Q1 2024 Uber Technologies Inc Earnings Call

Sarah: Thank you for standing by. My name is Sarah, and I will be your conference operator today. At this time, I would like to welcome everyone to the Uber Q1 2024 earnings conference call. All lines have been placed on mute to prevent any background noise. After the speaker's remarks, there will be a question and answer session, and if you would like to ask a question during this time, press star 1 on your telephone keypad. If you would like to withdraw your question, simply press star 1 again. I would now like to turn the conference over to Deepa Subramanian, VP of Investor Relations and Corporate Finance. You may begin.

Thank you for standing by my name is Sarah and I will be your conference operator today at this time I would like to welcome everyone to the Uber Q1, 'twenty 'twenty four 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 and neighborhood. If you would like to ask a question. During this time press star one on your telephone keypad. If you would like to withdraw your question simply press Star one again.

I would now like to turn the conference over to deeper Subramanian VP of Investor Relations and corporate Finance you may begin.

Deepa Subramanian: Thank you, operator. Good morning, and thank you for joining us today, and welcome to Uber's first quarter 2024 earnings presentation. On the call today, we have Uber CEO Dara Khosrowshahi and CFO Prashanth Mahendra Raja. During today's call, we will 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.

Deepak Mathivanan: Thank you operator, good morning, and thank you for joining us today and welcome to <unk> first quarter 2024 earnings presentation.

Deepak Mathivanan: On the call today, we have Uber CEO Dara crusher shot he and CFO <unk> Mahendra Rajah.

Deepak Mathivanan: During today's call, we will 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.

Deepak Mathivanan: Dot com so.

Deepa Subramanian: 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. 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 in other filings made with the SEC.

Deepak Mathivanan: Certain statements in this presentation and on this call are forward looking statements you should not place undue reliance on forward looking statements.

Deepak Mathivanan: 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.

Deepak Mathivanan: 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. These described in our most recent Form 10-K and in other filings made with the SEC.

Deepak Mathivanan: We 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 we will open the call to questions. Following brief opening remarks from Dara the Doc let me hand, it over to Dara. Thanks, Steve our results this quarter once again demonstrate.

Deepa Subramanian: 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 will open the call to questions following brief opening remarks from Dara. With that, I will hand it over to Dara. Thanks, Deepa.

Dara Khosrowshahi: Thanks, Deepak. Our results this quarter once again demonstrate our ability to deliver consistent, profitable growth at scale. Uber's off to a solid start in 2024 with trips up 21% year-on-year, consistent with our gross bookings growth rate on a constant currency basis. Our audience expanded by 15% while frequency grew 6%, underpinned by 7.1 million drivers and couriers on our platform. At the same time, record-adjusted EBITDA of $1.4 billion grew 82% year-over-year, and we generated $4.2 billion of free cash flow over the last trailing, and the trailing 12 months.

Dara Khosrowshahi: Our ability to deliver consistent profitable growth at scale.

Dara Khosrowshahi: <unk> is off to a solid start in 2024 with trips up 21% year on year consistent with our gross bookings growth rate on a constant currency basis.

Dara Khosrowshahi: Our audience expand about 15%, while frequency grew 6% underpinned by $7 1 million drivers and couriers on our platform.

Dara Khosrowshahi: At the same time record adjusted EBITDA of $1 4 billion grew 82% year over year, and we generated $4 2 billion of free cash flow over the last trailing over the trailing 12 months.

Dara Khosrowshahi: We're making good progress on many of the initiatives we laid out for 2024 in our last earnings call, demand for Uber remains strong, and just last week, we hit another best week ever for gross bookings. And we expect to deliver another quarter of over 20% year-on-year growth on a constant currency basis in Q2. With that, Operator, can you open up for questions?

Dara Khosrowshahi: Making good progress on many of the initiatives, we laid out for 2024 and our last earnings call demand for <unk> remains strong and just last week, we hit another best week ever for gross bookings and we expect to deliver another quarter of over 20% year on year growth on a constant currency basis in Q2.

Speaker Change: With that operator can you open up for questions.

Operator: Thank you. We will now conduct the question and answer session. If you have a question, please press star 1 on your telephone keypad. Your first question comes from the line of Justin Post with Bank of America. Your line is open.

Speaker Change: Thank you we will now conduct the question and answer session. If you have a question. Please press star one on your telephone keypad.

Speaker Change: Our first question comes from the line of Justin Post with Bank of America. Your line is open.

Justin Post: Thank you for taking my question. I guess, Dara, there has been a lot of press on Tesla and RoboTaxi efforts lately. How are you thinking about AV impact on Uber and potential for new competition? And then maybe, Prashanth, it looks like stable bookings growth outlook in the low 20s in the second quarter, excluding FX. Anything to call out on headwinds or tailwinds and any changes to your outlook, you know, mid to high teens growth as you think about bookings in the second quarter? Thank you.

Justin Post: Thank you for taking my question I guess Dara a lot of press on Tesla and Robo taxi efforts lately, how are you thinking about <unk> impact on Uber and potential for new competition.

Justin Post: Then maybe for Sean it looks like it's stable bookings growth outlook and the low twenty's in the second quarter excluding FX.

Sean: To call out on the headwinds or <unk> any changes to your outlook.

Sean: Mid to high teens growth as you think about bookings in the second quarter. Thank you.

Prashanth Mahendra: Prashanth, do you want to talk about the second question first? Yeah, let me get that one out of the way, Justin, and thank you for the question. So, just a recap of how we'd like folks to think about our gross bookings. Remember, the growth algorithm is audience, which is a measure of how many users of the product, frequency, how often they are using the product, and then, of course, pricing. Dara just mentioned that for the first quarter, we had very strong audience growth, up 15%, great growth in frequency as well, up 6%, and pricing relatively flattish. So, similar trends are expected for the second quarter, and that's what's implied in the guide in terms of the composition of that growth algorithm. Demand for the products remains strong.

Speaker Change: First of all if you want to talk to the second question first of all let me get that one out of the way Justin and thank you for the question. So just a recap for how we'd like folks to think about our gross bookings number.

Speaker Change: Remember the growth algorithm is audience, which is a measure of how how many users of the product frequency how often are they using the product and then of course pricing Dara just mentioned that for the first quarter, we had very strong audience growth up 15% great growth in frequency as well up 6% and pricing.

Relatively flattish so we see similar trends expected for the second quarter and Thats whats implied in the guide in terms of the composition of that growth algorithm demand for the products remains strong I think.

Prashanth Mahendra: I think we're expecting another quarter of pretty consistent scale top-line growth of over 20%. Actually, if you think of the guide that we gave for Q2, it's almost identical, both at the midpoint and at the range, to what we gave for Q1, so very consistent performance, and we're exactly where we want to be with respect to the three-year CAGR outlook that we gave you in February. Maybe just a little bit of color on the Q2 guide would be nice.

Speaker Change: We are expecting another quarter of pretty consistent scaled topline growth of over 20% actually if you think of the guide that we gave for Q2, it's almost identical both at the midpoint and at the range to what you gave what we gave for Q1, so very consistent.

Speaker Change: Performance and where we are exactly where we want to be with respect to the three year CAGR outlook that we gave you in February maybe just a little bit of color on the Q2 guide.

