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

Welcome back, everyone, to the next session here at the Goldman Sachs 30th Annual Communacopia Conference. For those who don't know, my name is Eric Sheridan, I'm Goldman Sachs' U.S. large-cap Internet Equity Research Analyst, and it's my pleasure to host Dara Khosrowshahi, the CEO of Uber for our next fireside chat. Dara, thanks so much for doing the conference and welcome. Great to see you virtually.

Happy to do it. 30 years is a long time, so honored to be here.

Thanks, Dara. I want to start with the announcement the company put out this morning, obviously, giving an update to the market on the volume trends you're seeing in Q3, as well as some of the improved profitability metrics you talked about in your disclosure this morning. Typically, I would start big picture, but you put news front and center today. I want to make sure we understand some of the key messages coming out of that and maybe I've got a few follow-ups so we could tease out all the nuances from it.

Sounds good.

So Dara, maybe just starting out, obviously, I think the big narrative was the improved profitability. Can you talk a little bit about some of the drivers of that improved profitability? And maybe what you've seen in the business since the last time you updated the market on the Q2 results in early August.

Sure. Absolutely. And we're very pleased with our path to profitability. We committed to investors that we'd get there, and it looks like we're going to get there sooner than we thought thanks to the good work of the teams. The -- in order for us to hit profitability, first of all, the Mobility business has to be in really good shape. And we leaned in, in Q2 last quarter, pretty aggressively into supply, especially in the U.S. as we saw that sessions and demand for rideshare was growing substantially faster than supply hours were growing. And we felt like in order to keep the quality of the service and the dependability of the service at levels that we believe are satisfactory, especially as people are getting out again, we had to dig in deep on the supply front and really invest especially in driver incentives, in order to get momentum behind supply. And I think one of the natural questions that investors asked and, listen, we asked ourselves is, "Hey, are we going to have to continue to overinvest in supply for the rest of the year, or are the actions that we took to some extent to overinvest in Q2 -- are those the right catalysts to get supply moving and get the marketplace into a more balanced place?" And the answer happily is the latter. Our session growth continues to grow. August session growth which is more of a measure of demand, paused a little bit with the latest COVID issues. But September, we're seeing session growth growing. And happily, we're seeing the momentum that we started building as it relates to driver supply in the U.S. increase significantly, and the momentum continues now. Just actually in the past couple of weeks, supply hours were up by 9% only in 2 weeks. So we were able to get momentum going on the supply front through a number of factors, resurrecting drivers who had elected to stay at home, incentives, guarantees, et cetera. And to some extent, we needed to overinvest in order to understand what worked in our ML algorithms, to teach ML algorithms what worked, what didn't work. And now the algorithms are kind of taking over and they're optimizing so that for every dollar that we spend, we get a better return. And for perspective, we think in order to hit the minus $25 million to $25 million in EBITDA in Q3, we're essentially going to come in at Mobility margins that are comparable to where we were in Q4 of '19. That's pre-COVID. Volumes of 30% lower than where they were, so that kind of tells you the core work that we've done in terms of the profitability of the business. And the incentive spend that we continue to make into the marketplace, and also, for example, some investments that we're making in the U.K., our competitors haven't established out drivers as workers as we are. Those actually represents another $200 million headwind as it relates to our Mobility business that we're able to subsume. So the business is able to drive Q4 '19 profitability levels at lower volume levels, and we're quite comfortable that volumes coming back: U.K., Germany, Spain, Brazil, Japan, country after country, volumes are now above 2019. So I don't think it's hard to imagine. We will be globally above 2019 with time. So at a lower volume and our taking in some of these temporal, we think, factors, driver incentives are going to return to normal. U.K. is going to be a level playing field based on the U.K. Supreme Court. We think the kind of the profitability the -- ability of the Mobility business to drive profitability in this market going forward for some period of time is significant, and we have our battery charge-off, so to speak, to drive both growth and profitability going forward. As it relates to delivery, we continue to execute. And the biggest factor there, the international markets are great markets for us. We're seeking 1 in 8 out of 10 of those markets, we are close to profitable in Q2. We will be profitable for the balance of the year. Those markets are terrific markets for us. And in the U.S., again, on the supply side, our courier supply has increased very significantly on a year-on-year basis. We're able to use the better supply situation, better algorithmic techniques, more restaurants, more eaters, more couriers essentially to drive cost per transaction down, which is not something that's temporal. Like it's -- that is a permanent efficiency in the marketplace that then we can reinvest into growth. And then we also show -- make a profitable growth as well in terms of delivery EBITDA improving. And the signal that we're seeing there is actually based on third-party data and our own internal data, we think we're the fastest-growing delivery platform in the U.S. in Q3. And certainly, we hope and expect that to continue for some period of time coming forward. So I think the momentum is good. And right now, we think we have the ability to continue that momentum into the back half of the year and beyond.

