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

We'll go ahead and get started about 8:00. Very pleased to introduce Dara Khosrowshahi. I'm very pleased to have him here again. He was at our conference, I believe, in 2019, and it's great to have you back. So come on up. It's really great to have you here. There's so much Uber touches in the economy and so many things to ask you, and we'll definitely try to get out to the audience as well.

But I guess we'll start with kind of the biggest piece of news center last quarter, which was kind of your memo on expense commentary and how you might be reining that in a little bit. So maybe just kick off, maybe your views on the economy and what you're thinking about expense levels going forward.

Yes. I don't know if it's a good thing for that to be the biggest piece of news coming out from us, but I'll take it.

It's [indiscernible]

It's for the market.

Yes, it is.

It's certainly appropriate. So I think from our standpoint, when we look at our business, we see really strong signal on it, and I can get to it later in terms of how the business is doing. We are benefiting from the secular shift back from retail, right? During the pandemic, retail went big and service spend retreated. And now we're benefiting from the opposite, which is spend on services is increasing much faster than spend on retail, which is a positive factor for us. But at the same time, I think if you're managing a company, you look at the dailies, but it's also up to you to take a look at the environment. And I do think that we are in an environment that is quite uncertain. We obviously have inflation that is affecting everybody and at least doesn't have a clear line of sight as to when inflation is coming down. We've got interest rates going up. We've got economic uncertainty potentially ahead in Europe and the rest of the world. And I think in an environment of increased uncertainty, it makes sense for any company to reflect their capital allocation framework based on that uncertainty. And you see in the markets we're in a position now where markets are looking for profitability faster. They are looking for free cash flow yesterday. And ultimately, investors are owners and we, as an operating company, want to reflect our activity certainly based on our long-term growth trends but within the context of what else is going on in the environment. And I think the advantage that we have as a company is that we have the global scope, we've got the scale, we've got the diversity in terms of the kinds of businesses that we have to be able to pull back in certain areas appropriately while maintaining the long-term growth profile that we have and that allow us to hit our top line targets or exceed our top line targets and, at the same time, exceed our own profitability targets and ultimately get to free cash flow faster, which we think is a good move there. And I think from our standpoint, because of our scale and because of our #1 position, we're able to do so from a position of strength, right? And so we can pull back on the least efficient marketing spend and/or the least efficient incentive spend out there, the next dollar that you spend in marketing, the next dollar that you spend in incentives is structurally less efficient if you're doing your job than the last dollar that you've spent. So there's some targeted pullback in terms of spend, in terms of marketing dollars and incentive dollars. Our incentive spend per trip, for example, as it relates to driver incentives are down on a year-on-year basis. And on the overhead side, while we are continuing to increase head count and sales head count, for example, U4B sales head count that pays essentially 5:1, those kinds of investments continue to make sense. And while we are making targeted investments in terms of continuing to hire software engineers in key strategic areas of our business, we are being careful in terms of head count growth. And if someone comes to us with an ask for head count growth, they've got to make a damn good case. And where it is a good case, we'll approve it. But in other areas, we'll say, "Let's be cautious in this environment" to be able to be that company that can deliver both healthy top line growth and margin growth and free cash flow positivity as well, which we've said we expect this year.

Got it. All right. Good. And getting to the consumer environment, as you think about that, I think the market has been a little worried about companies with a lot of margin improvement. Maybe Expedia, Amazon and Uber are 3 examples where there's just a big margin ramp. How dependent are you on the economy to achieve the goals in '24 you set out? And I guess just what gives you confidence in that type of ramp?

Yes. So I think what gives us confidence is are the trends that we see on the ground, right? Even when we look at May, May gross bookings have been up against April, already strong April, month-on-month in every super region that we operate in, in the U.S., in Europe and Lat Am. And again, I do think we're benefiting from a secular shift from retail to services, right? We're in a very different position than an Amazon, which, for example, benefited from the shift of services to retail during the pandemic. And now that trend is reversing. We are the beneficiaries of that trend. Same thing as it relates to trips, right? Trip growth May versus April was up on a month-on-month basis. So all of the signal that we see on the ground is a positive signal. And I do think that we have been executing on this plan in terms of margin. And if you look at our Mobility business, we're essentially not looking to increase net revenue margins at all, and we're really focusing on our cost base in terms of scaling the business, in terms of automating certain processes, incentive spend, higher targeting of incentive spends to get higher return. And if you look at our Delivery business, essentially, as we densify the network, we're taking cost per transaction down. Our Advertising business continues to scale up, which is very, very high-margin business as well. And as the Delivery business matures, our marketing spend as a percentage of total gross bookings continues to come down as well. So all of the levers that we have in terms of margin, they're in our control. And we have enough levers to be able to pull one way or the other, where if something goes wrong or something unexpected happens in the marketplace, we're able to continue to have healthy top line growth and continue to drive the margin expansion as well. We've talked about for every dollar of gross bookings growth for the company, delivering 7% incremental EBITDA margins to the bottom line, which should translate into free cash flow in a similar way, and we're quite confident about being able to deliver that in certain or uncertain environments.

