Uber Technologies Aktie

Okay. Good afternoon, everyone. Thank you for joining. My name is Nikhil Devnani. I'm Bernstein's U.S. emerging Internet analyst. I cover a range of marketplace businesses for us here at Bernstein, including Uber. It's my great pleasure today to have with me Balaji Krishnamurthy, Uber's newly appointed CFO. Balaji, welcome to the SDC.

Thank you.

Before we get started, I want to remind everyone to please refer to the Investor Relations website from Uber for any disclosures. And if you would like to submit questions for this session, you can do so via the QR codes available to you.

Now Uber needs no introduction. I'm sure everyone in this room is a consumer, but just to set the stage a little bit, the business is truly a global scaled platform now doing about $190 billion plus in gross bookings volume, supporting over 200 million monthly active customers. And there's a lot that I want to get into regarding the core business very soon. But I do feel it's most topical to start with the news that hit over the weekend regarding Uber's reported interest in Delivery Hero.

Now I know Balaji, there's only so much you can really talk about at this point on this issue. But we've looked at this deal from our point of view as well. Strategically, it's interesting. It's also a relatively large deal. So I would just love your perspective and some commentary on why this might be the right use of capital for Uber really at this point in time because I think there's a lot of demands on the business today. There's organic investments you're making. There's AV investments you're making, you have a capital return program you can lean into as well. So why would a combination like this make sense for Uber today?

Great. So maybe I'll start by talking about our approach to capital allocation, our M&A philosophy, and then I'll touch on Delivery Hero specifically to the extent that I can comment on it. So if you think about the approach to capital allocation that we have taken, it's been consistent, and I'll just remind everyone how we think about this. The first priority for us is reinvestment into the core organic efforts that we have.

And we've been in a very, very fortunate position that with the scale that Nikhil just alluded to, we've still been able to find a number of growth opportunities where the returns for us have been very attractive. And just to put a finer point on it, over the last 3 years, our gross bookings have grown 1.7x. and our free cash flow has 10x in that period of time. And so it's just really a proof point for the sort of reinvestment opportunities we have seen, and we continue to see those in front of us.

So that will be the first priority. Once we've done that, we still sit with about $10 billion of annual free cash flows that we're generating and then we think about what -- how we reallocate it in the best way. The first priority for that reallocation is our investments in supporting our EV strategy, right? We are going to invest to future-proof ourselves against the opportunity that's in front of us. We think this is going to be a massive TAM expansion for Uber, and we're making appropriate investments against that.

Then we think about M&A, and we will look at selective M&A, and I'll spend a minute on the sort of focus areas for us and what kind of parameters we look at when we think about assets sale.

And then finally, once we've reinvested for organic and inorganic efforts that meet our ROI hurdles, we then have excess capital that we are returning to shareholders through our buyback program, and we'll continue to do so, right?

So maybe let me go back to M&A and talk about the M&A philosophy that we employ. For M&A, when we think about assets, the first bar they have to meet is that they have to fit with the core strategy that we have and it needs to be an asset that can accelerate our organic efforts complements us in some way that we don't have capabilities.

Then as we think about what are the core strategic objectives that an asset needs to meet, we are looking for assets that either help us expand our TAM, broadens out our platforms, distribution capabilities or brings us new capabilities from a technical standpoint that we may not have in-house.

And then we are going to hold a pretty high bar for any acquisitions that we are undertaking. And I think it's instructive to spend a minute on thinking about how we define that high bar internally. For us, the bar that we are thinking through is, does this asset meet the strategic objectives we are talking about, and it does it meet multiple strategic objectives because that becomes easier for us to underwrite.

The second piece that we are thinking through is, do we have a clear plan from offer to regulatory approval to integration? And on the other side of this, we should have high confidence that we can drive a lot of accretion on an adjusted EPS basis because the alternative is that we can buy back our own stock, right? And we have a lot of visibility into our own business, and we can do that with high conviction. So that means that we should be able to say, if we make an offer, do we know what the antitrust regulatory approval process looks like, do we need shareholder approvals? Do we have a path to getting that? And then do we have a clear integration plan that we can put on paper today or through the process and then go execute once the deal closes.

So all of that, if they are met, then the last check that we have to do also is, is this asset available at a reasonable price? Again, we don't want to overpay for acquisitions, even if it meets all the other criteria for us, right? So that's kind of the construct with which we operate.

So let me come back to Delivery Hero with all that backdrop in mind. So what we have publicly announced is as of yesterday, we have exposure to about 37% of Delivery Hero. And what Delivery Hero has also publicly said is that they're actively reviewing strategic options for the company, right? And with the position we now have, we have a seat at the table for the outcomes that may emerge from the strategic review of Delivery Hero.

I think what we have found interesting about Delivery Hero in the past, and we've said some of this in the past is they do have some assets, some markets that are quite attractive where they have executed really well. They have a strong position, they're quite profitable in those markets. And markets that can be quite complementary to our Mobility presence as well.

So if you think about the Middle East, for example, where we have a very strong Mobility presence, we don't have a Delivery presence and that can be an interesting combination for us, right?

Similarly, they have very strong organic positions in markets like Argentina, Korea, et cetera, that could be interesting as well.

Then as you look at the remainder of the sort of framework I laid out, we know that given our global platform, scale and advantages on that front as well as the global tech stack, which is best-in-class that we can replicate for any assets we acquire, we feel pretty confident that the accretion opportunities should we undertake any kind of transaction would be quite meaningful and that is attractive to us.

And then finally, as I said, it needs to be at a reasonable price. So for anything to happen, it would have to be at a seller expectation that's reasonable. We have been quite disciplined in building out that 37% exposure that I just talked about, our cost base is in the low 30s, and that's basically what I can say at this point.

And when you just step back and think about the Delivery business globally and really the international portfolio, I think there's a lot of investor comfort and understanding with the U.S. market. It feels like a more stable market. It's getting more profitable.

I think international is more of a black box folks because there's less data, there's more competition or at least perceived competition. And so there's a question always about the quality of international growth and exposure versus domestic. When you look at the global lay of the land, how do you think about that difference?

Yes. I would say our Global Delivery business is quite underappreciated. First, we have, through the last few years, built out very attractive positions in some marquee international markets, right? We have a market-leading position in Canada, U.K., France, Australia, Taiwan and Japan, among others. These are all very attractive markets with a lot of untapped TAM still in front of them. And we are continuing to be -- we have that leading position with a pretty high margin output in these markets.

Now the interesting thing is even if you look at a market like Australia, which is amongst the most penetrated Delivery markets in the world, where we have a strong #1 position, we're still growing upwards of 30% year-on-year in that market with very high margins. And really, the opportunity that we have discovered is that we continue to expand in these parcel markets, which continue to be quite underpenetrated everywhere. And then on top of that, our grocery and retail efforts are kicking into high gear as well.

If you look at markets like Canada, U.K., Japan, all of these markets are growing at roughly 20% or higher and a market like Japan, for instance, has accelerated into that 20% plus growth territory that we're talking about. So quite attractive footprint that we have, and it complements our Mobility position in all of these markets very nicely.

Let's take a step back and talk about Uber in aggregate. A few years ago, you gave an Investor Day framework that pointed to mid- to high teens gross bookings growth on a compounded annual basis. You've been exceeding that. You talked about high [ 30s ] to 40% EBITDA growth, and you're well on track there.

As you look forward to the next 3 years for you as a new CFO in the seat, right, what are your strategic priorities? And what does that financial framework look like for Uber going forward?

Yes. So maybe just stepping back. My previous role before taking on this role was running the P&L for both Mobility and Delivery. So -- if you think about the strategy that we've been executing, I have been involved with that through the last few years. And with that sort of a lens, I would think about the path forward as a continued refinement of what we're doing versus something that we need to change, right?

And as I said, we are in a good position with that healthy growth with continued operating margin leverage that we have been demonstrating, and we want to execute on that kind of footing going forward as well.

To just respond to the sort of 3-year framework that Nikhil just reminded everyone of, for Q1, if you looked at it on a 3-year trailing basis, our top line compounded at about 20% CAGR relative to that mid- to high-teens CAGR that we had laid out for 3 years. Our profits compounded at about 50% CAGR in that period of time relative to the high 30s to 40% CAGR we were talking about. And then the free cash flow conversion was north of 100%.

So a very, very healthy position that we sit in as of Q1. And what we are looking for and our outlook for Q2 again was 18% to 22% growth for gross bookings. We are showing continued profit margin expansion against that. And we just want to keep doing more of that. And the goals here are unchanged: invest behind the platform, invest in product innovation, drive operating leverage through disciplined cost management. And then if we are doing that blocking and tackling well, we remain in a good spot to sustain that mid- to high teens kind of top line trend line.

The cross-platform push for the last few periods, I think has been clear to see, and it's all getting tied together now with Uber One. It is somewhat surprising to me, though, that you still only have about 20% of your Mobility and Delivery audience that's actively engaged and eligible to engage across both apps actually doing that. So why do you think that number isn't higher? And what do you think needs to happen to get it to go higher?

Yes. So it's a great question. I think the backdrop for that, the first thing you have to ensure when you're building these kind of businesses that fit together but are distinct categories on their own is that you have to build businesses that are individually really strong in every market that they're operating in, right?

So there's a lot of base level work you have to do to ensure that your Delivery offering is as good as your Mobility offering because otherwise, you're cross-selling into a service, that could be inferior to what you have on the other side. And our first -- and vice versa, right, where Delivery may be stronger, Mobility has to be as good. So our first objective over the last few years, as we've thought about our platform is to ensure that we have best-in-class individual services, right? So when you think about that 20% overlap that you just articulated, these cross-platform consumers are quite valuable for us, but I would think about that as largely an output of what we have been doing rather than something that we have driven up in a concerted way, which is something that we have started doing much more actively over the last year to 2 years, right?

So meaning that we built really good businesses and naturally consumers converged on to both, and that is roughly a good portion of the 20% overlap that you're seeing there. And now we are building out the motion to actively say, how do we convert this consumer from Mobility to Delivery or vice versa? How do we ensure that the value to the consumers is higher if they're engaging on both sides of the platform? And do we target our consumer acquisition efforts in a different way?

So what we have started doing is if you look at our app now, we are starting to roll out our universal search feature, One Search, which effectively says if you're on our Mobility app and you search for a restaurant you may be wanting to go to that restaurant or we can show you that you can also get a delivery from this restaurant in the future. Or if you're searching for a burger on the Eats app maybe you want to go to a burger -- hamburger store, right? So those kind of overlaps are beginning to happen for us.

Then the other piece that you have -- we've actively been doing is our Uber One push, where roughly 2/3 of our Delivery gross bookings are coming from Uber One and only 1/3 of our Mobility gross bookings today is coming from Uber One. And roughly 50% of our overall gross bookings is Uber One. That convergence for Mobility as it increases it starts driving increasing overlap of consumers as well.

And then I think when we look at the best-in-class markets where we have pushed higher on this metric, we're over 25% in those markets already on the overlap, right? So there's opportunity that is untapped here and the ceiling, we don't yet know what it could be, and we'll keep grinding towards that.

If you think about the business at a cohort level, Uber is no longer a new service. Everyone is broadly familiar with it. So what have you observed in terms of the size of the new cohorts you're acquiring? And now that you have an integrated platform, what happens to the observed frequency and retention of these cohorts with this broader platform approach?

So the good news is, if you think about the 200 million MAPCs that we had in Q1, roughly -- we are still driving a lot of audience growth for our platform. We have talked about 16%, 17% kind of growth on audience for now multiple quarters. And that has been the predominant contributor to a growth algorithm as we come into this year.

When you think about new consumers within that 200 million MAPCs base, we added roughly 40 million first-time users in just Q1, right? And that number is 40% higher than it was 3 years ago. So we have continued to not only drive new user acquisition through the sort of markets that we have operated. It's really a product innovation led story where when you think about what has contributed to that first-time user growth, if you look at our Mobility business, roughly 25% of our first-time users in the quarter were coming from our -- the two ends of the barbell that we've talked about, both the new affordable products and the premium products that we've been adding.

Similarly, for Delivery, a good contribution is coming from our grocery and retail efforts, which you would think hypothesis would be that you have all this base of online food delivery consumers, and you can sell them grocery and retail offerings Well, it turns out you can actually acquire consumers who come to you for grocery and retail and then convert them to online food delivery as well, right? So the product-led growth that we have has been very meaningful.

The second piece is, of course, we're showing up in markets where Uber has been underrepresented. And our sparse markets push that we have talked about for both Mobility and Delivery has been very important there. And then finally, as you look at the new market expansion efforts as well, again, that continues to be a theme.

From a retention and engagement standpoint, we are seeing continued strong retention of the cohorts we're acquiring. And again, Uber One tends to play a pretty big role in that retention effort. And then engagement you've seen the trend lines it's marching up steadily as we have gone through the last few years.

Our expectation is that until we are adding new consumers, engagement growth will be somewhat subdued because there's a downward pressure from the new consumers that you're adding, but that's healthy. And in the long run, as these cohorts mature, you should see some handoff to frequency lifts as well.

On that barbell approach for the different product suite you now have within Mobility, is that widely available to consumers across your main markets? Or is there because you know you have product market fit in certain things now, right, like Reserve and Wait & Save, you know these products resonate with consumers. Are those already widely available? Or can you land and expand them? And is there a low-hanging fruit in just taking them abroad to other regions?

Yes. So the beauty and difficulty of having a global business is that you're going to have a lot of products that you can scale globally instantly and there will be plenty of products that you can only launch in a local market, right? And that's fine. We -- It means that our teams are always on top of a lot of innovation efforts across the footprint that we operate in.

So maybe I'll give you a couple of examples. When you think about a product like Reserve or Teens, right? Those have global resonance. When you offer a reservation offering to consumers, there's no reason why it should be only in the U.S. It can launch in Brazil, it can launch in the U.K., it can launch in Australia. Wherever you operate, you can just go with that product pretty quickly. Teens is a similar product. You have to gear it for local regulations differently, but ultimately, it's a product that works everywhere.

When we think about a product like Moto, there is a market adoption that you have doing through as well. And it works very well in Brazil, and it will not work in the developed markets, and it might not even work in some of the emerging markets where there is not a 2-wheeler culture, right? So when we kind of find ourselves with that kind of a really resonant product in one market, but we don't see fit for that in other markets, it forces us to go back to the drawing board and say, "clearly, affordability matters and it drives a ton of new customer acquisition for us. How do we ensure that we have an affordable product available in these markets?" And the answer for the U.S. has been Wait & Save, right? Wait & Save as a product has had nearly double the fit in sparser markets than other products that we have launched, similar to Reserve, by the way. And then secondly, from an affordability standpoint, it has the resonance across the U.S. And in a lot of other markets, it will have the same sort of role to play as well. So I think it's a combination of those things, and we remain nimble to address the opportunities.

And in aggregate, the Mobility business started accelerating in the back half of last year, when you came into 2026, you explicitly called out an expectation that the U.S. business would improve both on a trips and bookings growth basis. So can you maybe elaborate on, I guess, the drivers of that U.S. improvement? And really your conviction level in that playing out as you look at the balance of the year here?

Yes. So again, as a reset for folks who may be newer to the story, the arc for our U.S. business versus our international business over the last 4 to 5 years has been that the U.S. has seen a very, very inflationary insurance environment from -- starting from COVID, but truly from 2022 to 2024. And international markets where that isn't necessarily an issue, we did not have a real inflationary headwind as such, right?

So what that meant for consumers was pricing in the U.S. rose as a response to the inflationary headwinds we faced. And international markets, that was not necessarily the case, and consumer pricing was much more stable in that period of time.

So coming into 2025, what we saw was our U.S. business had decelerated significantly whereas our business in Europe and LatAm, which have similar or even higher penetration in some cases, was still growing 30% year-on-year. So it just created this really remarkable A/B test for us on pricing, which if you think about it, it's long-term elasticity that we were seeing at that point of time.

So in 2025, given our work on policy reform for insurance, we started seeing some relief, and we started -- our philosophy has been consistent, and we've been articulating this consistently to investors as well. When insurance was a headwind, we priced it to consumers, when we find relief against insurance costs, we passed it back to consumers and not really look at it as a profit level for ourselves. So that reform theme has continued to play through 2025 and 2026. And by the back half of 2025, our U.S. business started reaccelerating. And coming into this year, we said that we expect hundreds of millions of dollars of savings from the reform efforts that we have here. And that is a natural tailwind that we expect we can pass on to the consumers.

The second thing that we have learned and to your question of why we had more confidence in May versus February. We've also concluded our rate renegotiations in March, which is the annual rate renegotiations we have to do with our carrier partners. And at this point, we have confidence that the rate increases are in the low single-digit percent, which is kind of the most benign we have seen in many years for insurance costs as well. So that has been a big theme, right?

Then the second piece is, again, going back to the barbell, the product adoption that we are seeing for our Wait & Save product is quite attractive. We've also recently launched Elite, which is the premium end of the spectrum, which we will continue to roll out across markets. And then U4B continues to grow at twice the rate of our overall Mobility business. So that's a big driver.

And then finally, the sparse markets effort in the U.S. as well, where we are seeing double the growth of our dense markets. All of those together continue to give us quite a lot of conviction in seeing trip and gross bookings acceleration in '25 versus 20 -- sorry, '26 versus '25.

I'll have to say Bernstein will let me try the Elite product as it rolls out.

They should.

I should.

You earned it.

Look, I feel like every -- I want to talk about AVs, which is a huge theme in the space, obviously, and every, I think, difficult question in AVs comes back to this idea of will the technology fragment out over time or not? Will there be many software providers in this space or not?

When you look at the subset of partners you're working with, both in the U.S. and abroad, what are the data points that give you conviction that, that is how this market will evolve over time. And there is not, in fact, a big, big gap that exists between Waymo and what everyone else is doing?

Yes. So I think the way we see AV, and I said at the outset, we think about AVs as a huge opportunity. Uber has, throughout its history, been a supply-constrained business, right? And AVs give us an ability to tap into a completely new sort of supply pool that will expand over time. And we remain excited about the intersection of autonomous vehicles with humans, and it should hopefully put us in a place where human drivers, jobs become easier and better and AVs can come in and complement the sort of rides that human drivers are providing today.

What we expect will happen and what we are working on ensuring is the outcome here is multiple AV software partners that get over the finish line of L4 commercialization, both in the U.S. and in international markets. And what we are seeing right now is today, there are two scale players, truly scaled players and the scale is still relatively small, but Waymo at about 0.5 million weekly trips in the U.S. and Baidu at about 350,000 weekly trips in China. And then WeRide and Pony are the two other players who are fast catching up to that. And I know Pony recently said they will have about 3,000 cars on the road by the end of this year as well.

For the Chinese players, they are looking at expansion out of China, and they're beginning to expand into a number of international markets. And we've already launched with WeRide, for example, in Abu Dhabi and Dubai, and we have announced expansion with both Pony and Baidu as well in other markets, right? So there's a lot of activity coming from those players in the Middle East, Europe, et cetera, in the next year.

So for international markets, our thesis already exists to a large extent and what we are looking for and what we expect is every jurisdiction is going to look for some local winners. And we fully expect that players like Wayve will get over that finish line as well and start deploying in markets like London, Tokyo, et cetera, in the near term. So international markets, I think there's plenty of proof points. That's where the world is going.

For the U.S., right now, we are working with a number of partners who are at various stages of getting to that commercialization effort. And I would say the few -- just to name a few, in the near term, what you would see from us is the first 1 is going to be our launch with Zoox, which for those who haven't followed this space closely is backed by Amazon. Zoox is live with their L4 deployments in both Vegas and San Francisco right now with a relatively limited number of cars. And as they continue to expand out, they're going to partner with us in Vegas first and then in a market like Los Angeles next year, and they will be driver out by definition from the start. They don't even have steering wheels, right?

The second partner that we are looking at making good progress with is Nuro, which we have said that by the end of this year, we expect to be live with them in Bay Area with the commercial deployment. We are already doing early rider testing with them in the market. So we feel pretty good about that.

And then Wayve, which I mentioned for London and Tokyo, we continue to explore whether they could be launching in the U.S. as well.

And then finally, NVIDIA has been quite clear that they're targeting this category quite actively. And their approach here is interesting, and they're going to be building into this space.

To augment all of those partners -- and by the way, there's a number of others who are coming out to market on a longer timeline, but we're equally excited about them. But to augment all of their efforts, we're building a suite of services we're calling Uber Autonomous Solutions. The most notable of the offerings there is our data collection effort. If you think about what is a big bottleneck to software development and the training of these models, it's rich data that can show the model all of the edge cases it will encounter in the real world. And guess what, our trips at about 40 million trips a day. We see every edge-case that can exist multiple times a day around the world. So we are beginning to deploy sensor-kitted vehicles on a fleet of Uber-driven vehicles. And these will be deployed into regular Uber trips generating revenues for Uber and collecting up to 2 million miles of data by the end of this year on a monthly basis and scaling from there, right?

And then in addition to that data collect effort, we have multiple additional services offerings from customer support, insurance and everything else that you need to be able to deploy a commercial service as well. So I think there's a lot of activity that's going to come, which will help us prove out the sort of strategy that we've been articulating and we feel confident that will be the case.

The final thing I'll say here, though, is -- it is important to remember that physical AI, as in terms of deployment in the real world is not as frictionless as virtual AI deployment in the digital world, right? And what I mean by that is you're going to have multiple bottlenecks that will dictate how quickly AVs can roll out across the markets. Software, which looks mature, will still run into issues, whether it's related to weather or stalled traffic lights in a city, and you will see these defleeting events that we have been seeing from various players. So it's not a straight line. There will be fits and starts.

Then you've got bottlenecks on how quickly your fleet ops can scale out, how quickly you can build out the ground operations. And then OEM production is another bottleneck, you will be kind of dependent on how quickly supply hits the markets. And finally, regulations, again, are not a straight line, and you're going to have to address legitimate concerns from cities and states on labor substitution, congestion, safety, et cetera. Some of those questions very much were also there when Uber was scaling, right? So this is not a new theme. This will continue to be the case for AVs as they roll out across the globe.

Given what you just described there, what do you think a reasonable range of outcomes is in terms of how significant AVs will be for the Uber network as you look at 5 years or 10 years?

So 5 years, if you take that sort of a time frame, I think you have to start -- I'll let everyone build their own models. My view is it's still going to be relatively immaterial relative to Uber's global volumes, right? And even Uber's U.S. volumes, it's going to be somewhat immaterial in the sense that it will be a small percentage of the volumes that we're talking about.

And the reason I say that is because we are currently operating with a roughly 15 billion trip volume. Our global driver base is about 10 million. Both of those numbers have been growing about 20% year-on-year, right? So you're talking about a base business where we are adding roughly 3 billion trips year-on-year, whereas the global autonomous ecosystem right now is at about 50 million trips altogether. And whatever sort of exponential curve you expect on top of that in a 5-year period, it's going to be relatively immaterial, especially when you consider the bottlenecks that exist for AV scale-out.

In a 10-year period, we do think that this becomes quite interesting because at that point of time, you would have addressed a lot of the hardware scaling challenges. Hopefully, regulations have been resolved in a favorable way for the category as well, and the build-out that you need across our footprint, again, will be materializing at that stage.

So I think at that point of time is between that 5- and 10-year mark is where we really see that TAM expansion potential coming because the price point needs to start coming down for TAM expansion to materialize, right? So that's where you start seeing real scale out.

And how do you see the AV ecosystem looking in that future? What are the different layers to the stack there?

Yes. So I think there's going to be five clear layers to the stack with various kinds of permutations for how they are set up with different partners. But the stack in our mind is the marketplace, which faces the consumer. Then you've got the AV software players, which are developing software, you will have OEMs who have to make the cars. Then you have fleet and asset owners, right? So somebody needs to operate the fleets on the ground. They may or may not own the cars.

And then you will also have asset owners who have to own the charging stations, maintenance yards, et cetera, on the ground. So that's the fourth layer. And then the fifth is third-party financing that will be the capital that supports the build-out of that fourth layer, right?

So that's the setup we see. I would say there's going to be permutations of -- there will be players who want to go vertically integrated and do everything on their own. There will be others who are going to try and do some combination of that. But our view is fairly straightforward. We'll engage with partners across that stack, and we believe we have a right to win with the marketplace itself, and that's a focus area that we will spend most of our energy on with enabling efforts on everything else.

One of the questions we frequently get is the extent to which you are willing to or want to use your balance sheet to help this ecosystem come together. What's your perspective on what that looks like now and then what that might look like longer term as well?

Yes. So I think that's a good frame that you've put it in because there is a 2-phase approach to this. The first phase is what we need to do to get the ecosystem going, and then once the ecosystem is running on its own, how do we enable it on the other side of it.

So for the first phase where we are kickstarting both the software development effort, ensuring that the OEMs are coming to market and ensuring that the on-ground infrastructure, the fleet ecosystem is coming to life. We are taking a pretty active approach to handholding and supporting that development effort with our own capital.

So what you've seen us do is a few things. We have stepped in with equity financing for some of our software partners. There we've gone in and supported that sort of initiative. The two markets that we have tried to solve for are: One, can we do this with a milestone-based timetable where the capital is tied to sort of our partners meeting their milestones on a predetermined timeline. And two, does our capital enable these partners to raise external capital. And that has so far been a thumb rule of for every dollar that Uber has invested, our partners have been able to raise $2.5 to $3 of external capital against that, right? So it's turbocharged their ability to raise funding.

Then the second piece of investment that we have talked about is work with OEMs. And for OEMs, we have stepped in with some level of, again, similar equity investments in some cases. But more importantly, we have stepped in with offtake agreements, where OEMs know that the cars that they're producing, Uber is backing those cars rolling off their assembly lines. And the titles are transferable. So it doesn't necessarily mean that Uber owns all the cars because we can get our fleet partners to step in and own those cars as well.

And ultimately, our expectation is that, that category will get fully financialized once you know what kind of revenue opportunities, lifetime -- useful lifetime and then residual value of those cars looks like.

The third piece that is the sort of investment that we have talked about here is really -- and this is going to be -- have the shortest timeline in my mind. It's the on-ground infrastructure investments that we're making today. And that's really designed to support the launches we have this year, next year and maybe start some part of 2028. Because there is a lead time to building out all that infrastructure and while our belief is that it's going to be owned by third parties over time and it likely will be owned in REIT-like structures, in the initial part, we need speed to market. And as we've said, by the end of this year, we want to be live in up to 15 markets globally, we're solving for speed here versus perfection on how it's set up, right?

