Uber Technologies, Inc. (UBER) Earnings Call Transcript & Summary

All right. I think we are on. So good morning, good afternoon, wherever you may be, everyone. My name is Youssef Squali. I'm the lead Internet analyst at Truist Securities, and welcome to Truist Securities Tech, Internet and Services Conference of 2021. It is a pleasure to have with us this morning, Andrew Macdonald, SVP of Mobility and Business Operations; and Balaji Krishnamurthy, Head of Investor Relations. So before we begin, let me just get going with the following disclaimer. So this call is arranged by Truist Securities Research for use by institutional investors and issuer clients as defined by FINRA. If you are not an institutional investor or issuer, please disconnect at this time. For required disclosures, please see our website at Truist Securities or our equity research library. So with that out of the way, Andrew, welcome, and good morning.

Thank you. Good morning. Great to be here.

Awesome. So maybe let's start at a very high level. You've been at Uber for almost 9 years now in different leadership capacity. Maybe you can speak to how the firm has evolved at least in the last couple of years. And I'm particularly interested in your thoughts around changes to operational focus, velocity of products, innovation, relationship with the regulators as you're going through that's in -- that in there as well since it's an important topic. Let's start there.

Sure. So yes, I'm very fortunate to have been with Uber now close to 9 years. Obviously, lots of change in that time. We had around 50 employees when I joined, and we're now 20,000-plus. And when I joined as GM of our Toronto business, if we were doing 3 concurrent trips, it was a big deal. So we're now doing billions a year. So lots of changes in -- with our company and culture and all that stuff, too. We've gone from, as I said, small luxury focused. As -- people don't recall, Uber started out as a limousine service. It was priced 20% to 50% higher than taxis, and that was considered the innovation at the start. And then we rolled out peer-to-peer ridesharing, and that really blew up and I think sort of changed the trajectory of the company. And now every year, we're rolling out many new products, new vehicle types, 2-wheelers, bikes and scooters, buses, public transit, integrations, car rentals, all sorts of different mobility options. So that -- and that's just on the mobility side, nevermind delivery. I think a lot of the things from those early days remains true, though. You mentioned operational focus. I think core nitty-gritty operators is still the DNA of folks on my team. Marketplace management continues to be what I view as a fundamental and foundational advantage for Uber. Relative efficiency is a focus of ours. This is why we're so focused on maintaining category leadership in all our biggest markets around the world because we think that gives you scale, which then compounds. And we continue to sort of be at this intersection of tech and operations, which I think is our superpower. That's very hard to do, right? We're not a traditional tech company. We operate in the physical world every single day, and that's messy. The physical world is messy, and I think we're good at that messiness. In terms of what's changed the last few years, we've gotten much more -- from an ops perspective, we've gotten much more focused on cost management. And I think that's -- this is about ripping out nonstrategic costs. So anything that doesn't add value to the rider or driver, taking that out, driving basis points off a very large base business. And I think that's not only great because it will drive bottom line improvements for Uber. It also lets us be the most efficient operator, which means we're going to have lower prices and drivers can earn more and we can make the most money. So that's sort of marketplace 101, and that continues to be at the core of what we do. And then as you say, we are in a regulated space. This has not always been he strength of Uber's, at least as far as having a good reputation in this regard. And we've evolved a ton, though. But again, 2013, the question was, should ridesharing even exist? And today, we're regulated everywhere we operate. It's a business model that's been validated and is evolving. And of course, there's always going to be questions, but I think we've really refined our approach. And the win that drivers got, because it's a win for drivers, on Prop 22 in California last year is a great example of how we've evolved and changed. And that's not a victory we could have had 3 or 4 years ago, that drivers would have had 3 or 4 years ago. So that probably gives you some sense of how we've changed.

No, that's a great setup. So maybe we can dig a little deeper into the day-to-day operation. So last -- just last week, your main competitor in the U.S. came out, basically announced that they're seeing better-than-expected demand for their rideshare business through the end of February. They're expecting that to continue into March as the country gradually reopens. Can you just provide some color, to the extent you can, on what you're seeing so far in the U.S.? And maybe trends in geos within the U.S. like Florida, like Texas that have reopened recently, not withstanding the huge weather issue that they had in Texas.

