Q2 2025 Lyft Inc Earnings Call
Good afternoon and welcome to the lift second quarter 2025 earnings call. At this time. All participants are in a 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 then zero on your touchtone, telephone.
As a reminder, this conference call is being recorded.
I would now like to turn the conference over to our know, VP fpna and investor relations. You may begin.
Thank you, welcome to the least, earnings score for the second quarter, 2025 on the call. Today we have our CEO David richer and our CFO. Aaron b as a reminder of full prepared, remarks are available on the IR website and we will use this time to answer your questions.
We'll make forward-looking statements on today's call relating to our business strategy and performance Partnerships future financial and operating results Trends in our Marketplace and guidance
This statements are subject to risks and uncertainties that could cause our actual results to differ materially from those projected or implied during this call.
This factors and risks are described in our earnings materials and our recent SEC 5.
All of the forward-looking statements that we make on. Today's call are based on our beliefs as of today, and we disclaim any obligation to update any forward-looking statements except as required by law.
Additionally today, we are going to discuss customers.
For right share. There are 2 customers in every car. The driver is leads customer and the rider is the driver's customer. We care about both.
Our discussion today will also include non-gaap Financial measures which are not a substitute for a gap results.
Reconciliations of our historical. Gaap to non-gaap results can be found in our earnings materials which are available on our website.
And with that, I'll pass the call to David.
Thanks aurelian.
Okay everyone uh listen up Q2 was a record-breaking quarter for left.
We delivered all-time highs across close bookings adjusted, ebita and free cash flows for the first time in company history.
We reduced our share count. Oh, excuse me. And, for the first time in company history, we reduced our Share account by repurchasing, 200 million dollars worth of stock.
This strong performance position is for positions of for an accelerated growth in Q3.
And we remain on track to achieve our long-term targets.
Our Marketplace is thriving, setting us up for an even stronger, second half of the year.
Over 1 million drivers spent a record amount of hours with Lyft.
That's the same number of drivers that lifts had preco but now on average, they're driving 40% more each.
We had a record number of active riders in Q2 with New Riders, increasing double digits year on year for the second consecutive quarter.
As a result rides reached, an all-time high of almost 235 million marking, our ninth consecutive quarter of double digit growth year-over-year.
As.
Not only are we consistently delivering for Riders and drivers?
But that customer obsession is producing record, results quarter after quarter.
And our momentum is building.
We are now a global more Diversified company but double The Tam.
We are significantly broadening options for Riders from Market expanding Innovations, like lift silver for nearly 60 million older Americans.
TV options.
And we are uniquely positioned to benefit from the coming edition of autonomous vehicles to our platform across North America and Europe.
This will be transformational for Lyft.
Look if you are getting tired of our customer Obsession and operating Excellence, delivering quarter after quarter of record-breaking performance. Well,
We aren't, we are just getting started and we're going to do it over and over again.
So, there's a whole lot to talk about. I go time, bring your questions over to you.
Thank you. If you would like to ask a question, please press star 1 on your telephone keypad, if you would like to withdraw your questions, simply press star 1 again.
We ask that you please let yourself to 1 question and 1 follow-up. Thank you.
Your first question comes from Eric Sheridan with Goldman Sachs your line is open.
Thanks so much for taking the question. Um, maybe a two-part or we. When you think about the scaling of some of your broadening out of the array of products you bring to market with a specific focus on affordability. Can you talk a little bit about what you're seeing in terms of maybe two factors: one as a stimulant of both rider growth and rider frequency, and how you think the broader competitive landscape continues to evolve? Where do you think about affordability becoming more a key theme across the industry looking out over the next 6 to 12 months? Thanks so much.
Um, sure they are stated.
Um, I will take it and maybe Aaron you might want to add in a little bit about the, the context, as well. So, um, you know, as you've seen, you know, our our growth has never been, uh, has never been greater continues to be strong and, you know, you point to affordability. Um, I might zoom out a little bit and put it in even a little bit broader context. So when we think about what drives our growth, we think of the fundamentals and there was actually the fundamentals we outlined. Um at our investor day years you know a better year ago. The first thing we actually think about is operational excellence, write the better, you do the better, you do the better you do and this is why frequency is up. This is why you know, I'll give you a specific stat. I know it's different, you know, far away from where you asked, but just to fill all this in when I started about 2 and a half years ago, our driver cancellation rate was about 15% now. It's uh Sub sub 5%. It's about 4.7% so dramatic increases improvements in ETA improvements in driver cancellations, and so forth. So that's the first thing.