So those are the three variations of major investments we're making. And then the fourth one is the investments we're making in Uber Autonomous Solutions, whether it's the data collection efforts or other things, which, again, are services that all our partners are going to need and over time can be potentially monetizable as well.

So that's Phase 1. Phase 2 on the other side of this, we do think the vehicle -- as I said, vehicles will be financialized. The assets on the ground will be third parties financing it. And really, when you think about our software partners, they should be viable entities that do not need Uber support once they have working L4 solutions as well. So we expect to remain quite asset-light on the other side of this transition.

You talked earlier about cost curves coming down, prices coming down, that being an opportunity. One of the questions we wrestle with is, as that happens, does that put downward pressure risk on your economics in these given markets. So what's your response to the bear case that this risk is becoming a bit of a race to the bottom on pricing and that pressure is your unit economics?

Yes so I would say this is -- the question is a little bit upside down. And I know you're articulating the bear case, I've heard it many times.

The scenario in which prices come down is a good scenario. And the reason prices are coming down is because software and hardware has become cheap enough and the scale of deployments has become large enough that your fixed cost burden on a per-trip basis is quite low. And when that happens, it means that consumer pricing is going down, right?

And I would say, if you go back to the history of Uber's original expansion, really. It was a wrong comparison to think about ridesharing TAM as what the New York Taxi Medallion system implied, and it ended up being multiples larger than that. The reason it happened is because, one, the service was better but also it was cheaper than taxis out of the gate, right? So it does make a big difference in how the TAM looks when you come out on the other side of this.

So as long as we have AV supply on our network and the prices are going down for the reason of the cost structure compressing, that's a great outcome because that means that the end market is much larger and multiples larger than what we have in the counterfactual scenario. And ultimately, what you would see then is even if the margin is lower, which I'm not sure that is -- I'm not conceding that, that's the case. But even if it is lower, the gross profit pool is significantly larger than what you would have had in the other counterfactual world of no AVs existing, right? So I think that's an important consideration to keep in mind.

I would also caution here that this is a relatively long-term question because as you think about the next few years, the hardware cost structure and the scale of deployments is not large enough for the price point to be below human drivers. And we've said in the U.S., the average Uber X trip is -- it costs about $2 per mile. So AVs have to be below that $2 per mile mark to be able to sustainably offer that price point to consumers, which is lower than Uber, right? So I think that's a world in which they're going to be matching Uber's pricing for the most part, maybe plus or minus 10%. And in that sort of a world, I would think about this as a question of what kind of economics are we setting up with our partners. And generally, we now feel pretty good that the partnerships that we've announced if they are able to deliver on the time lines that we're talking about, we should be in a pretty constructive spot where both our partners and Uber's economics are healthy and sustainable for a broader scale out from there.

I want to ask you about AI workloads, which are growing within Uber and growing within all of these tech companies. When you look at the compute needs and the cost of that compute relative to maybe some of the benefits you might be getting longer term with how you think about headcount more broadly, how do those 2 things net out in your mind?

Yes. So again, this is another theme that's been quite exciting, right? If you rewind over maybe an 18-month period, which is the time line in which AI adoption at Uber has inflected quite significantly. A year ago, if you'd ask me what kind of returns we're getting for the investments we're making, it would have been pretty hard to give you a clear answer on that because it was so early that we saw the potential from the capabilities that were being presented but we didn't really have any clear proof points on what we could get there.

Where we are right now is that since at least December, we've seen an exponential increase in the usage of AI tools in our developer force. At this point, 95% of our engineers are using AI tools on an ongoing basis. And that we are seeing that over 10% of the code going into production for us at this stage is autonomously written, meaning engineers are coming in only at the review stage before it goes into the production line, right?

So we are a culture, we're a company where the culture is. We want to have precision. We want to be able to say, for a dollar, we are investing, what is the return we are getting, and that's how we've run all the billions of dollars of incentives that we deploy.

I would say we're not quite there on AI investments for developer productivity, but directionally, it's a clear signal that what we are seeing is that for the investments we're making, we're getting a productivity lift. And if you ask me again in a year, we're likely going to be able to even quantify what kind of returns we're getting, right? So that's on the developer side, what we've been seeing.

The second area where AI is having a pretty big impact is on our customer-facing efforts. So customer support is the first area where we are making reasonable investments here. For us, we are doing about 15 billion trips. Every trip has at least two humans involved. So the surface area for customer support tickets is very, very large. And we -- as you can imagine, with the heterogeneity of our business across the globe and the sort of products we sell, we have a lot of policies for customer appeasement when it comes up.

I would say AI in this specific org is going to have a pretty meaningful impact and we're already beginning to see some cost savings and better quality of customer support outcomes for our consumers. And then finally, on consumer-facing Agentic users, we are beginning to work on first-party Agentic solutions on our apps, and we are also engaging with the third-party services there.

So maybe just the bottom line, though, is where we are today, we have enough conviction that the investments we are making here are driving productivity. And so what we have done is we have tempered the pace of hiring, and we -- and this is broadly across the company, but specifically from an engineering standpoint, the hiring ramp we have for the remainder of the year is significantly lower than what we thought it would be when we came into this year.

So we've got tempered hiring. We've got hopefully more fixed cost leverage coming through related to that. The Uber story over the last few years has been one of profit expansion quite substantially.

When you think about reinvestment opportunities and OI flow through to the bookings growth you're putting up, how do you think about that balance between the two? And how should we be thinking about your margin and your margin ramp from here?

Yes. So I think, as I said earlier, I don't think there's a big change in our philosophy. We have, over the last few years, delivered really attractive top line growth. And we have done that while delivering a lot of margin expansion against that, right? And it's been very much driven by operating margin expansion, driven by fixed cost items, but also just discipline on how we're thinking about all the discretionary levers that we have.

As we look forward, we have certainly tempered the pace of margin expansion relative to the historical norms. And the context there is important, right? We were coming from a world where Uber had been quite unprofitable, then it became barely profitable, and now we're getting to a spot where we are at a decent level of profitability.

So that second derivative certainly is changing the pace at which we're expanding margins is slower than we have done in the past. But it's not a function of our inability to drive more margin expansion, but rather a function of the opportunities we continue to find, both in Mobility and Delivery.

And so as long as we can sustain this mid- to high teens kind of growth engine, and it's coming from volume-based growth rather than from price. That's a good place to be as long as we can sustain that with healthy margin expansion beyond that growth, right? That means that we can compound our bottom line at a very attractive rate. And then, of course, we continue to do more optimization below the line as well.

Coming over the last couple of minutes here, we've talked about a lot of different themes across the business. How would you just generally sum up the direction that Uber is going in? What's the message you want to leave investors with? And what they should come to expect of you going forward over the next few years?

Yes. I would say, again, this is a business that has a meaningful impact on consumers and earners around the world. And we take that very, very seriously. It means that we have to be continuing to innovate and earn our place for that consideration that both our consumers and earners and merchants are giving us. And innovation is going to be top of mind for us to serve those audiences.

As we do that, we also have a high bar for the capital allocation that we need to do here. I talked about the priorities and the sort of inflection in our opportunity with AVs that we have in front of us. So we will invest behind that. But we are in a place where we can do that in a disciplined manner and continue to drive accretion over time and really reducing our share count remains a focus area for us as we go forward from there as well.

So what I would -- if I had to describe it in a sentence, I would say this should be a company, this will be a company that continues to be innovative remains disciplined and really drives a disciplined kind of financial model for our investors as well.

Maybe a quick final question there. Should we think about this as an "and" strategy between these different capital-allocation priorities?

Yes. I think I would very simply think about it as where we are and where we're going. So if you're looking at our free cash flows right now at about $10 billion and you project out the next 3 years, our free cash flow is growing at a healthy rate. So you can see the sort of free cash flow output that we are generating here. We've got -- we are a solidly investment-grade company. So we have plenty of firepower from our investment-grade rating as well. And we've articulated our financial policy clearly that we will not exceed 2x leverage, but that means where we are sitting with 1x leverage. We have plenty of room there.

And then finally, we've still got $8 billion or $9 billion of equity stakes on our balance sheet, which are we've been pretty clear. Most of them are financial investments for us, not strategic. So we'll look to monetize them when it makes sense.

So all of that put together puts us in this place where it's an "and". We can make investments in AVs, we can pursue some disciplined M&A, and we can continue to buy back our stock. So there's not really a meaningful trade-off in those from my mind. And what we're solving for is the best financial output that we can drive for the company.

Great. That's a great place to leave it. Balaji, thank you so much.

Thank you.

Hello, and welcome to the Uber First Quarter 2026 Earnings Conference Call. [Operator Instructions]

I would now like to turn the conference over to Alax Wang, Head of Investor Relations. You may begin.

Thank you, Sarah. Thank you for joining us today, and welcome to Uber's First Quarter 2026 Earnings Presentation. On the call today, we have Uber's CEO, Dara Khosrowshahi; and CFO, Balaji Krishnamurthy.

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.

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

For more information about factors that may cause actual results to differ materially from forward-looking statements, please refer to the press release we issued today as well as risks and uncertainties described in our most recent Form 10-K and in 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.

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

Thanks, Alax Wang. Uber had an exceptional start to 2026 driven by strong execution and a continued focus on product innovation. Despite a complex backdrop marked by war and weather, we delivered top line and profitability at or above the high end of our guidance.

Gross bookings were up 21% year-on-year, reflecting the durability of our platform, and that growth was once again trip and audience-led with our audience growing 17% alongside strong engagement. Our performance this quarter was balanced and broad-based.

Mobility gross bookings accelerated to 20% with record margins. Delivery grew 23%, led by grocery and retail and supported by strong retention and freight returned to growth for the first time in nearly 2 years. Importantly, we're scaling this growth profitably.

Non-GAAP EPS increased 44% year-over-year, more than twice as fast as our bookings growth driven by disciplined cost management and operating leverage. We also generated strong free cash flow and returned a record $3 billion to shareholders through buybacks this quarter.

We're also continuing to invest in the strength of our platform, which is compounding over time. We've now surpassed 50 million Uber 1 members and 10 million drivers and couriers globally, both important milestones that reflect strong customer loyalty an expanding number of order opportunities on our platform.

On the product front, our GO-GET event last week showcase how we're expanding Uber's role in everyday life across travel and local commerce. From hotel bookings and travel mode to new ways to shop and coordinate across our platform, these innovations are designed to deepen the everyday utility of our services and to build engagement and loyalty.

We're also making strong progress across our strategic priorities, including autonomous, where we continue to believe a hybrid network will unlock significant long-term value. We now have more than 30 autonomous partners across mobility and delivery and are scaling deployments globally. AV mobility trips grew more than 10x year-on-year, and we remain on track to be live in up to 15 cities by the end of the year, including new deployments in the U.S.

And with the launch of Uber Autonomous Solutions, we're building the technical and operational infrastructure to help our partners commercialize faster.

Looking ahead, our guidance reflects continued momentum, disciplined capital allocation and a clear focus on durable profitable growth.

And with that, operator, if we could open it up for questions.

[Operator Instructions] Your first question comes from Doug Anmuth with JPMorgan.

Dara, can you just talk about how the early benefits of insurance cost savings are playing out in L.A. and San Francisco? And what gives you the confidence in continued further U.S. mobility acceleration in '26. And then also just following up on GO-GET last week, how do you shift Uber users to more of an on-demand -- from more than on-demand mentality into booking hotels ahead of time, ahead of when it's needed.

Yes, absolutely, Doug. I'll start with GO-GET and then Balaji can jump in on insurance. We've always had an internal debate whether or not we can make the transition from on-demand kind of behaviors to more kind of preparing ahead, resorting ahead kind of behaviors. And it really started with the build Uber Reserve. We have thought about Uber Reserve as a product that we would build mostly for airport travel. We had some kind of feedback from the user as well the reliability Uber was awesome, but it's absolutely new that the driver was going to show up 15 minutes early, et cetera, it could reduce some of the stress as it related to travel.

And of course, it was a great opportunity for us to continue to increase travel bookings. And we've consistently seen our Uber Reserve service growth rates continue to grow well in excess of the mainline business. And as you know, the mainline business is growing at healthy rates as well. The margins on Uber Reserve are higher customer satisfaction is very, very strong, and now we're developing the Reserve service not just as a service for people to go to airports, but people to get picked up when they land in airports as well.

The experience with Reserve for us demonstrated our ability to go from on-demand to planned services, so to speak. Travel is a very, very natural category for us to get into. Airports are about 15% of our Mobility gross bookings and 40% of, for example, our U.S. riders take trips outside of their home city. And globally, just last year, we had over 1.5 billion trips happening outside 1 of our users' home cities.

So when you put that together, which is proving ourselves with Reserve, moving from on demand to kind of planning ahead and then the incredible audience and efficacy we have with the travel consumer hotels was, of course, a very, very natural expansion for us. We're very happy to have a relationship with Expedia. Their inventory second to none. So now we've got 700,000 hotels available on Uber as we speak. And we've taken most of the economics of that deal, and we are giving it back to or Uber One members.

Uber One members get 10% Uber credits. There's a rolling list of 10,000 hotels where you get another 20% off as well. So really, the focus for us is drive that cross-platform activity, give a bunch of money back to Uber One members. And obviously, you've seen kind of the momentum that we've had with Uber One with over 50 million members growing 50%. The retention rates are higher, they spend 3x more. It's our unique advantage that we have over our competition.

So we're very much looking forward to the product. We're really happy that the team put it together and happy about our partnership. And we're hoping hotels can be just as big as a Reserve. Balaji, do you want to take insurance?

Yes, sure. Thanks for the question, Doug. I'll level set first on where we are with our insurance journey. And as we said at the end of last year, we expect to see hundreds of millions of dollars of savings in our insurance line this year, thanks to the great work our policy teams have done as well as tech improvements we have implemented in the market. In addition to that, we also had our auto insurance renewals that went into effect in March, and we've seen continued improvement in rates there, which is also with the improvement in the market conditions here for auto insurance, we have found opportunities to also offload more risk to third-party carriers. And with that favorable market environment, we've taken opportunity -- taken advantage of that opportunity. .

So all in all, it's putting us in a place where this will be the first year since COVID where we expect to see good leverage on our insurance cost line for the U.S. Mobility business. And as we've said before, our philosophy has been to return that goodness back to the market and consumers see improvement in the pricing environment for Uber Rides on the system. So as a result of that, we are seeing really good elasticity. And as we would have expected, we have seen that price reduction translate to acceleration and trip growth.

And the overall California market growth has accelerated. If you look at LA, which is the market with the most significant insurance headwinds over the last few years, the trip growth trends there are significantly better than California and the rest of the country. And we expect to see this translating to accelerating U.S. business growth in 2026 as we've previously said, and we feel even more confident today than we did in December or January.

Your next question comes from Eric Sheridan with Goldman Sachs.

Maybe building on Doug's question, I wanted to go a little bit deeper in what you see as some of the critical technology investments you're making on the consumer facing side to tie all of these services together and layer in elements of personalization and recommendation. So increasingly, consumers know how to find these services on your platforms? And how much over time do you think some of that behavior will be more agenetic driven? And how does that again line up with what you're making on the investment side?

Yes, absolutely, Eric. So in terms of our tech investment and general investment, the one thing that I will highlight is it remains of utmost important for us to get the basics right. That means reliability as it relates to mobility, increasing selection of the kind of rise that you can get and seating reliability and selection and delivery. Those are kind of the core precepts and we think we provide the best reliability, best selection, both mobility and delivery globally.

And then once you do that -- and by the way, we seek to improve that every single year, you can add on services on top of that. And we think AI and agents provide a unique benefit in that 1 of the challenges that we've had in the past in terms of offering all of these experiences on our app, is that you have to build out UIs that essentially use our interfaces that are standard for all of your users. And the fact is that different users like to interact with our services in different ways.

And so if you have to kind of build a fixed UI for the majority or the optimized average of your users on a global basis, there are some users who may not see what you've got to offer or may prefer to interact with you in a different way. AI solves all that because essentially, the way that any user wants to interact with your services is up to that user. They can talk and they can ask whatever they want. Hey, search for hotels for me, get me an Uber to the airport, get me an Uber from the airport to the hotel, et cetera.

And the UI is whatever the user wants that you want to be. That creates unique opportunities for us to build out new services on our platform. And we think also affords a stability to drive cross-platform usage, which, as you know, is a very important strategic initiative of ours and a unique way in which we differentiate versus others.

The growth of cross-platform consumers is growing 1.5x faster than the overall growth of consumers. We're locking in consumers with our Uber One membership where they spend 3x more than others. And we're using AI, 1 to make sure that consumers can interact the way that they want to. So for example, card assistant, you can just take a picture of something that you see on the table or in a store or on a menu and will create a shopping cart for you, or earners can ask our AI agents questions about earnings, where they should go, when they should work, et cetera, and you can get the exact personalized answers for you.

And then we're using larger models to essentially upsell and offer products for you in a very, very personalized way. And that can work in very simple ways, like 3/4 at a time when you get a ride on an Uber we have preselected the destination for you. In other words, we anticipate where you're going to go, we offer it up as a card and 3/4 of the rides on Uber, we have successfully actually predicted with AI algorithms, where we think you're likely to go after work, you're probably going to go home, for example.

And at the same time, come up with upsells that delight and surprise you like a hot cup of coffee waiting for you in that Uber Reserve when you're going to the airport. AI makes this all possible. And we're very, very early in the early innings, and we're extremely excited about the potential that it has for cross-platform usage on our platform.

And I'll just augment what Dara said. As you think about the cross-platform opportunity for us, we are also investing in new entry points on both our rides and Eats. At GO-GET we talked about 1 search as another feature that we're introducing that is basically universal search across the product. Just to paint a picture of the size of the price here, we are already seeing nearly $15 billion of run rate gross bookings for our delivery business coming from our mobility app, and 30% of our eligible mobility consumers have never even used Uber Eats yet. So there's a lot of headroom here. .

Next question comes from Brian Nowak with Morgan Stanley.

I want to ask 1 about U.S. suburban delivery. You made a lot of progress on the suburban mobility side. Where are you on sort of the overall suburban delivery business and sort of using the mobility growth to drive better delivery growth as well. That's one. And then two, the strength of the Uber One -- the strength of Uber One was pretty strong. It seems like quarter-over-quarter. Can you just walk us through some of the drivers of growth of Uber One at this point in the quarter?

Sure, absolutely. We're very happy with the suburban with our development in terms of U.S. suburban delivery. But I tell you, Brian, it's very, very early innings. And I would actually expand this, not just the U.S. suburban delivery, but just growth in [indiscernible] markets in the U.S. outside of the U.S. pretty much in every single country that we operate in. We're going out and acquiring selection. And generally, as we add selection to these markets, whether it's more drivers in your suburbs or outside of the big cities or it's more merchant selection in the U.S. suburbs or many other suburbs across the world, we're seeing that trip growth rates are growing 2x faster generally in mobility and delivery in the sparse markets versus the core urban markets where kind of we grew up as a company. So -- this is a global playbook that we got is about expanding selection. It's about investing in reliability.

And then it is also about tailoring our products. So for example, we see a higher percentage of reserve and wait and save. Grocery is very strong in suburbs as well. And it's -- we think we're very early in terms of the selection and reliability improvements that we see in those markets. So lots to go. It's working in the U.S., and it's certainly working pretty much everywhere outside of the U.S. as well.

And in certain markets like in Australia, the size of those sparse markets are about 2x the size of the average sparse markets and other countries around the world. So we think there's a huge amount of potential here.

In terms of Uber One and the growth here, it's continuing. So I wouldn't say that it's any 1 item that's driving the growth of Uber One is 50 million members. It accounts for over 50% of our bookings now and growing 50% year-on-year. We ended 2024 with 30 million members. So we've added 20 million members in just a single year, which is pretty extraordinary. And number 1 is the membership benefits themselves, the membership costs have a similar amount of competitive membership programs, but we offer you no delivery fees and we offer you credits on mobility as well. So just the benefit of our membership program are structurally better than the benefits we believe of any other membership program out there, local membership program.

And then we are introducing benefits. We talked about hotels, getting 10% back hotels. On a long weekend in New York City, that's getting $100 back, which pays for your entire Uber One membership for the year. We're also increasing benefits like membership benefits are now going to work globally. We have a lot of global travel travelers, and you get benefits for your global travel. We introduced new features like no fees above a $60 basket for grocery as well. And then we're also going to run member days again, which has been a big feature for our members, delivering lots and lots of savings for the members.

So we've seen this growth go on for a long time. We kind of wondered when it's going to slow down. At this point, we don't see it slowing down, thanks to the innovation of the team that I'm very, very proud of.

Next question comes from Justin Post with Bank of America.

We'll go to AVs. I know Waymo is launching a bunch of southern cities. Just wondering what you're seeing in those cities, any changes to your growth rate. And then second, some real progress with partners during the quarter. What's kind of putting you over the top with like [ Zook ] and others getting those deals done.

Yes, absolutely, Justin. So we continue to believe AVs are huge opportunities for the entire industry. This is, we think, another $1 trillion TAM. And we don't see this as being a winner-take-all market. We certainly see Waymo moving very quickly, as we are moving very quickly, and I'll remind you, we expect to be in 15 markets by year-end and then significantly more than that going into next year with partners like Neuro, like NVIDIA, like Zook as well. So we're very, very happy about what's going on there.

Our Mobility business accelerated versus last quarter. Our U.S. Mobility business actually accelerated more than the overall business, and we talked about the anticipation that U.S. mobility is going to continue to accelerate for the balance of the year. So at this point, we don't see any effect of the Waymo launches on our overall business, and we continue to see Waymo kind of the performance of our businesses with Waymo in Austin, Atlanta continue to be strong, driver earnings are up. More drivers are joining those platforms as well.

And then if you look at kind of markets where Waymo has been launching has been around for some period of time, San Francisco and L.A., for example, our category position both in San Francisco and L.A. is higher today than it was 6 months ago. So this is an overall business that is of scale, the overall Mobility business. We continue to see very, very healthy trends, and we don't see any signs of that abating at this point. And of course, we continue to invest in AV aggressively with our partnership model.

And then I think, listen, why are we having success in signing our partners, I think it's self-evident, which is we got demand. We have shown that the utilization of these cars, which are very, very expensive on our platform is higher. And then we're also very excited to talk about Uber with the launch of Uber Autonomous Solutions, which helps our AV partners focus on kind of building the driver, and we can build everything else around them, whether that's fleet management, helping them with data collect, et cetera. So we think we're very early innings here, and we're very excited about the AV trends that we're seeing.

Next question comes from Nikhil Devnani with Bernstein.

I had a couple, please. Balaji, maybe for you first. I appreciate the ROI framing in the letter. So you've clearly been investing behind the business and making some near-term margin trade-offs. What is the successful payback look like for Uber at the aggregate level? Is it this ability to compound at 20% for much longer? How do you think about that?

And then maybe for Dara, the Santander deal announcement yesterday was interesting around financing. It looks like there's line of sight to financing AV fleets in the future as well. What is that broader conversation been like with those partners? And how do you think about integrating those partners into scaling these fleets over time?

All right. I can take the first one. So thanks for the question. And I think the starting position you should think about is -- this is a global, very broad business, and there isn't a single formula that would help us decide on ROI and payback period for the investments we are making. And we have to be cognizant of that and we kind of take each product initiative on its own merits.

Generally, what we are looking for is either the products that we are investing behind should be able to drive incremental audience acquisition or frequency lifts and/or it needs to be able to drive margins for the company. And I think a good way to think about this instructively, is to look at the barbell strategy that we have been executing.

On our barbell for Mobility, the low-cost products that we've been investing behind, they drive 75% higher frequency than our core products. And on the other end of the spectrum are high fare premium products drive 3.5x higher profit growth for the company. And all of these products are driving 25% lift in the first-time acquisition for us as well, right?

So effectively, as you bear those kind of -- as you put those kind of fact patterns together, what you're driving towards is the highest lifetime value we can get for the investments we're making. The payback period will vary. There are certain products where you get the payback instantly and there are others where it may take a few quarters. But as we think about this portfolio, we're able to balance it in a way where we can drive healthy growth on the top line, and we can show you healthy annual margin expansion for the company as well, and we are pretty happy to -- with the momentum that we're delivering right now.

Yes. And as far as the Santander deal, it's something that we're very, very excited about. I think to step back for a second. In order for AV to scale and get into the hundreds of millions in terms of trip count, we really have to build out a whole ecosystem around the development of these AV drivers, and that ecosystem includes fleet management, it includes depots and charging and repair and cleaning. It includes financing, it includes insurance as well.

And we're investing in that entire ecosystem we talked about a new relationship that we're building with Hertz on the fleet management side. We have teams going on and securing depots in markets that we think are ready from a regulatory standpoint as well now. And we have been doing so to some extent and working with these fleets for some period of time as an increasing percentage of our drivers have moved from combustion vehicles to EVs as well. So these are muscles that we've built for some period of time.

Financing and building out kind of financing for AVs is, to some extent, trickier because the residual value of these AVs is not something that is clear, right? There's a residual value for cars and used cars. They are very liquid markets for them. That is not true of AVs at this point, although it will be true, and for us, the advantage that we have is that AVs on our network have a very predictable use in terms of revenues or trips per vehicle per day, which at a premium to kind of 1P type networks, and as a result, revenue per vehicle per day.

And that kind of creates the circumstances where we think you can build a very, very healthy financing ecosystem. So we can build AV, but we can also build a castle light essentially. We're really happy to work with Santander that has been incredibly innovative in this field on a global basis. And then on insurance, for example, we talked about a relationship with Marsh and Apollo as well to build out insurance, and we think actually at insurance is going to be cheaper than human insurance because AVs ultimately will be safer as well. So we're investing in the whole ecosystem. Very happy with Santander relationship, and we're looking forward to building from there.

Next question comes from John Colantuoni with Jefferies.

Starting with AI spending, where you already bumped up on your original full year budget, not long after the first quarter ended. When thinking about how you're approaching layering AI capabilities into workflows, are you viewing them as more supplementing or replacing existing processes to give -- just to give a sense for how much those investments are incremental to the existing spend?

And second, maybe you could just talk a little bit about any notable market share trends across your top 10 delivery in mobility markets. And maybe talk a little bit about what's helping you deliver leverage across delivery specifically while growth is simultaneously benefiting from faster growth in some lower-margin offerings like grocery and retail.