Yes. Sort of uncharacteristic weather issue. We've seen lots of those over the years. Sure. So I mean some folks on this call -- Youssef, you may have seen yesterday, our CFO spoke at another conference, and his message was sort of loud and clear that we're seeing very similar positive trends and really not just in the U.S. but globally. We -- since earnings, it's been pretty good momentum, consistent week-on-week growth. In February, as you say, we had the weather disruption in the South, which does impact our business. Things were even more locked down there. But our month-on-month from January to February was roughly flat despite fewer days and the weather interruptions. And Delivery grew 150% year-over-year in Feb, including M&A. So consistency on Mobility, but continued momentum on Delivery. As you say, our competitor had some disclosures about 4% month-on-month growth for average daily rides, I believe, is what they gave out in February. We saw a very similar trend. And actually, in terms of gross bookings, a much better trend at 15% month-over-month. And so we feel really good about that momentum and confirms momentum in the sector overall and Uber's momentum in particular. And that was for -- that's for our U.S. and Canada business. As we've entered March, we've seen further acceleration in both Mobility and Delivery. Total company gross bookings are up nearly 10% year-over-year in the last week. Delivery is now exceeding a $50 billion run rate, up from $44 billion in January, still growing 150% a year. Mobility is a $27 billion run rate compared to $24 billion we reported for January, with gross bookings down just 43% year-over-year in the last week. So I feel really, really good both about Mobility emerging but also Delivery momentum continuing. If you look super recently, last week, our Mobility business in North America and EMEA had a few days of below 50% year-over-year declines. These were the regions that were sort of disproportionately down, if you look back a few months. So these markets starting to emerge is a big deal for us. And this is where you're seeing acceleration in vaccines and market reopenings in the U.S., U.K., et cetera, making progress. So that's great. And then you asked about specific cities. Miami, 75% recovered to pre-COVID; Atlanta and New York City are 60% recovered. The West Coast continues to lag a bit, but L.A., we've started to see a bit of momentum more recently. And then in Europe, France has recovered to about 60% last week. So all in all, I think really positive momentum story. It's a long way to go, but we think it's a one-way direction from here.

All right. That's super helpful. How about markets like, I don't know, Australia, New Zealand, Singapore, where COVID seems to have been basically put in the rearview mirror? Are there any markets where you're almost flat to pre-COVID levels? Or is that still kind of a -- is that still on to come?

Yes, there definitely are. Historically, we've talked about some of our markets in Asia, Hong Kong and Taiwan being the 2 that at various points over the last year have hit pre-COVID levels. But even Brazil and Australia, where, as you say -- I mean, Brazil is still having a really rough go of it with COVID, but the markets remained a bit more open than other places. So even -- so today, in Brazil, Australia, Hong Kong, Taiwan, all very large markets for us, are more than 80% recovered to pre-COVID. So that's -- we're getting close in a bunch of those places. Hong Kong and Taiwan are actually showing year-over-year growth in February, with both markets up double digits versus February 2019. So again, really positive strength in Asia. Australia was down 10% year-over-year last week. And basically outside of airport use cases, say, in a city like Sydney, we're basically fully recovered. So airport use cases remain down, probably not surprisingly to folks on this call. But otherwise, in a place like Australia, pretty much full recovery. So I think really good overall stories across many markets, and we expect others to get there.

All right. Well, congrats on that. That's pretty impressive to have....

It's been a long journey.

It has been. And you weren't alone, so you're in good company. So as you look past COVID, so let's put COVID in the rearview mirror and start looking at the shape of recovery hopefully in the second half and into next year, one of the things that we often hear is maybe the pandemic has created some structural challenges for not only your business but for ridesharing in general. And they, for instance, would give an example of airport rides that are not likely to come back for a while, right? I mean we're on -- we're doing this over Zoom, right? And it's really practical. So the assumption is maybe we'll never go back to 100% of what we used to do, have to hop on the plane, do all these things. Can you maybe speak to maybe areas where you feel there is some potential structural change, if at all? And then inversely, areas where there may actually be an opportunity for you? So for instance, I think there were some stats around how you guys have been -- and your competitor as well, both of you guys have been outperforming in terms of public transportation and getting new cohorts that would not have necessarily come to the platform. Maybe can you speak to the stickiness of those new cohorts to the extent you can?