Got it. You mentioned trips and bookings up month over month, but I'm sure people would love a May update if you have anything on bookings for either of your businesses. But -- just how -- what can you give us on May?

Well, I think I just gave you what I could give on May. But the trends are strong, right? Our Mobility trends continue to be strong, up year-on-year. Delivery continues to be strong as well. And we expect the second half of Delivery, we talked about acceleration on a year-on-year basis. Foreign exchange is a factor, right? Foreign exchange for any global company now is turning into a headwind, and we think we can withstand that headwind and continue to deliver the kind of top line and bottom line and margin growth, and ultimately, free cash flow positivity as well despite the ForEx headwinds that we see.

Got it. And in the U.S., we all have a lot of good U.S. data, but we probably don't have great data in Latin America and Europe. Is there any real divergence in trends in the different geographies that you're seeing?

Not really. And that, to some extent, is what gives us confidence here, which is the strength that we see in the Mobility business is broad, and it reflects what everyone is familiar with. Here we are, in person. People are getting out, they're traveling. They are on the roads, et cetera. And we, as people are getting out, are generally gaining share faster than other transportation modes. If you look at Uber growth relative to taxi or relative to public transit, we're seeing the share of the consumer spend as the world opens up come to Uber. And generally, when you look at our category position versus other rideshare competition, our category position is stable or moving up as well. So I think rideshare as a category is healthy. Our category position is improving as well. And the strength that we see is broad. It's not based on one area or another area. It really is quite broad-based strength. And then when you look at the Delivery business, one of the questions with Delivery was, is this a habit that's going to be sticky? Is delivery of food, grocery, alcohol, et cetera, going to be a habit that households continue with in a post-pandemic world? And the answer is absolutely yes. And with those 2 pieces of our business continuing to operate well with Freight coming to profitability as well, we really are hitting on all cylinders. And hopefully, we'll continue to do so for the balance of the year.

Got it. All right. I hear a lot of questions from investors, Boston, Chicago, New York out here about supply-demand and wait times on Uber. How do you feel about supply and demand in big cities? And are you where you want to be right now?

So we're not where we want to be, but we are getting there and we're getting closer. A little bit of context as far as our scale goes as a company. We've already added 1 million new rideshare drivers to the platform this year. So the scale at which we operate and the concept of investments that we can make in technology in process on the ground are substantial. The U.S. certainly has gotten a lot of headlines in terms of the health of supply and the labor demand here and the unemployment rate. And we're seeing our trends actually accelerate. We talked about -- last time we talked to investors that in April, the number of drivers on our platform in the U.S. and Canada was up 70%. That's now accelerated to 78% in May as far as drivers on our platform. The number of new drivers that we signed up as of April was up 121%, which is a really, really healthy number. It's now accelerated to 145% in terms of new drivers coming on to the platform. So the efficacy of our platform in terms of bringing earners on who are looking for flexibility and looking for really healthy earnings opportunities, getting them into the system through delivery Uber Eats, where we can get them into the system very, very quickly, earning quickly, and then essentially graduating them up to rideshare as well. That machinery and that unique structural advantage that we have now is really starting to work as it relates to drivers earning on our platform, and the earnings levels are very, very healthy on our platform as a result. When we look at the health of the platform in terms of ETA, surge, et cetera, we're always trying to balance essentially what we call shopping sessions. This is the number of times that you open up your app to look for an Uber, along with supply hours, which is increased by drivers coming on to the platform, but also increasing engagement of drivers and earnings on the platform. And shopping sessions and supply hours continue to increase, but the gap between the two is starting to decrease. So we're starting to see ETAs come down. We're seeing surge levels come down. We're seeing conversion levels improve as well. So the health of the marketplace continues to improve as we've made this pivot into an earner-focused company last year. We're seeing the operational improvement and the technical investments that we're making really starting to bear fruit.

