Q1 2022 Uber Technologies Inc Earnings Call

To ask a question press Star then the number one on your telephone keypad.

Yesterday that you limit yourself to one question and one follow up.

Your first question today comes from the line of Brian Nowak with Morgan Stanley .

Your line is now open.

Great. Thanks for taking my questions I have two the first one sort of on and users and on drivers wondering dara in the past you've shared stats about some of your cross platform adoption, 17% of users in the past etcetera any updates on what Youre seeing on cross platform adoption for your users and drivers and just some of the benefits of your multi.

Product offering integration Youre seeing from that is the first one and then the second one just a comment about the expected acceleration in delivery in the back half.

You call out there on what Youre seeing on user growth cohort or anything. So it gives you confidence in the ability to continue to sell at the delivery business through a potentially weaker consumer thanks.

Yes, definitely as far as our cross platform usage. It remains strong and consistent really with what we went through with you in Investor day, and what are the interesting factors that we're seeing is that as mobility is opening mobility, a significant number of new riders are coming onto both onto the platform and that gives us.

The opportunity to then upsell those new mobility rider.

Needs to our grocery offerings and then ultimately to our Uber one membership plan, which is the.

Only membership plan globally that offers both mobility and delivery offerings as well. So what we're seeing is really kind of a swelling of new audience coming in that then we can essentially upsell or cross platform product and then ultimately membership as well so we're super optimistic about all of the platform.

Investments that were making and the potential there.

We've already launched obviously Hooper wanted the U S. We announced launches in Mexico, and Germany, We've got a number of other launches teed up for the balance of the year and I will remind everyone that member than two seven times more than non members. So as we move over as new customers.

Come in we cross sell them into the platform and cross sell them into a membership we can increase the spend and the lock in that our platform provides in a way that no other monoline player can.

We already have the formula down and it's about rolling out Uber one globally and then applying the same formula over and over again and then on the cross platform side I saw that the invisible to I'd say most investors.

Is on the earner side.

And we talked about how our efforts to sign up earners.

Now are truly cross platform, we bring you and not to drive or to deliver but we bring you into earn on the Uber platform.

The success there has been very very significant you heard.

I think last night.

One of our competitors in the U S, having challenges or at least looking to lean into driver supply our active drivers in the U S and Canada are up 70%.

On a year on year basis in April new drivers were up a 121% year on year in April and it's because we are bringing we are bringing new drivers on not as Uber rides, not uber eats, but as <unk> as a platform.

And to earn in any way shape or form that they can on the platform and that's proving to be a structural advantage from what we can see versus the competition, both locally and we think ultimately globally.

And then question on backup power delivery, yes of course back after the delivery goes it really is about the European reopening and comps. So some of the countries France for example.

Is reopening it is spectacular news for our mobility business.

It makes the delivery comps a little bit tougher. So I think youll see Q2 growth rates similar to Q1, and then we expect Q3 and Q4 to accelerate and I think you've also seen for us as a team we delivered on what we say we're going to do so we're pretty confident of acceleration in the second half the other factor thats going to affect the second.

<unk> is that with new vertical, especially very recently along with Albertsons deal. We are now launching the native stack.

Corner shop, essentially grocery Uber.

<unk> platform, it's very very early but we see substantial improvements in customer experience and we see substantial improvements in terms of conversion.

<unk> native stack. So we think that the U S growth rate that is already pretty high is going to significantly accelerate in the second half of the year, which again gives us confidence is the delivery growth rates in the second half of the year.

Great. Thanks sure.

Sure.

Nevertheless.

Your next question comes from the line of Doug Anmuth with Jpmorgan. Your line is now open.

Thanks for taking the questions I just wanted to ask two on mobility product side or just if you could talk a little bit about the efforts, so far with upfront fare and destination info and <unk> and some of the key benefits and the rollout timing there and then also about around Uber X share how thats re imagined.

The key points of differentiation.

Yeah, absolutely as far as the upfront destination.

One of the most significant complaints that we get from.

Our earners and our drivers is that they don't know where the upfront destination is.

And if you if you go back to the origins of this business and how pricing was built.

Pricing originally was based on time and distance.

And that comes from let's say the taxi days, but the fact is that based on the destination.

