Uber Technologies Q1 2025 Earnings Report

Uber Technologies EPS Results

• Actual EPS: $0.83
• Consensus EPS: $0.50
• Beat/Miss: Beat by +$0.33
• One Year Ago EPS: -$0.32

Uber Technologies Revenue Results

• Actual Revenue: $11.53 billion
• Expected Revenue: $11.61 billion
• Beat/Miss: Missed by -$79.15 million
• YoY Revenue Growth: +13.80%

Uber Technologies Announcement Details

• Quarter: Q1 2025
• Date: 5/7/2025
• Time: Before Market Opens
• Conference Call Date: Wednesday, May 7, 2025
• Conference Call Time: 8:00AM ET

Uber Technologies (NYSE:UBER) Inc. is a San Francisco-based company providing mobility, food and package delivery services and freight transport. Uber operates in approximately 10,500 cities in 72 countries. The company sets fares based on local supply and demand at the time of booking and receives a commission from each booking. The company has 131 million monthly active users and 5.4 million active drivers and couriers worldwide. 

Uber was founded in 2009 by Oscar Salazar Gaitan, Travis Kalanick and Garrett Camp and was initially named Ubercab Inc. The idea for Uber came about after Camp and Kalanick spent a pricey $800 hiring a private driver on New Year's Eve, and Camp needed help finding a taxi on a snowy night in Paris. Camp, Oscar Salazar and Conrad Whelan built the prototype for Uber's mobile app, with Kalanick as the chief advisor to the company. Ryan Graves became the first Uber employee in February 2010 and was named CEO in May 2010. In December 2010, Kalanick succeeded Graves as CEO, and Graves became the chief operating officer. Uber's current CEO is Dara Khosrowshahi, who replaced co-founder Travis Kalanick of Uber in August 2017.

Uber debuted in San Francisco in 2011, opening its services and mobile app to the public after beta testing in May 2010. Initially, the application hailed black luxury cars, which cost about 1.5 times as much as a regular taxi. In response to San Francisco's taxi operators' objections, the company changed its name from UberCab to Uber in the same year. Uber's early team consisted of talented individuals from various fields, including a computational neuroscientist and a nuclear physicist who worked on enhancing the accuracy of Uber's car arrival predictions beyond what Google APIs offered.

In the summer of 2012, Uber rolled out UberX. This budget-friendly alternative permitted drivers to use their cars provided they passed background checks and met insurance, registration and vehicle quality standards. UberX expanded to 35 cities within a few months, demonstrating its popularity among cost-conscious riders. In August 2014, Uber extended its services by introducing Uber Eats, a food delivery platform. It also unveiled a carpooling feature in the San Francisco Bay Area, which soon spread to other cities globally, enabling passengers to share rides and save on fares.

Uber has faced legal action in several jurisdictions due to its classification of drivers as gig workers and independent contractors. Ridesharing companies like Uber have disrupted taxicab businesses and allegedly caused increased traffic congestion. Additionally, Uber has been criticized for various unethical practices, such as ignoring local regulations, some of which were revealed by the leak of the Uber Files between 2013 and 2017 under the leadership of Travis Kalanick.

In August 2016, DiDi acquired Uber's business operations in China, and in exchange, Uber obtained an 18% equity stake in DiDi. DiDi also pledged to invest $1 billion in Uber as part of the agreement. Later that year, Uber purchased Ottomotto, a startup specializing in developing autonomous trucks. The acquisition was valued at $625 million, and the founder of Ottomotto, Anthony Levandowski, was previously accused of stealing trade secrets from his former employer, Waymo, to establish the company. In the same year, Uber also bought Geometric Intelligence, the cornerstone of "Uber AI," a department dedicated to exploring and researching AI technologies and machine learning. The Uber AI project disappeared in May 2020.

Despite the controversies, Uber has committed to carbon neutrality globally by 2040, and by 2030, in most countries, rides will move exclusively to electric vehicles. The company has also formed various partnerships and acquisitions, such as with IT Taxi in Italy, Cornershop for grocery delivery and Postmates for alcohol delivery. Uber continues to expand its services and develop new offerings, such as Uber Works, Uber Green and Uber Eats. The company has recently announced plans to become an emission-free platform and is investing in self-driving cars.

Uber Technologies Q1 2025 Earnings Call Transcript

Key Takeaways

• In Q1 Uber grew its monthly active consumers 14% to 170 million, trips rose 18%, and it generated record adjusted EBITDA of $1.9 billion and free cash flow of $2.3 billion.
• Uber expanded its autonomous vehicle partnerships—launching Waymo in Austin with nearly 100 cars, announcing five new AV deals across the U.S., Europe and the Middle East—and struck integrations with OpenTable, Delta SkyMiles and acquired Trendy Algo in Turkey.
• Falling U.S. mobility insurance costs have moderated headwinds to high‐single digits and enabled Uber to pass savings to riders while still delivering margin leverage.
• Delivery profits improved, with margins reaching 3.7% of gross bookings (up 70 bps year-over-year) and grocery/retail hitting breakeven in Q4 then driving positive contribution in Q1.
• Sparser markets now represent 20% of mobility trips and are growing faster than core urban areas, extending Uber’s overall growth runway.

Presentation

[Operator]

and welcome to the Uber First Quarter twenty twenty five Earnings Conference Call. All lines have been placed on mute to prevent any background noise. After the speakers' remarks, there will be a question and answer session. I would now like to turn the conference over to Balaji Krishnamurti, Vice President, Strategic Finance and Investor Relations. You may begin.