Um, the second thing is innovation and here again, you hit an innovation uh, talking about affordability, afford, you know, affordability requires Innovation, right? So let's look at Price lock as an example. Price stock has a way for you to lock in a price. As, you know, commute is our single biggest use case. As you know, uh and it has got incredible retention rates uh price locked up. So you know I look at it not just in terms of pricing affordability but also in terms of reliability and um like that the third is Partnerships now Partnerships with funny things to talk about in affordability but let me say why first of all it's a big
Growth mechanism for us, right? It expands our Tam. It allows us to, uh, talk to chase customers to now United customers to Door Dash customers and so forth and so on. But, what's interesting about each 1 of these agreements is they tend to come with great economics, not just for both businesses but for our writers. So if you look at Chase for example, Chase now you get you know, ten dollars off a month. That's a new offer, $120 a year purchase after Reserve customers and you get 5 x points with door Dash, you get a great points with United. You'll get points on every single ride.
So when you look at affordability again, you have to think of more than just pricing, you have to think of value to customers. Um, and that's so important.
And then we can talk about media and global, and OBBS, you know, separately as part of the growth plan. But, um, that's sort of how I think about it: it's more of a value to customer thing rather than just a price thing. Now, having said that, our prices remain competitive; our price strategy is always to remain competitive and reliable. Um, pricing is a little different from what we expected a year ago, and again, it's sort of a nod to your point that pricing actually hasn't grown as much as we expected. We're very focused on making sure that we deliver great value to riders through that. So I'll turn it over to Aaron to talk a little bit more about that, but that gives you some context.
Yeah, happy to add on, you know, Erica, I guess the few things that I would add is, if you think about affordability, and I think I've said this on a previous earnings call, this is not new to lift, right? We've got a, a wide array of products to offer, uh, the consumer overall, and so affordability, and having that be part of our portfolio.
So in in Q2, I would say prices were roughly flat quarter over quarter up a little bit year-over-year as we think about Q3 and what's embedded in our guidance, kind of the same, you know, assuming roughly, roughly flat sequentially and up year-over-year. And yet we've continued to drive great profitability. Right record in, Q2 are adjusted. Ibaa was up 26%. So, I think we're positioned well. And, you know, again, I just end with this concept of affordability and having that as part of our, you know, uh, tool kit, I guess if you will say, is, is not new to lift, so we feel like we're positioned. Well,
great. Appreciate it. Thank you.
The next question comes from John Blackledge. With TD Cowen. Your line is open.
Oh, great. Uh, 2 questions. First on the third quarter, uh gross bookings guide. Uh, the range is 13 to 17%. Just curious, if you, if you can talk about the expected contribution, uh, from free now or maybe frame the gross booking Sky range. Excluding free now. And then second question kind of follow up on the partnership deals. Could you provide an update on some of the more impactful uh Power uh partnership deals that are driving the business? And as we think um look into the second half in 2026, what are some of the key existing deals that that could be growth drivers? Thank you.
Hey John, I'll start and then, uh, I'll turn it over to David. So, I'll, I'll start a little bit with where I left off in the last question. You know, it really centers around our algorithm around continuing to grow, grow active Riders and frequency, right? So I mentioned our performance in Q2, uh, that has been a very consistent drum beat over a long period of time and and we expect that to continue. And that's what really leads into our expectation in Q3 around rise growth. In the mid teens, uh, we expect that continued strong Rider and Driver engagement, you know, continued industry-leading service levels. Uh, you know, we're going to continue to grow exceptionally well across our markets and in particular last quarter, we highlighted some of the outsized growth. We see in places like under under served markets or uh in Canada, etc, etc. Now the thing to highlight with free now, uh, remember we closed 1 week ago, I think it's really important to note a couple of things. Our Q3 guidance includes.
2 months of free now in it. Um, another I think important thing to think about as you think about that business which which is a taxi business across 9 European markets, taxi tends to be a little bit more of an elevated experience. Um, they have a heavy business traveler travel population. So this is all getting to the Q3 is generally a seasonally lower quarter for them and in our guide, it only includes 2 months of activity. Um, so hopefully that color
Is helpful David? Sure. So Partnerships. Yeah, lots to talk about there. Um, and, uh, let's sort of go, maybe, maybe sort of new to, to older, um, that might be helpful. So, on the new side, of course, United is a big news today, uh, United as we all know, you know, first or second largest, um, global airline depending on how you count it. Uh, super excited about that partnership. You know, we'll talk more about the specific, uh, later this year when we launched it to Consumers, but the headline there is we expect it to be. Um, yeah, industry leading, you'll get points on every single ride, uh, not just rides to the airport. Um, and that's, uh, that's super exciting. And and we think it's, um, you know, it it's we're we're super flattered to be chosen by United. They've never had a ride share Parker before, uh, this would be their first and they're taking it very seriously. So that'll that'll provide a lot of growth Mileage Plus, of course, this is enormous program.
