Q1 2025 Lyft Inc Earnings Call
Good afternoon, and welcome to the first quarter 'twenty 25 earnings call. At this time, all participants are in listen only mode to prevent any background noise.
Later, we will conduct a question and answer session and instructions will be given at that time.
If anyone should require operator assistance. Please press star followed by the number zero on your telephone keypad.
Orlando: As a reminder, this conference call is being recorded I would now like to turn the conference over to Orlando P. P. F N a investor relations. Please go ahead.
Speaker Change: Thank you welcome to the Lyft earnings call for the first quarter or 2025 on the call today, we have our CEO, David richer and our CFO Eric <unk>.
Speaker Change: Starting with this call and going fallout or food prepared remarks will be available on the IR website before the call and we will use this time to answer more of your questions.
Speaker Change: We will make forward looking statements on today's call relating to our business strategy and performance partnerships should you'll find shortened operating results trends in our marketplace and guidance.
Speaker Change: These statements are subject to risks and uncertainties that could cause our actual results to differ materially from those projected or implied during this call.
Speaker Change: These factors and risks are described in our earnings materials.
Speaker Change: Our SEC filings.
Speaker Change: The forward looking statements that we make on todays call are based on our beliefs as of today and we disclaim any obligation to update any forward looking statements.
Speaker Change: As required by law.
Speaker Change: Additionally, today, we are going to discuss customers for rideshare. They are to customers in every car the driver at least customer and the writer is the drivers customer we care about both.
Speaker Change: Our discussion today will also include non-GAAP financial measures.
Speaker Change: at Financial Measures, which are not a substitute for gap results. Recommendations of our historical gap to non-GAAP results can be found in our earnings materials, which are available on our higher website. And with that, I'll pass the call to David.
Thank you, O'Rellium.
Hi everyone, and thank you as always for joining.
Speaker Change: Lyft had year-on-year growth across regions, across modes, across use cases, resulting in a record Q1 for active riders, rides, and driver hours.
Speaker Change: Looking at our financials, we delivered Q1 records in gross bookings, adjusted EBITDA and free cash flow.
Speaker Change: A note on gross bookings, this was lift 16th consecutive quarter of double digit year on your growth, demonstrating the resilience and momentum of our customer obsessed strategy.
Speaker Change: It's this financial strength that has enabled us to increase our share repurchase program to $750 million while maintaining the ability to invest in our most promising growth initiatives.
Speaker Change: I am so impressed and proud of the work our team has done over the last two years to build a strong foundation, fueled by customer obsession and operational excellence.
Speaker Change: I am very confident we are well positioned for twenty-twice, twenty-five and beyond, and now with that, let's get to your questions.
Speaker Change: And so when we will now begin the question and answer session,
Speaker Change: As at this time, I would like to remind everyone to ask a question, please press star followed by the number one on your telephone keypad. If you would like to withdraw your question, please press star one again. On moment, please for your first question.
Speaker Change: Here first question comes from the line of Brad Erickson, RBC Capital Markets. Please go ahead.
Speaker Change: And then second, just not insurance, I know it's a little early to talk about this, but maybe any update you can give on how you're thinking about that adding into the pricing formula through the year. Thanks.
Speaker Change: Hi, Brad. It's Erin. Why don't we start with pricing? I'll start there and turn it over to David, and then we can come back and I'll chat about insurance. And so...
Speaker Change: So here we are today, average prices in Q1, we're still lower than average prices in the fourth quarter, although they were up modestly year over year. David?
Speaker Change: We continue to move forward with our our programs and everything that we work on across our risk team here at Lyft, we highlighted a whole bunch of that at Investor day, and and I've talked about it sense, but it's just continuing that momentum we have unique industry leading capabilities we are continuous.
Speaker Change: Innovating to make our platform safer through technology products partnerships.
Speaker Change: We innovated things like the smooth cruiser score, which gives drivers feedback on on how they're doing and how to provide better rides. We will continue that we are recognized by our partners are long standing partners you know for all of those advancements and so we feel we feel really good about our program you heard us talk.
Speaker Change: About our renewal are 10, one renewal as you know we've got a six month cycle no new updates there you know it's reflected in how you see are our guide in the second quarter. So I don't have anything specific to.
Speaker Change: To call out there we continue to make great progress, we've got a great team and we've got great long term partnerships.
Speaker Change: Thanks.
Speaker Change: I think we'll take the next question.
Speaker Change: Your next line comes from the line of Ken guerrilla type Wells Fargo. Please go ahead.
Ken: Alright. Thank you for the question really appreciate it.
Speaker Change: I'm curious just a couple of things one is.
Ken: The other guys I think as you refer to them.
Ken: <unk> talked a lot about affordability initiatives in the U S.
Ken: I'm just curious is just as you think about the go forward.
Ken: The many innovations you've rolled out on the product side, how you're thinking about just the go forward there.
Ken: We are positioning in the market and kind of from a pricing standpoint, how the pricing outlook is for the remainder of the year and then the second if I may please.