Got it. And on your call, I don't think it was a contrast with your results, but Lyft reported, I think, the night before and mentioned a bigger investment in drivers. We'll just leave it at that. And there are some concerns that, that would tighten the market. How are you thinking about that?

Sure. I mean I think the first thing I'd say is that there's -- Lyft is a good company, solid company, and they're strong operators. They've been in the business for a long time. And I think they look to compete the right way, which is if your only lever is money and price, that can be a tactic, but it's not a strategy. And I think we've seen Lyft as being a rational competitor for some period of time. They want to build a good service. They want to build a good brand. But we're just operating at a very different scale and scope as a company. We have a structural advantage in that we can bring earners in to deliver and then graduate them on to riding. And that creates essentially a funnel in terms of drivers coming on to the platform that just converts at a higher rate than we have historically or any stand-alone rideshare player, we think, can achieve. And if you look at our actions and our geographical diversity, we made an investment in terms of incentives and in terms of growing our driver base Q2 of last year. And that's because of our global scope. We saw an increase in demand in a lot of international markets earlier than in the U.S. So because of the diversity that we have, we just have a very, very different footprint than Lyft does. Lyft is pretty West Coast-based. They have a strength in SF, LA, et cetera. While the East Coast where we have a lot of strength in terms of New York, Miami, Atlanta, those markets have been returning for some period of time. So I think that if you compare -- to compare us with Lyft is not a valid comp just because our geographical concentration is different, and we are so global in scope, which puts us in different stead. When we look at our incentive spend per driver, that's essentially down 25% on a year-on-year basis per driver per trip. So actually, we're seeing efficiency in the marketplace. And as I mentioned, we're seeing efficiency in the marketplace with an accelerated growth profile as far as new drivers coming on to the marketplace. So we're confident in terms of the trends.

Got it. And then it seems to be the other controversy beyond Lyft was gas prices, right? And I hear, "Hey, what happens with the $8 gas prices? Is anyone going to travel?" So I think people are thinking it gets worse. But how does gas prices affect your view on prices and demand for rides and the whole ecosystem?

Yes. I think no one is happy about gas prices, and I'm hoping just like everyone else for gas prices to come to stable levels or hopefully come down. At the same time, what we're seeing is that driver earnings are at quite elevated levels. We talked about last quarter earnings for drivers in the U.S. who drive more than 20 hours or over $39 per utilized hour. We would estimate that the total cost of ownership of a car, including gas, et cetera, is probably $5 an hour or so. So while the price of gas being elevated is absolutely not a good thing, it is hitting everybody's pocketbook, especially our drivers. Our overall net earnings, right, earnings from the platform net of the cost of leasing the car, driving the car, et cetera, still is an elevated level. We're doing everything that we can to help our driver partners be able to repair their cars, get discounts on gas prices. We have introduced a gas surcharge on our Mobility business that will go forward a couple of more months, and then we'll look to see what we do. So we're doing everything that we can to help our drivers and to face this increase in gas prices. And the most important part is it's -- the marketplace continues to be healthy, and the number of drivers who are engaging on our platform continues to be healthy as well despite the elevated gas prices.

Got it. Okay. Maybe going back to the $5 billion. Didn't seem -- on that guidance, people were super enthusiastic. And just wondering what you think maybe investors want more from Uber. What are you hearing? What are you trying to deliver?

Well, I think the market has changed pretty significantly since we gave that $5 billion target. I think, listen, investors want the same thing from Uber as they want any company, which is execution. And I think the $5 billion target reflects gross bookings growth of 22% to 25% and incremental EBITDA margins as we achieve that gross bookings growth of 7%. With that $5 billion, we've talked about free cash flow on an annual basis generally being about $1 billion lower than EBITDA. In Q1, for example, free cash flow was about $215 million below EBITDA as well. So in a world where we're generating $4 billion of cash -- of free cash flow, assuming that $1 billion stands, we will be a significant free cash flow-generating company. Nelson Chai, our CFO, and I have been around a lot, and I think we're pretty good allocators of capital as well. And I think we can show through execution separation from the rest of the field. If you look, for example, at our guidance in Q2, $240 million to $270 million in EBITDA versus a really healthy Q1, $168 million, we've consistently come in at the high end of our guidance or beat our guidance. And if you compare us to others in the field, they're looking at flat EBITDA or down EBITDA. And I think we're truly showing separation, which is Uber is global in nature. We're diversified in terms of our revenue streams. We have built scale businesses organically on top of our technology platform as well. So I think if we grow gross bookings at 20-plus percent, we show the increases in margin profile, we throw off free cash flow and we allocate investment well, I think we'll find the kinds of long-term investors who want to grow with us. So we're pretty confident in terms of where we stand.

