This is one outlet's own report from Business Insider — the article as it was filed.
AIPROPX ReportBusiness Insider · 3h ago
Uber COO says there's a downside to being at the top
Uber COO Andrew Macdonald said large companies with new ideas move more slowly than startups as employees get "fat" on the resources. Zed Jameson/Bloomberg via Getty Image
Uber is one of the largest ride-hailing companies in the world, with more than 200 million users.
Uber COO Andrew Macdonald said that kind of scale makes innovating at the company harder.
The executive said Uber has a program called "Growth Bets" to incubate new business ideas.
At the top, it's hard to know where else to go.
In an interview on Harry Stebbings' 20VC podcast published on Monday, Andrew Macdonald , Uber's chief operating officer and president, said that finding new businesses can be challenging when the company's core business is already so large.
Call it the "classic innovator's dilemma ," he said.
"The thing you've already built is so big that it just swallows up your organizational capacity to do anything else," Macdonald said. "And even if you're able to stand up other businesses, it's impossible for those businesses to get the resourcing, attention, distribution, marketing dollars, engineering capacity — whatever it is, it just gets swallowed up by the hole."
Macdonald said Uber is close to $250 billion in gross bookings on an annualized basis. At that scale, he said, a new product would need a plausible path to becoming a multibillion-dollar business before it's compelling enough for the company.
"It just actually constrains your thinking a little bit," Macdonald said.
Uber is operating at a formidable scale. The company reported $58 billion in gross bookings in its most recent quarter and $14.2 billion in revenue. Uber said the platform averaged 208 million monthly active platform consumers.
The company is still making big bets.
Autonomous vehicles , Macdonald said, are now Uber's "largest single area of investment." The company has partnered with a slew of robotaxi platforms, including Alphabet's Waymo, and launched Uber Autonomous Solutions earlier this year — a suite of services aimed at helping AV companies commercialize their tech. The Financial Times estimated in an April report that the company has committed more than $10 billion to investments in AV companies and spending on robotaxi fleets.
On Monday, Uber also unveiled a partnership with drone-delivery startup Zipline to allow Uber Eats customers to receive drone deliveries starting later this year. The companies said they were targeting one million daily drone deliveries by the end of 2029.
The partnership includes a "strategic investment" in Zipline by Uber.
Macdonald said on the podcast that the company tries to incubate fledgling ideas through a program called "Growth Bets," in which Uber dedicates employees to new projects rather than having people manage existing businesses simultaneously.
Even then, Macdonald said big companies throwing a ton of money at new projects often move more slowly than startups, as people get "fat on the resources."
The upside for Uber, he said, is that if a new idea works, the company can put it in front of more than 200 million people.
Not a bad head start.
Have a tip? Contact this reporter via email at [email protected] or Signal at lloydlee.71. Use a personal email address, a nonwork WiFi network, and a nonwork device; here's our guide to sharing information securely .
AIPROPX is an independent multi-source news index — we track, compare, and connect coverage from across the web into one place you won't find anywhere else.
