Episode Transcript
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Speaker 1 (00:02):
Bloomberg Audio Studios, podcasts, radio news.
Speaker 2 (00:07):
I think, you know, the streets kind of mild quickly
focused on growth, the slow down in growth. But I
think what's interesting about Uber and in its multi 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
(00:30):
in certain countries around the world.
Speaker 1 (00:33):
Actually, the growth for US this quarter has been remarkably
consistent with the last quarter. Trip growth. Trips came in
three billion trips in the quarter, which is a pretty
extraordinary number, up eighteen percent on a year on year basis.
Where you did see a slowdown is on growth bookings growth.
Gross bookings growth slowed down a bit from Q four,
and that was essentially because of price. You know, we
(00:54):
think as a company the best way to grow is
to increase audience, increase your frequency. Our audience was up
fourteen percent, frequencies was up three percent. But as we
saw the opportunity to reduce increases in pricing, especially as
it related to insurance costs in the US, which have
(01:15):
been increasing at pretty extraordinary rates. It forced us to
pass on those cost increases to consumers. We're seeing the
increasing insurance costs start to modulate. You know, we now
give incentives to our drivers to drive more safely. We
give them a safety score, so to speak. There has
(01:35):
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 Q one versus
last quarter, or was up four percent. 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
(01:56):
really increased profitability. Profitability was one point nine billion dollars
in EBIT a thirty five percent year on year record
free cash flow as well. So we're very very happy
with the growth that we're seeing and hopefully there'll be
more to come.
Speaker 3 (02:10):
Let's just talk about the leavers 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.
Speaker 1 (02:23):
I do think that we have passed on pricing to
the consumer and the business as you have you 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
(02:44):
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 thirty 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
(03:05):
to the platform, both in rides and delivery, the better
long term growth we've got ahead of us.
Speaker 2 (03:11):
There are I'm a loyal Uber one subscriber and I
think I see I think I see the net benefit
right on top of what I spend to b one
and I'm in that key category of US ride share,
which is so profitable for you. What I think would
help the audience understand Uber's business better is is that
something the boost margins for you Uber one or is
(03:34):
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.
Speaker 1 (03:45):
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 profitability. Now there is a hit
to profit margins, right, which is the for that consumer.
(04:06):
We're passing on savings to you. And what happens is
is that the Uber one member starts transacting much more.
On average, Uber one members transact three times more than
non members, They retain fifteen percent higher, they tend to
cross shop a lot more. About half of our Uber
one members use both their mobility product and our delivery
(04:28):
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 a 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, is driving booking's growth, is driving profitability growth.
(04:52):
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.
Speaker 3 (05:02):
Dar let's talk about airports. Let's talk about international travelers
a little bit more, because 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.
Speaker 1 (05:17):
Yeah, so our airport's 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 it effect in terms of the
international traveler coming into the US. Canada, for example, Canada
(05:38):
travel coming into the US was weaker than Canada to
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, they if they go to many
of the countries in which we operate, we're still going
to there's still going to be uber customers and they're
(05:59):
still going to get that air per pickup. But those
airport pickups internationally growing faster than the airport pickups locally,
we are seeing that trend.
Speaker 3 (06:07):
I want to go globe a little bit more as
well when it comes to potential M and A opportunities
because we're looking at what's just occurred in the UK
door dash stuffing up delivery for example, you're talking about
the cross pollination of driver to delivery. Are you thinking
doubling down on delivery anymore? Inorganic growth rather than just organic?
Speaker 1 (06:25):
Well, I think what's a great accomplishment of the team
here at Uber is that the vast majority of our
growth has been organically. We established ourselves globally and now
seventy plus country countries organically. We built our European business
from the ground up. We started the business there and
we also started Uber Eats organically as well. So the
(06:46):
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
globe in nature, and we compete with a bunch of
subscale local players, and we're multi platform. We have both
(07:07):
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 competitor, the competitors having to go
out and acquire companies inorganically. I think it shows that
our strategy is working. I'd always rather innovate them by
and I think Uber is a kind of company that
(07:29):
is continuing to innovate in all the sectors that we're in.
Speaker 2 (07:34):
That applies to autonomous driving or a future robotaxi service, right.
You know, Uber positions itself as a distribution platform and
fleet manager. So in the first instance, there are how
do you react to that partnership between Wai Moo and
Toyota and how do you think that that will serve
Uber's platform going forward.
Speaker 1 (07:55):
Yeah, we absolutely believe in the power of partnership and
we're incredibly bullish about the possibilities of av You know,
this is going to be a multi trillion dollar opportunity.
Av's are going to be safer than humans. We absolutely
believe we need superhuman safety as it relates to av's
and we have a great partnership with Weimo. Weimo for us.
(08:17):
We launch 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 Weimo, let's say, with Toyota,
to bring the Weimo 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
(08:39):
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 Weimo,
if they're on the Uber network, they are going to
be super, super busy.
Speaker 2 (08:59):
What are you seeing in Austin is a case study
DAR in terms of the percentage of rides completed in
that geofense geography that are robotaxi 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.
Speaker 1 (09:18):
Yeah. Absolutely, so we're very encouraged by the launch. It
is still early. We have about one hundred 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 WEIMO vehicle on Uber
(09:40):
is busier than ninety nine percent 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
a vehicle count expands, it will be a higher percentage
(10:04):
of our overall business. And then in terms of margins,
today autonomous vehicles are very expensive. We invest, along with
Uber significantly in safety. So the margins of an autonomous
vehicle in terms of the commercialization of that business, are
lower than the margins of our base business. But we
(10:25):
always believe that you've got to invest in innovation. You know,
Uber each started as an unprofitable enterprise. For years now
it's making billions of dollars. Margins continue to increase, So
at the beginning stages of any enterprise in partnership, you've
got to invest. We are in investment mode and autonomous
and with a portfolio that we can have, we can
(10:47):
invest in innovation, but at the same time deliver record
breaking profits, you know, quarter after quarter, year after year.
Speaker 3 (10:55):
How do you want to place yourself in that value
chain as well? A little bit, Dara, because your 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.
Speaker 1 (11:12):
And make that 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 the vehicles, repairing in terms
of having depots, etc. It will be a combination for
(11:34):
us of both investment, direct investment and partnerships as we
build this ecosystem. Again, there's going to be a trillion
dollar plus ecosystem, and I think we can play a
key part in the development of that ecosystem. And then
you're absolutely right. We're very, very excited about the power
of AI in multiple dimensions and we do have a
(11:58):
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 drive
(12:19):
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.
Speaker 3 (12:29):
And 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.
Speaker 1 (12:48):
Well, we Ride has been a terrific partner. I wouldn't
generalize in terms of the Chinese. You know, we have
terrific relationships with Reride, with Pony, We've had really really
promising talks with bay Do as well. The fact is
that these Chinese companies are run by entrepreneurs who want
(13:08):
to grow, who want to innovate, and they're innovating 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
US we want to be partnering up with local players
(13:32):
like Weima.
Speaker 3 (13:33):
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
US 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.
Speaker 1 (13:51):
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 fair goes
to to drivers as well, so we are kind of
(14:15):
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
US brand. We're obviously going through a periative change. The
(14:38):
long term, we absolutely believe that the relationship between the
US and the rest of the world will continue to
be strong and we want to be a part of
that