ROSE-SHOW-01
Interview with Apple CEO - Part 1>
Brian Chesky. Apple CEO Tim Cook talks about what makes Apple successful.>
CHARLIE ROSE, THE CHARLIE ROSE SHOW, HOST: Welcome to the program. Tonight, we talk about the sharing economy. We begin with Travis Kalanick, the Co-founder and CEO of Uber.
TRAVIS KALANICK, UBER TECHNOLOGIES, CO-FOUNDER AND CEO: In almost every city we are in, at some point the incumbent industry attempts to persuade the government to do what we believe is the wrong thing which is not allow competition.
And so we are very pro competition and that`s the principles in which we try to engage in a city but obviously, incumbents don`t always want that competition.
CHARLIE ROSE: We continue with Brian Chesky, the CEO of Airbnb.
BRIAN CHESKY, AIRBNB, CEO: You grow and people love your products. And so when they love it, they tell other people. I use to tell the company in our -- in Silicon Valley, everyone is focused on the growth. They`re focused on the numbers going up. .I say we should focus on making sure people have great trips.
CHARLIE ROSE: We conclude this evening with more of our conversation with Tim Cook from 2015 in our ongoing inquiry what makes Apple apple.
TIM COOK, APPLE INC., CEO: Here`s the situation, on your smartphone, in your iPhone, there`s likely health information, financial information, there are intimate conversations with your family or your co-workers, there is probably business secrets from the work that you`re doing, and there also tracks of what you`ve searched on, lots of information about what you`re looking at and writing, and maybe you`re a journalist and maybe even your sources, right?
And all of this stuff is incredibly personal and we believe incredibly private and you should have the ability to protect it.
CHARLIE ROSE: Travis Kalanick, Brian Chesky and Tim Cook, when we continue.
(COMMERCIAL BREAK)
CHARLIE ROSE: Travis Kalanick is here. He is the co-founder and CEO of Uber Technologies, the ride hailing service launched in 2010, is now present in 65 countries. Wire Magazine called it the transportation and logistics unicorn many private investors consider more valuable than Ford Motor Company or FedEx. It is valued at $62.5 billion.
In recent years, Uber had expanded into food and item deliveries as well as ride sharing with uberPool and uberCOMMUTE. A class action lawsuit over the classification of drivers as contractors instead of employees is ongoing.
The company is also facing stiff competition and opposition from some of its drivers who have rejected to a recent price drop in major cities.
I am pleased to have Travis at this table for the first time. Welcome.
TRAVIS KALANICK: Yeah.
CHARLIE ROSE: Here we go. This is fast company Innovation by Design 2015. So it`s a year ago. A $50 billion evaluation, a legion of enemies has CEO Travis Kalanick plans to keep the magic going on. Admit it you loved Uber.
People seem to love Uber? What is it that makes them love Uber?
TRAVIS KALANICK: Well, we didn`t` realized it but it`s actually really hard to get around.
CHARLIE ROSE: Yeah.
TRAVIS KALANICK: You know, I think a lot of people either get used to waiting for a bus, used to driving a car, usually, or used to just not being able to go somewhere when they want to.
It could be like, hey, you want to go to a restaurant but you don`t know how you`re going to get back because you`ve had a glass of wine or two. This is about safe, reliable transportation. No matter where you are in the world, it`s five minutes away.
CHARLIE ROSE: How did you start it?
TRAVIS KALANICK: Well, I was with my co-founder. We are in Paris and couldn`t get a taxi. Anybody who`s been out late in Paris knows like it`s very likely you`re going to be walking back to your hotel if you`re a visitor or walking back home if you live there. And we just wanted to push a button and get a ride.
It`s actually my co-founder, he`s like -- I just -- we going to push it -- I want to push a button and get a ride. I`m like that sounds like an amazing thing, let`s do go that.
And we went back to San Francisco and then we started working on it.
ROSE You had been a serial entrepreneur before that.
TRAVIS KALANICK: Yeah, I mean.
CHARLIE ROSE: . for success and failure?