So maybe just one broad follow-up to that. I think since I wrote about the company only 10 days or so ago when we reinitiated coverage, I think one of the questions we've gotten is as you move through the later stages, hopefully, of the pandemic, and you arrive at a sort of demand supply balance on both sides of your businesses going forward, how much have you learned of what's inside your control versus what's outside of your control in terms of, sort of, driving demand and growth on the volume side versus managing costs and sort of solving for margins on the cost side of the equation?

So I think one thing that we're seeing as it relates to our business is that there's a lot more pricing power in the business. We've always -- there's always been a hypothesis on the Mobility side that we've got lots of pricing power, it certainly shows. And in a situation, what we're seeing is that with proper investments in supply, when the marketplace comes into balance, the business structurally returns to the great business that we had pre-pandemic. And we have invested in automation, more targeted incentives, much, much stronger online and marketing, et cetera, that allows us essentially to be a more profitable business at the same size or even at a lower size. So there's nothing that we see that would suggest that the Mobility business can't return to be the great business that it was, that is going to return on a growth path above 2019 and beyond. And what we're doing now, to some extent, under the covers is, we're aggressively investing in alternative Mobility mechanisms. We have transit on the site, high-capacity vehicles. We will introduce Pool safely in certain markets. We're expanding into hail-ables whether it's 2-wheelers or 3-wheelers or taxi as well. We're making all the content investments that we have to for the next 2 to 5 years. So we feel like while we can't predict the pace of reopenings, as markets reopen, the business returns to normal and structurally, we're in a better place. I do think one other factor that's different is we're at a $52 billion run rate as it relates to our Delivery business. We're at a $40 billion run rate as it relates to the Mobility business. Both are moving in the right direction. But previously, 2 years ago, in a difficult market that didn't open up, you would have Delivery doing really well, but without the kind of profit margins that we saw with Mobility. Delivery is now turning into a business that can carry very big top lines with real profit margins as well, and they're profit margins that essentially were driving out of internal efficiencies. So as a business, we're going to -- we're looking at being a much more hedged business. If things open up, that's great. If things don't open up, our Delivery business continues to be very, very big, and that's great, too.

Great. One of the topics I've asked you about -- on the public earnings calls over the last maybe 1 year plus, is your strategy around reorienting the business towards being a super app and creating a platform and having a lot of multiple products. Can you talk a little bit about the strategy towards multiple products, subscriptions, creating more of a platform approach around the company, and where you are in terms of grading yourself on the progress you want to see across those efforts in the years ahead.

Sure, absolutely. I'd say that we're more of a like a family of apps, right, which is we have the Uber app, Uber Eats app. Google has Google and Maps and Gmail, et cetera. You see the strategy with a lot of the leading tech companies in the West. The super app strategy is more of a, call it, China, Southeast Asia strategy. I'm not saying whether it's right or wrong. But it's a collection, it's a family of apps right now that we are driving. And we're seeing a really, really interesting signal here. The family of apps essentially can give us an advantage in terms of customer acquisition. So for example, in the U.S. now, 22% of first-time eaters come directly from our mobility app. And we have Uber Eats available on the mobility app, and that is free traffic. We've tested it. Is there any cannibalization, et cetera? And so this is net of cannibalization, which essentially is 0. It creates more occasions for Uber users to open the Uber app, which is really cool as well. So we have essentially a free traffic source. And we're seeing it the other way as well, which is as mobility opens up, 20% of mobility users of Uber, actually first-time mobility users actually are using Uber Eats. In the U.K., that number is 40%. So what that translates into is essentially a customer acquisition mathematical advantage that we have over competition. We've been at it for 2 years. And for example, a 20% advantage in first-time eaters doesn't show up because most of our volume comes from second time, third time, fourth-time eaters -- doesn't show up in year 1. It doesn't show up in year 2. But year 3, 4, 5, 6, the compounding effect of all of this free traffic will allow us to gain share without having to sacrifice the P&L to do so. The second order issue that we're seeing, which is really encouraging, is that users who use multiple apps stay longer. The more connections we have with users, the more they transact on our rides, Eats, grocery products, the higher retention we have. And then on top of that, as we introduce membership and about 25%, for example, of our Eats volume comes from members, members transact twice more on top of nonmembers. So what you have is a structural customer acquisition advantage. You have a structural retention advantage and then membership is sort of our new weapon to augment all of that. It doesn't show up short term. But long term, and I think you're starting to see the long-term signals for us. Long term, we think it could be an enormous factor to drive outsized returns or outsized growth or outsized margin depending on how we allocate that incremental capital.