[Balaji Krishnamurthy, VP - IR at Uber]

Thank you, operator. Thank you for joining us today, and welcome to Uber's first quarter twenty twenty five earnings presentation. On the call today, we have Uber's CEO, Dara Khuzrashai and CFO, Prashant Mahendra Raja. During today's call, we will present both GAAP and non GAAP financial measures. Additional disclosures regarding these non GAAP measures, including a reconciliation of GAAP to non GAAP measures are included in the press release, supplemental slides and our filings with the SEC, each of which is posted to investor.uber.com.

[Balaji Krishnamurthy, VP - IR at Uber]

Certain statements in this presentation and on this call are forward looking statements. You should not place undue reliance on forward looking statements, and actual results may differ materially from these forward looking statements. We do not undertake any obligation to update any forward looking statements we make today, except as required by law. For more information about factors that may cause actual results to differ materially from forward looking statements, please refer to the press release we issued today as well as risks and uncertainties described in our most recent Form 10 ks and in our other filings made with the SEC. We published our quarterly earnings press release, prepared remarks and supplemental slides to our Investor Relations website earlier today, and we ask you to review those documents if you haven't already.

[Balaji Krishnamurthy, VP - IR at Uber]

We will open the call to questions following brief opening remarks from Dara. With that, let me hand it over to Dara.

[Dara Khosrowshahi, CEO & Board Member at Uber]

Thanks, Balaji. We're off to a strong start this year against the dizzying backdrop of headlines on trade and economic policy. Each component of our multiyear growth framework is humming. Our audience grew 14% to 170,000,000 monthly active consumers. Engagement strength continued with trips up 18% and with retention rates hitting all time highs globally.

[Dara Khosrowshahi, CEO & Board Member at Uber]

And gross bookings grew in line with trips fueled by strength across both mobility and delivery. We see this as robust healthy growth, growth that's not coming growth that's coming from engagement and frequency not just price. We think that's the right way to maximize long term free cash flow per share. And in Q1, we generated record adjusted EBITDA of $1,900,000,000 up 35% year on year and free cash flow of $2,300,000,000 The Uber team has been a major execution mode. We launched with Waymo in Austin with around 100 cars that are all exceptionally utilized.

[Dara Khosrowshahi, CEO & Board Member at Uber]

We announced five AD partnerships with deployments to come in The U. S, Europe and The Middle East. We signed a partnership with OpenTable to integrate dining, delivery transportation for our customers and we went live with our Delta SkyMiles partnership. And we announced the acquisition of Trendy Algo to supercharge our future growth in Turkey and that is all just in the last two months. Looking ahead, our Q2 outlook should underscore our expectation to reliably deliver more of the same strong top line growth combined with even stronger profitability growth setting us well for the seasonally stronger second half of the year.

[Dara Khosrowshahi, CEO & Board Member at Uber]

As I said to

[Dara Khosrowshahi, CEO & Board Member at Uber]

my team, feel great about where we stand. We're on solid footing with a clear strategy and ambitions that have never been higher. And that's why I'm emphasizing that good is not going to be good enough. We need to be great to continue to deliver for the people and cities that we serve and of course for all of you. So with that, let's get some questions going.

[Balaji Krishnamurthy, VP - IR at Uber]

Thank you. Operator, we're ready.

[Operator]

Thank you. Your first question comes from the line of Doug Anmuth with JPMorgan. Please go ahead.

[Douglas Anmuth, Managing Director & Internet Analyst at JP Morgan]

Thanks for taking the questions.

[Douglas Anmuth, Managing Director & Internet Analyst at JP Morgan]

I have two. First, just on Mobility as you work to keep prices low, curious what kind of elasticity you think you're seeing in terms of the response and how that's showing up in Rides? And then on AV, you talked about, almost 100 cars in Austin on the way to hundreds. What are you seeing there in terms of utilization of those Waymo's relative to some

[Douglas Anmuth, Managing Director & Internet Analyst at JP Morgan]

of their other markets? Thanks.

[Dara Khosrowshahi, CEO & Board Member at Uber]

Yeah. Absolutely. So Doug, on mobility, the elasticity that we're seeing is similar to the past, know, usually for dollar of increase in terms of price transactions are negatively affected. Now there's short term elasticity and long term elasticity. There's elasticity that you see in session, and then we think there's longer term elasticity, which is as you tend to kind of get used to prices not increasing as much as they were in the past couple of years, how does your how do your habits change?

[Dara Khosrowshahi, CEO & Board Member at Uber]

How does sessioning change? So we're happy with the results that we saw in terms of the pricing that we were able to deliver to the consumers as we saw saw the insurance headwinds ease ease a little bit, and hopefully, we'll keep that going. There was also kind of a mix shift in terms of trips, a bit more growth internationally than The US, especially in the travel sector that affected overall price mix, so to speak. But so far, I'd say so good in terms of elasticity. In terms of AV in in Austin, we're very, very encouraged with what we're seeing.

[Dara Khosrowshahi, CEO & Board Member at Uber]

Obviously, Waymo has a safety track record second to none. Consumers are loving the product. Often rates are very, very healthy, and the ratings are healthy. The team on the ground is doing a terrific job in terms of repairs and cleaning and recharging the cars, etcetera, to make sure that the Waymo's are available for rides. And then when the Waymo's are available for rides, they are very, very busy.

