Gurley explains Uber was impossible before smartphones due to cost of installing embedded systems in cars.
“You're not going to go install 700 embedded systems designs in every car and the wireless and build the contracts. You're not going to do all that.”
Gurley identifies taxi commissioners and taxi fleets as drivers of all Uber legal issues.
“The predominant driver of most 100% of the legal issues is either a taxi commissioner or a taxi fleet.”
Gurley reports Uber expanded San Francisco's black car fleet from 650 to 850 vehicles.
“When Uber started, there were six fifty licensed black cars in San Francisco. Today, there's eight fifty in San Francisco driving on Uber.”
Gurley observes people routinely eliminating second cars and using Uber for daily transportation instead.
“There are people spending 10 to $15 a year, and I routinely meet people who have gotten rid of a second car and are using Uber in their daily lives.”
Gurley cites D.C. council member whose jailed ex-chief of staff took taxi fleet bribes still deciding regulation.
“C, his former chief of staff is in jail because he took a bribe from the taxi fleet, you know, like two years ago, and he's still on the commission that's deciding these things.”
Gurley cites Morgan Stanley finding that cars are 97% idle despite representing 15% of global capital expenditure.
“There's an interesting thing that Morgan Stanley put out where they calculate that 97% of cars are idle.”
Gurley states Uber has 300,000 drivers globally and is adding 50,000 per month, the fastest job creation he knows.
“There's about 300,000 Uber drivers right now and they're adding it right now at a pace of 50,000 a month. That's on a global basis.”
Gurley argues that for eighty years we grossly underestimated transportation demand by limiting it with taxi medallions.
“The most fascinating thing for me is that for basically eighty years, we grossly underestimated the demand for transportation services. And we limited it at a city government level with the taxi medallion.”
Gurley cites Miami rule requiring two-hour window before car pickup as example of regulation protecting incumbents against Uber.
“So regulation protects the incumbent, it makes it very hard for an entrepreneur to break in, and some of the stuff like Uber saw in Miami, there was a rule that, in several governments they had written rules that you couldn't have a car show up within a two hour window of when it was ordered.”
Gurley reveals five investors including Fidelity felt all Uber constituents were at risk before taking action.
“So people typically say benchmark, but there was five investors, including Fidelity, who felt like all of the constituents at Uber were at risk, if action didn't happen sooner.”
Gurley says Uber's entire stakeholder base was at risk before leadership change.
“We reached a point where we felt like, you know, the entire company, you know, and all of its constituencies, drivers, riders, employees, shareholders, were at risk if the company continued to move in the direction it was.”
Gurley expresses high confidence in Dara's track record addressing Uber's problems.
“the DAR is starting to build up a track record of having put out these fires and and attack these problems.”
Gurley explains Didi's competitive strength internationally could separately impact Uber's valuation.
“Uber also competes with DD internationally. And so whether or not this affects DD's ability to be competitive is a different force that could impact Uber's valuation.”
Gurley discovered Amazon was running same-day delivery experiments through Uber drivers by talking to them as a shareholder.
“And I always talk to them. I always talk to the drivers because I'm a shareholder and I always talk to the drivers.”
Gurley describes Matt Cohler's concept of remote control for your life with Uber as one-click ride example
“And my my partner, Matt Cola, used to call this the remote control for your life. And we would talk about Uber as a one click ride.”
Gurley predicted black car marketplace would work better than taxi due to less friction before finding Uber
“Because there's going to be less friction and we're going to be able to use the tools that entrepreneurs know how to use to be successful.”
Gurley says Uber was already 20x bigger than the San Francisco taxi market when critics valued it at $4 billion.
“in San Francisco, we're already 20 x bigger than the San Francisco taxi market at the time he wrote it.”
Gurley credits Dara with building Uber to $200 billion valuation with over $10 billion annual free cash flow.
“And Dara has done an amazing job. I mean, to take it from there to $200,000,000,000 public company, over 10,000,000,000 a year in free cash flow, like from where we were. Yeah, unbelievable.”
Gurley recalls Travis Kalanick's first two companies ending in bankruptcy or minimal returns before Uber.
“I remember when we did the first Uber investment, Travis, his his first couple of companies, one of them I think ended up in bankruptcy.”
Gurley knew Uber was already 20x bigger than taxi market in San Francisco when professor valued it at $4 billion.
“I already knew in San Francisco that Uber was 20 x bigger than the taxi market. He didn't know that.”
Gurley knew Uber was already 20 times bigger than taxi market in San Francisco contradicting professor's TAM analysis.
“I already knew in San Francisco that Uber was 20 x bigger than the taxi market.”
Gurley notes the professor analyzing Uber admitted he had never used the product, only taxis.
“Not only that. In in the in the report of his, which a summary version got public, but I found the background version, he admits that he had never ridden Uber and only taken taxis.”
Gurley wrote a post debunking an NYU professor's analysis that Uber would never exceed $4 billion in value.
“He published this piece that said Uber would never be worth more than $4,000,000,000 And I wrote one of my favorite blog posts ever titled How to Miss by a Mile, where I took apart his analysis and tried to well, I had a little I had an unfair advantage.”
Gurley notes the NYU professor analyzing Uber had never ridden it and only taken taxis.
“he admits that he had never ridden Uber and only taken taxis. So I think being in New York gave you the exact wrong mindset.”
Gurley wrote How to Miss by a Mile critiquing NYU professor's claim Uber would never exceed $4 billion valuation.
“He published this piece that said Uber would never be worth more than $4,000,000,000 And I wrote one of my favorite blog posts ever titled How to Miss by a Mile, where I took apart his analysis”
Gurley argues dynamic pricing is essential for digital marketplaces and giving it up would be fatal.
“And I knew that if you wanted to create a digital marketplace, you wanna use price to to cause liquidity, to get encourage drivers to come out at the right time, like you'd hate to give up price in a digital marketplace or auction, like you never would.”
Gurley explains dynamic pricing is essential for digital marketplace liquidity and driver supply management.
“I knew that if you wanted to create a digital marketplace, you wanna use price to to cause liquidity, to get encourage drivers to come out at the right time, like you'd hate to give up price in a digital marketplace or auction, like you never would.”
Gurley told partners to pursue any company layering technology on top of black cars before seeing Uber.
“I said to my partners, if we ever see a company that's putting a layer on top of the black cars, we should run at it.”
Gurley cites Uber shifting from burning $2B yearly to generating $10B free cash flow under Dara.
“Dara was able, I mean, Uber was burning 2,000,000,000 a year and Dara had 10,000,000,000 in free cash flow last year.”
Gurley recalls Uber's mega-burn era had no precedent, leaving board with no mentors or case studies.
“You could take the board members from Walmart and Costco and GM and and General Electric or whatever you consider the top 10 best company, and they would have never been in this situation before.”
Gurley cites Uber burning $2B yearly, now generating over $10B in annual free cash flow.
“Uber's a case where we were burning 2,000,000,000 a year and Dara, you know, has it now generating over 10,000,000,000 a year in free cash flow.”
Gurley discovered Amazon was running same-day delivery experiments on top of Uber using burner phones and driver cars.
“And I'm like, what happens at 02:30? He goes, I have to meet at the Amazon warehouse at 02:30.”
Gurley says Uber in San Francisco was 20 times bigger than the taxi market, proving TAM conservatism wrong.
“By the time I wrote that, I already knew that Uber in San Francisco was 20 x bigger than the taxi market in San Francisco.”