And maybe following up there as someone who is a member and is reminded about my savings and all the elements of the business that both delight but also point out how much money I've spent at the same time, how do you drive more of that into the business? When you think about the power of utility and the power of consumption and lower churn and more LTV at lower friction cost, would there be an argument that you should push in on membership and as you should -- more aggressively invest against that as a theme broadly for your family of apps? How do you strike the right balance there?

I think, listen, it's an argument and something that we're leaning into. So with membership, we wanted to make sure that -- I've seen membership programs that grow and focus on growth and don't focus on retention, which hit a wall a year or 2 in. Acquiring new members is easy, retaining them is a much harder job. So we actually -- we push forward our membership to start with. And then we worked on our customer retention metrics. And right now, 6-plus month members retain at 98% plus on a monthly basis. That took us some iteration and optimization to do so. Now at those levels, we think membership along with the higher frequency, higher basket size, higher retention that we're seeing out of members and ultimately, more spend on the platform, that is giving us the opening to lean into membership aggressively in the U.S. and all around the world. So you should see member levels and the bookings, the gross bookings that come from members, that's about 25% of our gross bookings, that should -- our goal is to get to 50% and beyond. And I don't see any reason why we can't get to those levels. And that becomes a very, very strong, defensive asset that we have, especially because structurally we can just offer more in our membership program than anyone else can. Like there is no other player that can provide the breadth of food, of delivery, of grocery, of alcohol and then mobility structurally than us. And at this point, the retention is there, we just have to execute.

Got it. I want to come back to some of the comments you made on the Mobility business. As we look out for demand in mobility improving in the quarters ahead, how much of it is just down to product innovation and introducing more forms of mobility to user base versus just general mobility trends? I happen to go to the office every day, but that's not true for everyone. How much of it is things outside of your control, like return to office, flights, airport versus introducing new product innovation and offering more products to consumers, to maybe even drive some of the mobility trends on a global basis going forward?

The way I frame it is that in the next 6 to 12 months, the most important factors are going to be return to office, life getting to normal, et cetera. And as it relates to that, making sure that supply and demand for us are balanced. Because when you have significant changes either in supply or demand, the marketplace can get imbalanced and could get imbalanced in terms of is it core versus noncore, is it peak versus nonpeak, the demands of airport travel is different than non-airport travel, et cetera. And what we're consistently seeing is like businesses -- cities are opening up, the 2 areas that still aren't where we want them to be is commute and is also travel. And we tend to have a higher share of business commute and travel as well. We don't know when it's coming back. The trends, we actually have seen a nice bump in business travel happening. If it continues, it will be great. So the work for us is -- how fast it comes back is a little bit out of our hands, but we're seeing in every single country, it is coming back at different levels. And it's up to us to balance the marketplace so that as it comes back, the service is dependable. The service has a low price or as low as it can be while providing great earnings opportunities for earners, because I think kind of the competition for labor is higher than it ever has been. One area you talked about the super app, where we're really focused on is, we actually have an earner super app, which is drivers can drive people or they can drive stuff or they can drive food for us. And we're integrating those opportunities in a way that, frankly, we hadn't previously. And that should create more stickiness, the ability for earners to have higher utilization on our platform and, all things being equal, earning more with Uber than they can with other individual platforms. They have to like deliver here and then go to another platform to drive and then go to another platform to shop, et cetera. We have it all available, one app, whenever you want. Once we get past 6 to 12 months, you get into growth areas. And for us, the growth vectors are a bunch of countries we're investing in, we are in Germany, Spain, Japan, Argentina, South Korea. These are very, very big markets that were nonexistent for us 2 years ago. Now they are significant and can get much more significant. Second is use cases that drive pricing, consumer-facing pricing. We're investing in high-capacity vehicles, both for enterprise and consumer. Pool coming back in a careful way, 2-wheelers, 3-wheelers. And then powering taxis too. Taxis need demand. Taxi volumes are not where they were pre-pandemic, even close to. We think we can bring a lot of help there and then transit. So these are more affordable use cases. And then the third area is new use cases. the reserve product, for example, even more important in this marketplace. Rental cars that are delivered to you, et cetera. All of these expand TAM, and we're making investments now and frankly, we're making investments 6 months ago, so that once you get to the 6- to 12-month mark, we still have lots of growth ahead of us in terms of these -- the base business growing, but then new use cases growing as well.