Ken: You made an announcement to enter Europe could you just talk to us a little bit more and youre in Youre expanding in Canada can you just talk a little bit about your.
Ken: <unk> International ambitions should we think of this as the extend of it for the next.
Ken: Select period of time or there or could we see more thank you.
Ken: Sure good questions both.
Ken: On pricing I don't have much more to say than what.
Speaker Change: Aaron said, but maybe zooming out just a little bit I mean lucky in a marketplace like this.
Ken: You are live.
Ken: We actually step way way back you always want to be able to provide the best price you, possibly can I mean, let's be clear that's always important.
Ken: But I feel good about where our pricing is and I don't see it being made.
Ken: Major you know sort of area of focus for competition. It really all I mean by that is.
Ken: Like as you mentioned innovation is kind of a big thick right and at a certain level. There's only so much you going with pricing in the market. So that's a clearing price millions of times a day and we still follow the bucket seat on that as I say, we're competitive and reliable. So once you sort of have that and you kind of take that a little bit off. The table then it becomes much more interesting to think about things like the silver or price lock or the.
Ken: Earnings guarantee for drivers or whatever you can do to really drive preference for your platform and I think it's really because we've been so focused on that customer obsession and the operational excellence required to continue to execute on that.
Ken: We've seen that we've seen our growth be powered sort of independent of our pricing sort of bouncing around a little bit so maybe.
Ken: Maybe not much more to say about that on the international you're right to point out that we've seen great great growth in Canada, roughly doubled year on year and now up I think another 50%.
Ken: In fact, I think literally just today, we opened up the funnel for driver Onboarding in Quebec, The province of Quebec, which just gave us authorization to expand there.
Ken: Later this year, so super excited about that.
Ken: And then looking at that which obviously gave us a certain amount of confidence that our kind of customer obsessed formula can work outside the United States.
Ken: Quite clean out and I can talk more about that.
Ken: If you're interested but I don't think im going to be able to say much beyond our beyond that just now obviously that deal hasn't even closed it wont until the second half of the year. So a bit premature to think about further international expansion I will say more likely than not the near term focus will be kind of infill in the nine countries, where free knows operating rather than thinking about further expansion, but that's not a never say never it's shipped.
Ken: Our focus right now is on making sure if we in our position.
Ken: Exceeds its already great potential.
Speaker Change: The next question comes from the line of Eric Sheridan of Goldman Sachs. Please go ahead.
Eric Sheridan: Thank you so much for taking the question maybe I'll just ask one.
Speaker Change: You, obviously made the announcement with May mobility, and we're seeing a lot of different announcements and the broader EV landscape, we'd love to continue to sort of click down on how your views are evolving in terms of going to market with partners and what do you think that might do in terms of supply and demand dynamic in the cities, where you bring that type of supply into <unk>.
Speaker Change: Our system. Thanks, so much.
Speaker Change: Yeah sure I'll take this with Eric good to hear from you. So yes.
Speaker Change: Yes, let's probably let's start exactly where you started with may mobility. So we're super excited about that partnership.
Speaker Change: Scheduled and on track to launch this summer in Atlanta, which is which is wonderful.
Speaker Change: And I think it can be very interesting and very instructive for us of course, because it'll help us get feedback on what happens in markets. When we you know when we do this.
Speaker Change: And then next up of course is the partnerships that we've announced in Texas coming next year.
Speaker Change: And that will also involve a financing partner Mario.
Speaker Change: Roubini, which sort of maybe allows me to talk a little bit about the whole value chain for just a second and then get back specifically to your question I feel like maybe I'll just start by saying again, I avs and apps extraordinary opportunity for us apps extraordinary opportunity and it's because it brings a whole new supply as you were mentioning and frankly broadens the portfolio.
Speaker Change: Right you now have use cases that maybe people are excited about before on rideshare that now they get very excited about whatever those might be.
Speaker Change: It looked like and it's a good product and it's a safe product and so on and so forth. So super Super excited about how it can expand the market and opened us up to new opportunities.
Speaker Change: There's a whole set of activities that has to happen all the way from the equipment manufacturers have to be on board. The Oems have to be onboard financing has to be lined up again I'll mention marubeni a partner who's in the business of our fleet financing and fleet ownership.
Speaker Change: That ownership piece quite important someone's got to own these things and hopefully it someone with a good capital structure in Pennsylvania. So on so that's where they come in.
Speaker Change: And then there's the whole fleet management piece, which we've talked about several times and against this we're on the topic I would encourage anyone who hasn't read about this.
Speaker Change: Post Street.
Speaker Change: Just a couple of weeks ago on flex drive our subsidiary.
Speaker Change: The best Fleet management, I would highly recommend you read it because it gives you a strong sense of why fleet management matters. So much I mean anyone can have.
Speaker Change: A couple of cars, maybe even 50 cars.
Speaker Change: Keep them.
