Uber’s swerve on gas prices, hotels & a driverless future

ANDREW MACDONALD: Autonomy is existential for us and it is somewhere between existential and massive value unlocking and it won’t be a couple of years, but it also won’t be a couple of decades. And so somewhere between now and then, how the world moves looks totally different. You should be able to get anything to your doorstep in 30 minutes or less. All local commerce, anyone that has a storefront, a distribution center, a node, a warehouse, whatever, if you want that at your doorstep in 30 minutes, you should be able to get that.

BOB SAFIAN: That’s Andrew Macdonald, president and chief operating officer of Uber. With gas prices jumping, I wanted to ask Mac how drivers across Uber’s platform are responding and other signals he’s picking up about the economy from the company’s data. We also talk about Uber’s newest move into travel and lodging via a partnership with Expedia, whether the goal is to turn Uber into a super app and ways that Uber and Airbnb are competing. Plus what Max sees as the inevitable shift to autonomous cars and what responsibility Uber has to its human drivers. I’m Bob Safian and this is Rapid Response.

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I’m Bob Safian. I’m here with Andrew Macdonald, president and CEO of Uber. Andrew, Mac, thanks for being here.

MACDONALD: Bob, great to be here. I’m excited to chat.

SAFIAN: So Uber has gone through many waves and phases, early disruption and attention and a difficult period reputationally. Dara Khosrowshahi was on the show a while back, Uber CEO, and he was pretty candid about the challenges of resettling the brand and the culture. In recent years, it’s been definitely a maturing phase, growing up as a business. You’ve been along for much of this ride, joining in 2012. Where do you feel like Uber is in its journey for you? Are you in the midst of an ongoing phase? Is a new one emerging?

MACDONALD: Yeah, it’s a great question. It’s something I think about probably more than I should. At this point, I’m the longest tenured employee at the company. So I have a little bit of, I guess, the honor, but also the burden of carrying some of the history. And not many folks from, call it, Uber 1.0 are around for Uber, I think we’re on Uber 3.0 right now. I would say Dar’s early days were Uber 2.0, but we’ve come out of that rebuild phase and now it’s a phase of growth.

The new phase is like a technological shift more than an organizational shift. For Uber, like every company, AI is topic du jour, but also probably the topic that will dominate the next few years, if not decades. We’re a physical world company, an Adams company. We sit at this digital-physical intersection and I think AI and the physical world is a major new frontier for us. So it’s less about culture or organization new phase, more about technology, which I think is exciting.

Copy LinkHow Uber balances fuel costs, driver earnings & rider prices

SAFIAN: As we’re talking, a lot of the news is about rising gas prices, the Strait of Hormuz choked off, putting pressure on everyone who drives. What are you hearing from your drivers? And what can you do to help? Raise rates for riders? How do you navigate that piece of this moment?

MACDONALD: Yeah, so that’s something we obviously focus on a lot. We think about the people that earn money on our platform holistically. We think about what their P&L looks like, not just what our P&L looks like. I think the good news is even though, hey, rising gas prices, that’s got to be really tough for people who drive for a living. When you look at the percentage that an increase in gas prices, actually how much of that flows through to the drivers weekly P&L, if you will, it’s actually relatively modest.

I’m not saying it’s insignificant. Every dollar matters, but it’s not necessarily the extreme flow through to price that you would see in an airline industry, for example. Now that said, we are responsive to it. Driver sentiment is impacted when gas prices go up. We see it in our data right away. They also want to see a response from the company. In the past, we’ve made some mistakes. Candidly, for instance, we’ve done direct fuel surcharges in the past, where we just put additional, call it a buck on the consumer receipt.

SAFIAN: Charging riders a little more. Yeah.

MACDONALD: Charging riders, but also doing it in a very direct pass-through way. Put it on the receipt, fuel surcharge, here’s the impact. The challenge with that for us is it’s a bit of a fixed lever. When you pull that back, if gas prices revert to pre-crisis levels, is that your license to pull it back? You’re still going to have folks that are unhappy if you pull it back at that moment. And so we actually try to use levers that are a bit more flexible. In some cases, that means we just take some of the hit, i.e. we take lower margins, lower take rates. In some cases, we actually just raise underlying prices. So instead of having it be a surcharge, if the marketplace is tight, our prices go up. That’s the benefit of a dynamic pricing marketplace like what we’ve got. And in other cases, we’ll actually just try to negotiate on the driver’s behalf. So in the US, we’ve rolled out a bunch of fuel discounts through our driver loyalty program that actually ends up offsetting most of the cost.