Got it. Maybe one last big topic on mobility. You talked a little bit about the incentives on the supply side of the equation. Probably the other big question other than the supply-demand imbalance in mobility is the permanent versus transient nature of incentives to bring supply back into the market. Talk about some of the key learnings you've had as you've put incentives back in and tried to incent people to come back and drive and the overall labor supply imbalances that we find ourselves within a lot of markets globally. Maybe just talk about some of the key learnings and how you frame some of those for investors in terms of both permanent versus transitory in nature?

Sure. There's a certain class of incentives that is permanent. Those incentives are designed to match supply and demand either temporarily or spatially. So for example, temporarily would be usually during rush hour, this is pre-pandemic, we'd be undersupplied, during non-rush hour, we'd be oversupplied. So incenting drivers to drive rush hour would be a temporal incentive. Rush hours are net less rushing now. We'll see about what our post pandemic work looks like. If you create more flexibility in terms of when you come to the office, that will be really good for us because our marketplace will be more balanced on a temporal basis, and we won't have to give incentives in order, for example, to say more drivers drive during rush hour. The other one is spatial, which is typically, for example, historically, we've been undersupplied in core city, oversupplied outside of core city. That also is a pattern that may change. And again, if it changes, net it could be positive for us, which is some of these permanent -- what I thought were permanent features of incentives to balance supply and demand temporarily and spatially would actually get better. The other, I would say, what some people are wondering our permit incentives is, is are we going to have elevated levels of driver incentives for a long period of time. It's my view that the answer there is no, which is we need these kinds of incentives to balance the marketplace. Once the marketplace gets into a general balance, pricing and availability and ETAs essentially are driven algorithmically. And so pricing increases, our take rate, pricing increases aren't about our take rate. It's essentially about drivers earning what their fair market levels should be. So the real question is what is going to be the price of getting from point A to B in any marketplace. We've seen a lot of pricing power in our service, and we're actively developing alternative services for folks who want cheaper ways of getting around, including transit.

Got it. Okay. I wanted to turn to the delivery business and sort of ask a 2-part question. Maybe you talked a little bit about it in your opening remarks, but -- maybe just give us a broader update of how investors should think about running into tougher and tougher comps in the food delivery business as we move past the sort of volumes when we were all sort of working and staying from home on a more regular basis in the past 12 to 18 months. And the counterbalance, which is you're introducing a lot of new verticals, you've done acquisitions. You're expanding into a lot of areas where I think too many investors still think of it as food delivery where increasingly you think of it as delivery and local last-mile commerce. Maybe talk about those 2 countervailing factors and how investors should think about the puts and takes over the next 12 to 24 months.

Yes, I think the way I put it simply is a lot of investors were worried about, let's say, delivery volumes holding up in a reopening and our delivery volumes during what is typically slower months, slower summer months have stayed steady at the, call it, $52 billion run rate with the reopening happening during the slow months. And actually, in the U.S., delivery volumes have gone up, which typically they haven't. So what it shows to me is that this is a sticky habit. Our audience delivery has grown by 40% to 50%. Basket sizes have grown, frequency has grown. I think there was a hypothesis as well, frequency will come down as people can eat out again. But this is -- just like Amazon grew during the pandemic, no one's saying, "Well, are people going to -- not go to Amazon anymore." The comps may get harder, but fundamentally, it's a new way of getting things delivered to you, and we're at the very, very early stages of introducing these new verticals. So for perspective, on a global basis now, about 7% of our Eats audience is engaging with new verticals. This is grocery, alcohol, anything nonfood. And these users actually then get more engaged with the platform. So on average, they spend -- their frequency goes up by 1.5x. Let's say, a non-new vertical user and their retention, monthly retention is higher by 10%. So they become more sticky, they become more frequent users of the service. And this is, I would say, in the early period of optimizations, in the early period of membership as well. So we think that there's a huge amount of potential here going forward. And the compounding, when I took over, Eats was a $2.5 billion annual run rate business. We invested pretty aggressively in it. We executed pretty well. It's a $52 billion run rate business 4 years ago. Our new verticals business is about $3 billion run rate. And we're aiming for $50 billion or better.