Prashanth Mahendra: We included in the press release some notes on FX headwinds, so I did want to call that out. We've got about 5 percentage points of headwind to mobility year-over-year gross booking growth, primarily coming from the Argentine peso. So, said another way, we still expect mobility to grow in the mid-20s range at a constant currency base. I'll also highlight that in the prepared remarks, I made a comment about this. We expect mobility's adjusted EBITDA margins to be down slightly quarter over quarter, given that we did hold back some investments in Q1, and we would not do the same here for Q2. So with that, let me pass to Dara, and he can take the AV question.

Speaker Change: We included in the in the in the press release, some notes on FX headwinds. So I did want to call that out we've got about five percentage points of headwind to mobility as year over year gross booking growth primarily coming from the Argentine peso. So said another way, we still expect mobility.

Speaker Change: To grow in the mid twenties range at a constant currency basis.

Speaker Change: I'll also highlight that in the prepared remarks I made a comment about this we expect mobility adjusted EBITA margins to be down slightly quarter over quarter, given that we did hold back some investments in Q1.

Speaker Change: And we would not do the same here for Q2, so with that let me pass to Dara and he can take the EV question. Yes. Just then in terms of <unk> at our strategy. It really remains the same first thing I would say is that we think that the AAV technology at maturity is going to be very good for the industry. It will be grateful Uber.

Dara Khosrowshahi: Yeah, Justin, in terms of AVs and our strategy, it really remains the same. The first thing I'll say is that we think that AV technology at maturity is going to be very good for the industry. It'll be great for Uber. It holds a promise of safer rides.

Dara Khosrowshahi: It holds the promise of safer rise it holds a promise.

Dara Khosrowshahi: Expanding the marketplace by lowering prices and making mobility delivery available for a wider swath of the population.

Dara Khosrowshahi: It holds a promise of expanding the marketplace by lowering prices and making mobility delivery available for a wider share of the population. And usually, when we see kind of lower prices for any service, you see higher adoption for a service, and that really is the promise of AV. At the same time, we think that the technology is going to take a lot of time to develop. Obviously, there has to be a regulatory framework put in place.

Dara Khosrowshahi: Usually what we see kind of lower prices for any service you see higher adoption for our service and that really is the promise of <unk>.

Dara Khosrowshahi: At the same time, we think thats the technology is going to take out a lot of time to develop obviously there has to be regulatory framework to put in place and as the technology develops we think that actually youre not going to make a jump from one tech you human drivers fully to <unk> there is going to.

Dara Khosrowshahi: And as the technology develops, we think that actually you're not going to make the jump from one tech, you know, human drivers fully to AVs. There's going to be a relatively long period, a transition period that happens where, for example, on Uber, you see it now, you have a combination of human drivers fulfilling certain rides or deliveries or even loads on the trucking side along with AVs as well. And over a period of time, you'll see the kind of penetration of AVs increase. But I think it's very difficult to predict that period of time.

Dara Khosrowshahi: B, a relatively long period of transition period that happens.

Dara Khosrowshahi: Where for example on Uber you see it now you have a combination of human drivers.

Dara Khosrowshahi: During.

Dara Khosrowshahi: Human drivers fulfilling certain riser deliveries.

Dara Khosrowshahi: Or even loads on the trucking side.

Dara Khosrowshahi: Along with <unk> as well and over a prototype youll see kind of the penetration of <unk> increase.

Dara Khosrowshahi: I think it's very difficult to.

Dara Khosrowshahi: Predict that period of time, but really what we bring is the systems that we put in place the pricing matching routing algorithms.

Dara Khosrowshahi: But really, what we bring is the systems that we put in place, you know, the pricing, matching, routing algorithms, the payments systems that we have on a global basis, as well as the demand that we bring that enables us to partner with these AV providers to really drive utilization of their assets. This is very expensive tech that's been developed over a long time. And if you're an AV suite owner or you are an individual owner of a car, whether that's a Tesla or another kind of car, you're just going to make more money and get a higher kind of return on your investment if you plug your AVs into the Uber ecosystem and into Uber demand. So, you know, we think we bring a lot to the table.

Dara Khosrowshahi: Rhythms that payments systems that we have on a global basis as well as the demand that we bring that enables us to partner with these AAV providers to really drive utilization.

Dara Khosrowshahi: They're assets. This is very expensive tax that's been developed over a long time and if your own AAV fleet owner or you are an individual owner a car whether that's a tesla or another kind of car you are just going to make more money and make a higher return on your investment if you plug in your avs into Uber.

Dara Khosrowshahi: Stem and Uber demand so.

Speaker Change: We think we bring lots of the table, we're looking to partner with AAV industry I do think that there's a good amount of excitement over some of the newer technologies and kind of an imitation models that we see in terms of Avi.

Dara Khosrowshahi: We're looking to partner with the AV industry. I do think that there's a good amount of excitement over some of the newer technologies and kind of the imitation models that we see in terms of AV. And, you know, you see that promise with the Tesla FSD. It looks like a great product. And also, you see that same promise in a lot of smaller players, whether that's a wave in the UK who got funded for a billion dollars, or a lobby that, for example, we have investments in.

Speaker Change: And you see that promise with Tesla FSD it looks like a great product and also you see that same promise in a lot of smaller players.

Speaker Change: Whether that's a wave in the UK, who got funded $4 billion.

Dara Khosrowshahi: You know, these imitation learning models have a lot of promise over kind of the more classic heuristic-based development that you saw with AV, and we think it's going to allow more players into the marketplace. We think it's going to reduce the amount of capital required to develop these systems over a long period of time. And, you know, we're looking to partner with big players and small players. And again, as this technology develops, we think we will be a big partner in it. And we think, ultimately, it will benefit AV players, and it will benefit ourselves, and riders, and eaters as well.

Speaker Change: A lobby that for example, we have investments in this image these imitation learning models.

Speaker Change: Have a lot of promise over kind of the more classic heuristic based development that you saw with Eva and we think it's going to allow more players into the marketplace.

Speaker Change: We think it's going to reduce the amount of capital required to develop these systems over a long period of time.

We're looking at we're looking to partner with big players and small players.

Speaker Change: And again as this as this technology develops we think we will be a big partner in it and we think ultimately it will benefit a few players NOL benefit ourselves in riders and heaters as well.

Dara Khosrowshahi: Great. Thank you. You're welcome. Next question.

Speaker Change: Great. Thank you.

Speaker Change: You're welcome next question.

Brian Thomas Nowak: Your next question comes from the line of Brian Nowak with Morgan Stanley. Your line is open.

Speaker Change: Your next question comes from the line of Brian Nowak with Morgan Stanley. Your line is open.

Brian Thomas Nowak: Thanks for taking my questions this morning. I have two. The first one, Prashanth, I want to go back to the comment in the prepared remarks that you just referenced about intentionally holding back some investments with lower ROI. Can you just sort of help us unpack it a little bit?

Brian Thomas Nowak: Thanks for taking my questions. Good morning, I have two.

Brian Thomas Nowak: First of all I wanted to go back to that the comment in the prepared remarks that you just referenced about intentionally holding back some investments with lower ROI can you just sort of help us unpack that a little bit what areas of investments did you hold back on and sort of how do we think about the driver versus rider incentives or investment.

Brian Thomas Nowak: What areas of investments did you hold back on? How do we think about driver versus rider incentives or investment strategies as you go throughout the course of the year to drive durable growth? Then the second one, I wanted to hone in a little bit on Latin America. There have been some comments from one of your competitors in Latin America about potentially pulling back investment there. One, I'd be curious to hear about what you're seeing in Latin America. Just remind us, what was the base case outlook for Latin America in the annual estate guidance that we got in February?