Okay. Yesterday at Bloomberg, you gave a number on grocery, I think $4 billion.

Yes.

Is that annualized?

That's annualized run rate.

But there's a lot of investment going on there. So could you go into getting to that $5 billion within the Delivery business, how you're thinking about allocating that investment and what the levers are and just in that piece to get the margins up?

Well, I think we're fortunate as it relates to our Delivery business in that we're able to invest in new verticals in grocery, and it's grocery, alcohol as well, while at the same time improving EBITDA margins for overall Delivery business. So you should expect the Delivery business hits EBITDA profitability this year, you should expect a nicely increasing EBITDA profile for our Delivery business. We talked about 5% incremental EBITDA margins for Delivery for every dollar of gross bookings growth. That includes substantial investments that we're making in the new vertical segments. And the investments that we're making in the new vertical segments are global in nature as well. There's a lot of competition here in the U.S. You've got really strong companies here. But the delivery competitive set outside of the U.S. is very, very early in its development, and we think we can get to a #1 share as it relates to delivery and grocery outside of the U.S. in the majority of the markets that we operate in. Today, we're getting close to about 10% of Delivery users also using Grocery on a monthly basis. We see those users just as cross-platform users between rides and Mobility are our most valuable users. The cross-platform Delivery users who use both Eats and use Grocery as well tend to increase their consumption in terms of Uber Eats. They tend to increase retention within Uber Eats as well. And we think Delivery, Grocery especially, represents a very, very significant advertising opportunity as well. So we're quite confident of the investments that we're making, and we think that these are long-term investments but they're based on unit economics that we're confident can turn positive as well.

Got it. And on the Delivery business, what gets the margins up? Is it higher repeat rates so your marketing costs go down? Is it passing through more of the cost to the consumer as the VC funding goes away? Is it advertising? Maybe it's all three. But what are the levers to -- that get that business growing?

Yes. Absolutely. So I think an entree point into the Delivery business as far as Grocery tends to be promotional activity. You see it from a lot of quick commerce players out there. And we will give discounts to an Uber Eats user to try our Grocery service as well because what we see is when they use our service, they tend to come back. We already have all your payment information, identity information. We're a trusted brand. So I do think that you're going to see, and we certainly are seeing the promotional activity within the grocery space come down, and we think that will drive profitability within the space. We have a structural advantage in that we don't need to spend much marketing money at all as it relates to our new verticals, Grocery business, because we have an incredibly strong brand in Uber, which is promoting Uber Eats. And also we have substantial spend -- brand spend on Uber Eats as well. So we have an audience already that we really don't need to build. And then it's really about scaling and densifying the network, which is the more couriers you get in the network, the more stores you have, the more households are ordering. The more you can cross-dispatch, go pick up food and then go pick up groceries. And the higher batch rates that you have, which is one courier essentially going out there and making multiple deliveries, the lower cost per transaction and the lower cost per delivery. All of those are factoring into the economics of our Grocery business. Add to that an Advertising business that we targeted at $1 billion in revenue in 2024, and you get a very strong road map in terms of both top line growth but also margin improvement, and margins ultimately get into positive.

Got it. All right. Let's pivot to a couple of the issues with the Mobility business. I want to get into UberX and market share, maybe pooling, bringing that back in autonomous. Those are 3 things we hear a lot about.

Sure.

How do you feel about your market share just on Mobility in different regions?

