Is Uber super f*cked? Let’s ask “Super Pumped” author Mike Isaac

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Hi, everyone.

This is Pivot from the Vox Media Podcast Network.

I'm Kara Swisher.

And this is Scott Galloway.

Happy 50th episode, Scott.

This is

a new relationship.

You remember.

I remember.

You didn't.

Well, you know,

one is paper, 10 is copper, and 50 is sativa.

Okay, let's get the headset.

Orza Coppa.

That's what it is.

Or is a coppa.

Where are you again?

You're again not in New York where you work.

Where are you vacationing now?

I'm in Florida.

I'm here for Never Forget Dorian.

I had a plastic lawn chair blow over.

So Florida strong.

Florida strong.

We're hanging out.

All right.

You know, Florida, also known as Alabama, according to President Shakespeare.

Yeah, there you go.

What the hell?

There you go.

Oh, by the way, I did.

But you had no Dorian.

I did.

It's killing the rest of North Carolina, you know.

I did.

So many jokes.

What?

Go ahead.

I swabbed my fecal matter for that DNA test that guy sent us.

And I just got the results.

Oh, really?

Yeah.

And?

Well, I did.

What is that?

I did the DNA test, and according to this technology.

I got it.

According to this technology,

it predicts that tonight I'm going to have Forzacapa and Cokes vape and watch succession.

So it's really amazing technology.

God.

Succession's not on tonight, Scott.

It's on the 8th.

That's my joke.

That's my joke.

Okay, that's a terrible joke.

It's a terrible joke.

That's awesome.

I thought about that.

You joke about storms.

It's hitting North.

It's hitting the Carolinas right now.

Very seriously, it was great that it avoided Florida.

It was great that it avoided Florida.

Were you scared at all?

Were you nervous to be there?

Yeah, the weather, for some reason,

I can tell I'm getting older because I'm fascinated by the weather, but I'm not really old in that.

I'm not scared of it yet.

But no, it's

the Bahamas got hit.

It's terrifying.

What happened?

Really hard.

It's terrible.

It looks like the Carolinas are going to get hit.

This is going to be, it's bad.

But you need to come back to New York City.

I think it's time.

Well, it's nice to know you can't work.

Anyway, moving along, we have someone

here today.

We're trying a a new thing.

We're trying all kinds of new things on pivots.

And we usually do a big story breakdown, but we have in the studio Mike Isaac from the New York Times.

Hi, Mike.

Hi.

How you doing?

Mike used to work for me.

I really, really am responsible for his entire career.

But

we're going to shift things up.

We have big news stories, but first we're going to talk about this big story breakdown of his book on Uber, which came out, is it today?

Is it?

Tuesday.

Tuesday.

Okay, so this week.

Mike wrote a ton of amazing stories for the New York Times about

Uber.

And we're going to talk about his book, Super Pump, The Battle for Uber.

And it delves into all the drama of the rideshare company in Silicon Valley, which is full of it.

And we've got lots of questions.

Scott, would you like to start questioning Mike Isaac about this book?

Oh, you mean the guy where the student has become the master, the guy that's putting out a best-selling book?

Yeah, okay, Mike.

So first off, Mike, congratulations.

I've literally seen your name everywhere.

And this book is, I don't know if it's any good, but it's going to sell a lot because your publicists have done their job, which I think is the key here.

It's a great book.

So look,

my question is the following.

There's a bunch of data coming out that if you actually do the math, that Uber partners, the 4 million people who drive for Uber, are oftentimes making less than minimum wage.

Was there always, and I've always felt this sort of embodies the lords versus the serf mentality, where you have the nice, you know, the nice, mostly college educated, mostly white people at HQ, and then you have the mostly non-white, non-college educated people actually driving the business.

And it goes to Senator Josh Hawley, who, by the way, I promoted to Wall Street Journalist last week.

And I apologize for that.

He's actually the junior senator from Missouri.

But anyways, did you find there was much of a

focus or a concern around the fact that there were a small group of people making millions, if not billions, and then this workforce that, in fact, was at certain times not even meeting minimum wage thresholds?

Yeah, I mean, I feel like

the biggest thing that Uber unlocked, besides shareholder value for their earliest investors, was this idea of a hybrid labor force that has,

you know, and

the biggest proponents of labor rights now are saying that some of what Uber has done is really set back what that looks like for folks who are working now, right?

So there's this battle in California right now over what worker protection should be, whether Uber drivers should be full-time employees or still like contract laborers.

And

for a long time, the thought was they would land on something kind of in between, like maybe slightly more protections than just a 1099 contract worker, but not completely full employees because it would just...

erode the business model.