Sure. So a lot in that question.

Yes, sorry.

No, no, it's -- I think it's exactly the right question, and it's obviously one we're thinking about. So I think there are puts and takes in both directions, but we will net out stronger both as a company and as a Mobility business. So at the company level, our strong feeling is this has permanently expanded the TAM for the Delivery business and that there's no going back to where we were pre-pandemic even as people start moving again. There's just so many people that have come into the category that are now using our delivery services, not just food delivery, grocery, alcohol, convenience, all the other things that we service. So that market, we feel really good, permanent expansion of that category. And Uber is really well positioned there, #1, #2 player in many or most markets around the world. And then on the Mobility side, I think you're right that we have some -- on travel, it sort of remains to be seen what the new normal is. My sense and our sense and when we look at what you're hearing from travel providers, booking companies, et cetera, is there's a lot of pent-up demand on the personal travel side of things, which are a big part of our business still. People are going to get out there as soon as they can. They're going to book vacations. They're going to book multiple vacations. Maybe they're able to travel more because a little bit more flexibility in where they work. So I think there's a ton of upside on personal travel, and that's probably going to last for 6, 12, 18, 24 months. There's all kinds of data around savings rates and stuff like that, that people will have to spend on, on travel. So personal travel feel quite good about. Business travel, it's a bit of a TBD, right? I think that, yes, we are doing this conference on Zoom. But as you and I talked about before we jumped into the audience, it's not as good, right? There's an energy that's lost. There's -- attendance may be higher, but I think a lot of folks would still prefer to be in person. So I think business travel demand will still be there. How much, remains to be seen. And definitely, some meetings obviously will be moved to Zoom and some conferences and stuff like that. I think the flip side is as people are more distributed and companies are more distributed, there may be an opportunity for people to travel more to get together. I know -- I've heard some talk, distributed leadership teams flying more to spend a week together and then go back for 3 weeks and then another week together. So there could be upside in terms of travel, too. And I think in-person is going to matter. How much so, we'll see. But I think, we think there's probably some pent-up demand there as well. I know I have...

And I know you guys have historically broken the airport runs at somewhere around 15% of gross bookings. How big is the business component of that? Just -- I'm sorry, before you go to the other part of the question.

So we don't -- I can't give you an exact figure there because we -- there's much business trips that would show up as sort of -- we wouldn't have a way to identify if that's business trip, right? If you're a rider and you happen to fly into San Francisco and you're not on a business profile with us, we don't actually know whether you're a business rider. We've done rough estimates that somewhere in the neighborhood of 25% of our customers use Uber for business travel and then up to 50% of our trips are made up of those people who use us for business. So it's in that order of magnitude. But business travel can also mean within a city, and so -- but airports would be a much smaller percent than that. So it remains to be seen a little bit. But look, the other side of the coin is we do think there's been parts of the mobility pie that have expanded during COVID. So Brazil is an example I often cite in discussions. While the business overall is not back to 100%, there's many pockets of cities. So a city like Sao Paulo, which is one of our largest cities globally -- there's neighborhoods that are way ahead of where they were pre-COVID. And what we're seeing in those neighborhoods is people move from public transit to Uber because they feel safer. And we also see the time of day demand look very, very different. So in a bunch of places, nonrush hour commute times are back to above 100%. And these are in places like New York City as well, Rio, Hong Kong, Sydney. And these are new people, new use cases that have come into the category. And we think we're going to be able to keep those on the other side. So we think, overall, it's a category expander for us. But we'll have to see and we have a lot in flight to try to keep those users we've gained through COVID.

Yes. Okay. No, that makes a ton of sense. Can we switch topics and maybe step back high level? You guys have often talked about this ambition of creating a super app. And if you go to the Middle East and use Careem, right, they already have sort of a super app, right? They have taxis. They have bikes. They have shopping, et cetera. Maybe speak to where you guys are in that process? Yes, maybe there and then a little bit deeper.