So I think our market share on a global basis continues to be quite positive, quite constructive. Our category position in the U.S. is -- has been improving pretty substantially. Our category position outside of the U.S., if you look at Europe or Lat Am or Asia, tends to be stable to improving as well. I do want to stress, though, that our category position is an output that we look at. It's not an input that we're managing to, right? It's -- what we're managing to on an everyday basis in terms of capital allocation is, what are ETAs on a city-by-city basis? What are surge levels? What are conversion rates? What are our NPS scores? How was the experience of the rider or the eater or the earner? Those are the metrics that we are competing on essentially on a daily basis. That's how we allocate capital. The output is category position. And generally, the output tends to be positive because we are the scale player. We're the biggest brand. You see travel coming back, and we have a very, very high share of travel spend because of our global outlook. And then we see the positive category position of Mobility also translate into generally positive category position with Uber Eats because we have essentially a benefit of the Mobility audience that we can cross-promote into Eats. And now with our membership program, Uber One, that we're launching all over the world, we think we can deepen the relationship with our customers over a long period of time. That, again, helps that output in terms of category position. And I would add that our category position is constructive. It's positive in an environment where we intend to increase margins and increase margins substantially.

Got it. And then moving over to pooling. I know you kind of tried to take that out to the pandemic.

Yes.

I think you changed the model because it wasn't necessarily efficient for you or the rider. So are you bringing that back? And could that be a driver for new MAPCs?

Yes. Definitely. So we are -- we've launched Uber Share -- X Share in a few markets, and we're looking to expand it as well. And it really is a reimagined version of POOL and Share. We want to -- we have time during the pandemic, right, to redesign these systems from the bottoms up. And the way that we had built POOL in the past and some of our competitors have their pool as well, is it really is, to some extent, a conflict with a rider, right? A rider who picks a pool trip in the old model has an interest to instances to take pool when they don't think they're going to be matched up with another rider, right? They want to essentially get the benefit of pool and go straight to their destination. So the interests are not aligned. And usually, when your interests are not aligned with your customers, bad things happen over a long period of time. The systems are gamed, et cetera. The way that we've structured to Share is the rider gets a discount upfront but doesn't get the full discount upfront. And if that rider is matched with another rider, then they get a further discount so that it's actually in the interest of the rider to be matched with another rider as well. We're building the experience with earners very much in mind to make sure that earners are benefiting from a pool trip happening. They also want a pool trip to happen because they can make more. And overall, the system becomes more efficient, obviously, because you're getting more riders in cars, which helps cities, helps traffic as well. So we're quite hopeful as it relates to POOL, and it reflects a broader investment that we're making in increasing our supply, right, the investment that you've seen in taxi and the relationships that we built there and introducing an increase in lower-priced products to fight the inflationary pressures that we've talked about, and that includes UberX Share. We're testing on high-capacity vehicles in a number of cities. And obviously, we have relationships with mass transit as well to show up in the app so that we can actually be a customer acquisition tool for mass transit which, again, is in the interest of things opening up and are having more affordable pricing interact.

Is there enough savings to make people want to do pool in that?

I think that we believe there is, and the signal that we're seeing early is encouraging. But that's essentially something that we're going to optimize algorithmically, right? And as we get more liquidity as it relates to Uber Share and more liquidity in a market, our ability to predict whether you're going to be matched, let's say, with someone else, improves. And as our ability to predict matches improves, we can increase the discount, the upfront discount, to the rider to attract more riders and more liquidity into the product. We do think it is important to make it in the riders interest to be matched. So we think that's a very, very key element of the model.

Got it. And then let's talk about autonomous. I think 3- to 5-year investors care a lot about this.

Yes. Sure.

I'm hearing about it. You drive through San Francisco, there's probably a Waymo car, I don't know, every few miles.

Yes. Yes.

And you see them probably, too. So how do you think about that? I know there was a recent deal with Waymo on the freight side, I believe. But how are you thinking about autonomous? And are these companies going to go alone and try to eat out some market share in key cities?

