DLD Conference 2015 by Travis Kalanick

As the saying goes, ‘change is the only constant,’ and that’s something Travis Kalanick, then CEO of Uber, made very clear in his address at the DLD Conference in 2015.

You’d have found yourself riveted as he laid out his vision for the future of transportation, discussed Uber’s commitment to job creation, and addressed the thorny issue of surge pricing.

However, it’s his hints at a partnership with Daimler to develop autonomous cars that may have truly piqued your interest.

Are you curious to explore what this could mean for the future of urban transportation?

Background

At the DLD (Digital-Life-Design) Conference in 2015, Travis Kalanick, the co-founder and then-CEO of Uber, shared insights into the journey of Uber, from its inception to its status as a disruptive force in the transportation industry. Kalanick discussed the challenges and triumphs of pioneering the ride-sharing model, emphasizing how Uber leveraged technology to provide a convenient, efficient, and innovative service that transformed how people move around cities worldwide.

Kalanick’s presentation highlighted the importance of adaptability and resilience in the face of regulatory hurdles and market challenges. He spoke about the power of the sharing economy to make transportation more accessible, reduce traffic congestion, and lower carbon emissions. Moreover, Kalanick addressed the future of urban mobility, including the potential for autonomous vehicles and the continued expansion of ride-sharing services to improve urban living.

His talk at the DLD Conference provided valuable lessons on entrepreneurship, innovation, and the impact of technology on traditional industries. Kalanick’s vision for Uber was not just about changing the way people use transportation but also about rethinking the possibilities of the digital economy to solve real-world problems. The presentation shed light on the broader implications of ride-sharing for future urban development and the global economy, underscoring the role of startups in driving societal progress.

Key Takeaways

Here are 4 key takeaways from Travis Kalanick at DLD 2015 highlight innovation, entrepreneurship, and the challenges and rewards of disrupting traditional industries:

• Travis Kalanick unveiled a robust strategy for Uber in 2015, pledging to create 50,000 European jobs and building partnerships with EU cities.
• Uber emphasized its commitment to passenger safety and aimed to take 400,000 cars off European roads, contributing to reducing carbon emissions.
• Despite facing regulatory hurdles and legal challenges, Uber promoted ride-sharing to reduce congestion and pollution and integrated with public transit for a seamless transportation network.
• Travis Kalanick emphasized the necessity of robust partnerships, unwavering commitment to passenger safety, recognition of challenges, and a desire for a more diplomatic tone in refining Uber’s strategy.

Story

Travis Kalanick’s journey from frustration to innovation with Uber showcases how solving a simple problem—hailing a cab—can revolutionize an industry. This story highlights the power of serendipity, the efficiency of a well-oiled business model, and the challenges of navigating regulatory landscapes.

It’s a testament to looking at everyday issues as opportunities for monumental change, offering a blueprint for aspiring entrepreneurs on turning common grievances into global solutions. Let’s delve into it:

The Genesis of Uber

When Travis Kalanick and his co-founders embarked on the journey that led to Uber’s creation, they were motivated by a simple yet common frustration: the difficulty of hailing a cab in Paris. This story is a classic example of how addressing a personal need can lay the groundwork for revolutionizing an entire industry. Kalanick’s recount of Uber’s early days serves as a testament to the power of serendipity in the innovation process.

What began as a quest for a more convenient way to get around one city uncovered a universal demand for better transportation options. This narrative underlines the notion that significant innovations often stem from the pursuit of solutions to specific, personal challenges. The genesis of Uber reminds aspiring entrepreneurs and innovators that groundbreaking ideas can originate from the most mundane of problems.

It emphasizes the importance of observation, the willingness to tackle inconveniences head-on, and the vision to see beyond the immediate context. Kalanick’s story inspires future generations to look at everyday frustrations not as nuisances, but as opportunities to create something transformative that has the potential to impact the globe.

The Virtuous Cycle of Efficiency

Uber’s business model, as described by Kalanick, epitomizes a virtuous cycle of efficiency that has been pivotal to its success. This cycle begins with increasing ridership, which attracts more drivers to the platform. As the number of drivers grows, wait times and costs for users decrease, making the service more attractive to an even broader user base.

