Uber CEO Dara Khosrowshahi talks about taking the company public, the future of driverless cars, expansion plans and whether or not he takes an Uber. He appears on the latest episode of “The David Rubenstein Show: Peer-to-Peer Conversations.” The interview was recorded on June 11 at The Economic Club in Washington.
The trucking industry is worth hundreds of billions of dollars per year. Uber is going after this market with Uber Freight, an online platform that matches truckers with shippers looking to move cargo from one place to another.
In 2018, about 3.5 million people in the United States were employed as truck drivers. With the explosion of Amazon and other e-commerce companies, the demand for truck drivers has been outpacing supply. In 2018, the United States trucking industry was short over 60,000 drivers. If the trend holds, experts predict there could be a 160,000 driver shortage by 2028.
The social-media giant’s plan for Libra—the digital currency it is launching with a few dozen partners including Visa Inc., Mastercard Inc., PayPal Holdings Inc. and Uber Technologies Inc. —is the most ambitious yet to get consumers comfortable with the technology that underpins bitcoin. Facebook’s ultimate goal is for consumers to use Libra to pay their bills, buy things and send money to family members abroad, among other everyday financial transactions.
Facebook has a built-in advantage because of its massive reach; around one-third of the world’s people visit the site monthly. But persuading them to change their habits and adopt a brand-new technology could be a tough slog. Privacy concerns also could hinder adoption of the new currency, though Facebook has said it won’t mingle Libra users’ social and financial data.
Bitcoin is a case in point. Its pseudonymous creator, Satoshi Nakamoto, pitched the original cryptocurrency to the world a decade ago as a way for people to exchange value directly, without the intervention of banks or other middlemen. Yet it has failed to catch on as a payments platform.
Facebook’s toughest sell will be in the developed countries where established payment options such as cash and credit cards remain king, and in places like China, where mobile-payments networks dominate the market. Consumers in countries with limited access to banking services may be quicker to adopt the new currency.
The key will be incentives. Fiat currencies work for a simple reason: Governments decree that their citizens must use and accept them. Digital currencies such as bitcoin and Libra without ready-made communities have to give consumers a reason to use them.WSJCoin: To Understand Cryptocurrencies, We Created One
The founding members of the Libra Association, the Geneva-based not-for-profit that will govern the currency, will be tasked with designing and spreading user and merchant incentives, which could include discounts.
Libra’s appeal, at least in the beginning, likely will depend on how many merchants and service providers sign up to accept it, said Dante Disparte, head of policy and communications for the Libra Association. It also needs to work like the established financial networks that consumers are accustomed to using, he said.
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Libra aims “to make the transfer of currency more efficient than the alternatives,” Mr. Disparte said.
Bitcoin’s development wouldn’t have been possible without incentives. The miners that provide the computing power to maintain and secure the network upon which it exists get a shot at winning a competition for newly created bitcoin.
“That was Satoshi’s brilliance,” said Dan Held, a bitcoin investor and entrepreneur. “It wasn’t even the code. It’s that the code aligned incentives among participants.”
Still, bitcoin has struggled to grow beyond its core base of users and aficionados because of technical limitations.
Libra won’t carry the force of law, and it will have little investment value. It is being designed as what is known as a stablecoin, pegged to the value of a basket of fiat currencies that will shield it from the big swings typical of bitcoin and its descendants.
Thus stability and cost—Libra user fees are expected to be minimal—are likely to be its biggest draws, said Eswar Prasad, an economics professor at Cornell University.
But trust could be a stumbling block, he said. The question of Libra’s stability will be tied to Facebook’s reputation, at least in its early years.
Facebook still has a “reasonable amount of trust among its users,” despite concerns about its privacy practices, Mr. Prasad said. But it is competing with the central banks that issue hard currency, he said, and that could be a difficult fight to win.
“For all of Facebook’s wealth and domination of the social-media space, it is difficult to see its currency becoming a durable and significant store of value,” Mr. Prasad said.
Uber was the most valuable private company in history, but the public market has not been as enthusiastic. The reason explains a lot about how the tech industry works.
But some of it should go to Silicon Valley’s cultural divergence from the business reality. Investors loved the company not as an operating unit, but as an idea about how the world should be. Uber’s CEO was brash and would do whatever it took. His company’s attitude toward the government was dismissive and defiant. And its model of how society should work, especially how labor supply should meet consumer demand, valorized the individual, as if Milton Friedman’s dreams coalesced into a company. “It’s almost the perfect tech company, insofar as it allocates resources in the physical world and corrects some real inefficiencies,” the Uber investor Naval Ravikant told San Francisco magazine in 2014.