Um, then on sort of the newer side. Let's go back to chase. So Chase, of course we've had as a partner for many years, Chase Sapphire reserve and the JP Morgan card, uh, but the refresh has been extraordinary in uh, driving growth, particularly among uh, kind of higher value Riders. So we're seeing, um, there over a million connected accounts. So let's just sort of start with, with the the Baseline there.
Results.
It's uh it was the highest 1 day Spike. So like 300% more uh you know account links on that 1 day um than we than we typically seen. So um you know again that sort of shows, you remember dash pass is an 18 million Member Program uh globally. And again, we're now more relevant on the global side than we were before. Um, so that can produce real growth.
Um, now let's talk about Alaska. Alaska, you know, I think it's the fifth largest airline in the United States. We just refreshed that there. Now, of course, Alaska and Hawaii are linked.
But we just refreshed our offer with them, uh, you know, again, a better offer for consumers than it was before and 1 that we're, um, uh, seeing growth, uh, now let's talk about a build so build, uh, you know, relatively small in the grand scheme of things, but hugely important for, um, you know, a particular audience and the, uh, there we have a very interesting partnership with people can gain points picking out. So burn points in other words, use their build points to to take Lyft. Uh, they've been something like 360 million points. Redeemed already in the last 4 months or so. Um, so he and again, just getting started.
um, let's talk about business rewards so we just launched a business Rewards program uh the uh program itself is
Is, um, maybe I think it officially sort of launched yesterday in terms of actual customers, being able to use it. Um, it's a free program which is differentiated, uh, it allows you to get cash back which is wonderful back to the affordability, question the aircast. Um, but it also allows you to get, uh, double points on, uh, some of our partners, uh, including the Hilton and, uh, and others. So, uh, that's absolutely wonderful. And again, that just literally started, uh, yesterday, uh, in the market. So, so when you zoom out now,
You'll remember that when we talked about this as part of our investor day, uh, you know, we said that, uh, roughly 20% of our rides are, um, are associated with Partnerships, um, you know, that number is now, up to 25%, we have more than 50 million rides, uh, that are linked, uh, to, uh, to to partnership. And, and again, when we look at the penetration of our existing Partnerships, and of course of our new Partnerships with zero, but even existing Partnerships huge growth. So sorry for going on to this link on that. But it's it's um it's, it's such a big story, it's worth it's worth really going deep on.
Thank you. Thank you.
Yep.
Next question.
Your line is open.
Thanks for taking the questions. Um, David, can you talk more about how lift is looking to build the AV use case? And um, when you think about some of the stuff that you're doing in Europe, for example, in the recent, um, partnership that you announced with bu what are the key capabilities that lift and free now, uh, bring for avtech providers.
Sure you're done. Um, so yeah great question and obviously, you know, sort of a very rich area
The first thing to say, whenever we think about AVS is you have to think about them as a massive Tam expander for ride. Share
And the reason. I'm so confident in this is, we see the data. We see the data. So, for example, in the markets, where this is in the United States, in the markets, where
Abs are operational, you know, and these are the San Francisco's and LA's. And Phoenix's of the United States, we are seeing growth industry growth. I'm talking about that is 5 times larger 5 times larger than what you're seeing in other, uh, top markets, 5 times larger. Okay, why might that be? Well, you put a new product in the market. If it's a good product, it tends to get traction, right? So it is, are safe. It's great, they not only know the rules, they follow the rules. Uh, they're private, that's great. They're reliable. The cars. Tend to be very new, um, you know, for obvious reasons, uh, you know. So so there's some, there's some really good reasons. Now, now, some of that growth might tail off over time. Of course, this becomes a less novel product but you know, still this is a, this is a step change, okay? So that's the that's the thing, okay? So what do you need to commercialize an AV at this very expensive. Technology that's put in an expensive car and made even more expensive by all the extra maintenance and so on and so forth that you have to do to it. Well,
You have to have a couple things. Of course, you have to have demand, we got lots of demand, so that's great. And now we've got demand not just in the United States but we've got in Europe. Um, you've got to have a, you know, a Marketplace that works. It manages supply and demand and sets prices, you know, you, you need to have customer care if you don't have customer care when someone leaves their thing in the ab, or when the ab does something unexpected, uh, any number of things, you know, you got. Someone's got a, um, you know, answer the phone effectively.
so then, as you move through this sort of value chain, I'm sure it's talking on the right of the value chain, let's say, and then moving towards the left,
Utilizable, you know, as close to 24 hours a day, 7 days, a week to see if possibly is it possibly can be we have as you well know a very very well established operation subsidiary called Flex drive. It's been in business for about 10 years.