Brian Thomas Nowak: <unk> as you go throughout the course of the year to drive durable growth and then the second one sort of wanted to hone in a little bit on Latin America Theres been some comments from one of your competitors in Latin America about potentially pulling back investment there one I'd be curious to hear about your what youre seeing in Latin America, and just remind us what was the base case outlook for Latin America.

Brian Thomas Nowak: In the analyst day guidance that we got in February.

Brian Thomas Nowak: Okay.

Prashanth Mahendra: Thanks, Brian. Let me start then. So maybe as a reminder, when we think about investments on a quarterly basis across the market, we think about investments as: what do we need to do to encourage drivers and couriers to come onto the platform? What can we do to be helpful to bring merchants onto the platform? And then lastly, what can we do to encourage consumers?

Speaker Change: Thanks, Brian Let me start then.

Speaker Change: So maybe it's a reminder.

Speaker Change: When we think about investments.

Speaker Change: Quarterly basis across the market, we think about investments as what do we need to do to encourage.

Speaker Change: Drivers and couriers to come onto the platform what can we do to be helpful to bring merchants to to the platform and then lastly, what can we do to encourage consumers. So we rotate among those three on a quarterly basis based on what we are trying to drive in the different markets in which we opt.

Speaker Change: Alright.

Prashanth Mahendra: So we rotate among those three on a quarterly basis based on what we are trying to drive in the different markets in which we operate. For example, for the first quarter, in mobility. Because of the seasonality trends in the first quarter, the return we get on some of those investment dollars tends to be lower than we see later in the quarter just because of seasonal patterns. And because that ROI is lower, it didn't make sense for us to put as much into the first quarter as we would in other quarters.

Speaker Change: For the first quarter in mobility.

Speaker Change: Because of the seasonality trends in the first quarter. The return we get from some of those investment dollars tends to be lower.

Speaker Change: Then we see later in the quarter, just because of the seasonal patterns and because that ROI is lower it didn't make sense for us to put as much into the first quarter as we as we would in other quarter. So youll see us ramp that back up in.

Prashanth Mahendra: So you'll see us ramp that back up in 2Q. We called it out purely to keep folks from running too far ahead with enthusiasm on mobility margin improvement. We are very confident that mobility is still on a great trend for continuous margin improvement. But just from a timing standpoint, we wanted to acknowledge some of the lumpiness that you are likely to see.

Speaker Change: In <unk>, we called it out purely to keep folks from running too far ahead with with enthusiasm on mobility margin improvements. We are very confident that mobility is still on a great trend for continuous margin improvement, but just from a timing standpoint, we didn't want to we wanted to acknowledge some of the lumpiness that you are.

Speaker Change: Likely to see.

Dara Khosrowshahi: Yeah, and I think in terms of Latin America and the competitive environment there, the first thing I'd say, I'm assuming you're asking about mobility. We're seeing very healthy mobility volume growth in Latin America in the mid-20s.

Speaker Change: Yes, I think in terms of Latin America, and the competitive environment. There first thing I'd say I'm, assuming you're asking about mobility, we're seeing very healthy mobility volume growth in Latin America, and the mid twenties.

Dara Khosrowshahi: So we like the market, and we certainly like the volumes that we're seeing there. You know, I would say that, while I think you're referring to Didi, they have signaled a bit more capital discipline. We're not seeing that as of yet. We see Didi being highly competitive in the marketplace and spending money into the marketplace quite aggressively. Listen, it could be temporary, as it might be driven by their desire to show international growth as the Chinese markets have slowed down a bit as they prepare for the IPO. But it's difficult for us to speculate on that.

Speaker Change: So we'd like the market and we certainly like the volumes that we're seeing there.

Speaker Change: I would say that while I think youre, referring to didi they signaled.

Speaker Change: A bit more capital discipline.

Speaker Change: Not seeing that as of yet we see DD being highly competitive.

Speaker Change: In the marketplace and spending into the marketplace quite aggressively.

Speaker Change: Listen it could be temporary as it might be driven by their desire to show.

Speaker Change: International growth is the China markets have slowed down a bit as a prep for the IPO, but it's difficult for us to speculate on that.

Dara Khosrowshahi: And I'd say, you know, we've seen this behavior before, Brian, and we have a very strong record of effectively responding to defend our category position when our competitors stand up. And, you know, we do the same thing, and typically, we're much more efficient than our competition in terms of financial efficiency, network efficiency, et cetera. But at this point, we see Didi leaning in, certainly not leaning out

Speaker Change: And I would say we've seen this behavior before Brian and we have a very strong record of that.

Speaker Change: <unk> responding to defend our category position when our competitors spend up and we do the same thing and typically we're much more efficient.

Speaker Change: Then than our competition in terms of financial efficiency network efficiency et cetera.

Speaker Change: But at this point, we see DD leaning in.

Speaker Change: Certainly not leaning out and we are leaning in as a response just like we do with other competitors all around the world. The good news for US is we have a very strong P&L you see our margins continue to increase so we have lots of pockets of investments.

Dara Khosrowshahi: And we are leaning in as a response, just like we do with other competitors all around the world. The good news for us is we have a very strong P&L. You see, our margins continue to increase. So we have lots of pockets of investment to reach into, but we are going to be aggressive.

Speaker Change: To reach out to but we are going to be aggressive.

Dara Khosrowshahi: Ryan, just a shout out for the note last week. I thought that was nice, and we're very much aligned with the more public participants in this market, the better it is for everyone.

Speaker Change: Brian just a shout out for the note last week, just a shout out for the note last week I thought that was nice and we're very much aligned with the more public participants in this in this market the better it is for everyone.

Operator: Thank you both. All right. Thank you. Next question.

Speaker Change: Thank you both alright. Thank you next question operator.

Douglas Till Anmuth: Your next question comes from the line of Doug Anmuth with JPMorgan. Your line is open.

Speaker Change: Your next question comes from the line of Doug Anmuth with Jpmorgan. Your line is open.

Douglas Till Anmuth: Thanks for taking the questions. I just wanted to go back to the detail that you saw on monthly trips for MAPSE in one cue. I was hoping you could unpack that a little bit in terms of LATAM and some of the holiday impact there and what that means in two ways. And then, Dara, can you just talk more about your delivery strategy in the suburbs, the key levers to success there, and then how you think the Instacart partnership fits in as well? Thanks.

Douglas Till Anmuth: Thanks for taking the questions.

Douglas Till Anmuth: Just wanted to go back to the T cell that you saw on monthly trips per.

Douglas Till Anmuth: <unk> and <unk>, just hoping you could unpack that a little bit in terms of Latam and some of the holiday impact there and what that means in <unk> and then Dara can you just talk more about your delivery strategy in the suburbs. The key levers to success. There and then how you think the instant card partnership fits in as well.

Prashanth Mahendra: Yeah, let me take the first part of that. So, again, the mobility gross bookings growth for the first quarter was 26% on a constant currency basis. Included in that 26% is about a point, whether you look at it sequentially or on a year over year basis, that came from us deconsolidating the non-ride sharing portion of our Careem business in December. Remember that that used to be included in mobilities results. And when we split that out, you have it in the comparisons, but you don't have it in Q1. So that's roughly about a point.