Wait, first of all, is there a business model to start with?

I mean, if you add on these, if you lard on these costs, which it isn't larding on it's actually the people that are working there right i'll never forget the comment that travis made at the code conference you when you were working yeah when i was there yeah where he said the problem we have with our business model is the guy sitting in the front seat which i thought was it encapsulated what scott's talking about this idea that these are disposable beings yep and they used they called they used to call them supply not drivers right like so it was like it was just sort of a very um cold way of looking at what was essentially a giant math problem for them And so the way of eliminating that, and that's what I talk about a little bit in the book, is this obsession with self-driving, which again is problematic too, because there's costs that come with that that aren't really accounted for.

But it is really just sort of, you know, either you increase prices for riders or you decrease wages for drivers at the end of the day.

And I think for a long time, it was just pushing down on those drivers and what they get paid.

Do you see this company?

I mean, the promise around the expectation that justifies a valuation that's, you know, at one point was greater than Ford Motor is that

at some point they'll hit a scale where they can find profitability.

And it looks as if lately their scale, their costs are maintaining pace with their, they're not hitting scale.

After spending so much time with the company, do you think this company does in fact get to a point where it's making profits?

Or is this just a company that unless it can continue to sort of

you know, tell a spin a big story that it might it might in fact go to zero?

Is there a there there here?

Or is it an Amazon?

Because Amazon spun that story for a long time and it turned out they found a business that was true.

Right.

Totally.

And that's their, that's their pitch right now is like, look, we are going to be this Amazon.

We want to build this platform.

I think early on, Travis Kalinick's proposition was.

This was the original CEO.

Yeah, the first CEO was like, well, an entirely awful person.

We're going to build this huge war chest of cash.

We're going to outraise all of our competitors.

And, you know, we'll just spend them into the ground.

And then we're going to own the whole thing.

It's a winner-take-all thing.

And that might have worked maybe five or 10 years ago, but the environment has totally changed, right?

The soft banks of the world have come in and like they're very well-funded competitors across multiple continents.

So it's not just Uber fighting Lyft in the United States, it's Uber fighting Ola in India and at one point Didi in China and

regional competitor Didi in Brazil as well.

So I think the landscape has shifted dramatically from what they thought the game was in the beginning.

So now their whole thing is, well, we have, because of our scale and because of our core ride-hailing business, we can move into a bunch of different categories like food and trucking.

Yeah, exactly.

And eventually, if you hang with us long enough, we can get to a point of profitability there.

But it's still, it's hard.

You know, I mean, that takes a market that is

less risk averse than I think we're in right now.

I think like Wall Street is looking at these losses and doesn't have the metal that it did maybe five years ago or whatever to hang with Uber the way it did Amazon.

It's also not an Amazon-like business, right?

I mean, or is it?

I mean, the only thing they can do is raise prices.

Because I think in Amazon, I don't know about you, Scott, but when using Amazon, you're not thinking of price.

You're thinking of convenience, quick delivery, which New York Times actually had a great idea about the cost of that to workers.

Again,

that you're doing it.

I mean, Scott's main point is that you're doing it at the expense of workers until you can replace those workers, which is far away, or you can find another business that makes money.

And I don't know, Scott, do you think there's other businesses there that could suddenly become Amazon Web Services?

Well, people talk about Uber Eats and it does have a great brand, but it's not.

We're talking about apples and oranges here.

Amazon, pretty early on,

was cash flow positive.

And they had a very legitimate argument that the only reason they weren't profitable, despite having positive gross margins, was the massive reinvestment in the business.

And Uber's made that massive reinvestment, but it doesn't have cash flow.

It doesn't have gross margins.

There is no kind of,

you know, Uber is no Amazon.

Uber just loses more money as it gets bigger.

They, unless they can find a business, and Mike, tell me if you disagree with this, that starts spinning off cash flow like an Uber Eats.

This is a company that could, in fact, I wouldn't say it would go to zero because it has such a powerful brand and someone would want it, but it does look incredibly overvalued.

What is it?

I think it's off something like 23% or 25% since the IPO, and people are actually starting to check back and say, does this thing make sense as an ongoing business?

So let me ask you, Meg, what do you think is the most exciting or most viable business other than ride-hailing?

Because they're clearly searching.

Is it Uber Freight?

Is it Uber Eats?

This sort of sleeping, I don't know if I would say sleeping giant, but this thing that they're kind of quietly working on right now is less sexy but interesting, their payments infrastructure.

They actually, in order to accept payments from writers all around the world, you have to build out a pretty robust payment system.