It manages tens of thousands. I mean it's over the course of the years it's been many tens of thousands of cars we currently have, you know, some 10 to 15,000 cars on that platform and it's a very distinct set of capabilities its distinct from what rental car groups might have. I can explain that if you're interested. Uh, anyway, it's very tailored to ride here. It's very, very tailored to ride. Share its and it's very, very, uh, sophisticated, right? It sort of knows when a car is going to be maintenance before, the driver knows, it knows what the tire pressure is it knows what knows when when when to deploy cars versus not because demand is going to be low. Um you know demand when when demand is high you know you you deploy a lot of cars and that's low. That's when you put them in for maintenance and cleaning, it's a very sophisticated operation. We've got about 28 of them across the United States Depots across the United States and now we come to Europe, so Europe.
Has uh, we're free now has a very, very good relationship with the taxi fleets, right? The taxi fleets, who are fleets, so they know how to do Fleet Management as well for free. Now does and the taxi fleets and then I would say adjacent to that and this is sort of a little bit of an aside, but when you talk to CEOs of of Av tech companies, or or just industry, folks, and you ask them what will be the rate limiter? What would be the rate limiter on, uh, on on any of these? Uh, you know, many different things? You know, could be? Of course, the technology could be adoption. Could be
People's interest, and it could be different parts of the country. You know, snow could be ice, you know, rain all these different things. But but the fundamental thing that's going to that's going to slow aves down over time, or let's say, regulate their adoption is going to be Regulators Regulators in the United States different states in Europe. We now operates in 9 countries. Now, what do we have going for us in Europe? In particular, we have very good relationship with Regulators through free now, free hours had to work very closely with Regulators because taxes are regulated business, um, and it's, it's a real differentiator for US versus uh, versus other approaches who've been, uh, not as as regular. It's really friendly also, that's that. And then, of course, there's financing. Um, you know, we bring our many to the table, you know, we talked a bit about that.
And a bunch of other things I can talk about, but I think that broadly speaking, you know, when you look at us first again and just sort of summarize 80s, definitely going to be, you know, wind at the back of of ride share. It's going to introduce a lot of people to as most people's first a experience will be through a ride share. That's valuable to us but it's also valuable to to heavy company. A second. You're going to need demand. We've got that. You need a Marketplace. We've got that. You're going to need 7 by 24 operational excellence. We got it and then you got to have uh great Fleet Management somehow. And the fact that ours is integrated with ride, share is awesome. And you got to have good relationships with regulators and and Regulators need to understand that you're on their side, not trying to trying to mow them over.
Great. Thank you. David sure.
The next question comes from Benjamin black with Deutsche Bank, your line is open.
Great. Thank you for taking my questions. I just wanted to take a little bit deeper into to The Bu partnership sort of any sense on, you know, the economic model. Um, you know, any way to sort of think about the vehicle ramp and can we talk about the, the registry process in in, in Germany and um, and the UK, do you have a clear line of sight there?
And then, um, on free. Now, now that the acquisition is closed, is it talk about the incremental Investments? You may need to deploy to sort of ramp and scale that business, you know, what are some of the the key Focus areas that you're that. You're looking at now that you're fully Consolidated. Thank you. Yeah, sure.
So, um, let me start Benjamin and I'll start. So I'll start with the process around bu and maybe I'll just say, I'll answer 1.5 of the question, and then Aeron will answer the last 0.5 something like that? We'll break it down like that, so on bu. Okay, super, super excited about this partnership, right? And just to level set, I think everyone on the call knows this, but I do is the largest provider of a tech in the world. Uh, they've delivered over 11 million rides right now driver out rides to be clear. Uh, and, um, uh, you know, and there are market leader where they where they operate, which of course is is China.
so, if your buy do you're looking for access to other parts of the world,
And they chose us. We're very proud of that, to be their European, uh, at least the first European expansion, um, kind of partner. Okay. So what does the deal look like? Well,
We're not going to get super specific, but what I can tell you is that there's an initial deployment, you know, think of that as hundreds. And then that goes to thousands uh of cars.