Speaker Change: Yeah, Let me take the first part of that so so again the mobility gross bookings growth for the first quarter was on a constant currency basis was 26%.

Speaker Change: Included in that 26% is about a point, whether you look at it sequentially or on a year over year basis that came from us deconsolidation. The non ride sharing portion of our Korean business in December remember that used to be included in mobility results.

Speaker Change: And when we split that out.

Speaker Change: You have it in the compares but you don't have it in Q1, so thats roughly about a point and then from a from a more seasonal impact we'd call out two items first in Latin America.

Prashanth Mahendra: And then from a seasonal impact, we'd call out two items first in Latin America. Last year, we saw stronger demand in Brazil around Carnival that we did not see recur in Q1 of this year. And then from a timing standpoint, both Easter and Ramadan shifted on us between the quarters. So again, on a comp basis, that creates some lumpiness, but overall, I would say that we are very much still confident in the growth of the mobility business again in the mid 20s.

Speaker Change: Last year, we saw.

Speaker Change: Stronger demand in Brazil around Carnival that we did not see recur in Q1 of this year and then from a timing standpoint, both the Easter and Ramadan shifted on us between that between the quarter. So again on a comp basis that creates some lumpiness, but overall I would say that we are very much.

Speaker Change: I remain confident on the growth of the mobility business again mid twenties.

Prashanth Mahendra: Year over year at constant currency for Q2 was sort of very consistent with what was done in Q1, and, as we mentioned in the opening remarks, audience and frequency are both strong at the overall Uber level and remain very strong at the individual L. O. B. levels.

Speaker Change: Year over year at constant currency for Q2 sort of very consistent with what was.

Speaker Change: <unk> done in Q1 and the.

Speaker Change: As we mentioned in the opening remarks audience and frequency are both strong at the overall Uber level and remained very strong at the individual <unk> levels.

Dara Khosrowshahi: Yeah, and Doug, in terms of our suburban strategy for EATS, it's very similar to our general strategy for our delivery business on a global basis. You know, we're very happy about our growth rates here, 17% constant currency growth rates for the second quarter in a row. Our U.S. growth rates are higher than that; our U.S. and Canada growth rates are actually higher than that, which we're quite happy about.

Speaker Change: Yes, and Doug in terms of our suburban strategy for eats.

Douglas Till Anmuth: It's very similar to our general strategy for our delivery business on a global basis.

Douglas Till Anmuth: We're very happy about our growth rates here, 17% constant currency growth rates.

Douglas Till Anmuth: For the second quarter in the row.

Douglas Till Anmuth: Our U S growth rates are higher than that of our U S and Canada growth rates are actually higher than that which we're quite happy about and generally we are growing faster in the suburbs than we are in.

Dara Khosrowshahi: And generally, we are growing faster in the suburbs than we are in urban destinations where we have higher penetration. And it's about getting the basics right, building an audience and a brand, increasing selection, making sure we've got pricing right, and making sure the quality of the service continues to be high. And really, the Instacart deal that we have represents the addition of a very high quality and highly targeted audience, the suburban audience, to the Uber EATS ecosystems and to our merchants.

Douglas Till Anmuth: Robin destinations, where we have higher penetration.

Douglas Till Anmuth: It's about getting the basics right building, an audience and our brand increasing selection, making sure we've got pricing right.

Douglas Till Anmuth: Sure the quality of the service.

Douglas Till Anmuth: Continues to be high.

Douglas Till Anmuth: And really with the instant cart.

Douglas Till Anmuth: The card deal that we have represents.

Douglas Till Anmuth: The addition of <unk>.

Douglas Till Anmuth: Very high quality.

Douglas Till Anmuth: And highly targeted audience of urban audience.

Douglas Till Anmuth: To the Uber eats ecosystems and to our merchants.

Dara Khosrowshahi: And we think that additional demand from this high-end consumer is going to be welcomed by our merchants. And at the same time, we continue to increase, for example, penetration with Domino's and a bunch of other merchants in the suburbs. So we think that we're well-positioned to continue to grow into the suburbs, and we definitely think that the Instacart deal puts us in a better position for growth going forward in the suburbs.

Douglas Till Anmuth: And we think that additional demand from this high end consumer is going to be welcomed by our merchants and at the same time, we continued to increase.

Douglas Till Anmuth: For example, penetration with Domino's and a bunch of other.

Douglas Till Anmuth: Merchants in the suburbs. So we think that we're well positioned to continue to grow into the suburbs and we definitely think that inspect the instant cards.

Douglas Till Anmuth: Deal puts us in a better position for growth going forward and the servers.

Operator: Thank you both. All right. You're welcome. Operator, next question.

Speaker Change: Thank you both alright Youre welcome operator next question.

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

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

Eric James Sheridan: Thank you for taking the question. Maybe a two-parter on Uber One. We'd love to learn anything that you've sort of continued to evolve and develop with respect to Uber One internationally as some of those markets have rolled out, and they've begun to scale the longer Uber One's been available in some of the more overseas markets. And second, you have the call-out in the prepared remarks around the subscription revenue run rate. What do you see as some of the biggest white spaces to drive more subscription revenue but also continue to add more value and depth to Uber One at the subscription layer in terms of incentivizing adoption? Thank you.

Eric James Sheridan: Thank you for taking the question maybe a two parter on Uber, one we'd love to learn anything that you've sort of continue to evolve and develop with respect to Uber one internationally as some of those markets have rolled out and they began to scale the longer Uber one has been available in some of the more overseas markets and second the call out in the prepared remarks around.

Eric James Sheridan: Subscription revenue run rate, what do you see as some of the biggest white spaces to drive more subscription revenue, but also continue to add more.

Eric James Sheridan: More value and depth to Uber one at the subscription layer in terms of incentivizing adoption. Thank you.

Deepak Mathivanan: Before Dara jumps into that, I just want to remind everyone what is being referred to. We announced in the prepared remarks that our Uber One membership fees are now in excess of a billion dollars. So that's the first time we've called that out, but it's a big milestone for us on our way to continue driving that. Yeah, Eric, in terms of...

Speaker Change: Before it before Dara jumps into that I, just want to remind everyone on the on what it.

Speaker Change: It is being referred to we announced in the prepared remarks that our Uber one.

Speaker Change: Membership fees are now in excess of $1 billion. So let's say that's the first time, we've called that out but it's it's a it's a big weight for us on our way to continue driving that yes, Eric in terms of our strategy.

Dara Khosrowshahi: Yeah, Eric, in terms of our strategy for Uber One internationally, it's largely the same as our strategy domestically and globally. It's a global product.

Speaker Change: Strategy for Uber, one internationally is largely the same as our strategy domestically and globally. It's a global product, we see penetration of Uber one consistently increasing.

Dara Khosrowshahi: We see penetration of Uber One consistently increasing in the US, Canada, and internationally. Members are now generating 32% of mobility and delivery gross bookings, which are nicely up year over year. It's over 45% of delivery gross bookings, where we're generally higher, more highly penetrated. And I'll remind folks that members spend 3.4 times as much as non-members per month.

Speaker Change: In the U S, Canada and internationally.

Speaker Change: Members are now.

Speaker Change: Generating 32% of mobility and delivery gross bookings, which are nice nicely up year over year.

Speaker Change: It's over 45% of delivery gross bookings were generally kind of where higher more highly penetrated and I'll remind folks that members spend three four times as much as non members per month.