This efficiency doesn’t just enhance user experience; it’s a key driver of Uber’s rapid growth and widespread acceptance. Kalanick’s insights into this cycle reveal the core principles of supply and demand that underpin Uber’s operation. It also highlights how technology can optimize these dynamics to create a more efficient and accessible service.

This narrative offers valuable lessons in economics and business strategy, demonstrating how focusing on operational efficiency can lead to mutual benefits for both providers and consumers. For entrepreneurs, this virtuous cycle presents a blueprint for building scalable and sustainable business models that leverage technology to continuously improve service delivery and drive growth.

The Challenge of Regulatory Adaptation

Kalanick’s reflection on the regulatory challenges faced by Uber touches on a critical aspect of technological innovation: the tension between new business models and existing regulatory frameworks. This challenge is not unique to Uber but is a common hurdle for disruptors seeking to introduce novel solutions in markets governed by outdated regulations.

Kalanick’s experiences underscore the importance of engaging with policymakers, educating stakeholders, and advocating for regulations that both protect consumers and allow innovation to flourish. The journey of regulatory adaptation is fraught with obstacles, from resistance by traditional industry players to legal battles across various jurisdictions. However, it also offers opportunities for dialogue and collaboration that can lead to more inclusive and forward-thinking regulatory environments.

This aspect of Uber’s story highlights the broader implications of technological advances on society and the economy, emphasizing the need for a balanced approach that recognizes the benefits of innovation while addressing legitimate concerns. Kalanick’s narrative on navigating regulatory challenges provides a roadmap for future innovators on the importance of persistence, communication, and strategic thinking in overcoming the obstacles that lie in the path of bringing transformative solutions to market.

Learnings

In Travis Kalanick’s DLD 2015 Conference, there are 3 key learnings. Let’s delve into each:

Fostering Innovation within Urban Ecosystems

Uber’s trajectory provides key insights into the integration of technological solutions within city environments, underscoring the transformative potential of such innovations:

• Encouraging technological solutions: Highlights the importance of supporting innovations tailored to urban challenges, showcasing how technology can significantly alter the urban landscape to meet contemporary needs.
• Adapting to changing urban needs: Reflects on Uber’s ability to evolve in response to the fluid nature of urban mobility demands, stressing the necessity for services to remain adaptable and forward-thinking.
• Integrating services with urban infrastructure: Points to Uber’s efforts to complement existing public transport systems, emphasizing the importance of cohesive planning that incorporates new mobility solutions into the broader urban infrastructure for enhanced city living.

These lessons underline the value of embracing technology-driven solutions to address and adapt to the complexities of urban environments, promoting a more integrated and efficient urban ecosystem.

Economic Empowerment through Mobility Solutions

Uber’s model illustrates the economic benefits that innovative mobility solutions can bring to individuals and local economies:

• Job creation: Demonstrates Uber’s role in fostering employment, highlighting the broader potential of digital platforms to stimulate job growth and contribute to economic vitality.
• Entrepreneurial opportunities for drivers: Showcases the platform’s provision of flexible work options, offering drivers a pathway to entrepreneurship within the urban mobility landscape.
• Impact on local economies: Suggests that by reducing dependence on personal vehicle ownership, Uber may help divert consumer spending towards other sectors, thereby supporting diverse economic activities.

This perspective showcases the multifaceted economic advantages of modern mobility solutions, from job creation and entrepreneurial opportunities to broader impacts on local economic health.

Navigating Regulatory Landscapes for Sustainable Growth

Uber’s experience emphasizes the importance of constructive engagement with regulatory frameworks to ensure the sustainable growth of innovative services:

• Engagement with regulatory bodies: Underscores the need for continuous interaction between technology companies and regulatory entities to cultivate an innovation-friendly regulatory environment.
• Advocating for modernized regulations: Highlights the push for regulatory updates that accurately reflect new technological advancements and their societal benefits, advocating for regulations that support sustainable service integration.
• Balancing innovation with public safety and welfare: Points to the essential balance required between fostering technological innovation and safeguarding public safety, security, and welfare through thoughtful regulatory measures.