SAFIAN: Is it different outside the US? I mean, you’re a global business in that gas prices are much higher in some other parts of the world than they are in the US.

MACDONALD: It’s definitely different. I mean, I would say this is one of those topics that is a bit country-specific. This is why we are not the normal tech company, per se. We get pulled into the country level details of the 75 countries we operate in, often the city level details. And gas prices are a different story, depending on where you look. I mean, yes, the war obviously just puts upward pressure globally, but in many places they have huge domestic industry and production or governments subsidized gas prices. You have electrification rates, which are very different.

We have seven cities in Europe that are highly electrified, i.e. driving a lot of EVs. We call those our Spark Seven Cities. The ability for those markets to absorb fuel price increases when you’ve got 40% of drivers in electric vehicle is very different. And so yeah, the factors are different. And what we do is we organize a global SteerCo, where individual teams will adhere to a global set of principles, but we need solutions that work locally. We actually do have a fuel surcharge. As much as I don’t love that approach, we have a fuel surcharge in Australia, for example, because there’s some local factors there that make that attractive. So we vary our approach quite a bit, which is frankly a theme for our company overall.

Copy LinkWhy being an American brand helps in some markets and hurts in others

SAFIAN: I mean, Uber’s an American brand, how much is it viewed that way around the world? I mean, I know some markets resisted Uber as an interloper at first. Over the last year or so, you’ve got US actions in the Middle East and trade policy. Are there implications about being an American brand for your business?

MACDONALD: Yes. And candidly, sometimes it’s a halo for us and sometimes it’s a drag. Brazil is our second-largest mobility market by bookings, by dollars, and our largest mobility market by trips volume, and meaningfully so. In Brazil, generally American tech companies have a halo. They’re seen as high quality, aspirational, providing excellent service levels relative to local alternatives. So being an American tech company or a Silicon Valley tech company is actually a big tailwind for us.

SAFIAN: And when tariffs are put on relations with Brazil, that didn’t necessarily impact the way your brand is viewed.

MACDONALD: It hasn’t. And we tend to be pretty immune to the microeconomic impacts of tariffs. So much of our money flows locally, we actually don’t get that impacted by things like tariffs or punitive cross-border policies. If you’re a customer in Brazil and you pay us $10, 9.50 is going into the driver’s pocket and so the money stays locally. And I think we actually benefit a little bit from that.

If you were to like boycott Uber and Brazil because of it’s an American brand, sure there’d be impact on us, but actually there’s more than a million people that depend on our platform locally to earn money. So those are the folks that actually end up impacted. So we often feel more local because the face of our business locally is the restaurants that earn money on our platform, the retailers, the drivers, and that’s who shows up for us when you’re a customer. Now in a place like Europe, it’s different. Some European politicians have said openly, “Our recourse in trade policy is taxing the American tech companies.” And we get bucketed into that group and that can be tough.

SAFIAN: But it sounds like it’s more about government policy than it necessarily is about like, “Oh, Uber’s American. I don’t want to support that brand for that reason.”

MACDONALD: Yeah, that’s minor. And part of it is too, there’s often not a local competitor and a local alternative. So I’m from Canada originally. It’s been well publicized that there’s been some bi-Canadian movements the last year and a half. People are like, “Don’t use Uber. It’s an American tech company.” Well, the next biggest ride-hailing player is Lyft, which is also an American tech company. The next biggest is Hopp, which is European. There’s not a Canadian alternative to Uber and in most countries, that’s true.

Copy LinkWhat Uber’s data reveals about local labor markets

SAFIAN: You emphasized the local nature of Uber’s business. I was thinking that you serve both folks who go out for the night and those who stay in and order takeout. And in that way, your business has a barometer of the economy in some ways, of what’s going on on the ground.