TRAVIS KALANICK: Yes. Yes for sure. I mean what (inaudible) have been an entrepreneurs since I basically since I got out of high school and have seen the all, you know, all the different sort of trials and tribulations of an entrepreneur, but I guess my approach is -- on the failure side of it, is that -- it`s just, yeah, you`re going to get knock down but you keep -- you just find a way to get back up and then it doesn`t feel like failure.
That`s why when you said failure I was like, ah, you know, maybe not. But yes, I`d definitely things that people would look at as hate failures of some kind or another.
But if you just keep getting back up and you keep putting your roll into it, I found that you eventually find succuss.
CHARLIE ROSE: (Inaudible) for me, Uber could not have happened without...
TRAVIS KALANICK: Smartphone.
CHARLIE ROSE: Smartphone.
TRAVIS KALANICK: Yeah. Right. Uber could not have happened without a connected smartphone with data.
CHARLIE ROSE: Someone -- as you were sitting down asked the question about lowering prices. Very good for the consumer.
TRAVIS KALANICK: Yeah.
CHARLIE ROSE: Perhaps not so good for the driver. But there`s an answer to that.
TRAVIS KALANICK: Well, look, what we`ve found is that, when prices go down, that people can -- a lot more people can use it. It becomes affordable to a lot more people. And so then you see people using it in places and at times they wouldn`t before, and what that means is that when a driver drops a customer of, he then can get --he can then get another request much more quickly.
And so what happens is the trips per hour that that driver can do and the price goes down.
CHARLIE ROSE: Volume goes up?
TRAVIS KALANICK: The volume goes up. And so what happens is we`ve done from, for instance, here in New York, we`ve gone from, you know, four years ago the driver was making about$19 an hour, go all the way up to $32 an hour because everything got more efficient as we moved prices down, so the driver is making more money per hour as price goes down.
CHARLIE ROSE: How many governments have tried to prevent you from doing business?
TRAVIS KALANICK: I mean, in almost every city we are in, at some point, the incumbent industry attempts to persuade the government to do what we believe is the wrong thing which is not allow competition.
And so we are very pro-competition and we -- that sort of the principles in which we try to engage in a city, but obviously incumbents don`t always want that competition.
CHARLIE ROSE: There`s also the question of drivers being employees versus being private contractors. As of today they continue to be private contractors?
TRAVIS KALANICK: Yeah, that`s correct. I mean, look, the way to think about this is it kind of starts with., you know, how the independent contractor thing works, not just here in the U.S. but around the world.
Over 90 percent of the taxi drivers in the United States are independent contractors today, right, but those taxi drivers have shifts, like, you know, a lot of cases it`s 12 hour shifts.
CHARLIE ROSE: Do they get medical benefits and things like that?
TRAVIS KALANICK: No, they`re independent contractors.
CHARLIE ROSE: Right.
TRAVIS KALANICK: So, they have shifts and they have -- and it`s not their equipment, it`s not their car, and they have lots of rules on how they do business. In the Uber world, there are no shifts, you just work when you want and stop working when you want. And, of course, it`s your car, so it`s just really your business.
So we feel like the independence that drivers have on our platform is pretty clear, and then it`s just about the political discussion about, you know, as a community, you know, making sure that the labor side of the equation is getting a good or fair deal.
CHARLIE ROSE: This is a sharing economy. Airbnb is part of the sharing economy. What else is vulnerable or open or possibly changing because of the sharing economy?
TRAVIS KALANICK: Well, look, you know, I like to think of it at least where the world that Uber is in is on-demand economy. And like I said, you push a button, you get a ride. That`s how we feel as consumers.
But on the labor side, pushing a button and starting work, pushing a button stopping work, that flexibility in work is, I think, the real breakthrough in what I call the on-demand economy.
And I think that`s.
CHARLIE ROSE: You can shape your own hours?
TRAVIS KALANICK: You literally have control of your time, which almost -- there`s very little work in the world that allows for that, and that`s a true breakthrough when you can do it at scale when you`re talking about millions of people who now can work on their own time when they choose and not when they don`t.