This analysis illustrates the critical role of regulatory engagement and adaptation in facilitating the sustainable introduction and growth of innovative technologies and services within public spheres, ensuring that advancements align with societal well-being and safety.

Travis Kalanick’s DLD 2015 Conference Speech

All right, well, it’s very good to be here in Germany, and it’s my first time here at DLD. What I wanted to do is first take you through a little bit about who we are and a little bit about how we look at 2015 and how we look at 2015 in Europe.

So, first, Uber started very much as an unambitious, simple idea. Actually, my co-founder and I were in Paris, and we wanted to get a taxi ride. I think a lot of folks know it can be pretty difficult to get a taxi ride in Paris. And so, we just were at a cafe late at night and said, “We just wanted to push a button and get a ride.” It was really that simple. And we went back to San Francisco, a place where it’s very difficult to get a taxi as well, maybe a sister city in that regard, and we started up essentially a side project which we called Uber. It started out for me, my co-founder, and a hundred of our friends.

It wasn’t meant to be a big business; it was just a way for us to get around the city. And for us, it meant no more driving, no more looking for parking in a city that didn’t have a lot. It meant that when we were in a car, we could work or talk to friends and family. We had the credit card on file, and so I didn’t have to get the wallet out when I left the car; I just walk out. There’s no cash, and you’d get to your destination, walk out of the car, and of course, you rate the driver on a five-star basis, which allows us to make sure that there’s a service level that’s being delivered and sort of accountability for the driver side of the equation.

And so, what happened was it started out for a hundred of our friends, and it just turned out that everybody in our city wanted it. And so we opened it up. What happened was I would get a car, and of course, somebody else would request somewhere else in the city, and then they would get picked up by that same car. In fact, you’d have one car essentially being shared across dozens of people in a single day. And so, more riders ultimately meant more cars, and more cars meant lower pickup times.

And of course, when you have low pickup times, then that means that drivers are wasting less time going to pick people up, which means they can do more trips per hour. More trips per hour then means the drivers can make more money; it also means you can get prices down. And so, it started this virtuous cycle where we are constantly looking for more efficiencies in the system, and with those efficiencies, finding ways to allow drivers to make a higher income and also bring the prices down of this core service.

And so, we would do all kinds of things for efficiency. We predict where demand was going to be and we give cues to the drivers, essentially heatmaps, for how to go where demand is going to be in the next 15 minutes. Those again leading to more trips per hour, and this virtuous cycle just kind of keeps spinning. And with recent innovations, something some of you may have heard of, we have in San Francisco, we also have in Paris and New York, it’s a service called UberPool, which means you push a button, and an Uber comes just like it did before, but when you open the door to get in, there’s somebody else in the car already.

We have so many users in certain cities, so many riders, that two people are literally taking the same trip at the same time. And in a previous world, that’s two cars with two separate people in them, taking up twice as much space when you could actually take up half as much. And so, we have these really interesting visions for, well, when that gets really efficient. Of course, what’s happening is you’re taking cars off the road, you’re certainly taking cars out of parking lots, and you’re making a huge difference in the city.

We have this thing we call the perpetual ride, where a driver picks up one customer, then picks up another, drops one of them off, then picks up another. And what happens is that driver always has a customer in the car. It’s sort of like almost like a private, a private bus-type service, but on-demand and hyper-convenient, taking, picking you up exactly where you are and taking you directly to where you want to go.

If you can get 10 people trips on this perpetual ride, this UberPool ride, and the driver needs to make 25 euros an hour, you’re now looking at a situation where each person trip costs two euros and fifty cents. And that’s sort of the vision of where Uber wants to go, is to get such huge efficiencies that the price of getting around goes far below the cost of owning a car.

So, Uber is known for its reliability; sometimes it’s even known for being expensive or high-end. We certainly have high-end options, but, of course, we have low-end options. And the way we look at what we do is, we are the cheapest reliable ride, always. And the key there is reliable because you can always have a cheap ride; you can sell a ride for half as much, but if you can’t get one, it doesn’t really matter. And so our philosophy is to always have an available ride to somebody who wants it.

