Q4 2023 Uber Technologies Inc Earnings Call

Operator: Good morning, my name is Krista, and I'll be your conference operator today. At this time, I would like to welcome everyone to the Uber fourth-quarter earnings conference call. All lines have been placed on mute to prevent any background noise.

Good morning, My name is Krista and I'll be your conference operator today at this time I would like to welcome everyone to the Uber fourth quarter earnings Conference call. All lines have been placed on mute to prevent any background noise. After the speakers' remarks, there will be a question and answer session. If you would like.

Operator: After the speaker's remarks, there will be a question and answer session. If you would like to ask a question during that time, simply press the star followed by the number one on your telephone keypad. And if you would like to withdraw your question, again, press star one. We ask that you limit yourself to one question and one follow-up and then re-queue for any additional questions. Thank you. I would now like to turn the conference over to Alex Wong, Head of Investor Relations. Alex, you may begin your conference. Thank you, Krista.

Krista: To ask a question during that time simply press star followed by the number one on your telephone keypad and if you would like to withdraw your question again Press Star one we ask that you limit yourself to one question and one follow up and then re queue for any additional questions. Thank you I would now like to turn the conference over.

Krista: Two Alex Wang head of Investor Relations, Alex You May begin your conference.

Alex Wang: Thank you Krista. Thank you for joining us today and welcome to <unk> fourth quarter and full year of 2023 earnings presentation on the call today, we have Kuberski Dara Casa Shahi and CFO, Chris Johnson Mahindra Roger.

Alex Wong: Thank you for joining us today and welcome to Uber's fourth quarter and full year 2023 earnings presentation. On the call today, we have Uber CEO Dara Khosrowshahi and CFO, Prashanth Mahendra Raja. During today's call, we'll present both GAAP and non-GAAP financial measures. Additional disclosures regarding these non-GAAP measures, including a reconciliation of GAAP to non-GAAP measures, are included in the press release, supplemental slides, and our filings with the SEC, each of which is posted to Investor. Uber.com

Alex Wang: During todays call well present, both GAAP and non-GAAP financial measures additional disclosures regarding these non-GAAP measures, including a reconciliation of GAAP to non-GAAP measures are included in the press release supplemental slides and our filings with the SEC each of which is posted to investor Uber Dot com.

Alex Wong: Certain statements in this presentation and on this call are forward-looking statements. You should not place undue reliance on forward-looking statements. Actual results may differ materially from these forward-looking statements, and we do not undertake any obligation to update any forward-looking statements we make today, except as required by law.

Alex Wang: Certain statements in this presentation and on this call are forward looking statements you should not place undue reliance on forward looking statements actual results may differ materially from these forward looking statements. We do not undertake any obligation to update any forward looking statements, we make today, except as required by law.

Alex Wong: For more information about factors that may cause actual results to differ materially from forward-looking statements, please refer to the press release we issued today, as well as the risks and uncertainties described in our most recent Form 10-K and other filings made with the SEC. We published our quarterly earnings press release, prepared remarks, and supplemental slides on our investor relations website earlier today, and we ask you to review those documents if you haven't already. We open the call to questions following brief opening remarks from Dara and Prashant. With that, let me hand it over to Dara.

Alex Wang: More information about factors that may cause actual results to differ materially from forward looking statements. Please refer to the press release, we issued today as well as the risks and uncertainties described in our most recent Form 10-K and other filings made with the SEC.

Alex Wang: Published our quarterly earnings press release prepared remarks, and supplemental slides to our Investor Relations website earlier today and we ask you to review those documents if you haven't already.

Alex Wang: We will open the call to questions. Following brief opening remarks from Dara <unk> with that let me hand, it over to Dara. Thanks, Alex Q4 was a standout quarter to cat both stand at year trip growth was 24% year on year outpaced gross bookings growth towards fourth quarter in a row powered by strong audience trends and record engagement as consumer.

Dara Khosrowshahi: Thanks, Alex. Q4 was a standout quarter to cap off a standout year. Trip growth of 24% year-on-year outpaced gross bookings growth for the fourth quarter in a row, powered by strong audience trends and record engagement, as consumer activity remained healthy all around the world. At the same time, adjusted EBITDA of $1.3 billion exceeded our Q4 outlook with gap operating income of $652 million. Looking back, 2023 was an inflection point for Uber, providing and proving that we can continue to generate strong, profitable growth at scale. These results in our Q1 outlook demonstrate that we're starting 2024 with tremendous momentum and reliable execution. I'm energized by the pace of innovation I'm seeing across the company, and I'm looking forward to another exciting year ahead. And now, here's Prashant.

Alex Wang: Activity remained healthy all around the world.

Alex Wang: At the same time adjusted EBITDA of $1 3 billion exceeded our Q4 outlook with GAAP operating income of $652 million looking.

Alex Wang: Looking back 2023, with an inflection point for Uber, providing proving that we can continue to generate strong profitable growth at scale. These results and our Q1 outlook demonstrate that we are starting 2024 with tremendous momentum and reliable execution I'm energized by the pace of innovation I am seeing across the company and I'm looking forward to another exciting.

Alex Wang: Adding year ahead.

Prashant: Now here's prashant.

Prashanth Mahendra Raja: Thank you, Dara. And let me add my welcome to our Q4 earnings call. As a reminder, we will be hosting an investor update next week on Wednesday, February 14th to present an updated view of our strategy and capital allocation plan. As such, we kindly ask that you keep your questions today focused on our fourth quarter and full year 2023 results. And with that, let's open the call to questions. If you would like to ask a question, please press star 1 on your telephone keypad. To withdraw that question, again press star 1, and please limit yourself to one question and one follow-up.

Prashant: Thank you Dara and let me add my welcome to our Q4 earnings call.

Prashant: As a reminder, we will be hosting an investor update next week on Wednesday February 2014 to present, an updated view of our strategy and capital allocation plans.

Prashant: As such we kindly ask that you keep your questions today focused on our fourth quarter and full year 2023 results and with that let's open the call to questions.

Prashant: If you'd like to ask a question. Please press star one on your telephone keypad to withdraw that question again press Star one and please limit yourself to one question and one follow up.

Doug Emuth: Your first question comes from Doug Emuth from J.P. Morgan. Please go ahead. Thanks so much for taking the question. As you come off of 2023, where you've grown Bokeh by 20% and achieved positive gap operating income and net income and driven meaningful free cash flow, can you just talk more about your top priorities as you enter 24?

Prashant: Your first question comes from the line of Doug Anmuth from JP Morgan. Please go ahead.

Thanks, So much for taking my question as you come off of 2023, where you've grown bookings, 20% and achieved positive GAAP operating income and net income driven meaningful free cash flow can you just talk more about your top priorities as you enter 2000 and for how you shift over to become more of an everyday product and what are some of the key strategic.

Dara Khosrowshahi: How will you shift Uber to become more of an everyday product? And what are some of the key strategic investment areas that you're most focused on? Thanks.

Prashant: Investment areas that you're most focused on thanks.

Dara Khosrowshahi: Yeah, great question, Doug. So, I think for us, the good news is that the strategy remains largely the same. If I were to broaden in terms of mobility, first and foremost, it's about making certain that our supply position, the number of drivers that we have on the road, and the engagement of those drivers continues to be healthy, because that is what drives overall marketplace health. And you can never forget about the basics.

Speaker Change: Yes, Great question, Doug So I think for US the good news is that the strategy remains largely the same.

Speaker Change: If I were to broad in terms of mobility.

Speaker Change: First and foremost, it's about making certain that our supply position. The number of drivers that we have on the road and the engagement of those drivers continues to be healthy because that is what drives overall marketplace. How often you can never forget about the basics.