CHARLIE ROSE: Are you in a hurry to do something? And I mean by that, people talk about you, and they believe that you`re trying to rise to higher and higher levels of scale because it means something to you.
TRAVIS KALANICK: Sure.
CHARLIE ROSE: But would you have developed this at least this profile a young man in a hurry?
TRAVIS KALANICK: Well, look, you know.
CHARLIE ROSE: With all the (inaudible) suggest.
TRAVIS KALANICK: You know, I think it`s -- if -- how should i put it -- we look at all of the cities and the hundreds of millions or billions of people who live in cities around the world and we know that the transportation systems there are just not --they`re not serving everybody`s needs. I mean even here in New York with a great mass transit system, there are still 2.5 million cars going over those bridges every day.
And so we just believe we can help the city do better. I guess most successful entrepreneurs are not waiting for success. They`re not waiting for progress. We are generally a little forward-leaning when it comes to try to making progress happen.
CHARLIE ROSE: Well, you become, I think, in love with the idea that you have been part of, you know, and you can`t wait to push the edges of what that is.
TRAVIS KALANICK: Well, I think what it is like, for me, it`s about problem-solving and loving to solve problems. And so, if you are passionate about solving problems --sometimes I just like to describe this as like, imagine a really great math professor with no problems to solve.
CHARLIE ROSE: Yeah.
TRAVIS KALANICK: Right? A great math professor, somebody who wants the hardest problems, who wants to solve them and loves solving them, and the same.
CHARLIE ROSE: Yeah, go head.
TRAVIS KALANICK: Yeah. And so that`s how I feel about my work. And so it`s not about a man in a hurry, it`s more about really interesting problems in the world and how you lean into them and solve things that people maybe thought weren`t even possible to solve and that`s fun.
You know, I like problems -- I like problems that have.
CHARLIE ROSE: Consequences?
TRAVIS KALANICK: Well, certainly that. But I think I like problems that where you can fight for something that matters, where you feel like maybe there is a little bit of justice that`s part of solving.
CHARLIE ROSE: And how would you define what matters in your case?
TRAVIS KALANICK: Well, like in Uber`s case, imagine a system -- imagine the way in which all people get around their city, what`s constrained because somehow or another it was illegal to have alternative. Somehow or another, it became illegal for cars to be used for commercial purposes and, because of that, everybody for the last50 years has had to buy cars because no cars were allowed to be shared. But when you can share them.
CHARLIE ROSE: The technology wasn`t there to share, right?
TRAVIS KALANICK: Well, not necessarily.
CHARLIE ROSE: OK.
TRAVIS KALANICK: If you look at the past, like the -- there was an Uber before there was an Uber and it was called the jitney and it was in the early 1900s and it literally grew faster than Uber`s grown but very quickly there are regulations put into effect that made it illegal for people to share cars.
CHARLIE ROSE: When will you be for profit?
TRAVIS KALANICK: Well, it`s interesting. We, you know, we like I think some other tech companies -- maybe even like Amazon or something like that --where the profits come in and you didn`t go and invest in the new thing.
And so for us, we have, you know, we`re well over 100 cities that are profitable, but you take those profits and you invest and you either go into new cities or you invest in new technology or new kinds of businesses.
Now, I don`t want to do too many things. We try to keep a limited set of things that we do so we can stay focused, but we do like to invest our profits into the new thing.
CHARLIE ROSE: OK, let`s talk about the new thing.
TRAVIS KALANICK: Yeah.
CHARLIE ROSE: UberCOMMUTE?
TRAVIS KALANICK: UberCOMMUTE. So this is -- well, let`s start with pool. UberPool is you push a button, car comes to you just like before, you open the door, you get in the car, and there is somebody else already in the car.
Two people taking the same trip at the same time, uberCOMMUTE, is somebody`s driving to work. They`re not a commercial driver and they pick you up on the way to work and you guys just happen to be going the same place at the same time. The cost is way down with uberCOMMUTE because the person is already going where they want to, they`re already going to work so the marginal cost goes down, you know, goes down substantially.