[Dara Khosrowshahi, CEO & Board Member at Uber]

So we're seeing very high utilization of the vehicles in terms of trips per vehicle per day. As a matter of fact, the average Waymo in Austin is busier than 99% of Austin Drivers is defined by kind of the number of trips per day per waymo as well. So very, very encouraging early days. We are going to continue to increase the vehicle count in Austin, and we're super excited for expansion in Atlanta as well as some of the other AV announcements that we've made and the expansion that we see both in The U. S.

[Dara Khosrowshahi, CEO & Board Member at Uber]

And especially outside The U. S. As well.

[Douglas Anmuth, Managing Director & Internet Analyst at JP Morgan]

Thank you, Dara.

[Dara Khosrowshahi, CEO & Board Member at Uber]

You're welcome. Next question?

[Operator]

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

[Eric Sheridan, Analyst at Goldman Sachs]

Thank you so much for taking the question. I want to know if we could go a little bit deeper on the broader competitive landscape. If you could give us a bit of an update on what you're seeing competitively, especially around either pricing dynamics or incenting supply and demand across both mobility and delivery? And if there were any specific geos you wanted to call out from a competitive intensity standpoint? Thank you.

[Dara Khosrowshahi, CEO & Board Member at Uber]

Yeah. Eric, this these markets continue to be very competitive on a global basis. In terms of mobility, we've got a strong competitor domestically here in Lyft. I think we're more focused on competing with each other on service, on quality. Obviously, insurance is something that's hit both of us as well.

[Dara Khosrowshahi, CEO & Board Member at Uber]

So I'd say the competitive intensity in The US is pretty consistent. And then internationally, of course, we got both in Europe and DD and Latin America. They're strong competitors. They continue to focus on expansion. I think as you see about our results, you know, we're the number one player in the vast majority of markets in which we operate.

[Dara Khosrowshahi, CEO & Board Member at Uber]

And even at a very competitive market, our category position continues to be market leading. And then the same in delivery as well. Obviously, The US market is highly competitive. We're seeing terrific growth both in terms of top line, in terms of margin, in terms of our grocery and retail business that accelerated this quarter versus last quarter. And then you are seeing some consolidation in the sector, in the food delivery sector.

[Dara Khosrowshahi, CEO & Board Member at Uber]

You know, we were early to the game in terms of growing internationally organically. We're seeing some consolidation happening inorganic consolidation happening and that's to be expected in markets that are as large and as competitive as ours. So I'd say no change. We can't rest for a second. And because of our global position and because of the unique platform that we have, we think we can, hold our own and then some.

[Eric Sheridan, Analyst at Goldman Sachs]

Great. Thank you.

[Dara Khosrowshahi, CEO & Board Member at Uber]

You're welcome. Next question?

[Operator]

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

[Brian Nowak, Managing Director at Morgan Stanley]

Great. Thanks for taking my questions.

[Brian Nowak, Managing Director at Morgan Stanley]

I have two, one on Austin and one on U. S. Mobility. Just going back to Austin, Dara, can you sort of walk us through how you're thinking about a size of a fleet or an internal timeline or target when Austin, Waymo combined with Austin Human Drivers could sort of better be matched supply demand to drive incremental volumes to Uber overall? When do you think that could happen?

[Brian Nowak, Managing Director at Morgan Stanley]

And then the second one maybe just kind of drilling a little more into U. S. Mobility. Any update on sort of how quickly U. S.

[Brian Nowak, Managing Director at Morgan Stanley]

Mobility is growing and sort of how the suburbs versus the more urban areas are trending? Thanks.

[Dara Khosrowshahi, CEO & Board Member at Uber]

Yeah. Brian, in terms of Austin, we're really focused on making sure that the experience every single day is an excellent experience. We're absolutely growing the fleets. It's going to be over a hundred vehicles soon based on the trends that we're seeing. And really, the focus is on keeping the utilization of the vehicles at the high levels that we're seeing and making sure that, safety and customer experience, aren't compromised in in any way.

[Dara Khosrowshahi, CEO & Board Member at Uber]

At this point, we're not really a goal and often isn't necessarily for incremental trips one way or the other. It's just to make sure that every single ride is the perfect ride. What we see over the long term is if we provide a service that is highly reliable, where the every single trip is exceptional, prices are reasonable, ETAs are predictable, then over a period of time, the business grows, and we are able to gain category position, And we see more consumers kind of coming onto our onto our platform. The fact is that, you know, less than 20% of adults 18 18 and over use our platform on a regular basis. So we think there's plenty of room for growth.

[Dara Khosrowshahi, CEO & Board Member at Uber]

So the focus right now is kind of day to day making sure we get it right and making sure that the streets of Austin are safe.

[Prashanth Mahendra-Rajah, Chief Financial Officer at Uber]

Yeah. Brian, can

[Dara Khosrowshahi, CEO & Board Member at Uber]

talk to the second question?

[Prashanth Mahendra-Rajah, Chief Financial Officer at Uber]

Yeah. Brian, it's Krishna. I'll take the I'll take the second part, and that it was on, on mobility growth. So maybe we'll let's have let's have set some context, for the, for the last couple quarters, I think three quarters now, we've had about 19% year over year trip growth. So very strong trip growth.