And

I think that what they're doing is working on this version of, think of like a Venmo-ish type thing inside of the Uber app where you can build up cash or whatever.

So imagine

if you can save on the millions of transactions that they occur per day and like somehow

eke out

some sort sort of, I don't want to say profit, but like find room in those margins to eventually build a business with that cash and maybe funnel it into Uber Eats orders or different other parts of the app where you can spend money.

That's something that they're trying to do.

Well, they wanted to get into payments to public transit systems where you put your phone down, you use your Uber app to pay.

But now public transit systems like New York just initiated its own.

So, I mean, that's going to be an enormously difficult business to get into.

Yeah, and add to that that they never really played well with cities in the first place, right?

Like, how are you?

I don't know.

It's very complicated.

I think a lot of

the hype right now is around Uber Eats.

But again, with food delivery, like there's so much money going into competition there right now.

Like DoorDash is getting tons of money from SoftBank.

You have Amazon.

Yeah, exactly.

Amazon, what are they going to do?

Postmates is still like a player, even though they're kind of in trouble, you know?

So

I feel like we are five years ago,

where we were with Ride Haling five years ago, we are at food delivery now, just a ton of money being burnt just to get market share.

So And then what do you, what do you, you know, writing your book, obviously a lot of it has to do with the drama around Travis Kalinek and stuff, which who ended up with billions of dollars anyway, the worst person in the world running a company and doing terrible things.

One of the things that I struck was like, you don't get paid, you don't, there's no payback for bad behavior in the end.

I mean, that's, you know, it was sort of at one point someone was talking to me about him like, oh, he really got it.

I'm like, really?

Because he just got yelled at by me and other and you, but ultimately, he was just fine.

I mean, he's a billionaire five times over right now, right?

He's cashed out.

He's

he's doing this new startup doing like cloud kitchens also in like food delivery, which is based atop of Uber and

food and writing.

So he's betting on the sector versus the individual.

Exactly.

Yeah, exactly.

And so, you know, that's sort of the, you know, when I get to the ending, like, what have we learned here?

It's not like he's been ostracized from, you know, well-to-do company in Silicon Valley or anything.

And I do wonder what the lesson is for folks walking away from this company, you know, because everyone that was in early and everyone that was involved in the drama made out pretty all right.

So I don't know.

I don't know if it's...

if it's a cautionary tale or just like another as the wheel turns in Silicon Valley or whatever.

What's the worst thing he did from your perspective in your book?

I mean, it just depends on worst in terms of like culturally or worse in terms of like a strategic mistake.

I think what I think honestly, if he, if he was able to grow and change as a leader, like maybe there was a way that he could have still been there today, right?

But I think his the things that made him such a strong CEO from the beginning just did not scale when he became like on top of the world, right?

And I think there's this mentality among startup CEOs that you still think you're a scrappy small guy, even when you're huge, right?

And you can still

feel like, you know, the big taxi or governments are the bullies and you should be the one that's the underdog and can fight dirty or whatever when in reality, like you're, you're the dominant player at some point.

And I don't think he was able to see that.

And I'm not sure if he would be ever able to see that.

You know, maybe that's the tragedy of his character.

I don't see much tragedy there.

Scott, what do you think?

Well, you brought up an interesting point about secondary sales that

he's a billionaire, and I don't know how much of that was proceeds from the IPO.

Did you do any analysis on secondary sales pre-IPO?

In other words,

who got out early?

Adam Newman's coming under a lot of scrutiny for selling $700 million before the IPO.

A lot of, so it's funny.

In the tender offer when SoftBank was buying in,

everyone who was on the cab table from

early investments investments from Google and Benchmark on down

sold at least some of their shares and made a ton of money, right?

And that's a different valuation than where you are today.

You know, since they gone public,

the stock has taken a beating and it's just been brutal.

But I would say like everyone on the cap table from series...

probably C or D or something is doing okay.

And even SoftBank, I think now is underwater with

their initial investment too.

So if you got in early, you're probably feeling all right, especially if you sold into that tender offer.

But, you know, everyone that came in late, it's kind of the story of the valley too, right?

If you came, the later you came in.

Sucker, you don't know the sucker in the room.

Last money in.

Yeah, exactly.

So we have to, you're going to stay on for the whole show.

But when you think about this book, if you were writing the next chapter of this, like what Scott would say, would it be like, my second AOL book was about the decline, you know what I mean?

The first one was on the way up.

They managed to figure everything out.

And the second part was the disaster that was.

What do you imagine is going to happen?

They've got this decent CEO in there who's just, you know, I always think of Dara Khosrashahi like he must be opening a drawer and there's a dead body every time he turns for the first year, like, oh, this dead body, this dead body.