Sure. I mean I think we're -- you're right about Careem, and it's a great example and one we're close to. And we think the super app potential for Uber is pretty great. This is a model that's had a ton of traction in Asia. It's, I think, becoming more of the norm in Latin America, which is a huge market for us. There is a bunch of benefits to the consumer. So if you're a customer, you're opening the app to go somewhere, you don't necessarily care whether it's an UberX or maybe you want to upgrade the ride and take comfort or a Black car or maybe there's a bike or a scooter nearby that can get you there quicker and more cheaply or maybe you actually just use us to get your public transit information or you land in a new city and you open up the app and you find your rental car through Uber. You're kind of looking to go from A to B, and there's a bunch of different ways we can get you there, and that's sort of our specialty. And so even just from a mobility perspective, being able to offer lots of different options and do so in a compelling way that cross-sells and upsells and does all that, I think, is value-added for the consumer. You then add in the ability to use Uber for delivery services, and that's valuable for the customer because there's just a level of trust that exists with Uber and discovery that comes on their end. And for Uber, it's really valuable. Two stats that I'm really excited about. I was looking over at some of these numbers last week and was surprised at how much this has grown. We're doing nearly 4% of our Delivery gross bookings that is originating through the rider app, what people think of as the rider app. 4% of Delivery GB is coming through that. It's an amazing statistic because you think of how much -- how down the Mobility business is right now. Like our user numbers are still significantly down. So as those numbers come up, that percentage on Delivery is going to grow. We also disclosed that close to 10% of our Uber Eats first trips came through the Uber rider app in Q4. So again, you could see the sort of lead generation discovery potential for the super app. And again, that's going to grow as mobility grows. And really, I think we're very early on in our efforts there. So it's powerful. We think it's good for the customer. We think it's good for Uber. Over time, I think it brings down our user acquisition cost, which gives us a P&L advantage. So there's a lot of reasons to be excited about it.

Yes. Yes. No, for sure. And then on -- if you look at where you are from a product standpoint or the -- on the R&D side to kind of make this a reality, how much of a heavy lift is it to do? And how do you actually get it adopted by users? I'm just thinking investment side of the equation to get you to where you need to get to.

Yes. So as far as the technology to be able to operate a super app and present options to users and do so in a way that feels intuitive and clear, that's ready to go. I mean that's not some big lengthy project that we need to embark on. If you open the rider app today, you'll see a bunch of different tiles for a bunch of different products. And so we're sort of already doing that. It needs to continue to evolve and get better and get snappier and all those things we push ourselves on. But that's there. For us, I think the magic is servicing the right product to the right user at the right moment in their journey because, of course, the risk is as you build in lots of different services and services, you could potentially confuse the user, do they know what they're getting. And you also want to maintain the magic of Uber, which is push a button, get a ride. That's been our -- that's been the same story for 10 years. And so somebody just wants to open the app and get from point A to point B, the same ride they take every single morning, it should still be one click to do that. But then how do you show that person's food at the right moment or groceries or let them know that they can use their membership program, their subscription program and to also get a discount on all these new services? So that's the magic, and we're getting better at that. And I think what's exciting for us is we found a way to present all these options without having any negative impact on, say, mobility. So we can do a lot of this cross-selling I just described in the Mobility app, and there is -- our data science shows there is no downward trade on the Mobility business. People aren't getting confused and leaving the app or choosing another option. So that, I think, is a really powerful thing.

And from a marketing standpoint, how do you get it adopted? It seems like at least, at this point, it's more organic, right? There's no plan on going all out trying to run some big marketing campaigns to try to get more people on?

Yes. I think it's fairly organic, especially at the moment we're in for the Mobility business, right? It's a bit of an odd one to go with broad campaign about all these different ways you can move. We're just focused on making sure people know the platform is safe. That if they need to move, they can move on Uber. As the recovery kicks in, no, I think that's when we get pretty aggressive around educating users on all the different options. And again, I think it's like right moment for the right user. We need to be really segmented in how we do this. We've got car rental pilots going on, I think, in 4 cities around the U.S. right now. You wouldn't go out, do a national campaign on a very early-stage car rental. But for a user that lands at an airport in the right city, they get you to get hit with the push notification that they can run their car through Uber at the right moment. And so it's that kind of like hyper-segmented, hyper-local-type product education that I think will drive long-term value. And then you don't have to spend a lot of money to do what I just said either.