[Prashanth Mahendra-Rajah, Chief Financial Officer at Uber]

And as we look at what we've incorporated into the guide, we're thinking that it should be around the same and that, we're fortunate it's still very heavily led by audience growth. When we look at that conversion from trip growth to GB growth, we are starting to see the gap between trips and gross bookings narrow a bit because we've been able to pass along lower insurance costs, primarily here in The US. You might remember we indicated that in the latter part of the year that that we would expect better insurance costs in this year, and that's exactly how it's turning out. The other item that, that, Dara made mention of earlier in one of his answers is we are seeing a slightly higher mix of international trips, and that's a bit due to that lower inbound US travel, which which comes with lower gross bookings per trip. But despite sort of the this mix shift, you'll notice that we were able to print all time high margins for the for the quarter.

[Prashanth Mahendra-Rajah, Chief Financial Officer at Uber]

So, we're able to really continue to pass those insurance costs through. There's no economic impact of that, to our shareholders, and we're able to put the margins, and continue to show that sort of margin accretion story. And then lastly, I think you asked a bit about growth in the suburbs, versus the urban. A metric that we're we're now able to share is that sparser markets, which are growing, at a faster rate than our core, are represent about 20 on a trip basis, for for mobility. So we're continuing to see, great growth in those sparser markets because it's growing faster, but it's also a sizable percentage of the overall mobility volume.

[Brian Nowak, Managing Director at Morgan Stanley]

Great.

[Brian Nowak, Managing Director at Morgan Stanley]

Thank you take

[Prashanth Mahendra-Rajah, Chief Financial Officer at Uber]

the next question, operator.

[Operator]

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

[Ross Sandler, Analyst at Barclays Capital]

Great. Just question on the delivery margin and a call out you guys made in the prepared remarks. So you said that restaurant delivery has profit margins that modestly lower than UberX profit margins. So that's an interesting, nugget in itself. I guess the question is,

[Ross Sandler, Analyst at Barclays Capital]

looking at that, what does

[Ross Sandler, Analyst at Barclays Capital]

that say about the cadence of margin expansion at grocery and retail? I think you also said that that part, is is at a 2018 kind of equivalent maturity. And then how much of the restaurant margin, you know, being way up there is because of advertising just because of time in market and, you know, the usual kind of retention cadence, etcetera? Any thoughts on that?

[Prashanth Mahendra-Rajah, Chief Financial Officer at Uber]

Sure. Thank you, Ross. It's Prashant. I'll go ahead and take that. So delivery has been a pretty incredible profit story for us.

[Prashanth Mahendra-Rajah, Chief Financial Officer at Uber]

If you if you look at the results for the quarter, delivery margins are at 3.7% of GBs. That's up 70 bps, versus where it was just a year ago. Very strong expansion. Now that margin expansion is primarily being driven by advertising and the leverage we're getting, just from the scale, the OpEx leverage that we get from scale. And that's been a fairly consistent driver of what's been behind the margin expansion over the last couple quarters.

[Prashanth Mahendra-Rajah, Chief Financial Officer at Uber]

The the item that I'd probably highlight there is that the the, our cost per trip, continues to show great improvement. That's the benefit of the scale we have declining. It's declined both quarter over quarter and year over year. In the delivery profitability numbers, that includes our grocery and retail, which, which you made reference to. Remember that we said in q four of last year, grocery and retail hit breakeven for variable contribution, and in q one, it's now starting to accrete at variable contribution levels.

[Prashanth Mahendra-Rajah, Chief Financial Officer at Uber]

So that that grocery and retail business has has great upside, and it's gonna continue to grow both, as a result of advertising, but also as we continue to improve selection. I will call out one item that may not be notable to everyone is incremental margins for delivery in q one were 9%. So just, you know, on with that very strong top line growth, it's a reflection of what just the earnings power of this business can be with continuing to to see that that opportunity to drive margin expansion. Having said that, as we've said consistently in in our calls, we need to always find a balance between growing profitability and growing the top line. So, I don't want to overcommit to a, the growth in delivery profitability.

[Prashanth Mahendra-Rajah, Chief Financial Officer at Uber]

We're looking for steady margin expansion so we can continue to invest in growing the top line of the business given that we have so many opportunities to invest in. Next question, please.

[Operator]

Your next question comes from the line of Mark Mahaney with Evercore. Please go ahead.

[Mark Mahaney, Senior Managing Director at Evercore ISI]

Okay, thanks. I'll try to. First, just on the insurance headwinds. Do you feel like that's mostly behind you now? Just talk about where you think ongoing leverage against insurance costs are?

[Mark Mahaney, Senior Managing Director at Evercore ISI]

Is that something that's kind of structural to the industry? Or are those things kind of workarounds or improvements that you've been able to do? And then, Dara, in terms of AV partners and you've

[Mark Mahaney, Senior Managing Director at Evercore ISI]

got

[Mark Mahaney, Senior Managing Director at Evercore ISI]

a pretty good view on all the different offerings that are out there. Waymo is doing a fantastic job. Who do you think is coming who do you think in in the marketplace is closest to Waymo now in terms of having the ability to roll out at, you know, a decent scale a true, AV experience? Thanks.

[Prashanth Mahendra-Rajah, Chief Financial Officer at Uber]

So why don't you take the the Waymo one first and then I'll close with insurance.

[Dara Khosrowshahi, CEO & Board Member at Uber]

Yeah. Sure. Mark, it's it's hard to tell exactly who has what capability because AV is is still very, very early in terms of its development. I tell you that listen, in in China, you have AV product that has is in market today from WeRide, who's a partner in Abu Dhabi and and Dubai and expanding in 15 countries. Pony, whom we expect to introduce to The Middle East sometime in Baidu as well.