Dara Khosrowshahi: So it is a great vehicle for us to drive adoption and really attachment with our various services as well. We are kind of working on a bunch of pretty exciting new initiatives. One that I would call out is continuing to optimize the use of Uber Cash on the mobility side. On mobility, on delivery, you get a discount on your order; you don't have a delivery fee; you get a discount on your food often.

Speaker Change: So it is a great vehicle for us to drive adoption.

Speaker Change: And drop really attachment with our various services as well.

Speaker Change: We are kind of working on a bunch of pretty exciting new initiatives, one that I would call out.

Speaker Change: Continuing to optimize the use of Uber cash on the mobility side on mobility on delivery you get a discount on you don't have a delivery fee you're got a discount on your food often with mobility you get back Uber cash.

Dara Khosrowshahi: With mobility, you get back Uber Cash, and actually, 25% of Uber Cash earned on mobility in the US, for example, is being redeemed on delivery. And that's up from the mid-teens when we originally rolled out the benefits. Business riders also get Uber Cash, which is pretty cool, and we're seeing over 60% of the Uber Cash that's earned on mobility actually redeemed on delivery as well. So we think that membership is a powerful lever in terms of general penetration into our marketplace and the frequency growth that we're seeing, but it's also a great lever in terms of using Uber Cash and introducing more of our users to the delivery benefit as well.

Speaker Change: And actually 25% of Uber cash earned on mobility in the U S. For example is being redeemed on delivery.

Speaker Change: And thats up from the mid teens, when we originally rolled out the benefits biz.

Speaker Change: Business riders also get Uber cash, which was pretty cool and we are seeing over 60% of the Uber cash thats earned on mobility actually redeemed on delivery as well. So we think that membership is a powerful lever in terms of general penetration into our marketplace and the frequency growth that we're seeing but it's also.

Speaker Change: A great lever in terms of youth.

Speaker Change: Using uber cash and and introducing more of our users.

Speaker Change: Two the delivery benefit as well.

Dara Khosrowshahi: In terms of mobility, we do think that we can penetrate more deeply into mobility, and like we're now introducing cashback accelerators where you can increase the cashback amount for any product to the extent that we're trying to drive a product, or quests that encourage users to use more premium products as well, but carry higher margins for us.

Speaker Change: <unk> mobility, we do think that we can penetrate more deeply into a mobility and like we're now introducing cashback accelerators, where you can increase the cashback amount for any product to the extent that we're trying to drive our product.

Speaker Change: Or quest that encourage users to use more.

Speaker Change: More premium products as well, but carry higher margins for US you will see more member exclusives coming up where members have exclusive access to events and experiences which.

Dara Khosrowshahi: You will see more member exclusives coming up where members have exclusive access to events and experiences, which will kind of surprise and delight our members. And then lastly, I would say that we are now moving more of our members on a global basis to the annual pass. An annual pass actually results in significantly higher retention rates, so our members are able to save money, so to speak, and we see it in the retention benefits, and that has resulted in retention increasing by nearly 200 basis points on a year-on-year basis in March, for example.

Speaker Change: Which will kind of surprise and delight our members and then lastly, I would say that we are now moving more of our members on a global basis to annual pass annual class actually results in significantly higher retention rates. So we'll cut the our members are able to save money.

Speaker Change: To speak in there and we see it in the retention benefits and that has resulted and retention increasing nearly 200 basis points on a year on year basis in March for example, so there's a lot going on.

Dara Khosrowshahi: So there's a lot going on. We think there's a ton of white space as it relates to our membership product. We're very pleased with a billion in revenue, but we think that there's a lot more growth there in membership generally and in terms of membership revenue. Great, thank you. You're very welcome. Next question.

Speaker Change: Think we are there is a ton of white space.

Speaker Change: As it relates to our membership product, we're very pleased with $1 billion in revenue.

Speaker Change: But we think that there is a lot more growth there and membership generally and in terms of membership revenue great.

Speaker Change: Great. Thank you.

Speaker Change: Youre very welcome next question.

Nikhil Vijay Devnani: Your next question comes from the line of Nikhil Devnani with Bernstein. Your line is open.

Speaker Change: Your next question comes from the line of Macau Dasani with Bernstein. Your line is open.

Nikhil Vijay Devnani: Hi, thanks for taking the question. Dara, I wanted to ask about U.S. rideshare growth. First, is it keeping pace with your mid-20s growth overall for the business? And then, second, can you talk a bit more about where the growth is coming from? Obviously, the service is not new anymore, so it feels like it's more frequency-driven, but is there still a healthy supply or healthy funnel, sorry, of new customer acquisition that you're still finding? Maybe it's suburbs or smaller cities or new demos, however you want to frame it, but just your overall thoughts on how this growth sustains would be very helpful.

Macau Dasani: Hi, Thanks for taking the question Dara I wanted to ask about U S rideshare growth.

Operator: Thank you. Yeah, team.

Macau Dasani: First is it keeping pace with your mid Twenty's growth overall for the business and then second can you talk a bit more about where the growth is coming from obviously the service is not new anymore.

Dara Khosrowshahi: So it feels like it's more frequency led but is there still a healthy supply.

Dara Khosrowshahi: The final sorry of new customer acquisition that you are still finding maybe it's tougher to smaller cities or new demos. However, you want to frame it but just your overall thoughts on how this growth sustained would be very helpful. Thank you.

Dara Khosrowshahi: Yeah, I think in terms of U.S. mobility growth, we don't disclose U.S. versus non-U.S. But obviously, by the overall numbers that you see in terms of our mobility growth, 26% on a year-on-year basis, you know, compared to 28% last quarter, and 100 basis points of that kind of slowdown was because of Kareem on a comparable basis. These are very, very high growth rates, and the U.S. is our largest market in terms of gross bookings, so we wouldn't be able to grow at these rates, so to speak, without U.S. growth being very, very healthy.

Speaker Change: Yes, and in terms of use mobility to growth, we don't we don't disclose U S versus non U S. But.

Speaker Change: Obviously by the overall numbers that you see in terms of our our mobility grow 26% on a year on year basis, compared to 28% last quarter and 100 basis points of kind of slowdown was because of cream on a comparable basis. These are very very high growth rates in the U S is our largest.

Speaker Change: Market in terms of gross bookings, so we wouldn't be able to grow at these rates so to speak without the U S growth being <unk>.

Speaker Change: Very very healthy in terms of where mobility growth is coming from I would say the significant the most significant for our growth is coming from audience.

Dara Khosrowshahi: In terms of where mobility growth is coming from, I'd say the most significant part of growth is coming from audience. Our MAP-C growth in mobility was up 17% on a year-on-year basis, overall 15%, so audience growth for mobility is actually growing faster. And one particular area of growth that we're seeing is our new products. You know, when you look at our Halibles product, U4B, our new health business, Reserve, UberX Share, all of these products, kind of our new growth bets are growing 80% year-on-year, but at the same time, over 20% of our new customers are coming from this new product category as well.

Speaker Change: Our map see growth in mobility was up 17% on a year on year basis overall, 15%. So the audience growth for mobility is actually.

Speaker Change: Growing faster.

Speaker Change: In one particular area of growth that we're seeing as our new products.

Speaker Change: When you look at our <unk> product.

Speaker Change: You for B.