Speaker Change: Utilized but maybe you can start talking about thousands of cars and you're talking about a lot of maintenance auto repair a lot of uptime monitoring a lot of cost control and so on and so forth and that's what flex drive provides us we do that to the tune of 10% to 20000 cars every year on our platform already.
Speaker Change: And we're super excited about welcoming <unk> to that and then of course, you have the marketplace piece that supply demand management E T. A estimation and so on and so forth and then pricing in all the outbound marketing them to generate demand. Okay. So that's the whole value chain again, we've written about this I recommend you read that paper as well just for for education.
Speaker Change: Back to the center of your question I mean, our general view is the more supply the better right. We think it will come from a lot of different partners.
Speaker Change: Amazing early one mobile I of course is another tech provider to the ones who are providing the tech in Texas for us.
Speaker Change: There are companies that frankly, we've never even heard of yet there'll be providing this technology over the coming years and then you have the current market leaders.
Speaker Change: As well in our strategy through all of this is.
Speaker Change: Which is we want to be the absolute best way for an AB supplier of any type to monetize those assets on the platform to monetize those assets on the platform and that's what we're setting up for them, we feel very confident in our position.
Speaker Change: Your next question comes from the line and lack of Deutsche Bank. Please go ahead.
Jeff: Hi, Thanks. This is Jeff on for Ben Thanks for taking our questions.
Speaker Change: This is a follow up to that.
Speaker Change: Kind of looking beyond getting the supply on the platform.
Speaker Change: What do you think the impact will be to pricing and frequency membership.
Speaker Change: Avi scale longer term.
Speaker Change: And also would be.
Speaker Change: Great to hear your thoughts on the Lima, Toyota partnership for personally owned vehicles.
Speaker Change: That would be great to get your perspective is this could impact less than I guess, the transportation market more broadly thank you.
Speaker Change: Yeah, great questions both.
Speaker Change: And sorry, the second one I'm very clear on the first one again say that one more time.
Speaker Change: Could you just kind of again.
Speaker Change: Alright, thank you.
Speaker Change: Hi, I am frequency membership.
Speaker Change: Of course, yeah of course so.
Speaker Change: I mean, we can give you our views, but I will tell you that probably that the dominant thing to take away on that is a little too early to talent and the reason I say that is because if you look at the markets, where avs are operational right now.
Speaker Change: San Francisco, usually a Phoenix you see in L. A is in Austin as an example, and the dynamics in each of these is slightly different in some markets.
Speaker Change: Price is a premium product and some market share price at a little bit of a discount.
Speaker Change: In most markets the service levels are actually not as good as traditional rideshare about which.
Speaker Change: You can understand why that might be that the odd's are somewhat limited in.
Speaker Change: Even when there is dense supply you know those companies don't necessarily or it's really that company. It doesn't necessarily have the same sophistication with supply demand balancing and.
Speaker Change: And so forth. So it's very hard to know over the long term, what's going to happen obviously the bat that generally people are making is.
Speaker Change: Is that over time, this will increase supply of raw and decrease cost to operating a network like that and that seems like a reasonable assumption for obvious reasons, but that can be quite a long ways away. It really cut for example insurance people think a lot of an insurance guy should be safe that's true, but on the other hand, they're very expensive to repair. That's also true they still do get an accident.
Speaker Change: Because other people causes accidents sometimes.
Speaker Change: The utilization rates are very unknown you know the profitability of these on a unit basis per car basis, we'll have lot to do with whether they're utilized 14 hours a day or 18 hours a day so.
Speaker Change: And then sorry back to insurance I.
Speaker Change: So as I mentioned, the insurance companies tend to be quite conservative when it comes to pricing insurance, particularly early on they say if you looked at five to seven years of data which means.
Speaker Change: And sort of I'd say their incentive is maybe even to overpriced at the beginning so you don't get caught upside down. So I may not be very satisfying answer, but I think that's kind of the truth, but long term I would expect again that it will.
Speaker Change: It'll be very sort of expansionary.
Speaker Change: And maybe bring prices down but.
Speaker Change: I don't bet on that in a Super short term I think more interesting in the short term is just how differentiated.
Speaker Change: They are from their existing offering and therefore market expanding.
Speaker Change: On the issue of individual ownership in the particular Weibo tried I think I won't probably mentioned or talked about too much but.
Speaker Change: But I think what it does is it validates.
Speaker Change: If theyre going to be a couple of phases of adoption. The first of course is very pilot in trial and that's obviously, where we are now.
Speaker Change: Over time, there will be owners of fleets right and today those owners typically are the people who are designing and building the tech will be.
Speaker Change: Obviously exhibit a to Z.
Speaker Change: The tax they buy the cars from Jaguar and then they own them themselves.
Speaker Change: But over time, you wouldn't expect that necessarily you would expect new companies like marubeni, and others and even companies like lifted a small scale.
Speaker Change: Actually went up one the assets and manage the assets and so forth.