The value of a ride, which may take the same amount of time and distance for driver may be very different based on the destination. So if youre going from the airport into central San Francisco and Youre going to get a ride as soon as you drop the person off that's a pretty valuable rod if you carry a passenger same.

Time and distance into the.

The outskirts of the neighborhood and then have to drive back empty for lets say 30 or 40 minutes. That's not arrived that's particularly valuable to an earner and if you are purely basing your charges on time and distance essentially those two.

Those two.

Rides are priced equally we think thats a bug in our system.

And it certainly does not serve the best interest of the earners. So now with our new system, we display the.

Full information of the ride, especially what the destination is our algorithms are then able to take signal, let's say the trip out to the outskirts where the drivers have to come back empty. We will then price up that trip so that the burner trip earns the fair value of that fare.

And also knows exactly what they are accepting or not accepting.

That also improves the consumer experience because cancellation rates once drivers understand what the destination is go down as well, there's a huge amount of technology that has to go into developing this kind of a system because essentially a pricing systems have to get signal based on her behavior in order to.

Hone in the pricing to truly price kind of that trip based on the market clearing price that earners are willing to accept that trip with so there's a huge amount of ml data work that goes into that system, but we think it is fundamentally a better way and the feedback that we're getting from our driver partners has been has been.

And quite positive it's a big change, though I will tell you.

There's a lot of debugging going on there's a lot of algorithmic work to make sure that the experience.

As great as it is but we're very very optimistic about the fundamental change.

The last thing I'll say about this is this is one of those invisible or not so visible benefits of the platform. This is actually how delivery has been pricing their trips for some period of time delivery company show upfront, where you pick something up they've shown upfront fare is exactly right introducing upfront that Uber riders.

And our being a multi platform multi product business allows us to take learnings from one side of our business apply it to the other and instead of kind of starting from scratch, we've already where adolescents natura now.

We're using all of our knowledge from our delivery business and passing on to the mobility business. So lots of advantages, having a single marketplace team a single technology team thinking about the best of both worlds and constantly applying learnings.

For one together and then as far as Uber Exco Uber share with.

Super excited about the business.

Sure.

We're looking to resolve a fundamental issue that the older pool model had to which is the interest of the rider and the interests of Uber were misaligned right, which is the rider would ask for a pooled trip, hoping not to be batched.

And <unk>, obviously would want that trip to the match nor to achieve the economics that we expect with Uber share Thats an upfront discount.

And when you are matched with another rider you get a higher discount on your trip. So all of them interests are aligned in this kind of system.

And we're very very encouraged by the early signals that we're seeing and we're looking to launch <unk> share at about 15 markets in the next quarter and we will continue to expand.

Expand from there so.

<unk> upfront there and <unk> share are areas that we're quite excited about in areas, where there's a lot of innovation going in protein.

Thank you Doug.

You're welcome next question.

Your next question comes from the line of Eric Sheridan with Goldman Sachs. Your line is now open.

Thanks for taking the question maybe two if I can on the delivery business.

Grew as you talked about earners at a very high rate, especially in the U S. Can you talk a little bit about the competitive landscape for <unk> in the delivery business and where you see yourself vis vis competition from a scale standpoint, it's just in the markets that you think are the most important to you where it lines up the most with the mobility business.

And then on the expansion of categories. How important is it to get some of those categories right.

<unk> standalone apps in standalone businesses versus them being broadly more folded into the Uber app and getting the platform experience more right than wrong. If you look out over the next couple of years vertical versus platform. Thanks, so much.

Sure I think in the U S on the burner side and again, we don't necessarily look at earners now carriers are drivers because increasingly we want to earn however, they want to on a particular day. They may want to stay in their local neighborhood.

And that accrues more to delivering food because typically you stay within a certain radius or they may want to make more money and right now earnings four drivers for example, who drive more than 20 hours on our platform.

And the last quarter were 39 Bucks, including <unk>, our earnings are Super Super High, which is which is great.

For our earners on the Courier side I wouldn't say that there is a huge amount of competition.

And that we've got plenty of careers and from what we can tell our our competitors do as well, it's a very flexible way to earn.

Our earners appreciate.

So we have seen that.

The number of active careers globally up 34% on a year on year basis.