Our mission, we like to say, is transportation as reliable as running water, everywhere, for everyone.

So, where does that vision or that mission go? It means that our customers, anywhere in a city, have a ride that’s within five minutes. But it means any city in the world. Today, almost 270 of them, and it becomes ultimately that cost-effective replacement for owning a car.

Now, why does this sort of accidental breakthrough from something that was just a side project, why does it matter? It matters because, in today’s world, well, around the world, there are over a billion cars out there. A billion cars that are 96% unutilized, right? Meaning, maybe you are in your car for an hour a day; the other 23 hours, it’s sitting there, doing nothing. Which means, of course, we have this huge infrastructure for storing this highly unutilized asset.

Those billion cars, by the way, is twenty trillion dollars of an asset distributed around the world, 350 million in Europe, and 50 million here in Germany. We use 15% of our city space to store these vehicles. We have buildings specifically designed for the storage of this unutilized asset. And of course, like I described earlier, without an UberPool-type mechanism, these assets are poorly organized and poorly allocated. They’re not shared; they’re inefficiently routed. And of course, 2% of your life is spent sitting in one of these metal boxes, sitting in traffic.

And so, of course, that inefficiency also leads to a massive carbon footprint that we all are going to have to live with, our children and grandchildren as well. And then there are things, you know, simple things, but things that matter, like drinking and driving being a major problem in world cities. When everybody owns a car and they feel like they have to drive everywhere because that’s how it is, that’s how many cities in the world work, and people drink and they drive, and accidents happen, and it’s not necessary.

And so, this car replacement story that I alluded to earlier, it’s not just a vision or a dream; it’s something that’s actually taking place today, and it’s amazing to see it sort of coming to, you know, sort of being realized. In San Francisco, we launched the whole company four and a half years ago, June 2010, so four and a half years old. We have 1.6 million people who’ve ever ridden an Uber in San Francisco. The equivalent, remember, we have people who are driving on the Uber platform full-time. We have people who are driving on the Uber platform for five hours a week or 10 hours a week.

The equivalent full-time jobs that we’ve created in San Francisco is 7,500. In New York City, we’ve been there three and a half years. We’ve seen 1.9 million riders, and the equivalent full-time jobs that we’ve created in three and a half years is 13,750. In London, we’ve seen massive growth; it’s been two and a half years. We’ve seen a million riders or close to it and supporting 7,800 full-time jobs. In Paris, three years, 500,000 riders, and 3,700 jobs.

You say, well, that’s amazing growth; those are substantial numbers. But what happens when we continue to grow? San Francisco right now is growing 3x year-over-year. New York City, 4x year-over-year. London, 5x, 6x year-over-year. And so, what happens in the coming years? How many jobs, how many unemployed and underemployed people can come onto this platform and find a way to make a living, to be part of an Economic Opportunity, which is not just, of course, putting food on the table for their family but making their city better at the same time?

And so, in Paris, it’s a great example where, you know, it’s not just about getting people where they want when they want. It also is an incredibly good complement for existing transport options. So, in Paris, the Metro, of course, is everywhere in Paris, but 15% of all of our rides either pick up or drop off more than a kilometer away from where the metro stops. And so, what that

means is, by complementing the existing infrastructure that’s in place, we’re actually extending the ability for public transportation or mass transit to serve people.

And so, with this success we’ve seen in many cities, just four of dozens of examples, or even hundreds, we can go to any mayor in any city, maybe we want to partner with that mayor, maybe we’re not in that city yet, and we can say, look, if we can find a way to partner up and find a regulatory framework that works for making this a reality, we can promise you 10,000 jobs in four years. And the vision for what that means in six years or 10 years, you’re talking about tens of thousands of jobs. You’re talking about reduced congestion, of course, reduced pressure on parking, more efficiency on your existing mass transit options. See, we’re starting to hit that inflection point at a certain size where the impact that we can bring to cities is huge, and we have proof points that we can talk to these mayors about.