MACDONALD: We’re constantly looking for what’s coming in our data. So we will slice by zip code, whatever we know socioeconomically about our customer cohorts. We’ll look at different credit card type, different payment method, all sorts of different cuts to try to get at is the consumer weakening? And we just don’t see it. I think we’re a really good barometer of the labor market, actually a more pure barometer of the labor market than consumer health. Generally, the barriers to get on the Uber platform as a worker, compared to other jobs, are quite low.

And so we tend to be a really good sign of the local labor market. When there is high unemployment, and again, I would not say that at the federal level or even state level, I’d say at a city level or even a zip code level, you see more supply come into the market and prices go down until there’s an equilibrium found between price and earnings. And when labor markets are tight, you see prices go up and, again, that equilibrium get found at higher prices. So a lot of people study us for labor data and right now, the labor market’s quite healthy in the US, in particular. Prices are not necessarily coming down as a result of excess labor supply. And so I think that shows the economy’s still ticking along.

Copy LinkInside Uber’s partnership with Expedia

SAFIAN: You recently announced a partnership with Expedia, enabling users to book hotels through Uber, and it feels like the next step in Uber as all in one super app. Is that the strategy, the goal?

MACDONALD: Yeah. I mean, this was a fun one for us, not the least of which because my boss is on the board of Expedia and used to be the CEO of Expedia. We don’t use the term super app internally. We don’t love it. And the reason is we’re not trying to be all things to all people. And often super app, particularly when you use it in the context of developing markets, I think some of the biggest super app success stories are out of China or out of Southeast Asia or India.

SAFIAN: Amazing penetration in businesses they’ve developed.

MACDONALD: 100%. And usually, not always, but usually payments and/or messaging are at the center of those ecosystems. It’s often built on a wallet or it’s built on a very large user base via messaging or whatever. And then they start building out adjacent services. That’s how I think of a super app. I think about us as daily usage, broad access to local commerce. And we do intend, we have built out adjacent services to core ride hailing and core on demand food delivery and now have many different flavors across mobility and delivery.

And by the way, increasingly with our Uber freight business, which we don’t talk about as much, serving end-to-end logistics in cities and across countries. And really, it’s about convenience and accessibility for the customer. And travel is a very natural use case for us to anchor in. 15% plus of our mobility business comes through airports. We have a very high percentage of our customers that use us across multiple cities. Increasingly, people are replacing room service at the hotel with Uber Eats. Increasing when you get to your hotel and you realize you forgot your toothpaste or your toiletries, you’re doing a quick convenience order. So travel tends to be at the core of a lot of how people use our platform, and so we’re building around that.

SAFIAN: I talked with Airbnb’s Brian Chesky last fall about their efforts. They had the experiences. Now they’re offering car services, largely from airports in Europe. How much are Uber and Airbnb eyeing each other as competitors as you’re each moving from a core to a different place?

MACDONALD: Yeah, so it’s a great question and we have amazing respect for Airbnb. I mean, through our Expedia partnership, we’re making VRBO rentals available as well, so we’re going to play in that space as a channel. Now many channels is not a new thing in the travel business and I think frankly, we all intend to grow the pie. And Airbnb, I think we watch closely what they do. We don’t view them as a competitor. We view ourselves as an incremental channel to the industry.

What I’d say though is, just as the super apps of yore are based in payments or messaging, which are high frequency use cases, we’re building around on demand food delivery or rideshare, which is also pretty high frequency transactions for the average customer. I think going from infrequent to frequent is tougher.

And so I don’t know what the average annual usage is of an Airbnb customer. I have a decent sense of what that looks like for the hotel operators and I think it’s hard to get somebody to go from two to three personal hotel bookings a year to now using you for all sorts of things that are more about daily use. I think that’s a tougher transition to make. Now we’ve got to prove the opposite. We’ve got to prove that we can go from frequent to infrequent. How do we get you to think about booking your hotel through Uber when you’re used to use us for a bit more of the daily utility transaction? That is a challenge, but I think it’s an easier challenge because you’re just starting with more shots on goal, but it’s a different challenge.

