by Isaac, Mike
I had heard that he was building his next startup, focused on food delivery and logistics. My sources told me he was working just as hard—if not harder—at his new company, cracking the whip on his employees as much as he did at Uber. And to build it, he was recruiting many of the employees he had fired from Uber—the employees who were forced out because of the Holder report.
Kalanick was a billionaire. Garrett Camp and Ryan Graves were rich beyond their wildest dreams. The venture capitalists would soon reap enormous rewards from their investments. And by the time Uber made its debut on the public markets in 2019, there would be plenty more newly minted millionaires in Silicon Valley who would join them, ready to christen the next wave of innovation, to fund the next era of new startups. I wondered if there would be a new generation of Travis Kalanick protégés soon. What would they think of the founder’s rise, and the path he took to get there?
Kalanick and I shook hands again, ending the conversation. He walked away from me, peering into the courtroom through the glass panes in the closed doors.
“God,” Kalanick said, still staring inside the chambers, speaking out loud in the hallway, to everyone and to no one. “It feels like we’re in the tunnel in a stadium, right before the Super Bowl,” he said, laughing quietly to himself.
He began slowly raising his arms above his head, his eyes still locked on the witness stand in the courtroom, ready to jog down the aisle to his seat. He smiled, waiting for the guards to open the doors and let him into the room.
“I’m ready,” Kalanick said.
Epilogue notes
§§§§§§§§§§ Harford’s tenure has not been all sweetness and light. Months after he began his role at the company, I reported what appeared to be Harford’s persistent problem with making sexist and racially insensitive comments to subordinates. Harford was reprimanded and forced to undergo sensitivity training and executive coaching, but was not let go.
POSTSCRIPT
After months of speculation, Uber announced that it would hold an initial public offering in May of 2019. Lyft had debuted on the public markets just a few weeks prior at $72 per share. On the opening day the price spiked at first, until settling around $78. Uber set its sights much higher.
As Uber prepared itself for its coming IPO, the company had hired Morgan Stanley and Goldman Sachs to market its public shares to investors, floating the sky-high valuation of an Uber worth $120 billion, nearly twice its last round of private funding.
In pitching themselves to Uber, the bankers had not ignored the particulars of the CEO’s compensation package. Before Khosrowshahi left Expedia, he had been the highest paid CEO of a publicly traded American company. In taking the Uber job he left behind tens of millions of dollars in unvested Expedia stock. To balance that loss, Khosrowshahi negotiated a hefty perk into his Uber gig: if the CEO were able to take Uber public at a valuation of more than $120 billion and keep it above that market cap for more than 90 days, he would receive an enormous payout of more than $100 million. Bankers at Morgan Stanley and Goldman Sachs internalized that number and (if only tacitly) aimed to achieve that splashy $120 billion market cap.
But in the months leading up to Uber’s big coming-out party, the bankers’ high expectations met reality. SoftBank, a supposed Uber ally, began funding competitors in some of Uber’s highest growth areas like Latin America and various food delivery industries. Uber’s stats began to look less rosy as investors scrutinized the details. As the weeks wore on during Uber’s “roadshow”—the process by which investment firms decide if they wish to buy Uber’s stock—it became clear that the company was not going to fetch $120 billion.
Bankers and traders crowded the floor of the New York Stock Exchange as Khosrowshahi and his entourage arrived on the morning of May 10, 2019. Early Uber employees and even some of Uber’s longest-tenured drivers joined them at the invitation of the company. Staff were passing out black, Uber-branded hats and T-shirts for securities traders to wear as they typed their first buy and sell orders into the NYSE computers that lined the floors. Caterers brought in rounds of Big Macs, french fries, and hash browns, a nod to Uber’s big deal with McDonald’s for UberEats food delivery. Everyone was ready to start trading shares of $UBER.
There was some tension leading up to the big day. Khosrowshahi had asked Travis Kalanick not to join him on the balcony for the ceremonial bell-ringing that morning, something that pissed Kalanick off. Word leaked to the press that the two men were at odds, and there was a question as to whether Kalanick would end up showing at all. But Kalanick showed, arriving in time for an early breakfast that morning where he and Uber’s current CEO publicly buried the hatchet. Khosrowshahi called Kalanick a “once-in-a-generation entrepreneur”; everyone in the room agreed.