Yes, absolutely. So we're seeing the use of AI just grow at unbelievable rates, and you're seeing it in the market rates in the market as well. We're certainly seeing it within our company. I think if you look at Uber we have been using AI tools, whether it's for pricing or matching or routing for years and years. We're kind of very comfortable in the real world, which is a probabilistic world versus a deterministic world.

So using these AI tools and building with these AI tools, it's just kind of how we build and how we build for many, many years. So we're seeing uptake of these tools, whether it's our legal team, our marketing team or developers. And we think it's creating kind of employees with superpowers. And I would say that it's important to note that AI for example, our engineers don't just write code. There's a lot more that goes into it.

There's prototyping ideas and design ideas with designers and PM. There's certainly coding activity, which AI helps with is reviewing and testing your code, whether it's an AI agent reviewing that code and then humans as well to make sure that there's a proper code review before you check on that code, whether it's being on call and making sure that all the systems are running or it's maintenance, it's migrating code or improving kind of performance of that code. AI is helping our engineers and our employees across the company become more efficient to move faster across the board in almost every single step of building and we are seeing it.

Like if we look at the number of code commits for engineer, it's increasing the number of lines per code is increasing. About 10% of our codes now is committed that's committed and built by agents, autonomous agents out there. Obviously, we check the code before it gets committed. So I think you should just look at AI as an accelerator for us for every company, it means that our investment in AI tools and infrastructure is increasing. That will be offset by slower head count growth. But if every person in this company can increase their throughput by 20%, 30%, 50%, 100%, then I think metering head count growth and leaning in on AI investment is going to be well worth it.

Balaji, do you want to talk about the competitive environment?

Yes. I'll get there. And just 1 last comment on AI. I would say candidly, when we set our budgets for 2026 in November, we underestimated the amount of impact the AI rules could have. And obviously, in December, we had new models come in. So we've re-upped our investment here. And as Dara said, we are trading that off against incremental head count growth, which we noted in the remarks as well.

On delivery competition. So first of all, as we noted in the earnings materials, we are seeing our delivery position improving quite substantially across the globe. We are -- as we think about our top 10 markets, really, in the U.S., we are continuing to invest in our sports markets expansion, and we expect to see results from that over time.

In international markets, we are very much on an offensive footing. So if you think about Europe, where we are seeing an incremental level of competitive intensity from both DoorDash and process as they have expanded into the market, we've held our own quite well. And in addition to defending our core positions, we are on the offensive in the market. We've announced expansion to 7 new markets -- just this morning, we launched in Finland. We are already at the #1 position on the App Store there. And we've talked about the other large markets in the region that we continue to go into.

In APAC, we are seeing very good trends in Australia, Japan, Taiwan, Australia has been a standout from its highly penetrated position as we've gone into spare markets. We've reaccelerated that business back to 30% growth. And similarly, in Japan, we're seeing very good trends as well.

Next question comes from Ron Josey with Citi.

Maybe 1 on AV and another 1 on just trips growth. On AV, Dara, getting back to your comment on just how everything needs to come together, charging insurance, financing, et cetera. as we reach services in 15 cities by the end of this year, just would love to hear your thoughts on perhaps what are the bottlenecks? Or are there bottlenecks as we scale supply and demand really grows across the cities more as more services launched?

And then on trip growth in Sanford and LA, I think we've talked about it improving meaningfully, talk just a little bit more about the drivers here? I know you mentioned greater affordability insurance, but just wondering if you're seeing perhaps greater adoption of Uber One and cross-platform usage in those cities specifically and using that as a guide for others.

Yes, absolutely. So in terms of getting to market and scaling in market, obviously, where we continue to expand the number of partners that we have, and our partnerships are very, very broad from [indiscernible] to a [indiscernible] to Pony and We Ride and Baidu as well in international markets, and we think they'll continue to broaden. Right now, I'd say the blockers are we just need more cars on the road. We have to make sure that these drivers are safe. So usually, we introduce them with a safety driver and then we'll take the safety driver out when our partners kind of pass our safety case as well, such as Abu Dhabi and Dubai as well.

And at the same time, we have to make sure that we are introducing these autonomous vehicles into local markets with their appropriate dialogue with those local markets, making sure that we have a dialogue with regulators which will take time and regulators are kind of -- they're asking the right questions, which is how are AVs going to interact with in situations where the power goes out or interacting in school zones or working with firefighters, et cetera, in the city, just the interaction between AVs and real life is something that is critical.

Questions about safety, about congestion, about the effect on work and drivers as well. These are all important questions and dialogue that we have to have both in the AI space in the digital AI space and the physical AI space as it relates to AVs as well. We want to be a part of that dialogue. You'll see us kind of expanding on our thinking there. But this is going to take time both in terms of scaling the business, fleet management, financing, insurance and also making sure that we have the right dialogue with regulators on a local basis and all the constituents that are going to be affected by these changes in our society. So it will take time, but we think it's worth investment.

Balaji, do you want to talk about trip?

Sure. So on SF and LA, we already talked about this even in the Q4 earnings release that we were seeing the impact of incremental AV adoption in the market as being expansionary for ridesharing in the cities in aggregate. And as Dara mentioned, our category position in these markets has also expanded over the last 6 months, which has had an accelerating impact on the sort of trajectory we're seeing there. .

Looking ahead, all of the comments I made earlier about insurance-driven goodness as well will show up in the trip trajectory that you should see in these markets. So -- not only are we seeing these healthy trends in the market today, we expect that the acceleration should continue as we go through the rest of the year.

Sarah, we'll take our last question, please.

Your last question comes from Michael Morton with MoffettNathanson.

I wanted to talk about an inbound question we're getting from investors a lot. And that's a greater risk to marketplaces direct relationship with their users as we could see in adoption of personal agents going forward. So the view is someone's going to talk to their personal agent that either Meta or Google builds and they say, order me arrive to rideshare with ride the fastest ETA or ordering pizza from my favorite place, and they never interact with their go-to apps and you get like abstracted away. Could you talk about Uber's approach to this, how you're viewing the risk if there's like some preventative measures in your terms of services? Or any way to push back around those fears?

Yes, absolutely. So I think the first thing that I would say is we are building an indispensable what we view as an indispensable local service. And the breadth that we have in terms of operating in over 70 countries, and many of them, both mobility and delivery is really unparalleled. And we continue to make investments in engagement of our users and our owners as well with the 50 million Uber One on members that we talked about growing 50% year-on-year. So the engagement that they have is a real direct and deep engagement that they have with us. .

First thing I'd say is we are investing in these agents, and we are investing in these AI tools, and we're seeing kind of the interaction directly with our agents see the first use case, that's a magical use case. And I talked about this earlier in the call, like 3 quarters of the time, for example, with the mobility. We're guessing, we can anticipate where you're going to go. So it's just kind of a 1 push button. Our agent knows, hey, Balaji time to go home, right, for you. And those are kind of unique benefits that we bring.

At the same time, we are working and talking to many of these third-party agents, we have a great market position. So we're able to kind of often dictate the terms of trade in those discussions. I think you'll know that I came from the travel industry many, many years ago, and there were fears for example, on travel in terms of metasearch and this layer above the travel companies.

And as the travel business consolidated with an Expedia booking an Airbnb, which are incredible companies, most of the value of those front ends accrued to the large players, the consolidated players, Expedia, the Airbnbs and the Booking.com. So we've kind of seen this movie before as long as we are building terrific core products we think we will get more than our fair share of consumers coming direct to our services.

We will build in APIs to whether it's an Apple or an OpenAI or a Claude or [indiscernible], we will work with these agents as well. But I think we'll continue to see that the majority of our transactions come direct. We saw the same theme play out in metasearch I don't know if folks remember, but at 1 point, even Google Maps had kind of comparison shopping between Uber and Lyft, and it wasn't the same experience that was coming direct to the app.

So we're very confident that AI is going to empower entirely new experiences, but we think the majority of those experiences are going to come direct to us.

All right. So I think that's it. Thank you very much for joining the call. Huge thank you to the Uber teams who delivered another terrific quarter for us. And another thank you to our partners, whether it's our earners, couriers, drivers and also merchants who make this all possible. Thank you very much for joining, and I look forward to talking to you in the next couple of quarters.

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

[Presentation]

All right. Well, thank you for the video Balaji. It's good to see you. Congrats on the new role.

Thank you. Thank you for hosting me.

Of course. Now let me first do the disclosures. Please note that all important disclosures, including personal holdings disclosures and Morgan Stanley disclosures appear on the Morgan Stanley public website at www.morganstanley.com/researchdisclosures. They are also available at the registration desk.

Some of the statements made today by Uber may be considered forward-looking. These statements involve a number of risks and uncertainties that could cause actual results to differ materially. Any forward-looking statements made today by the company are based on assumptions as of today, and Uber undertakes no obligation to update them. Please refer to Uber Forms 10-K for a discussion of risk factors that may impact actual results.

You've been with the company for 6 -- over 6 years, newly minted CFO. So first, let me say congratulations to you. There are a lot of factors to talk about with the company, with the core businesses, with the future of autonomous driving. So we have a lot to cover. Honored to do your first fireside as a CFO officially.

Wouldn't think another one.

It's a kind of you. So let me ask you. So let's sort of level set. You're in the new role now. How should we think about changes with capital allocation, strategic focus, the way you're thinking about sort of balancing capital returns versus investment and the overall cash flow?

Yes. So I think to level set, if you think about my role for the last few years, it has been leading our P&L for mobility and delivery. So really setting the P&L strategy and capital allocation for the 2 largest businesses that Uber has. So from that standpoint, as I think about our capital allocation direction, I think about this more as a refinement versus the reformation of what we've been doing, and you should expect that most of what we've been doing continues, right?

So when I think about the capital allocation priorities for us, they fall into 5 separate pillars, and I'll just go through them quickly. The first one is that we will continue to make disciplined reinvestments into our core business. And effectively, what we're trying to do there is to ensure that we are investing to maximize the lifetime value of our cohorts, ensure that the profit dollars that are flowing through the business over time are maximized and really driving operating leverage as we are making these investments. So that's the first pillar. And we'll continue to do that. There's lots of areas we can talk about in terms of the investments we are making.

Even as we do that, we are in this fortunate position where we just generated $10 billion of free cash flow, so it gives us lots of room to do other things on our capital allocation priority stack. And the #1 item that I think about there is to ensure that we are making the right-sized investments behind AVs. And for Uber, AVs are going to be a massive opportunity over the coming years. And we have this strategy here, which is designed to ensure that we are staying nimble. We're making the right investments across the ecosystem, and I'm sure we'll talk about that.

Then the third thing that we are doing is ensuring that for M&A, we are holding a very high bar. We don't want to get distracted when we have the sort of opportunity we have in our core, and we are making these investments in AV. So what we are looking for are bolt-on opportunities that fit with our strategy and can accelerate our organic path, right? Good examples of that would be what we've announced in Turkey with [indiscernible] and [ Get Here ]. And recently, we acquired SpotHero on the mobility side as well. Those are the sort of acquisitions that you should be looking at us doing.

Then, as we've done those things, we still are left with a lot of cash to ensure that we continue to return capital to shareholders. And last year, we returned more than [ $6 million ]. We continue to remain on that kind of a footing for this year. The refinement that you should look for is that we will look at dislocations in our stock, and when we find those opportunities, we'll be aggressive. And we are not looking for it to be a steady every quarter kind of a buyback. And I said this on the earnings call as well. We think our stock is dislocated right now, and we are being aggressive, right?

And then the final piece there then is we're doing all of these things while retaining our investment-grade rating. We will maintain financial policies and liquidity that keep us in that place and allow us to expand on our strategy.

Great. There's a lot to dig into there. Maybe I'll start with, number one, on sort of investing in the core the cohort sort of the -- a lot of the positive traction kind of core business. Part of that has been cross-platform users. Maybe remind us again, what are you seeing in cross-platform spend versus non-cross platform? How big is it now? And how do you think about the next couple of years continuing to get a higher percentage of your users engaging a cross-platform activity?

Yes. So when we talk about cross-platform, what we're talking about is if we acquire a consumer from 1 of our services, whether it's mobility or delivery or within delivery, food delivery or grocery and retail, we introduced them to the other that Uber has to offer. And consumers, then, when they start engaging across those multiple services, they tend to become quite valuable to Uber. And the quantification we've talked about previously is consumers engaging a cross platform tend to drive 3x as much gross bookings and profits than those who engage on only 1 side of the platform. I think if you look at grocery and retail as another example, grocery and retail consumers tend to have frequency that's 3x as high as consumers who are engaging only on food delivery, right? So the penetration rates here are quite early, though, even though the opportunity is great. All right. It's not working. I was wondering why I was having to shout.

So I think as you think about the penetration rate here, it's still quite early. And for our overall cross-platform penetration, we're just at 20% of our MAPCs who are engaging across the platform. On something like grocery and retail, it's less than 10% of our delivery -- first-time consumers who are engaging on the grocery and retail side. So there's a lot of runway here for us to do more work.

So the ways we're going about this are: first, we are ensuring that our services are designed to attract consumers to the other side of the house, right? So if you go to your Uber, UberEats app now, you see a top tab that gives you optionality to go to the other side. We now have a universal search. So if you're on the Uber app, you're searching for a ride to the restaurant, we may surface up delivery to that restaurant as well not because we wanted to deter you from going to the restaurant, but it's a good recall for you that UberEats can bring that food to you as well in the future, right? So things of that sort of the first way we are going there.

The second thing we've been doing is personalization and using machine learning to ensure that based on time of day, season, location, whether you're traveling or you're at home, we are ensuring that we can surface up different kinds of solutions to you. And then the third thing we're doing is work on membership as well as the ecosystem, where from a membership standpoint, for instance, we are now introducing things like Quest, where we may give you a quest to say do 2 food delivery orders, one grocery and retail order and take 1 trip and you will get this reward, right? So things of that nature or we're working with third-party players like Rakuten to bring in their rewards program to pair up with our cross-platform efforts as well. And all of that goes towards driving that penetration higher for us.

That's helpful. Maybe in the U.S. on this cross-platform opportunity. Talk to us about sort of the still existing efforts to bring on more supply, nonrestaurant supply grocery stores and retailers. What have you done? And how do you think about continuing to increase the non-restaurant supply?

Yes, it's a great question and a big area of focus for us right now. The way I think about where growth trend retail as a category is I like to think about this as a journey where food delivery was in 2019 or 2020, right? So it's quite early. And at that point of time, just for context, our food delivery business was doing about $14 billion of gross bookings. Our grocery and retail business right now is $12 billion, $13 billion. And now, of course, our overall business is near $100 billion. So clearly, the expansion that came after that, we've all seen and DoorDash and others have grown in that period as well.

So what we are seeing with grocery and retail is for grocery specifically, there are a set of large merchants across the country for whom we want to bring a service that's incremental to them, right? And really, what we've seen is our top-up use cases where consumers are adding on another order on top of their existing core of online food delivery order or they're coming to us because they forgot something they needed on an on-demand basis. Those sort of things tend to be quite incremental to the grocers and they're engaging with us on that.

And then the retailers are the broad local commerce category where they have been looking for a way to access consumers and think about the categories such as best supplies, home goods, beauty, pharmaceuticals, alcohol, et cetera. These are all individually very large categories, but there is a very long tail of merchants. City by city, you have to acquire them. To me, the analogy here is that the grocers are like the large QSRs that we acquired for food delivery, and then the retailers are like the large scale of SMBs that we acquired on the food delivery side. And that's kind of the economic split that we are also beginning to see here. And the more supply and selection we add here, the more reason we give consumers to keep coming back to us, and that's really the goal for us over time.

Got it. There's a lot going on in the core, but we must talk about AV. As you know, there's a little bit of an autonomous debate going on around the industry and the stock. So maybe let me ask you one just sort of to table set on AV. Talk to us about now versus 1 year ago. What has surprised you most about how the autonomous vehicle industry has evolved? And what do you think is the most misunderstood part by investors and all the discussions you have about Uber's position in this industry?

Yes. So let me start with what we said a year ago and how that has played out. And I would say it has actually held up quite well. A year ago, we said autonomous technology is beginning to mature, and it's beginning to get to the prime time of deployment across many markets, but commercialization is going to take a lot. And the 4 key reasons why we thought commercialization has hurdles in front of it were software needs to be super human safe. Some players have met that hurdle, not everyone. OEMs need to produce cars, and they need to do it at a cost point that makes sense. And they need to do it at a scale that will allow for the fixed cost to be absorbed. Third, you need to put fixed infrastructure on the ground. This is not a deployment like Uber's early days where we just had to sign up drivers and we were off to the races. You actually have to build out deployments on the ground as well. And then the fourth piece is regulations are a barrier for the deployment curve here as well because the more you think about where this category is going, it's not going to be a straight line. There will be ups and downs on whether regulatory approvals come through or right? All of those factors have actually held up quite well through the last year. And where we've been surprised positively is that what we have seen so far has proved to be that AVs are incremental to the ride-hailing category. It has gone back to a core hypothesis behind ridesharing that this is a supply-driven category. The more supply you add to the market, the more the category grows. And we've seen that now coming through in various deployments, including an SF where AVs are not even on Uber or Lyft's network. The category has still expanded, and this market has been growing faster than the rest of the U.S. It has accelerated versus 2024 and 2025.

And then in markets where we have deployed AVs in our network, we have clearly seen that it has not only been incremental to our growth, but we are demonstrating the value of our hybrid network with both high utilization to our partners and better consumer experiences, right? We talked about Austin and Atlanta showing 30% higher utilization, 25% faster ETAs and lower consumer side prices than 1P deployments and all of that has been quite positive for us in action because a year ago. It was all a hypothesis, right?

So I think where we sit now, the most misunderstood piece for investors, as you pose the question, I think is those gating factors. This is not a straight-line growth. And the more time passes, the more conviction we gain that the strategy on which we have been playing, which is multiple players getting to the finish line of L4 deployment, that's beginning to bear out as we go. And we are beginning to see players like NVIDIA also enter the space, which incrementally drives further adoption over time.

So I think just from -- the last point I'll make on this is from a capital availability standpoint as well, we have started seeing the capital entering the space accelerate. Setting aside Waymo, all of our other partners have raised about $7 billion in the last 18 to 24 months. And in the last month or so, you've already seen that accelerate where we've raised $1.5 billion, while we had a commitment for $1 billion, right? So this is only getting faster and faster as we go forward.

Okay. Great. I want to give you the opportunity to sort of do the point, counterpoint on a couple of common AV bear cases that I hear in investor discussions. So the first 1 is there are some investors who say, over the long term, and that could be 10 years away, Uber faces a potential supplier concentration risk, where we're moving from millions of drivers down to 5, 6, 7 different networks that, that will run all the cars basically in an AV world, and that leads the in-period unit economics. What is your response to that and That's why that's not a long-term concern?

Yes. So I think, again, it goes back to the fundamental nature of ride hailing, which is more supply we add to this business, the better the category becomes, right? So we have to start there first and foremost, because the more supply you're adding, the reason this category benefits from that is because you're adding more units to a market. Consumers have lesser and lesser reason to look elsewhere. It's more reliable. It's a cheaper service. And as you go through that kind of motion, the incrementality of AVs to ride hailing becomes clearer and clearer, right? So that's the point -- the first point you have to think through.

The second thing I'd say here is what tends to be true for winner take all or winner take most kind of deployments is that they tend to have a very hockey stick inflection curve and those gating factors we just talked about ensure that this is going to grow at a slower rate than what the fundamental nature of a winner take all deployment is. And I think the way I think about this in my mind is the fastest-growing EV deployments right now are at best tripling their volumes year-on-year.

In the early years of Uber's deployment, for the first 6 or 7 years, Uber almost 9 to 10x-ed its volumes every year, right? That was the exponential curve, which we were on and where AVs are right now.

Then the third factor you have to think through here is, again, when you think about the OEMs incentive curve here, which again, you have to remember, OEMs have to build these cars, OEMs don't want to be single source either, right? And from their standpoint, there's a lot of geopolitical consideration here as well, which ensure that there will be an effort to bring up a lot of local champions behind the OEMs, right? So when you think about a player like Wave, for instance, there's going to be a European effort for players like Wave to come through on the other side. If you think about an OEM -- let's pick a Hyundai, they are going to have pretty low incentive to have only one software player serving them and them being fully beholden to them, right? So that's another reason why that becomes a challenge.

From our perspective, when we think through this deployment curve over the next few years, once we start getting conviction that software is going to hit the mark and it's going to get to that L4 deployment with superhuman safety, our efforts start shifting to a couple of other priorities. The first one is securing OEM supply, right? We need to ensure that any of our partners who can deliver that kind of software have enough scale volumes coming to them, and then that volume can get deployed on Uber's network. And then the other thing we have to do is to ensure that we are bringing AB in structure on the ground. And for instance, for our 2027 deployments, we're already scouting sites across our footprint. We already have about 50 different sites that we are beginning to get into leasing conversations, and those deployments will start once we have the software there.

Got it. Okay. That answered the winner take most bear case or [indiscernible], I often get as well. So I want to ask you about the international AV offering. I feel like this is something that is almost underappreciated sometimes. I know you hosted a group in the Middle East last week and sort of showed some of the Baidu and the WeRide partnerships. Maybe walk us through some of the differences in the international landscape, what you can share on the cost of the vehicles, how your positioning there is a lot different than it is in the U.S.

Yes. So I think what we are seeing in our international markets is already -- are sort of thesis proving out. And as you think about what we have already talked to you about in terms of our commitments here, we want to ensure that by 2029, Uber has the largest AV deployment globally, and we'll be facilitating the more trips than anyone else. And as a market towards that, by the end of this year, we want to have up to 15 cities where AV deployments are going up on Uber's network, and roughly half of them will be in international markets.

So what we're seeing in those international markets right now because we have 3 distinct partners who are already capable of deploying AVs on our network, which is Baidu, WeRide and Pony, we are beginning to see the scenarios where you start seeing a variety of supply coming. So in Abu Dhabi, for instance, we already have VR with driver Art solution. In Dubai, we'll likely have players like both WeRide and Baidu going on our network and bringing their services to the market. And in that kind of a world, you don't have a lot of conflict where your partners may be thinking about, should I go 1P, should I go 3P. They're trying to get to speed to market and the fastest way to get that kind of an outcome is to work with Uber and also work through all of these solutions we bring, both in terms of our fleet partnerships as well as the Uber Autonomous Solutions kind of stack that you just saw the video right before our chat. We are beginning to see that kind of a theme play out there.

From a cost standpoint, the Chinese partners we're working with are at a price point for their hardware and software, which is better than anything we are seeing anywhere. So they will certainly have an advantage there. And the fact that they don't have philosophical debates about whether they want to do 1P versus 3P, puts them in a place where they're maximizing revenues against the lowest cost structure, and that just gives them a leg up in how quickly they can ramp up.

Great. Good color. Let's come back to the core in the U.S. because there's -- the overall business is being run really well. And one of the shining points has been the dense -- the less dense or the more sparsely populated market. I think you've talked about them growing 1.5x faster than the denser market. Maybe walk us through what has driven that faster growth. And how do you think about sort of investing to keep that more sparse market growth moving quicker through the overall P&L?

Yes. So what I would say there is that it has been a function of our product innovation as well over the years, right? Historically, the reason we've not been able to serve sparser markets is that reliability in those markets is much worse. And over the years, we were able to address the reliability challenge on 2 dimensions. First, we introduced reserve which, as a consumer, allows you to trade for reliability in exchange for price. Reserve is more premium, you pay a price and get the reliability that brings you. And then at the same time, we were also able to launch and expand a product like Wait & Save, which gives you the opposite choice. You get reliability in exchange for time, right? You're making a trade-off on the time dimension versus price.

So as we've done that, and we have gotten better about things like taxi integrations because historically, again, we didn't have the 3P integration available. In many markets, taxi is the best way to go expansion. All of that has allowed us to go into these sparser markets and serve consumer needs in a way we couldn't earlier.

So what we're beginning to see now is, today, when you think about the disclosure we gave on earnings where trips happening within our top 20 markets in the U.S. represent about 30% of our gross bookings, but only 25% of U.S. mobility EBITDA, that just is a function of our non-top 20 markets growing faster, getting to a profitability position that's better than our top 20 markets and continuing to grow from there, right? It's not at mature state margins either. And the further out you go on that density quartile, the better that story becomes for us, and we feel that the runway here is very, very long.

And this is not just a U.S. story. We see similar sort of themes in Europe and markets like Lat Am as well, where we are expanding with our motor product, which is today 15% of first trips in Brazil and 90% of these Moto consumers migrate from Moto to UberX and other Uber products, which are quite profitable for us as well, so lots of runway with the product and geographical expansion we are driving here.

If we think about sort of pairing the sparse market mobility strategy with the cross-pollination strategy into Eats. How far away are you being able to say, look, we're making progress in the sparse markets on rides. Now we're going to really sort of press more into the delivery and the food and everything else that '27 dynamic, and '26. When can that investment happen?

Yes. So it's definitely something we think about. But before we start pressing on those kind of investments, we have to ensure that the quality of our product is excellent on it, right? And for delivery, the way to measure that is do we have the right kind of selection in every market. So if you're in a sparse market, we cannot just show you McDonald's, Subway, Starbucks and hope where consumers to be sticking to us because we do need to bring you the local champions in that market, and we have to get you the best selection from that town or city.

So there's still selection work that we're doing, right? Then, you have to ensure that the way your courier motion is in that market is also different, right? In dense markets, you can get to couriers on a very hands-off basis. They can come in and out of the system whenever they like because there's enough density, whereas in sparser markets, you need to allow scheduling, you need to be able to tell couriers when to log on when they can expect to find business, right? So there's work that's happening on that side of the marketplace as well.

Suffice to say, it's not lost on us. It's definitely a part of our plan, but we need to ensure that the product quality on both sides is good before we start making that investment. Otherwise, we're not getting the returns we expect there.

Got it. Managing [ occurred ] that was very complicated despite the AI bear cases that we may have heard the last couple of weeks. People forget someone actually has to deliver that food. Delivery has been doing well. I think you've accelerated from high-teens growth in the first quarter to mid-20s growth by 4Q. What can you call out as sort of having been the drivers of that acceleration over the course of the last 4 quarters?

Yes. So definitely a very good story for us here. We -- when we look at our Q4 performance for delivery, the vast majority of that growth is coming from audience expansion still. In fact, Q4 2025 was our strongest MAPC growth quarter for 4 years, right? So it's been an accelerating story, and we are at a spot where we are continuing to accelerate from. And the way to think through that is when you look at the cohort behavior, 2025 cohort for us from a retention and engagement standpoint is better than our previous years. So we've been just seeing better and better traction with the consumers we've been acquiring.