But

what can he do?

I mean, he's obviously not as charismatic as Travis.

He's not, he's

a relatively honest person about the disaster.

You know, he's been that way.

What's the verdict on Uber?

What do you think the future of ride-sharing holds?

Or is it just a big subsidized event

that investors give to consumers that will eventually not be sustainable?

I think that the very difficult part of what's happening with Uber is the same thing for WeWork, which is where

these businesses came up in a time where people had a better appetite for risk and losing money and being willing to sort of see this vision in which we hit a platform or we hit a point where this tips and it actually becomes a real business because it's going to be ubiquitous.

But I think we're in a different time now where like profitability is actually important to

the street and to like normal investors.

And when it doesn't look like you can actually make a profit, it seems like not a not a super viable thing.

So I think he has the unfortunate timing of coming into that.

That's the climate of which we evaluate companies right now.

And I don't think that was always the case, you know, five or 10 years ago.

So I don't think it's going to be positive.

I think he's still going to sort of sell this story and be like, look, this is the drumbeat.

Give us another year or two years or whatever, and we can get there and we'll belt tighten.

But it's going to be, I think it just seems like a very difficult time to do that.

All right.

We're going to take a quick break now.

We're going to stay here and talk about our other things, our other news stories.

But when we get to predictions, you need to make a prediction of who's going to buy Uber because they are really the reservation system, right?

So you have that part of it and the brand part of it.

The network.

And so you have to think about who's going to buy it, because that's where I think it's going.

But you may not think that or disagree with me.

But we're going to take a quick break now when we get back.

We're going to talk wins, fails, predictions, and listen to some listener mail.

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Welcome back to Pivot.

Okay, let's get in some wins and fails, shall we?

Mr.

Galloway, what are your wins and fails?

So, my win is Walmart.

I thought that they thread the needle really well around some of the concerns or obviously the very important topic of around gun sales.

And I think people, I think they address it thoughtfully after the shooting at their store in El Paso.

And if you look at what they've done, A, they decided to stop carrying ammunition, or once the current inventories are sold out, of ammunition that typically is purchased for assault weapons.

And so they're going to take their share of ammunition sales in the U.S.

down from 20% to somewhere between 6% and 9%.

They're going to stop selling handguns in Alaska, which was the last state that they sold them in.

They previously had raised the age for purchase of guns from 18 to 21.

They do background checks, and they've offered to give that technology to, or lend that technology, that background check technology to other retailers.

So, you know, I would argue that Walmart is actually where the majority of America is around guns.

And if you go into the Twitter sphere, you hear the folks who want an outright ban of most or all guns.

And then if you, you know, and then the other side is unfettered, you know, open carry everywhere.

And also Walmart has said, when I thought this was hilarious, I'd have to actually articulate this, that we'd prefer you not have open carry in our stores.

And the funniest part or the or saddest part of the press release said that if someone is engaging in open carry, which is mean you have a visible weapon walking into a public place, a Walmart, an employee will in a non-confrontational manner address you and ask you to put your gun away, which I think is just good common sense to not be confrontational with someone who's carrying around a gun visibly.

They have to get old ladies to do it, right?

Don't you think?

Like those old ladies.

Yeah, the ones that are at Walmart.

But if you think about it,

there's a larger issue here, and that is these corporate leaders.

If Walmart is the largest private employer in the world, the largest retailer in the world, more people going to a Walmart than any federal agency every week, then effectively Walmart in many ways has more impact on the U.S.

citizenship than the government.

And I would argue that Doug McMillan is kind of the president we want right now, and that is he's making hard decisions and he's going where most of America is.

So I think that Walmart handled this really well.

What's your take on this, Kara?

Well, I think there, you know, we'll see about if there's a fake backlash of like angry people, but I do think you're right.

I think he's exactly where his cut.

I don't think he would do this if he didn't have some sense that his customers were okay with this, right?

Of course.

But at the same time, I do think he's,

I've interviewed him.

I like him a great deal.

I find him to be a very thoughtful, interesting leader.

And I think, you know, you can't have an incident like this happen and not have something to say about your customers and keeping them safe.

So I think it's a win.

I think it's, and we talked about this, that they had to do something.

There's a few digital people on that board.

Marissa Mayer is still on that board, I think.

Enrique.

And the woman from, who's the CEO at Nextdoor, I believe, Sarah Fryer?

There's a lot of,

it's interesting.

I think it's an interesting way to deal with it.

I think it's a smart way to move forward.

We'll see if he gets a lot of pushback politically from the NRA and everywhere else.

But

it's certainly a step in the right direction, for sure.