At the breakfast, Khosrowshahi called Kalanick up to the front of the room along with Garrett Camp and Ryan Graves as the men stood for a round of applause. In just a few hours, Graves’s shares would be worth $1.6 billion, while Camp’s would net a cool $4.1 billion in value. Kalanick would be worth the most; after the bell, his stake in the company would be worth $5.4 billion. The three men who built Uber into what it was over the past decade were all billionaires. They also no longer happened to be on close speaking terms. Kalanick left shortly thereafter without incident, hours before the shares would hit the market, leaving the spotlight to Khosrowshahi.
As Khosrowshahi gathered with his executive team to execute his first trade, a scrum of employees, securities traders, photographers, and the press surrounded him. The CEO looked up at the monitors, waiting to see what the price would be. The night before, Uber had set its IPO price at $45 per share, below the value it had initially sought but still carefully calibrated for a healthy first-day “pop,” an initial surge in price bankers like to promote to clients as an incentive to buy-in early. At $45 per share, the bankers expected the stock to immediately open at at least a few dollars above that number.
That didn’t happen. As the minutes ticked forward, the number started falling—$44, $43, and finally to $42, the price of its first official public trade. Khosrowshahi’s face sunk. The floor, once brimming with excitement, fell to hushed whispers. Uber would be opening at below its initial pricing target. That was unheard of, especially for tech stocks that normally see a healthy first-day pop. By the end of the day, Uber had lost more in dollar terms than any other American initial public offering on Wall Street since 1975. Uber’s coming-out party was a disaster.
Almost immediately, questions began swirling about how private market valuations had spun out of control, and whether Uber—the king of the unicorns—was finally tamed by the realities of Wall Street. It wasn’t tenable to be losing billions of dollars with no definite path to profitability when you were trying to convince public market investors to purchase your stock. Silicon Valley investors wondered if Uber’s disappointing debut would be a harbinger of many difficult technology IPOs to come.
Khosrowshahi, for his part, tried to stay upbeat. Later that evening, at a party on the stock exchange floor, he would give a toast to employees holding Big Macs and glasses of champagne, attempting to inspire his team—many of whom owned a great deal of the declining stock—even as brutal headlines posted about the IPO.
“Now is our time to prove ourselves,” Khosrowshahi said to the room. “Five years from now, tech companies that come IPO after us will stand on this very trading floor and see what we’ve accomplished.” The mood was sober, but Khosrowshahi was doing his best to rally the troops.
“They’ll say, ‘Holy shit. I want to be Uber.’ ”
ACKNOWLEDGMENTS
While only my name is on the cover, this book could not have been written without the help of dozens of people who supported it over the past two years.
I have to thank Tom Mayer, my editor at W. W. Norton, for his expertise in bringing my ideas and prose to life in such a masterful way. Few editors I’ve worked with th
roughout my career are as talented as Tom, and his touch elevated the narrative. I’m a better writer for working with him.
A large team at W. W. Norton, additionally, made this book a reality: Will Scarlett, Dassi Zeidel, Becky Homiski, Beth Steidle, Anna Oler, Nneoma Amadi-obi, Steven Pace, Brendan Curry, Nicola DeRobertis-Theye, Elisabeth Kerr, Meredith McGinnis, and many others. Everyone hustled to make this book a success. Their support and efforts have been invaluable.
I’m grateful to Daniel Greenberg, my agent at Levine Greenberg Rostan, for meeting me in 2014 when I first thought an Uber book might be a good idea. And for his continued persistence despite my decision to ghost him for three years after that initial meeting.
I wouldn’t be half the reporter I am today were it not for Pui-Wing Tam, my editor at the New York Times, whom I’ve worked with for years. Pui-Wing is an excellent mentor, and she worked closely with me through every step of Uber’s dramatic 2017. I couldn’t have penetrated the company without her excellent advice. (Apologies, Pui-Wing, for the many times I’ve called you after hours with a request to file yet another Uber story.)
And to that end, I owe a great deal of thanks to everyone at the Times who supported me in writing this book. Dean Baquet, Joe Kahn, Rebecca Blumenstein, and Ellen Pollock were particularly kind in letting me take leave to write it. My colleagues on the tech desk picked up my slack, and for that I’m super appreciative. And A. G. Sulzberger’s kind notes on my coverage were inspiring, especially when I was going insane trying to make sense of all of my reporting.