Okay. One more piece I wanted to ask about in terms of the top line of the business is you've talked about the advertising opportunity as a company going forward. And the more verticals you are and the more products people buy, obviously, you're towards, if not at the very bottom of the purchasing funnel in a lot of respects. How do you think about that advertising opportunity? How do you see that business developing and evolving in the next couple of years when you have this large a base of users and that much intent being expressed at the bottom part of the funnel?

Yes, I think the base for advertising is that, when we look at some of our competitors, Meituan, some of the really good players there in advertising and frankly, in my old job in travel, like you said, these are very, very targeted users who are looking for food. And there's a very well-established road map to drive about 1% to 2% of gross bookings in terms of advertising dollars. Amazon is well above that number. And if we're at a $52 billion run rate, 1% is $500 million, 2% is $1 billion and we're going to go much higher than $52 billion in terms of top line as it relates to delivery. So that's kind of a singular path forward. Our grocery business generally has much higher advertising dollars. So there's huge advertising dollar potential in Drizly than we've structured from a regulatory standpoint, the Drizly team has. We haven't done it in a way where those advertising dollars can be available for the platform and the team is doing a great job there. Where we are different is that we have Delivery and Mobility. Many of the players in which we do business, they're obviously interested in eyeballs who want anything delivered to them, but they're even more interested in people who want to go to the restaurant to eat or go to the supermarket to shop, et cetera, and we have the largest audience in terms of Mobility users looking to go anywhere. So the go-get strategy is a consumer strategy, but it is very, very differentiated and compelling advertising strategy as well. And we're in the first inning here. And it's a very high-margin business that we're excited about. We brought in new leadership from Amazon there who's very sophisticated in how to build this market, and we're really confident about the future.

Great. Okay. I have to turn to regulation as the next big topic, obviously, one that investors ask about all the time. I wanted to break it into 2 pieces. Maybe first on worker classification. There's been a lot of back and forth in the press. There's been court rulings. There's been initiatives at the state level. How do you see some of the nuances you've had to deal with in the U.S. on either the state level and potentially moving up to the federal level versus some of what you've seen on a global scale in terms of worker classification, and how investors should think about bringing that back to the cost structure of the company over the medium to long term?

Yes. I think so first of all, I would say that we've been regulated on a local basis since we were born as a company. We're very comfortable with this. And yes, it creates lots of different structures that we have to operate the company. But we're a hyper local company, and we build big, global technology that can essentially adjust to local tunings, more so now on kind of deep learning basis. But like this is how we built our systems. We're very much used to local regulations. If you step back, regulation could be unpredictable short term. But long term, it tends to follow common sense. Long-term regulation is smart. But I think what we're seeing over and over again is that our earners do not want to be employees. Unions may want them to be employees, but they do not want to be employees. By 4:1 ratio, earners prize their independence and the flexibility that they have. All of the celebration that we have of like the maker economy, et cetera, individuals being able to earn on these platforms, that's what we are. And it's for individuals who are doing blue-collar work, and that's great. So I think over a long period of time, regulators are going to recognize that this is a win-win for earners. It's a different way of earning. And the way forward is not to go back 20 years, it's to look forward as to where things are going to be 5 to 10 years. So we will have our local wins and our local losses sometimes. But overall, I think the macro trend of earnings is IC+: Flexibility, plus protections. And you're seeing a step up, for example, in the U.K., we're taking very significant economic hits. But in stepping up and setting the example for the mobility industry in the U.K., we think others will follow. They may have to follow. One way or the other, they will be pushed forward. And by the way, we think it actually makes sense in a world where, on average, we think labor, there's going to be a lot of competition for workers. And so making the work not just flexible but with protections, that's a good thing. That's going to help our supply going forward. So it's an investment that absolutely makes sense. So I think, again, there will be back and forth, there will be wins, there will be losses. But the regulatory environment for us, generally, is getting better, headlines aside, really on a global basis.

Okay. And maybe the second part on the regulation, obviously, a lot of news flow on commission caps in the food delivery business. Help us understand a little bit of how you think you can navigate these issues as a company and how they sort of manifest themselves as we come out of the pandemic, hopefully, and move on to a more normalized environment.