Mike, what's your win?

This is going to sound funny.

I think a win is probably going to be Facebook dating.

They just,

yeah.

Oh, my God.

Galloway, we got to.

I'm in.

Say more.

Say more.

Oh, my God.

No, look, I mean, it's a, if you own the largest network in the entire world and all these existing connections between people, I feel like slapping that on and sort of knifing IAC and Match Group

is a probably, yeah, yeah, right.

And with Tinder and all the dating properties they have is probably like a real

at least they have to show like different model different

it just happened it just did this morning

in the US

and it's connected to Instagram as well and like look I think the kids so I'm told find find each other through

Instagram and and Twitter and that stuff they do not do they not no I have kids so no I think it's just inane that it's so deeply uncool to have met on Facebook I don't know

Yeah,

I think the fact that it's tucked into Instagram as the network actually makes it a little bit more like maybe if Facebook is the

match.com or the eHarmony or the one for like folks who are 40 and up, and Instagram is the one that's like the Tinderish age, then maybe that's a better corollary.

But I think it might actually be a smart way of monetizing dating.

Stanley, what is it?

Mike just went gangster.

You know what?

That's actually a great one.

I'm embarrassed we didn't bring it up.

Facebook and Instagram are going after your buddy Diller IIC is basically an online dating company and when you think about Instagram and Facebook they could be huge in this this is a big category one out of five marriages start online it's um it's it's still something people are willing to pay for they're able to segment the marketplace with different different niches this could be i think mike's on to something this could be their phone was so great their phone was so good everything they do that's not in necessarily related to what they basically do just steal your information they suck at So, actually, this is a lot of information, so maybe they'll be good at it.

But the idea of putting more information on Facebook about your sex life is like, no, thank you.

I mean, maybe you're right.

Maybe it's like, maybe the time right now, people are just like, oh, now you're going to get into my, this is who I sleep with or whatever.

That's not what I want to share.

I mean, that's fair.

You kind of do say that it's complicated, all that stupid stuff.

I don't know.

I think Instagram is really the killer part of this.

I think like that's how the youngs find each other out.

What do we think Kevin Sistrum would think of this?

That's, you know, know, I mean, it's Mark's company now, right?

Yeah, yeah, that's true.

It's Facebook, Instagram by Facebook.

Oh, God.

What did you think of that, Mike?

We didn't like that.

I don't like it.

I think you're ruining your brand for the sake of, what, putting your Facebook stamp on it?

Just don't do it.

He's trying to keep away.

All right.

Fails, boys.

I'm not going to do any this week because I'm giving Mike my win-and-fail slot.

What's your fail, Scott Galloway?

My fail is,

again, we work, they cut their valuation in half half in order to try and say to the public markets, no, check us out.

We're now only going to cost you 20 to 25 billion in the public markets for our IPO, which I call fleecing feces at Tourist of the Unicorn Zoo.

I don't think this, anyways, it's just ridiculous.

And by the way, and I'd like to think we played a role in this, we're the $6 million woman and man.

Adam Newman announced he's giving the money back that he charged the company for the trademark to the term we, which he had adopted for his own own personal asset management firm.

So it's nice to see that.

And also just along,

I'm pinging around here, but Tristan, Harris has clearly had an impact on legislation with what Josh Hawley has proposed for Missouri.

But my loss or lose again is this ridiculous foisting on the public markets this crap or this shit called the WeWork business model and the recognition today that they're in no way going to get the valuation they initially initially floated.

And I'll even bridge, I'll go to a prediction here.

And then Mike, I want to hear your loss and your prediction.

I don't think the WeWork, I think we have a firewall here that's holding and I don't think WeWork gets public.

Mike, what do you think?

I think you're right.

No, I honestly, I was talking about this with someone yesterday.

Even this morning, I think I saw something that said they're considering delaying it, but like, it's so brutal.

I haven't even read most of the S1, but I just keep hearing like how absurd the whole thing is.

Scott Galloway is personally going going to stop this IPO.

He's going to get in the way.

He's going to be like Gerald Butler in what was fallen?

Angel has fallen.

There you go.

Gerard Butler.

You're Gerard Butler, Scott.

Yeah, I get compared to him a lot, except never.

But thank you for that.

Never.

Thank you.

It's like me and the rock.

Yeah.

Anyway, you're going to stop this IPO if it's the last thing you do.

Is that correct, Scott Galloway?

Well, at some point, we got to recognize that our economy has just turned into a basic giant inequality machine where the VCs and the founders figure out a way to foist all this crap on the public markets once they've taken their money out and gotten and created all the value for themselves.