And so, for us, it’s like, well, why not? Why aren’t we in every city? Why are there certain cities that it just doesn’t quite work out? Well, it starts with all transportation rules that are governing essentially an analog economy. Right, it’s easy to sort of flippantly say something negative, let’s say, about a particular law that is keeping progress from happening, but there are a number of them that serve their purpose in a world where you get into a taxi, and there’s no technology. You have a random person getting into a random person’s car, and it’s important to protect that person’s safety. And so, what did you have? You had color schemes on taxis so they’re identifiable. You knew that it was a legitimate taxi for that city. You had meters in the car so that you knew what you were going to pay when you finish that ride.

But what happens when you have new technology? When you have new technology, these rules maybe don’t make as much sense. But in addition to those old analog rules that did have a purpose, what we’ve seen over decades is that there’s been almost like a regulatory capture. There’s been a situation where we had a good set of rules that protected people, but then a whole new set of rules which protected an industry. For example, in New York City, there are 13,000, there were 13,000, 250 taxis in the 1950s. We are now 60 years later, and there are 13,000, 250 taxis in New York. How did that happen?

It happened because the existing incumbent industry made sure it did. They wanted to create a sort of artificial scarcity. What it means is that the average driver who wants to make a living can’t go do so on his own. He has to ask for permission. And when he asks for permission, the taxi company says, sure, it’ll cost you one hundred and forty dollars a day. What that means is that a driver spends $40,000 renting a car every year. He should be driving around in a Bentley. But for that privilege of spending 40 grand a year, he gets to be impoverished. And that is the taxi industry that exists, and not just cities in the US but cities around the world.

We have other kinds of rules. There’s a rule here in Germany called return to garage. So if you’re familiar with a black car service or a chauffeured service, technically, that driver, let’s say you call him up, and he’s supposed to come pick you up, that driver has to go back to his garage and park, and then come back to you to pick you up. That is what the law says. We have one or two cease-and-desist that mention this rule.

In France, there was a decree that came down; it was what was called the 15-minute rule. So, if you requested a car, whether it be on an app or a phone, and the car came in just a few minutes, there was a 15-minute rule that said you could not enter that vehicle until 15 minutes had passed. Why do these rules exist? They exist because the existing taxi industry is trying to protect itself through, let’s call it, regulatory capture or legislative capture.

One of my most favorite rules, and I’ll get moving, is in South Korea. Chauffeured car service in South Korea is totally legal, as long as the passenger is not Korean. So, if you are Japanese and you are in South Korea, you can take chauffeured limo service all day long. You are obeying the law. But if you are South Korean, it is illegal for you to have a nice ride that you pay a fair price for.

So, in many cities, the job of driving for a living has become a protected monopoly. Right, a protected monopoly means there are

more cars on the road, more traffic, higher unemployment, and a bigger carbon footprint. It’s not serving the city; it’s not serving its citizens; it’s serving a few people who own the incumbent industry.

And so, when new technology comes out, that means new rules are necessary. Mobile tech and GPS tracking mean we don’t have to hail a car anymore. There’s no longer a situation where an anonymous person is getting into another anonymous person’s car. You have a service in the middle, an app, an app like Uber, and there are, of course, competitors that sit in between, branded services that sit in between the rider and the driver that now can be accountable to both. But that doesn’t mean that we just enter a world where there’s no regulation at all. I think, in fact, though the old rules don’t work, the policy principles that drive these rules are the same.

One, you want to safeguard Rider and Driver Safety. Two, promote choice and competition so that consumers are served. Three, encourage economic growth and tax revenue. If you accomplish those three things, I think most of us would agree that you have a good regulatory framework.

And so, what are the regulations that align with these principles? I mean, we have gone to cities around the world, in fact, you know, spent a lot of 2014 working with cities around the world to make this a reality. Background checks, for instance, in the U.S., we have national background checks, City County background checks, motor vehicle record check, basically zero tolerance for any drug or alcohol offense, reckless driving, or any felony at all.