uh, uh, there's a, there's a, there's sort of let's say
3 pieces to the whole process 1 is there's a what's called a homologation process. So the cars have to be certified to be Road ready, uh, in the uh, in Europe and specifically in Germany, in the UK, that's a process. That's well understood. Um, you know, these cars are, it's called the rt6, and it's a car that they've designed themselves, it's been on the road for many years. They're going through that process already in Switzerland and very other other countries. So anyway, that's part of the process and the tech has to be tried on the road. Of course, first, with the driver, uh, you know, that a safety driver, you know, then taking Riders and not charging and then, um, you know, finally charging for Riders and, and that whole process will will take some time. You know, it's we're getting started immediately, but it it takes time, you know, however, long, it takes the first time, you hope the second time takes, you know, 80% as long as there are 10 takes 80%, as long as that and, and so on and so forth. It'll be a bit country by country. Because countries have very specific, you know, interests. Um, here and of course, the UK drive on 1 side of the street, Germany on the other. So, you know, there are a whole bunch of different things, they have to go through, but you can expect that that process is is, you know,
We we understand it already, they understand it already. Um we're going to go, you know, step by step through that process. Um and the results should be that in 2026. We're operating in 2 markets, you know, a number of the cars. Uh, those cars we will own ourselves so that we, we are going to purchase those cars ourselves as we will do strategically, uh, when that makes sense. Um, you know, we can talk more about the long-term economics of the of the abuse in a couple of minutes.
Um, so that's where I think sort of stand with bu super excited about that about that partnership and uh, you know, stay tuned obviously for much more to more to come on that.
If I stay in Europe, it's shift to to free now. Uh, now
You know the again maybe just sort of step back for a second. I mean the the European um, you know, ride share ride Hing Market, of course it's a gigantic Market. It's roughly the size of the United States. It re taxes continue to play a gigantic role there and remember the half those taxes are still effectively offline. These are either held on the street or people doing old-fashioned phone calls. So there's huge growth opportunity built right into the the system effectively because there are a lot. There's a lot of ride share going on within big quotes that's being done in a way that that is, um, you know, more 20th century than, than 21st century. So, you know, there's immediate work that we can do there.
There's also immediate work, we can do to bring um you know, first lifts current customers onto the bu platform. I think we talked about how 4.6 million times over the last, you know. 2 years people have open Lyft in Europe, expecting to be able to lift. Now we can direct them to, to, to buy news. So it's, it's a free now. So, all of these things are, um, relatively straightforward and and not particularly costly, you know, this is not a gigantic investment, then we can start to apply our own technology and help free. Now incorporate that technology under their platform and this will give you more stable pricing. For example, it could be a faster pickups, for example, and the teams, even though, of course, the deals just closed last week, but the teams have already been
Kind of brainstorming early mode and are now you know really getting to work rolling up their their sleeps on that. So all of those things is all that safe. This is a growth partnership, a growth acquisition. Um, Aeron will talk a little bit about the economics in a couple of seconds, but really the whole premise of this is, um, you know, this is, this is about growth. The last thing I'll say is back to the taxi Market, remember that the taxi Market in Europe is a much higher end Market much more luxury product that is in the United States that comes with, um, some nice, uh, unit economics, uh, and and nice, um, and nice booking as well. So, anyway, a lot to get excited about there. I was just in Barcelona a couple weeks ago with their technical team, uh, Hamburg, uh, their office, you know, month before teams have already been talking, they're going to be here next week, so we're just such in the early days, but we've got a whole lot of immediate term opportunities to drive growth. And um, and maybe here we can talk a little bit more about the cost side. If, if that done
Right, answer the question.
Side, but I'll, uh, I'll add a little bit more to some of the near-term color. Um, you know, clearly after kind of a deal process and a month-long regulatory review process as you might imagine pretty, typical in this type of a situation, right? That takes Focus. Um, so you're kind of splitting your focus between running the business and, and uh, making sure that the deal gets done. So I'll just read out at David said, the teams are super excited to get going. Alright, we're just here in the first few days. And so, um, uh, we have really ambitious plans as David just articulated going forward, I'd say, you know, you know.
Very near-term. And as I think maybe about the balance of 2025, we had articulated when we announced the deal about a billion Euro run rate on an annualized basis for the business. Um, I'll just emphasize again, our third quarter guidance, that includes 2 months, uh, not 3. But as we think broadly about, uh, those, you know, 5 months or the balance of the 5,
Nothing dramatic and it does nothing to change our long-term plans. Um, and then, you know, we're also assuming that, uh, at least again in this near-term. This sort of 5 month, if you 5 months, uh, for the balance of 2025 on an IBA, de dollar basis for it to be relatively neutral, right? So we're going in in, uh, here, you know, Eyes Wide Open really focused on, uh, driving that growth on the top line side and, um, energizing some of those growth opportunities that we see.
10 Groth ski with Wells Fargo, your line is open.
Perhaps your line is on mute.
Okay.
The next question comes from Stephen Fox of fox. Advisors your line is open.
Hi uh, good afternoon. Um, Aaron. I was wondering if you could break down free cash flows a little bit more, it was a very strong number. Is there anything unusual 1 time in nature in that number and outside of that, can you talk about the organic progress? You made in cash flows. Thanks very much.