Dara Khosrowshahi: The number of drivers we have on the platform was up 30% year on year, with engagement also being up 10%. So we still believe drivers are the heart of the business. And as long as we've got drivers who are earning as they are, for example, in the US, $33 per utilized hour, and staying on the platform for longer, that platform stays healthy, and we have more people coming in. At the same time, we're augmenting that base platform with a number of new initiatives that we've got in place, newer products, this is our U4B enterprise business that's actually showing nice strength early in the So you've got a base business that's growing at fast rates, typically gaining category position against many competitors, and then augmented by some of these faster growing products.

Speaker Change: The number of drivers we have on the platform was up 30% year on year.

Speaker Change: With engagement average engagement also being up 10%. So we still drivers are the heart of the business and as long as we've got drivers who are earning as they are for example in the U S $33 per utilized our and staying on the platform for longer.

Speaker Change: That the platform stays healthy we have more people coming in at the same time, we're augmenting that base platform with a number of new initiatives that we've got in place newer products. This theaters are you for be enterprise business Thats actually showing nice strength early in the year.

Speaker Change: <unk>.

Speaker Change: For folks who are willing to pay more for better reliability for those travel locations for example, low cost product.

Speaker Change: Well and then taxes.

Speaker Change: And two wheelers and three wheelers, so you've got a base business thats growing at faster rates.

Speaker Change: Typically gaining category position against.

Speaker Change: Many competitors and then augmented by some of these faster growing products in delivery is very similar which is adding more restaurants, making sure. The reliability of services is excellent.

Dara Khosrowshahi: In delivery, it's very similar, which is adding more restaurants and making sure the reliability of services is excellent. You've seen that business actually accelerate its growth from 16% of the top line to 17%, while significantly increasing margins as well. And that's augmented by new services, such as grocery, which is now 7 billion a year and growing at very healthy rates. And then advertising, which we told you would be a billion dollar a year business next year, which is going to surpass that. We're already at a 900 million plus run rate, just in Q4 of this year.

Speaker Change: You've seen that business actually accelerated growth from 16% topline to 17%.

Speaker Change: While significantly increasing margins as well and thats augmented by new services, such as grocery which is now $7 billion run rate.

Speaker Change: <unk> growing at very healthy rates and in advertising, which we told you would be $1 billion run rate business next year, which is going to surpass that we're already at a $900 million plus run rate just.

Speaker Change: In Q4 of this year, so again strong base business augmented by these new exciting businesses that add both topline and margin as well.

Dara Khosrowshahi: So again, a strong base business augmented by these new exciting businesses that add both top line and margin as well. And then all of it is going to be undergirded by the power of the platform. First and foremost, that's our technology platform, all of the algorithms we have that are matching drivers to riders or matching couriers to go pick up something at a grocery store and deliver it home on time. So it's a technical platform that's doing all the matching routing driven by AI.

Speaker Change: Then all of it is going to be under girded by the power of the platform first and foremost that their technology platform. All of the Alagoas. We have that are matching drivers to riders are matching careers to go pick up something at a grocery store and delivered home on time.

Speaker Change: So it's a technical platform that's doing all the matching routing driven by AI.

Dara Khosrowshahi: And then other factors like our membership program, which is up to 19 million members. And then, of course, cross-selling across the platform, which continues to increase Uber users who buy across platforms. Let's say if they take an UberX and order an Uber Eats, they will, on average, order three times more than those who don't.

Speaker Change: And then other factors like our membership program, which is up.

It's a 19 million members and then of course cross selling across the platform, which continues to increase.

Speaker Change: <unk> users, who buy a cross platform, let's say if they take an Uber acts in order an Uber eats.

Speaker Change: Will on average order three times more than those who don't so I think as we look forward. It's more of the same and increasing the scale of each of these efforts because as you can see we're growing faster than our competition on a global basis, we continue to improve margins.

Eric Sheridan: So I think as we look forward, it's more of the same and increasing the scale of each of these efforts because, as you can see, we're growing faster than competition on a global basis, and we continue to improve margins. And now that we're profitable, that creates other possibilities as well. So I think that's what we're kind of like if next year is the same as this year, just with bigger numbers, I'll be happy. Great. Thank you, Dara. You're welcome. Your next question comes from the line of Eric Sheridan from Goldman Sachs. Please go ahead.

Speaker Change: And now that we're profitable.

Speaker Change: That creates other possibilities as well so I think thats what were kind of if next year is the same as this year, just with bigger numbers I'll be happy.

Speaker Change: Great. Thank you Doug.

Speaker Change: Youre welcome.

Your next question comes from the line of Eric Sheridan from Goldman Sachs. Please go ahead.

Dara Khosrowshahi: Thanks so much for taking the question. Maybe you could follow up on Doug's broader question and spread it out around the globe. Curious if there were any geographic areas you wanted to call out exiting 24 and looking into 24, where you see elements of either improved market share position or elements of driving the utility around Uber One and linking more mobility activity with more delivery activity that we should keep an eye on as we move deeper into 2024. Thanks so much.

Eric Sheridan: Thanks, So much for taking the question maybe following up on Doug's broader question and spreading it out around the globe curious if there were any geographic areas you wanted to call out exiting 'twenty four and looking into 'twenty, four where you see elements of either improved market share position or elements of driving the utility around number one and Lin.

Eric Sheridan: King more mobility activity with more delivery activity that we should keep an eye on as we move deeper into 2024. Thanks, So much yes.

Dara Khosrowshahi: Yeah, Eric, what I'll start with is delivery. And what we're quite happy to see is that, for example, our delivery business, which, again, accelerated gross bookings growth this year, grew its category position in 10 out of its top 10 markets. So the growth that you see from us and with delivery is substantially in excess of the category. It's partially and mostly the great execution of the team in terms of the basics, which is adding more selection, bringing in more consumers, bringing in more couriers, making sure that the reliability of the service improves, and making sure that errors improve as well. You know, you don't get your food late, but then again, that is the power of the platform, right?

Speaker Change: Yes, Eric what I'll start with is actually delivery and.

Speaker Change: What we are quite happy to see is that for example, our delivery business, which again accelerated gross bookings growth. This year grew category position in 10 out of its top 10 markets.

Speaker Change: So the growth that you see from us and with delivery is substantially in excess of the category.

Speaker Change: It's partially in mostly the great execution of the team in terms of the basics, which is adding more selection and bringing more consumers, bringing more careers, making sure that the reliability of the service improves and making sure that errors.

Speaker Change: Errors improve improve as well.

Speaker Change: You don't get your food.

Speaker Change: Late but then again it has that power of the platform right, which is our Uber eats business is getting significant free traffic.

Dara Khosrowshahi: Which is our Uber Eats business is getting significant free traffic from rides or close to free traffic from rides. And then, of course, the membership program continues to be a larger and larger portion of our business. Now, about 45% of delivery gross bookings are coming from membership, and that just mathematically drives frequency.

Rides or close to free traffic.

Speaker Change: <unk> and then of course, the membership program continues to be a larger and larger portion of our business now about 45% of delivery gross bookings are coming from membership and that just mathematically drives frequency and if you look at delivery audiences up frequency is up basket size is up as well so the growth come.

Dara Khosrowshahi: And if you look at delivery, audience is up, frequency is up, basket size is up as well. So the growth comes, it's very broad growth, and more of the growth this year is coming from transactional growth versus pricing growth relative to last year. Last year there was more pricing growth and transaction growth. Now it's the other way around.

Speaker Change: It's very broad growth in more of the growth. This year is coming from transactional growth versus pricing growth relative to last year last year was more pricing growth and transaction growth now.

The other way round.