Right. Right. So talk to us a little bit about the supply and demand dynamics in the Mobility business today and how you're managing that. So we know you guys said you're starting to spend more on driver acquisition, for example, in anticipation of the higher demand this spring. There is obviously a risk there fueling, again, a promotional environment that we were in back 1 year, 1.5 years ago. So both on the driver side and on the consumer side, maybe speak to that. What you're seeing so far and your plans in the not-too-distant future, say, over the next 3 to 6 months?

Sure. So you're absolutely right that I think the constraint or the focus for us is going to have to be on growing our driver supply business because what we've seen time and again through the pandemic is the minute cities open up, the Mobility business comes back almost instantly, right? Even when you -- even small signals, restaurant capacity goes from 25% to 35%, we start to see that show up in our numbers right away. So it's pretty amazing. And so when you get into vaccination where people truly feel safe and cities open up for good, we think demand is going to come roaring back. So for us, it's about getting drivers back on the road so that we can supply that demand, keep ETAs low, keep the service reliable, keep prices low. And that's got to be what we deliver on really for the rest of this year and into next year around the world. The good news is that's our core DNA. I mean,as long as Uber has existed, supply growth has had to lead demand growth. And building our supply back is a challenge I think we're really well set up for. There's all sorts of COVID-specific factors limiting supply growth. That will start to dissipate, right? So obviously, the safety concerns as drivers and societies get vaccinated, those, I think, will fade. There's been lots of government support through COVID, which is great, although when -- we do know that people drive to earn and to pay the bills and those types of things. So as those programs wind down and if unemployment stays high, which it probably will for some period of time in many places around the world, we'll see more drivers either come back or come into the category. Even things you wouldn't think of, government offices close down, it slows down document processes and licenses and all this other stuff. So all those things will dissipate, and supply will start to come down. We will start to invest again. We really cut investment into the crisis, as you would expect. But we'll start to ramp that up as a normal course of business. So as those things dissipate and we really lean in, we think supply -- driver supply will come back to the platform. The good news is, as I said, I think the sort of gig economy has permanently expanded here, and that does introduce some competition on the supply side of the market. But the best earning gig economy job is being a driver on the Uber platform. And so we've got a natural advantage there. We also just have the capability. We've got teams all over the world. We've got COEs. We're talking about hands-on stuff like call every single driver that's left the platform since pre-COVID, do it in a matter of weeks, help them, educate them on the safety of the platform, how to get their vaccine, how to get back on the platform. And so we're all in on this, and I think we're well set up to do it. But it will be a challenge. There's no doubt about it.

Do you think that this has -- or let me step a bit. Let me ask it this way. How do you think that ultimately impact the economics to you guys from a take rate standpoint? I think take rate was down a little bit last quarter, but it sounded like it was mostly due to geographic mix. But based on what you just said, how do you see the trend in take rate for the Mobility business evolving over, say, the rest of the year?

Yes. So great question. No bold proclamations for me on take rate as far as where the numbers will move, and Balaji can share what we've shared there. We do have different take rates in different geographies by country, by city. That varies depending on all sorts of dynamics, local supply-demand balance, competitive dynamics, all those different things. So as different geos recover at different rates, that does impact the overall take rate for the business. I think what I'd say is we're very bullish on the profitability trajectory for mobility overall regardless of ups and downs on take rate because of all the work we've done on cost, right? So take rate is part of the equation, but really ripping out all those strategic -- nonstrategic costs. As volume comes back, we get a ton of leverage on that, right? I think we've done a really good job on that. There's more to do. But as the largest player, you get a lot of scale advantage there. And so we will get a ton of operating leverage as volume comes back on cost. And yes, we want to be thoughtful about doing our best to improve take rate over time, but not at the expense of market leadership long term, not at the expense of an imbalanced marketplace because we think those would be short-term decisions that are not the right even medium-term call. That said, I don't -- nothing I'm describing on the supply side of the business I would view as irrational or promotional behavior. This is just core nuts and bolts, what we have to do to scale volumes back. This is not unexpected. And so we don't think it's anything irrational or irregular. Frankly, it's just what's needed to get the volume back, and I think it's good investment. So we're not super worried about it, but obviously, it's something we manage very tightly week-to-week.