Yeah, thanks for the question. Stephen, you know, I wouldn't highlight anything in particular, we specifically, you know, focus on a trailing 12-month number, right? Because there can be some quarter to quarter variation but nothing new. Uh, in terms of the D, the Dynamics, to just, you know, to refresh everyone. Um, as as we think about free cash flow, right? This is going to be influenced by a few things. Of course, the growth of the base business, but also um, timing around, uh, our rides growth and the way that we acrew for insurance and then the actual cash out the door payments for insurance, which tend to be on rides that were delivered, you know, anywhere between 1 and 7 years ago, but the bulk between the last 1 and 3. Um, so those similar Dynamics which we've uh which we've walked through and articulated, um, remain the same so nothing in particular to highlight but we are Inc. Incredibly proud of the progress.
Uh, we continue to make 9993 million over a trailing, 12-month period. Um, so we feel great about where that's positioned, our balance sheet continues to be extremely strong. Um, and so hopefully that, uh, is helpful Stephen
Yeah, that's great perspective. Thank you. You bet.
The next question comes from Stephen JW with UBS, your line is open.
Great. Thank you. So uh David you know I I
Think 1 of the things you talked about before, in terms of, you know, a product development direction for Lyft is to, you know, hopefully start opening up a differentiated, you know, Innovation wedge, uh, versus your competitor and you start diverging in different directions over time and lift, will be known for various things, and Innovation, Etc. But, you know, it seems like whatever Innovation Gap from, you know, either yourself or from Uber, you know, gets closed fairly quickly. So, you know, has your thinking evolved here in terms of how Lyft competes, uh, how lift, you know, resources product development, Etc. Thank you.
Yeah. Hey Stephen. Um you know I like this question a lot and I'm going to spend a minute on it.
so the first thing I'll say is no our approach hasn't changed and and the reason I say that is because in the technology world
you must continue to innovate and it is an imperative.
Now, the and you can and you can see that sort of, by looking at history and and look at what happens when companies start to Outsource their Innovation to competitors or just or just stopped entirely. Uh, that's that's death, that's death. And and, you know, I mean books get written about this uh, you know, you can read those books. If you start to read those books, I encourage you to look at chapter 11, because that's where you'll find a lot of those companies that decide to stop stop innovating.
now, if you look at the gap between us and our competitor,
I would say, their strategy does appear to be a bit of a photocopy strategy. Now, this I would characterize again, as, you know, it's a, it's interesting territory to try to, um, try to mine. But but what's my evidence that? Well, let's look at 1 plus connect 1, plus connect. We, we did about 2 years ago. They just sort of came up with their kind of lightweight version, um, you know, a couple weeks ago in a couple of markets. Let's look at Price slot, price lock, we launched.
Maybe 8 months ago, something like this. Now, you know, they've come up with, um, you know, something sort of similar.
Company looking to its other companies. It's competition instead of the market for Innovation. I don't think it tends to work out super well, but you might ask yourself, well, what's been the results? Well, the results are, you know, we're, uh, continuing to grow quite nicely and I don't tend to talk a lot about market share, but I will just take a moment to note that when I start that, well, I'll just say it this way. Our market share is at the highest point. It has been in the last 2 and a half years. Highest point has been the last 2 and a half years
So so that's nice, right? That's nice. And we're now, you know, by the way, when we started, we were not making any money. We were consuming cash. You know, we're doing a whole bunch of different things. Now, as they're just pointed out 930, excuse me, 9903 million dollars of cash, you know, highest profits in the company's history, of course, highest growth rates or excuse me, highest active riders in the country's history. Oh, a driver advantage, of 29 Points, 29 Points over the other guys, in terms of preference for people to drive on both apps, 29 Points hugely important. If you're in the service industry, to have the people on the front line prefer driving on your platform versus the other guys. Okay.
So you know, you can feel, you can hear, I feel strongly about this: the customer session, trust, profitable growth, and it's working quite well. I'd rather be the leader than the follower in the tech space. Here's the last thing I'll say, and this is maybe the most surprising thing you're going to hear me say: for all of that, it's still...
Small stuff. What I mean, what I mean because
we, if you look at this industry, this is an industry. It is a multi-billion dollar industry. It is growing at, you know, mid teens growth, you know, quarter after quarter after quarter, and it is ridiculously underpenetrated, ridiculously independent with the gigantic tan, a gigantic Tam 161 billion ribs and between the 2 of us. We do maybe 3 billion. Okay? So if you just look at all that and you're like, I don't care. Copy fine. Go ahead, knock yourself out. What I really care about is our Riders and drivers getting a better experience on ride. Share if they are the Market's going to grow and if we're doing better than the other guys faster than the other guys leading, more than the other guys well guess what, history tells you pretty clearly how that's going to end up.
Thank you.
Question.
Honey with Bernstein, your line is open.