What you're seeing underneath that is our selection quality has been improving. We've been making a lot of investments in affordability initiatives. And then from a reliability and timeliness standpoint as well, our product quality has improved quite a bit. And as you do -- as you hit the mile mark on all of those dimensions, the consumer acceptance of your product is going to be better than it was previously, right? So that's the first piece.

The second thing that we are seeing is membership adoption has been quite spectacular for us, right? We talked about 46 million members as of the last quarter, still growing over 50%. It's the largest membership program of its kind in our category. And really, what you're seeing with that is the stickiness, everything that I was talking about from the previous point, that magnifies even more for the consumers who are members and paying to engage with our platform.

The third thing you're seeing is, from a category position standpoint as well, we're in a very, very good spot. So U.S., our category position is relatively stable. It's a great category where both Uber Eats and DoorDash are benefiting from the expansion of the category. But outside the U.S., we have continued to gain share even though our position is 2 to 3x as large as the next player in the market. And I'm talking about large markets like Canada, France, Australia, Japan, Taiwan, Turkey, right, all of which we are now at a strong #1 position and the U.K. as well, we are in a good #1 position now. So from a category position standpoint, there's a lot of momentum that we're getting there.

And the final point is as you think about the relative presence of our business, mobility is in about 75 countries, delivery is in only about 32, 33 countries at this point. So there's more of a geographical expansion story as well here, which you will see us continue on as we go from here.

And part of the geographic expansion, I think there was an article or if you guys confirmed or sort of expanding some of the markets throughout Europe with food delivery to come. But maybe let's talk a little bit about European food delivery because with Dash, having acquired Roo, there's a lot of discussion about France and the U.K., where you do have really strong businesses. How do you think about sort of the investments in France and the U.K. and just Europe more generally, delivery side?

Yes. So we did announce an expansion into the Nordics. And if you think about the Nordics markets, we already have a mobility business there, but we didn't have a delivery business, and we announced an expansion there, which is consistent with the point I was making. We will look for markets where we think there's a potential for us to bring a differentiated solution, and we benefit from a baseline of our mobility consumer base. So that fits into that kind of a mold.

But stepping back into the broader European question of what we see. From our standpoint, we feel pretty good about the strategy we've been executing. We have gone into most of the European markets with a mindset of not leaving any part of the continent underpenetrated. So when you think about the U.K. or France, for instance, we are not in London or Paris business. We have expanded into most of the non-London, non-Paris markets in those countries. We've also leaned into grocery and retail. In the U.K., we are now the clear #1 player from a grocery and retail standpoint. And then membership for us has been a very strong adoption story there as well.

So as we sit here, what we are seeing is actually opportunities because when your competitors are replatforming and introducing disruption for their own stack, that creates an opportunity for us to engage with merchants who are looking for certainty that their business doesn't get disrupted. And in markets like London, for instance, we are now seeing an opportunity to bring on selection, which was exclusive to our competitor. And in markets like France, of course, we already have a clear #1 position the way just pressing home the advantage of that, right?

So broadly, a healthy story. And then the final market that I'll call out, which is also going to be interesting is Germany, where Jet has a market-leading position. We are now the clear #2 player, and Volt has not made as much progress as us. And that market we continue to lean into. It's a very strong market for our mobility business. We have a #1 position there. It's a top 10 mobility market. So we'll continue to invest in Germany as well.

Okay. Let me ask you one about Gen AI and sort of the GPU-enabled machine learning. Can you give us some examples of things you're doing now with either GenAI or GPU machine learning that you maybe weren't doing 2 years ago. And anything you can quantify on early signal on ROIC of these new capabilities?

Yes. So I think, generally, if you just step back and think about the complexity of our marketplace, it has always been driven by machine learning. And as we have gone into this world of GenAI and more and more powerful GPUs, what it has allowed us to do is to think about ways to engage whether that's incremental source of compute to drive the throughput of our marketplace.

A great example where I would start is just thinking about grocery and retail, right? When you go from mobility to food delivery, it's already from a compute standpoint, quite intensive. But when you go from food delivery, where the menu may have a certain number of SKUs, to grocery and retail, where the SKU count just explodes exponentially compute needs quite dramatically changed right? So where we are making an investment there, first and foremost, is we are making more of an investment in GPU resourcing to ensure that our marketplace is well supported, right? And that will be a continued theme. That will continue for many, many years to come. And I think when Jensen talks about that, we see that in action in our business, right? So that's the first piece from an infrastructure standpoint that we think about.

Then as you think through the general use cases that most organizations are talking about, most of them are true for us as well, right? Developer productivity is the first area we are looking at. Dara recently talked about 90% of our coders using some sort of coding tools. That has been a very positive inflection for us over the last year. And we're beginning to see that every few months, there's a step function change in how that engagement is happening and where there's an incremental productivity lift that we are seeing there.

The second piece from a customer support standpoint, again, we are leveraging more of the GenAI tools there. We are at a $15 billion-plus trip run rate, and each of our trips has at least 2 participants. So the number of customer support interactions we're looking at as well is very large. Again, so this, I think, for us, will be a multiyear cost savings and better customer support experience opportunity.

And then finally, from a customer experience standpoint itself, which is where you start thinking about the agentic use cases, we're being very front-footed. We are engaging with the leading labs like OpenAI, et cetera, to be pilot customers to evaluate what opportunities exist here. And ultimately, our goal is to ensure that we're meeting consumers where they are, and we're looking for incrementality of those engagements for us. And if it's incremental, we'll go deeper.

And then agentic point and there's a lot of discussion about sort of the big horizontal agents potentially wedging themselves between the consumer and Uber and others, which could lead to the loss of the customer, the loss of the high-margin ad business? Just sort of philosophically, what are you doing to sort of ensure that you don't lose the customer and you don't lose the unit economics?

Yes. So I think it just glosses over the complexity of the marketplaces that we operate, right? First, if you think about the mobility business, what consumers are looking for are -- is reliability, price and safety. They are engaging with our service, on average, 6 times a month. And really, if you go back to the olden days of where Uber and Lyft were surfaced up on Google Maps, and this question used to come up even then, what we saw was consumers just don't behave that way. They don't engage with our service through a third party because there's a price comparison point available to them. They're looking for all 3 of those things to be met, not just price. Delivery is even more complex. And what you are looking at from a third-party surface standpoint is, yes, it can bring you selection. But when consumers are looking for delivery to their houses, they're hungry. They want that delivery to come to them in their time line that's been promised to them. They need it hot. They want all the items to be present. And if something goes wrong, they want resolution quickly as well.

And by the way, the same sort of complexity exists on the courier side. It exists on the merchant side. And all of that is quite -- from a cost deployment standpoint, it's quite immaterial to most consumers in the grand scheme of things. And I think that's really where you start going into the world of why would you want to do that when this is a really easy way for you to engage anywhere.

So I think, again, it's not to dismiss the potential of agentic commerce here. We will certainly see some usage and we will engage and see where it makes sense. But it's not a binary flip where it's either this or that.

I know we have an extra minute. I just want to give you an opportunity as well to sort of talk about one of the other budding disruptive bear cases on autonomous delivery, drones, droids, Waymos, et cetera. So one, remind us what Uber is doing on the different modalities of autonomous food delivery? And how do you think about just some of the challenges of delivering across all the different end points?

Yes. I mean I think on that front, we're in a pretty good spot. We already have over 1,000 delivery bots on our network in more than 10 cities. We are working with about 7 partners in that ecosystem. It spans both sidewalk robots and drones. And what we are seeing right now is sidewalk robots have potential, but they come with their own friction, right? You are -- if you're a merchant or a consumer, you're now used to seeing a courier show up to your counter, pick up the order and drop it off at your doorstep whereas sidewalk robots have friction on both ends and you have to go out and meet the bot.

Drones, on the other hand, can be faster. They can cover larger radius and they can potentially even drop off the package in your backyard. So there's a broader use case there. I think we are going to keep exploring and see where this goes. The good news is that economics of these deployments is already quite attractive for us. It's interesting for us to be able to deploy these while not having to make a deep investment and they're learning as we go.

Long term, no question in our mind that drones and bots will play a much bigger role in delivery, but there's still some things to be ironed out.

Great. All right. Well, thank you so much for the time. Congrats on the new role. Talk to you soon.

Thank you.

Thank you for standing by. My name is Greg, and I will be your conference operator today. At this time, I would like to welcome everyone to today's Uber Q4 and Full Year 2025 Earnings Conference Call. [Operator Instructions]

I'd now like to turn the call over to Alax Wang, Senior Director of Investor Relations. Alax?

Thank you, Greg. Thank you all for joining us today, and welcome to Uber's Fourth Quarter and Full Year 2025 Earnings Presentation. On the call today, we have Uber's CEO, Dara Khosrowshahi; CFO, Prashanth Mahendra-Rajah; and incoming CFO, Balaji Krishnamurthy.

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.

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

For more information about factors that may cause actual results to differ materially from forward-looking statements, please refer to the press release we issued today as well as risks and uncertainties described in our most recent Form 10-K and in 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. We will open the call to questions following brief opening remarks from Dara, Prashanth and Balaji.

With that, let me hand it over to Dara.

Thanks, Alax. Q4 was another great quarter for Uber. Trips on our platform accelerated again to a 15 billion annual run rate, and our audience grew to more than 200 million monthly active users. These healthy inputs drove exceptional outputs with gross bookings up 22% year-on-year.

Looking at 2025 in full, we had our fifth consecutive year of annual gross bookings over 20%. We generated $8.7 billion in adjusted EBITDA, up 35% and a phenomenal $9.8 billion in free cash flow, up 42%. We started 2026 with a ton of momentum, a scaled and profitable platform and a clear operating framework to generate durable growth. This gives us the confidence to make targeted growth-oriented investments aligned with the 6 strategic areas of focus that we outlined last quarter.

Of course, one of these areas is autonomous. At this time last year, we laid out our views on AVs in more depth, and we've done that again this quarter. With the benefit of learning from multiple AV deployments around the world, we're more convinced than ever that AVs will unlock a multitrillion-dollar opportunity for Uber. AVs amplify the fundamental strengths of our platform, global scale, deep demand density, sophisticated marketplace technology and decades of on-the-ground experience matching riders, drivers and vehicles, all in real time. We also understand that there are reasonable questions being asked and a debate being had about what autonomy means for Uber, both in the short term and the long term.

I'd encourage everyone to read our prepared remarks and take a look at our supplemental slides where we lay out our latest views and why we believe our approach is proving to be the right one.

Finally, I want to take a moment to say thank you to Prashanth, who we announced this morning will be stepping down as CFO on February 16, whether it was getting to us the investment-grade status, spearheading our first share repurchase program or steering us through several acquisitions, Prashanth has been a great partner to me and the management team. I wish him all the best in a very exciting new opportunity that he will share more about very soon.

I'm also thrilled that Balaji will be stepping up as CFO. Balaji won't be a stranger to many of you on the call. I've worked closely with him for a long time, and I'm confident that he is the right person for this job. He knows our business inside and out. He's a bold thinker and brilliant strategist, and I'm super excited to have him join the management team at this important time for Uber.

Now I'll hand it over to Prashanth and Balaji to say a few words, and then we'll take your questions.

Thank you, Boss. First, I want to say thank you to Dara and the entire Uber management team. And of course, my heartfelt congratulations to Balaji, who I know will do a terrific job. Uber is a once in a generation company. It's a dynamic, fast-moving and innovative place, and I have loved every moment of my time here, and I am extremely bullish about its future.

Over the holidays, I had a chance to take stock of where we were and all that we had achieved from delivering phenomenal growth at scale, achieving investment-grade status and returning significant cash to shareholders. At the same time, a new opportunity presented itself where I could serve America and get back to the country that has given me and my family so much. I look forward to sharing more on that soon. And in the meantime, I'll be working with Dara and Balaji to ensure both a successful and seamless transition.

Now let me hand it over to Balaji.

Thank you, Prashanth, for everything you've done for Uber, and thank you, Dara, for the trust you're putting in me. It's an honor to step into this role at this moment. I'm lucky to be building from such a strong base and accelerating core business supported by a huge and increasingly active consumer, owner and merchant base, large and growing cash flows, which we can use strategically to invest into our future, and world-class talent that is innovating and executing at scale with a GO-GET it culture that is always pushing ahead.

I look forward to working with Dara, the management team, our board and with all of you to solidify Uber's position as a once in a generation company that stands the test of time.

With that, we'll take your questions.

All right, operator.

[Operator Instructions] All right. It looks like our first question today comes from the line of Justin Post with Bank of America. Justin?

Great. I guess I'll ask about the competitive environment on AVs and really appreciate all the slides and prepared remarks. Just wanted to think in the context of 30% of your bookings coming from major cities, which you outlined, how do you think about the impact of AV ramps from, say, Tesla or Waymo in those cities on market share and your profitability? Just high level on those things.

Yes, definitely, Justin. So I think the good news on AV for us is that we view the introduction of AVs as actually an overall growth driver for the markets in which we operate, right? So San Francisco gross bookings for us have accelerated, where we are in Austin and Atlanta as well, our bookings have accelerated. New riders to the platform has -- is growing faster than the rest of the country. Frequency is super strong as well.

So AVs in the marketplace whether they're competitive in SF or whether they're on our platforms like Austin and Atlanta are turning out to be net positives in growing the overall economic pie or the economic pie available to boom in, so to speak. So from that standpoint, when we look at AVs, it's fundamentally a positive opportunity as reflected in Waymo's latest valuation of $110 billion, which is pretty incredible on a pre-money basis. But this is not kind of a technology that is going to replace, it's going to augment.

And then when we see our own performance as it relates to AVs, we're seeing AVs on our platform at significantly higher utilization than kind of 1P stand-alone platforms based on the publicly available data in that trips per vehicle per day are 30% higher, ETAs are better as well. So we know that the best product today out there in the market is an AV on the Uber platform as well.

And then if you look at the partnerships that we are setting up, whether it's a partnership with Waymo, or NVIDIA or newest partner, Waabi or Avride or Nuro and Lucid, which kind of have a production-ready car out there, we expect to be in 15 cities by the end of this year and then expanding beyond that as well, which should actually increase kind of the wave of kind of the AV business that we're seeing behind us. So from a top line basis, we see AV as a net positive for the ecosystem.

In terms of margins, I think AV is going to be very similar to other products out there, which is any time we introduce a newer product, we introduce it at a lower margin than, let's say, UberX or Uber Black or Uber Reserve as we're building our liquidity. And then over a period of time, margins improve. And for example, in the deals that we're striking today with various partners, with AV partners at scale, we are going to have healthy economics based on current consumer fares and healthy economics mean positive economics. And these are deals that we're striking right now.

So from a margin standpoint, structurally, we think the AV kind of ecosystem, it will -- it will be a net positive to mobility generally. The margins that we're getting now are good positive margins, and they are fair for our partners, and they're fair for us as well.

And from a competitive standpoint, at this point, AVs really haven't scaled, right? We added 50x the trips on the Uber platform this last year than kind of the entire AV industry added. As it scales up, we expect it to be competitive. We think a lot of these players will be on our platform as they realize that utilization is structurally higher in a 3P platform. And listen, competition is nothing new for us.

We're the multiproduct player. We are everywhere. We are global as well. And then with the membership program that really gets people highly, highly engaged with our platform, we're very confident in terms of what we will do in a competitive market, and we're very confident that we're going to be the first choice for kind of AV manufacturers and technology companies to put their assets on our platform.

And Justin, this is Balaji. One additional thing I'd add there is, while you asked about the top market, it's important to remember that 70% of the U.S. is outside of the stock markets and nearly 75% of our U.S. profits come from those markets. And that -- those numbers have been growing because those markets are growing faster than the top 20 cities. I think this is a very, very common misconception. We've heard many times that Uber's profit pools are concentrated in the top cities, and it could not be further from the truth.

And as you think about where AVs go in the near term, those non-top 20 markets are going to be unlikely to be addressed by AVs for a long time to come as well. So from our perspective, not only are we going to be well positioned in those markets to be the platform of choice for our AV partners. But for the remainder of the U.S., it is going to be played by traditional ridesharing operators such as Uber.

And also, just remind investors that 60% of our mobility gross bookings are international outside of the U.S. as well. So we have a big business in the U.S. outside of the big cities, and we have an even bigger business outside of the U.S. as it relates to mobility.

Our next question comes from the line of Eric Sheridan with Goldman Sachs.

First, wishing you the best going forward, Prashanth and congrats Balaji on the new role. I wanted to drill down a little bit in the shareholder letter, you talked about customer growth and the momentum you have coming out of 2025. Can you lay out some of the strategic priorities and growth investments that are top of mind for you guys in terms of maintaining that momentum in terms of new users across your products? And then also reflect on how Uber One can continue to evolve the customer lifetime relationship you have looking out over the next 12, 18 months?

Yes, absolutely. So we have been very, very happy in terms of our user growth. And in terms of the strategy behind the user growth, I'd laid out in terms of there's products, there's use cases, there's demographics and then there's geographies. And we are introducing products along each of those different segments. If you look at the products, for example, our Moto product, it's a 2-wheeler product. It is much more -- it's a lot cheaper and more affordable that is bringing on significant new segments to our audience. And then we're seeing on occasions, those Moto users, if it's raining, if they're on a date at night, they will upgrade to an UberX or other use cases. So just introducing newer products is one area where we get new consumers.

And then there's new use cases. A new use case might be Reserve where we thought that Reserve was actually going to serve people who wanted higher reliability. But it's also -- there's a whole customer base, much of them in the suburbs outside of the big cities that didn't find previously Uber reliability high enough for an airport trip for a time-sensitive trip. Now they do because we offer the Reserve product. And so that is a product that has higher margins, has higher earnings for our drivers as well. At the same time, is introducing new customers into the flow.

Same thing for women preferred. Same thing for teens, same thing for older demographic, kind of the simpler product that we have. All of these are introducing our kind of newer use cases or different demographics that are coming to the platform.

And then last but not least, I'd say international and the growth that we see in the less dense markets that Balaji just referred to. This is growth outside of the mainline cities. Generally, growth in less dense markets is about 1.5 to 2x more than growth in the middle of the big cities. This is a result of, again, new supply coming on first and then new audience coming on after that supply as well. So we're very, very happy with the customer growth. And at this point, we don't see any signal of it slowing down.

And then, of course, what I started with, which is AVs are an entirely net use case. There are people who are curious about the product and then there are people who absolutely love the product, and we think AVs can be another opportunity for customer acquisition. Anything to add, Balaji, to that?

I'd just say just adding some quantitative lens on everything Dara said. If you think about where the crux of our growth is coming from, it's still audience growth, which is very encouraging for where this business will go over the next few years. And looking at 2025, we started the year with MAPC growth at about 14% year-on-year. We ended the year with MAPC growth at 18% year-on-year, which is a very, very strong step up.

And there's a lot of runway in front of us still as you look at that MAPC number at over 202 million monthly actives, our annual active base is over 450 million, and we are continuing to improve our penetration of that base. As we're doing that, frequency, while it is growing at a slower rate, that is more a function of our cohorts coming on and maturing from there. What we are seeing is our new rider cohorts, new eater cohorts are exhibiting much stronger retention than prior U.S. cohorts. And part of it is driven by our focus on early life cycle investments, we're ensuring that consumers were acquiring, retain better through the early part of their engagement with Uber's platform.

Then as we introduce them to multiple products that we are serving our consumers with, which at this point, 40% of consumers in Q4 were using more than one Uber product. And then finally, our membership program, which has been a key investment area and still is growing 55% year-on-year, that then supercharges that cohort that we are acquiring. So there's a lot of runway here, and we feel pretty good about the investments we're making, we are being quite deliberate in measuring the LTV to CAC ratios on that.

And our next question is from the line of Brian Nowak with Morgan Stanley.

I have 2. One on autonomous, one on capital returns. Dara, I appreciate all the color on autonomous in the letter. I wanted to give you one more shot to kind of refute one of the other concerns. The history of technology with capital-intensive, heavy investment technologies often kind of shows the technology will migrate toward winner-take-most at scale. Can you just sort of walk us through why you don't think AV will go that way when safety is so important to scaling AV the next 3, 5, 10 years? That's the first one.

And then the second one, maybe for Balaji or Prashanth. I think throughout 2025, you talked about sort of a 50% free cash flow commitment to shareholders. Are you still sort of maintaining that philosophy? Or what is sort of the reinvestment versus capital return philosophy as we look at 2026?

Yes, absolutely. As it relates to AV and winner-take-most, listen, I think this is true of technology platforms, and I would remind you that as it relates to Mobility and now increasingly Delivery, Uber is the winner who has taken most. And that wasn't always the case. It is because of how we built, the fact that we have this international footprint, the fact that we go broader than our competitors and the fact that we are a multiproduct and have built those products organically within the system.

So we are the winner-take-most kind of product as it relates to Mobility and Delivery certainly outside of the U.S. I think hardware is fundamentally different in that if you look at the OEM industry, there are many, many car manufacturers, manufacturing is local, you have local champions, et cetera. And if you look at the trend as it relates to AV, it looks more and more like our vision of the future, which is 10 years from now, every single car -- a new car sold, is going to have L4 or L3, full L3 and L4 software attached with it.

In that kind of a world, we think we will have many, many suppliers, not just 1 or 2 suppliers. And if you look at AV now, there are multiple players who are getting to the finish line. Obviously, Waymo is -- while they're not finished, they are safer than humans, which is terrific. You have players like Pony, you have WeRide, you've got Baidu in China who has developed AV-ready technology, whom we are partnering with outside of the U.S. as well.

And then there are many other partners in the U.S., Waabi, Wayve in the U.K., Waabi in Canada, Wayve in the U.K., Nuro here in the U.S. and Avride in the U.S. And then, of course, the biggie, NVIDIA that is developing a hardware platform, sensor stack, compute stack, which we believe will be industry standard and now is actually building out full self-driving software as well.

So with all of the players in the space, the fact that it has been solved multiple times by multiple software providers with NVIDIA kind of setting an industry standard as well, we're very confident that, one, AVs will be a net positive to the Mobility sector. In other words, it will expand the category. And we are the winner-take-most player as it relates to 3P, and we think that the 3P kind of marketplace will be very, very large and will be very, very healthy. Balaji, do you want to take the second?

Sure. So we did lay out our capital allocation priorities in quite a lot of detail. But just to quickly summarize how we think about this. Our first priority is to ensure that we are making appropriate reinvestments behind the opportunity we're seeing in our core business. We are in a good position where even as we make those investments, we are throwing off a lot of cash as we said, we were already generating about $10 billion of free cash flows, growing 40% as of the last year. So that gives us a lot of room to make investments in ensuring that we are advancing our AV strategy and potentially evaluating any selective bolt-on M&A opportunities as they come along.

And then that still leaves us with a significant amount of cash that we can return to shareholders. So this is not a trade-off for us in the sense that we are choosing one or the other. We're able to do all of these things in parallel.

As to your question on whether we would be returning 50% of free cash flows, based on our current visibility into what we're seeing as well as the fact that our stock remains really cheap, we will continue to be aggressive buyers of our stock, and you should expect that it continues at a steady cadence, and we are on track to reducing our share count by a healthy amount as we go forward.

And I think the good news here is with our free cash flow generation and our expectation of the free cash flow generation increasing going forward, we can do both. We can invest appropriately as it relates to growth. And then at the same time, we are going to continue reducing the share count because ultimately, all of us are shareholders, and we think right now the opportunity to buy back shares is pretty awesome.

And our next question comes from the line of Mark Mahaney with Evercore.

Two questions. You talked about acceleration in the U.S. trips and gross bookings in '26. So that's a little bit unusual. You don't normally seek businesses at scale -- at your scale accelerating. So just go through a couple of factors. The biggest reasons for confidence in that acceleration. And then I know this question has come up in the past, your willingness to deploy capital into AV fleets like how capital -- any changes in your thinking about how capital intensively you want to run your AV business going forward?

Sure. Thanks, Mark. I'll take U.S. acceleration and Dara will take the second question. So when you think about our U.S. business, what we have been seeing for the last few years up until the beginning of 2025, we had a lot of inflationary impacts from insurance, in particular, in the U.S., which had -- which we had passed on to the market in the form of consumer pricing, and it was driving a slowdown in the business.

But throughout the last year, we have held prices relatively consistent. And as we look forward with the amount of insurance reform and product-driven hundreds of millions of dollars of cost savings that we are seeing, we are in a position where insurance is going from a deleveraging cost item to something that gives us leverage, and that allows us to hold prices flat or better in certain markets.

So that price consistency has a huge impact on long-term elasticity of demand. And the longer we can do this, the better the outcomes for us are, and we feel pretty good about our core business accelerating in the U.S. as we do that. In addition to that, there is our barbell strategy that is also having a pretty meaningful impact on opportunities that we see here. We talked about both the low end and the high end, growing 40% in the last year. And that's true even in the U.S. and products like Wait & Save are showing a lot of momentum as well as products on the other side, XXL, shuttle expansion at airports. So I think there's a lot of opportunity on those products.

And then finally, our expansion into sparser markets, which Dara already referred to earlier, which are growing as much as 1.5x faster than dense markets, but only 20% of global mobility trips, there's a lot of opportunity in the U.S. for us to improve reliability and target our product offerings in the sparse markets. Dara?

Yes. And Mark, in terms of the investments that we're making in AV and the capital efficiency, one is, we're certainly investing in the players in AV in terms of the software players in AV. So our latest investment was, for example, in Waabi, which is a leading AV provider of trucks and is getting into passenger mobility as well, which is terrific. And for example, as part of that investment, the first 25,000 passenger vehicles that they produce on their platform will be exclusive on Uber as well.

So we are putting our capital up in order to guarantee supply going forward. And as I said, much of that supply is going to be on profitable economics, which is terrific. And we will continue making these kinds of commitments, Nuro, Lucid, for example, and others to come. At the same time, we're talking with financial players. And the statistics that we're seeing as it relates to the production of AVs in terms of trucks per vehicle per day, in terms of the utilization, the revenue generation of each vehicle and then, of course, the profitability of each vehicle, we work with fleet partners to run the fleet, clean them, keep them charged up, et cetera, repair them.

We have the largest fleet ecosystem in the world. And as a result, we will be able to scale those operations in a way and have a lower kind of variable cost basis, we believe, and the largest global footprint than any player because we already are global.