Dara Khosrowshahi: And that really is broad. In mobility, I would say standouts were Latin America and APAC. Again, we had very strong broad growth around the world, but we've seen very strong growth, particularly in Asia Pacific. You know, the Japanese market is super strong. Korea is starting to come up. Australia remains very strong. Taiwan, et cetera.

Speaker Change: And that really is broad in mobility I would say standouts.

Speaker Change: Were Latin America and APAC.

Speaker Change: Again, we had very strong broad growth around the world but.

Speaker Change: But we've seen very strong growth, particularly in Asia Pacific the Japanese.

Speaker Change: Japanese market is Super strong Korea, starting to come up.

Speaker Change: Australia remains very strong Taiwan et cetera. So all of these markets are strong I think its augmented by.

Dara Khosrowshahi: So all of these markets are strong. I think they're augmented by taxis. India, for us, is super strong, and we are gaining category position versus our big competitor there, and we think we're the larger player, making a lot of progress with two-wheelers. And then Latin America, it's really two-wheelers.

Speaker Change: By taxis.

Speaker Change: India for US is super strong and we are gaining category position versus our big competitor there and we think we're the larger player.

Speaker Change: Making a lot of progress with two wheelers and then Latin America, it's really it's really two wheelers Moto, it's a lower cost product that is the hero. It's a newer product trip growth. There is incredibly healthy so Latin American trip growth was was absolutely standup.

Operator: Moto, it's a lower-cost product that is the hero. It's a newer product. Trip growth there is incredibly healthy. So Latin American trip growth was a standout this year. Thank you.

Speaker Change: Thank you next question you bet.

Brian Nowak: Next question, you bet. Your next question comes from the line of Brian Nowak from Morgan Stanley. Please go ahead.

Your next question comes from the line of Brian Nowak from Morgan Stanley. Please go ahead.

Dara Khosrowshahi: Thanks. Morning, guys. I have two, one for Dara and one for Prashanth.

Brian Nowak: Thanks, Good morning, guys.

Brian Nowak: Wanted to Darling Prashant alright.

Prashanth Mahendra Raja: Dara, you talked a lot about the 2023 period about sort of increasing frequency and increasing engagement on the overall platform. Can you just talk to us about, operationally and from an investment perspective, what are sort of the key areas you need to invest in to continue to turn more mouths into wows and wows into dows, etc.? How do you do that operationally? And then the second one, Prashanth, you've had a little time on top of the hood and now sort of under the hood.

Brian Nowak: Talked a lot over the 2023 period about sort of increasing frequency and increasing engagement on the on the overall platform can you just talk to us about sort of operationally and from an investment perspective, what are the key areas you need to invest and to continue to turn more miles into wireless and Laos.

Brian Nowak: How do you do that operationally and then the second one for Sean you've got a little time on top of the Hood now sort of under the Hood, just sort of talk to us about maybe one or two of the things that you think are most surprising and underappreciated internally versus externally now you've sort of gotten to know the company a little better.

Dara Khosrowshahi: Just sort of talk to us about maybe one or two of the things that you think are most surprising and underappreciated internally versus externally now that you've sort of gotten to know the company a little better. Yeah, absolutely. I like your phraseology there. Listen, I think in terms of frequency, I know there's a bunch of sexy stuff that people talk about.

Speaker Change: Yes, absolutely.

Speaker Change: Your phraseology, there listen I think in terms of frequency.

Speaker Change: There is a bunch of sexy stuff that people talk about but the most important factor in terms of frequency as being a service that is reliable and predictable every single day for every single occasion, so for mobility.

Dara Khosrowshahi: But the most important factor in terms of frequency is being a service that is reliable and predictable every single day for every single occasion. So, for mobility, it's making sure that ETAs are at constructive levels, and that surge is typically less than, let's say, twenty percent of sessions. And both of those are moving in the right direction. And especially if you want them to, they're moving in the right direction. And then for delivery, just taking out any errors in terms of, you know, you're missing a drink, et cetera, and making sure that if we make a delivery promise of twenty-five minutes, we deliver in twenty-five minutes. So, I think those are the basics.

Speaker Change: Making sure that Etfs are are at <unk>.

Speaker Change: Constructive levels, making sure that surge.

Speaker Change: Typically is less than let's say, 20% of sessions and both of those are moving in the right direction and especially in Q1. They are moving in the right direction.

Speaker Change: And then for delivery, Jeff taking out any errors in terms of youre missing a drink et cetera, making sure that if we make a delivery promise of 25 minutes, we deliver in 25 minutes. So I think those are the basics now the advantage or one of the advantages that we have is the platform.

Dara Khosrowshahi: Now, the advantage or one of the advantages that we have is the platform, which is, as we see our users engage with more than one product, those users tend to come back more often and tend to stick around for longer. So, we have now a team that is essentially using AI algorithms, and there are a number of promotions that we have lined up. So, if you're going to work, if we know that you're commuting to work for breakfast, we may have a promotion for you to pick up a coffee at Starbucks. If you're coming home from work, and we know it's around six thirty, and that's when you order dinner, we may say, "Why don't you order a pizza?". It'll be a home for your family.

Speaker Change: Which is as we see our users engaged with more than one product those users tend to come back more often and tend to stick around for longer. So we have now a team that is essentially using AI algorithms and there are.

Speaker Change: A number of promotions that we that we have lined up. So if you are going to work. If we know that you are commuting to work for breakfast. We may have a promotion for you to pick up a coffee at Starbucks, if you're coming home from work and we know it's around 630 and Thats. When you order dinner. We may say why don't you order a pizza it'll be home for your family.

Dara Khosrowshahi: By the time you get there, all of these occasions, there are different occasions where we can target the right person with the right offer at the right price. All of that now is algorithmically driven, and it's pretty powerful because it's gone from, you know, I say, like, programming a third of the time. Let's throw this promotion a third of the time. Let's throw another promotion.

Speaker Change: By the time you get there.

Speaker Change: All of these occasions, they are different occasions that we can target the right person with the right offer at the right price all of that now as algorithmic Lee driven.

Speaker Change: And it's pretty powerful because its gone from I would say like programming a third of the time, let's throw this.

Speaker Change: Promotion and a third of the time, that's thrown another promotion as it turns algorithmic as it becomes much more targeted and personalized the power of the platform increases and that generally just mathematically moves frequency the right direction. The last point that I would make is again membership too is it's just a tailwind for us for frequency we've got <unk>.

Prashanth Mahendra Raja: As it turns algorithmic, as it becomes much more targeted and personalized, the power of the platform increases, and that generally just mathematically moves frequency in the right direction. The last point that I would make is, again, membership, too, is it's just a tailwind for us for frequency. You know, we got nineteen million members on a significantly higher basis on a year basis. Members buy more, they stay longer, and just mathematically, members will account for a higher percentage of gross bookings, which means a higher percentage of customers are going to stick around for longer and transact more frequently. Prashanth, do you want to take the second question? Right, great. Good morning, Brian, and thank you for giving me a softball to start with.

Speaker Change: <unk> million members up significantly on a year on year basis.

Speaker Change: Members by more they stay longer and just mathematically.

Speaker Change: Members will account for a higher percentage of gross bookings, which means a higher percentage of customers are going to stick around for longer and and transact more frequently for Sean you want to take the second question right. Greg Good morning, Brian and thank you for giving me a softball to start with so.

Prashanth Mahendra Raja: So, if I think about kind of my observations over the last three months now, under the hood, using your expression, I would say what I found most surprising is just the level of excitement and energy within the organization in the focus they have on building products for users, for earners, and for partners. It's a very mission-driven company. I know that's an expression.

Greg: If I, if I think about kind of my observations over the last three months now.

