Today I wanted to — well, this morning — I want to talk about the future of human-driven transportation; about how we can cut congestion, pollution and parking by getting more people into fewer cars; and how we can do it with the technology that's in our pockets. And yes, I'm talking about smartphones ... not self-driving cars.
But to get started we've got to go back over 100 years. Because it turns out there was an Uber way before Uber. And if it had survived, the future of transportation would probably already be here.
So let me introduce you to the jitney. In 1914 it was created or invented by a guy named LP Draper. He was a car salesman from LA, and he had an idea. Well, he was cruising around downtown Los Angeles, my hometown, and he saw trolleys with long lines of people trying to get to where they wanted to go. He said, well, why don't I just put a sign on my car that takes people wherever they want to go for a jitney — that was slang for a nickel.
And so people jumped on board, and not just in Los Angeles but across the country. And within one year, by 1915, there were 50,000 rides per day in Seattle, 45,000 rides per day in Kansas and 150,000 rides per day in Los Angeles. To give you some perspective, Uber in Los Angeles is doing 157,000 rides per day, today ... 100 years later.
And so these are the trolley guys, the existing transportation monopoly at the time. They were clearly not happy about the jitney juggernaut. And so they got to work and they went to cities across the country and got regulations put in place to slow down the growth of the jitney.
And there were all kinds of regulations. There were licenses — often they were pricey. In some cities, if you were a jitney driver, you were required to be in the jitney for 16 hours a day. In other cities, they required two jitney drivers for one jitney. But there was a really interesting regulation which was they had to put a backseat light — install it in every Jitney — to stop a new pernicious innovation which they called spooning.
All right. So what happened? Well, within a year this thing had taken off. But the jitney, by 1919, was regulated completely out of existence.
That's unfortunate ... because, well, when you can't share a car, then you have to own one. And car ownership skyrocketed and it's no wonder that by 2007, there was a car for every man, woman and child in the United States. And that phenomenon had gone global. In China by 2011, there were more car sales happening in China than in the US.
Now, all this private ownership of course had a public cost. In the US, we spend 7 billion hours a year, wasted, sitting in traffic. 160 billion dollars in lost productivity, of course also sitting in traffic, and one-fifth of all of our carbon footprint is spewed out in the air by those cars that we're sitting in.
Now, that's only four percent of our problem though. Because if you have to own a car then that means 96 percent of the time your car is sitting idle. And so, up to 30 percent of our land and our space is used storing these hunks of steel. We even have skyscrapers built for cars. That's the world we live in today.
Now, cities have been dealing with this problem for decades. It's called mass transit. And even in a city like New York City, one of the most densely populated in the world and one of the most sophisticated mass transit systems in the world, there are still 2.5 million cars that go over those bridges every day. Why is that? Well, it's because mass transit hasn't yet figured out how to get to everybody's doorstep. And so back in San Francisco, where I live, the situation's much worse, in fact, much worse around the world.
And so the beginning of Uber in 2010 was — well, we just wanted to push a button and get a ride. We didn't have any grand ambitions. But it just turned out that lots of people wanted to push a button and get a ride, and ultimately what we started to see was a lot of duplicate rides. We saw a lot of people pushing the same button at the same time going essentially to the same place.
And so we started thinking about, well, how do we make those two trips and turn them into one. Because if we did, that ride would be a lot cheaper — up to 50 percent cheaper — and of course for the city you've got a lot more people and a lot fewer cars.
And so the big question for us was: would it work? Could you have a cheaper ride cheap enough that people would be willing to share it? And the answer, fortunately, is a resounding yes.
In San Francisco, before uberPOOL, we had — well, everybody would take their car wherever the heck they wanted. And the bright colors is where we have the most cars. And once we introduced uberPOOL, well, you see there's not as many bright colors. More people getting around the city in fewer cars, taking cars off the road. It looks like uberPOOL is working.
And so we rolled it out in Los Angeles eight months ago. And since then, we've taken 7.9 million miles off the roads and we've taken 1.4 thousand metric tons of CO2 out of the air. But the part that I'm really —
But my favorite statistic — remember, I'm from LA, I spent years of my life sitting behind the wheel, going, "How do we fix this?" — my favorite part is that eight months later, we have added 100,000 new people that are carpooling every week.