Speaker Change: But then I think in the medium and long term you got to a very different and next level, where individuals or maybe very small fleet owners of small groups of cars.
Speaker Change: One on cars and we're already planning for that is very very directly. So this is why I think our mobile IP partnership.
Speaker Change: It is so important.
Speaker Change: Again mobilized there the driver assistance technology, that's an 800 different car models right now so they have very good relationships with Oems, but it's level two.
Speaker Change: Kind of lane assist and so forth.
Speaker Change: But they have a very clear strategy and a very clear roadmap and again, we're dependent on that roadmap as we realized in Texas with them.
Speaker Change: To get to level four level five.
Speaker Change: The idea there is that that technology won't just be in bespoke cars, you know one or two OEM.
Speaker Change: Yeah, I misheard or even one or two platforms within one or two Oems, but rather ultimately universally available and as I've said before I think they will come a time you know call. It. The next 10 years, probably not much sooner than that but 10 years, we're buying a car without a V. It would be like buying a car within a radio.
Speaker Change: Actually I think a better analogy is buying a stick shift car I think thats, a better analogy you could bias to accept today I happen to have one they're awesome and it's super fun to drive, but they're definitely the thing that you drive it because you'd like to not because you are.
Speaker Change: It may not be your.
Speaker Change: The best commuter option every single day. So so I think it would be kind of like that there will be there will be manual cars, just as there are today, but increasingly avi will be everywhere.
Speaker Change: And in that World.
Speaker Change: This idea of lift ready every carbon lift ready so that when you buy it you can put it on the lyft platform and habit generate.
Speaker Change: Revenue, having a sort of myself monetize you might say all becomes a very appealing. So that's the world. We're already building to we know it's a long way away, but we also we have a very long term view on <unk>, because I think you have to get for all of the sort of short term buzzer is that flurry of press releases and so forth.
Speaker Change: That's one thing, but I think sort of DFW area is on the on the long term on this.
Michael Martin: Your next question comes from the line of Michael Martin.
Nathan: Nathan Please go ahead.
Michael Martin: Hey, good evening. Thank you for the question.
Michael Martin: To the extent and he can talk about it I know, it's just announced but I wanted to hear your thoughts on the ability to invest behind free now and then maybe how youre thinking about the business mix between taxes and rideshare for free now going forward versus where that mix shift stands today.
David: Then just quickly David.
David: Pricing increases subside I'd love to hear about any changes you're seeing in consumer behavior that might lead them to spend more per month, just because there's less sticker shock right with you open. It you look at your morning commute that's too much. But then you started opening is not going up it's my son, they actually end up using it more.
David: Then they would have been there prior budget.
David: Maybe seeing more shopping engagement at this point, maybe I haven't transitioned into actual conversion yet, but anything there would be very helpful. Thank you.
David: Super Perceptive questions, Michael So why don't I do this maybe I'll talk just super briefly about how we see free now and sort of the mix question, you're talking about maybe I can pass it to Eric to talk about investing behind it to the extent, we can say anything which will be much smiling at me right now.
David: Fair.
David: And then I'll come back to talk about that for communication and and what we're seeing there so briefly with with free now.
David: Maybe I think to remember is that it's so it is a taxi first marketplace and actually I want to talk about this for a second because.
David: I think people's intuition can be a little bit.
David: So overweighted by maybe what you see in the New York City. When you think taxes. For example, so in Europe, just to be Super clear the taxi tends to be a sort of a premium product in most parts of Europe and you might think of the London Black cab.
David: You might think of taking a mercedes from the airport and and.
David: In Frankfurt.
David: The drivers oftentimes are long term drivers you know some of you might know I lived in Barcelona for many years many of the taxi drivers had been doing it for years and years and so it's a it's a very stable a very important part of that was Atlanta.
David: Landscape there.
David: And an enormous part of the ride hailing industry in Europe ride hailing got abroad, including taxes personal vehicles and everything else on the street raise your hand, all the things.
David: It's roughly I think a $40 billion of your own market, but roughly half of that is still offline.
Speaker Change: And it's quite traditional you know it really is its people will pick up the phone and calling a taxi and literally was a sack and secret personal experience. Here. This is exactly what I did when I lived in Europe as much as I like the tech.
David: Their habits that are sort of hard to break.
David: But part of that and the reason for that is sort of stasis. It just hasnt been a lot of innovation on the sort of taxes side in particular in part because there's so many different individual fleet operators that don't really have the scale or the capital to expand what they're doing so if we know it brings that and that's why they've been so successful at is why are they really are the dominant player in that space and we continue to believe that that's going.
David: The interesting point, because they say, it's sort of a higher as people maybe ask a friend in Paris at some point, how they feel about rideshare versus taxes, and often they'll talk about how rideshare it feels a little bit like I sort of a less than experienced with taxes. So as I got more than experience and we really wanted to lean into that.
David: Country by country things differ there are some countries where personal vehicle kind of rideshare is we think if anything I'd say it isn't illegal.