Greg: Under the Hood using your expression I would say what I found most surprising is the just the level of excitement and energy within the organization in the focus they have on building products for users for earners and for partners.

Greg: It's a very mission driven company I know Thats, an expression you often hear.

Prashanth Mahendra Raja: You often hear a lot of tech companies use this, but I'm really experiencing it within the four walls of Uber. I'll say the other learning that has been very, very encouraging for someone coming in is just the internal conviction and plans around driving profitable growth. And there's a tremendous runway that this organization has over the next couple of years to continue focusing, not just on growth, but also making sure that that growth comes with significant profit. Your next question comes from the line of Ross Sandler from Barclays. Please go ahead.

Greg: A lot of tech companies views, but I am really experiencing it within within the four walls Uber.

Greg: The other learning that has been very very encouraging for someone coming in is just the internal conviction and plans around driving profitable growth and there is a there.

Greg: There is tremendous runway that this organization has over the next couple of years to continue focusing not just on growth, but also making sure that that growth comes with significant profit leverage.

Greg: Your next question comes from the line of Ross Sandler from Barclays. Please go ahead.

Ross Sandler: Great. Dara, the mobility incremental margin bounced back pretty nicely to 10%. You guys said in the last quarter that this would move around a bit.

Greg: Great.

Ross Sandler: Mobility incremental margin bounce back pretty nicely to 10% you guys said on the last quarter. This would move around a bit. So how do we think about the outlook on that going forward and as these new areas like <unk>.

Prashanth Mahendra Raja: So how do we think about the outlook on that going forward? And as these new areas like, you know, reserve, which has a higher margin, but taxi or shared rides have a lower margin. As those come in and the mix starts to change, how do we think about mobility incrementals going forward? Thanks a lot.

Ross Sandler: Reserve, which is higher margin, but.

Ross Sandler: Taxi or shared rides has lower margin as those come in and the mix starts to change how do we think about mobility incrementals going forward. Thanks a lot.

Prashanth Mahendra Raja: Yeah, good morning, Ross. I'm going to take that question. So before I jump into incremental margins, maybe I'll just take a minute to talk about, as we go forward, we'd like to focus really on EBIT dollar growth. Given the power of the platform, the leverage that we're generating off of our revenue growth, we're pretty excited about the absolute EBIT dollar growth we're gonna be able to generate over the coming quarters. And we think that's a better metric for us because it allows us to really share with you a better proxy for our ability to generate cashflow. Having said that, I do want to talk specifically about incremental margins.

Speaker Change: Yes, good morning, Ross I'm going to take that question.

So before I jump into incremental margins, maybe I'll just take a minute to.

Speaker Change: Talk about as we go forward, we'd like we'd like to focus really on EBIT dollar growth given the power of the platform the leverage that we're generating off of our revenue growth, where we're pretty excited about the absolute EBIT dollar growth, we're going to be able to generate over the coming over the coming quarters, and we think that's a better metric for us because it allows.

Speaker Change: To really share with share with you a better proxy for our ability to generate cash flow.

Speaker Change: Having said that I do want to talk specifically to incremental margin. So.

Speaker Change: You're referring to that in in Q4 incremental margins grew sequentially for the mobility business.

Prashanth Mahendra Raja: So you're referring to that in Q4, incremental margins grew sequentially for the mobility business. And as a reminder, that can bounce around a little bit based on mix and also based on the investment decisions that we make. So I wouldn't put too much focus on the continued expansion of incremental margins.

Speaker Change: As a reminder, that can bounce around a little bit based on mix and also based on the.

Speaker Change: The investment decisions that we make so I wouldn't put too much focus on continued expansion of incremental margins, we feel very comfortable that the overall incremental margins for Uber are going to continue to be something that is going to pull the overall profitability of the company up but remember that we will always.

Prashanth Mahendra Raja: We feel very comfortable that the overall incremental margins for Uber are gonna continue to be something that is going to pull the overall profitability of the company up. But remember that we will always be making investments in areas such as our growth bets that you referred to, whether it be halobals or new geographies that are going to put some pressure on that, but overall, look for continued growth in EBITDA margins but probably a little less acceleration in incremental margins. Your next question comes from the line of Justin Post from Bank of America. Please go ahead.

Speaker Change: Be making investments in areas.

Speaker Change: Debt such as our growth paths that you referred to whether it be.

Halo bowls or in new geographies that are going to they're going to put some pressure on that but overall look for continued growth in EBITDA margins, but probably a little less acceleration in incremental margins.

Speaker Change: Your next question comes from the line of Justin Post from Bank of America. Please go ahead.

Justin Post: Great. Thanks. I'll ask a couple of questions. First, just on mobility pricing and ability to drive growth, where do you think you are on that, mostly for UberX, and how do you see pricing in 24? And do you see that maybe as a headwind for growth or any issues with that? And then second, on insurance, can you just confirm one month is in higher rates or in the March guidance, and how you're thinking about maybe the step up in 2Q, if anything we need to think about? Thank you.

Great. Thanks, I'll ask a couple of things we get a ton of questions on first just on mobility pricing and ability to drive growth, where do you think you are on that mostly for Overwatch and and how do you see pricing in 'twenty four and do you see that maybe is a headwind for growth or any issues with that and then checking.

Speaker Change: On insurance can you just confirm one month is in higher rates or in the March guidance, and how youre thinking about maybe the step up in <unk> if anything when you think about thank you.

Dara Khosrowshahi: Yeah, absolutely. So I think in terms of mobility pricing, Justin, you know, mobility pricing has been relatively flat on a year-on-year basis, really for the full year this year. And kind of when you go back to pre-COVID levels, you know, we're up now in the 20s, but compared to like a bunch of other products, we're probably, you know, I think the cost of Uber has increased similarly to many other products. So we actively work to make sure our supply position is in the right place. We actively work to make sure our own cost levers, et cetera, are getting more efficient so that we can keep prices at, you know, the prices that they're at now and drive the majority of our growth in terms of transactional growth.

Speaker Change: Yeah, absolutely so I think in terms of mobility pricing Justin.

Speaker Change: Mobility pricing has been relatively flat on a year on year basis really for the full year this year.

Speaker Change: And kind of when you go back to pre Covid levels were up now in the Twenty's book compared to like a bunch of other products. We're probably I think the cost of Uber has increased similarly to many other products. So we actively work.

Speaker Change: To make sure our supply position is in the right position, we actively work to make sure our own cost.

Speaker Change: Leavers et cetera.

Speaker Change: We're getting more efficient so that we can keep price at the prices that they are now.

Speaker Change: And drive the majority of our growth in terms of transactional growth and you can see that in on the overall numbers, which is overall company growing transactions 24%.

Dara Khosrowshahi: And, you know, you can see that in the overall numbers, which is overall company growth of transactions 24% and gross bookings growing 21% on a constant currency basis. So we're actively looking to keep a lid on price, so to speak. And then what we're doing in terms of targeting different demographics is there's a certain segment of folks who are willing to pay a premium for higher reliability or nicer cars in black or reserve, and then, of course, for the more cost-conscious consumer, we're offering Uber X share and some of the other products as well, two-wheelers or three-wheelers in some of the developing countries. So we don't see price at this point as a factor that is restricting growth.

Speaker Change: And gross bookings growing.

Speaker Change: 21% on a constant currency basis. So we're actively looking to keep a lid on price so to speak and then what we're doing in terms of.

Speaker Change: Targeting different demographics.

Speaker Change: There is a certain segment of folks who are willing to pay a premium for higher reliability or nicer cars and black or reserve.

Speaker Change: And then of course for the more cost conscious.

Speaker Change: Sumer.

Speaker Change: We're offering Uber X share.

Speaker Change: And some of the other products as well two wheelers or three wheelers in and some of the developing countries.

