Uber CEO Talks Driverless Car Growth and Earnings
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I think, you know, the streets kind of myopically focused on growth, the slowdown in growth.

But I think what's interesting about Uber and its multiple offerings, right, is that that can be different in different geographies. Was there somewhere specifically in the world where ride sharing slowed down and you can identify a reason for it? Or there were pockets where you were stronger in particular businesses in certain countries around the world?

Well, actually, the growth for us this quarter has been remarkably consistent with the last quarter. Trip growth, trips came in 3 billion trips in the quarter, which is a pretty extraordinary number, up 18% on a year-on-year basis. Where you did see a slowdown is on gross bookings growth. Gross bookings growth slowed down a bit from Q4, and that was essentially because of price. We think as a company, the

best way to grow is to increase audience, increase your frequency. Our audience was up 14 percent. Frequency was up 3 percent. But as we saw the opportunity to reduce increases in pricing, especially as it related to insurance costs in the U.S.,

which have been increasing at pretty extraordinary rates. It forces to pass on those cost increases to consumers. We're seeing the increase in insurance costs start to modulate. We now give incentives to our drivers to drive more safely. We give them a safety score, so to speak. There has been some insurance reform in a couple of states, and that's essentially allowed us

to reduce any increases in pricing. Pricing was flat year on year in Q1 versus last quarter where it was up 4%. We think that's actually very healthy for the consumer. And what we're able to do is not pass on these price increases

but really increased profitability profitability was you know 1.9 billion dollars in ebitda up 35 year-on-year record free cash flow as well uh so we're very very happy with the growth that we're seeing and hopefully there'll be more to come let's just talk about the levers to pull in the growth that you're seeing and indeed in margins because this economic environment doesn't make it feel like any more pricing can be passed on to a consumer is that what you're feeling

Well, it's not. I do think that we have passed on pricing to the consumer and the business, as you have seen, has scaled really well. We just want to do everything that we can to keep everyday low prices for the consumer, both in mobility and delivery, to really drive that frequency growth. Frequency now, in terms of engagement with our platform, is six transactions per month on average.

It continues to grow. And for example, one of the areas that we're really focused on is our Uber One membership program. We got over 30 million members. It gives you a discount to use Uber more. So again, the more we can pass on discounts to the consumers, the more they become attached to the platform, both in rides and delivery, the better long-term growth we've got ahead of us.

Dara, I'm a loyal Uber One subscriber. Thank you. I think I see the net benefit, right, on top of what I spend to be one. And I'm in that key category of U.S. ride share, which is so profitable for you. What I think would help the audience understand Uber's benefits

business better is, is that something that boosts margins for you, Uber One? Or is it another incentive? I also get sort of the Amex credit card benefit each month, right? And it's really hard to understand that as a mechanism for Uber to drive profit, or if you're just giving more away.

Well, it absolutely is driving profit in that the average consumer becomes more profitable for us in dollar terms once they become a member. So members are worth more. It is driving long-term profit.

profitability now there is a hit to profit margins right which is the or that consumer were passing on savings to you and what happens is is that the the uber one member starts transacting much more on average about uber one members transact three times more than non-members

They retain 15% higher. They tend to cross-shop a lot more. About half of our Uber One members use both our mobility product and our delivery product as well. But they're doing so because of the savings. But then what we're doing now is we're also introducing experiential benefits.

So you get priority dispatch, for example, in airports as a benefit of being an Uber One member. So when you look long-term, it absolutely is driving revenue growth, it's driving bookings growth, it's driving...

profitability growth, but we do give up some margins to that member to keep them kind of working with us. And we're definitely seeing it in terms of frequency and the amount of spend on a platform. Dara, let's talk about airports. Let's talk about international travelers a little bit more because the Americans are traveling and they're spending elsewhere and you'll see it coming up in your data. What about people coming here in America? And are you seeing Canadians, others starting to shun trips?

Yeah, so our airports business and travel business continues to be a real star in our portfolio. Airports has consistently been growing. Airport trips tend to be more premium, so you have more comfort cars or black cars as well. But we are seeing an effect in terms of the international traveler coming into the U.S., Canada, for example, Canada travel coming into the U.S.,

was weaker than Canada travel to other parts of the world. The great thing about our position is, you know, we're kind of capturing that business anyway. If they go to the UK, if they go to France, if they go to many of the countries in which we operate, we're still going to, they're still going to be Uber customers and they're still going to get that airport pickup. But those airport pickups internationally are growing faster than the airport pickups locally. We are seeing that trend.

I want to go global a little bit more as well when it comes to potential M&A opportunities, because we're looking at what's just occurred in the UK. DoorDash snapping up delivery, for example. You're talking about the cross-pollination of driver to delivery. Are you thinking doubling down on delivery anymore in organic growth rather than just organic?

well i think what's uh... a great accomplishment of the team here in uber is that the vast majority of our growth has been organically we established ourselves globally and now seventy plus country uh... countries organically rebuilt our european business from the ground up we started the business there and we also started uber eats organically as well so the capability of this team to innovate and to be a big-scale company but then grow businesses from scratch is

pretty extraordinary we now see we've always said that the advantage that we have as a company is we are global innate uh... in nature we compete with a bunch of sub-scale local players and

we're multi-platform. We have both rides and the Eats business feeding each other with this Uber One membership program that is really second to none. And we're seeing the competitors having to go out and acquire companies inorganically. I think it shows that our strategy is working. I'd always rather innovate than buy. And I think Uber is the kind of company that is continuing to innovate in all the sectors that we're in.