Now, in China everything is supersized, and so we're doing 15 million uberPOOL trips per month, that's 500,000 per day. And of course we're seeing that exponential growth happen. In fact, we're seeing it in LA, too. And when I talk to my team, we don't talk about, "Hey, well, 100,000 people carpooling every week and we're done." How do we get that to a million? And in China, well, that could be several million.
And so uberPOOL is a very great solution for urban carpooling. But what about the suburbs?
This is the street where I grew up in Los Angeles, it's actually a suburb called Northridge, California, and, well — look, those mailboxes, they kind of just go on forever. And every morning at about the same time, cars roll of out their driveway, most of them, one person in the car, and they go to work, they go to their place of work. So the question for us is: well, how do we turn all of these commuter cars — and literally there's tens of millions of them — how do we turn all these commuter cars into shared cars?
Well, we have something for this that we recently launched called uberCOMMUTE. You get up in the morning, get ready for work, get your coffee, go to your car and you light up the Uber app, and all of a sudden, you become an Uber driver. And we'll match you up with one of your neighbors on your way to work and it's a really great thing.
There's just one hitch ... it's called regulation. So 54 cents a mile, what is that? Well, that is what the US government has determined that the cost of owning a car is per mile. You can pick up anybody in the United States and take them wherever they want to go at a moment's notice, for 54 cents a mile or less. But if you charge 60 cents a mile, you're a criminal. But what if for 60 cents a mile we could get half a million more people carpooling in Los Angeles? And what if at 60 cents a mile we could get 50 million people carpooling in the United States? If we could, it's obviously something we should do.
And so it goes back to the lesson of the jitney. If by 1915 this thing was taking off, imagine without the regulations that happened, if that thing could just keep going. How would our cities be different today? Would we have parks in the place of parking lots? Well, we lost that chance. But technology has given us another opportunity.
Now, I'm as excited as anybody else about self-driving cars but do we have to really wait five, 10 or even 20 years to make our new cities a reality? With the technology in our pockets today, and a little smart regulation, we can turn every car into a shared car, and we can reclaim our cities starting today.
Chris Anderson: Travis, thank you.
Travis Kalanick: Thank you.
CA: You know — I mean the company you've built is absolutely astounding. You only just talked about a small part of it here — a powerful part — the idea of turning cars into public transport like that, it's cool. But I've got a couple other questions because I know they're out there on people's minds.
So first of all, last week I think it was, I switched on my phone and tried to book an Uber and I couldn't find the app. You had this very radical, very bold, brave redesign.
CA: How did it go? Did you notice other people not finding the app that day? Are you going to win people over for this redesign?
TK: Well, first I should probably just say, well, what we were trying to accomplish. And I think if you know a little bit about our history, it makes a lot more sense. Which is, when we first got started, it was just black cars. It was literally you push a button and get an S-Class. And so what we did was almost what I would call an immature version of a luxury brand that looked like a badge on a luxury car.
And as we've gone worldwide and gone from S-Classes to auto rickshaws in India, it became something that was important for us to be more accessible, to be more hyperlocal, to be about the cities we were in and that's what you see with the patterns and colors. And to be more iconic, because a U doesn't mean anything in Sanskrit, and a U doesn't mean anything in Mandarin. And so that was a little bit what it was about.
Now, when you first roll out something like that, I mean, your hands are sweating, you've got — you know, you're a little worried. What we saw is a lot of people — actually, at the beginning, we saw a lot more people opening the app because they were curious what they would find when they opened it. And our numbers were slightly up from what we expected.
CA: OK, that's cool.
Now, so you, yourself, are something of an enigma, I would say. Your supporters and investors, who have been with you the whole way, believe that the only chance of sort of taking on the powerful, entrenched interests of taxi industry and so forth, is to have someone who is a fierce, relentless competitor, which you've certainly proved to be.
Some people feel you've almost taken that culture too far, and you know — like a year or two ago there was a huge controversy where a lot of women got upset. How did it feel like inside the company during that period? Did you notice a loss of business? Did you learn anything from that?
TK: Well, look, I think — I've been an entrepreneur since I've been in high school and you have — In various different ways an entrepreneur will see hard times and for us, it was about a year and a half ago, and for us it was hard times, too.