Yes. Okay. All right. In the interest of time, let me keep going on -- one area that honestly is super exciting to us is the growth in subscribers that you guys put up last quarter. I don't know how you went from 1 million to 5 million. That was really impressive. Maybe can you just speak to -- obviously, it's super important. We all understand why. But one, how are you able to grow the subscription base this fast? And any KPIs that you can share in terms of the how these cohorts of subscribers are behaving relative to the nonsubscribers, either in terms of frequency or average basket size or any KPIs that you could share?

Yes. So I don't think I can disclose anything new from a numbers perspective versus what's already been disclosed in earnings and what Dara and Nelson may have talked about in the last couple of weeks. Suffice it to say, we are seeing increased cross-platform usage of subscribers. We are seeing increased basket size when we have members on the platform versus nonmembers. We do think this will -- these trends will continue. There's no reason to believe that's not a sort of structural change in user behavior, which is great. We are continuing to expand our past program. So as you said, we're happy with the 5 million number, but it's nowhere near what we think the end stage should be. And we think that end state should come in months, not years. And so we're going to really accelerate adoption efforts here because, look, anytime you are rolling out a program like this that is great for your customers and does really good things with your own business, that interest alignment is super powerful. It means we'll just go super hard at it from a marketing and promotion perspective. You'll see it show up in places like the super app, and there's all kinds of great ways to get folks to adopt the membership program, and we really like their behavior once they do that. So it's a major priority for us. We're happy with the growth, but nowhere near satisfied. And we'll keep leaning in. The good news is our Pass offerings get that much more valuable to customers as the Mobility business comes back. And so while our sort of Eats-focused, Delivery-focused Pass is doing great today, we have this really powerful ability as a multi-business company to offer users benefits on both getting around their city and ordering food or ordering other things for delivery. And it's relevant to almost all our customers, like everybody moves, everybody eats. That's certainly going to be true in the post-pandemic world. And so the offering, I think it's going to be powerful and differentiated from what any of our monoline competitors can do.

And just to be clear, that's a global number, right? Have you guys broken out or gave a U.S. versus international or North America versus rest of world?

I actually don't know that off the top of my head. Balaji, I don't know if we've done that disclosure, maybe we can follow up, but I'm not sure.

We -- yes, we haven't, but what we have said is the U.S. is a majority of that 5 million. A good majority of that is the U.S., primarily because that's where we've had it for the longest. And all the international markets we expanded to were in Q4. So you should imagine that, that's a small contribution at this point.

Right, which is, I assume, a big area of growth, particularly in places where you have a super app or the beginning of a super app because the kind of -- there's a lot of synergy there. All right. I guess staying with international for a second. So DiDi has been a pretty strong competitor in LatAm, Brazil, in particular. We saw the announcement that they're entering the European rideshare market. How do you guys think about that? Does that provide or does that cause a potential risk that -- with just driving up promotional activity to a level that could hurt margins and maybe jeopardize your profitability well for this year?

So no changes from DiDi's expansion to our profitability goals, either for the company or for the Mobility business overall. Honestly, it's not -- I know when announcements like that go, they can sometimes get a lot of attention, but it's not surprising to us, right? This is what we've been expecting. They've been quite clear in their global ambition. And competition is a good thing. It makes us better. It's better for consumers and for drivers. So -- but no surprise. I am a little surprised when the news of expansion generates as much waves as it does. But we compete everywhere, right? I mean competition is not a new thing to the European market, in our largest businesses there. We deal with 2 to 5 competitors for the most part. And there, many are already quite aggressive. So this is not new or a major change. Three, 4 years ago, it would have been. But today, that's not the case. And in places like London, we're dealing with 5 plus, including the existing industry, et cetera. So competition is good. It's not surprising to us. It doesn't change what we think we'll deliver. And if you look, we've been competing toe-to-toe with DiDi outside of China for 5-plus years at this point. And they're a good competitor. But our largest markets where they exist, Brazil, Australia, these are places we've maintained 70-plus category position leadership in Brazil, 80-plus category position leadership in Australia. And we're running nice profitable businesses in those places. So look, they're a good competitor, but they've made us better, and we're happy to compete.