Sean Lavery was my fact checker and armchair psychologist during more difficult moments. Simone Stolzoff’s early research and support was a boon as well; I can’t thank either of them enough.
Sam Dolnick and Stephanie Preiss, as always, are my wonderful collaborators at the Times.
I would be remiss not to thank all the people who spoke with me, some at great personal risk, for the reporting of this book. Everyone has a motivation to speak with a reporter, but many of my best sources felt they were doing the right thing by coming forward and telling their story in hopes it would help people to better understand the story of Uber. I want to express my thanks to all of you here: I truly could not have done it without you.
Many thanks as well go to the writers and friends who counseled and supported me through the process. Kevin Roose, B. J. Novak, Nick Bilton, and Anna Wiener gave brilliant feedback, while Tristan Lewis, Emily Silverman, and Hana Metzger provided much needed respite from my writing desk.
And finally, to my family—Michael, Lorraine, Joe, and especially Sarah Emerson and Bruna—all of whom have managed to deal with my craziness, long days, and even longer nights of reporting and writing this book. For that I am forever grateful, and this book is dedicated to you.
A NOTE ON SOURCES
The contents of this book are written based on hundreds of interviews with more than two hundred people over the five years I’ve been reporting on Uber, and painstaking review of hundreds of never-before-seen documents.
All of the events that occur in the narrative are based on information taken from primary and secondary sources, either from firsthand accounts of the parties involved, or from two or more parties with direct knowledge of the matter. Every scene has been corroborated by multiple people.
All of the dialogue that appears in the book was taken from video recordings, audio files, or transcripts, or recounted by people involved in or with direct knowledge of the situations. Emails or text messages that appear in the book were viewed by or described to the author.
My utmost concern is for the safety and security of my sources. I truly appreciate their help in telling this story.
NOTES
PROLOGUE
xiiiHales had promised: Karen Weise, “This Is How Uber Takes Over a City,” Bloomberg Businessweek, June 23, 2015, https://www.bloomberg.com/news/features/2015-06-23/this-is-how-uber-takes-over-a-city.
xivbuilt into the cement floor: Max Chafkin, “What Makes Uber Run,” Fast Company, September 8, 2015, https://www.fastcompany.com/3050250/what-makes-uber-run.
xvwould later tell reporters: Weise, “This Is How Uber Takes Over a City.”
xivthe advertisements said: Alyson Shontell, “10 Ads That Show What A Circus the War Between Uber and Lyft Has Become,” Business Insider, August 13, 2014, https://www.businessinsider.com/10-uber-lyft-war-ads-2014-8#heres-a-similar-ad-that-suggests-ubers-are-better-than-taxis-9.
Chapter 1: X TO THE X
3according to a letter: Kara Swisher and Johana Bhuiyan, “Uber CEO Kalanick Advised Employees on Sex Rules for a Company Celebration in 2013 ‘Miami Letter,’ ” Recode, June 8, 2017, https://www.recode.net/2017/6/8/15765514/2013-miami-letter-uber-ceo-kalanick-employees-sex-rules-company-celebration.
4“fast-growing”, “pugnacious”, a “juggernaut”: Kara Swisher, “Man and Uber Man,” Vanity Fair, November 5, 2014, https://www.vanityfair.com/news/2014/12/uber-travis-kalanick-controversy.
6a noun coined in 2013: Aileen Lee, “Welcome to the Unicorn Club: Learning From Billion-Dollar Startups,” TechCrunch, October 31, 2013, https://techcrunch.com/2013/11/02/welcome-to-the-unicorn-club/.
6under fire for emails: Sam Biddle, “ ‘Fuck Bitches Get Leid,’ the Sleazy Frat Emails of Snapchat’s CEO,” Valleywag, May 28, 2014, http://valleywag.gawker.com/fuck-bitches-get-leid-the-sleazy-frat-emails-of-snap-1582604137.
6Dropbox and Airbnb: Jack Morse, “Bros Attempt to Kick Kids Off Mission Soccer Field,” Uptown Almanac, October 9, 2014, https://uptownalmanac.com/2014/10/bros-try-kick-kids-soccer-field.
11“philosophy of work”: Brad Stone, The Upstarts: How Uber, Airbnb, and the Killer Companies of the New Silicon Valley Are Changing the World (New York: Little Brown, 2017).