Now, inside, we felt like — I guess at the end of the day we felt like we were good people doing good work, but on the outside that wasn't evident. And so there was a lot that we had to do to sort of — We'd gone from a very small company — I mean if you go literally two and a half years ago, our company was 400 people, and today it's 6,500. And so when you go through that growth, you have to sort of cement your cultural values and talk about them all of the time. And make sure that people are constantly checking to say, "Are we good people doing good work?" And if you check those boxes, the next part of that is making sure you're telling your story. And I think we learned a lot of lessons but I think at the end of it we came out stronger. But it was certainly a difficult period.
CA: It seems to me, everywhere you turn, you're facing people who occasionally give you a hard time. Some Uber drivers in New York and elsewhere are mad as hell now because you changed the fees and they can barely — they claim — barely afford the deal anymore.
How — You know, you said that you started this originally — just the coolness of pressing a button and summoning a ride. This thing's taken off, you're affecting the whole global economy, basically, at this point. You're being forced to be, whether you want it or not, a kind of global visionary who's changing the world. I mean — who are you? Do you want that? Are you ready to go with that and be what that takes?
TK: Well, there's a few things packed in that question, so —
First is on the pricing side — I mean, keep in mind, right? UberX, when we first started, was literally 10 or 15 percent cheaper than our black car product. It's now in many cities, half the price of a taxi. And we have all the data to show that the divers are making more per hour than they would as taxi drivers.
What happens is when the price goes down, people are more likely to take Uber at different times of the day than they otherwise would have, and they're more likely to use it in places they wouldn't have before. And what that means for a driver is wherever he or she drops somebody off, they're much more likely to get a pickup and get back in. And so what that means is more trips per hour, more minutes of the hour where they're productive and actually, earnings come up.
And we have cities where we've done literally five or six price cuts and have seen those price cuts go up over time. So even in New York — We have a blog post we call "4 Septembers" — compare the earnings September after September after September. Same month every year. And we see the earnings going up over time as the price comes down. And there's a perfect price point — you can't go down forever. And in those places where we bring the price down but we don't see those earnings pop, we bring the prices back up.
So that addresses that first part. And then the enigma and all of this — I mean, the kind of entrepreneur I am is one that gets really excited about solving hard problems. And the way I like to describe it is it's kind of like a math professor. You know? If a math professor doesn't have hard problems to solve, that's a really sad math professor. And so at Uber we like the hard problems and we like getting excited about those and solving them. But we don't want just any math problem, we want the hardest ones that we can possibly find, and we want the one that if you solve it, there's a little bit of a wow factor.
CA: In a couple years' time — say five years' time, I don't know when — you roll out your incredible self-driving cars, at probably a lower cost than you currently pay for an Uber ride. What do you say to your army of a million drivers plus at that time?
TK: Explain that again — at which time?
CA: At the time when self-driving cars are coming —
TK: Sure, sure, sure. Sorry, I missed that.
CA: What do you say to a driver? TK: Well, look, I think the first part is it's going to take — it's likely going to take a lot longer than I think some of the hype or media might expect. That's part one.
Part two is it's going to also take — there's going to be a long transition. These cars will work in certain places and not in others.
For us it's an interesting challenge, right? Because, well — Google's been investing in this since 2007, Tesla's going to be doing it, Apple's going to be doing it, the manufacturers are going to be doing it. This is a world that's going to exist, and for good reason. A million people die a year in cars. And we already looked at the billions or even trillions of hours worldwide that people are spending sitting in them, driving frustrated, anxious. And think about the quality of life that improves when you give people their time back and it's not so anxiety-ridden. So I think there's a lot of good.
And so the way we think about it is that it's a challenge, but one for optimistic leadership, Where instead of resisting — resisting technology, maybe like the taxi industry, or the trolley industry — we have to embrace it or be a part of the future.
But how do we optimistically lead through it? Are there ways to partner with cities? Are there ways to have education systems, vocational training, etc., for that transition period. It will take a lot longer than I think we all expect, especially that transition period. But it is a world that's going to exist, and it is going to be a better world.
CA: Travis, what you're building is absolutely incredible and I'm hugely grateful to you for coming to TED and sharing so openly.
Thank you so much. TK: Thank you very much.