Hi there. Thanks for taking the question. Apologies. If this is a little bit repetitive, I've been bouncing around, but now that you've closed the free. Now, transaction. Can you maybe talk about how you're thinking about investment into Europe as a region for you? Um, next year and and thereafter is this, um, going to be a significant area of investment, um, or not so much and and I guess how much investment is required, um, to to get that business, to, to grow a bit quicker. Um, and and add to the overall
Platform.
Okay, and if you'll it's definitely good to hear from you and I promise I'm not at all going to make fun of you for asking the exact same question. Uh, that was asked 2 times ago. So look, uh, just to be really brief. We we we bought a free now for all the growth opportunities, it has its economics are great. It's service is great. It's it's relationship with Regulators great. Um, you know, all these different things and we have a lot of ideas. As we, we were saying a couple of minutes ago of ways we can, um, you know, leverage it. And it's not going to be very costly and I'll I'll let Aaron speak much more directly. Um, and if we briefly, I think,
Yeah, I I just sort of re-emphasize, you know, again the the case that we talked about here is you got to remember that more than half of this Market is offline, right? So just the opportunity to, you know, more creatively and innovatively capture more of that to come online, you know, just refocusing, frankly the team after a month's long. Uh, you know, deal and and Regulatory process is is going to bring some improvements. Um, you know, the tech teams, uh, in in some of the initial at least thinking and brainstorming, you know, have, uh, ideas about, you know, dispatch, you know, other areas where efficiencies, uh, can be driven across the platform, you know, taking expertise and experience, that's already there, you know. And then, of course, over the long term, you know, we see a lot of value around, you know, our partnership strategy and expanding that and a much more Global way. Uh,
Media, autonomous vehicles, Etc. So that's really how we think about the growth there.
Netflix in the car, there's a lot of bundles out there that are pretty large um are those addressable at some point as well via partnership you think
Yeah. Yeah, I love that question. I mean I think the answer is yes you know I mean Roger plays a super super important role in a lot of people's lives, right. I mean it's 800 million rides a year just that we give um, you know, we're talking about 2 million rides plus a day so therefore we're very, very embedded part of people's lives and if you look, you mentioned Sephora. I think it's an interesting example and then we can kind of Zoom back out so Sephora, we actually had a partnership with very specific, it was more targeted. Uh, it was over the summer, it was a 3-day partnership and literally we increased. So, Sephora has something over 1700 to 2,000 stores in the United States. Some are, you know, if we setting some a pop up and we delivered something like 4 times, the average daily, um, you know, volume, uh, when we did this partnership with Sephora, over over a short period of time to their store. So that's foot traffic, that goes right to the store. You can imagine if you're Sephora or why you might want to do something like that. If you're competing with online only competition gosh, which is very convenient, of course, gosh, it's very helpful to have someone literally, you know, be driven to your your, your front door. Um, you know who's uh, who's ready to buy so
I think with that suggests is that support, it's not a subscription program. Of course they've got a great points program and so forth, so the subscription program but it it, that's a point in time program, but it gives you a sense of the type of opportunities that we can, um, unlock
I think to your broader point you know we we very much see ourselves as part of a an ecosystem that surrounds individual Riders and drivers individual Riders and drivers. Um I think about drivers in the second. Actually we through our loyalty program there. We've actually already given out. It's kind of like 1.2 billion points to them to spend in their own way that they can actually then spend in places like Walmart or Starbucks or other gas stations. Other things like that.
So, you know, a little bit of a roundabout way of saying, I think if you think of yourself not as the king of the world, but rather a part of a person's life and ecosystem of, you know, opportunity that that that Riders and drivers, you know, are part of, then you very much, you say, gosh, if door Dash is working very well, and it is, then why not others as well will definitely be exploring that. Um, and I, and I'll just end here by saying the thing that I I feel the most strongly about is any partnership has to satisfy a couple of criteria. It's got to be really interesting for riders or drivers. Otherwise it's just you know, kind of noise and it's got to work really well for both companies, which means they take a while to to negotiate because they got to have, you know, economics to flow in 2 directions. Um, you know, positively, um, and hopefully, they can be really durable and, and great for both. So anyway, more to come nothing specific to talk about there. But definitely, I like them. I like the overall question and approach.
Thank you both sure.
This is the next question comes from Ken gki with Wells Fargo.
Thanks so much and sorry about the technical difficulties last time. Um, I I just want to touch upon, uh, David. You you're, you're talking about the penetration levels in the domestic ride share market, and how there's so much room still to go. Can you talk a little bit about pricing? Uh, and if I go back, you know, way back to kind of the IPO days. Um, the talk was around getting cost per mile down low enough, where you'd replace car ownership or at least partial car car ownership, especially outside the cities. Uh, could you talk a little bit about how you're going to continue to how you can address some of those lower price or lower cost use cases? And, and the unlocks there. It's been a struggle in, in domestically other markets, have figured it out, let's say Brazil or you know, um, India Etc but but us has been a real struggle. Could you could you please address that?