11Fourteen core leadership principles: “Leadership Priciples,” Amazon, https://www.amazon.jobs/principles.
13employee explained the term: Alyson Shontell, “A Leaked Internal Uber Presentation Shows What the Company Really Values in Its Employees,” Business Insider, November 19, 2014, https://www.businessinsider.com/uber-employee-competencies-fierceness-and-super-pumpedness-2014-11.
Chapter 2: THE MAKING OF A FOUNDER
16a former co-worker, said: Elizabeth Chou, “Bonnie Kalanick, Mother of Uber Founder, Remembered Fondly by Former Daily News Coworkers,” Los Angeles Daily News, August 28, 2017, https://www.dailynews.com/2017/05/28/bonnie-kalanick-mother-of-uber-founder-remembered-fondly-by-former-daily-news-coworkers/.
17an inherent competitive spirit: Chou, “Bonnie Kalanick.”
17Travis later said: Travis Kalanick, “Dad is getting much better in last 48 hours,” Facebook, June 1, 2017, https://www.facebook.com/permalink.php?story_fbid=10155147475255944&id=564055943.
17in an interview in 2014: Kara Swisher, “Bonnie Kalanick, the Mother of Uber’s CEO, Has Died in a Boating Accident,” Recode, May 27, 2017, https://www.recode.net/2017/5/27/15705290/bonnie-kalanick-mother-uber-ceo-dies-boating-accident.
18positive relationship with his ex-wife: Taylor Pittman, “Uber CEO Travis Kalanick and His Dad Open Up on Life, Love and Dropping Out of School,” Huffington Post, April 11, 2016, https://www.huffingtonpost.com/entry/uber-travis-kalanick-talk-to-me_us_57040082e4b0daf53af126a9.
18built an electrical transformer: Swisher, “Bonnie Kalanick.”
18Donald later told a reporter: Pittman, “Uber CEO Travis Kalanick.”
19Travis was a top seller: Adam Lashinsky, Wild Ride: Inside Uber’s Quest for World Domination (New York: Portfolio/Penguin, 2017), 40.
19His prize: An enormous trophy: Jesse Barkin, “Valley Conference Basketball Honors Top Students,” Los Angeles Daily News, March 30, 1988, Z10.
20$20,000 in knives: Chris Raymond, “Travis Kalanick: ‘You Can Either Do What They Say or You Can Fight for What You Believe,’ ” Success, February 13, 2017, https://www.success.co
m/article/travis-kalanick-you-can-either-do-what-they-say-or-you-can-fight-for-what-you-believe.
20his commissions growing larger: Sarah E. Needleman, “A Cutco Sales Rep’s Story,” Wall Street Journal, August 6, 2008, https://www.wsj.com/articles/SB121788532632911239.
20recalled Sean Stanton: Interview with author, 2017.
21it occurred to some of them: TechCo Media, “Travis Kalanick Startup Lessons from the Jam Pad—Tech Cocktail Startup Mixology,” YouTube video, 38:34, May 5, 2011, https://www.youtube.com/watch?v=VMvdvP02f-Y.
22where he “worked, ate and slept”: Stone, Upstarts.
22growth was paramount: John Borland, “Well-Scrubbed Business Plan Not Enough for Scour,” CNET, January 11, 2002, https://www.cnet.com/news/well-scrubbed-business-plan-not-enough-for-scour/.
22“traffic was going through the roof”: BAMM.TV, “FailCon 2011—Uber Case Study,” YouTube video, 26:18, November 3, 2011, https://www.youtube.com/watch?v=2QrX5jsiico&t=2s.
23“we need to go find money”: BAMM.TV, “FailCon 2011.”
23“really litigious hardcore dude”: BAMM.TV, “FailCon 2011.”
24sued Napster for $20 billion: Rich Menta, “RIAA Sues Music Startup Napster for $20 Billion,” MP3newsire.net, December 9, 1999, http://www.mp3newswire.net/stories/napster.html.
24a lawsuit against Scour: Matt Richtel, “Movie and Record Companies Sue a Film Trading Site,” New York Times, July 21, 2000, http://www.nytimes.com/2000/07/21/business/movie-and-record-companies-sue-a-film-trading-site.html.
24Ovitz had sent letters: Richtel, “Movie and Record Companies Sue.”