That applies to autonomous driving or a future robo-taxi service, right? Uber positions itself as a distribution platform and fleet manager. So in the first instance, Dara, how do you react to that partnership between Waymo and Toyota? And how do you think that that will serve Uber's platform going forward? Yeah, we absolutely believe in the power of partnership and we're incredibly bullish about that.

the possibilities of of av you know this is going to be a multi-trillion dollar opportunity avs are going to be safer than humans we absolutely believe we need superhuman safety as it relates to avs and we have a great partnership with waymo waymo uh

uh... for us we watch in austin it's been an incredibly successful partnership we're about to launch in atlanta as well so when we see these partnerships of way more let's say what to yoda to bring the way mode driver to you know hopefully every single toyota or personally owned vehicles we think that's a great thing it's a great thing in terms of vehicles being safer on the streets but to the extent that those toyotas are bought by fleets

We think that we as a distribution partner can really drive the most utilization. We think those autonomous Toyotas could be on the Uber network. And based on what we're seeing in Austin with Waymo, if they're on the Uber network, they are going to be super, super busy.

What are you seeing in Austin as a case study, Dara, in terms of the percentage of rides completed in that geofence geography that are robo-taxi versus human-driven? And it's an expensive enterprise, but what's the margin profile like of an autonomous ride versus a human-driven ride?

Yeah, absolutely. So we're very encouraged by the launch. It is still early. We have about 100 vehicles on the road, and that's increasing every week as the operations continue to evolve. What we're seeing is very, very high utilization of these vehicles. The average Waymo vehicle on Uber is busier than 99% of human drivers in terms of completed trips per vehicle per week.

which is pretty extraordinary and we think that there's a potential for it to grow. As a percentage of our total rides, it's still a small percentage, but that's because we don't have enough vehicles on the road. So I think as the vehicle count expands, it will be a higher percentage of our overall business. And then in terms of margins, today,

autonomous vehicles are very expensive. Uh, we invest along with Uber significantly in safety. So the margins of autonomous vehicle in terms of the commercialization of business are lower than the margins of our base business. But we always believe that you've got to invest in innovation. You know, Uber eats started as an unprofitable enterprise for years. Uh,

Now it's making billions of dollars. Margins continue to increase. So at the beginning stages of any enterprise and partnership, you've got to invest. We are in investment mode and autonomous. And with a portfolio that we can have,

We can invest in innovation, but at the same time deliver record-breaking profits, you know, quarter after quarter, year after year. How do you want to place yourself in that value chain as well a little bit, Dara? Because you're very asset-light, but will you have to invest more in the infrastructure and the offering of charging? And also, you're going outside of the realm of mobility to offer your AI services, for example, as well. How much more do you want to add on and make there?

Well, it is. We are very asset light and we are going to both invest and partner in some of these areas. So, for example, we have fleet partners who focus on charging these, the vehicles, repairing in terms of having depots, etc. It will be a combination for us of both investment, direct investment and

and partnerships as we build this ecosystem. Again, this is going to be a trillion-dollar-plus ecosystem, and I think we can play a key role

part in the development of that ecosystem. And you're absolutely right. We're very, very excited about the power of AI in multiple dimensions. And we do have a really promising business that we're building, Uber AI Solutions, where actually we're using our drivers and other experts, for example, to rate models. We can operate this globally.

We've got over eight and a half million people earning on our platform, and we're just extending that platform, not just to draw folks around, not just to deliver, but also train AI models, translate language, et cetera. We think it's a really, really exciting new business that we're building with our partners as well.

Let's just go to that global footprint for a moment, because you recently increased your partnership with Reride, which is over in China, for example. It's about expanding in Europe and other countries from an AV perspective. But how easy or hard is it to make deals with the Chinese right now in this geopolitical environment?

Well, it's a, we ride has been a terrific partner. I wouldn't generalize in terms of the Chinese, you know, the, we have terrific relation relationships with re-ride with pony. We've had a really, really promising talks with Baidu as well. The fact is that these Chinese companies are run by entrepreneurs.

who want to grow, who want to innovate, and they're innovating at incredible speed. And we want to be part of that innovation, and we want to grow in partnership in the right markets. I do think that we will be working with Chinese AV players in Europe, in the Middle East, in the rest of the world. And then obviously here in the U.S., we want to be partnering up with local players like Waymo.

And lastly, it's a sensitive one, Dara, but we talked about how, well, perhaps there are fewer travelers coming from Canada into the United States. As such a pin-up U.S. brand, are you finding any reticence geographically from international users in this time where perhaps, well, America's brand is getting hit a little bit, it feels?

It's something that we've asked ourselves, but we don't see any signal there whatsoever. And I think what's great about Uber is that we're the ultimate local company. Yes, we're a global brand. But the fact is that when you get into that car, you're getting into a car with a local entrepreneur,

the majority of the fare goes to uh to drivers as well so we are kind of the flow of funds is very very local we work with the local merchants in your city so it's not only local in terms of countries but it's actually local in terms of the cities in which we operate we are you know the ultimate global local company if you want to call it that and i think it shows in the results

And, you know, we're big believers in the U.S. brand. We're obviously going through a period of change. But long term, we absolutely believe that the relationship between the U.S. and the rest of the world will continue to be strong. And we want to be a part of that. Hiscox Small Business Insurance knows there is no business like your business. Across America, over 600,000 small businesses, from accountants and architects to photographers and yoga instructors, look to Hiscox Insurance constantly.

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