in cities.

Travis Kalanick, founder of Uber, at Y Combinator Startup School on October 20, 2012. Startup School is YC's free online program for founders. Sign up to access the full curriculum and over $100k in deals! https://www.startupschool.org/

Presented in Stanford Memorial Auditorium by Y Combinator and the Stanford Technology Ventures Program.

My name is Travis Kalanick, co-founder, CEO of Uber.

So I do a lot of speaking because We're a technology company that is, we're in the trenches, we're in the cities.

You know, more than half of our employees are not in San Francisco.

I don't even remember the last time I spoke in San Francisco in front of an audience.

Every time I go to speak somewhere, right, I look, I go on Google and I look at the roads.

I look at cool pictures I can put that are iconic.

And I'm going to speak in Silicon Valley and I'm searching Google images and I can't find anything And so yeah, there you go.

It's good to be here Anyways, I found a little something All right.

So guys I'm guessing most people here at least know what Uber is, but for those of you who don't, I'm gonna go do a sort of a basic tour just really quick.

It's an app on your iPhone that helps you get a car.

And so you open up the app and you see a bunch of cars that are near you.

And this is, of course, all screenshots from your app.

When he arrives, you're told, you're notified.

You can call the driver, of course, and if you're lucky, he'll open the door for you.

When you're done, this is a short trip, $15, that's our minimum in San Francisco.

Of course, we have lower cost options now.

A couple days ago we launched Taxi in San Francisco.

A lot of folks are like, you're doing taxis, you're the anti-taxi, what are you doing?

We know what we're doing, but we'll get to that in just a second.

Launched in June 2010, so We're just over 2 years old.

A lot of people don't know that about us.

They think that we employ lots of drivers.

We have 120 employees, most of which are not in San Francisco.

We actually just soft launched in Sydney a couple days ago.

Hundreds of thousands of hours driven per week.

50% of all the people who have ever ridden on Uber have ridden in the last 30 days.

And remember, when you ride, you're paying.

Think about a commerce site or a commerce app, where 50% of the people who've ever paid, paid in the last 30 days.

Average person is paying about $105 a month.

In San Francisco, it's a bit higher than that.

That's an average over the last now 16, 17 months.

You go, okay, well, if you start really low, then you can grow really big.

But we were pretty big 12 months ago, and if you do 26% month over month growth, that means in 12 months you're 16 times bigger than you were 12 months ago.

So we're growing fast, and in fact, September over August was 29% month over month.

So I'm gonna tell a little bit about our background, and then hopefully if I have enough time, get into some of the regulatory stuff, which I know none of you guys want to hear about.

So this, you can't see really well because of all the lights, but it's a romantic shot in front of the Eiffel Tower between, with me and my co-founder, Garrett Camp.

It was in Paris at Le Web where we came up with this idea.

Essentially, he said, look, I just wanna push a button and get a ride, and let's make it a classy ride.

Paris, in many ways, is a sister city of San Francisco.

I'm not sure if you guys have ever done that, but some people actually put their arm out to get a cab.

It's a weird thing, but this is what we used to see in San Francisco, I went through that.

When we first started actually, it wasn't about taking over the world.

It wasn't about taking on corruption in every city around the world.

It was actually just about being baller in San Francisco.

And the only way to do it, the original idea was let's go buy 10 S-classes, let's hire 20 drivers, and let's get a parking garage.

And I'm like, Garrett, we're not buying any cars, dude.

And we're not signing any lease on a parking garage.

But the idea of pushing a button and getting a ride in within minutes was a magical 1.

And at the beginning, it was a lifestyle thing.

It was S Classes for us and our 100 friends.

In order to use the app, anybody could download it, but in order to use it, you had to have a special code that I gave you.

And pretty soon the inbox was just getting full of people who wanted the code because our friends were telling their friends and then, you know, I searched on Google Images, this is my favorite thing, explosive viral growth on the internet and there you go.

You can see much more of what's going on today, but I can't show you the new version of God view.

But this is a screenshot of a Friday night very soon after we launched, maybe a few weeks or something like that.

We had 4 trips going on at the same time.

We got a dispatch, the green line at the top there, that's a dispatch.

He shouldn't have his arm up, but he does.

But he's got a little briefcase, which is cool.

That's Friday night early on, and now this is 5 AM on a Monday.

The eyeballs, by the way, you see some eyeballs every once in a while in there.

Remember, we're a logistics company, or what I'd call, we were building an urban logistics fabric.

So when you do something successful, not everybody's happy.

And the older the industry you're tackling, the more Protected it is by government or by corruption or by both, the more they're going to be upset about what you do.

We're making drivers' lives a hell of a lot better.

They're living their American dream, and Uber's helping them do that.