Speaker Change: We don't see price at this point as a.

Speaker Change: Factor that is restricting growth and if anything you can see the growth of the company continues to be very very strong we think growing faster than the category and then on top of this base of course, you have all of the new products that we're building.

Dara Khosrowshahi: And if anything, you can see that the growth of the company continues to be very, very strong. We've been growing faster than the category. And then on top of this base, of course, you have all of the new products that we're building, you know, U4B and Haleables, et cetera. That portfolio is now at an $11 billion run rate, and it's growing 80% on a year-on-year basis. So we think the growth vectors that we've got in place are strong, and we look forward to continuing to grow the top line at very healthy levels this coming year while delivering margins at the same time. Prashant, do you want to talk insurance? Not really, but I'll take that question.

Speaker Change: You for be inhalable et cetera that portfolio is now.

Speaker Change: At $11 billion run rate and is growing 80% on a year on year basis. So we think the growth vectors that we got in place are strong.

Speaker Change: And we look forward to continuing to grow the top line at <unk>.

Speaker Change: Very healthy levels.

Speaker Change: Coming year, while delivering margins at the same time, Sean do you want to talk insurance, not really but I'll take that question, yes. So.

Prashanth Mahendra Raja: Yes, So, as a reminder, maybe we'll say that remember that we provide automotive liability insurance on behalf of our drivers. So, it's a benefit we provide to them, and in turn, we build that in to our pricing. Certainly, this is an area that has been facing significant cost pressure. You're going to be seeing similar inputs from or outputs from both the personal and the commercial auto insurance companies. As a data point, we'd point you to the latest CPI print, which shows motor vehicle insurance up 20% year over year. So, in this more inflationary environment, we are taking a number of steps to actively manage our costs. First, I'd call out that we can use the data that we have access to in the technology environment to really drive safety technology, and that includes things that we've talked about before, like reducing left turns, giving alerts to drivers when they're approaching challenging intersections, and enabling both audio and video recording during trips so that there can be evidence of liability, which can be helpful to us.

Sean: As a reminder.

Sean: Maybe we will say that that.

Sean: Remember that we provide automotive liability insurance on behalf of our drivers so.

Sean: It's a benefit we provide to them and in turn we build that in to our pricing certainly this is a.

Sean: A space that has been facing significant cost pressure youre going to be seeing similar <unk>.

Sean: <unk> from where outputs from both the personal and commercial auto insurance companies.

Sean: As a data point, we'd say, we'd point you to the latest CP.

Sean: CPI print, which had motor vehicle insurance up 20% year over year. So in this more inflationary environment.

Sean: We are taking a number of steps to actively manage our costs.

Sean: First I'd.

Speaker Change: I would call out that Ted that we can use.

Speaker Change: The data that we have access to the technology environment to really drive safety technology and that includes things that we've talked about before like reducing left turns giving alerts to drivers when theyre approaching challenging intersections, enabling both audio and video recording during trips so that there can be evidenced.

Speaker Change: Liability, which can be helpful to us. In addition, we have an excellent risk management program. We are we have a good partnership with with our carriers and we maintained these relationships over a longer term, but what is helpful. There as well as we have our own captive insurance company and that allows us to retain more risk where NES.

Prashanth Mahendra Raja: In addition, we have an excellent risk management program. We have a good partnership with our carriers, and we maintain these relationships over the longer term. But what is helpful there as well is that we have our own captive insurance company, and that allows us to retain more risk where necessary, particularly in harder insurance pricing markets when it could be for a particular geography or locality. And then lastly, on the regulatory side, we've got a really strong policy team that is working on reforms state by state. So we've seen some good progress, positive legislation in Florida, in Virginia, and Georgia, and we are working on some other states as well.

Speaker Change: <unk>, particularly in harder insurance pricing market when it could it be for a particular geography or locality and then lastly on the regulatory side. We've got a really strong policy team that is working on a reform on reforms state by state. So we've seen some good progress positive.

Speaker Change: <unk> in Florida, and Virginia, and Georgia, working on some other states as well and.

Prashanth Mahendra Raja: And we're also active in a number of states, including California, and you might have seen some activity on this in the last couple of weeks, where we see an opportunity to really educate the new legislatures, given there's a fairly high level of turnover that's expected at the state level, about 40 or so seats that are going to open up. And we've indicated that we're willing to put as much as $30 million into our Uber Innovation Pack, which is really focused on helping to identify business-friendly legislatures for California. Wrapping up at the kind of overall 2024 level, I would say that the insurance costs per trip for the US are certainly going to be a headwind.

Speaker Change: And we're also active in a number of states, including California, and you might have seen that you might have seen some activity on this in the last couple of weeks, where we see an opportunity to really educate the new legislature is given there's a fairly high level of turnover thats expected at the state level.

Speaker Change: About 40, or so seats that are going to open up and we've indicated that we're willing to put as much as $30 million into our Uber innovation pack, which is really focused on helping to identify business friendly legislature's for the California state.

Speaker Change: Wrapping up at the kind of at the overall 2024 level I would say that the insurance cost per trip for the U S. That's certainly going to be a headwind. We've got these multiple cost mitigation efforts that we're going to continue to factor and really just to your question. All of that is priced into the guide. So you should expect all that to be reflected in the outlook we're giving.

Prashanth Mahendra Raja: We've got these multiple cost mitigation efforts that we're going to continue to factor in. And really, Justin, to your question, all of that is priced into the guide. So you should expect all that to be reflected in the outlook we're giving. Your next question comes from the line of Mark Mahaney from Evercore ISI. Please go ahead.

Speaker Change: Okay.

Speaker Change: Your next question comes from the line of Mark Mahaney from Evercore ISI. Please go ahead.

Mark Mahaney: Yeah, thanks. Let me ask you two questions, please. On advertising revenue growth, that's, you know, been better than maybe we all thought a year or two ago. What do you think have been the biggest growth surprises? What have, what parts of all the advertising platforms that you have, have done the best for you? And then, in terms of Uber One, you've got whatever 19 million users, you know; it's a really good number. I know it's a product that, kind of like Prime, over time can have more, not more, not just bells and whistles, but more really great features and functionality added to it. Can you just give a sense of what some of those new incremental features and functionality would be that, you know, consumers would really appreciate? Thank you.

Mark Mahaney: Yeah. Thanks, Let me ask two questions. Please on the advertising revenue growth that's been better than maybe we all thought a year or two ago. What do you think have been the biggest.

Mark Mahaney: Kind of growth surprises would've what parts of the <unk>.

Mark Mahaney: All advertising platforms that you have had done the best for you and then in terms of Uber one you've got.

Mark Mahaney: With over 19 million users. It's a really good number I know, it's a product that's kind of like prime over time can you have more not more not just bells and whistles, but more really great features and functionality added to it can you just give a sense of what some of those new incremental features and functionality would be that consumers would really appreciate it. Thank you.

Dara Khosrowshahi: Absolutely. So, Mark, in terms of ads, we're very happy with the progress on ads. I'd say that we're not surprised because we've got a terrific team, both on the sales side and the tech side, and they have been executing what they promised. Now, the biggest area of strength in advertising is still the smaller businesses that advertise on our platforms. These are your neighborhood restaurants who want to increase their business by 20% and put in a certain dollar amount into the Uber ad system that we bid on for them. These advertisers, on average, are earning eight times their spend. We've got about 550,000 businesses now advertising on our platform. It's up 75%. And that is the majority of our advertising revenue, and it's about bringing in more advertisers onto the platform or getting them to increase spend. And if you're making eight times your investment, well, increase your spend from $200 a week to $300 a week to $400 a week.