And in the U S and Canada up 79% year on year. So we're in very good shape, there and actually a fair amount of the year on year increase in take rate call. It true take rate that youre seeing in the delivery business is because we've been able to drive cost per trans.

<unk> down as a result of higher efficiency in our marketplace, because we have plenty of careers and as we get more density in our marketplace essentially the distances that we have to carry food and go pick up food et cetera.

Reduce and our algorithms in terms of routing and batching continue to optimize and get better and better and better that is essentially upside as it relates to net revenue and it really doesn't cost anything it just cost engineering time to achieve which which is time that we have.

And then as far as the Super App versus multi app consumer experience.

The way that we're doing it is on the consumer side, we're looking to get the best of both worlds think about it in the same way that Facebook has a family of App, they've got Facebook and Instagram and Whatsapp and Theyre kind of loosely coupled same thing with Google They've got Google and Google maps, and Google Mail again, there coupled you have one identity, one payments et cetera, where.

Looking to achieve the same thing multiple apps, whether it's Uber eats a corner shop. Your identity. The same truthfully you sign up the same we treat you the same way our customer experiences is consistently excellent you've got the Uber one membership that flows across all of those app to save you on delivery fees.

And at the same time within each App, we're constantly cross promoting one platform to the other on rides where cross promoting eats we're actually Super excited we're starting to cross promote rides on our <unk> App, we frankly werent sure. If it's going to work we announced the signal that it's working actually were able to resurrect riders.

Back into the reopening through the <unk> App, which is something that we're super excited about so all the app talk to each other cross promote each other we use machine learning algorithms to figure out what is the best promotion to put in front of the right person at the right occasion and you can.

Imagine lunchtime.

The promo maybe different than shrinks time for example on the backend as it relates to earners. We are a single Super App and essentially you sign them to earn on Uber and more and more we will offer different opportunities to earn based on based.

Based on what we know about your profile based on time of day based on where you are and based on what the opportunities are and we think that's a very very significant structural advantage over other players in.

In our industry, none of which has a super App model.

Thanks for all the color.

You bet next question.

Your next question comes from the line of Justin Post with Bank of America. Your line is now open great.

Great. Thank you I guess just given the challenges.

Lift they talked about.

Can you talk about the mobility supply demand dynamics, and how youre going to manage.

It hopes to be a pretty robust opening.

Over the next six months and then when you look at your prepared remarks, some interesting stuff on regulatory and new use cases.

Just wanted to see if you feel like Youre kind of getting over the hump here on regulatory if there's real progress there and why you have kind of decided now to expansion you can't use cases to car rentals and travel.

Does that kind of signal that the core business is now kind of on a positive trajectory. Thank you.

Yes.

Yes.

<unk>.

<unk>.

Our need to increase the number of drivers on the platform is nothing new nor is it a surprise.

We were on this last year. If you remember Q2 of last year. We were very early you saw signal.

And we leaned in very aggressively initially with incentives.

Into improving our driver supply and then we followed up the investment and incentive with tons and tons of innovation in terms of product in terms of improving the driver sign up flow in terms of a while coming drivers to the Uber family and then giving them opportunities delivery.

Opportunities or arrived opportunities, we see the sooner earner can earn on the platform the higher our sign up rate to that first trip.

And often we can get earners, earning on the platform faster with delivery than we can with mobility because of regulations or background checks et cetera. So we're able to engage that earner with money in their pockets really really early and at the same time, we've invested in experiences where instead of for example, you are having to ups.

Load your documents into our systems, we will go connect to insurance companies <unk> etcetera.

And as we build out both API essentially we upload those documents automatically versus having you do the hard work and sometimes it works and sometimes it doesn't and sometimes we make get the document right or wrong.

We have we talked about upfront destinations for earners as well. So we have pivoted the company to being burner centric innovating for earners thinking about the earn her experience.

Treating earners as with respect and dignity and building for them versus building just for the company. This has been an activity that we've been off for a year and we feel very very well prepared for the future. We're constantly watching supply demand dynamics were constantly watching supply.

Ours earn our retention is improving engagement on the platform is improving so we feel as good about our driver supply in general our earnings earn a position as we ever have that said, we know we have to improve we have to keep increasing the number of new drivers on the platform.