[Dara Khosrowshahi, CEO & Board Member at Uber]

These they have essentially AVs running in Chinese cities right now, very challenging traffic conditions and conditions generally. And then there are a lot of other players that are showing incredible promise as well. You know, we announced a partnership with Main Mobility, with VW, with Momenta as well where we expect to see an AV development deployment in Europe as well and AV rod. So this is this is a technology that has been proven. Waymo was definitely the leader there, but there are many other players, investing in the space, and we expect to see, you know, a number of successful companies in the space, hopefully partnering with us.

[Prashanth Mahendra-Rajah, Chief Financial Officer at Uber]

Yeah. So, Mark, on the on the insurance question, I remember in, in q four of last year, we indicated that that for 02/2025, we thought insurance, increases would moderate and more likely be in the high single, perhaps low teens area. And, and we, we actually overestimated it. CPI print for March was coming in at 7% year over year, and that's the lowest we've seen in almost three years. So as we think about our US mobility insurance cost expectation for the balance of the year, we're thinking that it will continue to be, a very modest headwind of, of high single digits, through 02/2025, and that is meaningfully lower than we've seen in the last two years.

[Prashanth Mahendra-Rajah, Chief Financial Officer at Uber]

And certainly given the rate of growth for The US mobility business, that's gonna create some leverage for us. But as I said in my, prior response, we intend to pass those, those, opportunities, to consumers. Now where we are getting, some incremental, strength from the from the great efforts of our team are in in a few areas. First, on safety tech, some great innovation that, we're driving in this space, including giving our drivers insight into how their driving behavior, is is being scored. And that is now live in all US markets, and drivers are responding very favorably to being able to understand their, their actions like speeding, harsh braking, acceleration, etcetera.

[Prashanth Mahendra-Rajah, Chief Financial Officer at Uber]

So that's, that's one element that we've now deployed across The US. On the policy side, which has also been an area that we've been talking about for a while, we're getting some great momentum there. For example, in, in just in this first quarter, a court reform bill, is in Georgia awaiting the governor's signature. And if, if we get through that, that's gonna be a meaningful step to combat some of the legal system abuse and is going to help us continue to drive down insurance costs over time. And we have other, bills, in other states like Nevada and Texas and continue to have some good discussions in other areas.

[Prashanth Mahendra-Rajah, Chief Financial Officer at Uber]

So overall, I think that, that the energy that we're spending on insurance both because we have a captive that allows us to create tension on pricing. We have an organization of engineers that's really working on finding new technologies, and the efforts that we're doing on the policy side are gonna continue to make this a a more favorable situation for us than it has been over the past couple of years.

[Dara Khosrowshahi, CEO & Board Member at Uber]

And, Mark, I just stress on the on the policy angle that, you know, US drivers are not, less safe than drivers internationally. The cost of insurance that has to be paid on to consumers outside of The US is de minimis compared to The US. So this is just it's it's a huge part of inflation that consumers are experiencing. We're hoping that local policymakers and and the administration in place, you know, want to fight inflation as much as we do because really this inflation is caused by abuse of the legal system. It's entirely unnecessary and we're hoping that policymakers can work with us to bring prices down for consumers and more of the fares going into the drivers' pockets.

[Dara Khosrowshahi, CEO & Board Member at Uber]

That we really think is a win win.

[Mark Mahaney, Senior Managing Director at Evercore ISI]

Okay. Thank you very much.

[Mark Mahaney, Senior Managing Director at Evercore ISI]

Thank you very much.

[Dara Khosrowshahi, CEO & Board Member at Uber]

You're welcome.

[Operator]

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

[Justin post, Analyst at Bank of America]

Great. Thanks. Just like a question on the macro. You mentioned maybe slower airport trips, but any impact on mobility rides or pricing or delivery, lower AOVs or anything like that on the macro or contemplated going forward? And then can you give us an update on competition in Bay Area and San Francisco I'm sorry, Bay Area and LA?

[Justin post, Analyst at Bank of America]

I know those are areas where Waymo's operating. Any update on the competition there? Thank you.

[Dara Khosrowshahi, CEO & Board Member at Uber]

Yeah. Absolutely. So in in terms of macro, Justin, we're watching it pretty closely. We don't see any signals that that I describe as significant. Audience growth is very consistent with last quarter up 14%.

[Dara Khosrowshahi, CEO & Board Member at Uber]

Frequency is is consistent as well. We are looking to modulate price increases, and and you saw that in our results as well. But we're not seeing, like, you know, basket sizes continue to increase. So I think that would be a leading indicator to the extent that there was macro uncertainty. We're not seeing trade downs in terms of the kinds of restaurants that our eaters are are eating at.

[Dara Khosrowshahi, CEO & Board Member at Uber]

So it's it's absolutely something that we're watching, but we don't see any signal as of yet in terms of the consumer. And remember, the categories that we operate in, know, these are restaurants, transportation, grocery tend to be categories that are quite consistent even during periods of macro uncertainty. So I think from a relative standpoint, we're a little bit less subject to these issues. But right now, we don't see any signal whatsoever and hopefully it will remain the same. You kind of see that in the guidance, which is pretty consistent in terms of top line with this quarter.

[Dara Khosrowshahi, CEO & Board Member at Uber]

In terms of San Francisco and LA, the competitive environment, pretty stable, Justin. We're not seeing any change there. We are very supportive of Mayor Lurie's plans to kinda get San Francisco going again, We think that will benefit all of the competitors in that marketplace.

[Justin post, Analyst at Bank of America]

Great. Thank you.

[Dara Khosrowshahi, CEO & Board Member at Uber]

You're welcome. Next question.