David: Theres somewhere anyway, so country by country and greenhouses in nine countries each country I slightly different dynamics, but I wouldn't expect the overall approach really to change very much they've got a very good model and we can bring a lot to that model, but a lot. There's a lot. We know about the way pricing works in market dynamics, and so forth it because of our scale in our history.
David: Got it and vice versa, they'll bring a lot of fleet management experts, who starts because of course every one of these taxi operations typically means another fleet manager tool.
David: And the last thing I'll say there.
David: That's the kind of alluded to earlier is I think to the extent that there is.
David: Work to do in investments or something I'm not going to speak much about this but there may be some infill opportunities within the markets. We're already working on I think maybe I can turn it over to Ted at this point.
Ted: Yeah. So you.
Ted: You know what it's a look and free now we've found a partner too we see opportunities to immediately fueled growth.
Ted: Unlock potential for partners level, the experience for drivers and riders alike. So we're excited about it and obviously doubles our addressable market.
Ted: Overall, so the strategic purpose of this acquisition is fully aligned with the strategy that we outlined at Investor Day, you know very specifically, we said we would as part of our capital strategy responsible investment and attractive growth and margin expansion opportunities. It was important to us this fits that bill.
Ted: The first step however is to close the deal. So we expect that to happen sometime in the second half of the half of the year and then we'll start some foundational integration and and we will continue to evaluate opportunities for growth over time. So that's what I would add there.
Ted: Maybe I'll start with the second part of the question, which is around affordability and what I would say Michael is affordability is not something that's new to left if you look at our overall product portfolio. This is something that we've emphasized in terms of you know our mode for every mood so to speak.
Ted: For a period of time, and so you think about things like wait and save obviously, which has been a.
Ted: Rate feature overall for the company and that's certainly not a monolith. If you think about the ridership right wait and save riders use them out about a third of the time they tend to take about two axa rides. So you know again affordability is not new and I think that the breadth of our portfolio and even the growth that we.
Ted: We highlighted in some of our prepared remarks at that at the higher end of our portfolio is is a strength and that's where you're seeing you know more than 16% rides growth in the quarter I'm really proud of that David mentioned some of the stats and has opened opening remarks. So I don't know David do you want to add anything to the affordability question I'll add.
Ted: And maybe and exactly where kind of Michael is also growing.
Ted: So interesting about this idea of affordability.
Ted: Actually you touched on in the cycle is.
Ted: Think of it I think sort of.
Ted: It may be small way as well as lower prices well, it's sure I mean, obviously again you want a great cost position, you'll remember we took $303 million out of our cost with a couple of years ago to be able to afford to give great prices and great.
Ted: Earnings to drivers and so forth.
Ted: But at a certain point that becomes a little bit.
Ted: I'm kind of just baseline and then you have to start to innovate on top of that and I do think price lock is such a good example, and I'll tell you why so commute is now our largest use case with our largest use case.
Ted: What I remember 10 years ago, <unk> zero percent of zero percent of zero percent Roger didn't exist right now it's a third of our of our rise roughly so we're talking about an enormous part of People's Daily lives.
Ted: Do you think well why isn't everybody doing I remember 150 billion ride the year of which some gigantic number of commute arrived.
Ted: In a fraction of a fraction of a fraction or start rideshare and so much of it is all of the irritating things that rideshare sort of introduced over the years or it didn't quite get right like search pricing being the single biggest one so annoying right you're doing the same thing everyday why should you pay something different every day no. One wants that that's irritating, but on the other hand cautiously equate to sit in the back seat and be able to text or starting to work or make up.
Ted: Phone call or whatever you say goodbye to you.
Ted: Spouse.
Ted: After he left because you've got a chance to say goodbye, but whenever it is he wanted to do it. So it is a great service, but you've got to take away some of the current stock.
Ted: Price off does that and I can tell you that were pressed like membership we introduced a couple of quarters ago, It's now up 21% compared to Q4.
Ted: And very interestingly the retention rate is super high it's greater than 70% I think we spent 70 in the past it's up to about 75% right now which means that once people sign on they do it again and that's a form of affordability right into sort of a normalization is kind of like okay. The price not going to bounce around that kind of understand what it is maybe it's a little higher than I wanted to be I don't know whatever but at least.
Ted: Can understand what it is every day and I began to understand the value and little by little by little by Little it becomes part of more and more People's lives. So that's very much the way we think about these things and we like when we see a product like this have such good product market fit because it shows that we have.
We've discovered something pretty important.
Ted: Thank you.
Ted: Mhm.
Speaker Change: Your next question comes from the line of <unk> with Bernstein. Please go ahead.
Speaker Change: Alright. Thank you for taking my questions I had two please.
Speaker Change: First on the taxi initiatives, you're rolling out any U S. Do you think this can accelerate your growth in 'twenty five and 26, just trying to get a sense for the scale of it and is there a long process to bring more taxes online in more markets or do you think this is something where you can move fairly quickly with new cities beyond St. Louis and then.