And that the suckers are the actual endowments and institutions and unions and pension funds that have been hyped up on the stock who, because so many people have made so much money on Facebook and Google stock, think the same thing is going to happen.

And so, you know, the kind of the venture industrial complex has decided to capture all those gains as long as they can foist this shit.

And let's be clear, it is shit on the marketplace.

Case in point, the company that Mike wrote that book about.

I mean, Uber,

I'm curious.

Mike, yes or no?

I think Uber is literally going, is going to lose 80% of its value in the next 24 months.

Your turn.

Oof.

Oof.

Your turn.

Oh, my God.

Mike,

comment?

I don't know if I would say 80%.

I do think that

they are in for a hard time.

Look,

Dara's sort of come come in and supposed to have this reputation of being the guy who's going to whip it into shape.

And I think culturally he has.

I think he's sort of brought a lot of the internal dynamics around, and that's a good thing for them.

But I think financially, it's just, it's a brutal business to be in, and it's going to be a brutal business for the near future.

So I don't think it's hard for me to say that, you know, the bears are going to just suddenly change their minds in the next year or so because it's.

The thing is, people do like it.

I mean, they're being subsidized.

Yeah, it's a product, people like it.

It may not be an economic product.

All right, so uh, uh, your fail, Mike.

I hope you guys didn't talk about this last week before, but uh, the Twitter um Jax account getting hacked, we did a little bit, but go right ahead and just cover that.

Please, here's the thing, please,

it was

the reason it lay it down,

so um, funny and sort of ironic is because they used a method um from a company that they acquired to grow in low-latency latency regions and throughout the world.

So like if you just do texting, SMS texting as your company.

Which we used to do on Twitter.

Right, totally.

And that's that's so like imagine if you're going to push your product into developing regions and

they don't have high speed connectivity or whatever.

That was like an

indispensable tool for their growth in a lot of ways.

And then it ended up becoming the thing that took their CEO out.

And now they just,

I think yesterday, said that they have to actually disable the option because it's too dangerous for anyone to get it.

Right, like the president's account is impacted, right?

Because he uses his phone.

Although, honestly,

what would be the difference?

Alabama!

It was under siege.

Like, you really wouldn't know if it was different.

It would be like, oh, this is way too logical.

At this point, yeah.

Sharpiegate.

I can't believe either you didn't talk to Sharpie.

I want to talk to the Sharpie people.

I can't believe they made him special Sharpies.

That's what I want to understand.

They did.

He talked about it.

He didn't like the color, so they made them all black with his signature on it.

I just don't.

Sharpie, you have a lot to answer for in terms of your Sharpie situation.

All right, those are very good winds.

So what do you think is going to happen there?

It's a way at Twitter.

I'm really like worried about them.

They just seem like they're stuck in the same place and they have three years ago, you know?

And I think Jack had this sort of

this, you know, a lot of,

a lot, there's a lot of credit when you're a founder coming back to a company or being in a company, you just get, I mean, you know, you just get like cred of like i'm the founder and i think originally when he came back he was supposed to be this you know mythical guy who can fix twitter and they haven't really done a lot no you know and i wonder if that's just his method or if that's just the product and what it is or whatever but go to their healthy conversation meeting i did not sent you yeah neither of us we would they didn't invite us did you see that they had a meeting where you could go watch them debate healthy conversations i think someone bid at the new york times and i was like really we weren't invited mike and cara weren't invited to to those.

They're very cerebral in how they think through like policy, but it just doesn't seem to translate into action, which worries me.

Good point.

All right.

Those are very good wins and fails.

And obviously, the Brexit thing.

We'll talk about that next week, Scott, because it looks like it's Downton Abbey with bad haircuts.

Anyway, let's dig into some listener mail before we get to predictions.

Hi, Cara and Scott.

This is Eric Ryback in Red Hook, New York.

A clothing rental company I'd never heard of is buying Lord and Taylor.

So I'm interested to to know more about the clothing rental business.

I assume there are some things people will rent, but other things people would still want to buy.

I'm not talking about underwear, but for instance, everyday dresses you would still buy, but special dresses you might rent.

Do I have that right?

And how does that then integrate with owning a department store?

Thank you.

Scott, our listeners are smarter than us.

Do you understand that?

Are you getting that sense?

You mean they're smart.

Okay, you take this one.

These rental companies, I think it's a, I've talked about this.

I think it's a really big trend.

A lot of millennials I know are renting everything,

not just special occasion dresses and wedding stuff.

I think it's a big trend.

And we're about to interview a lot of different people at Code Commerce about this, one of these, one of the topics.

What do you think of these fashion rental companies?