Riders are getting around town much more efficiently.

I'm not sure who hurts from this, other than a particular incumbent industry, which I won't mention.

Look, when I'm having a bad day, I just go to our overall revenue graph.

If you take that image and you flip it, it's like a smile.

Okay Look, we launched in Sanford Oh, by the way So this this is what?

26% month-over-month growth looks like and man a lot of times when I show this when I when I do presentations in cities We every time we launch in a city, we do this big launch event, sort of have some high rollers, and people who really make the city move, we sort of pay our respects to that city and do a really nice dinner.

And these folks are always leaning to the left, looking for the access.

When we first launched, first of all, a lot of people go, wow, it's successful, it's so obvious.

I call it the palm to forehead moment when they learn about Uber.

They're like, I had this idea, or I should have had this idea.

When we first launched, guys, it wasn't easy getting our angel around.

But it took off, like I said, and so 1 of the interesting things before we went to our series A Or sorry, this is actually before our series B here Which we did in November of last year was is this a one-hit wonder or not?

Is this only gonna work in San Francisco because it's so screwed up.

And so we started launching in other cities and this is a revenue chart on a weekly, it's a weekly window, or what you could think of as like almost a moving average.

The brown is Seattle and the green there is Chicago.

This was like sort of the first 100 days.

But what we found is that every city we were rolling out, just, hey, we didn't know if it was going to work.

Every city we were rolling out got progressively better.

Our operations side of the house got very efficient.

And then the technology and the number of people who knew about us when we go in.

We went into New York, we had 1,000 people with credit cards on file without a car on the ground.

So this wasn't a one-hit wonder, and so we just started launching a ton of cities.

Remember, as liquidity goes up, this is people in the marketplace who are building a marketplace know what liquidity means.

It means demand and supply go up together.

If they don't, you don't have a marketplace.

In our world, as liquidity goes up, the quality of the experience goes up, and dramatically, right?

So our average pickup times in San Francisco are 2 minutes and 45 seconds.

When we first started in New York, we were like 12-minute average pickup times, and let me tell you, you don't want to be delivering 12 minute pick up times to New Yorkers.

So as it gets better, now we're right around 5 minutes in New York and that's kind of when they lose their minds.

As more people use it, you go from the core user base to bigger, the engagement actually gets deeper.

The number of rides per rider per month actually go up as we expand.

This is a cool cohort graph, but who cares?

The bottom line is that 50% of the people who have ever used still use, and we've seen that from the beginning.

So we're getting, there's lots of town cars in San Francisco, right?

The number of town cars that there were in San Francisco before we got there was 600.

There are now more cars dedicated to Uber than there were town cars in San Francisco when we got there.

And so you're like, well, this thing's going to slow down.

This train's going to slow down at some point.

We indexed San Francisco revenue from last year, July 1st, through the end of the year, and looked at this year, July 1st, to where we are now.

And when you're talking about for a particular city, 20% month over month, that's really big growth, especially when the numbers are getting big.

So on the operations side, I think a lot of us are techies.

But when you're on the ground, when your technology touches people and it touches cities, What you have to do is have process managers.

Process managers are similar to product managers.

They manage the process that people do versus machines.

And the roadmap for product has to dovetail with the roadmap for process, because any time we change anything that happens in a car, that's got to change the tech and vice versa.

So there's really interesting roadmapping processes that we go through.

This is supposed to be a picture of Europe.

We're rolling out very big in Europe right now.

So getting the operational expertise, and I think this just isn't talked a lot about in startups, is the operation side of the business.

I think a lot of e-commerce companies see that.

We see it on a very deep level because the rubber's actually meeting the road.

But getting teams ready to roll out in Europe is something we've been spending time.

Like I said, we're going to be in Amsterdam very soon.

And there's a whole host of other cities that are lined up in Europe, and that's going to be a big push end of this year all the way into the first half of next year.

And Sydney's sort of our first city in Asia pack.

And I can't wait to go to the launch party.

And everybody goes, wow, I'm going to do a low-cost Uber.

That decide they're going to be a low-cost Uber, and they clone our app.

They flatter us by basically stealing all the pixels and copying them over to their app.

Uber, FYI, Uber's gonna be a low-cost Uber.

But it's about quality and choice, and what we see when we roll out a low-cost option, what we see is that, actually, engagement gets deeper because people have choice.

They don't have to always get the expensive thing.

People who maybe wouldn't start with the black car products start with taxi or what we call UberX.

And then it's date night and they want to improve, you know, they want to impress their lady or they just need a comfortable ride and it it goes from there, so This was a well choice a beautiful thing.

Let's keep moving Taxi we did in Chicago in April We now have a few cities.