Speaker Change: And my second question is around <unk> partnerships.
Speaker Change: The deals that Uber striking today actually accelerate your ability to onboard partners because there is a playbook for these AAV providers to rinse and repeat so to speak or do you feel like you need to be the first foot in the door biggest fleets are still really small and experimental so there arent enough cars to go around just yet thank you.
Speaker Change: Clinical too good good question, So let me touch on both.
Speaker Change: Thank.
Speaker Change: Well and I am sorry, I took.
Speaker Change: Thinking about your last question so much that I've already forgotten your first and second half are done today say that first of all the time.
Speaker Change: Just on the taxi initiative in the U S.
Speaker Change: Roll out to more cities, yeah, yeah, sorry about that the two part question is always tricky so on that.
Speaker Change: So just to sort of level set with everyone. Yes, we started in St. Louis.
Speaker Change: And it's great.
Speaker Change: I know you asked specifically about is it can accelerate your growth I'm not going to comment on that particularly but what I will say is when we look at our strategic initiatives over the course of the year and we start to use at the end of last expanding our sort of access to the fleet was quite important and it's important for a couple of reasons.
Speaker Change: Effectively diversity of supply really matters it matters at the sort of one in taxes.
Speaker Change: We're doing it also when it comes to what we call the high margin mode, particularly the black cars, which also tend to be our fleet cars. They have good economics.
Speaker Change: To ensure in a different way from normal insurance with us. So that's all good.
Speaker Change: I am not going to we've only talked about St. Louis So far so I won't speculate beyond that but I will say it is an important part of what.
Speaker Change: We're doing in the U S and again when you hear the free now acquisition you understand that that.
Speaker Change: Obviously their expertise is going to it's going to come in handy for us.
Speaker Change: On the <unk> side. It absolutely is not the case that you have to be first it's just it just isn't in the reason I say that is because.
Speaker Change: Even if fleets are limited, which is sort of maybe the premise behind the question.
Speaker Change: Well I guess, you sort of put it both ways right you said EBIT as the playbook, where theres a limitation.
Speaker Change: I would say first of all <unk>.
Speaker Change: Every AAV provider has a very strong incentive to have multiple partners.
Speaker Change: Partners I mean, it's just it's just clear no one wants to be beholden right. So that's why you don't see anything that looks really exclusive.
Speaker Change: That would just be sort of self defeating.
Speaker Change: There'll be supply constraints from time to time of course, and so maybe one person will get a little ahead of the other for a certain period of time in a certain city, but but I think that's that's very temporary.
Speaker Change: Much more interesting.
Speaker Change: If I'm a supplier of equipment or what have you is who is the partner who can better monetize and frankly that I can.
Speaker Change: Sort of work with better who brings more to the table.
Speaker Change: Maybe it could be any number of things I won't characterize it too much but obviously, we're very excited about the unique asset we have we are the only sort.
Speaker Change: Sort of integrated fleet management solution to rideshare, that's out there. So that's obviously a huge advantage we have so I think that that's probably more important at this point.
Speaker Change: Simply because.
Speaker Change: I think it really again just to be Super honest I think most suppliers have an incentive to bring on at least at least two partners right. So that they can differentiate excuse me. It so that they can sort of diversify and also not be beholden to anyone.
David: Thanks, David.
Speaker Change: Your next question comes from the line of Steve <unk> UBS. Please go ahead.
Speaker Change: Okay. Thank you so much.
David: So David I think.
David: When you offered lift media targets back at the Investor Day, I think there was some amount of skepticism in the market as to whether you can actually hit those goals over the next few year or so but there was a very interesting angle I thought.
David: To offer our retailers and merchants traffic based on the user's destination.
David: Especially if they are headed to your store so.
David: You up to potentially onboard performance AD budget. So can you talk about how this is progressing and how the outreach efforts to these performance advertisers and undoubtedly also to the awareness and brand upper funnel advertisers, how thats been progressing thanks.
David: Sure, Yes, great question and a good memory. So let's start Big picture first and then we'll kind of dive in so at the time I remember the skepticism.
David: That was it's not lost on me.
David: We're on track as we said before to reach $100 million run rate at the end of the year and very much on track and feel quite good about that and I will also say by the way quite good about the leader who's getting us there Suzy I've mentioned her in the past you really helped build.
David: Youtube's AD platform and waves later, so anyway.
David: And actually I'm actually but as long as I've been bragging on people off of bragging on the whole team. There. It's an extraordinary team and we're actually adding new folks in fact, we just got a new person on Doc yesterday. So super excited about how we're building that out the results. We've seen so far had been really strong as I say, we're on track for $100 million, but I think part of it is because particularly come back to your point in the second but particularly when we look.
David: Some of the Big brand partnerships, we have we continue to see and again. This is third party data, but we can see continue to see.
David: The third party measurement platforms, telling us that we have their numbers that are seven times the impact relative to the norm on brand perception and we still have about 10 times the standard click through rates. So super good there. We're also expanding our formats. So.