I think people are willing to do this.

Yeah,

I think this is a fascinating space and it's arguably going to be one of the most disruptive forces in retail.

Because if you think about department stores, you know, they've just gotten the crap kicked out of them.

They're sort of in the eighth inning of their life,

whether it's Macy's,

Nordstrom, Cole's, they're all off somewhere between 20 and 70 percent if you loop in JCPenneys.

The bottom line is no millennial will take an escalator to sharp, to shop.

You can do a strategic strike into a Sephora and get your La Roche Pose in three to seven minutes.

Anytime you step into a Sears or, well, actually, there are no more Sears, but every time you step into a JCPenneys or Nordstrom, you're there for 30 minutes.

It's just not how America wants to shop any longer.

And then you combine that with sustainability.

You combine that with young people don't mind wearing other people's clothes.

You combine that with the fact that a 30-year-old for the first time isn't making as much money as his or her parents were at 30, meaning they need to buy more with less.

And you're looking, and then, and then it looks as if projections are that rental.

or resale is going to be a bigger business than fast fashion.

So all you need to think about is the type of wealth that was created for fast fashion families in Europe, the second and third wealthiest families in Europe.

And you think about the kind of wealth that's going to be created in resale, and you're looking at massive disruption.

Now, what people are missing around this is it's too late.

Department stores have already been disrupted.

They're already dead.

Maybe they don't know it yet, but they're pretty much already dead.

Who it's really going to disrupt is specialty retail.

Because if you have a huge explosion in the amount of clothes being getting useful new life or being recycled, it's going to put huge pressure on the initial or the first time sales organization.

And the majority of specialty retail apparel is from specialty retail.

And

the number of leases held by, or the lease space or the square footage space in malls from specialty retailers and apparel is collapsing as evidence of that.

So great question, but disruption is on its way at the hands of resale.

But the big losers are going to be specialty retail.

They're about to get their turn of the woodshed.

Specialty retail.

Sorry, long answer.

I agree with you.

I think young people are very willing, the way they're willing to do Uber and cars and hotels and Airbnbs, and they're able to rent almost anything.

Actually, my column in the New York Times this week is again about my car, the fact that I don't own a car.

It's an update.

Did you get rid of your car?

Yeah, I got rid of my car.

I'm doing an update.

Yeah, yeah.

So I think people are willing to think about renting everything, like in terms of stuff that they don't need

beyond just, you know, a dress for a wedding or a prom or whatever, or a tuxedo or anything else.

But the people are very willing.

And obviously, Eric from Red Hook, not underwear.

I think that is always going to be.

It's a very niche dating story.

No, no.

All right, Mike.

You've spent too much time with Scott Galloway that you're making dirty underwear.

Let's roll, my brother.

You can't come to work.

Let's roll.

No, no, I can't have two of you.

Listen to me.

I don't want to get canceled.

I don't want to get canceled.

You're getting canceled right now.

All right.

Last section: predictions.

Predictions, boys.

I'm not going to make a prediction this week.

Again, I'm giving it over to Mike.

Your prediction, we already made

Mr.

Galloway, Professor Galloway, which was

I think the immunities are kicking in.

I think the markets are prone to fits of sanity and rationality or rational thinking is starting to seep in.

And I don't think WeWork is going to get public.

And it's going to be,

I think it's the markets finally saying enough.

So my prediction is WeWork, despite cutting their valuation in half today,

doesn't get out.

And I have a question before Mike gets to his prediction.

Mike, do you take Uber?

So, you know, it's funny, I got into this in the book a little bit, but I stopped taking Uber, not even for ethical reasons, but for just like my sources wouldn't meet me if I used it or had it on my phone because they knew how deeply they were able to track location and things like that.

So I did stop for about two years.

I should tell you about that.

It's all messed up.

But

now

I would say I rely primarily on public transportation, but I do use Uber, Lyft, and Flywheel, and Juno if I'm in New York, sort of equitably.

But I would say, yeah, like I try to stick to Muni and Bart and the subway when I can.

Interesting.

Interesting.

All right, prediction?

So this is going to be kind of nerdy, but I think Dropbox is going to have a very big product revamp.

And the straw that broke the camel's back was Chrissy Teigen tweeting how much she hated Dropbox's new products because it was bloated and gnarly.

And if you use Dropbox, it's definitely gotten a lot more difficult to use as just a product.

It's very

in the first place.

And that's the thing.

Like, I think that

these cloud services are supposed to be very simple from the outset.

And once you sort of lard it up with a bunch of new features and stuff, it gets gnarly.

And then your core, like, normal, simple user gets angry.