As part of that, we are talking to financial institutions, private equity players, banks, et cetera, who are already, in some cases, lending to our fleet partners, these fleet partners usually are going out and buying EVs, and that will transition to AVs as well.

So this is something that is absolutely going to happen. You will see news on kind of fleet financing for both AVs and EVs going forward. So while we will make commitments, and these commitments are for profitable economics, we do think that we will have a very, very healthy financing ecosystem, both in terms of equity and debt. Just like Marriott doesn't have to own its hotels, you've got REITs that own their hotels and kind of making an appropriate return on equity, you will see the same thing in the future on fleets. We're very, very early on that path, but we're quite confident we're going to get there and the whole ecosystem is going to financialize just as you see data centers financialize as well.

Congratulations, Balaji. Wishing you all the best, Prashanth.

And our next question comes from the line of Doug Anmuth with JPMorgan.

Just on AVs, can you talk about how you see data and simulation accelerating the path to market for those kind of AV 2.0 software players? And then on the 15 markets that could be deployed by the end of this year, what are the key unlocks or hurdles just to get those up and running either through regulatory, manufacturing or safety or anything else?

Yes, absolutely, Doug. So we're very, very excited on the data and simulation space, generally, SIM capabilities with larger models with stronger compute, SIM capabilities in the industry are getting much, much stronger. Waabi, for example, who I talked about is one of the leading players as it relates to simulations. And what the newer SIM capability is able to do is take a piece of data and then run thousands of different SIM scenarios so that you can create the long-tail cases that can be so difficult in the real world, you can create them in simulation. You can have multiple kind of instances and branches to train your models and prepare them for the real world.

Now the real world is different and the real world can create unexpected circumstances, like, for example, the San Francisco blackout where Waymo had a very, very difficult time negotiating, so to speak. So getting real-world data is incredibly important. And the good news is we're incredibly well positioned to do so. We're partnering with NVIDIA to kind of build a real-world data collection factory that's looking to collect over 3 million hours of real-world specific data to passenger AV, pickups, drop offs, all of the things that Uber drivers have to -- all the complexity that Uber drivers have to deal with. We and NVIDIA are going to be collecting that data and then providing it to our partners as well. So if there's one area where the smaller player has a disadvantage, it is data, but we and NVIDIA are teaming up to democratize AV data, real-world data and provide it to the entire AV ecosystem.

You combine that with advanced simulation capability that many of our partners are developing or have and you get to a road map, a very fast road map to AV readiness for many, many players.

In terms of the 15 cities that we expect to be in, listen, these are -- you got to strike a deal with partners. Obviously, you have to make sure that there's capital for the vehicles. We are setting up depots, acquiring real estate, making sure we have the charging infrastructure in place. And of course, our government relations team is working with the regulators on the ground to make sure that we're ready to go.

And then, of course, we have to work with our partners on the safety case. Safety is incredibly important as it relates to AV. Usually, we will launch with a driver in vehicle and then over a period of time, like we have in Abu Dhabi, we will take drivers out of the vehicle and kind of have full AV capability. So we -- this is kind of machinery that we have built, and we're learning on, and I think that we're going to get faster as we go along here.

And I would just add that while you're thinking about what it takes to launch, in parallel, we have to think about what it takes to scale as well. Launching will have all of the impediments and work that Dara talked about, but this is going to be a game of avoiding bottlenecks down the road. So in parallel, we need OEMs to start ramping capacity. And as you've seen us talk about tens of thousands of vehicles already announced in a few partnerships, we will have a lot more of those kind of OEM relationships coming down the pike. And over time, we expect those commitments to get financialized and for asset owners to take ownership of those. But in the first few years, we are going to be stepping in with some vehicle purchases as well.

And our next question comes from the line of Michael Morton with MoffettNathanson.

Congratulations on the new seat, Balaji. I was wondering, AVs require investors to think about things long term. If you could talk about the different stages and the duration in which you expect them to play out. We're in Stage 1 today, like launching in small launches in markets like San Francisco. Can you talk about how we get to the tens of thousands of AVs on Uber's networks over the next several years? And I know it's a moving target, but how the market should expect that to play out?

Sure. Thanks, Martin. I'll take this one. So as you think about these deployments, especially on Uber's network, what we are going to be solving for initially is to get baseload supply from AVs to meet the demand at the trough of the weeks demand curve. So as you saw in the slide, we have on the deployment in Austin, we are, at this point, able to deliver very, very consistent demand to the AVs on the roads in the market. And if you think about the Saturday to Monday drop for our network, which is about 45%, for AVs, that number is much more consistent, right? So we are able to do that and the first stage will be launching in multiple markets and getting to that kind of a consistent baseload supply.

As we move from that to larger scale, the goal for us there is going to be that the vehicle platform cost needs to come down, and it needs to be able to expand the TAM for us in a meaningful way because we should be able to lower cost to consumers at that stage. And at that point, we can go beyond the trough level demand and start moving towards more medium levels there. Eventually in a very long term, we can think about a majority of supply coming from AVs in certain markets. But that future is far, far away given where the OEMs are on their production ramp curves.

So I think, again, going back to the question of how do we get to tens of thousands of vehicles? That question, the answer is going to be common for every player out there. It will come down to how quickly OEMs can ramp production here. And for OEMs, this is going to be a challenge where they have to think through a novel new use case where they're thinking through tens of thousands of vehicles versus the millions of vehicles that they produce on their traditional cars. And offtake commitments like the ones we are talking about with our partners will come in to play a big role there and financialization of those assets is important from there.

And Mike, just one thing that I would add, if you really think about the long, long game, one of the key elements is going to be what companies are able to utilize these cars in the troughs where they will largely not be busy and are having delivery and freight as part of our logistics ecosystem gives us an opportunity to actually use these vehicles at a structurally higher utilization than anyone else. We have the network utilization. We've already dominated that our network is driving higher utilization even in a circumstance where supply is really low. As supply increases, the utilization advantage that we have, both on the mobility-only network, but then for delivery, for freight, for last mile delivery is going to be super interesting, and it's a structural advantage that we have that's not available to any other player.

Greg, we'll take one last question, please.

Okay. And the final question then comes from the line of John Colantuoni with Jefferies.

Starting with advertising. The advertising business has continued to see impressive growth with penetration in delivery now exceeding your prior target of 2%. Maybe you can update us on how you're thinking about the long-term potential of delivery advertising and any key opportunities you see to keep growing that business at a fast pace?

And second, with delivery growth accelerating to multiyear highs, maybe you could just talk about drivers of that faster growth and provide your perspective on sustainability in the coming quarters?

Thanks, John. I'll take ads and Dara will take delivery. So on ads, we're very, very pleased with the momentum that we are seeing. As you rightly pointed out, we had many years ago talked about 2% as the potential ceiling for penetration with delivery advertising. What we are seeing is that the opportunity size here is potentially much larger. And as we think through where we are on the journey with enterprises versus SMBs. SMBs -- SMB ad penetration is a lot higher than 2% and enterprise year-on-year growth is now outpacing SMBs by a lot more.

So in a way, enterprise advertising is catching -- playing catch-up, and that means there's going to be a lot of runway here. At the same time, our products on grocery and retail and mobility are a lot more nascent, and there's going to be opportunity for us to grow there as well. Dara, you want to take delivery quickly?

Yes, absolutely. So in terms of delivery, I'd say there are 5 factors as it relates to the growth rate. First, I would say, just the basics of selection. Our selection still in many countries is 30%, 40% of the addressable market. Our selection in the U.S., especially in less dense markets, in small and medium businesses is not where we want to be. So you will see -- you already saw an increase in terms of the acceleration in the number of merchants that we have on the platform. You should expect to continue to see that. We are continuing to invest in the sales force, obviously enabled by AI, et cetera. So it's as efficient as it can be. But our selection growth is accelerating. And as you grow selection, you have more items to sell. You have newer restaurants bring new audience, and at the same time, you increase conversion. So selection is #1, and we have plenty of selection to go through.

Second is growth in less dense areas, especially in the U.S., our category position in the suburbs is significantly lower than category position in the big cities, and we are making progress there as it relates to selection. And as it relates to just the reliability of the service, we are growing significantly faster in less dense areas and dense areas, both in the U.S. and outside of the U.S.

Third is newer products that we're selling on Eats. I talked about this. Going into grocery retail, that's another $1 trillion opportunity, and we continue to add grocery partners. We've got 5 of the top 10 in the U.S. That is going to expand. We'll have announcements coming up. And then for example, we have newer announcements like multiyear exclusive with Kohl's that is the largest grocer in Australia that we're very happy to be partnering with. So newer products along with selection is the third.

Fourth for us is membership, 46 million members, growing faster than 50%. Our members overall on the platform, this is not just delivery, but overall on the platform are getting close to 50% of our gross bookings. We're not quite there, but we will pass 50%. And these members are super sticky, whether it's ordering food or ordering groceries or getting a charger or Best Buy or getting an AV ride. These are very, very sticky members.

And then last but not least, there is continued expansion into newer markets. Our international footprint on Eats is not quite what it is with our mobility business. Every time we launch Eats along with mobility, we just have a structural advantage over the other players. And we're able to grow category position. We were the #3 in the U.K. We're #1, all organic.

We launched from scratch in Germany and now are neck and neck with a top player in Germany in a lot of individual cities. So we have kind of -- Japan was another organic launch, and we're by far the #1 player in Japan. So there's still some international growth behind delivery, and I think those 5 elements, selection, less dense areas, newer products, grocer and retail membership and then some new international launches are going to position us to continue to grow top line at very healthy rates and increase our margins at the same time.

All right. I think that is it. So thank you, everyone, for joining us on the call. Huge thank you for the Uber team on delivering another great, great year. And then another big thank you to Prashanth for helping us get through this journey [indiscernible] it's a very different company than it was when you joined. And a lot of that is because of your leadership. And then I think you have prepared Balaji very, very well to carry on kind of what you started and get us to the next level. So big congrats to Balaji.

I think we're going to go ahead and get started. I'm Stephen Ju with the UBS U.S. Internet team. Sitting to my left is, of course, the CFO of Uber, Prashanth Mahendra-Rajah. So welcome back to the conference.

Thank you. Great to be here.

Yes.

I have a different role. I have the privilege of having one of the collectors' items, which was the last vest they gave out at this conference, which was before Credit Suisse imploded. So I have that saved. I don't know how many of you saved yours, but if you remember the one from the -- I think it was the 35th anniversary. So...

Yes. I think it was the 25th anniversary, and it's somewhere deep in the closet in my office. I don't care bring it out. So great to see you. Yes.

And so just kind of get started with the core business. The overall delivery and mobility gross bookings growth has been stronger than Uber had projected. I'm happy you were wrong there at the 2024 Analyst Day. So what have been the biggest sort of upside drivers versus what you had thought at the time?

Sure, sure. So maybe start with a reminder that back in February, we set a 3-year CAGR framework where we said the -- our view was that the top line or gross bookings would grow in the mid- to high teens, and then we would drive leverage off of that for EBITDA to grow in the high 30s to 40%. So you look back at this last quarter, third quarter, we grew 21% at gross bookings level. We're at a $50 billion run rate now. So the business really is humming along.

And when we look at sort of what's behind that strong growth, it's really the -- what's sort of reassuring to me is that it is very broad-based. It is across multiple products, it's across multiple geographies. Probably, the most challenging question I get from investors is what's driving the growth. And it's an unsatisfying answer when you say everything, but it really is a reflection of just how diversified and strong we are experiencing right now.

If we look at sort of particularly where have we been making some investments that are really helping to support that and why we feel good about sort of the position we're in, I think we like the investments that we continue to make on quality. So the consumer experience is really driven by things like liquidity, selection, defect rates, et cetera. We've had I think growth in couriers and earners -- in general, couriers and drivers, 21% growth in the number that have come on the platform. Number of merchants that have come on the platform is up 12% year-over-year for Q3. So that continues to make the supply and choices available to consumers better, which improves sort of the quality of the experience they get.

Another area that has been very relevant for us in 2025 certainly has been focusing on use cases. So we've got some really good use cases such as the New York shuttle, the investments we're making in grocery and delivery, and those are continuing to feed the growth. What else can I say? The focus on the dense markets, I think, has also been one that we're very happy with that instead of focusing purely on the metro cities, we've been expanding to look at suburbs and sparser markets. And those are growing 1.5 to 3x as fast as cities. So overall, I think we're feeling this has just been a great -- it's been a great year for us, and we feel the momentum is going to continue.

Got it. So there's a lot of underlying pieces here that's driving the growth. But are any of these durable secular changes from your perception that should support higher growth for a longer period of time? So at least high teens in delivery and maybe high teens, hopefully low 20s in mobility over the next 3 years?

Sure, sure. The -- I think maybe 2 -- I'll tell you if I zoom back, how do I think about it. The first is what is the -- what's sort of our view on penetration. And if we look at our top 10 countries in terms of gross booking size, the number of adults in those countries who use either Uber or rides or delivery is around 15%. So -- and then you have the other 60 countries where that penetration is even lower, right? So on average, for the top 10, we're at 15%.

And then if you look within a given country, the number of folks who are using Uber and Uber Eats together is only at 20%, right? So when we think about over the next several years, why do we remain confident that there is years of growth in front of us. We know from looking at some of our stronger or more penetrated countries, there's room to grow that 15%. So that's going to continue to tick up and that we've seen that trend very steady across our largest markets. You look at the long tail of countries that are not in the 10 largest markets, and those still have to get to the 15%. So still plenty of room to grow there.

And then you look at the opportunity to get more folks using both products and grow that 20%. Again, plenty of opportunity there as well. So -- which is really why when we -- over this year, we've been talking more about investing some of our profit dollars for longer duration growth ideas because we have many ideas that we view as -- given the opportunity set in front of us that there's a long runway for growth, and we didn't want to just focus on -- we're coming to the end of our -- of that 3-year framework and then what happens at the end of that. There's plenty to go beyond.

Yes. I mean if you're that underpenetrated and if we have that much white space in front of us, you shouldn't be over earning, right?

Correct. Yes, exactly.

So I guess for the U.S. market, how penetrated are we in terms of potential TAM we just talked about? And then strategically, there's user growth versus frequency, usage across platforms as well. So which is going to be the lever or the vector that you're going to be pressing on for the next year?

Yes. So maybe the way that we think about growth and the healthy way that we would encourage investors to think about growth is how many users are on the platform per month and then how frequently are they using the platform. And then you multiply that by changing price and you get to your gross bookings growth rate. So our user growth -- and so let's start with the top level number. Globally, in the third quarter, we grew trips 22%. And if you break that 22% down, 17% growth in monthly active users and 4% growth in the frequency at which those users are reaching the platform. So the U.S. is continuing to grow, and we see -- we continue to see double-digit growth in the U.S. for the last several quarters and continue to be optimistic that, that's what the future will look like.

Interestingly, the penetration of adults in the U.S. is right in line with that 15% average that I told you. So still plenty of opportunity there to continue driving growth here in the U.S. Again, it's interesting being in my chair with a group like this is investors tends to be extraordinarily high users. So from your mindset, it's often a view of there is no way I could use Uber any more than I am, and there's no way my children can order Uber Eats more than they already do. But you are a really unique case compared to the U.S. average. And I think just appreciating your mindset or sort of your operating world is not really what we see across the U.S. and that's why we remain very optimistic about the U.S.

I mean at 15% penetration, it's still an open-ended growth story?

Very much. Yes.

All right. So on the mobility side, let's zoom in there a little bit. I think insurance costs and what you have to incur here has been a headwind over the last several years. And I think in the coming year, I think that headwind is set to dissipate. So help us think through what kind of an impact that will have on gross bookings growth for next year for mobility?

Sure. Yes, yes. So let's see, I've been -- I just cleared 2 years with Uber. And when I started, the -- I guess, it was probably the second most popular question I would get from the owners would be to talk about insurance because it was creating significant pricing pressure for us in the U.S. Over that time. And really prior to my arrival, we had created a cross-functional effort that we had sort of named bending the insurance cost curve. And we looked at it across sort of 3 different areas. The first is what can we do with technology that can continue to bring down our insurance costs? What can we do from a policy standpoint to improve the environment that we operate in? And then what can we do on the commercial side?

So against those 3, we've made really, really strong progress. On the technology side, and there's many examples here, but I'll use one more recent is we have made available to all of our drivers in the U.S. something called Driving Insight. And it is us collecting information about their driving patterns and their driving behaviors that gives them a safety score. It takes into consideration, are you doing fast accelerations? Are you hard breaking? Are you making your turns very sharp? Are there things that you're doing that we can see that say you could be driving safer? And that was purely just for awareness.

We then moved, and we're piloting this in several cities. So early days now to say, if you can improve your score, we want to reward you. We will give you a better selection of rides that you can -- or trips that are more in line with your interest. We will give you better economics on some of your trips if you can get to a certain score. What we've seen is that for the number of miles that are being driven by those who are in the highest rated safety category has -- is growing significantly over time. So the behavior nudges are working, and we are seeing the driver patterns and behavior respond accordingly. So that's an example on the tech side.

On the policy side, we have been working with a number of state situations to improve the equality of -- and the fairness really of the circumstances in various states on how Uber has to -- what levels of insurance Uber has to provide. California is probably one that many of you have heard about more recently. We used to have to carry $1 million of liability for uninsured and underinsured, whereas the car next to us would only have to carry a liability of $300,000. That delta ended up building a cottage industry of folks who were looking for Uber as a source of torque and legal claims. I mean, it really -- we became their TAM. And by readjusting that down, we know that the amount of fraudulent use of the legal system in a number of states, California, we've done some reforms in Georgia, Nevada, et cetera, are also starting to give us benefit.

And the last is, overall, the cost of insurance industry-wide in the U.S. has also started to moderate. So that's now down to sort of mid-single digits from when I started at Uber, it was -- I think it was in the low 20s. So very good progress there. And then the commercial relationships we have are stable. So the result of all of that is we've got a fairly substantial amount of savings that we're putting back into the U.S. market for 2026 at lower pricing. And you should think of that in sort of hundreds of millions of dollars. And we believe that by putting that back into the U.S. market and knowing the experience we have on elasticity of demand, we feel good that trips were actually going to inflect.

Yes. So there's reasons to believe that some of the stuff is maybe a little bit more onetime in nature, stuff like California. But you do have products in the pipeline that should drive that long-term secular product-driven improvements that we were talking about.

Correct. But that -- those California savings are -- they're recurring savings.

Yes. Got it. All right. Switching gears a little bit to delivery side. Your business grew gross bookings at its fastest rate in nearly 4 years in the fourth -- in the third quarter. So talk about what's driving that strength and the initiatives that you're most excited about to drive continued growth in the business.

Sure, sure. So I think maybe underappreciated is that our delivery business growth has been accelerating on a quarter-over-quarter growth has been accelerating sequentially now for -- I think we're on our -- either our seventh or eighth quarter. So it's been a long run of this business growing in scale, but also growing faster than it was the quarter before. So we're really enjoying the momentum.

And you see that acceleration, whether you look at it with the recent acquisition we did or without. So organically or inorganically, we're seeing that. And that growth really is being driven, I think, by a number of areas, but I guess, I would focus on improving the product, right, that the consumer experience and the tech that we're putting in to improve the product through both adding more merchants to increase our selection, adding the -- improving our tech to improve the defect rate so that you're getting a really magical experience when you're ordering from us. There's still plenty of work for us to do there, and that is continuing to give dividends on driving retention.

In addition, there is a great focus on affordability, particularly given some of the pressure that consumers are facing with some of the tariff and economic headwinds that are coming at us. And that focus on affordability, we've been quite fortunate is being partly contributed to by restaurants and merchants who are funding offers to make their products more affordable. So merchant-funded offers are up over 50% year-on-year. And that is where a merchant says, "Buy one sandwich, get one free. Buy this, get a free French fries." Whatever it might be, but offers that they're driving to attract you to their store, also competing with other merchants who are doing the same, but helping to keep the affordability levels for folks quite good.

I think an interesting metric on that, by the way, is we look at our users on an income cohort basis. So I mean, I may not get these buckets exactly right, but I believe it is under 70,000, 70,000 to 90,000 and then over 90,000. So based on your ZIP code, we sort of know what income you are in. The growth in all 3 of those income buckets has remained very steady, even in more recent quarters where I think folks are saying, "Hey, what -- how is delivery growing at a time when it feels like the economy is not as strong as it used to be. But the growth that we're seeing in all of those cohort groups continues to be very strong, which I think just speaks to the sort of the habit of and the convenience and the value that delivery is bringing.

As an overall catalyze the change in behavior.

Yes, very much so, right? I mean no different than we did with Rides many years ago, right? And then lastly is -- that's been really a big boom behind the delivery growth has been our grocery and retail, which has been a big focus for us, adding a number of key groceries that have come on and a number of key merchants. I think it's been a parade. If you look back at our earnings over the last several quarters, you'll see that every quarter, we are announcing key merchants, key large grocery stores coming on to the platform, and we expect that to continue for several quarters. There's still a whole great set of negotiations that are ongoing. And it sort of feeds on itself. As you become more relevant, then more merchants and grocers want to be on your platform.

Yes. I think you brought up groceries. So I think it's go time for Amazon now. It sounds like they've been building the infrastructure for the last couple of years. They've done some things to lower the customers back. So it sounds like they're now going to step up their efforts in the category. So why should investors not worry about the competitive intensity here? And as a result, there's going to be impacts to your business, the consumer incentives go up. There's going to be other factors here. So help us think through that and how the environment might change.

Sure, sure. This is a massive TAM, massive. We are -- we, as an industry, are still in early innings of the behavioral changes that are underway where consumers will get their grocery activity -- grocery purchases delivered to them. Where Uber is fitting into that secular trend is we are the choice for top-up. We are the choice that folks go to when you are in the kitchen, preparing something and you're missing 1 or 2 ingredients. We are the choice that you go to when you're deciding to cook tonight and these are the things that I need to finish out what I need. So that is a -- it's a clear set for how folks use Uber, and we feel very good that, that is sort of what comes to mind as you think about it.

The -- I think you will also see a growing trend as this becomes more pervasive to sort of break the -- it's a very U.S. mindset. For those of you who are not from the U.S., you'll appreciate this. It's a very U.S. mindset to go to the grocery store on a Saturday or Sunday and come back with 2 full cartloads of groceries to load into your SUV or your minivan. In the rest of the world, you're hitting the grocery store multiple times during the week. So it's just behavioral. And I'm confident we will continue to see that behavioral change come through here in the U.S. And as folks move to that more, what am I going to do tonight? Am I going to order food or am I going to get a restaurant food delivered and what's on Uber Eats? Or am I going to cook and therefore, what am I going to need from Uber Eats to be able to prepare that meal? So we feel very comfortable behaviorally.

That business is now running at a $12 billion run rate. It's been growing meaningfully faster than delivery. And then if you look sort of across the globe because it's not just the U.S. market, it's a global market, we are #1 in, I think, 7 or 8 of the top 10 markets.

And of course, you have the customer already there. So that just in front of them.

Indeed.

Great. So I think you touched on this earlier. I think you guys have been fairly vocal about reinvesting a part of the margins in both businesses back into growth, and there's an opportunity for higher TAM capture here. I think on the deck, you've laid out, I think, what's going to be an increase in TAM of 6x, right, $2 billion to $12 billion. And eventually, what should be higher profit dollars over time. So can you help us understand a bit more like what are the largest areas of investments that you're going to be looking at over the next 12 months? And what might be some of the new investments that might be coming up?

Yes, sure. So let's first make certain that there's clarity on how we think about running sort of the company's P&L. We're very confident that we have an abundance of investment opportunities to continue to drive durable growth for Uber for many years to come. And as has always been the case with our business, that requires us to invest now to build the product out, to build the use and then sort of let it loose and watch that grow. I think an easy example would be think of Germany, which 4, 5 years ago, we entered the market, very limited presence. We're losing money.

Now it's a great growing market for us and it's profitable. So we know how to do this repeatedly, whether it's at a geography level or a product level. So we have these list of ideas. We need to balance that with what is the right level of profitability to deliver to the owners versus investing in the business. So what we've talked about for the last couple of quarters, and again, more specifically at our third quarter earnings call here is that we see profitability growing faster than our top line for years to come. But we want to continue to invest in that -- in the ideas to grow that top line. So you probably won't see the same level of margin expansion that you've historically seen. But the leverage will be there, and we're committed to leverage for, again, as far out as I can see.

Now where are those ideas? They're really across all of these areas that we've talked about. We believe that there are still geographic opportunities for us. For example, mobility is in 70-plus country, delivery is only in 30. We believe that there are -- continue to be use case areas that we can develop. We've just launched seniors, which is gaining traction, very similar to teens. It's a product that's a little more tuned for folks who may not be as tech savvy or need someone's assistance in ordering an Uber. We're going to continue to invest in the grocery and delivery space that I have already mentioned that, again, there's merchant selection there. There's product development. There's a lot of search that needs to be improved for us. I think we are early innings on how we help consumers find what they're looking for on the product.

And then I think a big area that sort of was reflected in the organizational change Dara made earlier this year is we've historically looked at our businesses as discrete P&Ls. There's the mobility and then the delivery. And as a result of doing that, we missed opportunities to optimize across the platform. And so you will see us make significant investments in driving that cross-platform utilization. And that cross-platform utilization comes from things like discovering, when do we show you a product or an opportunity that's in a different P&L structure.

For example, if you are on your morning ride to an office or to a meeting, that's an ideal time to offer you a Starbucks. When you are -- when we know what restaurants you have ordered from in the past, then what can we do to encourage you on the mobility side, take an Uber to that restaurant to eat in person. Membership benefits that go across both ways. So lots of investments in those areas that we think can continue to drive the cross-platform utilization. And we know that when you use more than one of our products, your retention is higher and your -- you spend more on the platform in general. I think it's -- you spend 3x more.

Yes. Got you. We only have a couple of minutes left. So this is a topic that we have to touch on.

Sure.

Of course, the topic of robotaxis that everybody has been focused on over the last year plus. So walk us through where you are in terms of your strategy here. You've probably done speed dating a bunch of people over the last year plus. And so where are you between potentially buying and owning fleets longer term? Is there even a likelihood that you might own thousands if not...

We got a minute and 20 here. Let me do this. So one, we are highly -- we have very, very high conviction that the platform is the right way for this market. Why? Because you're solving 2 incredibly important problems. First, if you are a manufacturer and provider of AV vehicles, you need to maximize the revenue per vehicle and the way to maximize the revenue per vehicle is to make sure that it is never empty. It always has a paying passenger in it. We can do that better than anyone because we have the demand.