SAFIAN: More shots on goal makes things easier, but as Mac also acknowledges, not all shots are the same. So might Uber take a shot at buying Expedia and how big is its bet on autonomous vehicles beyond partnerships with Waymo and Zoox? We’ll talk about that and more after the break. Stay with us.

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Before the break, Uber COO Andrew Macdonald talked about Uber’s reaction to higher gas prices and what’s driving its new partnership with Expedia. Now we talk about the prospect of buying Expedia outright, the role that Uber’s membership program, Uber One, might play in the future and why he’s focused on autonomous vehicles, plus why stats about AI, including its costs can, make your head explode. Let’s hop back in. There were rumors last year about potentially, possibly an Expedia acquisition. Could this partnership be a step in that process?

MACDONALD: That acquisition is, I would say, off the table for now. There’s nothing live and ongoing there. But of course, as we learn about the travel space more by participating more directly in new product offerings there, to the extent we get very excited about travel, we will do more commercial partnerships, we’ll grow our existing commercial partnership with Expedia and we would be open to pushing into new verticals more directly as well. So I think-

SAFIAN: It’s early days, as you said. It’s early days, right?

MACDONALD: As Dara always says, “We’re always exploring everything.” We are listening all the time and I think that’s how you find interesting opportunities. Uber One, which is our membership program, and we just announced last week that we crossed 50 million members, started out primarily focused on our food delivery. No delivery fee as a core value prop of Uber One was something that really was a clear hook for consumers. We have taken steps over the last few years to layer way more value into that program by adding mobility benefits, buying family benefits. And now we’re starting to add travel benefits and I think the offer we’ve given on the hotel side is really rich. I think we have an opportunity to make Uber One the best travel rewards program and that’s an interesting hook for us as we go forward.

SAFIAN: It’s funny. It’s like you’re building your Amazon Prime or a Costco membership. There’s that other side of the business that’s part of what you’re doing at the same time as you’re pushing into these other verticals.

MACDONALD: When you think about a local membership program that you can get anything you want from really any storefront, whether that’s a restaurant, a retail store, a convenience store, and you can go anywhere you want. And you could do that on a bike, on a scooter, on transit, in an UberX, in an Uber Black and all of that is layered on top with a local membership program, I think that’s really compelling. And then if you’re traveling, all those benefits travel with you to explore whatever city you’re going to, that’s unique and different. And we aspire to be alongside the Costcos and the Amazon Primes of the world, for sure.

Copy LinkHow Uber is rolling out autonomous vehicles

SAFIAN: You recently released an intriguing paper about autonomous vehicles, that AV technology is ready, that the conversation around it lags the capabilities. Can you explain that, why you released this now?

MACDONALD: Sure. When you’re building new infrastructure in a city, which is essentially what Uber has done in rolling out transportation systems in more than 10,000 cities around the world, you have a deep responsibility to all the stakeholders that are impacted by that. It’s not just about product market fit. It’s not just about whether consumers love your app. It’s not just about whether people enjoy earning money on the platform. It’s you are impacting cities. And we think in retrospect, ridesharing happened to cities and then cities had to respond and often that response was combative and dragged out over multiple years. And in some cases we’re still paying down that debt. We’ve gotten a lot of things wrong over the years. We think autonomous should happen with cities. And by the way, the underlying technology is so amazing and will have so many knock-on benefits for society from a safety perspective, from an economic value creation perspective, eventually from a cost perspective, it’s going to be awesome.

And I think we feel a deep responsibility to steward that future forward, having learned the lessons from our past, which means working with cities, making sure that important issues are addressed head on, as opposed to as an afterthought. Issues like the labor transition. AI is raising this question for society overall and AVs, autonomous vehicles, are probably the purest form of the physical world AI. We need to make sure that, as we roll out a new transportation system in the cities or new ride hail network of sorts, that we’re not recreating the problems of the taxi industry in the past and all sorts of, I think, important questions that are all addressable, but actually we’ll make sure that there’s not pushback against autonomous vehicles and that the progress isn’t slowed, which ultimately is important to us. So yeah, that’s why we put it out there. We’ve learned our lessons and we want to help the world learn lessons and we just want to put a stake in the ground of what we think good looks like.