Speaker Change: Absolutely so mark in terms of ads, we're very happy with the progress on that I'd say that we're not surprised because we've got a terrific team.

Speaker Change: Both on the sales side and the tech side and they have been executing.

What they promised now the biggest area of strength on advertising.

The smaller businesses that advertise on our platform. These are your neighborhood restaurant, who wants to get it.

Increased their business by 20%.

Speaker Change: And puts it in a certain dollar amount into Uber.

Speaker Change: Mover AD system that we bid on four of them. These advertisers on average are earning eight times their spend.

Speaker Change: We got about 550.

Speaker Change: Businesses now advertising on our platform, it's up 75% and that is the majority of our advertising revenue and it's about bringing on more advertisers advertisers onto the platform or getting them to increase spend if youre, making eight times your investment will increase their spend from 200 Bucks.

Week to 300 Bucks three eight to $400 a week that is absolutely something that we're focused on and frankly, it's in the interest of our advertisers based on the return on AD sales that they're seeing some of the faster growing areas of advertise of advertising or with enterprise clients in CPG clients enterprise advertisers.

Dara Khosrowshahi: That is absolutely something that we're focused on, and frankly, it's in the interest of our advertisers based on the return on ad sales that they're seeing. Some of the faster-growing areas of advertising are with enterprise clients and CPG clients. Enterprise advertisers sometimes look for additional bells and whistles. They may want to target a certain demographic. They may want to target a certain daypart, for example.

Speaker Change: Sometimes they look for additional bells and whistles. They want they may want to target a certain demographic. They may want to target a certain day part for example, one of our big enterprise consumers wanted to target breakfast as an example, or they may want to only bring on new customers, who haven't eaten at that.

Dara Khosrowshahi: One of our big enterprise consumers wanted to target breakfast as an example. Or they may want to only bring in new customers who haven't eaten at that establishment before. So we're building out a much more mature tool set for those kinds of advertisers, more reporting, more reporting on the incrementality of the ad spend as well. And then for CPG companies, especially in the grocery part of our business, which is one of the fastest-growing segments of the business, we built out, for example, sponsored items for grocery. These CPGs are advertising in Albertsons. They're advertising on grocery shelves at this right now. They advertise on Instacart.

Speaker Change: Establishment before so we're building out much more mature tool set for those kinds of advertisers more reporting.

Speaker Change: We're reporting on incrementally of the AD spend as well and then for CPG companies, especially in the grocery part of our business, which is one of the fastest growing segments of the business. We built out for example sponsored items for grocery. These CPG as you know they are advertising in albertsons.

Speaker Change: Our advertising and the.

Speaker Change: In grocery shelves at this right now they advertise on instant card. So essentially we rebuilding those kinds of products to get them in front of an audience in Uber eats audience thats not only global but it's growing very very quickly so any CPG advertiser, who wants a growing.

Dara Khosrowshahi: So essentially, we're rebuilding those kinds of products to get them in front of an audience, an Uber Eats audience that's not only global but is growing very, very quickly. So any CPG advertiser who wants a growing audience and a global growing audience should get in front of our audience. And then, of course, there's our journey ads, which is advertising on mobile.

Speaker Change: <unk>.

Speaker Change: And our global growing not as should get in front of our audience and then of course, there is our journey ads, which is advertising on mobile.

Dara Khosrowshahi: These are people who are going out, who are impressionable, who may see kind of higher-level branded, higher CPM brand advertising in the Uber app as well. That part of the business continues to grow, and that team had, frankly, a terrific Q4. When you look at membership, which we're very excited about, membership really had a bit of a sprint at the end of the year. We had some holiday promos on free trials.

These are people who are going out who are impressionable, who may see kind of higher level branded higher CPM brand advertising.

Speaker Change: <unk> as well.

Speaker Change: That part of the business continues to grow and that team has frankly, a terrific Q4.

Speaker Change: When you look at membership, which we're very excited about membership really have a bit of sprint at the end of the year.

We had kind of holiday promos on free trials, we moved a bunch of our Uber one members to annual memberships that reduces.

Prashanth Mahendra Raja: We moved a bunch of our Uber One members to annual memberships, which reduces kind of the turnover or increases the retention of the members. So right now, I'd say the focus of the team has been launching in more countries. We're in 25 countries, making sure that features like annual membership upsell that increase retention are available all over the world. Next year, you will see some bells and whistles. I would say more on the mobility front in terms of surprising and delighting the customer if it's an upsell or if you're, let's say, in an airport. But I want to save those surprises and delights for when we're ready to announce them. But stay tuned. And maybe just to wrap it up, just put some numbers out there so that you have, again, 19 million members across the 25 countries that Dara mentioned. And again, I want to go back to the data he pointed out earlier.

Speaker Change: Kind of the turnover or increases the retention of the members of the members. So right now I'd say the focus of the team has been.

Speaker Change: Launching in more countries. We're in 25 countries, making sure that features like annual membership upsell that increase retention.

Speaker Change: <unk> available all over the all over the world net.

Speaker Change: Next year, you will see some bells and whistles I will say more on the mobility front.

Speaker Change: In terms of surprising and delighting the customer if it is an up sell or if you're let's say and in airports.

Speaker Change: But I want to save those surprises and delights for ROE and we're ready to announce them, but stay tuned.

Speaker Change: Maybe just to wrap it up just put some numbers out there so that you have.

Speaker Change: Again 19 million members across the 25 countries that Don mentioned and again I want to go back to the data point.

Speaker Change: Pointed out earlier about 45% of our delivery gross bookings is coming from members. So it is definitely driving the frequency, which is elemental to the growth algorithm.

Prashanth Mahendra Raja: About 45% of our delivery gross bookings are coming from members, so it is definitely driving the frequency, which is elemental to the growth algorithm. All right, next question. Your next question comes from the line of Ron Josie from Citi. Please go ahead. Great, thanks for taking the question. Maybe two deeper dive specific ones, Dara and Prasant.

Speaker Change: Alright next question.

Speaker Change: Next question comes from the line of Ron Josey from Citi. Please go ahead.

Ron Josey: Thanks for taking the question, maybe two deeper dive specific ones dollar and percent I wanted to maybe sticking with the delivery side on grocery and retail I think that's all gross bookings are now in a $7 billion run rate, maybe <unk> talked about it just about the progress of the grocery now that I think the infrastructure is built out and how you think about integrating grocery within.

Ron Josie: I wanted to, maybe sticking with the delivery side of grocery and retail, I think I saw gross bookings are now on a $7 billion run rate. Maybe Dara, talk to us about the progress of grocery now that I think the infrastructure is built out and how you think about integrating grocery within delivery and food going forward. And given the conversations around frequency as a big opportunity to improve overall usage going forward, I would love to get an update on Uber Teens. I think we saw that is now expanding to newer markets, but here in the States, talk to us about demand for Uber Teens and sort of where that might go. Thank you.

Speaker Change: Delivery and food going forward and given the conversations around frequency is a big opportunity to improve overall usage going forward, we'd love to again update on Uber teams. I think we saw that is now expanding to newer markets, but here in the states talk to us about demand for Uber teams and sort of where that might go. Thank you.

Dara Khosrowshahi: Yeah, absolutely. As far as grocery and retail goes, we're very happy with the progress there. Like you said, $7 billion of gross bookings. And really, the focus that we have now on grocery and retail is to upsell to the Uber Eats customer. Our grocery and retail business is now fully native. We have stopped using the corner shop app all over the world. But we certainly haven't stopped that team.

Speaker Change: Yeah, absolutely as far as grocery and retail goes we're very happy with the.

With the progress there like you said $7 billion of gross bookings in.

Speaker Change: And really the focus that we have now on grocery and retail is upsell.