[Operator]

Your next question comes from the line of Ken Gorelski with Wells Fargo. Please go ahead.

[Ken Gawrelski, Analyst at Wells Fargo]

Thank you. Two if I may please. First maybe one for Sean. Given the affordability initiatives and the commentary on insurance, but also your kind of preview of the Go! Get!

[Ken Gawrelski, Analyst at Wells Fargo]

Event later this month, Could you talk about the impact potentially on mobility margins in the second half of this year and beyond? And then one for Dara, please. If you could talk expand a little bit more about your view of the AV landscape, kind of both in inside The US and outside The US. When do you see software enabled AV solutions as a as a scale commercial option? Thank you.

[Prashanth Mahendra-Rajah, Chief Financial Officer at Uber]

Yeah, Ken. So let me I I I'm reluctant to guide, for the second half, but I can say this, that, that we are committed to continually showing steady margin improvement on a year over year basis. But as we've said many times, we're gonna we're gonna manage the p and l across both lines of businesses and striking that really tough balance of investing for growth when we have so many opportunities to invest in while continuing to to drive the the profitability of the company. We we shared some pretty strong, profit expansion in the mobility, business this quarter on a sequential basis and on a year over year basis. I would not, take that as an indicator for how you wanna model the balance of year.

[Prashanth Mahendra-Rajah, Chief Financial Officer at Uber]

I think that, steady margin expansion throughout the throughout, the the cycle of this company on a year over year basis is how you wanna how you wanna model us out.

[Dara Khosrowshahi, CEO & Board Member at Uber]

Yeah. In terms of AV, we're seeing a ton of innovation in in the marketplace that we're actually quite excited about. And and generally, you see, you know, really, I would say AV tech was based on heuristics, a bunch of if thens based on different scenarios that were being built. And we're seeing players like Waymo and a number of others, you know, move more and more the heuristics logic into large transformer models to create more flexibility, better scalability, better cost, etcetera. And those kinds of models also have the benefit of not having to be overfipped to a particular compute or hardware or sensor stacks as well.

[Dara Khosrowshahi, CEO & Board Member at Uber]

They're generalizable in terms of where they drive, and they're more generalizable in terms of the hardware kit that's necessary, the sensor kit, etcetera. So that is all moving in the right direction as far as separating the software stack from the hardware stack. I think a lot of you probably saw the announcement of Waymo partnering up with, with Toyota. That's just indicative we think of where AV is going, which is you've got, pure play software developers, increasingly, offering, more sophisticated, AV platforms, to the OEMs around the world and a world in which, you know, ten years from now, every single new car sold, comes with level four, level five AV, we think is a terrific outcome in terms of safety for the streets and also our platform which will allow, you know, any player, any owner of those vehicles, whether it's financial institutions, etcetera, to monetize those vehicles at the highest utilization so that they've got the lowest cost of capital. So the direction that we're seeing is absolutely it's very encouraging.

[Dara Khosrowshahi, CEO & Board Member at Uber]

There are some players out there that are are pure, call it, next generation large models, end to end models as well. You know, these are the waves or the lobbies of the world in in trucking or momenta as well. And that is a more pure AI kind of direction, which has been incredibly promising in terms of the pace of development and, again, the generalizability of the software both in terms of where it's driving and the hardware kits as well. So the innovation that we see is is pretty incredible. We are obviously working with many of these partners around the world.

[Dara Khosrowshahi, CEO & Board Member at Uber]

I think we've got a excellent point of view as to who the leaders are, and you're seeing us partner with many of the leaders in the industry. So hopefully more to come. And, you know, we've announced, I think, five partnerships in the past week. It is coming fast and furious, and and the the innovation and the development there is pretty exciting for us.

[Ken Gawrelski, Analyst at Wells Fargo]

Thank you both.

[Dara Khosrowshahi, CEO & Board Member at Uber]

You're welcome.

[Operator]

Your next question comes from the line of Shweta Khajuria with Wolfe Research. Please go ahead.

[Shweta Khajuria, Managing Director at Wolfe Research LLC]

Thanks a lot for taking my questions. I have two on delivery, please. Dara, could you please talk about your affordability efforts in your letter you talked to four key areas and affordability was one of them. So if you could please expand on that, that'd be great. And then the second is just in Europe in particular, have seen now you have a majority stake you just announced and then DoorDash announced deliveries.

[Shweta Khajuria, Managing Director at Wolfe Research LLC]

So could you please talk to that market? How fast is it growing? What is the competitive landscape look like there? And how do you view consolidation? Thanks a lot.

[Dara Khosrowshahi, CEO & Board Member at Uber]

Yeah. Absolutely. So in terms of delivery, we we are very focused on affordability as it relates to delivery as well. And the two efforts that I would point out, you know, one is membership. So membership essentially is, our, lowering prices, no delivery fee, for example, for members, and and for the most loyal, customers that that we've got.

[Dara Khosrowshahi, CEO & Board Member at Uber]

Members tend to have high retention. They spend three times more than, than nonmembers as well. And our membership program now with 30,000,000 members is delivering billions of discounts, so to speak, for for those members. And our penetration of membership continues to increase on delivery. It's over 60% now.

[Dara Khosrowshahi, CEO & Board Member at Uber]

And in certain markets, it's it's at the 70 plus percent, mark as well. So we think, you know, more members getting better deals, getting more discounts is is a good thing, and and that's part of our business that continues to grow. The second area of focus that I point out are what we call merchant funded offers. These are essentially offers that merchants can put into the system. I just enjoyed one a couple of nights ago.