CHARLIE ROSE: What are the new adventures other than each commute and pool?
TRAVIS KALANICK: I mean, look, you know, something like 30 -- I mean close to a third of all our trips are in China. That`s interesting.
CHARLIE ROSE: A third of your volume is in China?
TRAVIS KALANICK: Yes.
CHARLIE ROSE: And what do you think it will be by 2020?
TRAVIS KALANICK: I mean I got.
CHARLIE ROSE: That`s four years.
TRAVIS KALANICK: I have no idea.
CHARLIE ROSE: But you love thinking about it.
TRAVIS KALANICK: Yeah, for sure. I mean what I love doing is solving the problem, right? So how do you.
CHARLIE ROSE: OK, so what does solving the problem mean in China`s case? It`s the metric of demand on all of that or China`s a different place and you have to make your way around a different set of rules? What is it?
TRAVIS KALANICK: It`s the latter, right? So, for instance, we have our existing system, but there are so many things that are different in China - - maps are different, social networks are different, payment systems are different, government and how they work with businesses is different.
And so now you have a whole new problem to solve. And sometimes it`s, like, it`s different in this little way, but that little way, that Chinese way of doing things can change everything, and it`s interesting for an entrepreneur and certainly for a problem-solver because then you have to re-think your problem.
CHARLIE ROSE: How will driver less cars affect your business?
TRAVIS KALANICK: Well, I think we see all of the good things that happen with human-driven transportation, like what Uber does today, with people driving cars. When you go into autonomous, I think, well, you get -- those benefits get bigger, in many cases, but I think the biggest one is that a million people die a year in cars and, when you go into autonomous cars -- and we know Google has been working on this since 2007 -- when you go into autonomous cars, the prospect is a million fewer people dying a year globally. That`s a big deal.
CHARLIE ROSE: That`s a big deal.
TRAVIS KALANICK: That`s a huge deal. These are like senseless deaths that shouldn`t have happened.
CHARLIE ROSE: So how far away is that?
TRAVIS KALANICK: I mean, you know, there is no right answer. Nobody really knows because there is still science to be solved, there is still regulatory to be solved. The point is like if a Google autonomous vehicle is in a desert and no crosswalks and no people, they`ve got that now. If there is crosswalks they probably have it. If there is really extreme weather, maybe it starts functioning not quite right.
And the thing is like, there`s a 150, there`s -- or not -- there`s hundreds of these types of problems that have to be solved one at a time in order for it to work all of the time.
CHARLIE ROSE: Issues of people, either a driver being attacked by somebody from the back or a driver acting hysterical.
TRAVIS KALANICK: Yeah.
CHARLIE ROSE: .in terms of taking off and not stopping, running stop signs, and going too fast, how big an issue is that for you? And what are you going to do about it?
TRAVIS KALANICK: Well, look, you know, we -- you know, Uber`s first cultural value, our number one cultural value is to celebrate the city and what that means is everything we do is to make a city better. And so part -- to sort of -- the first thing we do is say what can we do -- when we first got going, what can we do to make for the safest way to get from point A to B, that`s part one.
Part two is, well, that`s great, but how can we actually help to make the city safer? No city`s perfect. No system will be perfect, but can you institute technology, can you roll out technological systems that make being an Uber or make Uber the safest place in a city?
And so this is things like, well, of course, things you do before the trip even happens -- making sure the right drivers get on the road and the wrong ones don`t, it`s making sure that, you know, any feedback that`s happening in a car like goes back to a centralized system and you can deal with situations or partners -- we call the drivers partners that, you know, if there is feedback that needs to get back to them, we do. If it`s an extreme situation, we take them off the system. And then there`s after the ride, too.
And so, imagine if you had a system where somebody`s -- you know, if -- and this is the kind of technology that`s interesting is when you -- let`s say somebody is accelerating faster than they should or decelerating faster than they should, is there a way to detect that? This is the kind of future that we`re trying to figure out. And if you can detect it, are there ways to prevent it if so -- and basically it starts with a system of accountable and then technology that makes that system more and more accountable overtime.