The second problem you're solving that's critical is if you are a consumer, you want a seamless experience. I'm sure everyone in here has called an Uber at some point. You've had a very long delay in when that ride can get to you. You've canceled. You've tried again or maybe you've switched to a different app. That ability for you to get that ride in the time you want it is critical in terms of how consumers interact with the product. So having a hybrid network that allows you to serve folks through AV or through non-AV vehicles will be critical.

What we -- the technology problem has been solved. Multiple vendors have solved that. It is now really how do you commercialize this and scale this for profits. We will have 10-plus cities by the end of 2026, where you can order an AV on Uber. I think we just announced this morning that Dallas is launching with one of our partners. And then last week, we announced, I think Abu Dhabi, the driver is now out of the car. So the wave is coming, and we think we're really extremely well positioned to help both the AV providers make money and the consumers have the right experience.

Sure. We're a little bit over, but any type of -- any thoughts or details that you can share in terms of what your partnership with Waymo has yielded because I think what that's yielded in Austin as well as Atlanta?

Sure. So for -- we're operating with Waymo in Phoenix, Austin and Atlanta. And I think that our -- kind of the key metric that both of us look at is that utilization metric. And that utilization metric has been extraordinarily high. Those vehicles are busier than 99.9% of Uber drivers in terms of the number of trips per day that they're doing. And for us, that's sort of the proof point that we need to know that it is the platform provides the right level of demand because we can aggregate that demand.

And in the end, we know this from our 50 years of experience, consumers want to get from A to B. How they get there is a secondary consideration. The price they pay is really what's most important. And that is why we've seen -- you've seen so much effort from us not only on maintaining the affordability of Uber X, but investing in low-cost products because we know that, that is what -- that's what drives demand. What drives demand is how I get there at what cost versus the vehicle that takes me there.

Okay. We're going to have to leave it there, Prashanth. Thank you very much for joining us.

All right. Thank you so much.

And we'll see you back getting with UBS. Thank you, Uber.

Hello, and welcome to the Uber Third Quarter 2025 Earnings Conference Call. [Operator Instructions] I would now like to turn the conference over to Balaji Krishnamurthy, Vice President, Strategic Finance, Investor Relations. You may begin.

Thank you, Sarah. Thank you, everyone, for joining us today, and welcome to Uber's Third Quarter 2025 Earnings Presentation.

On the call today, we have Uber CEO, Dara Khosrowshahi; and CFO, Prashanth Mahendra-Rajah.

During today's call, we will present both GAAP and non-GAAP financial measures and 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.

Certain statements in this presentation and on this call are forward-looking statements. You should not place undue reliance on forward-looking statements. Actual results may vary -- may differ materially from these forward-looking statements, and we do not undertake any obligation to update any forward-looking statements we make today, except as required by law. For more information about factors that may cause actual results to differ materially from forward-looking statements, please refer to the press release we issued today as well as risks and uncertainties described in our most recent Form 10-K and in 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. We will open the call to questions following brief opening remarks from Dara. With that, let me hand it over to Dara.

Thanks, Balaji. Q3 was an outstanding quarter for Uber, driven by a powerful combination of innovation and execution. Trips grew 22%, marking our fastest growth since 2023. Both lines of business accelerated with mobility trips coring 21%, significantly exceeding our expectations. This top line strength was fueled by record audience and engagement, up 17% and 4%, respectively.

Gross bookings grew 21%, while average pricing remained relatively flat. This translated into record adjusted EBITDA and free cash flow, reinforcing our ability to deliver affordability for consumers while generating strong operating leverage. We're expecting more of the same strong performance in Q4 with another quarter of high teens gross bookings growth and low to mid-30s EBITDA growth. In fact, we hit a new record over Halloween weekend, this most recent Halloween with more than 130 million trips across Mobility and Delivery and generating more than $2 billion in gross bookings.

While we're proud of what we built, we're even more focused on what comes next. As I often remind the team, great technology companies deliver today while building for tomorrow. To that end, we've defined six strategic areas of focus to guide our next phase.

First, from Trip experience to Lifetime experience. We're deepening engagement across our platform with cross-platform consumers spending 3x more and retaining 35% better than single product users. Second is building a hybrid future, seamlessly integrating human drivers and autonomous vehicles into a single marketplace, giving us unmatched flexibility and efficiency. Third, investing in local commerce, expanding rapidly into grocery retail now and an approximately $12 billion gross bookings run rate and growing significantly faster than restaurant delivery.

Fourth is multiple gigs. This is broadening earning opportunities for 9.4 million drivers and couriers, including new digital tasks powered by Uber AI solutions. Fifth is becoming a growth engine for merchants, helping our over 1.2 million merchant partners drive significant incremental sales through ads, offers and new demand channels like Uber Direct as well as new partnerships. And then finally, Generative AI, embedding intelligence across Uber to enhance productivity, optimize our operations and deliver more personalized consumer experiences. You'll see us invest in these areas with our product, our people and our capital in the years ahead. They're designed to deepen customer relationships, grow our technology advantage and to extend the profitability flywheel that we built. The strong execution, a unified global platform and unmatched scale, we're building the next generation of Uber, one that's positioned to create lasting value for many, many years ahead.

With that, operator, why don't we start questions?

Your first question comes from the line of Douglas Anmuth of JPMorgan.

Dara, can you just talk about the path to increase the 20% of [ MAP ] season markets where you have mobility and delivery, they use Uber One and you talk about these drivers of cross-platform usage. And then could you expand on the recently announced NVIDIA partnership. Both of you have invested in several [ baby ] tech providers. You've also talked about deploying 100,000 vehicles. Can you talk about the time line and then who will own the fleet in that scenario?

Sure, absolutely. So in terms of cross-platform and the penetration there, as we talked about, about 20% of consumers where we operate both mobility and delivery because we know and operate mobility delivery in every single country that we operate in. Only 20% of consumers are active across both businesses. And for example, 30% of our mobility riders have never tried any Uber Eats offering and 75% have never tried gross in retail. And typically, where we see a higher penetration of that is in markets where mobility and delivery are particularly strong in terms of their penetration, Australia would be an example of that. And so just mathematically, the cross-platform crossover is higher.

What we have now done, what we're doing now is to set of specific programs to drive cross-platform behavior. So you'll see kind of [ Top Tabs ] and Rise and Uber Eats app to make it easier to transact across the various businesses. We're creating like personalized experiences to upsell based on context, let's say, [ ride to eat ]. If you're going to work, we'll offer you Starbucks on the way to work. That's a great incremental business for Starbucks and it's kind of a delightful experience for you as well. And then, of course, membership is a huge factor in deepening kind of our own relationship with consumers, but then also introducing cross platform as well.

So all of those are various ways to drive cross-platform the average cross-platform consumer is spending 3x more than kind of monoline consumers. So it's just a mathematical and unique advantage that we have. And I think we're very, very early in terms of the innings in terms of driving cross-platform activity. It's happening naturally. And again, a lot of innovation going on from the teams to make sure that when we target cross-platform usage, we're doing with kind of with the right context and not getting in the way of your "just ordering pizza on a Friday night".

In terms of NVIDIA, we are very, very excited about the partnership there. NVIDIA is creating with [ Hyperion ] like a reference architecture for [ L4 ready ] autonomous that they are going to make available to any OEM out there. And if you kind of step back and you think about the strategy, a future 10 years from now, where every single new car sold, is not only [ L3 ready ] if it's a personal car, but it's also [ L4 ready ] if you want to contribute that car to a ride-sharing platform like ours or fleets might buy those cars as well. That is a very bright future for the world because it will make the world safer in terms of these autonomous vehicles being super safe, not getting distracted in terms of driving, but it's also very good for our ecosystem and that we will have already kind of supply of cars on our platform as well. And we are very early, but I think that we're quite confident in demonstrating that cars, L4 cars that are on our platform can drive higher revenue per car per day than cars than aren't on our platform.

So we think that the NVIDIA strategy and our strategy is very much aligned. We announced the relationship also with [ Stellantis ] with a initial 5,000 vehicles that are going to be powered by NVIDIA as well. But we expect that to scale significantly more going forward. We will use our -- again, NVIDIA is building the software as well. So it's a hardware platform, but NVIDIA is also investing in building out L4 software stack that will be than essentially distributable on any car using the [ Hyperion 10 ] platform, which is a great reference architecture.

And then in terms of who's going to own the fleet, we will -- we can lean in with our balance sheet early on to kind of establish the economics of these fleets. But eventually, we think that you're going to have -- just like you've got these REITs owning hotels, better yield vehicles, I think that you will see yield vehicles show up for fleets in terms of whether they're owned by private equity or public fleets out there. So we can lean in with our balance sheet, but we think that all these assets are going to be financialized over a period of time.

So very excited about the partnership. Obviously, if there's one ally you want in the world in terms of AI or autonomous is NVIDIA and super excited to innovate with them.

The next question comes from Eric Sheridan with Goldman Sachs.

On the delivery side of the business, as you continue to widen out the array of what you're offering users, can you talk a little bit about how much of that is a stimulant to new user growth for Uber Eats or a driver of increased frequency across the broader platform, just to better understand where the sort of the output of the yield is showing up in the business. And then on the AV side, maybe the building on Doug's question, where you've rolled out AVs today, what have you learned so far with respect to the impact of more supply on the road and how it helps either stimulate demand or impact on the pricing side?

Yes. Eric, it's Prashant. I'll take the first part of that on delivery and then let Dara address the AV side. We had a -- we're really thrilled with how the delivery business has accelerated. For the third quarter, it's the fastest growth we've seen in 4 years, four points of acceleration. And it's really -- you're seeing that growth pretty broad across multiple markets. and it's coming from investments that we're making in a number of areas on improving the product.

On the grocery and retail side specifically, we're very excited on how grocery and retail is leading to an introduction of folks into the online food delivery as well. And we're seeing great growth, and I think we have some data in our supplemental charts that show some of the statistics around that, which is gross and retail being a source of creating consumers for the online delivery, grocery and retail. It's a great TAM for us. I think in the prepared remarks, we may have mentioned that we're at now a $12 billion run rate, which is it's growing at a meaningfully faster rate than our online food delivery. And we'll continue to lean into that grocery retail business, which is now variable contribution positive. So it's helping us carry its own weight with high growth and really working quite complementary with delivery.

And then as Dara just answered in Doug's question, it's a cross-platform strategy that we're working on to help folks move across all three of our LOBs.

And then, Eric, in terms of how AVs are affecting the overall business, listen, it's very, very early, the biggest scale operations that we've got are with Waymo in Austin and Atlanta. And what we are seeing is that those markets are growing faster than other U.S. markets. And this is in a Q3 where the U.S. actually accelerated nicely Q3 over Q2. So the overall U.S. market is strong, but we're finding that, for example, growth in Phoenix often Atlanta was more than twice the rest of the U.S. So that's certainly a good signal. What that has also led to is that driver earnings in those markets are super, super healthy as well.

So in Austin, for example, where we have the most AVs on the ground, drive our earnings per hour actually outpaced the rest of the U.S. So whether or not the growth in those markets is correlation or causal, it's too soon to tell. But the market certainly look healthy. Our partnership with Waymo continues to be excellent from an operational standpoint. Waymo utilization is still very, very high. And what we're seeing is an overall market that's healthy as well, which is a really good signal as we transition to this hybrid network of AVs and human drivers.

The next question comes from Brian Nowak with Morgan Stanley.

I have two, one on Mobility and one on Delivery. The first one on Mobility, the U.S. business seems to be doing very well again. Just curious for any further color on progress you're making in the urban versus suburban strategy or the sparse city strategy that you talked about call it, 6 or 9 months ago, sort of drivers of that growth and the nice trip growth you're seeing in the U.S., urban versus suburban.

Now in Food Delivery, any color you can give us about the European food delivery business. One of your competitors is going to be entering a couple of those markets potentially a little more aggressively to come. How do you sort of think about the key investment areas into '26 you're focused on in the European food delivery business?

Okay. Thanks, Brian. I'm going to handle the first question on mobility and then Dara will talk about competitors in the food delivery space.

So the sparse geography strategy, which we had talked about. This originally, if you recall, this originally was an output of the work that we had led on focusing on how to increase our delivery business. And in that analysis and as we begin to look at how we can make better progress on delivery, we identified that there was more opportunities for us to continue to push on sparse geographies in the mobility area.

And the benefit that we're seeing there really is first, it's a very large footprint. So as we look across the globe here and similar for the U.S. our sparse geographies are actually growing at about 1.5x the rate of our denture market, and the penetration opportunity in these sparse markets continues to be quite high. We -- our rough take is that we're maybe 20% into what the opportunity is on the sparse market. So still lots of upside there. And again, that's global numbers, but you're sort of seeing similar demographics for the U.S., which I think is where your question was.

So in focusing on the sparse geographies, we're really focused on three areas. It is on the expanding the availability of the product, increasing the reliability of the product and then ensuring that we have the right product fit. So for example, the wait and save product has been an excellent match for the sparse geographies because typically, when you're in a more suburban environment -- you're in a situation where you don't mind waiting a little bit for your ride, which gives us the ability to find the right match and to compensate for the lower density of cars, which may be in that market. So all of that is continuing to feed the flywheel, and we feel very excited about how smart geographies are going to continue to provide growth for our U.S. market for many quarters to come. I'll hand here now to Dara to talk about the Delivery Competition environment.

Yes, absolutely. So we are very happy about our position in Europe. We've got the leading position in Europe. We have become the #1 player in the U.K. We've been the #1 player in France for some period of time. We're gaining category position very solidly in both Spain and Germany. I was visiting there last week to visit with the teams and understand a bit more with -- about the market. So the momentum in Europe and the profitability in Europe is excellent.

And listen, food is a huge category. It's no surprise. This is [ $2 trillion ] TAM and food and kind of [ $10 trillion ] in grocery. So competition is going to be a fact. We have built a position in Europe organically and some of our competitors have had to buy their way into a European position, and that's always more difficult because it comes with a bunch of integration, mess, et cetera, that we don't have to deal with.

And I think from our standpoint, we're going to do more of the same, which is it's all about expanding merchant selection and improving service, improving reliability in terms of delivering the food to you exactly as expected at the right time. we're going to use the power of the platform to drive cross-sell and membership as well. And then we're going to continue to kind of deepen our partnership with the ecosystem. You've seen announcements with [ OpenTable Instacart, iFood ] as well in Brazil, not in Europe, obviously, but in Brazil.

And I think the last thing that I would say is, we competed with a number of these players outside of the U.S. We compete with] [DoorDash ] in many markets, in Australia, Japan, Canada and we've been gaining category position in those markets for some period of time. So competition against these players is nothing new. And certainly, in the U.S., in Europe and the rest of the world, we have been a category gainer for some period of time. while improving profitability, and I expect that to continue.

The next question comes from Justin Post with Bank of America.

Just would love to hear you talk about the margin flow-through in the quarter if you made any extra investments? And then second, you're thinking about the investments you're going to need over the next 12, 18 months to really scale your AV business? And could that impact Mobility margins?

Okay. Yes. Justin, I'll take the first one, and I'll let Dara sort of comment on that second one there.

So maybe let's take a step back to reflect on third quarter. Our profit, our EBITDA was up 33% and year-over-year. And as a result, we hit an all-time high for our margins at 4.5% of [ GB ], which is up roughly 40 bps year-over-year. The outlook for Q4 is pretty consistent. Another rinse and repeat and we are tracking exactly where we want to be against the 3-year framework we gave you in February of '24, and that is mid- to high teens gross bookings growth and a high 30% to 40% EBITDA CAGR.

We really are proud of how we've been able to drive profitable growth at scale here, both Mobility and Delivery are accelerating, and that's accelerating off of a pretty enormous base. So it is tough to really defy the law of large numbers. And with that growth, we're converting that into the strong profitability and generating a ton of cash, almost $9 billion on a trailing 12 month, which were which we're using to reduce share count.

So we are very deliberately as we have said for several quarters now, we are very deliberately moderating the pace of our margin expansion. Over the last couple of years, we demonstrated that this enterprise and this business model can be profitable.

We've taken our -- for example, we've taken our delivery business from when I joined in late '23 from like a low 2% EBITDA margin to now almost 4%. And that has been through to demonstrate that this is a great business. These are both great businesses. With that, we're now asking investors measure us on total profitability understand that we are committed to annual profit expansion year-over-year profit expansion for as far into the future as we can see. But we will sort of run the balance between the two product lines and on a sequential basis to make investments. And that's because we -- as we've said many times, we have so many exciting opportunities to invest in I won't go through a big laundry list here, but Dara has already mentioned the exciting things we see on cross platform. The investments we're making in affordability and low-cost product offerings is partly what is responsible for the acceleration in mobility that we're talking about.

In some earlier questions, we talked about grocery and retail, which are being a great source of adding new consumers. So I could go on and on, but that's the model, and we're excited about the future. And I would just continue to remind investors focus on our overall profit dollar expansion and know that we are committed to grow that on an annual basis for as far into the future as we can see.

Let me now relate that among the many exciting investment opportunities to hand off to Dara to talk about investment opportunities in AV.

Yes, Justin, so just putting some perspective in terms of AV, is not profitable today. And any new product that we introduced into the marketplace starts off in a position where we're losing money, and we're unprofitable. And the pattern is the same every single time, introduce a new product, invest in building up supply of that product. Once we invest in building out that supply of that product, we build up liquidity in the ecosystem. And as we build up liquidity, we build more consumer demand as liquidity and reliability improves, consumer demand improves as does willingness to pay to improve.

Like that, we've done it 10x, 15x over and over again. And if you look at our strategy on the mobility business, it's a bit of a barbell strategy. So we've got kind of UberX, which is kind of the baseline business. And then we have some premium products like [ U4B ], Uber for business that has premium margins like black and reserve that also come with premium margins as well. And we use those premium margins to invest into some of the categories that we're trying to build our growth back, for example. So this was taxi. It was 2-wheelers moto, 3-wheelers, autorickshaws in India is UberX share, for example. All of those products have been unprofitable when we launch. And as we build out liquidity kind of the profitability of those products improves, and frankly, we can turn those products profitable if we wanted tomorrow, but it's about the balance of investing in profitability and growth.

The same is true of AV here, which is as we're building out our supply base, we'll lose money in AV. I expect that AV won't be profitable for a few years going forward. And as we build liquidity, we can take margins up. Right now, it looks exactly like a number of our early products and kind of we can balance the overall margins of our mobility business with this barbell strategy of premium products, feeding some of our investment products and feeding some of the new growth bets.

As it relates to AV, we'll also use our balance sheet. We'll kind of invest in the AV ecosystem, various players. We will -- we have established a global kind of fleet network to make sure that they can clean the cars, recharge the cars, et cetera. And we're also investing in AV data collection and partnership with NVIDIA, so that we are collecting kind of ride share specific data that we can provide to our partners as well. So this is -- it's something we've done multiple times, and we expect to run the play again in AV in terms of the barbell strategy that we've got.

The next question comes from Ron Josey with Citi.

Maybe sticking with the investment theme, but a to your point on lifetime investments. I think in the letter, you talked about suggested some short-term investments for loyalty gains. Can you help us understand a little bit more on these loyalty gains on the Uber One benefits? Clearly, you've talked about cross-platform. And then back on U.S. trip growth which accelerated affordability, the [ barbell ] approach totally get it. Talk to us about insurance rates and then the benefits from newer driver or newer riders like seniors and teens.

Yes, absolutely. So we're very, very happy about our progress in Uber One. I think the last time that we talked to, we talked about 36 million members growing at healthy rates. That continues. So the penetration of Uber One's in terms of gross bookings, it's about 2/3 of gross bookings for our delivery business and continues to increase its gross bookings penetration in mobility as well. And the benefits are there -- frankly, they're just the best benefits in the industry. You got 6% cash back on rides, no delivery fee up to 10% off of orders plus exclusive selection an upgrade to priority delivery and then kind of surprise and delight other moments as well that we give to our members.

The other good news for us is that when we look at membership cohorts, and membership retention, even though members the number of members is growing very, very fast, the cohorts actually in terms of retention continued to improve. Especially as we move a higher percentage of the users from monthly passes to annual passes as well. And then at the same time, we continue to roll out the program geographically. We're up in -- we're now in 42 countries versus 28 a year ago.

Now I would tell you that early on in the initial months when someone becomes a member, typically, that is profit negative for us because the discounts that we offer the member exceed the increment in terms of how much they use the product and/or how well we retain them. Both of those go up. As the members mature, 6-plus months, then the members actually become profitable as well. So in the first 6 months, actually moving someone over to membership, especially moving someone who is already a high-frequency user, is a net negative. We still make money on those members, but it's a net negative in terms of margins. And then it becomes a net positive as the power of the platform comes in, cross platform comes in and the retention kicks in as well.

So it's just an example of kind of a near-term investments that we make to drive long-term engagement and long-term growth and the math behind those investments in terms of the lifetime value versus the cost of a member acquisition continues to improve.

As a result, we're also kind of investing in more partnerships to align our membership program with other membership programs. Obviously, we have a [ best-in-breed ] program with Amex, the consumer plan of spend. But you're also seeing like exclusive premium table reservations via [ OpenTable ], discounted or sometimes free Clear Plus memberships as well. So the power of the membership is actually getting stronger as we align with others in the industry as well.

Ron, I'll take the second part of that question on insurance. And 2025 really has been a very good year for us in terms of the progress that we've made. And maybe before I get into the elements, just a shout out to the cross-functional team across Uber U.S., who really has helped us in a number of different areas, make great progress in '25.

So we've always talked about sort of three elements to our insurance strategy. And over the course of this year, all three have really contributed to what I think will be beneficial for us in '26 and as we go forward.

On the legislation side, we've had a number of great wins in a variety of different areas, Georgia, Nevada and then most recently, I think there's been a bit a bit of press on the wins in California, which will help specifically reduce the uninsured and underinsured motorist coverage limits that are applicable to us from $1 million down to $60,000 on an individual basis and $300,000 per accident. That is very beneficial for us in California, and it adds to the momentum that we've seen in a number of other states.

On the tech side, we've talked about the driving insights dashboard, and this is a product that the tech team has developed that allows our drivers to get some intelligence and some performance feedback on what their driving behavior is doing. It helps alert them to [ JackRabbit Starts ] and hard braking, sharp turns and so forth. And by giving them this feedback, we are actually seeing drivers on their own sort of improve their driving behavior. And it's actually -- we've seen -- after we've introduced that visibility to drivers, we've seen more miles driven by those in the highest scoring bucket, which is an indicator that folks are adjusting their behavior to be safer drivers.

And then the sort of the cherry on top of that is we've now introduced advantage mode into select cities, and we'll continue to roll that out and advantage mode actually provide some rewards to those drivers who are the -- who are improving their driving score.

And then lastly, on the commercial side, by having a captive and having a top class team that is working on the commercial negotiations we have the ability to continue to keep our partnerships really at a stable level and also where need be, apply some tension on who holds the risk and who holds how much profitability our partners can share from that, and that allows us to keep tension on the cost side. So the result of all these efforts is that we expect that we're going to see hundreds of millions of dollars of savings. And we look to pass those savings on to customers through lower fares really across the U.S. for next year.

The next question comes from Ross Sandler with Barclays.

Just wanted to ask about the new multiple gig initiatives. So what are some of the areas that you're looking into for new work, new earnings potential? And stepping back, how it this initiative impact things like driver retention or overall profitability for Uber compared to just kind of operating only the two areas of earnings that we're in today?

Yes, absolutely. So just similar to the consumer where we see consumers using multiple platforms they retain better. They use our -- they get embedded with their platform more. The same is true for earners, which is to the extent that they use is for delivering and shopping, et cetera, or delivering and/or mobility. They're embedded with the platform or retain them for longer, et cetera.

What kind of -- one way of looking at Uber, obviously, we are a logistics transformation platform in terms of moving people places or getting anything to your home or getting a truck to ship your goods.

Another way of looking at our platform is that we're a platform for work. And the first kind of work that we have gone after is transportation, but we can empower other kinds of work as well, which is what Uber AI solutions is all about the work that we are doing encompasses, training AI models, to rating both kind of voice audio responses to annotating videos from multiple sources for various players like security cameras and robots, for example, we're creating kind of judging query response pairs across various answers, AI answers. And this kind of work is available to both earners who are on the platform all around the world. We need this work done in English, and we'll need it done in Spanish, we might need it done in many other languages as well. And it's another earnings opportunity for both our owners who are in place now, but also new earners who can come to the platforms.

Some of the rules require PhDs, for example, in physics in order to get the gig done, so to speak, and the pay for that kind of work is obviously higher. So this is, we think, one is it is an opportunity to provide more work as the nature of work changes going forward. We do think that it will provide more earnings opportunities for earners and kind of -- which is terrific. And we think this can ultimately be another profitable line of business for us. Uber AI solutions is we're landing a ton of customers, and it is kind of nascent in its operations right now, but the potential that we see is enormous.

The next question comes from John Colantuoni, with Jefferies.

First, can you talk about any key capabilities provided by the [ Toast ] partnership? And how it fits into your broader framework for leveraging partnerships to help drive growth and profitability. And second, Prashanth, maybe you can talk about the rationale for shifting some of the non-GAAP metrics. And for the move from adjusted EBITDA to adjusted operating income, specifically does this have any reflection on your ramp in capital investments in the Autonomous Vehicle space?

Yes, absolutely. So in terms of [ Toast ], We're very, very happy about that partnership. They are a strategic partner. And obviously, [ Toast ] is kind of one of the leading point-of-sale offerings in the industry. What you will see in terms of toast is that a restaurant that is post enabled essentially will be automatically enabled for Eats as well. So the integration between Toast and Eats is going to be seamless. Menu uploads will be seamless. Picture uploads will be seamless. So we're actually using the data, the restaurant data that Toast is empowering and then moving that data directly across to Uber Eats. It's going to simplify kind of setting up your operation on Eats, it's going to simplify how you market on these and it's going to kind of save a bunch of time for those entrepreneurs who are building out our restaurant ecosystem.

So I think it's just going to be a more seamless integrated experience that gets restaurants a lot more control, a lot more flexibility and allows them to launch on each immediately. We are also hoping to help Toast grow its international presence outside of the U.S. Obviously, they're very, very strong in the U.S. our footprint outside of the U.S., as you know, is much more mature. So we think this is kind of a win-win. For us, it gives us more footprint across cost ecosystem. And then for Toast, it helps them grow outside of the U.S. as well.