[Dara Khosrowshahi, CEO & Board Member at Uber]

It's kind of buy one, get one free or other kinds of discounts. Merchants like those discounts because, you know, their cost of food isn't necessarily they they get to kind of use the cost of food as as the discount, and and and they can enjoy a margin on their on their food. And we're seeing higher and higher percentages of merchant funded offers in the marketplace. Merchants who who put these offers into the marketplace increase their visibility in the marketplace and are able to increase their sales in the marketplace as well. We're seeing growth in both and we think that is partially responsible for the consistently high gross bookings growth that we're seeing in delivery both in The U.

[Dara Khosrowshahi, CEO & Board Member at Uber]

S. And internationally as well. And then to your question in terms of competition, especially in Europe, we're really, really happy about our results in Europe. We recently, we believe, got to the number one category position in The UK with Eats entirely organically. We didn't have to buy our way into Glory, so to speak.

[Dara Khosrowshahi, CEO & Board Member at Uber]

France remains a top market for us, and we think that Germany, for example, is a market that holds a significant amount of promise. I think we launched in Germany Three To Four Years ago and our category position continues to increase in Germany as we invest in that market both on the mobility and delivery side. So we're seeing very encouraging trends in Europe. And frankly, it's not a surprise to see some of our competitors, look to expand there inorganically. We like organic expansion more.

[Dara Khosrowshahi, CEO & Board Member at Uber]

We've been investing for years in these marketplaces, and I think it shows in our results.

[Shweta Khajuria, Managing Director at Wolfe Research LLC]

Thank you, Dara. That was helpful.

[Dara Khosrowshahi, CEO & Board Member at Uber]

You're welcome. Next question?

[Operator]

Your next question comes from the line of Michael Morton with SVB MoffettNathanson. Please go ahead.

[Michael Morton, Senior Research Analyst at Moffettnathanson LLC]

Good morning, everybody. Thank you for the question. One on delivery and then one on mobility. For delivery, as we see the continued adoption of these large language models introducing shopping experiences, They seem to be preferring different retailers than, let's just say, the two giants in which we're all aware of. And it seems like a natural opportunity for Uber to work in partnership with these retailers you already work with to deliver the local inventory.

[Michael Morton, Senior Research Analyst at Moffettnathanson LLC]

So Dara, I was curious any possibility of partnerships with the ChatGPTs of the world? And then I think one for Prasanth on the sparse market. Could you talk about the duration of this opportunity and the ability to continue offsetting some of the natural deceleration you've seen in some of your urban markets? And then maybe help investors think about the margin profile of the sparse mobility markets compared to your core kind of urban markets? Thank you so much.

[Dara Khosrowshahi, CEO & Board Member at Uber]

Yeah. I think on delivery and large language models, you know, we're we're very, very early in terms of the development of these of the models and their application to consumer experiences or enterprise technology. And I wouldn't say that right now our focus is to kinda push volume from one merchant to the other. It's really to focus on improving the customer experience. And and, you know, it starts in smaller ways.

[Dara Khosrowshahi, CEO & Board Member at Uber]

So for example, we're using larger models in terms of our restaurant and grocery search so that we understand more about the context of the consumer. We get to know the consumer more, and we're able to to surface better results, higher quality results in terms of search, in terms of the sort order of restaurants that we're offering you or the promotions that that that we're offering you as well. And then we absolutely are working with OpenAI's of the world and the other leading LLMs and LLN companies in terms of some of the agents that are being built and being able to offer kind of a Uber experience that is seamless and delightful that you can talk to as well. I stress that it's very, very early in experimentation phase, and, you know, we're gonna be working with them to to understand what the possibilities are. We have unique access to transportation inventory.

[Dara Khosrowshahi, CEO & Board Member at Uber]

We are global, obviously. We have human drivers. We have AV drivers. We have food available, grocery available. So I think we're kind of the partner of choice for many of these players.

[Dara Khosrowshahi, CEO & Board Member at Uber]

But right now, the focus is how do you build consumer experiences that are delightful? How do you make every single service of ours a little bit more optimized for consumers. And then, you know, we'll deal with the after effects later in terms of merchant concentration. It's just not something we're focused on right now. Prashanth, you wanna take the other one?

[Prashanth Mahendra-Rajah, Chief Financial Officer at Uber]

I will. I'll take the second one. Thanks for the question, Michael. Maybe I could start with just a gentle correction to a comment you made about deceleration. It may surprise folks to know that the vast majority of our top 20 cities are still continuing to grow at double digit rates.

[Prashanth Mahendra-Rajah, Chief Financial Officer at Uber]

So we we are still very, still seeing very strong growth in our in our core areas. But what we do see is we see the opportunity to, to increase the length of time that that core business can grow at attractive rates by investing into these sparse markets. And we're already seeing great indications, for example, in mobility. I think I'd already mentioned that 20% of our trips are now, coming from, sparser markets, and those are growing even faster than, than the urban core. Having said all that, I think, the the way to maybe to capture all this is once these markets hit sort of the the the full investment profile and they're running they're running well, margins are very much in line with what we see in our other markets.

[Prashanth Mahendra-Rajah, Chief Financial Officer at Uber]

And the rate at which we're investing is we're we're we're launching hundreds of new cities in 02/2025. So there's plenty of room for us to run here. Obviously, there's an investment period before they before they achieve those, those more continuity level margin profiles. But that's all part of the growth opportunities that we see in front of us.