Speaker Change: Each customer.

Speaker Change: Customer in our grocery and retail business is now fully native.

Speaker Change: We have sunset the corner shop App all over the world.

Speaker Change: We certainly havent sunset that team that team is now actually leading many parts of our grocery and retail.

Dara Khosrowshahi: That team is now actually leading many parts of our grocery and retail business. But the upsell is about showing groceries to an eater at the right times. So, for example, after you've completed your order, maybe you want a bottle of wine from a nearby liquor store, or you want some dessert, etc.

Speaker Change: Business.

Speaker Change: But the upsell is about.

Speaker Change: Showing at the right occasions.

Speaker Change: Grocery to an eater. So for example, after you've completed your order maybe you want a bottle of wine.

Speaker Change: A nearby liquor store or you want some dessert et cetera, it's those occasions that can introduce in a very natural way that uber eats customer to grocery and retail.

Dara Khosrowshahi: It's those occasions that can introduce in a very natural way the Uber Eats customer to groceries and retail. And then what we'll look to do after that is promote. There's a supermarket around the corner.

Speaker Change: Then what we will look to do after that is promotes.

Theres a supermarket around the corner do you want to do a top up shopper do you wanted to your weekly shop on that supermarket as well so.

Dara Khosrowshahi: Do you want to do a top-up shop, or do you want to do your weekly shop at that supermarket as well? So, there's a lot of basic things to tackle, including getting more retailers on board. And steadily, we're increasing the number of eaters who also order groceries and retail. It's now up to 14 percent.

Speaker Change: A lot of basic tackling including getting more retailers on board.

Speaker Change: <unk> steadily we're increasing the number of eaters, who also order grocery retail is now up to 14%.

Dara Khosrowshahi: And that is a percentage that you will continue to see move up throughout the year. So, that's essentially what we're doing. Again, we expect big things from grocery and retail. Prashanth, do you want to talk about the investment philosophy there? And then we'll get to Obertine.

Speaker Change: And and that is a percentage that you will continue to see move.

Speaker Change: Move up throughout the year.

Speaker Change: So that's essentially what we do and again, we expect big things from grocery retail.

Speaker Change: Sean do you want to talk about kind of the investment philosophy, there and then we'll get to over team Ron I think when we think about the unit economics.

Prashanth Mahendra Raja: Yeah, Ron, I think when we think about the unit economics for groceries, we feel pretty good about the direction we're headed and how this will grow into a profitable business. A couple of the levers that we have access to are clearly the power of the platform that allows us to have efficiency at the fulfillment level, which is very hard for others to obtain, given the scale that we have and the courier network that we've built out. In addition, with roughly 150 monthly users, we can provide a very attractive platform for advertisers to come onto the platform, advertise for the grocery business, but also potentially have access to a much broader set. So we feel good that Union Economics will get to a point where this is going to be a great business for us.

Speaker Change: <unk> for groceries.

Sean: We feel pretty good about the direction, we're headed and how this will grow into a profitable business a.

Sean: A couple of the levers that we have access to is clearly the power of the platform allows us to have a efficiency at the fulfillment level, which is very hard.

Sean: Sure.

Sean: For others.

Sean: To obtain given the scale that we have and the carrier network that we built out in addition, with with roughly 150 monthly users. We can provide a very attractive platform to advertisers to come onto the platform advertise for the grocery business, but also potentially have access to much.

Sean: <unk>. So we feel good that unit economics, we'll get to a point, where this is going to be a great business for us I will say that for 2024, while this business will not be in the black it is going to be doing better than it was in 2023. So.

Prashanth Mahendra Raja: I'll say that for 2024, while this business will not be in the black, it is going to be doing better than it was in 2023. So the trajectory is going in the right direction. And then let's have Dara finish up on Teens before we go to our last question. On Teens, as a parent of a teen, I can tell you that Uber Teen is one of our all-time favorite new products out there. Obviously, the parent has to invite the teen to use the product.

Sean: The trajectory is going in the right direction and then let's have Dara finished.

Dara: Finish up on teams before we go to our last question.

Dara: On teams.

Dara: The parent of a team I can tell you that <unk> is one of our all time.

Dara: Favorite new product out there obviously the parent has to invite the teen.

Dara: To use the product we continue to expand in a number of markets and one thing thats very interesting in terms of teen.

Dara Khosrowshahi: We continue to expand in a number of markets. And one thing that's very interesting in terms of teens is that we're actually seeing the frequency of use of teens, I guess it shouldn't be a surprise, be just as high as the frequency of adults. So once teens get their hands on the product, and it's a very safe product, you know, they use it every day to get around. And I think the reason why parents really love the product is because they're the ones inviting their teens to use it. They can rest assured that only the best drivers that are on the platform who have been there the longest and who have the best ratings can pick up a teen. There is automatic pin dispatch to make sure that your teen gets in the right car. That is sometimes a worry.

Dara: Is that we're actually seeing the frequency of use of teens I guess it shouldnt be a surprise b just as high as the frequency of adult so once teams get their hands on the product and has a very safe product they use it everyday to get around and.

Dara: And I think what the reason why parents really loved the product is they're the ones that are buying their teams to the product. They can rest assure that only the best drivers that are on the platform.

Dara: <unk> had been there as long as who have the best ratings.

Dara: Can pick up a team.

Dara: There is automatic pin dispatch to make sure that you and your team gets in the right car that sometimes is a worry you can track your teen automatically to make sure no. One day get picked up no when they get dropped off and use the parent can directly contact that driver Justin.

Dara Khosrowshahi: You can track your teen automatically to make sure you know when they get picked up, know when they get dropped off. And you as a parent can directly contact that driver just in case you have any questions, if the car stops and you're worried about it, et cetera. So the out-of-the-box tech that comes with Teen, which is really an amalgamation of a number of safety innovations that we've led on in the industry, make it a product that has been an absolute hit. And, you know, I think we're pretty comfortable that once those teens turn into grownups, Uber is going to be their first choice for mobility. So this is a product that, you know, today is a product that is looking great in terms of frequency and customer satisfaction, but it's also a product that's designed for growth not just today but tomorrow. Our final question comes from the line of Deepak Mathivanan from Wolf Research. Please go ahead.

Dara: Do you have any questions of the car stops and you are worried about et cetera. So the out of the box tech that comes with teen.

Dara: Which is really an amalgamation of a number of safety innovations that we've lead on the industry make it a product that has been an absolute hit.

Dara: And I think we're pretty comfortable that once those teens turned into grownups Uber.

Dara: <unk> is going to be their first choice for mobility. So this is a product that today is a product that is looking great in terms of frequency and customer satisfaction, but it's also a product thats designed to.

Dara: For growth not just today, but tomorrow.

Speaker Change: Our final question comes from the line of Deepak Matthew Shannon from Wolfe Research. Please go ahead.

Deepak Mathivanan: Great, thanks for taking the question. Dara, Upfront Fares has been live in the U.S. for a few quarters now, and has definitely been a huge factor in 2023. Can you talk about the opportunities to expand this into more international markets and also perhaps integrate it with a wider range of mobility products beyond UberX in 2024? And then, on the grocery side, what are some of the key product initiatives for 24 or for building out the grocery vertical? And do you see opportunities to accelerate product build out and maybe even retail partnerships through acquisitions? Thank you so much.

Speaker Change: Great. Thanks for taking the question Dara upfront fast has been live in the U S for a few quarters now and it's definitely been a huge factor in 2023 can you talk about the opportunities to expand this into more international markets and also perhaps integrated with the wider range of mobility products beyond <unk> in 2024, and then just a follow.

Speaker Change: On the grocery side.