Speaker Change: Our new health business Reserve Uber X share all of these products kind of our new growth paths are growing 80% year on year, but at the same time over 20% of our new customers are coming from this new product cat.

Speaker Change: Category as well so it's good business is growing very very quickly, but it is also introducing a whole new audience.

Dara Khosrowshahi: So it's good business, it's growing very, very quickly, but it's also introducing a whole new audience into our marketplace. The last thing that I would add is that, you know, with a pandemic, I think a lot of people who are kind of commuting to work, et cetera, have stopped commuting. We have lost some of our most frequent customers, but we see the weekday commute use case being particularly strong as people are coming back to work.

Speaker Change: Enter a marketplace last thing that I would add is that with the pandemic I think a lot of people who are kind of commuting to work et cetera stop commuting.

Speaker Change: We have lost some of our most frequent customers we see the weekday commute use case being particularly strong.

Speaker Change: As people are coming back to work <unk>.

Dara Khosrowshahi: Some folks may not like that, but we love it here at Uber, people getting back to work and getting back to the office. So there is an audience who have kind of stopped using us as frequently as they used to. We were kind of a daily habit, and hopefully, we will see that audience come back, and we're seeing evidence of that in terms of the weekday volume being super strong. Thanks, Dara. You're welcome. Next question, operator.

Speaker Change: Some folks may not like that but we love it here or people getting back to work and getting back to the office. So there is an audience who kind of <unk>.

Speaker Change: Stopped using us as frequently as they used to we were kind of a daily habit.

Speaker Change: And hopefully we will see that audience come back and we're seeing evidence of that in terms of that weekday volume seeing super strong.

Speaker Change: Thanks Dara.

Dara Khosrowshahi: You're welcome next question operator.

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

Dara Khosrowshahi: Your next question comes from the line of Ross Sandler with Barclays. Your line is open.

Ross Adam Sandler: Great. The prepared remarks flagged a bunch of new features in the advertising business enterprise features. So can you guys give us an update on where we are with the non-restaurant advertising as a percentage of just the total advertising ARR? And then, you know, somewhat related to the new Instacart partnership, can we sell advertising against that engagement? And I guess just, you know, how does the Instacart partnership change your own, your kind of O&O efforts in U.S. grocery? And how are the unit economics going to work in this partnership? Thank you.

Dara Khosrowshahi: Great.

Ross Adam Sandler: Prepared remarks flagged a bunch of new features in the advertising business Enterprise features. So can you guys give us an update on.

Ross Adam Sandler: Where we are with the.

Ross Adam Sandler: Non restaurant advertising as a percentage of the.

Ross Adam Sandler: Total advertising <unk>.

Ross Adam Sandler: And then.

Ross Adam Sandler: Somewhat related with the new instant card partnership.

Ross Adam Sandler: Can we sell advertising against that engagement and I guess just.

Ross Adam Sandler: How does the <unk> partnership change your own you're kind of <unk> efforts.

Ross Adam Sandler: In U S grocery.

Ross Adam Sandler: And how are the.

Ross Adam Sandler: Unit economics going to work in this partnership thank you.

Prashanth Mahendra: Ross, it's Prashanth. Let me start with just a couple of data points and then hand off to Dara. First, as a reminder to everyone, we hit a $900 million run rate for advertising in Q4 of 2023. We do not break that down between delivery and mobility. And then on the Instacart arrangement, As Dara mentioned and we discussed yesterday, when folks click through Instacart and they come to the UberEats WebView app, that's our ads, and that's our space to use and monetize.

Speaker Change: <unk>, let me start just with a couple data points and then hand off to our first as a reminder to everyone.

Speaker Change: We hit a $900 million run rate for advertising in the in Q4 of 2023.

Speaker Change: We do not break that down between delivery and mobility and then on the <unk> arrangement.

Speaker Change: As Don had mentioned.

Speaker Change: We discussed yesterday, when folks click through into cart and they come to the Uber each web view App that was our our ads and those are our that's our space to use and monetize so with that let me pass off the data to make some more comments in terms of the <unk>.

Dara Khosrowshahi: So with that, I will pass off to Dara to make some more comments.

Dara Khosrowshahi: Yeah, in terms of non-restrictive advertising, listen, it's still really in the nascent stages. So we talked about restaurant advertising, getting to 2% of gross bookings. We actually think that our sponsored items, product, for example, grocery, can get higher percentages of that. Instacar, for example, we think is in the Med2s in terms of advertising as a percentage of gross bookings.

Speaker Change: Non restaurant.

Speaker Change: Advertising listen, it's still really a nascent stages. So we talked about restaurant advertising.

Speaker Change: Getting to 2% of gross bookings, we actually think that.

Speaker Change: Our sponsored items product for example, grocery can get the higher percentages of that.

The data: As the car for example, we think is in the mid twos in terms of advertising as a percentage of gross bookings.

Dara Khosrowshahi: And we've fully launched our sponsored items in the U.S. and Canada, and now we're scaling it in eight additional priority markets in 2024. So I say like sponsored items are where we were in sponsored listings for restaurants three years ago. We gave you a very clear growth map to a billion dollars in terms of revenue, and we're going to beat that this year. And we're quite confident that we can start moving.

The data: And we fully launched out our sponsored items in the U S and Canada and now we're scaling it in eight additional priority markets in 2024, So I would say like sponsored items is where we were in sponsored listings for restaurants three years ago.

The data: We gave you a very clear growth map to $1 billion in terms of revenue and we're going to beat that this year.

The data: And we're quite confident that we can start moving in a similar direction as it relates to non restaurants sponsored items.

Dara Khosrowshahi: in a similar direction as it relates to non-restraught-sponsored items in the grocery space. We're already active with about 500 top CPG brands, and we're seeing very strong retention as we expand, and it really is going to be about the growth of the underlying grocery platform. As we increase our grocery audience, this last quarter, about 15% of our monthly active users on eats bought from grocery stores, that's up nicely on a year on your basis. As that audience increases, we think we can monetize that audience with the base business, but with advertising just as we've done with restaurants.

The data: In the grocery space, we're already active with about 500 top CPG brands.

The data: And we're seeing very strong retention.

The data: As we expand and really is going to be about the growth of the underlying grocery platform as we increase grocery audience.

The data: This last quarter about 15% of our monthly actives on eats bought from grocery that's that's up nicely on a year on year basis as that audience increases. We think we can monetize that audience with the base business, but with advertising just as we've done with restaurants.

Dara Khosrowshahi: And we think it can be an enormous opportunity, and it can be a high-margin opportunity as well. I would also point out that we are quite bullish on rider apps and rider ads. We're seeing very strong engagement from riders, so a quick-through rate of about 2.5% is more than 2.5% compared to an industry average of less than 1%. So video ads and tablets continue to be a very promising growth area for us, and we're quite happy to see the progress there. All right. Operator, next question.

The data: And we think it can be an enormous opportunity and it can be a high margin opportunity as well.

The data: I would also point out that we are.

The data: We're quite bullish on rider apps.

The data: <unk> adds.

The data: We're seeing very strong engagement from riders, so click through rate of about two 5% more than two 5% compared to an industry average of less than 1%.

The data: So video ads and tablets continue to be a very promising growth area for us.

The data: And we're quite happy to see the progress there.

Speaker Change: Alright, operator next question.

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

The data: Your next question comes from the line of Mark Mahaney with Evercore. Your line is open thanks.