We're focused on resurrecting a number of drivers as well and we're focusing on increasing engagement on the platform because the earnings levels are so high so there's a lot of work to do ahead of us but this is a machine that's rolling like this this the earner team at all levels of the operational level at the technical level.

At the engineering level with <unk>.

<unk> algorithm optimizing for example driver incentives all of it is rolling and we know all of it has to work well in order for us to hit our really aggressive targets and the balance of the year.

And then as far as the regulatory process and new use cases, I'd say the new use cases are us playing.

Offense, we have seen the cross platform initiatives throwing from one essential service to the other from eats derives from each of the groceries et cetera, We know how to cross promote use cases, theres, a huge amount of trust and frequency and comfort with our with our <unk>.

Products, we have yard density we understand where you are we have your payment details et cetera. So are adding new use cases, such as car rental or travel bookings or adding new supply areas like taxi, they're just natural growth areas for us and because we've already acquired the customer because we already have.

<unk> built trust with our customer we're essentially able to.

Continue to increase engagement with our customer the more engaged our customers are.

The more we retain those customers and we're able to monetize those map. These as a result, so its kind of a win win win on that front.

Great. Thank you next question.

Your next question comes from the line of Mark Mahaney with Evercore. Your line is now open.

Thanks, two questions. Please there's been a lot of focus on retail marketing so.

At least across the industry. So could you just give us a little bit of an update on where you are in terms of.

Adding together advertising revenue I know you laid out a goal at your Investor day, any any update on that and then secondly on the map sees.

Numbers any way to think about what the what should happen to map see growth going into the next quarter. I think that was that sequential decline I think was a lot of omicron hit so you're back to a point, where we did.

Where it's reasonable to expect map cease to grow through the balance of the year. Thank you.

Yeah I'll start the second one first which is.

We're absolutely seeing map see growth continue to accelerate.

<unk>. So for example, while <unk> growth for the quarter was or map. These were $115 million up 17% for the quarter in March they were up at a $120 million up 20% on a year on year basis. So we're seeing massive growth accelerate and we expect to see that acceleration build into <unk>.

<unk> and the balance of Q2.

We absolutely see the reopening as a very very big Massey driver, especially on the mobility side. So.

So expect <unk> to continue to grow and if anything to accelerate into into <unk>.

Second quarter as far as our advertising business goes kantar.

Continued strength, there, we essentially more than triple the business on a year on year basis.

And we are very much on track to hit the targets that we laid out during.

During Investor day.

Thank you.

Youre Welcome next question please.

Your next question comes from the line of Lloyd Walmsley with UBS. Your line is now open.

Thanks, two if I can just first can you talk about the UK mobility business and where that is on kind of the path back to profitability under the worker classification in that that charges in the UK do you didn't get back to prior levels of profitability.

And where are we on that journey.

And then the second one in the script you talked about now expecting to be free cash flow positive for the full year any update on how you think about the potential for capital return given your cash position.

And kind of where the shares are trading anything you could share there would be great.

I'll do the second one first and barrels of the UK after.

As you know, we're still it's still coming out of the pandemic. We were clear early on that we're going to focus on making sure we have ample liquidity.

I covered this on Investor day to let you know that free cash flow largely trails EBITDA by about $1 billion a year.

That's why we have the confidence to make the statement that will be free cash flow positive this year.

We certainly recognize given what's going on in the market right now and we encourage all to get towards being free cash flow positive because we think it will be very important as we think about this cycle.

As we think about capital return down in the future, we certainly going to be open to it right. So we recognize that we're not going to get we don't get paid for hoarding capital.

You know in the past there may be some things we want to do and we will certainly look at capital return is one of those levers, but again I think it was important that as you think about the <unk>.

Pragmatic walk that we've taken on capital and on liquidity importantly, and as you know we've taken every opportunity to.

Improve our debt in terms of the amount of both extending and reducing the.

The debt and so I think you'll expect to hear more about this as we go into next year, but I think it was important to get to this point, where we can declare that we will be free cash flow positive. This year and then we understand capital return, but I think if you think of our equity Stakes.

They weren't they were debt mark to market down there very good sources of liquidity and many of those lockup restriction.

Expire if you will or come due during the course of this year and so depending on where markets trade as well, we will have plenty of sources to return capital.

