Ben Gilbert: belief

Transcript context

…Well, first of all we should be clear that this is not a bad deal for Uber, right? It’s a sort of remarkable retreat that nearly 20% of what will be kind of their major international rival, a billion dollars investment to kind of recoup some of the massive losses, I think at this point, this is a very respectful set of negotiations primarily Jean Luo of Didi and Emil Michael from Uber culminating, as I depict in the book, this kind of famous drinking session between Cheng Wei and Travis in Beijing over the summer of 2016 where they’re drinking Baiju and Cheng Wei was sort of hilariously dismissive of Travis’ drinking abilities. But of course, Baiju is not for the faint of heart. I guess I don’t have much illumination on how they came to kind of 17% or 18% ownership stake other than this is what sort of the market was suggesting at this time. And for Didi it's a great deal too because they kind of win not just the Uber China brand and its customers and all those employees but basically an open playing field to be the primary kind of transportation innovator in the world’s largest transportation market. We usually save this more for the end, our evaluation criteria. I think we’re going to look at Uber here and say was this – usually we look at the M&A event and say was this a good use of funds, was this impactful and multiplicative in the future to bring this company in. So the lens I think we should look at this through is was it a good move for Uber to engage in all of this activity and then leave with the 17% stake in Didi. If you just look at the raw dollar leverage, I mean, it’s a very short period of time of blowing $2 billion to get almost $6 billion in value of present dollars. And the hope is, is you make that investment and that Didi continues to grow in value in China. And you raise a great point, one of the best markets in the world or the best market in the world, the biggest market in the world should get remarkably bigger than Uber itself. So I think it was a good deal for Uber, I only gave two reasons. But I’m curious to hear what you guys think. One, Uber may not have known this but the regulatory environment in China was about to change for all the ridesharing companies. A lot of the big cities have now said it was illegal to drive for these companies if you don’t live in the city. That has constrained the supply of Didi and slowed down its growth. So I think Uber got out at probably the right time. If you’ve got a constrained supply being on a battle for the hearts and minds of drivers is not the position you want to be in if you’re the foreign company.…

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