SAFIAN: I recently had Zoox’s CEO, Aicha Evans, is a guest on the show and you’ve partnered with Zoox and also with Waymo. Uber shuttered its own AV effort several years ago, but you’ve left the door open to reviving it. As you talk about AV, it sounds like you’re a believer that AV fleets, they’re coming, they’re going to be here. Will you need to have your own AVs in the long run? Can you just be the conduit for others?

MACDONALD: It’s a great question and candidly, it’s a question that I think we have a responsibility as a management team to continue to revisit. We have 25 autonomous vehicle partnerships today globally and starting to work with our partners to scale, helping them build out the physical world infrastructure they need to scale, whether that’s depots or charging capacity, remote vehicle management or customer support. It’s no longer about, hey, let’s just get a couple of vehicles on the road and test that our integration works and help see how your technology performs, but how do we go from five vehicles to 500 to 5,000? And to me, that’s a matter of when, not if the technological problems are largely solved. It becomes a business model problem and a scaling problem.

And our job is to make sure that the economic return on those assets for our partners, or for whoever the ultimate vehicle owner is, right? Because I think many models will emerge. I think you’ll have fleets that will own these assets. I think you’ll have financial investors that will own these assets. I think you’ll have individuals that will own these assets. So whether or not we need to own vehicles directly, own fleets directly, own the technology directly, I think is something that will get answered over time. Our position today is that that’s not our role in the ecosystem, but like any management team, we should always be open to changing our mind. If the facts change or our strategy is proven to be wrong, then we’ll have to change direction.

SAFIAN: Your current human drivers who are worried about being replaced, like many people are worried about being replaced by AI, what do you feel like is your responsibility in that transition toward those drivers compared to the responsibility of the cities, of the governments?

MACDONALD: One of the ways you don’t make this entirely a government problem is that corporations act responsibly. And so when we advocate for things like a hybrid network, when people are requesting an Uber, they may get that fulfilled by an autonomous vehicle, they may get it fulfilled by a human driver. We think a hybrid transition is a very responsible transition. That allows us to continue to grow the pie. Our business is still growing north of 20% a year and that means that human rideshare jobs and earnings are still growing. And I think they will for years to come, even as we layer in autonomous vehicles to our network, and I think that helps the transition. More than 10 million people to earn money on the Uber platform globally and we have a deep responsibility to those folks to help them have opportunities in the future. We, of course, will work with governments on this transition, but I think corporations need to lead the way.

Copy LinkWhat AI is teaching Uber leaders

SAFIAN: Are there things you’ve learned in this process as you’re testing, figuring out how to apply AI in a way that’s effective that others might take away from the experience? Because I mean, the equal part’s excitement and fear and cost about this.

MACDONALD: Yeah. And the first thing I’ll say is I’m on a learning journey, like probably everyone else on this podcast. And as much as I, multiple times per day, have moments in my personal AI usage where I’m like, “This is so cool. This is amazing. I can’t believe I was just able to do that,” I also suffer from the inertia of there’s a couple of hours of learning for me to do that thing via Cloud or via ChatGPT, and so I’m going to do it the old way. And I’m trying to fight that every day.

I think the way consumers are now expecting to consume AI from companies is like this chatbot format. And it’s not yet clear to me how a company like Uber or many of the other consumer transaction oriented companies actually make that transition. Brian Chesky yesterday, I think it was yesterday, tweeted about why isn’t Airbnb rushing out AI-led interfaces for customers. And I thought he was very honest in his response, which effectively was something like, it’s very hard for us to make the transition from our traditional UI to a chatbot-led AI or a voice-led UI without killing conversion. And there’s like more than $100 billion flowing through the Airbnb platform. And if you kill conversion on that as you make some hard fork to a totally different UI, that’s billions of dollars of value destroyed in the short term. And even if you’re the bravest founder-led forward design thinker like Brian is, that’s a hard gap. And by the way, it’s not obviously better for the consumer. I’m not sure-

SAFIAN: Well, that’s the thing, right? You’re not sure what’s going to be better for the consumer. And until you’re sure you don’t want to sell them something that maybe isn’t what they want.