All right. That's super clear. Moving to Autonomous. So you've made the divestiture of ATG, even though you're obviously still committed with the investment in Aurora. Your, again, U.S. competitor talked recently about putting AVs on their network starting in 2023. Super curious to know what you think about that time horizon and what does yours look like.

Yes. So we aren't committing to any specific time horizon. It doesn't mean we're not interested, but targets in this space have typically fallen short of reality, and we'd rather deliver reality. So targets are great. They motivate teams and set goals and help you move faster. But our focus is actually delivering rather than putting some stake in the ground about a future date. We're very excited about the partnership with Aurora. Two talented teams together. We obviously have a very deep invested interest in the space and knowledge of the space. And we think we are the platform of choice to put EVs into market. And all our expertise around bringing consumer demand for mobility and marketplace management and managing the customer experience, I think we've built those capabilities for years. We have thousands of fleet partners today not operating autonomous vehicles, operating traditional vehicles. But we are the place to put your vehicle to drive utilization, make money on that vehicle. And we think that will be true with other modes of transportation going forward. So it's an interesting space. We think it's a great thing overall for the world. It's going to take some time to get there, and I think we're still really well positioned as the platform of choice. And so we'll work with Aurora. We'll work with other partners where it makes sense, and we'll certainly look at technology as it evolves. But we feel pretty good about our positioning here.

And just to clear out the question that we often get around the business model. Do you guys have any interest in operating your own fleet? Or is the idea that you'd be a customer acquisition and relationship layer on top of third-party fleet operator?

I think it's unlikely we would want to operate our own fleets. We traditionally don't want to be in the capital-intensive part of the value chain, and that's not our core capability. Never say never because, of course, we've got to do what it takes to win, but I don't think it's likely we'll go down that path. We are, as you say, bringing hundreds of millions of eyeballs every week to an app to get from point A to point B. That's going to be a massive point of entry for AVs and also just a value-add. We manage the marketplace. We can do to -- complement traditional supply with AV supply, manage the transaction and the trip. All of these are our capabilities. So we should play where we have an advantage. And also -- and we're not in the business of trying to get into these very heavy capital-intensive businesses.

Yes. Yes. No. I suspect that you're going to say that. All right. The last few minutes we have, I just want to hit the regulatory environment. So can you speak to the recent U.K. Supreme Court ruling on the employment status of drivers? I know it was backward-looking, limited to 140, I think or so, drivers. Is there any concern of knock-on effects going forward on the larger driver base in the U.K. and even other geos?

So look, you heard me speak earlier about our journey and how we've evolved as a company and how we've been able to navigate changing regulatory environment both on the core business but also on the labor side Prop 22 is a big, big turning point. So I fully expect overall that we're going to continue to make progress and developing the future of work and rolling out models that provide flexibility and independence, which is universally what drivers tell us they want. They don't want to be traditional employees. They are here for the flexibility. They're here for the independence. They often work on multiple apps. They often work to supplement other sources of income. And that's true. And that's what they want. And that's why we won on Prop 22, it's because it's what drivers want. And I think it's why, over time, we'll be able to work with governments around the world to provide flexibility and independence while also giving some additional safety net and benefits and the types of things that were included in Prop 22. So that's the overall story. But the U.K. specifically, as you say, backward-looking, limited to a small set of drivers overall, we're still evaluating our sort of go-forward approach there. I do think it's worth noting, that was -- drivers there were classified as workers, which is this category between traditional employees and independent contractor which actually, in many ways, looks like what we're advocating for in terms of IC+ and what the Prop 22 model is overall: flexibility, ability to turn on and off the app, but also an economic model that works for platforms. So we do think there's a path forward there, and we'll navigate it the way we've navigated California and other challenges along the way. It's still early days. And so -- and we want to take an approach that is what drivers want. So that will be at the forefront of our actions going forward.