And I think as far as the UK goes we made tremendous progress in the UK, we move to the worker model, where now compliant with Mercury.

<unk> status.

And we've recently been granted a private higher vehicle operator license for 30 months, which is terrific.

Our relationship with the city is second to none and we're committed to city com's goal of electrifying our fleet by 2025 in London.

A real leader in.

And environmental impact and something that we are firmly behind.

We absolutely believe that it is a condition for every operator's license to move to merchant we have not seen some of our competitors do so but the tfl has been very very clear that they will enforce those rule. So we just think 11 Plainfield, it's just a matter of time and the ones that are ignoring the law.

R.

Neither accruing liability theyre going to pay for it sooner rather sooner or later, one way or the other we can tell you the timing, but it is going to happen as it relates to our business on the ground. Our position is very strong. So we're very confident at the rule as it relates to our category position and our business is written.

To solid profitability than we see profitability in the UK.

Healthy and improving into the balance of the year.

Okay.

Alright, thanks, guys.

You're welcome next question.

Your next question comes from the line of Ross Sandler with Barclays. Your line is now open.

Guys.

Just two kind of big picture questions first is on.

On the delivery side, so on convenience and grocery I think there is a debate whether <unk> delivery or these new dark store concepts are a better business model. So how do you view that I know most of your businesses started in <unk>.

But would it make sense to build out <unk> grocery or convenience eventually and then second question is on.

The taxi partnerships. So thank you said you want every taxi on the planet on Uber by 2025.

Can you just talk about how those partnerships might impact the unit economics and rights. Thanks a lot.

Yeah, absolutely as far as grocery growth Threep.

Versus lumpy.

Our.

First of all.

Is that one building maintenance checkup AAC I'm not sure.

Oh, sorry on the <unk>.

Call.

We see it.

On the call Christina we have no one else wanted to answer.

Okay.

Sure.

Operator.

It needs to be muted.

Go ahead Mike.

Yes.

Okay, well, we'll try again, so as far as the <unk> versus lumpy I think our goal is to provide a great experience as it relates to our <unk> and our shopper, who want their groceries and they want it fast.

All of our data suggests that <unk>.

Getting your groceries inside of an hour is a spectacular experience I think there's lots of debate whether.

Whether it's got to be 10 minutes or 15 minutes or half an hour and if anything we see a bunch of the 10 or 15 minute folks move to the half an hour area, which is <unk>.

More of where we are we believe we can get a spectacular experience.

For our grocery shoppers through partnerships.

With our grocery partners. This is what they do day in and day out.

For example, we have a partnership with <unk>, which is a.

Huge player in France, where they are adjusting their model. They are taking everything that they've learned in their grocery space years' of experience and essentially they're reducing the number of.

Of goods that they have.

And reducing the delivery time to that 2030 minutes, which is a delightful experience. So we believe that we are able to get.

The essentially 100% of experiential benefits of SaaS grocery through partnership and avoid the kind of capital investments that you have to make in terms of leases opening up a bunch of stores all over cities. In addition, frankly to the deep focusing of the team what we bill we are.

Building a software layer on top of the physical world. That's what we're good at we're good at matching demand and supply in a real term real time way, we do it more broadly and with audiences that are unrivaled around the globe and we think building a bunch of.

Sure.

Of dark stores in a few cities doesn't make our network any better and we certainly have the best real time network out there. So everything that we see right now we're essentially partnering up on <unk> and all the signal that we see a positive we are in a very limited way running.

Test.

In a few countries in Taiwan and Japan.

Just to make sure we understand that counterfactual, because we want to be intellectually curious at.

At this point, we think the partnership way is the route to go if.

If we ever have to switch we have the audience we've got.

Of members. So we think it's much easier to go vertical if we ever need to but right now we don't see any signal that we should be going vertical.

Especially as it relates to the <unk> focusing on the team.

In terms of taxi just just.

This one for US is we think a no brainer, which as we've talked at the beginning of this call and a lot of folks have.

<unk> talked about.

How bringing driver supply on in the U S and globally is incredibly important initiatives.

We have about $4 5 million total Uber earners, all around the world.

There are 4 million taxes globally, 4 million taxes versus $4 5 million total Uber earners that we have.

These taxes typically are underutilized relative to our earners.