MACDONALD: We’re working with pretty much all of the large model companies as they roll out, try to roll out commerce and there hasn’t really been anything that’s taken off yet. It doesn’t mean it won’t happen, but a year ago at our board meeting, we were worried that by this point a year later, we’d be totally disaggregated because all commerce is going to be flowing through the large model codes in the form of chatbots, and that just hasn’t played out yet.

SAFIAN: I had a interesting discussion with Luis von Ahn from Duolingo. I don’t know if you know Luis or not, but how he’s learned over the last year that some of the things he thought AI was going to make more efficient for the company doesn’t necessarily because you have to spend so much time checking it and reinforcing it. He’s not finding that enormous leverage from his engineering team that he hears about, that he’s Hopping for.

MACDONALD: Yeah. I mean, the headline stats, you make your head explode when you hear companies talking about, “Hey, 25% of code commits over the last quarter were AI-driven,” or, “Our token usage went from X to Y,” or, “Our percentage of employees,” all these numbers and it’s amazing and I think it’s this massive transformation of society, but then you sometimes go and you talk to your senior engineering leaders and you’re saying, “Okay, how many projects that were on the cutting room floor got moved above the line because of the productivity gains because 25% of our code commits were via Claude Code last quarter, that link is not there yet.

I mean, I think maybe implicitly, there’s more that is getting shipped, but it’s very hard to draw a line between one of those stats and okay, now we’re actually producing 25% more useful consumer features and that line is hard to draw. And I think over the coming quarters and years, maybe that will become clearer, but I think today it’s hard even if some of the underlying metrics are trending in a really astronomical to Direction. Our CTO Praveen went viral because he effectively said in an interview that we had blown through our AI budget for 2026 and it was middle of March or something when he said this and everyone was like, oh, head exploding moment. We’re going to have to start talking about token consumption and the associated cost versus headcount and making trades on that as an engineering organization. And so if you’re not actually able to draw a direct line to how much useful features and functionality you’re shipping to your users, that trade becomes harder to justify.

SAFIAN: Because it’s not free. AI is not free.

MACDONALD: No, it can fee that way. And if you’re just a user sitting there and coming up with interesting use cases and you don’t pay the bill, it can feel that way, but somebody’s paying the bill.

Copy LinkHow autonomy could redefine Uber

SAFIAN: What’s at stake for Uber right now?

MACDONALD: Autonomy is existential for us and it is somewhere between existential and massive value unlocking. And it won’t be a couple of years, but it also won’t be a couple of decades. And so somewhere between now and then how the world moves looks totally different. And I think that’s amazing. I mean, I don’t think my daughters, who are all little kids today, but I don’t think they will end up getting a driver’s license.

SAFIAN: They won’t need to learn to drive.

MACDONALD: No, I don’t think so. I think ultimately autonomy will go to the skies, whether you’re talking about drone delivery or you’re talking about companies like Joby that are effectively building human sized drones, which will, again, further revolutionize how people move around. And by the way, we want to be pushing on those frontiers. And then on the delivery side, you should be able to get anything to your doorstep in 30 minutes or less. All local commerce, anyone that has a storefront, a distribution center, a node, a warehouse, whatever, if you want that at your doorstep in 30 minutes, you should be able to get that. I think that’s really inspiring and again, further changes how people experience the world and it’s really compelling and exciting.

SAFIAN: Well, Mac, this was great. Thanks so much for doing it.

MACDONALD: So happy to be here. Thanks for the time, Bob.

SAFIAN: This was the first time I spoke with Mac and I was impressed by his openness about Uber’s menu of reactions to rising gas prices, the pros and cons of being an American brand and the costs around AI. It’s nice to hear an acknowledgement of past mistakes by the company too, although whether those lessons can be applied to an AI future is still TBD. One clear thread in Mac’s comments is around flexibility. Uber is leaving the door open on a bunch of things, from buying Expedia to creating its own AV fleet. It’s a reflection of just how uncertain the future is for even successful business models. We may have goals and impact we want to make, whether that’s a 30-minute delivery of everything or ridesharing in the skies, but we also have to keep our feet on the ground, ready to change our route based on the dynamic conditions around us.
I’m Bob Safian. Thanks for listening.