CHARLIE ROSE: Yeah. Accountability but also sensors that can do the work of protection.
TRAVIS KALANICK: Sure. For sure.
CHARLIE ROSE: It`s been an investment from General Motors. And car company invest it it?
TRAVIS KALANICK: That`s correct.
CHARLIE ROSE: A car company invested in it.
TRAVIS KALANICK: Yeah, that`s right, yes.
CHARLIE ROSE: Does that make sense to you if you`re a car company?
TRAVIS KALANICK: Yeah, look, I think as transportation becomes a service, as fewer and fewer people own cars, there is going to be this software and hardware partnership. Uber and folks like Uber are the software side of things. We`re not making cars.
CHARLIE ROSE: Not now, not tomorrow?
TRAVIS KALANICK: No, I don`t -- I mean all you have to do is go to a manufacturing floor and see cars being made and you`re, like, wow, this is a whole new level.
CHARLIE ROSE: Yeah. Right.
TRAVIS KALANICK: And so I think there`s a natural partnership between the hardware and software side of things.
CHARLIE ROSE: What do you worry about in the middle of the night about Uber? Is there a disruptive technology that could change the game?
TRAVIS KALANICK: Well, look, I think we are all about -- we`re like we basically are all about making it more convenient and bringing that convenience at a lower cost. And whoever is able to bring the most amount of convenience at the lowest cost is going to be a big winner in premium transportation in the cities.
CHARLIE ROSE: How did you change your image? Why did you feel like you needed a new symbol of Uber?
TRAVIS KALANICK: Yeah. Look, when we first came up with what is now the old Uber logo or the old app icon.
CHARLIE ROSE: Right.
TRAVIS KALANICK: . we were only black hearts. We were a high-end service, a luxury service, almost, and this was an aspiration or it was the sort of we are trying to show something that looked high-end and could almost look like something that would go on the front of a very nice car, but we were only in one city when we made that, we weren`t global, and it was super high end.
And so we said, look, for now and almost 400 cities, dozens of countries around the world, we wanted to be deferential to the places that we serve, that`s where the colors and the patterns come in and, by the way, you`re indifferent countries, you get a different pattern and color on your icon.
CHARLIE ROSE: It`s going to make something universal.
TRAVIS KALANICK: And then, you know, the "U" we turned into something more universal. "U" doesn`t mean anything in Sanskrit and the "U" doesn`t mean anything in Mandarin, and we wanted to have something that was more approachable, and so that`s -- that was the purpose.
CHARLIE ROSE: It`s great to have you here.
TRAVIS KALANICK: Yes, good to be here.
CHARLIE ROSE: Brian Chesky is here. He is co-founder and COE of Airbnb. The online marketplace have people booked travel accommodations around the world. Since beginning in 2008, Aairbnb has connected 80 million guests with hosts in more than 190 countries. It is valued at more than $25 billion.
Writing in "Time Magazine" last year, Apple`s Johnny Ive said, "Brian Chesky`s audacity is fabulous. He dares to believe that we shouldn`t be strangers that we can have a sense of true of belonging whenever, wherever we travel."
I`m please to have to Bryan back at this table. Welcome.
BRIAN CHESKY: Thank you very much, Charlie.
CHARLIE ROSE: I love the Johnny Ive quote too.
BRIAN CHESKY: Yeah.
CHARLIE ROSE: You two share something of great passion for design.
BRIAN CHESKY: We love design. You know, when I was a kid or I was in college, a lot of kids put posters of Lebron James in their wall and I had Johnny`s design on my wall. He was my idol. I went to Rhode Island for designing. I thought it be industrial designer when i grew up and I told Johnny that.
CHARLIE ROSE: I mean he and Mark are close friends.
BRIAN CHESKY: Yeah.
CHARLIE ROSE: And when they came here we did a friend we did -- did a program with them together.
BRIAN CHESKY: Yeah.
CHARLIE ROSE: . and they were terrific (inaudible) things with him for 60 Minutes on Apple.
BRIAN CHESKY: I love Johnny and Mark.