And on Prop 22, just one quick clarification. So your competitor seems to be indicating that they've decided to eat much or absorb much of that price increase. I think you guys -- if I remember correctly, Nelson on the last earnings call, I think, said you're absorbing some, you're passing on some to the end consumer. Is there a difference there? Could that be a competitive disadvantage if ultimately you are proven to be a little more expensive? Or is that not the case?

So just to clarify, I think the competitor you're referencing that has said we're going to eat the cost or whatever is on the delivery side. On the mobility side, I believe our primary competitor has actually passed through the cost to consumers as we have as well. So we don't think there's any relative disadvantage there. And nothing that we're seeing in California suggests that, that pass-through, which is a relatively small amount, has had an impact on demand or our positioning in the market or anything like that. So for Mobility, we feel good. On the Delivery side, folks are going to manage the business the way they manage the business. Our sense is that they pass through cost increases nationwide over the last little while. And so maybe not specific to California, but overall, we do think there's some clawback there, which -- there's different approaches here. But we don't think we're at any disadvantage overall in California. And again, we think Prop 22 is a great outcome for drivers and for the industry.

All right. So thanks for that clarification. That's -- actually, I didn't know that. So last question and just to close out. So just as you look at the ridesharing business for you guys over the next, I don't know, 3 to 5 years and just opportunities around it, what really excites you the most today?

So we have -- I think the -- for us, the vision for mobility is to power every journey that happens in the city. And so today, I think people still, even within the mobility space, think of Uber as primarily UberX, you get a ride from point A to point B. We've got a bunch of business users who use some of our premium products. And then we've got some traction with a bunch of subcomponents of the business, taxis in certain markets and 2- and 3-wheelers in others. But I really think the -- what's going to power long-term growth on this platform is people switching to a mindset of every time I leave the house, I use Uber. And a bunch of the products we've got in the pipeline are going to drive that behavior. They're going to expand the TAM. They're going to expand the pie. They're going to bring more people in who use Uber for their daily needs. I talk to some of the things we're seeing through COVID on that front. We've got some really interesting high-capacity vehicle experiments going in 3, 4 markets that we're starting to expand and selling both to customers but also to businesses, which is super powerful. That's -- we're talking about not bringing down the cost of a ride like 5% or 10%, but 50%, 60%, 70%, which fundamentally changes the pie. We've got tremendous growth on our hailables portfolio, so motorcycles, 3-wheelers, taxis. These are businesses that are growing year-over-year through COVID given our expansion. And it's this huge portion of the mobility ecosystem that traditionally we've shied away from playing in but now are becoming sort of the software that powers that part of the industry as well. We're seeing really great traction in our transit business. Again, it's early days, but working with agencies, helping them manage costs, manage their networks, almost starting to do some SaaS pilots where we're actually selling them software to help them manage their own portfolio of cars, which is a super interesting business. And the list goes on and on and on. I mean if you go out of the car rental industry and think about how we can help that business modernize, that is a really tough customer experience for anyone that's done it in the last couple of years. Such an opportunity to like Uberize that and make it smooth, pickup and dropoff experience, getting to and from where you need to get your car, maybe take some real estate out of the space long term, which helps them bring the cost structures down. So I can go, again, down vertical after vertical where I think we're going to have a chance to do what we did with this core for-hire point-to-point transportation. And the technology we're building is excellent. Our ability to sell through on our B2B side is scaling really, really quickly. So Dara often talks about we've got this powerful mobility distribution. We've got these eyeballs, hundreds of millions of eyeballs, and we've got hundreds of thousands of businesses using that. We build these innovations and we could sell them. So I know there's a lot there, but I'm excited about a lot here. I think it's going to be an amazing sort of 5 to 10 years of growth from the seeds we're planting today.

That's true. Super exciting. Okay. That is all the time we have. So Andrew Macdonald, thank you so much for this. It was far wide reaching, this conversation, and then I really enjoyed it. Balaji, thank you so much as well for help set up. And thank you, guys. Thank you, everybody, for attending as well. And hopefully, next year, we'll meet in person. And who knows? We'll use Uber to get there.

Definitely, definitely. Awesome. Well, great chatting you. So thank you so much. Cheers.

Thank you. Thanks, everybody. Be safe.