Insurance, you want to make sure that in any case, the driver and the rider feel protected, no matter what happens. Coverage is important to make sure that we have coverage that goes beyond what is required for private cars. This is something, of course, we promise all our users, but something that is important for a regulatory regime to also codify.

Choice and competition, choice, allow platforms to connect a consumer to any transportation provider at different price points, not just a taxi. Give drivers the freedom to choose multiple platforms to make a living. A lot of times, drivers are locked into one platform, and when that happens, let’s say it’s the taxi industry that exists today, those drivers get screwed over. They just don’t make what I would call a living wage. They don’t make enough money.

Economic growth, abolish limits on the number of transportation jobs. Like I said, in New York, it’s not just in New York; it’s in most cities around the world. They’ve literally limited the number of jobs that can be created by the transportation industry so that they can have this asset that’s worth a ton of money. Streamline Licensing processes so somebody who’s underemployed or unemployed can quickly get into that industry and be productive, for professional drivers but also for those who want to drive maybe just a few hours a day, maybe this is supplemental income.

And on the tax side, bring the underground transportation economy, right, when you go and pay a taxi in cash, drivers are happy to take cash. It seems like these credit card systems don’t work a lot of times. I’m not sure why, but it’s because it’s an off-the-grid industry. But once Uber goes into a city, it’s now on the grid. And so, we can partner with tax authorities to increase providers’ compliance, those transportation providers, and increase overall tax revenue.

So, where are we today? So, I sort of alluded to where we were in the U.S. in 2014, and this might come as a surprise for some of you, but in 2014, we worked with 22 different jurisdictions to pass laws regulating ride-sharing. In the last year, now, the U.S. is a little bit ahead of some of our other efforts internationally because, well, of course, we started in the U.S., but our international efforts aren’t that far behind. And I think in Europe, we really want to make that the 2015 effort.

So, today in Europe, we have strong consumer adoption in many cities in the EU. We talked about Paris and London, of course, but in the Netherlands, Sweden, in Belgium, we also have growing businesses. Of course, we have challenges from incumbents. You may have read about them, France, Spain, Germany. Incumbents often are going, taking legal means to try to slow down progress. Competition authorities, however, across the EU, have spoken out, urging to repeal anti-competitive laws and regulations.

These are competition authorities from France, from Italy, Germany, Spain, the Netherlands, etc. And that’s important to know because they see the rules that are out there that are keeping progress from happening, and they know that it’s not good for the consumer, and it’s not good for the cities themselves. And it’s good for,

obviously, for us, and I think for the cities, for these authorities to speak out.

And so, progressive legislation is now being considered. Well, we’ve got legislation being considered in the Netherlands, in Brussels, and Helsinki. Of course, we’d like to see it in a few more places.

And so, my main message today is this is that in 2015, we want to make 2015 the year where we establish a new partnership with EU cities, where we push for progressive regulations that ensure innovation and help build the smart cities of tomorrow, some of which I’ve outlined earlier, where we promote core city functions through partnerships on data and technology, and where we provide massive economic benefit to cities and their economies.

What does this mean at the end of 2015? It means if we can make these partnerships happen, we create 50,000 new EU jobs. And remember, that’s for 2015; that’s in one year. And this is an exponentially growing company with operations that exponentially grow in each of the cities. So, what happens when that triples the year after and doubles the year after that? It becomes a huge job generator. We want to take 400,000 cars off of EU roads in 2015, and we want to bring UberPool to more EU cities, reducing congestion and emissions.

So, that’s our message for 2015. I think I’m probably going to be spending a little bit more time here in Europe. I’m looking forward to it. Thank you. Danke.

Conclusion

You’ve heard Kalanick’s vision:

• Uber’s global reach
• their defiance against regulatory hurdles
• their ambitious urban transport plans

You’ve understood their commitment to:

• job creation
• their approach to surge pricing
• their focus on passenger safety

You’ve seen their future blueprint, marked by a partnership with Daimler for autonomous cars.

It’s evident that Uber isn’t just a ride-hailing app, it’s a game-changer, driving innovation and revolutionizing urban mobility.

 

You can read the rest of the speech collection here:

Speech Collection