We're in Boston, Toronto, Chicago, San Francisco.

We were in New York, but we're not anymore.

We did Uber X, which is sort of like a low-end Uber, and we did this in July in San Francisco and New York, and that's where it's basically 30% cheaper, all hybrid fleet, At least in SF, we're starting to diversify a little bit out of hybrids because we can't get the partners to buy cars fast enough.

But the thing is, is you push a button and a car appears in 5 minutes, and that feels magical.

But how you make that happen is actually very complex.

I like to tell them, I say, look, guys, you're in charge of our margins.

Because they need to get the pickup times really low, but the utilization really high.

Well, you do that through a lot of math, but let's start with our math department.

But we have 2 nuclear physicists on staff, a computational neuroscientist, a machine learning expert, and a few other guys, they're killing it.

And some of the things they do, they do demand prediction, congestion prediction, supply matching, supply positioning, smart dispatch algorithms, dynamic pricing.

Friday and Saturday night are special nights.

We sometimes get really big waves of demand that you can't really get enough cars to do anything about, so you have a marketplace-oriented sort of dynamic pricing element that clears the market.

It gets more cars on the road and sort of lassos in sort of uncontrollable demand.

You can't see these pictures really well because of the lights, but they're pretty.

This is DC right here, but you guys probably can't see it.

So in our company, when math goes operational, that becomes...

We have a heat map of demand, but basically we're predicting demand 20 minutes ahead of time.

The problem is that if I gave the heat map to drivers, they'll all go to the same spot.

And then that'll be bad for a lot of people who aren't in that hot spot.

So what we do is we say, here's the heat map of demand, our prediction for 20 minutes ahead of time.

What's left over is residual heat, underserved demand.

And we do that on a neighborhood-by-neighborhood basis.

The math is very tricky and complex and computationally intensive.

But that gives you a sense of some of the things we do.

You don't see it because once you get in the car, he's on trip and he doesn't see that map anymore.

I talked a little bit about that already.

We have 1 of our nuclear physicist guys is a big San Francisco Giants fan.

Clearly, we have to look at events in the city because that affects demand in a big way.

When the Giants play, of course demand is huge.

When the Giants win, it's much huger than when they lose.

Because people want to go out in style, you know?

They want to go to the bars, they're just feeling good.

Actually, what's interesting is in Boston, when they lose, when the Red Sox lose, we actually have bigger demand.

But basically, that huge uptick in demand when the San Francisco Giants win starts about 3 hours before the game begins.

Uber Vegas is going to take on a whole new meaning.

So I'm going to really speed through here.

And this sucks because there's so much cool regulatory stuff I could have talked about.

But giving riders high fives, look, transportation is thought of as a boring space, it's boring.

Well, until you push a button and a car magically appears.

But we basically have lots of people who love us and how do we get them to tell that story over and over again?

Give them an excuse to tell the Uber story.

I think a lot of you guys have seen that.

But look, Valentine's Day, we distribute tens of thousands of roses to thousands of drivers.

On President's Day in DC, we did what we call an Ubercade.

Okay, Escalade, town car, escalade, American flags all the way down.

1 out of every 20 people that push the button, an Ubercade rolls up.

The driver has an earpiece that makes him look like Secret Service.

And as you're driving through town, kids are like waving.

We got pedicabs, because you don't do a town car in South by, that's just douchey, like don't do that.

So we did that, That's cool, 100 pedicabs, you push a button, pedicab takes you where we want to go.

But we took 10 of those pedicabs and we outfitted them with these containers that could hold Texas barbecue.

So we did on-demand Texas barbecue, you push the button, and a cow would come to you on the mat.

We did ice cream in July, and every time we roll out a city, we do what's called rider 0, the first person to get in an Uber when we soft launch.

This used to be an organic thing that just happened, and then my city team started getting excited about it.

This is Edward Norton taking the first Uber in Los Angeles to go surfing.

So we give riders high fives, but we give drivers hugs.

And that's because, look, the riders, you know, date night goes well, they get to their business meeting on time, or they're not stranded a certain part of town, but For a driver who's scrapping who maybe has a few hours in the morning and 1 or 2 hours in the evening or in the afternoon booked filling out that time with a consistent revenue stream helps him make ends meet.

And so you go from just barely making ends meet to really making a living and then investing in your business.

We have drivers who've gone from 1 car to 15.

Each of those cars grossing more than a hundred grand a year.

So these guys are living their American dream.

He actually was hustling 1 of our engineers early on.

Our engineers were getting unlimited Uber.

He's the highest performing driver on the system.

He makes 20% to 30% more per hour, most productive driver on the system, than all the other drivers.

We still haven't figured out how he does what he does.

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Travis Kalanick at Startup School 2012