Mark Stephen F. Mahaney: Thanks. I have two questions, please. I think in the prepared remarks, you talk about delivery and MAP-C growth accelerating in markets like the U.S. Can you go into why MAP-C growth is accelerating for you? And then secondly, in delivery, grocery, and retail delivery, can you talk about what impact that's having on segment margins or what the unit economics are like there or how much of a drag it is or when you see a path to profitability? Maybe it's already there for those two segments, but just talk about the impact of those two segments on the delivery's overall profitability. Thank you very much.

Mark Stephen F. Mahaney: Thanks, two questions. Please I think in the prepared remarks, you talk about delivery map see growth accelerating in markets like the U S. Can you go into the Y <unk> growth accelerated for you and then secondly in delivery grocery and retail delivery can you talk about what impact that's having on.

Mark Stephen F. Mahaney: Segment margins are what the unit economics are there are like there or.

Mark Stephen F. Mahaney: Yes, how much of a drag or when you see a path to profitability and maybe it's already there for those two segments, but just talk about the impact of those two segments on the deliveries overall profitability. Thank you very much.

Dara Khosrowshahi: Yeah, Mark, so in terms of delivery growth and audience growth, this has been pretty consistent, right? We've accelerated the growth rate of our delivery business. It was growing closer to 10% early last year. It's now growing in the teens.

Speaker Change: Yes, Mark so in terms of delivery growth in audience growth. This has been pretty consistent right we've accelerated.

Speaker Change: The growth rate of our delivery business that was growing closer to 10% early last year. It's now growing in the teens and we think the nature of that growth is improving as well, which is most of the growth last year was on price now actually prices are relatively small portion of the growth in audience and frequency.

Dara Khosrowshahi: And we think the nature of that growth is improving as well, which is that most of the growth last year was on price. Now, actually, price is a relatively small portion of the growth, and audience and frequency are the largest portions of the growth in delivery. And it is about just getting the basics right.

Speaker Change: Are the largest portion of the growth in delivery and it is about just getting the basics right. It's about having a great service, having significant selection our selection.

Dara Khosrowshahi: It's about having a great service, having a significant selection or variety. Active merchants are up 12% on a year-on-year basis. It's about improving pricing. So, for example, merchant-funded promos, these are merchants putting in promos, pricing promos into the marketplace in order to drive volumes. Those are up 100 basis points on a year-on-year basis, again, lowering the effective price to the consumer. And then there is quality.

Speaker Change: Active merchants is up 12% on a year on year basis.

Speaker Change: About improving pricing. So for example merchant funded promos. These are merchants put in promos pricing promos into the marketplace in order to drive volumes.

Speaker Change: Those are up 100 basis points on a year on year basis again, lowering effective price to the consumer and then it's about quality, we continue to improve our defect rates all of that adds up to higher frequency higher retention of audience and we continue to spend aggressively in terms of marketing our brands.

Dara Khosrowshahi: We continue to improve our defect rates. All that adds up to higher frequency and higher retention of audience. And we continue to spend aggressively in terms of marketing our brand. We think that Uber Eats is the top brand out there. And then, on top of that, of course, we've got the unique platform benefits of our mobility business that continues to grow audience, throwing over some of that audience to our delivery business.

Speaker Change: And.

Speaker Change: We think that Uber eats brand is top brand out there and then on top of that of course, we've got the unique platform benefits of our mobility business that continues to grow audience.

Speaker Change: Throwing over some of that audience to our delivery business. So this is all part of the formula that we have.

Dara Khosrowshahi: So, this is all part of the formula that we have in this journey that we've been on over the past couple of years. We're able to do so while increasing margins because of the efficiency that we are getting in our marketplace, because of the efficiency, and the kind of structural benefits that the platform brings. And we see no signs of that slowing down.

Speaker Change: And this journey that we've been on over the past couple of years, we're able to do so while we're increasing margins.

Speaker Change: Because of the efficiency that we're getting and our marketplace because of the efficiency the kind of structural benefits that the platform brings.

Speaker Change: And we see no signs of that of that slowing down push off do you want to talk about grocery retail, yes, I'll take I'll take the last part of that so.

Prashanth Mahendra: So, Prashanth, do you want to talk about grocery retail? Yeah, I'll take the last part of that.

Prashanth Mahendra: So we remain very positive on grocery and retail. The business growth remains quite strong. GBs are up about 40% on a constant currency basis, once again, 40%, so a very strong top line there.

Speaker Change: So we remain very positive on grocery and retail.

Speaker Change: The business growth remains quite strong GBS are up about 40% on a constant currency basis. Once again, 40%, so very strong topline there.

Prashanth Mahendra: And despite that very strong growth, we were still able to expand our delivery EBITDA margins by about 20% sequentially, and that was partly contributed to by an improvement in the profitability of the grocery business. But it is still not where we want it to be.

Speaker Change: And despite that very strong growth, we were still able to expand our delivery EBITDA margins by about 20% sequentially.

Speaker Change: And that was partly contributed to by improvement in the profitability of the grocery business. So it is still not where we want it to be it's still new.

Prashanth Mahendra: It's still not at a positive EBITDA margin, but it is improving both year-over-year and sequentially, and we feel very good about the path we have to getting to profitability on grocery. It's going to come from a couple of things. First, the power of the platform, which we refer to quite frequently here. Fifteen percent of our delivery users are ordering groceries, and that's up sequentially from where we left Q4, continuing to see opportunities for ads, which are a great margin created for us as we bring those CPG players into the platform for grocery advertising, being able to lower some of the consumer promotions we have.

Speaker Change: Not at a positive EBITDA margin, but it is improving both year over year and sequentially and we feel very good about the path, we have to getting to profitability on grocery.

Speaker Change: Come from a couple of items first the power of the platform, which we referred to quite frequently here about 15% of our deliberate users are ordering on our ordering groceries and that's up sequentially from from where we left Q4 <unk>.

Speaker Change: <unk> to see opportunities on ads, which are great margin accretive for us as we bring.

Speaker Change: Those CPG players into the into the platform for grocery advertising being.

Speaker Change: Being able to lower some of the consumer promotions, we have so overall a number of different drivers and we think that groceries will eventually be a very strong part of the overall portfolio with that I think we have time for our final question. Operator, So if we could go to that.

Prashanth Mahendra: So overall, a number of different drivers, and we think that groceries will eventually be a very strong part of the overall portfolio. With that, I think we have time for our final question, operator. So if we could go to that.

Operator: Thank you. Your final question comes from the line of James Lee with Mizuho. Your line is open.

Speaker Change: Thank you. Your final question comes from the line of James Lee with Mizuho. Your line is open.

James Lee: Hey, thanks for taking my questions too on delivery. Can you guys give us an update on, maybe, the European gig economy regulation? Maybe what policy should we pay attention to? And how should we think about the implication of labor costs? And maybe on the U.S. side, can we get a sense of the impact of the minimum wage in Seattle and New York on GB and EBITDA? And how do you guys plan to mitigate the impact going forward? Thanks.

James Lee: Yes, thanks for taking my questions. Two here on delivery can you guys give us an update maybe the European economy regulation, maybe what policy, we should pay attention to and how should we think about implications on labor cost.

James Lee: And maybe on the U S side.

James Lee: Can we get a sense the impact of minimum wage in Seattle, and New York on GB in EBITDA and how do you guys plan to mitigate the impact going forward.