And then you have Chrissy Teigen tweeting angry things about your company online.

And so they're freaking out.

They're having a forealarm fire over there.

And I think they're going to have a big revamp in the next few years.

Sort of like Snapchat.

Remember, Snapchat redid its films.

Yeah, when everyone freaked out about the redesign or whatever.

I think that just like, yeah, I don't know if it was a Jenner or someone that complained, but once you get Louis Swisher complained and I forwarded it to Evan Spiegel.

And that's it.

That's it.

Louis Swisher's pissed out.

He loves you.

When you get those level of complaints, I think that actually drives the companies into that oh shit moment.

Good one.

Scott, see how creative Mike Isaac is?

That was a good one.

I'm starting to feel a little bit threatened.

Starting to feel a little bit threatened.

You know, Mike, every generation.

Backups to backups for you, my friend.

I mean, backups to backups.

Garamucci's on the list.

Isaac is on the list.

There's a lot.

But every generation has kind of a seminal moment, whether it was JFK or the Vietnam War or Reagan saying, you know, Mr.

Gobertrev, bring down this wall.

As a kind of

a tell for this generation, the seminal moments are Chrissy Tagan saying she doesn't like Dropbox and also Jeremy Renner closing down his app, the Escape X.

That is my favorite story.

Isn't that the best where like-minded fans could come talk about Jeremy and by stars?

And it was weaponized.

The platform was weaponized and he decided the best thing for

the polity and for society was for him to shut it down.

And I thought, this is perfect if it had been signed by Mark Zuckerberg.

It's really good.

All right.

We're going to finish up.

Mike, what do you think of his prediction?

Just really, what do you think of

the prediction that it's going to be?

The WeWork one?

Not the WeWork one, but he was talking about Uber, the same thing, that it's going to be enough.

Is it going to be enough for Uber?

Make a prediction.

I don't, I mean,

I don't know.

I'm having a really hard time thinking that they're going to come out of this soon.

And I don't think that they're going to get any leeway in the near term.

I think it's just going to be a lot of pain in a very, in the, over the next few years, over the next two years at least.

Excellent.

It's so nice having you here, Mike Isaac.

Thank you.

So nice to have you back.

Listen to me.

What's the name of the book?

The book is Super Pumped: The Battle for Uber in Stores Right Now.

In stores right now.

And also, it was an excerpt in the New York Times.

And as Scott said, your PR people are doing a great job.

It's a great read.

It's a real, if you like Bad Blood, or that was John Carey Hughes' book,

it's that kind of book, and it's great.

And actually, having written a lot about Uber, and you know, we also broke a lot of stories and stuff like that, I found out stuff I did not know, which is beautiful, which is great.

And yes, the student has surpassed the

no, you haven't.

You're being kind.

Good try.

He's an amazing reporter, and he covers Facebook and stuff like that.

And maybe we'll have you on and talk about when you write your Facebook book.

Anyway, Scott, we're going to be together in New York.

Remember,

behave.

I'm sending you some.

Scott, don't get canceled.

I'm sending you some literature.

And so we're going to be live in person.

You're going to be on your best behavior.

The letters are.

Yes.

Oh, no.

I'm ready.

Let me explain to you.

Let me explain to you.

There are very people that are just, you don't want to cross this militia etheridge.

I'm just telling you, they, speaking of, carry, I just,

they carry a lot of things you don't want to get hit with.

Anyway, we're going to be talking at the annual Lesbians Who Tech Summit in New York.

It's actually, there's one in New York, there's one in San Francisco.

We're going to do the New York one, and he's going to be on his best behavior.

And these are really talented, diverse

women, and non-binary women in the field of technology.

It's going to be an honor to be there.

It sure will.

Hey, Mike, congratulations and well done.

I think the book, it sounds like the book's off to a great start.

And both of us, Kara and I, know how difficult and what a labor of sort of love these things are.

So well done and congratulations on the book.

Well done, Mike Isaac.

You're the best.

He's also a sweetheart.

Anyway, today's show was produced by Rebecca Sinanis and Eric Johnson.

Erica Anderson is Pivot's executive producer.

Thanks also to Rebecca Castro, Drew Burroughs, and Nishat Kirwa.

Thanks again to Mike Isaac for joining us.

How do they find you, Mike?

You can go to Twitter and find me at at Mike Isaac.

Yeah, he's kind of crazy on Twitter.

Yeah, I should definitely follow him.

Anyway, make sure you subscribe to the show on Apple Podcasts.

If you like this week's episode, leave us a review.

Thanks for listening to Pivot from Vox Media.

We'll be back next week for another breakdown of all things tech and business.