Yes. I think as far as commission caps go, we think the majority of commission caps are going to fall away, but not all of those commission caps. We will challenge the commission caps in court. We think we're on the right side of the law. We don't think that the government should be setting prices between 2 businesses. It makes no sense. And what we're doing now is being much more flexible in terms of our pricing for merchants, so that there's not just kind of one overall price, but the pricing becomes much more on an a la carte basis, depending on the services that you want from the marketplace, including, for example, advertising. And I think on the commission caps right now, we are essentially subsuming the economic detriment of the commission caps. It's a real number. It's over $50 million a quarter right now that we're taking into the delivery business. But we're able to do so while improving delivery margins, which should tell you what the long-term ability of this business to earn is.

Got it. Okay. We only have a few minutes left with you. And I want to sort of bring where we started today, talking about profitability, you on CNBC and I'm reading an 8-K early on. I'd bring it back to maybe the multiple facets that the business faces in the next couple of years. Obviously, there's a pressure to become more profitable, but you have a lot of growth initiatives and a lot of areas of business you want to grow and scale in the next couple of years. And capital is a finite resource, and you also have an array of investments globally. Can you put a finer point, from your perspective, running this business, how do you think about the profitability goals you want to meet in the next couple of years when measured against and balanced with the growth initiatives you want to meet as a CEO in the next couple of years? And then how investors should think about capital being deployed in the business versus maybe return to them over time, or value being realized for some of the investments that were made in the recent past?

Yes. I think the good news for us is that we haven't updated our long-term, let's say, profit margin targets. But we have shared that we have markets, mobility markets, which today are earning 10% EBITDA as a percentage of gross bookings. And those are not like unusual structured markets. We believe that those kinds of margins should be available to us globally while investing in new Mobility categories. On the delivery side, we have delivery markets today that are in excess of 5% of gross bookings. And this is within the context of $50-plus billion delivery business, $50-plus billion, I would say, Mobility business once things are to normal. So that is a $50 billion, 10% is $5 billion on $50 billion, 2.5% is $7.5 billion. And that's kind of where we are today. So that's the earnings power, I would say the natural earnings power of the business at maturity. That allows us -- that kind of earnings power allows us to actively invest in new initiatives, in new verticals, in new products such as hail-ables, et cetera. And the good news for us is, listen, we're a growth company. We've been investing pre-pandemic. We invested during the pandemic. We're investing today and we're going to invest tomorrow. So it's not like there's going to be some kind of a switch where all of a sudden, we got to go all in and invest here. Investment is part of kind of our DNA and will continue to be, but we're in a marketplace business and marketplace businesses typically allow you to have healthy margins. And then if you keep investing, you can grow. So there's always a trade-off, but it's a trade-off that we're comfortable with. We think we can grow the business at very healthy rates and demonstrate consistent margin improvement over many, many years.

Maybe I could just ask one last final point here, because I think it comes up with investors a lot. How much is the structure of the market or the competitive intensity of a market going to dictate sort of the path to profitability? And some of what you -- so the sort of in your control versus out of your control dynamic, when you look at some of those markets that are at those elevated levels of profitability today versus getting the broader portfolio to where you want it to be, maybe on a 5- to 10-year arc.

Yes. I think from a competitive standpoint, short term, some of the competitive situation could be out of our control. But what we do essentially is we have a lot of profit goals. We're in a lot of countries out there. And so short term, when we see a competitor buy volume, we react very quickly so that essentially, we don't allow a competitor to buy volume. Whether or not they stick with it for a month or 3 months or 6 months, the -- what we want to do with competitors is compete based on brand, compete based on technology, compete based on availability, compete based on service, safety, consistency. On that basis, we think we can be the winner long term. And when competitors kind of launch price wars with us short term, we react very quickly, and we have enough profit pools to kind of allocate profit from one market to the other. And I'd say the example is in the U.K., right? U.K. is a huge market for us. We are taking a very, very significant margin hit in the U.K., yet we're able to deliver the kind of Q3 that we outlined in the 8-K.

Great. Well, Dara, I want to thank you for being part of the conference this year. We're running up against time. Thanks so much for being part of the conference. Thanks for all the investors listening in today. I wish you and the whole team at Uber a lot of safety and stay well in the current environment and look forward to catching up with you around the next earnings report.

Take care. Take care and stay safe, everyone.