Prashanth, do you want to take the second?

Yes. Thanks. So yes, thanks for the question, John. So the rationale really is a reflection just as we, as a company, grow in size, scale and maturity, we want to provide investors with metrics that allow for better comparability across the alternative options they have on where to put their clients' capital and moving to an adjusted EPS model really allows for that ease of compare, and it reflects that we, as a management team, understand that there are real costs that come from depreciation from some of the software amortization, the stock-based comp, et cetera, that need to be reflected in the cost of our -- running the business as well as including really the benefits that come with reducing share count from returning the cash that this enterprise is generating to shareholders by repurchasing our shares.

So nothing more to it than really I think it's a journey that all companies go through as they scale and become more meaningful in an investor portfolio. And then personally, I think as CFO, I like having the LOB leaders held to an adjusted operating income because there are choices that they make on, for example, talent decisions and location decisions, which can impact costs, such as stock-based compensation or depreciation, and those are real cost to the business and it helps to have that also in their consideration as they think about where they want to make their investments to continue to drive top line growth, but being mindful of our commitments to continue to grow profitability. So it's really just, I think, the appropriate evolution for the company given where we are.

All right. We'll take the last question, please.

The last question comes from Nikhil Devnani with Bernstein.

I had a couple, please. So first, I wanted to follow up on the strong results in mobility. And I'm just wondering, did the upside primarily come from the moderation in insurance pressure? Or were there other network improvements that unlocked the growth in the quarter as well. I think the letter talks about driver supply and product uptake. So just trying to understand the relative contribution from those additional factors and how they might continue to stack in your favor into '26?

And then my second question is on AVs. Dara, can you speak a little bit about the scale and quality of real-world data that you're able to contribute? It seems like that's a core constraint for a lot of AV companies. and you can help chip away at that problem. So I'm curious to hear how you're going about tackling that.

Yes. Thanks, Nikhil. I'll take the first one .And it's very specific to mobility growth, I believe, is where you were asking. So the business is doing really well. Look, the investments we've made have -- are starting to come through at a great rate that the marketplace trends are strong. The product innovation is giving us conviction. I think what we would like investors to really focus on is this growth is trips led, and that is the healthiest way to grow the business because it comes from expanding our audience, their mobility audience hit almost 150 million users. That is an all-time high for us. Our frequency growth was also very strong. So together, you're seeing the right drivers behind it. And it's coming from great growth on the core as well as the new product portfolio.

So we still feel very confident as we look to 2026 and beyond. I mean, the metric that we -- that keeps us excited is -- for example, looking at our top 10 markets, only 10% of the adult population uses Uber on a monthly basis. So we have -- we continue to see great opportunity to continue to penetrate the TAM.

And I think Dara has made reference to our [ barbell ] strategy and maybe just to help put that in perspective. UberX, which is really the core engine of our growth represents sort of about 2/3 of our trips. So when you look at the wins, you see the investments we've made in product innovation on the low cost, such as the [ Moto ] product, Wait and Save, the shuttle that we're running in New York, shared ride. All of those are making Uber more accessible to a broader population and helping us onboard new users, which is behind some of that audience growth.

And then the investments that we're making in premium, which include the comfort, the black, I think we've made mention that we're working to launch an Uber Elite product in the next quarter or 2. All of those help us to balance that overall profitability to allow us to continue to drive the margin expansion. So overall, we feel great about the growth. And then sort of more specifically, if we think about what happened in third quarter, I would tell you that it was -- on the trip side, we had good growth internationally, LatAm and APAC, and we also had a great European summer travel that really helped out on trips. And then just in terms of helping you bridge from the high trip growth of 21% to 19% of [ GB ] growth, as I mentioned, that growth internationally, that puts a little bit of mix pressure down because, obviously, a trips outside the U.S. and Canada are at a lower price point. So that puts a little bit of trip pressure as well.

So I wouldn't really characterize what we saw in Q3 as one-off. We're now entering our busiest quarter. Dara already made opening comments on what a spectacular weekend we had for Halloween. So we feel good that 2026 is going to be another great year for Uber, and we'll continue to be a business that has the ability to generate high mid- to high-teens growth, convert that into great profitability, convert that into great cash and then use that to reduce share count. And that's the model we want people to get behind.

Right. And then in terms of AVs and collection of real world beta, we are collecting real data as we speak. The advantage that we have is we already run a rideshare network, and it's essentially putting a vehicle in place that is appropriate for collection of this real-world data. And as you can expect, the right share use case is particular in terms of pickups and drop-offs or the commonality of ligand drop-offs, stadiums, airports, et cetera. We have -- obviously, we're working very closely with our AV partners and the feedback that we're getting from them in terms of the value of the data and trading their models is very, very positive.

And then the NVIDIA announcement for us is a marker to really scale the operations here. We are looking into building out a more robust sensor stack, for example, to get higher definition data quality across both camera and LiDAR for some of our partners. And we're not really restricted by scale because it's either a vehicle or it's a sensor suite that we can put on top of these vehicles. we've got, for example, we'll probably work with some of our fleet partners as well as some [ IC ] drivers as well. So this is something that we can scale up essentially as much as we desire in partnership with NVIDIA and our other AV partners as well. And again, we think that between the Hyperion hardware platform, NVIDIA working on for themselves, the multiple partnerships that we have, both in terms of Mobility and Delivery on AV and now our ability to collect data -- and then the [ SIM ] capabilities for many of these partners are much stronger in terms of collecting one piece of data and then running thousands of scenarios from that core piece of data. We think that's a terrific combination to bring AV to market as quickly as possible and obviously on the Uber platform. So very excited about the possibilities here.

All right. Thank you very much. Thank you for your questions, and thanks, everyone, for joining us and to the Uber teams, great quarter in terms of growth, both top line and bottom line. and hopefully, more to come. Thanks, everyone. Talk to you soon.

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

Okay. I think in order to keep us on track, we're going to get started with our next fireside chat. It's always my pleasure to host Dara Khosrowshahi, he's the CEO of Uber Technologies.

Dara, thank you so much for being part of Communacopia Technology again.

Happy to be here. Thank you.

Okay. So look, to lay the foundation for our discussion, why don't you talk a little bit about the evolution that the platform has been on over the last couple of years. And I'm sure we have 1 million topics we have to get through and only 35 minutes to get through it. But why don't you set the table for us in terms of the evolution of the company, evolution of the platform?

Yes, sure. So we're very excited about where the company is and where we're going in that we continue to be the only global player that's running both mobility and a delivery marketplace. And in the early days, there was a hypothesis that the 2 would help each other in terms of moving demand from one side of the platform to the other side of the platform and then supply as well as drivers engaging on both sides of the platform. And I think as we've matured as a company, we see that hypothesis coming to life and coming to life in a way that advantages us versus our competition. And it allows us to acquire customers from mobility, move them over to delivery.

1/3 of deliveries first trips come from the mobility app and more and more we're going delivery to mobility as well. And if you open up your Uber app now, you will see it will look much more like an everything app, which is both mobility and delivery in that same app as well. So the platform is coming together really well. And if you step back and you think about kind of the overall growth drivers of the business, there's a core business for us that continues to grow really well. For example, our mobility business in our top 20 markets on a global basis, mobility trips are still growing in the teens. Delivery growth is very, very healthy as well.

And one area of growth that we're seeing that is very encouraging is growth in -- from kind of the urban markets that has been our traditional strength to the less dense areas and growth in less dense markets tends to be anywhere from 1.5x to 3x faster than our core market growth. So that core business in the middle of big cities growing really, really well and then consistently expanding into these less dense markets as well, which is terrific. Then we have on top of that a set of growth bets portfolios. This is Reserve and Uber for Business and Grocery and 2-wheelers and 3-wheelers, et cetera. These are newer businesses that we've landed. That portfolio of businesses is now -- does about $30 billion in gross bookings, growing faster than the core and now is responsible for 1/4 of our first trips coming from these new businesses.

So it's not just about growth, but it's actually newer customers coming on to the platform. Then there's -- once we get kind of the core and the growth bets, we mix them together with the power of the platform, so to speak, that's essentially moving riders, customers who use both Rides and Eats on a monthly basis or on a quarterly basis, spend 3x more than ones who don't. And then on top of that, we lock them in with membership as well. We've got over 36 million members growing 60% year-on-year. Members spend 3x more. So the cross-platform monetization and membership really locks in these customers. Fourth big growth area for us is AV that I'm sure we'll talk about going forward. It's a $1 trillion-plus TAM that's being released for us. And then as we have all this growth, we've proven the ability to leverage our margins as well.

So we think that last quarter, we grew top line 8%, bottom line, 35%. I think we'll continue to leverage the P&L that way. And then, of course, we'll try to deploy our capital smartly now that we have a ton of free cash flow as well. So that's kind of the picture of the overall business. But the platform side, the ability for us to acquire new customers, have those customers interact across the platform is increasingly a big part of our business. We actually -- I brought on Andrew Macdonald, who has been with us for 12 years. He's one of the operational veterans of this company now as COO and President to really kind of run these operations with a single operator on top that I think is really maturing some of our platform efforts there. So I'd say so far, so good. And we've had a couple of good years, and I think we see a couple of good years ahead of us.

Okay. Lots of lines in there, but maybe picking up on a couple of those themes. With the appointment of a COO, talk a little bit about management structure inside the company and marrying vision and execution, where you want to take the platform for the longer term versus the blocking and tackling of executing every day.

Yes. Listen, vision without any execution is no good and execution without vision at some point hits the wall, right? And I think having that on top of both businesses allows us to really push this platform concept much more aggressively. So just an example for folks, only 1 in 5, less than 20% of our monthly active platform consumers use both Rides and Eats in a single month, right? So it's only 25%. Moving -- less than 20%, moving that up is enormous incremental volumes for us. So we think that our ability still to cross-sell is significant. 30% of our mobility users, these are in countries where we have both mobility, both Uber and Uber Eats. 30% of Uber users have never used Eats. So for us to introduce that population to Eats is still enormous potential and enormous potential growth for Eats.

And in the past, while we're one company, kind of the P&L has gone the way, right? You have 2 totally different operating leaders and ops teams, et cetera, 2 different P&Ls. So we were constantly trying to make trade-offs with those P&Ls. Now you have one individual along with Mac and then Prashanth, our CFO, who are making the trade-offs between the 2 businesses, really going after that next dollar of growth, wherever that growth comes from, whether it's from mobility or delivery, actively trading off both.

And then we have a number of the platform -- big platform businesses now like our membership business, our AV business and, for example, our advertising business, all reporting directly to Mac as well. So I think we've got the right kind of both operating setup and kind of when we step back the opportunity generally of all things on demand and AV and a bunch of the growth that we're making, I think that kind of the road map that we have and the runway that we have is pretty significant.

Yes. I think one of the challenges I always run into in talking about the business with investors is that I think investors generally over-index to frequency. So you talked a little bit about some of those stats that I thought were super interesting about pockets of the ecosystem that under-index to frequency. When you think about level setting on frequency and behavior and driving more repeat behavior across the platform, talk a little bit about some of the initiatives that are key to that and maybe wrap it around a little bit of a conversation of how Uber One can continue to evolve as a subscription product in the years ahead.

Yes, absolutely. So when we look at frequency, first, we think the frequency now for us across our platform are all-time highs. And I think we will continue to hit all-time highs, hopefully, for the foreseeable future. But there's very, very substantial opportunity there in that while our frequency across the platform is around 6, our monthly active platform consumers use us an average of 6 times a month, about 50% of those consumers are only using our services 1 or 2 times a month versus if you think about our top 10% of frequent consumers, they're using our services an average of 15 times a month.

So moving that 50% that's only using us quite infrequently now to using us 3 to 4 times a month to using us getting up to the average and then becoming the power user is a significant focus for us. How do you move that early lifestyle -- early lifetime consumer to a much more mature consumer. So the opportunity, we think, to increasing frequency is very, very significant. In terms of how we're going after that opportunity, I'd say there are 3 big angles to it. One is -- probably 4 big angles. One is just keep focusing on the core and making sure that the product gets better. And by that, I mean selection increases, the number of stores that we have on Uber Eats has increased by 14% on a year-on-year basis. The more stores you have, the more choice you have, the better conversion of your users, the more they come back, et cetera.

Our error rates on Eats, the percentage of times when something goes wrong with the delivery are all-time lows. So it's very, very important. People can talk about a bunch of highfalutin things. But like first things first, which is every single year, the core product is getting better and better and better. And if the core product gets better, we see people coming back to us more. So I'd say that's one. Second for us, a real focus is affordability. I'd say one of the criticisms that we have is some people say, oh, it's an expensive product. That has never gone in the way of, let's say, our growth. But we specifically have a significant work stream on affordability. If you look at mobility, for example, our lower-cost product, our 2-wheelers, our 3-wheelers are growing at very substantial rates compared to the whole business. You're taking the cost of the vehicle down. Therefore, you can take the cost of the ride down.

Our Wait & Save product, our share product, high-capacity vehicles are another way, get more than one person into the vehicle or get the person to wait a little longer, you can decrease price. Wait & Save now is expanding to 30-plus countries, saves on average of 9% per ride as well. So again, as you bring affordability down, you get more usage, and then on the Uber Eats side, we have a product called Merchant Funded Offers, which is merchants can put in offers, buy one, get one free, spend $10, get something free, et cetera. These merchant-funded offers now are being redeemed at the level of $1 billion per quarter. So these are funding that comes from our merchants, gets handed over to our customers. Merchants get kind of higher exposure in the marketplace as a result of this funding, and it's not something that comes out of our margin, so to speak.

So base business gets better, affordability. Third for us is just more stuff. The more things we have on the marketplace, it goes to what we were talking about on the platform, the more services you have, the more customers use us. And so for example, with food, the addition of grocery, grocery users on Uber Eats transact substantially more for us than only online food delivery users as well. And then fourth for us is membership. We have the best membership program in the world, just like Netflix has the best content. They have more content than other players, which makes them the leading player in entertainment. Membership, for us, we have more content than any other player because you get discounts on mobility and you get discounts on delivery.

Over 60% of delivery gross bookings now come from members. Focus now, we're going to keep that going, and we think we have more upside there, but we're really starting to focus on mobility benefits as well. And one of the benefits that really seems to be resonating with our mobility users is essentially surge savings, where they can -- our members can be protected against certain surge levels as well. That looks like it is a product that is resonating very, very well with our members. So I think there's a lot of upside in terms of driving additional membership for mobility product that generally has been trailing delivery, which has been doing incredibly well. We've got over 36 million members.

Our revenue from membership subscriptions now is over $2 billion now on a run rate. So it's a strong business of itself. And at the same time, it really drives lock-in and use of the platform where members spend 3x more than nonmembers retain at higher rates, as you would expect as well. So I think the frequency kind of road map is a pretty strong road map for us, and you'll continue to see us kind of hit all-time highs as we progress along this road map.

Okay. Maybe just one quick follow-up because you've been adding benefits to Uber One as membership over time, elements across a lot of different partners in that ecosystem now in different industries other than the ones you necessarily operate in. How much of a living, breathing membership is this? Like how far can it go in terms of like looking across ways to partner with other companies to create value for external parties as well as for your member base?

I think we're very, very early in terms of the development there. Our membership program has only been around for, call it, 5, 6 years. It is both relatively immature compared to its potential in terms of the features that we have and the partner ecosystem that we're developing. And the good news is because of our global scope, because of the breadth of the product that we have, we are a leading kind of partner for all these players. And the benefit of these partnerships is that they tend to convert a higher percentage of low-frequency consumers to membership.

So if you have a high-frequency person who uses -- who converts over to membership, if you're already transacting 7 or 8 times a month for us and you become a member, there's incrementality in terms of your use, but the incrementality is less than, let's say, a Delta SkyMiles user who through our partnership with SkyMiles converts into a member as well. The incrementality of membership in terms of frequency, in terms of just incremental use or moving off of other platforms, we see higher in terms of some of these third-party deals that we're making.

Okay. I wanted to turn next to the delivery side of the house. This is a business that began anchored around food delivery. And now in our view, we've written about it becoming more of a local commerce business over time. So talk a little bit about the drivers of growth as you expand beyond core food delivery into areas like nonfood delivery and grocery over time.

Yes. So I'd say the first thing, again, if you start with the core, the food delivery business, if you look at the penetration of, for example, the broad retail commerce category, broad retail commerce is in the mid-20s in terms of penetration of overall e-commerce. Delivery is still substantially more immature than that. It's probably in the mid-teens. So I do think that the online food, the core food delivery business still has significant runway ahead of it. And there's no reason why it can't penetrate just like overall commerce, if not more, because we certainly think the benefits could be higher. So the OFD business is growing at very, very high rates. We're very happy about the continued penetration and the growth there.

On top of that, obviously, we see our grocery business as well. Outside of the U.S., we are in a position. We're absolutely in a pole position to be the leader in terms of grocery delivery. In the U.S., we've announced we're very excited about improving our selection. Selection for grocery is up about 35% as far as number of stores, is accelerating over what we've had in the past. We've announced DICK'S Sporting Goods, Five Below, Dollar General, Family Dollar. So a lot of retail partners coming on to the platform. And again, as you improve selection, the product gets better, you get more audience, conversion goes up, it all adds up. So we're very, very happy about both grocery and retail. And then on top of that, we have our direct business, which is essentially delivery on demand for us to power retailers to build out their own front end. That's a business that is growing at very, very high rates, not profitable yet.

We're not running it for profit. We're running it for growth, but we think there's substantial opportunity there of kind of delivery of everything on demand. The pattern that we see is consumers value their time. Their perceived value of time is only increasing. And any time we introduce new products and kind of the reliability and the ease of using our products, we see consumers coming on to those products. So there's a very, very long road map as it relates to grocery and delivery. Today, the grocery habits that we see are more of a top-up habit, which is, call it, $30, $40, $50 basket sizes versus the $100-plus weekly shop. So we're much more in the top-up category. But what we're seeing is 2 things. One is top-ups as a percentage of the overall grocery category are going up because it's just becoming easier.

It used to be -- I used to be an appointment shopper, my wife and I would go to the grocery store once a week, once every 2 weeks and load up, where you can just kind of order -- just like with Amazon, it's like I'll order a single thing and press delivery there. With Eats, if you're a member, get 2 or 3 things. It's no big deal. So we're seeing kind of top-ups grow as a percentage of the overall category. And we think eventually, as you get more consumers embedded into our ecosystem, we can become that weekly shop, and we can increase the basket size substantially. But right now, the focus is just drive selection, just drive frequency within that top-up area and then eventually, you can become kind of the prime area for shopping.

Okay. I want to turn to the mobility business and just again talk about sort of the aspects that can compound growth. How are you thinking about elements of mature geographies versus immature geographies, the traditional product versus how the product is evolving. You talked a little bit about affordability earlier. Talk a little bit about the building blocks of growth within the mobility business as you see it over the next couple of years.

Yes, absolutely. So I think, first of all, the core business is growing at very strong rates. And even if we're in our top 20 markets on a global basis, on average, are growing in the teens in terms of trips. So the core business is very, very healthy in aggregate, even in the large markets that we're in. I talked about going into small markets, less dense markets, these are the suburbs. They may be smaller cities, secondary, tertiary cities, growth rates substantially in excess to the core. So I'd say that is one area of real effort. And then we have this barbell strategy in terms of high-cost and low-cost products. The higher cost products, the premium products are the reserve products, the Uber for Business products, SUV comfort, et cetera. Those products come with higher average purchase price and higher margins.

And we're using the margins of that premium product to drive our more affordable products. We talked about 2-wheeler, 3-wheeler shares, for example, one product that we're pretty excited about is our price lock product. So you can go in, lock price, and this is aimed at the commuter. And as you can tell, we can tell from trip patterns, whether you are a commuter or not when you leave in the morning, the predictability of the place that you go to. And as we identify these commuters and sell price lock to them, the commuter who buys price lock is taking 6 more trips per month than the commuter that isn't. So there's a combination of both affordability and predictability that then drives frequency and brings us kind of those incremental trips as well. And so it's kind of this barbell strategy that we're running.

So overall margins are still very, very strong, but you're adding a lot more growth to the overall ecosystem. Autonomous is obviously a huge, huge growth driver for us. So between kind of the base business growing well, the barbell strategy driving margins and growth, autonomous. And then for us, as I mentioned, membership more is as we build out our membership ecosystem for mobility, I think we'll see more incrementality for mobility coming from membership as well.

Got it. I did have to smile because the app is getting quite good at predicting when I'm about to leave my apartment to head down the West Side Highway every day. So...

We measure that, which is like do you -- it's a one-click ride.

It's getting very good. I want to come back to the overall demand environment we find ourselves in. There still is a fairly robust conversation about the macroeconomic environment among investors. Can you level set what you're seeing in terms of demand across the array of products you bring to the consumer and the business lines?

I think it continues to be quite encouraging in terms of demand. Obviously, we've been growing GBs 18-plus percent every single quarter for the past 2 years. So generally, our growth is very healthy with higher margins as well. So we don't have to kind of buy our way into growth, so to speak. I think across every level of consumer demand, we continue to see encouraging trends, which is frequency is all-time highs. We're not seeing consumers trade down in terms of the product that they're buying or the stores that they're shopping in or the restaurants that they're eating for, we're not seeing any signs of trading down. We are actively driving affordability of our products.

It's something we think that, obviously, gross bookings growth drives the bottom line, but high gross bookings growth with high trip growth is kind of the best solution for us. And for example, with our mobility business, grow 19% the past couple of quarters. We see pretty consistent GB growth, at least for the next couple of quarters. So everything that we look at in terms of consumer demand looks pretty consistent with what we've seen in the past, which is healthy. And remember, for us, there's -- we're kind of hedged in terms of the economic environment, which is obviously in stronger economic environment, we have more demand come in. The cost of labor tends to be pretty strong. But to the extent that the economies weaken and the labor market loosens up, that reduces the cost of our supply, so to speak.

So we get more supply into the marketplace, surge comes down, pricing comes down, which then drives demand as well. So we are -- we have a pretty good hedge both in terms of strong demand markets and weaker markets. At this point, we're not seeing signs of weakness, but we're certainly looking around.

Okay. Understood. So we have to talk about AVs. Why don't I give you the floor to just level set what you've learned about the AV environment as it's built in its momentum over the last 6, 9 months? And what you see as some of the disconnects between the way outsiders think about AVs versus maybe the way you guys as a company think about AVs?

Well, I think we continue to see AVs as it's just a terrific product. It is -- we continue to see the development of the entire AI ecosystem and AV is a flavor of AI in the real world. These technologies are getting more mature. There's a ton of investment going into all these technologies. The sophistication of these models is getting more and more powerful. So in terms of kind of the development of the core tech, I'm more encouraged in terms of the velocity of the development of the core tech than I ever have been. It is happening, and it's happening in multiple places in China, here in the U.S., in Europe, it's -- companies are absolutely getting to the finish line. The product that we see, and we're working with Waymo, who is, I think, best-of-breed in the world there, it's a product that consumers love.

So in the markets in which we have developed AV, the consumer willingness to pay a premium for the product has been a nice surprise. These are nicer cars. I think consumers are willing to pay a premium for the safety that they have. Consumers rate the product at very, very high rates. And we're seeing the demand that we expected for the product, which are the Waymos that we have in market now in Atlanta and Austin, they're busier than 99% of our human drivers as well. So we're able to drive really, really high utilization of the product. And one of our core thesis was if you put your product on the Uber marketplace, your utilization is going to be excellent and the utilization that we see in the field certainly supports that assumption.

The results that we're seeing are even better than our expectations as well. And then the real question for us is the cost of the vehicles, the cost of hardware coming down. And again, we're seeing very encouraging trends there. LiDAR, which used to cost $20,000, $30,000 a pop, now solid-state LiDAR coming out of some of the Chinese manufacturers is costing $300, $400 per LiDAR as well. So the affordability of hardware is moving absolutely in the right direction. We have over 20 partnerships now with various AV partners. We just announced a new one, Momenta, which is a player out of China, actually in Munich.

So Europe is certainly open to this technology as well. And I think even this year, you're going to see 4 to 5 deployments, both in the U.S., 2 in the U.S. in Texas, Avride and May Mobility and then 2 deployments outside of the U.S. as well. So you're seeing this technology in the street. It's technology that our users love, and we're quite confident that it's going to be a significant TAM expander for us.

Okay. We only have a few minutes left. When you take all of the growth initiatives you've talked about so far, how do you, as a management team, think about balancing incremental margins and delivering on the margin targets you've talked to investors about against making sure you're getting the balance right in support of all of these growth initiatives?

Well, listen, I think to some extent, it's an art and not a science, right? There's always a debate as to how much growth can we drive, how much margins can we drive. And there's always a trade-off between the 2. I think we have largely got it right as a company. And I think the good news for us is we are in a position because of the leadership position that we have in most of the markets that we operate in, in both Mobility and Delivery because of the platform advantages that we have in a unique business model and the global scope and the scale that we have, we're in a position to be able to drive both top line and bottom line, very healthy top line and leverage our margin as well. So we haven't gone to that point of, let's say, painful trade-offs where you have to kind of choose one or the other.

We're able to deliver both, and we gave our investors kind of a 3-year growth formula that we talked about, and we're well on our way to hit those targets as well. And I think that now Andrew Macdonald coming in as President and COO, is actively -- we are making active trade-offs between Mobility and Delivery, which was harder to do in the past because, again, we had those businesses separate. So I think we can continue to grow the business and grow our margins for the foreseeable future. I don't see an end to that.

Okay. Last topic before we close out, just capital allocation. You've been on a bit of a journey in returning more capital to shareholders. When you look at the balance sheet you have, the scope for the potential return of capital to shareholders, the scope to invest in growth initiatives, what are the right priorities that are your focus points? And how might those priorities shift in the years ahead?

Well, I think growth initiatives are always going to be -- organic growth initiatives are always going to be top priority for us. We are actively investing in the business. There are many new initiatives that we're taking on where we're losing substantial sums of money. And I consider that a good thing, right? So it is -- we're constantly having pockets where we're leveraging on profitability and plowing it back into newer businesses that we're trying to grow. So organic growth comes first in terms of our priority. Second area that we're looking at is the AV space, right, in terms of funding new and promising players in the AV ecosystem, making commitments, let's say, to a Lucid for thousands of vehicles.