Speaker Change: Some of the key product initiatives for 24 of our building out the grocery vertical and do you see opportunities to accelerate product build out and maybe even retail partnerships through acquisition. Thanks. So much.

Dara Khosrowshahi: Yeah, so in terms of upfront fares, we're very pleased with the rollout of upfront fares in the U.S. and a number of other markets. And I'll remind our investors, too, that we actually originally rolled out upfront fares on the delivery side of the business. So delivery was built out upfront with upfront fares in terms of couriers knowing where they're picking up, dropping off, and what the fare was going to be. Based on the knowledge there and kind of working on that product, we determined that this is a product that could work for mobility as well, because the number one issue that drivers were asking for was, "I want to know where my destination is, which wasn't available." So it's just an example of the power of the platform there, which is something that we do on the delivery side and innovate on the delivery side, finds its way on the mobility side.

Dara: Yes, so in terms of upfront fares were.

Very pleased with the rollout of upfront fares in.

Speaker Change: In the U S in a number of other markets.

Speaker Change: I'll remind.

Speaker Change: Our investors too that we actually originally rolled out upfront fares on the delivery side of the business. So delivery was built out upfront fares in terms of careers, knowing where they are picking up dropping off of what the fair was going to be based on the.

Speaker Change: Knowledge, there and kind of working on that product. We determined that this is a product that could work for mobility as well because the number one issue that drivers. We're asking for is I want to know where my destination is which wasn't available. So it's just an example of the power of the platform there, which is something that we do on the delivery side and innovate on the delivery side.

Speaker Change: <unk> finds its way on the mobility side and again, we were the first.

Dara Khosrowshahi: And again, we were the first in the U.S. to debut upfront fares, and drivers absolutely love the destination information that they're getting. I'd say on upfront fares, actually, we're less focused on launching it globally as we are on tuning the product itself. What you observe in terms of upfront fares now that drivers know where they're going and whether they're accepting some trips or not accepting some trips is that, you know, drivers are quite idiosyncratic in terms of their desires. There are some drivers who want long trips, some that want short trips, some that want to go to the airport, some that, you know, don't want to go to the suburbs, et cetera

Speaker Change: In the U S to debut upfront fares and drivers absolutely love that the destination information of that.

They are getting I would say on upfront fares actually we're less focused on launching it globally.

Speaker Change: We are on tuning the product itself.

Speaker Change: What you observe in terms of upfront, there's now that drivers know where theyre going and whether they are accepting some trips are not accepting some trips is understanding that drivers are quite idiosyncratic in terms of.

Speaker Change: Their desire is there some drivers who want long trips some that want short trips some that want to go to airports some debt.

Speaker Change: I don't want to go to the suburbs et cetera. So I think that what we can do better is actually targeting.

Dara Khosrowshahi: So I think that what we can do better is actually targeting different trips to different drivers based on their preferences or based on behavioral patterns that they're showing us. That really is the focus going forward, you know, offering the right trip at the right price to the right driver, which is a win-win-win. You know, the rider wait time is lower, drivers are seeing the trips that they want at the right price, and the network gets more and more efficient. And I would also say that the nature of upfront fares, you've gone from just flat time and distance to now kind of point estimates for every single trip based on the driver.

Speaker Change: <unk>.

Different trips to different drivers based on their preferences or based on behavioral patterns.

Speaker Change: That they're showing us that really is the focus going forward.

Speaker Change: Offering the right trip at the right price to the right driver, which is a win win win the rider wait time is lower drivers are seeing the trips that they want at the right price.

Speaker Change: And the network gets more and more efficient and I would also say that the nature of upfront fares, you've gone from just flat time and distance to now kind of point estimates for every single trip.

Speaker Change: Just on the driver it accrues to players who have the kind of data skills.

Dara Khosrowshahi: It accrues to players who have the kind of data skills and the amount of data that we have. We have more of these point estimates; we make more of these point estimates than anyone else. We're making these point estimates both in mobility and delivery. We're doing it globally. So all things being equal, our AI algorithms are going to be able to learn more and are going to be able to be more accurate than anyone else's, which is an advantage that, over a period of time, is absolutely going to accrue to us.

Speaker Change: And the amount of data that we have.

Speaker Change: We have more of these point estimates, we make more of those point estimates than anyone else. We're making these point estimates both in mobility and delivery we're doing it globally.

Speaker Change: So all things being equal our AI algorithms are going to be able to learn more.

Speaker Change: And are going to be able to be more accurate than anyone elses, which is which is an advantage that over a period of time.

Speaker Change: Is absolutely going to accrue to us.

Dara Khosrowshahi: In terms of grocery new product initiatives, you know, again, I think the focus for us is actually continuing to build out our merchant base. We continue to sign up new merchants all over the world, you know, some of the wins in the U.S. for Big Lots and Sprout Farmer Market in Italy as well. So one is just driving choice in the marketplace. And then, in terms of our catalog, one of the areas that we're quite focused on is making sure that the catalog is mature and searchable. And, you know, when you search for chocolate milk, you get exactly what you're looking for.

Speaker Change: In terms of grocery and new product initiatives.

Speaker Change: Again, I think the focus for us is actually continuing to build out our merchant base.

Speaker Change: We continue to sign up new merchants all over the world.

Speaker Change: Some of the wins.

Speaker Change: In the U S for a big lawsuit and sprouts.

Speaker Change: Farm spot former market, Italy as well. So one is just driving the choice in the marketplace and then I do think in terms of our catalog one of the areas that we're quite focused on is making sure that the catalog is mature and searchable.

Speaker Change: And when you search for chocolate milk, you get exactly what Youre looking for.

Dara Khosrowshahi: And I do think that the searchability of the catalog and a lot of the basics that we have in grocery stores can get better and better. We're very excited about the potential there. And as we continue to add more merchants all over the world, we think this business will continue to grow and eventually get to profitability. That concludes our question and answer session. I will now turn it back to management for closing remarks. Thank you, Christa.

Speaker Change: And and I do think that the search ability of the catalog and a lot of the basics that we have in grocery can get better and better.

Speaker Change: We're very excited about the potential there.

Speaker Change: And as we continue to add on more merchants all over the world. We think this business will continue to grow and eventually get to profitability.

Speaker Change: That concludes our question and answer session I will now turn it back to management for closing remarks.

Speaker Change: Thank you Christophe so thank you all for joining us today as we wrap up the Q&A I did want to share a quick organizational announcement.

Management: So thank you all for joining us today. As we wrap up the Q&A, I did want to share a quick organizational note. As part of the career development for the exceptional finance talent here at Uber, Alex Wang, who has done an incredible job leading IR, will be expanding his scope to include some FP&A responsibilities in addition to his role in IR. And I'm delighted to announce that Deepa Subramaniam, the former CFO of our delivery business, will be expanding her scope to be the VP of IR and Corporate Finance. This will be a gradual transition, but I wanted to let you know that you'll be working with both of them in the coming quarters. So, please join me in congratulating them both, and we appreciate your time. I look forward to talking to all of you again next time. This concludes today's conference call. Thank you for your participation, and you may now disconnect.

Speaker Change: As part of career development for the exceptional finance talent here at Hoover, Alex Wang who has done an incredible job, leading IR will be expanding his scope to include some <unk> responsibilities. In addition to his role in IR.

Speaker Change: And I am delighted to announce that Deepa Superman the former CFO of our delivery business, we will be expanding her scope can be the VP of IR and corporate finance this will be a gradual transition, but I wanted to let you know that you'll be working with both of them in the coming quarters. So please join me in congratulating them boat and we appreciate your time.

Speaker Change: We look forward to talking to all of you again next week.

Speaker Change: This concludes today's conference call. Thank you for your participation and you may now disconnect.

Speaker Change: Yeah.