CHARLIE ROSE: Remind me again for people who have not in them. You know, when you talked about this before, of understanding what Airbnb does.
BRIAN CHESKY: The basic idea of Airbnb is that you can go to Airbnb and you can book 2 million, any of 2 million homes in 191countries.
CHARLIE ROSE: Home, apartments.
BRIAN CHESKY: Homes, apartments, castles, tree houses. We started with homes and one day someone added a castle, an igloo, and so we have all these different types of spaces.
The big idea though was we basically realized when people travel, if you notice, if you asked somebody like in your own city, like if they travel and visit the city you live in, you ask "Where did you go?" They`ll often mention the very tourist districts and it be something you would never go with yourself.
And we said why when you travel you can use go somewhere and feel like you live in that community and what better way to live in a community is actually live in home.
And so this is the basic idea that yo could go somewhere and feel like you live in that community.
CHARLIE ROSE: And you started with a website and the idea you and a couple of your friends.
BRIAN CHESKY: Yeah.
CHARLIE ROSE: .needed to make a little money.
BRIAN CHESKY: I couldn`t afford to pay rent.
CHARLIE ROSE: Yes.
BRIAN CHESKY: You know, I was living in San Francisco. And we thought this design conference was coming to San Francisco and we thought why don`t we just host some people and make some extra money? We eventually -- we wanted to make a bed and breakfast. We didn`t have any beds though. So pulled out three air beds. We called it the air bed and breakfast. And I wouldn`t have thought three air beds would have inspired 2 million homes around the world.
CHARLIE ROSE: And you think this is in fact a sector of the economy that has huge promise and not remotely been utilized.
BRIAN CHESKY: Not even close to being utilized. I mean we have 2 million homes. I think it`s possible you will see a factor of 10, much more of that. So I think the whole sharing economy is like this huge explosion of opportunity. We used to live in the world where there were people and there were businesses, and there was a clear line between those two. I think starting we`re living in a world where people act more like businesses. There is a blurring of the line. I can drive a car on the side with Uber, Lyft, I can share my home, there`s we were. There are so many opportunities.
CHARLIE ROSE: You don`t think your competition is hotels, do you?
BRIAN CHESKY: I don`t really think the competition is hotel. I mean tell you why, .most average stay in hotels one to two nights. Average stay in Airbnb is close to five nights. I think it`s a little more of a category creator. Even you ask CEOs of Hilton Marietta, they false set on record, they don`t think there`s a lot of overlap between our businesses.
I think that we`re solving a pretty unsolved problem which is you want to go to a city for a week or even longer and want to be a part of a community and save money and there`s not really been a lot available options before this.
CHARLIE ROSE: What`s the business model?
BRIAN CHESKY: Business models we handle all payments to our platform and we take about 14 percent commission.
CHARLIE ROSE: And that`s it?
BRIAN CHESKY: That`s it. 14 percent commission.
CHARLIE ROSE: So they get 85 percent of whatever rent they incurred?
BRIAN CHESKY: Yeah, yeah. Yeah, that`s the way it works. And the economics works really well for them. Our average host makes close to$8,000 a year so it`s meaningful, supplemental income. For most people it`s money they make on the side.
CHARLIE ROSE: Most people do it on the mobile device?
BRIAN CHESKY: Most people use the mobile device but they also use the web. So -- but yes, most people manage it everyday on the mobile device.
CHARLIE ROSE: One of the great stories about your and your development is Paul Graham who came here.
BRIAN CHESKY: Yeah.
CHARLIE ROSE: . you know, from Y Combinator.
BRIAN CHESKY: Yeah.
CHARLIE ROSE: And you`ve had not a great success looking for money.
BRIAN CHESKY: Yeah.
CHARLIE ROSE: And you went to him.
BRIAN CHESKY: Well, it`s amazing. Originally, another company in Y Combinator, Michael Cyball, just one of our like -- like our first advisers, introducing like 15 angels in Silicon Valley. We were looking to raise $150,000. We were going to sell 10 percent of the company for $150,000. I couldn`t even get most people to reply to our e-mails.