[Balaji Krishnamurthy, VP - IR at Uber]

Great. Operator, we'll take our last question, please.

[Operator]

And your last question comes from the line of Nikhil Divani with Bernstein. Please go ahead.

[Nikhil Devnani, Analyst at Bernstein]

Hi, thanks for taking my questions. I have two on Mobility please. First, how should we think about the slope of deceleration in Mobility gross bookings over the next year? Q1 stepped down by several points and maybe that's just pricing and mix given the trip growth comments, but how do we get comfortable with Mobility bookings not decelerating more aggressively here in the quarters to come? And then separately, a follow-up on the less dense markets.

[Nikhil Devnani, Analyst at Bernstein]

Do you think the frequency opportunity in these markets is the same as your larger cities? I would imagine there's far more car ownership and some reliability differences. So how do you think about the opportunity set on a frequency basis relative to your core urban centers? Thank you.

[Prashanth Mahendra-Rajah, Chief Financial Officer at Uber]

Thanks, Nikhil. I'll start and then hand off to Dara. I think the you know, if you if you go back to the to the algorithm, it is bookings equals trips times our, our average, our average price. And if you look at the strong growth that we've been putting up over the last several quarters, those have all been built on top of a 19% year over year trip growth for the last three quarters. And our our indication is that q two is going to be in similar, similar vein.

[Prashanth Mahendra-Rajah, Chief Financial Officer at Uber]

The the contributor to that, to those trip growth continues to be heavily led by audience growth. And so that that narrowing of of the delta between trips and gross bookings is coming from, as I mentioned, a little bit of mix, because we saw higher international mix and the the favorable, versus expected delta on insurance costs. So we would we would sort of, I guess, softly let you think about balance of year gross bookings should you shouldn't be looking for a deceleration. You should be looking for that trip growth to continue to be led heavily by by audience growth, and and then we'll we'll have to see what where the where the pricing opportunities continue to be provided by insurance.

[Dara Khosrowshahi, CEO & Board Member at Uber]

Let me feel like I just add in terms of mobility trip growth as well is that the base trip growth, the core trip growth is supercharged by the growth in less dense areas as well and some of the growth that's what we've had, you know, in terms of lower cost products. Two wheelers and three wheelers are growing incredibly quickly. Our taxi business continues to grow. You know, we have the we're not even close to the majority of taxis in the world. And as we add more taxi supply, trip growth continues to grow and kind of extends the runway of our growth there.

[Dara Khosrowshahi, CEO & Board Member at Uber]

And then, of course, shared, you know, rides both in terms of high capacity vehicles that bring the price envelope down and or x share our products that essentially allow, you know, single driver to serve multiple riders as well. So we got a business that continues to have a lot of growth runway. We're expanding into new markets, both geographically, but into less dense markets. And there's a whole portfolio of newer products that continue to grow, faster than the core, so to speak, that have substantial runways ahead of them. In terms of frequency, in the less dense areas, you know, the the our less dense initiative really started with delivery.

[Dara Khosrowshahi, CEO & Board Member at Uber]

And what we're seeing is that in in those markets, you know, you actually typically have families ordering, etcetera. And the frequency that we see in delivery continues to grow in both dense markets and less dense markets. So So it's unclear as to whether expansion into less dense markets would hurt frequency on the delivery side. It's certainly frequency continues to increase in delivery. So we're very happy as it relates to those results.

[Dara Khosrowshahi, CEO & Board Member at Uber]

On mobility, I do think that you're right. People will have car ownership will be higher in suburbs, etcetera. So I would expect frequency and mobility as we expand into these lower devs less devs areas to be a headwind, I do think that price will be a tailwind especially as it relates to reserve. In some of these markets, people kind of use reserve in order to drive reliability in the suburbs. About 40% of reserve trips are now not related to travel as well, so it's becoming kind of a everyday habit going out to dinner.

[Dara Khosrowshahi, CEO & Board Member at Uber]

And I do think that the concentration of reserve in these less dense markets is gonna be higher than in urban markets as people are willing to pay a premium for higher reliability in these less dense markets. So I do think frequency will be lower, but I think pricing and margins as it relates to product mix will be higher.

[Nikhil Devnani, Analyst at Bernstein]

Thank you both.

[Dara Khosrowshahi, CEO & Board Member at Uber]

Alright. I think that's it, operator, for the call. Thank you everyone for joining us this quarter and a huge thank you to the Uber team as well as our partners. None of this will be possible without the hard work of your team of the team. So thank you to the team, and we'll see you next quarter.

[Dara Khosrowshahi, CEO & Board Member at Uber]

And hopefully, this will be the start of a strong year for the company.

[Operator]

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

Participants

Executives

• Dara Khosrowshahi, CEO & Board Member
• Prashanth Mahendra-Rajah, Chief Financial Officer

Analysts

• Balaji Krishnamurthy, VP - IR at Uber
• Douglas Anmuth, Managing Director & Internet Analyst at JP Morgan
• Eric Sheridan, Analyst at Goldman Sachs
• Brian Nowak, Managing Director at Morgan Stanley
• Ross Sandler, Analyst at Barclays Capital
• Mark Mahaney, Senior Managing Director at Evercore ISI
• Justin post, Analyst at Bank of America
• Ken Gawrelski, Analyst at Wells Fargo
• Shweta Khajuria, Managing Director at Wolfe Research LLC
• Michael Morton, Senior Research Analyst at Moffettnathanson LLC
• Nikhil Devnani, Analyst at Bernstein