We think that the technology that serves the taxis can be better and we're to help them partner with them as it relates to technology, we think that the days of Youre going on the street and waving your arm to hail taxis.

We think those days are over like we think we think any entity that is dependent just on street hail is like a retailer who pretends to the internet never happened so.

This is the time and we're seeing taxi partners want the benefit of our technology. They want the benefit of our demand they understand that we're all in it together and this can be a benefit for us it can be benefit for taxi drivers. It can be a benefit for fleet owners et cetera. So this is a win win win and it's a big opportunity $4 million.

Taxes on a global basis, and we are now kind of going country by country City by city. We're obviously excited about that announcement in New York City, and San Francisco, but I want to make sure that our investors and analysts understand we've been at this for a while but we've been signing up taxes in Spain and Japan.

<unk>.

In Korea, and we have built out an experience set as to how you build out the taxi product and how you optimize the experience for the rider as well. This is another benefit of our being a global company.

We're coming to the U S with a confidence and experience that we built in Spain, Japan, and a bunch of other markets as it relates to Kathy. So we think it's a huge opportunity and the team is incredibly excited to get going on.

Okay.

Next question.

Your next question comes from the line of Deepak <unk> with Wolfe Research. Your line is now open.

Great. Thanks for taking the question. So first given that you have a meaningful competitive advantage on the rideshare side would be our driver supply position with this competitor how do you think about the opportunities to gain share I mean, it seems like you can manage consumer prices at better levels than it is competition can you talk about.

<unk> two <unk>.

Sure and then second on each one of the fears investor investors have on this space is that every product category.

<unk> benefit from the pandemic is now seeing some form of accelerated reversal, maybe due to churn or retention initiatives food delivery has been very resilient.

Can you talk about what you're seeing in terms of frequency and usage.

<unk> bookings growth. Thanks, so much.

Sure absolutely as far as.

Gaining share versus our competition, but I will tell you are gaining share isn't a priority for us right now.

It's happening naturally in some of the reopening and it could be because of the mix shift for example travel the travel category is growing at very very significant rate. Then we tend to skew high on the travel category or the Uber for business category. So we are observing some share gain.

In the U S and frankly in most countries around the world. We are observing these kinds of share gains and it may be that the kind of consumer that's an uber consumers higher end travels a lot of travel for business et cetera is coming to the platform pretty quickly and and obviously, we're a beneficiary of that our focus is on profitable growth.

And.

I think we're able to achieve profitable call a durable grow while.

<unk> share versus our competitors because of the power of the platform.

So it's kind of naturally happening, it's not something that we have to lean into and we're a lot less focused on lets say our competitors our competitors share as we are the opportunity to grow the business.

Durably to add on new segments, such as taxi or Halo, both two wheelers, three wheelers or lower cost product.

Whether its high capacity vehicles et cetera, Thats really the focus and the share will take care of itself. Although it has been taken care of itself.

And we're quite constructive in terms of share gains.

As far as the delivery reopening impact and frequency.

When you look at our delivery business map. These were up 4% year on year basket sizes were up 3% year on year frequency was up 4% year on year. So all of the core metrics that drive the business are positive and because of our innovation as it relates to bringing more earners.

Onto the platform and then the density of the network driving cost per transaction down we're able to improve the margins of the delivery business.

So we're happy with the trends that we see and we think that our frequency is going to also be assisted by our cross platform usage and a higher penetration of <unk> members into our gross bookings space. We are the penetration of Uber. One members is still low generally for.

And low compared to some of our competitors.

And we see higher frequency with Uber one members. So we think thats a natural tailwind that can maybe combat some of the headwinds that.

Some folks are seeing in the reopening.

Got it thanks by the way one.

One note I didn't answer and I want to answer all questions I Didnt answer the question on taxi margins.

So.

As it relates to tack the margins first of all on margins differ by geography.

For example in the U S. The deals that we've done with the taxi companies should be at quite attractive margins that are consistent with the rest of our business.

In some markets, let's say, a japan or some developing markets our taxi margins are lower.

But we've consistently seen we're able to start at lower margins and then increased margins over a period of time. So when we think about the growth of our mobility business and a 10% incremental EBITDA margins that we are looking to deliver.