Yeah, sure. I think a couple of things I mean, first I think the basic thesis know I I don't think I know it. It's it's like the sun coming up tomorrow. Like there will be fewer cars over time that are individually owned. There's just no question. There's because there are just other opportunities. I mean, you know, sort of demand kind of follows Supply. So if you only have 1 opportunity, buy a car you do it, okay? Then car manufacturers got clever they said well how about you lease a car? Okay. Cool. That unlocks all sorts of
Finishing opportunities, that's a finance strategy. Now you've got, you know, various different, you know, car share networks. Those are still, uh, you know, quite small, but you have ride, share. And that's the fundamental reason why, so many kids today, I mean, I'm a little
Like a sort of off, whatever demographic comment, but you know, the, the sort of the, the big moment of getting your driver's license. This is not that big anymore. The reason is not because people don't want the freedom, it's because they can get it another way and they get it on demand way and the car, you know, literally, you know, comes to them and uh and then they don't have to maintain all those sorts of stuff. So all those things are part of the big picture. Now, when you get down to pricing, it is there's no question that price licity is a thing. You know, the lower, you can get the price. Um, you know, the more demand you can you can tap into it is not the only way.
So that suggests that you can do it in multiple ways, but clearly, you can lower price this time to to sort of stoke, demand, unlock more demand.
So you know what's the floor there? Well, you know, obviously driver earnings are part of it, right? You've got a 2-sided market place, it's which just makes things quite uh complex. Um you know Riders and drivers. They kind of want the same thing but they kind of want a different thing which is drivers want to be paid more Riders. Want to be paid less. Well what's going to be the big on lock there? I have no surprise as as are going to be a big unlock there because now you don't have a 2 sided Marketplace in that same way and you've got a fixed cost that you can price in a different way. So that will absolutely have some pricing impact over time over over time, there'll be other things to push in the other direction but that's something to think about.
What's another floor for us? Insurance in terms of big cost, we've done an incredibly good job, managing Insurance, incredibly good, it has gone to. It's a it's a, it's a, it's an art and a science. Uh and and we've got a we've really got it dialed in.
But there are floors. Those floors typically are as much regulatory as anything else. Um, we're working super, super close with regulators, the country and state governments because it's the state industry. Um, Erin can talk a little bit about the general trends, but we're seeing there. Um, I wouldn't be surprised to find some step changes happen over time in certain states where the minimums are just out of hand; they're just too high, and that causes higher prices and it costs lower, you know, earnings for drivers. You know a lot of people who don't really like that. Um, you might have seen, for example, there's some press come out of the state of Washington around Seattle.
Ride share prices are too high. It's not because we're pricing too high; it's due to a combination of state regulations and insurance that make costs higher. So anyway, the long way of saying it is really state regulations in Washington, to be clear. But in other states, like California, insurance is a bigger issue. So,
So those are, those are some things and then there's just you know some cool Innovation things like price lock and other. You might say bundles or almost cross subsidies. Can continue to drive the effect of price down. If you look at our media business, our media business which continues to be on track for, you know, hundred million dollar run rate, uh, you know, coming out of the fourth quarter. That is a business that over time can help, you know, subsidized rights and and Sephora. Again, I've already used the example, but it's a good example, right? Those were those were free rides or discounted rides, uh, to Sephora Stores. Um, so so, there are times I think where you can find the third parties to offset the price of the ride. Uh, so that's the driver still makes what the driver needs to make, but the rider uhm pays less. So there's a lot more Innovation here. There are some sort of, semi hard floors, but we'll kick through them, it'll just take time, things like insurance and then again ABS, I think we're also, you know, could slightly reset the table there. I want to overset expectations there because there's cost to running ABS as well. Um, but it's certain, you know, change.
Changes economics, I think favorably, uh, over time.
Thank you, David.
That is all the time we have for questions. I will turn the call to CEO David richer for closing remarks.
Listen, I just want to thank you all very much for being a part of this call. I'm going to go Oscar for about 30 seconds and say I think um you know it's a new lift you're looking at. Now it's a much more Global lift a much more Diversified lift a lift. That's got a lot of, you know, good irons in this sort of growth fire. Um, and also margin as well. So we've got, we're a stronger company we've been ever before and um, super excited to have you guys along on the journey, look forward to talking to you all uh either in person or next corporate, when we all get back together again. Thank you so much.
This concludes today's conference call, thank you for joining. You may now disconnect