And again, we've got the balance sheet and cash flows to continue to make those commitments. And I do think that as the AV economics and the ecosystem matures, many -- much of those balance sheet investments that we have made have the opportunity to be financed by third parties going off balance sheet. But in the short term and medium term, where appropriate, where we can get an advantage, where we can drive growth, we'll be aggressive with our balance sheet because we have substantial cash flows to fund these operations. Third, I'd say is M&A, opportunistic M&A, and these will be more, I would say, tuck-in type acquisitions. For example, the acquisition of Trendyol Go in Turkey that so far has been an absolute terrific success for us. And then fourth, of course, is buybacks.

And because of the cash flow generation of the company, and we're growing, we're going to grow margins. So cash flow, free cash flow is only going to improve over the next couple of years that gave us the confidence to announce a $20 billion buyback. When we announced buybacks, we actually follow through on those buybacks. But it gave us the confidence to announce that buyback knowing that our free cash flow generation would be able to get through that kind of a buyback, but at the same time, have plenty of capital left over for organic and inorganic opportunities as well. So I think the company is in a good place. And we think the stock is a great opportunity as an investor. We know the company really well. And I think that effective capital allocation over the long term can be a real booster in terms of stock price value, and we think we can definitely deliver that boost.

Okay. Well, Dara, thank you again for coming and being part of the conference. Please join me in thanking Uber.

Thank you very much. Appreciate it.

Hello, and welcome to the Uber Second Quarter 2025 Earnings Conference Call. [Operator Instructions] I would now like to turn the conference over to Balaji Krishnamurthy, Vice President, Investor Relations. You may begin.

Thank you, operator. Thank you for joining us today, and welcome to Uber's Second Quarter 2025 Earnings Presentation. On the call today, we have Uber CEO, Dara Khosrowshahi; and CFO, Prashanth Mahendra-Rajah.

During today's call, we will present both GAAP and non-GAAP financial measures and additional disclosures regarding these non-GAAP measures, including a reconciliation of GAAP and 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.

Certain statements in this presentation and on this call are forward-looking statements. You should not place undue reliance on forward-looking statements. Actual results may differ materially from these forward-looking statements, and we do not undertake any obligation to update any forward-looking statements we make today, except as required by law. For more information about factors that may cause actual results to differ materially from forward-looking statements, please refer to the press release we issued today as well as risks and uncertainties described in our most recent Form 10-K and in 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.

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

Thanks, Balaji. Q2 was another quarter of new records for Uber as we achieved all-time highs in both audience and frequency. This powered robust growth in trips in gross bookings, both up 18%. We also reached new highs for adjusted EBITDA, GAAP operating income and free cash flow. We're expecting more of the same strong performance in Q3 with another quarter of high teens gross bookings growth and low- to mid-30s EBITDA growth.

We've already made great progress harnessing the unique power of our platform to foster deeper engagement with our consumers who visited our apps nearly 30 billion times over the past 12 months, but we're just scratching the surface of what's possible. Today, fewer than 1 in 5 of our consumers are active across both Mobility and Delivery, and we believe this can and will go much higher over time.

That's one of the reasons I'm super excited that Andrew McDonald has stepped into the role of COO. One of Mac's primary focus areas will be supercharging our platform strategy and the growth that it can bring with our Mobility and Delivery leaders now reporting directly to him as well as the cross-platform efforts like advertising and autonomous. While we remain as focused as ever on our core business, we continue to push forward on building the future with AV. And Q2 was jampacked. We expanded our operating zones in Austin with Waymo and Abu Dhabi with WeRide, and we also launched exclusively with Waymo in Atlanta.

And at the same time, we announced several new and expanded partnerships, including with Baidu, Lucid, Nuro and Wayve. Our autonomous momentum continues at Uber speed and we'll be ramping those deployments significantly over the next few quarters in the U.S. and internationally. To be put, we've never been more excited about what Uber is delivering today or the many opportunities ahead. That's why today, we announced a new $20 billion share repurchase authorization as part of our sustained focus on value creation for our shareholders. With that, let's go to questions.

[Operator Instructions] Your first question comes from Eric Sheridan with Goldman Sachs.

I want to follow up on this theme you introduced around platform initiatives in the letter. When you think about the success you're unlocking on the platform initiative side, how much of this in your early learnings continues to come down to consumer knowledge, array of supply or even affordability in terms of driving some of this cross-platform behavior. And as you're thinking as the company continues to evolve, how do you think about one single super app under the Uber brand as opposed to having multiple apps with different utility experiences for consumers.

Absolutely, Eric. It's a great question and something that, honestly, we're learning as we go. I think as it relates to platform, it's easy to talk about, but it's actually much harder to execute on the ground. A pixel that we place on the Mobility app that is, for example, promoting delivery, a delivery feature could be reducing the experience of the Mobility app itself. So we have to make sure that we are cross-promoting one service to the other mobility to our each business or each business to grocery, grocery user to retail in a way that is targeted and in a way that is adding value for the consumer. And the only way to get there is through super, super aggressive experimentation.

The great news is that the -- those who kind of use both sides, both Mobility and Delivery, their retention rates are higher, they are 35% higher than single business consumers. They generate 3x the gross bookings and profits in single business consumers as well. And that then allows us to market more aggressively uniquely because the vast majority of our competition is only monoline in terms of the business that they run. So structurally, for a subset of consumers we can just pay more than anyone else can. And that structural advantage is going to continue to get better over a period of time.

Now what we're seeing now is a lot of people talk about AI and some of the AI applications are just larger models, larger models that can take more contacts from a consumer, history of that consumers use longer periods of time in terms of seasonality. And part of what we're seeing in terms of the cross-platform promotion is that we're able to pick kind of the right time to send a promotion to you. So on your way to work, maybe you pick up a Starbucks coffee with a promotion attached to it. Those kinds of magical experiences have to be hyper-personalized. And again, can be optimized as a result of a bunch of optimization and model kind of tuning work.

I do think that Andrew McDonald, Mac, we call them, heading both Mobility and Delivery kind of solve the structural problem because to some extent, the teams who are optimizing for the mobility app, they just want to optimize for Mobility and for Delivery, even though they're part of one company, now both of those organizations are under one person, which structurally allows us to be more aggressive on the platform. And then as you know, our membership program is a huge part of the platform with Uber One 36 million members, and these members spend 3x more.

We have been debating as to Eric, your question on the super app. We've been debating it internally. Now to some extent, when you go to the rides app, it is a super app. You'll see a -- you'll see a delivery tab on the rides app. We are building out our experience. If you look at our supplemental slides, which actually has delivery and grocery and a bunch of other choices on the rides app. And the rides app today drive $10 billion of bookings or delivery kind of bookings on the Mobility app. It's about 12% of annualized delivery gross bookings.

So in some ways, we're slowly kind of moving towards a super app of source. But what we're trying to have is the best of both worlds, a highly tuned mobility app, a highly tuned delivery app, both of which talk to each other and take targeted moments to promote each other as opposed to kind of broad promotion that can seem like in our anti-consumer to some extent. This is a long journey. I think we're in the second inning. And with our product teams and our tech teams focused on it and Mac as the COO, I think the journey towards the fourth, fifth innings is going to be easier than the first two innings so to speak.

The next question comes from Brian Nowak with Morgan Stanley.

I have two. The first one on the core platform. So the MAPC growth up $10 million quarter-over-quarter and the Uber One member growth of $6 million quarter-over-quarter, both really good numbers, really good results. So the question is, is there any changes that sort of came through this quarter that drove that faster growth? And how do we think about the durability and the faster growth going forward?

And then secondly, on autonomous, [indiscernible] I think in the past, you've talked about the number of AV rides deployed across the network at $1.5 million last quarter. Any update on how large that is or ways we can think about quantifying the Waymo utilization on Uber's network?

Sure, absolutely. So Brian, in terms of audience growth, which was super healthy at 15%. There are many ways in which we're expanding audience. But I'd say one of the ways that I will talk about is some of the lower-cost products that we're introducing. So for example, Moto, which are 2-wheelers that are coming in a bunch of our developing markets, now it is over kind of $1.5 billion in gross bookings growing 40%. A bunch of them -- on the premium side as well, our premium business is now over $10 billion, growing 35% and our reserve business continues to grow 60%.

So the strategy that you're seeing from us, which is to target consumers, different demographics, whether they're demographics in terms of income, whether they're demographics in terms of age, building a teens product, or building a product for an elder audience. These are new consumers that are coming on to our platform. And then when they come into our platform, we find that they use multiple products per the discussion that we have there. So we'll get someone in on Moto. But if it's date night or if it's raining, they'll use UberX, and they'll start kind of get introduced into the platform as well. So we are very, very pleased in terms of audience.

And I would tell you that while a lot of people think, hey, everyone that I know uses Uber, et cetera, in our top 10 markets, for consumers who are 18 years and older, only about 20% of them come to us on a monthly basis. So there's a ton of audience that we can continue expanding into. And at this point, we're not seeing any signal whatsoever that audience growth is slowing down.

Uber One, we've been very, very happy about growing 60%, 36 million members. I think one of the differences that you're going to see in Uber One is, Uber One has always been a huge hit as it relates to delivery. It has been a bit more difficult in terms of introducing it to the Mobility audience, the incremental use on delivery showed up on day 1. But our mobility, the incrementality as a result of Uber One has been something that we had to work on. One of the newer products that we're very excited about is actually search savings. This is the #1 product that our Mobility consumers have asked for. Surge is necessary for us to improve reliability across the network, but a lot of our users don't like it to be frank. So surge savings is an opportunity for members to save during those surges and kind of pay prices closer to what they're used to, and we think that can drive membership as well.

So one of the reasons why you're seeing membership grow as fast as it grows is while it's highly optimized for Delivery, call it, 80% of where we're going to get to. In Mobility, it's like not nearly as optimized and we're very much earlier kind of in the path in terms of introducing membership to our mobility users and coming out with kind of spectacular products like the search savings that we talked about. So both early the teams are doing well, and we expect that execution to continue.

In terms of AV, it is very, very early. In terms of the development of AV, I think the commercialization is going to take time, but we're going to be in the lead in terms of commercialization. Austin launch continues to go really well in terms of utilization. Atlanta launch has been -- it's early, but the Atlanta launch has been great. And in both cases, the average Waymo is busier than 99% of our drivers in terms of completed trips per day.

And then what we're also seeing is that having Waymo's as part of our product is -- it looks like it has kind of a positive halo effect on the overall system in terms of people being excited to use an AV, it's certainly showing up in Austin. Too early to show up in Atlanta, but it's something that we're looking at closely. And then obviously, beyond Waymo, there's a big ecosystem out there, [ Mamability ], Avride, Volkswagen, Nuro, Lucid and then a lot of players in the rest of the world, WeRide, Pony, Baidu, Wayve and Momenta. So lots of partnerships here. And really, the focus now is how do we bring this product to market as quickly as possible because it looks like from a consumer standpoint and from a safety standpoint, it's a real hit.

Next question is from Michael Morton with Moffett Nathanson.

Dara, maybe a great time to follow up on those AV comments you just made. And I wanted to dig in a little bit on the Lucid and Nuro partnership that was announced. There were some investor concerns that this partnership, in particular, with the capital around it was a negative read-through for the relationship with Waymo and then also just capital intensity, a little surprising for the marketplaces. Could you maybe speak to why this might not be the best framework for thinking about that partnership? And then some high-level thoughts on how you're envisioning owning some of the AV assets versus divesting them to fleet operators and how investors could expect to see this play out over the next several years?

Yes, absolutely, Michael. Listen, we're very, very excited about the partnership with Nuro and Lucid. Nuro is a leading software player, obviously, excellent management and Lucid as well, one of the leading EV manufacturers out there with great tech. So we think it's terrific. Listen, we -- I've said it before, we are a supply-led company. The more drivers there are in the ecosystem that we can amalgamate with our platform, the better our service becomes, and that applies with robotic and autonomous drivers as well.

So we are investing, absolutely investing in the software players and the hardware players to bring that to [ for ] and the fact that we are able to work with Nuro, Lucid speaks very well to AV supply going forward. The more supply there is, both humans and AVs, again, the better our platform is. And I think from our standpoint, the good news is that, as you've seen with our cash flow and our capital allocation, we can afford to invest aggressively in the autonomous space and at the same time, to return plenty of capital to our shareholders. So it's not either/or.

I do think that you will see us do more deals like Nuro, Lucid in the early days of autonomous as we're proving out the economics of the marketplace. How much can one of these cars make. Now the signal that we see with Waymo is based on the trips per day being at a 99th percentile in terms of utilization, that news is great. So once we prove out the revenue model, how much these cars can generate on a per day basis, there will be plenty of financing to go around, third-party financing. We've talked to private equity players. We've talked to banks, et cetera. And while it will take some time, we're very confident that these assets are going to be financeable.

And for us, we believe it's a competitive advantage for us to be able to use a relatively modest part of our cash flow to fund kind of the catalyst to get things started here. So we think it's great news. We've got obviously something approved to shareholders. We always do. But I think it reflects kind of the catalytic potential that we can bring to the market. Anything you want to talk to Prashanth?

Maybe just to remind folks, as we've said in the past, that as we think about our investments in AV, you want to think about them in terms of where will we use capital to take equity positions in some of the software players or ecosystem players to help them kick start their development and where does Uber being part of their cap table sort of add to their credibility.

We're going to continue to recycle some of the proceeds from the minority stakes that we have to fund some of those investments. You've seen us do that already and expect us to continue to do more of that over the coming quarters.

Second, expect us to use some of our cash flow in a more capital structure as we may need to invest either in real estate, in facilities or as we announced with Lucid actually in vehicles. Exactly as Dara said, this is really to help us build our learning base and to build enough information for us to be able to engage more credibly with financing partners having run these at scale ourselves and then be able to bring them into the fold with real data on how they can earn a return in this space.

And then lastly is obviously AVs today are not profitable. That has been a pretty consistent investment approach for Uber as we go into markets and go into products starting at a loss, we build scale, we build our experience. And then over time, we know exactly the levers that are necessary to turn to get that to profitability. You've seen us do that in multiple growth bets as well as in the delivery business when we started and expect that to be the same for AV. I'll just call back to -- we announced a $20 billion authorization today in part to make it clear that returning the cash generated from this enterprise to shareholders remains our #1 concern. And so the investments that we're going to be making in this area are going to pay a sort of in comparison to that.

Next question comes from Justin Post with Bank of America.

A couple of more questions on AVs. In the letter, you talked about we are increasingly focused on broadening OEM partnerships. So really, maybe talk about that and your partnership pipeline here for the next 6 months or so. And then second, with a lot of news about Tesla expanding, how do you think about that? And maybe just give us an update on your share and growth in the San Francisco and L.A. markets.

Yes, absolutely. So Justin, in terms of OEMs, what we're seeing is that the development of software, actually AV software has really been accelerated based on these larger AI models. There are some approaches that are kind of perception models interpreting the world and then prediction models that decide what to do. Some players like Tesla and Wayve, for example, are going with single models. But whatever the approach is, it is really accelerating in terms of time to market. And we actually think the harder part of commercialization is going to be hardware, bringing on hardware platforms and hardware partners that can build these platforms at scale affordably because today, at least AV vehicles that are able to be deployed at scale are pretty expensive.

We've obviously made the Lucid announcement. We are talking to all of the major OEMs in the space, and we're confident that over the next couple of years, we will have OEM partners. And again, because we bring a ton of demand, we've got a great balance sheet that we can invest in order to prove out the financing of these models, we think we're in a great position to do so. So stay tuned. You'll see more announcements with OEMs. And then there are certain players like Baidu who also have established, not just software platforms but also hardware platforms that look to be effective at scale and quite affordably, which is terrific. The Apollo Go for is one example of that.

And then in terms of Tesla, listen, we see them on the streets right now, the deployment that we're observing is very, very small. So we haven't measured any change in terms of trends, both in Austin and/or San Francisco. It's something that we'll watch. And again, we said it before, this is a very, very big market. There will be no winner take all. And I think you're going to see a lot of experimentation early on with lots of different models.

Waymo is working with us, Waymo is going direct, are working with a number of other players. You'll see a [ panoply ] of models, but we are confident that based on our platform, based on our ability to balance kind of supply and demand, peaks and valleys, we think we'll be the leading third-party platform out there. And with a market that is going to grow and expand the way AV promises to, I think, will be a winner, but we won't be the only winner.

Next question comes from Doug Anmuth with JPMorgan.

I have two, one for Dara, one for Prashanth. Dara, just in terms of Mobility, how are consumers responding to the pricing growth deceleration just tied to the moderating insurance pressures and guess what gives you confidence in U.S. Mobility trips accelerating in 3Q?

And then Prashanth, is there any more color that you can add around the buyback and just kind of loosely how you think about overall time frame, just given that the $7 billion from a couple of years ago, kind of started somewhat slowly, it's ramped more now, but any more color there would be helpful.

Yes, Doug, in terms of -- I'll answer the first one. In terms of the response of pricing, it's been really positive. So there is a sensitivity to pricing on kind of a session level, right, if someone sees a ride for $20 and then sees a ride for $17, the conversion on those two sessions are going to be different. But there's also the person who saw the $17 ride has a greater proclivity of coming back to us 2 days later, 3 weeks later, et cetera. So there's kind of a delayed reaction to pricing which we're now able to, with some of the data scientists out there who are really terrific, we're able to measure.

And that's exactly what we're seeing in the U.S., which is if, if you measure kind of bringing prices down, and I think the good news here to be clear is we're just passing on these insurance savings. So our profit per ride in the U.S. is up on a year-on-year basis. This is -- it's insurance money passed right to consumers. What we're seeing in the U.S. is that there are some session benefits or in-session benefit, but there's a delayed benefit to consumers then coming back with the app more and that's absolutely showing up in July, where transaction growth accelerated nicely versus Q2.

And our expectation based on our being able to continue to pass on insurance savings for the balance of the quarter is that the same trends are going to show up in the balance of the quarter. The trends generally are getting better as the quarter progresses, which gives us confidence in Q2, and hopefully, that will continue into Q4 -- sorry, Q3 and then go into Q4. Prashanth you want to take the next one?

Yes. Thank you. So Doug, maybe a couple of points on the buyback to help folks understand how we think about it. As this business has inflected and we have started to generate meaningful cash flow, returning that cash to our shareholders is a key priority for us. We've already executed over 60% of our authorization from last spring, when it was originally authorized. So today's $20 billion is in addition to the roughly $3 billion that is yet to be executed. So I know that sometimes folks get confused on that. So think of it as $23 billion to execute over the next couple of periods here. That represents about 12% of our market cap and really is a reflection of how great we feel about the cash flow generation that's in front of us.

So if you look at our history now, we've been allocating around 50% of our free cash flow to buybacks. I think that's a fair sort of way for you to think about how we will execute the capital return over the coming years. That gives us also a good sort of way to benchmark how we want to design our programs every quarter. So you should expect this to be sort of a multiyear plan. We will be active every quarter. But of course, we always reserve the opportunity that if there is a meaningful dislocation, we're going to get very opportunistic in the market. And just a reminder that we made a commitment last year in our Investor Day that we were going to turn the curve and start reducing our share count. And now in the second quarter, we've actually taken share count down 1%, and you'll see that trend continue for the next couple of years.

Next question comes from Ross Sandler with Barclays.

Great. This is probably for Prashanth, but could we put a dollar amount on the vehicle commitment from these OEM partnership deals over the next few years? Or is there a framework that we can think about this? Is this hundreds or thousands of vehicles per partnership, I know the Lucid deal had that 20,000 vehicle commitment. Like how much do you think Uber will be taking on of that 20,000?

And then the second part of the question is just -- it seems like the Waymo partnership is more of an asset-light version of this. So how important is expanding with Waymo in new cities beyond the two that have been announced.

Thanks Ross. I'm going to take the first part of that, and I'll let Dara take the second part of it. I think -- probably the best way to think about the investments, going back to, I think, what I said for Doug earlier, is we are committing that at least half of our cash flow generation over the coming years will go to share repurchase, and that's sort of the message we wanted to send with that very strong $20 billion share repurchase. We will recycle the proceeds from our minority stakes as best as those are opportunistic to allow us to fund some of the equity investments in our AV players.

So for us, the -- what we've concluded is a modest redeployment of our free cash flow makes a big difference for the partners that we are working with. So I would think more about the impact that we can create with our partners which is outsized reflective of the amount of cash flow we're generating. So I wouldn't -- I don't want to give you a size on it except to say that you should be comfortable that a lot of our cash will continue to go back to shareholders.

As Dara mentioned, I think earlier that -- or we might have been on CNBC this morning, that we will always continue to look at inorganic moves that make sense for us, like the [ TrindleGo ] deal that we did last quarter, which has been great for us on growth. And then beyond that, that leaves us some capacity to continue to help build out this ecosystem. And then with the question on Waymo, I'll let Dara take that one.

Yes, absolutely. So in general, in terms of Waymo, Ross, really our focus is making sure that we're executing incredibly well on the deployments that we have now, both in terms of Austin and Atlanta and both are going really well. We would love to have more Waymos on our platform, both in Austin and Atlanta and in additional cities. But I don't want to comment on when and if that's going to happen. But clearly, it's something that our consumers love. And clearly, the Waymos on the Uber network are very, very busy and producing economic value. And so hopefully, we certainly know we're going to expand in the cities that we're in. And hopefully, we'll have more to tell you over a period of time.

In terms of the specific business model, again, I don't want to comment on that. But I would tell you that we see kind of 3 different business models coming in generally depending on whom we're working with. It's going to be what I would call the merchant model. And under a merchant model we will essentially pay a partner of certain dollars for -- per trip per day or dollar per day. And so the partner will have a kind of revenue that is very, very predictable. And we will take the risk on monetizing our network. And again, we have more demand than anyone else. So we will be able to, I think, sign up for revenue levels that other people just can't. So the merchant model really kind of creates an advantage for us.

Then there's an agency model. Agency model, think of it as a rev share. It's kind of the model that we have with our driver partners now. Driver takes a certain percentage, we take a certain take rate as well and you essentially have a revenue share based on -- and if you do well in a market, that's great. If you do less on a market, it's kind of risk sharing.

Then there's another model which where we might or financing partner might own the assets and then essentially you're buying cars and then there will be a licensing model as it relates to the software. So there will be a -- whether it's monthly licensing or per mile licensing, you can imagine lots of different models out there. So those, I think, are how the marketplace is going to shape up. I think you'll see all three of those models in our marketplace over the next 5 years. And it's going to depend on really the needs of our partner. But we're very confident as to being able to kind of build the most robust economic and operational ecosystem as it relates to AV within the Uber network.

Anything to add, Prashanth?

Yes, I think, Ross, maybe just circling back to the first answer I gave you. One element I probably should have added is, I wouldn't conclude that by purchasing vehicles the economics are going to be worse. In fact, our analysis is that the Nuro, Lucid deal will probably yield better economics for us because it's a collective deal and we just get the efficiencies of having the vehicle and having the software integration in there. So our view is actually, we're probably going to do better on that from an economic standpoint. .

Operator, we'll take the last question.

Your last question will come from Benjamin Black with Deutsche Bank.

Dara, you mentioned the barbell strategy within U.S. Mobility. I guess when you look across the spectrum of opportunities across the curve, where do you see the greatest incremental opportunity for Mobility in the U.S.? Is this more sort of on the lower-priced offering? Or is there still a lot of room to run on the higher end as well? And then can you just dig a little bit deeper into your comments around externalizing your technical capabilities in the letter? Are you talking about data licensing opportunities within AV? And if so, how big could that become?

Yes, absolutely. Ben, I'd say in terms of the barbell strategy, it is both. It is low cost and premium. I would say that premium is easier to execute on. There is clearly a consumer wants in terms of paying more for higher reliability. That's essentially what the reserve product is, and/or paying more for -- and as a car, which is kind of the premium product, I would also say that our Uber for Business is also growing nicely over 30% on a year-on-year basis. So I think premium near term in terms of profitability is -- has higher potential, call it, over the next 3 years. .

The lower-cost product is a harder product for us to pull off and because we have to kind of drive efficiency across the network and one of those instantiations is wait and save where you accept lower reliability and as the results are able to pay less. Or our Uber share product where essentially your -- you will take maybe a longer ride, maybe a little bit of a detour sharing that car with someone else and again, saving money on that.

The lower-end product, I think, ultimately is kind of the greater opportunity in terms of trips, in terms of TAM. But over the next 3 years, our lower-end product, is costing us a margin that we think is appropriate in terms of the investments that we're making in our future.

Expect us to continue on the barbell strategy, and you'll see similar things as it relates to our delivery business. Priority delivery, paying up for priority delivery in order to get your delivery faster or accepting some delay in your delivery and again saving some costs. So this part of strategy is something that we're using both in Mobility and Delivery and they both carry significant promise there.

In terms of externalizing our tech capabilities, this is something that I'm really excited about. And just like a really simple example is our advertising business and our direct business. If you think about Uber Eats, there are two pieces of value that Uber Eats brings. There's audience to an SMB restaurants that it brings and in this fulfillment capability, which is getting the food to the home and we separated those two capabilities into an advertising business that's growing incredibly healthy, very, very high margin and a direct business where essentially we deliver on demand for our customers who may have brought those consumers to their front door on their own through their own app.

You should expect to see more of that. So for example, data collection for AV is absolutely something that we're working on. I'd say it's not really something that I'm looking to make profits on but really helping AV get to market faster. And then one area that we're really excited about is kind of one way to look at Uber is, it is a platform for work. We've got almost 9 million people who are earning on our platform, and they can earn in different ways other than driving or transporting things. An example of that is actually our Uber AI solutions, which is one of the really exciting parts of our business growing very quickly off of too smaller base, I tell that team at this point.

But they are engaging in data labeling, translation, map labeling, tuning algorithms, et cetera. And these are sometimes drivers on our platform, sometimes kind of specialists that we bring on to the platform but it's using the core Uber capability, which is sending out tasks to earners all over the world, you're just going to see a different kind of earner that is going to work for kind of the really exciting kind of AI developments that you see all over the world. So that is another example of our externalizing our platform and it's -- we are many conversations with their tech teams as to what else we can do with their platform capabilities globally. So something that we're quite excited about.

All right. I think [indiscernible].

Yes, let's wrap it up there.

All right, everyone. Thank you very much for joining us. We really appreciate your taking the time, and a big thank you to the Uber teams. Balaji and Prashanth and I get to talk about the results, but it's the teams on the ground who are delivering every day. So a special thank you to all the teams who delivered another great quarter for us. Thanks, everyone, and we'll talk to you next quarter. .

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