Our core product, but the Uber E X or reserve or block those will tend to deliver higher than 10% incremental margin will use some of those incremental above 10% to invest in products such as taxi three wheelers, two wheelers et cetera in order to drive.

Ill call durable growth map, the growth et cetera, and we're constantly balancing the two and hopefully you have seen as it relates to our execution over the past couple of quarters and years that we have our hands on all the different levers in order to deliver very very healthy topline growth and the kind of profitability then.

Especially looking for nowadays.

Alright.

Question.

Our next question comes from the line of James Lee with Mizuho. Your line is now open.

Thanks for taking my questions just a follow up on regulatory.

Date here, maybe Dara can you talk about maybe the ongoing conversation with the New York State, giving you reason wind in Washington.

So pretty strong ongoing support from drivers in Massachusetts.

This victory kind of help you move the conversation along and also what the key friction you're looking to resolve.

Hi, James and thanks for the question. The most important factor that is helping based conversations move forward is that drivers want to be independent contractors drivers price flexibility above anything thats. The reason why they earn on our platform I think everybody knows.

In the U S. If you want a job you can have a job if you want a full time job, it's not a problem getting a job, but our opportunity flexible work opportunities in healthy work opportunities.

<unk> adds a unique you can work for US you can work for competitors, who can work. When you want you can work, where you want et cetera.

It's pretty powerful and I think that.

Fortunately or unfortunately in a zoom world, where white collar workers now have a lot more flexibility maybe they also appreciate the value of flexibility in a way that they couldn't appreciate previously.

So as it relates to New York or any other state. The good news is regulators are more and more aware.

At of what drivers want and drivers overwhelmingly want flexibility and they want other protections and benefits whether its minimum earnings or.

Other benefits, which may change state to state to state.

I don't want to comment on New York, specifically, we're having promising discussions there but.

But you never know when kind of the regulatory.

Wins move one way or the other but generally I would say that the regulatory momentum it's positive you see.

See that in Washington.

In Massachusetts, we have.

Al initiative out there we are very confident of our prospects.

Massachusetts.

And essentially we.

We'd like to see a negotiated settlement in the cities certainly we will look to have a negotiated settlement of Massachusetts.

But we're confident in if we have to go to the ballot and hopefully New York, we'll get there, but we can't predict the timing.

Thanks, so much.

Take the last question, operator, Alright, and last question.

Our last question today comes from the line of.

Hi, John Blackledge with Cowen Your line is now open.

Great. Thanks, two questions.

The mobility ride rides volumes in the first quarter.

Versus pre COVID-19 levels, and what are the kind of the key use cases, where there is headroom to close the gap, particularly as we look toward reopening in the second quarter in the back half of the year and then just on grocery and other delivery what was that as a as a percent of delivery gross bookings in the first quarter and just discuss any progress that you saw in the quarter.

And as we round through the year. Thank you.

So our rides business is actually fully recovered versus where we were pre pandemic level and in fact, even on a trip basis, where more than 95% recovery globally.

We still lessor in the U S. We are still in the high <unk> in terms of recovery there, but we've really seen all use cases come back including airport travel pretty much in line with pre pandemic levels. So we were seeing a very very strong reopening on the mobility side.

And then the delivery side as far as delivery goes new verticals.

Ours were.

<unk> continued to be higher than $4 billion.

And we're seeing very very strong growth there.

We're also integrating the new vertical.

<unk> and a native way on overheads, and we're seeing really really promising early signal there.

And when you look at as of March less than 10% of the users who completed a delivery trip on Uber in the last month ordered new verticals. So there's huge opportunity there that number is up 400 basis points year on year, but we think that the potential is.

Essentially upselling, new verticals opportunities to our eats.

Two our eaters is very very young and there's a ton of upside left there.

Thank you alright, great. We can wrap up there alright. Thank you everyone for joining us on the call and.

Great work to the Uber team Q1 was a super Super strong quarter.

We're expecting more of that in Q2.

I think this is a quarter, where we're starting to show separation against their competitors in terms of execution and that execution is showing up in the financials in terms of a healthy growth profile that we expect to see for some period.

And also profit generation and free cash flow generation coming up this year that we're very very excited about so thanks, everyone for joining and we'll talk to you next quarter.

This concludes today's conference call. Thank you for attending you may now disconnect.

[music].

Okay.