Dara Khosrowshahi: Yeah, as far as the EU platform work directive is concerned, EU lawmakers essentially voted to maintain the status quo there, with platform worker status continuing to be decided on a country by country basis. Member states have until mid 2026 to implement that, and we think that the deal is really unlikely to bring major changes to the current situation in the vast majority of EU countries. And, you know, for us, our view remains the same, which is that we believe that we should bring kind of the flexibility that GigWorx brings to couriers, to drivers in a marketplace, along with certain protections that we kind of talk to and have discussions with on a local basis. So we really don't see any changes coming in terms of the EU.

James Lee: Yes, as far as the EU platform work directive.

James Lee: Lawmakers essentially voted to maintain the status quo there.

James Lee: With platform worker status, continuing to be decided on a country by country basis.

James Lee: Member States have until mid 2026 to implement that implement that and we think that the deal is really unlikely to bring major changes to the current situation and the vast majority of EU countries.

James Lee: And.

Speaker Change: For us our view remains the same which is we believe that we should bring kind of the flexibility that gig work springs.

Speaker Change: Two carriers to drivers in a marketplace along with certain protections.

Speaker Change: That we got to talk to and have discussions with on a local basis. So we really don't see any changes coming in terms of the EU.

Dara Khosrowshahi: You know, in terms of Seattle and New York, I think some of the regulation that we've seen has actually been very unpopular with couriers, restaurants, and customers. So couriers may be making more per order, but they're getting a lot fewer orders, which has resulted in 30% of active couriers actually leaving the platform, which I think is certainly not what the city council had in mind. So we're actually seeing the city council in Seattle, for example, bring forward reform in Seattle to make the standard lower and much more viable for the platforms. We're not there yet, but there's a vote coming up, I think it's actually tomorrow.

Speaker Change: In terms of the Seattle and in.

Speaker Change: New York.

Speaker Change: I think I think some of the.

Speaker Change: Regulation that we've seen has actually been very unpopular with careers restaurants and customers.

Speaker Change: So for example, we saw in Seattle, which is a relatively small market for us delivery order volumes decreasing by 45%.

Speaker Change: Which has resulted in carrier wait time actually increasing 50% on a year on year basis, So carriers may be making more per order, but they're getting a lot less orders.

Speaker Change: Which has resulted in 30% of active carriers actually leaving the platform.

Speaker Change: Which I think is certainly not.

Speaker Change: What.

Speaker Change: What the city Council had had in mind.

Speaker Change: So we're actually seeing the city Council in Seattle for example bring forward.

Speaker Change: A form in Seattle to make the standard lower and much more viable for the platforms, we're not there yet.

Speaker Change: There's a vote coming up in.

Dara Khosrowshahi: And, you know, we think we'll have a positive outcome there, and it's important that it's a positive outcome for couriers and restaurants and customers, because certainly, you know, the Seattle regulations that have been in place in Seattle have clearly been poor regulations that have hurt the people that they're supposed to protect. You know, we'll see what happens in New York City. Unfortunately, again, in New York City, we have had to essentially slot in couriers, and we've got a wait list of over 20,000 couriers who want to be on the platform.

Speaker Change: I think it's actually tomorrow.

Speaker Change: And we think we will have a positive outcome there and it's important that it's a positive outcome for careers in restaurants and customers.

Speaker Change: <unk> certainly seen.

Speaker Change: Seattle regularly the regulation that has been in place in Seattle has clearly been poor regulation that has hurt the people that they are supposed to protect.

Eric Sheridan: We'll see what happens in New York City.

Prashanth Mahendra Raja: Unfortunately again in New York City, we have has it essentially.

Dara Khosrowshahi: Slot careers, and we've got a waitlist of over 20000 careers.

Dara Khosrowshahi: Who want to be on the platform, but because of that regulation, we've had to reduce the number of carriers on the platform by close to 25% since the standard went in place so less people get to earn in New York, We don't think Thats a good thing.

Dara Khosrowshahi: But because of that regulation, we've had to reduce the number of couriers on the platform by close to 25% since the standard went in place. So fewer people get to earn money in New York; we don't think that's a good thing.

Dara Khosrowshahi: Now, again, we have been able to absorb the financial hit of all these different regulations on our platform. You can see this in our profitability, which is up over 80% in Uber Eats on a year-on-year basis. So we're a big company. We have a lot of markets. We're quite diversified. Our technology continues to drive a more effective marketplace that allows us to absorb these regulations. But I think couriers in New York City who want to work, couriers in Seattle who want to work, they're getting hit hard by these regulations, and we're hoping that regulators see the right path going forward because, so far, regulation has definitely hurt the people that it's supposed to protect.

Dara Khosrowshahi: Now again, we have been able to absorb the financial health of all of these different regulations and our platform you have seen in our profitability which is up.

Dara Khosrowshahi: Over 80% in Uber eats on a year on year basis. So we're a big company. We have a lot of markets. We're quite diversified our technology continues to drive a more effective marketplace that allows us to absorb these regulations, but I think carriers in New York City, who want to work per euros.

Dara Khosrowshahi: In Seattle, who want to work.

Dara Khosrowshahi: They're getting hit hard by these regulations that were hoping that kind of regulatory or see the right path going forward because so far a regulation is definitely hurt the people that it's supposed to protect.

Deepak Mathivanan: Okay, before Dara wraps it up, I wanted to remind everyone next week is our annual Uber Go Get event, which showcases new products and features across both mobility and delivery. Obviously, we're not going to get ahead of the announcements, but our theme is togetherness, and in addition to the product piece, we've got a great fireside chat with Dara and Maria Shriver. This will be in New York. So if any of you are looking to get out of the office, please reach out to Deepak, and we can see what space we have. If you do join us, my only request is that you travel by Uber. With that, let me have Dara wrap it up. I like it.

Speaker Change: Okay before Dara wraps it up.

Deepak Mathivanan: I wanted to remind everyone next week is our annual Uber go get this was our event, which showcases our new products and features across both mobility and delivery. Obviously, we're not going to get ahead of the announcements, but our theme is togetherness and in addition to the product piece, we've got a great fireside chat with <unk>.

Deepak Mathivanan: And Maria Shriver this will be in New York. So if any of you are looking to get out of the office. Please reach out to deeper and we can see what space. We have if you do join US My only request as you travel by Uber and with that let me have Dara wrap it up I'd like at my CFO Upselling and thank you everyone for joining us on the call and a huge.

Dara Khosrowshahi: I like it. My CFO's upselling. Thank you, everyone, for joining us on the call. And a huge thank you to the Uber team. There's a ton of work that goes into all of the new products that we're launching, into the products that we'll be talking about in GoGet, and into delivering the kind of growth and profitability that we've seen from Uber over the past couple of years. So a big thank you to the team for continuing to deliver this quarter. Thanks, everyone. Talk to you next quarter.

Dara Khosrowshahi: Thank you for the Uber teams has a ton of work that goes into all of the new products that we're launching into the products that we will be talking about and go get.

Dara Khosrowshahi: And into delivering the kind of growth and profitability that we've seen from Uber over the past couple of years. So a big thank you for the team for continuing to deliver.

Dara Khosrowshahi: This quarter. Thanks, everyone talk to you next quarter.

Operator: This concludes today's conference call. Thank you for joining us. You may now disconnect your lines.

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

Operator: Okay.