David: Aaron mentioned wait and save a little while ago is a nice product for from our consumers so that they can chew.
She has to wait a little longer and save some money.
David: It's also nice for us because it gives us a little bit more time to engage with riders and we now have a new AD unit, which is sort of a vertical takeover.
Speaker Change: Video unit that takes over while Youre waiting right. So you've got the time on your hands, why you're waiting and saving measures will use it.
Speaker Change: Checking out a movie trailer or a kind of a grand activation or whatever so.
Speaker Change: So we're seeing.
Speaker Change: Very excited about its still early days of course.
Speaker Change: And a lot of ways, but I feel very very good about the platform, where we're building and the opportunity. There is when it comes to what we internally called sponsored rides Yeah. We're still super excited about that it's very much an experimentation mode. I think I don't actually have I, just don't know whether we can mention the partners live now I'm not sure that we can but we have a couple of partners that we're working with to try that out.
Speaker Change: And encouraging results, but there are certain things that you try at small scale and then you just don't know yet, but I still have a lot of conviction around that I know of any book any store any retailer any.
Speaker Change: Restaurant anyone who depends on that marginal person to walk in the door.
Speaker Change: To make that sort of make the week or make the night.
Speaker Change: <unk> become very interested when you when they start talking to partners, who can literally deliver effectively foot traffic to their door.
Speaker Change: Anyway, good memory nothing to share on it right now, but definitely an area, where we still got a real conviction based on what we see.
Speaker Change: Thank you.
Speaker Change: Okay.
Speaker Change: Your next question comes from the line of Anmuth of Jpmorgan. Please go ahead.
Speaker Change: Thanks for taking the questions.
Speaker Change: Just as you continue to see strength in rides with the 200 basis points of acceleration, but pricing was down 3% year over year.
Speaker Change: Can you just talk about what's driving the lower gross bookings per ride, particularly as you continue to grow luxury modes.
Speaker Change: Are you seeing more discounts and promotions are just industry wide pricing dynamics tied to insurance easing and then maybe.
Speaker Change: <unk> and just thinking about delta.
Speaker Change: Are there any shift or change from kind of how you were thinking about the 100 basis point.
Speaker Change: Impacts of rides in 200 basis point impact from some gross bookings. Thanks.
Speaker Change: Thanks, Doug This is Aaron I'll take the question starting with gross bookings overall so.
Speaker Change: I'd start with framing that we remain very focused on penetrating that $161 billion private vehicle Tam that we've talked about that we highlighted at our Investor day.
Speaker Change: We continue to grow in our top markets.
Speaker Change: But one of them and commute David mentioned earlier commute.
Speaker Change: Particularly strong, which we're really proud of.
Speaker Change: And then one of the biggest opportunities for us is to really penetrate and grow in what have been historically underrepresented market. So you've heard us talk about Canada now for awhile.
Speaker Change: And our progress there right we grew that market, 100% in 2024, we grew rides 55% in Q1.
Speaker Change: We're about to launch in Quebec and in a few cities. So we will continue our growth path there in that market overall gross bookings pruritus is lower than the average in the U S.
And then another area that we highlighted in our prepared remarks is underpenetrated markets in the U S. So we this is not new we've been kind of taking our formula for operational excellence and customer obsession.
Speaker Change: More broadly in the U S and we've seen fantastic results out of that we highlighted for example in our prepared remarks, we talked about growth in Indianapolis, but cities like Indianapolis, Charlotte, where we grew.
Speaker Change: In both cases more than 30% year over year in Q1 and so.
Speaker Change: That's fantastic because we are continuing that really strong growth in active riders and frequency and in rideshare really is.
Speaker Change: Great option across now in multiple markets. In addition to the growth of our top markets, but there is a mix impact.
Speaker Change: That's the way you should think about that as you as you see some of that gross bookings up her ride dynamic overall.
Speaker Change: And then your second question as it relates to Delta. So maybe just starting with the fact that the Delta partnership ended on April seven.
Speaker Change: So still pretty early days and I think the right way to think about this is you know when you whether you're entering or exiting a partnership like this you know it tends to have an impact over time. So in this case that curve is going to depend on the offer that theyre getting also frankly our efforts.
Speaker Change: Around retention and in competitiveness and we have amazing service levels et cetera. So so pricing benefits are really just one part of the process the decision making process on behalf of the rider.
Speaker Change: The other thing is that our partnership our past partnership with Delta offered more benefits in the one.
Speaker Change: That there is today there is today with the other guy. So you know Theres a couple of different decision criteria I think that any that any rider is going to go through so.
Speaker Change: Still relatively early days, we do still believe that over time. This will have an impact of about 1% to our rides.
Speaker Change: Two percentage points to our gross bookings.
Speaker Change: So that's how I would highlight those.
Speaker Change: Great. Thank you.
Speaker Change: Yep.
Speaker Change: Your next question comes from the line of Steven Fox of Fox Advisors. Please go ahead.
Steven Fox: Hi, Good afternoon, just one question just following up on that last one if we think more deeply about the Q2 guidance in terms of ride growth.
Steven Fox: Monetizing per ride basis, like what would be the sort of how you would directionally talk about it is there any consideration for any consumer spending risks and then where would be some of the things you've highlighted this.
Steven Fox: On this call about both on different platforms, what would be the major drivers would it still be commute, leading the way or something else. Thanks.
Speaker Change: Yeah sure. So you know again, starting at a high level, we provided range overall for our guide our intention is for that range to bracket.
Speaker Change: Of course for a number of different scenarios overall, we expect commute to continue to be strong. We think this mix of are the results of our efforts in some of these underpenetrated markets. We continue to see great momentum there should we think that will.
Speaker Change: <unk> have an impact in the second quarter as well as growth in our top markets. So.
Speaker Change: Some of those similar dynamics that I just talked about for Q1, I would expect to consider for Q2, and maybe I'll start with the consumer sentiment side, David if you want to add anything.
I think the headline here is we are we're just not seeing anything in our data as you know we don't have a lot of leading indicators, but we are not we are not seeing in our data signs of weakening we see continued growth across across modes across different use cases overall, so David you want to add.
David: Anything to that.
Speaker Change: You just had.
Speaker Change: Interesting.
Speaker Change: I'll probably talk openly about this we all read the same headlines but at the same time when we look at the data.
Speaker Change: We had our strongest scribed a week I think the last week of March ever and then <unk>.
Speaker Change: Even as recently as this past week when you look at <unk>, which is another area where people tend to like rideshare.
Speaker Change: Super Super strong so again, everyone understands the uncertainty in the future and of course, we are.
Speaker Change: We have a business that's sort of resilience that we can talk about that separately, if you're interested but in terms of sentiment so far.
Speaker Change: Look strong.
Speaker Change: Yes. Thank you if you if you did want to follow up I'd love to understand just the key headlines on how resilient the business could be in.
Speaker Change: Downturn.
Speaker Change: Sure.
Speaker Change: I mean, I think it's just let's talk about the sector first before before lift I do think this this sector has a certain amount of Brazilians built into it.
Speaker Change: Looking to Matt well, let's start with the basics right is there demand there there is definitely demand there and we see it week on week. It's again, we've made this point in different ways now.
Speaker Change: This is part of People's Daily lives and we've talked about commute a lot.
Speaker Change: Might talk about it much different part of the of the sort of spectrum health care I think our health care arrived.
Speaker Change: Non emergency medical transportation have grown something like 30% year on year. This is literally people going to doctors and medical appointments and stuff often paid for by somebody else, but the point being that it has become very foundational for for a lot of people.
Speaker Change: So demand is there then when you sort of look at the supply side will actually hold on lets talk more about demand you could imagine a world, where let's say tariffs increase the price of cars you can imagine a world where if that's the case that people become even more interest in rideshare, because it's a lot more approachable to think about 10 or $15 arrived in it.
Uh huh.
Speaker Change: $30000 a car they just got more expensive so.
Speaker Change: That's kind of interesting and I'll point to sort of broad data that says in general and of course every economic downturn. If there is such a thing is a little different but in general services tend to be more reliant are reliable and durable goods durable goods flux, a little but but services tend to be somewhat more more of a level so within that context.
Speaker Change: Rideshare false.
Speaker Change: And then when you look on the supply side.
Speaker Change: Again this is not any new data, but remember we have $1 4 million people, who drive on the platform and and they like it and come back to that in a second but.
Speaker Change: That's also quite important part of a lot of People's lives and.
Speaker Change: Remember again, it almost a macroeconomic level.
Speaker Change: It's actually quite stabilizing for the U S economy, because what it means is that if a person loses their job.
Speaker Change: Which could happen of course in an economic downturn times.
Speaker Change: 48 hours later literally 48 hours later, they could be driving an earning again.
Speaker Change: No.
Speaker Change:
Speaker Change: Big picture again, it feels like a very very stable place you never say never you don't know exactly what the future holds but certainly we believe that we're very well positioned.
Speaker Change: Come what may.
Speaker Change: Yeah.
Speaker Change: Further questions at this time with that I will now turn the call to David Richardson, Chief Executive Officer for closing remarks. Please go ahead.
Speaker Change: Yeah. Thank you everyone. Thank you Ryan Thank you Erin and thank you everyone on the team who has worked so hard to do all of the work we've done to put together a great quarter. So really appreciate everyone on the call as always and your support and lift.
Speaker Change: We've never been a stronger position as we continue to deliver on our mission to serve and conduct. Thank you all very much and we will see you next time.
Speaker Change: Ladies and gentlemen. This concludes today's conference call. We thank you for participating and ask that you. Please disconnect your lines.
Speaker Change: Okay.
Speaker Change:
Speaker Change: Yeah.