So I think any technology that adds more transportation options that are safe and affordable in the cities in which we live and operate or adds more delivery options or more shipping options that are safe and affordable is a technology that's good for society and is a technology that's good for Uber. And just as we're looking to sign up every driver who's qualified and safe, et cetera, on our platform and provides a great customer experience, we're going to be doing the same in terms of every robot driver who is safe and provides a great experience. And I think the same reason that drivers sign up for Uber first, which is we are the largest player, we have the best technology, we really drive very, very high utilization are the same reasons why we believe the companies that are working on autonomous technology will also sign up with us as well. So we have an investment in and a great relationship with Aurora. Chris Urmson was actually one of the early Waymo folks. And one of the benefits that we have as it relates to our company is we have scale operations in passenger vehicles. We have scale operations in Delivery, and we have scale operations and leading technology in Freight as well. So we are able to work with autonomous providers across the space in a way that no other player can. And I think the ambitions of a lot of these companies are also global in nature, and we can bring them global scope and global scale in a way that no other players can. So you will see us continue to build relationships with autonomous players. Waymo is a great example of that in terms of their Waymo Via, which is the product that we're -- they're building for Freight. They are now reserving billions of miles essentially for working with Uber Freight. And we're essentially building a deep software integration with them so that anyone who buys a Waymo truck essentially can, in a very elegant way, have that Waymo Via truck plug into the Uber Freight network and get access to the incredible demand that the Uber Freight network brings. So we think it's a great strategic alignment, but it will be a great technical integration as well. And ultimately, Waymo is a great tech company. We're a big tech company. And I think it's a strong match. Will these autonomous companies build their own direct demand? I think so. Absolutely. And I'll go back to my -- the olden days in the travel space. Expedia had a -- has a great relationship with Marriott. Marriott has a direct relationship with our consumers. And at the same time, they believe that is beneficial to work with intermediaries and OTAs to increase the amount of demand and certainly be able to drive utilization in their hotels, right? And ultimately, the two can work hand in hand. So we think that we can work with the autonomous industry in a very, very constructive way. We think we're uniquely situated in terms of our scope, our scale, the global nature of the business. And we absolutely think that autonomous can be a win-win-win.

Got it. And from a financial perspective, I don't know if you can comment on this, but would you buy the cars and would you license the cars? And then is there enough savings to make it really interesting from a margin perspective for Uber?

So I don't think we'll be in the business of buying the cars. We're -- we have made the important decision early on to be asset-light, and that's a decision that I like. And if you think about autonomous, I think there are a few layers. There's a network layer, which is our layer that brings demand. There's a software layer that is essentially the driver. There's operations layer. This is your -- you have fleets in market, repair them, clean them, refuel them, most of them will be electric. And then there's ownership layer as well. And you'll have players that play at different levels there, but then you have pure plays as well. Ultimately, I think fleet ownership is going to look like hotel ownership, which is there'll be -- instead of REITs, there'll be fleets, right? And there'll be financial owners that are looking to lever up those assets and essentially get the highest return on those assets. And they will need high utilization to get maximum return, which means they probably will be plugged into the Uber network. We're definitely going to work at the -- obviously, the demand layer, we'll be the biggest demand provider. I think it could be interesting to work in the operations layer because we have ops teams on the ground in every single city. We understand the city, how it works. We have relationships with airports. We have relationships with venues, et cetera. So if there's any layer that we would work with in kind of as a principal, not a partner, it will be in the ops layer. But it's -- the space is very, very early in its development. So at this point, we're sticking to the network layer. We're sticking to technical integrations and commercial integrations, and then we'll see what the opportunities are from there.

Got it. I'm running out of time, but I got more, and I want to get one to the audience. But let's do regulatory real quick.

Yes. Sure.

I was in meetings with you 2 or 3 years ago. It was just nonstop. And now it doesn't seem to come up. So CE level -- CEO-level view...

I consider that an improvement.

Yes. Are you over the hump? And what are the challenges or things you're looking at right now?

I wouldn't call it a hump in that. I think we have a greater understanding of what regulators want and regulators have a greater understanding of what Uber and good work brings, which is great flexible work opportunities. And what we're seeing now is the model now move into 3 categories. One is the independent contractor model, which is kind of the core of how we grew up. There's another model that we call IC+, which, for example, is here in California, which is you have independent contractor, all flexibility, et cetera, with some protections. And those protections could be the minimum earning standards or time off or insurance, accident insurance, et cetera. And that plus is based on discussions that we have with regulators on the ground, state by state, country by country. U.K., the worker designation is an IC+ kind of a model. And then in certain countries, we're operating through fleets who employ drivers as well. All 3 models for us are profitable. The bill technology, that can essentially operate those 3 models on the ground and has flexibility based on what regulators want and what makes sense for us. And we think that is the way forward. Ultimately, we think a higher percentage of our volume is going to move to IC+. You saw it in Washington state, for example, and we're having a number of discussions with other states. It improves -- drivers love it because they have all the benefits of flexibility and they have other protections as well such as minimum earnings. So IC+ is really looking like the winning model, and we think it's a very strong, stable place for us to grow off of.

Got it. Is there a ballot initiative in Massachusetts this year coming up?

Yes. And again, it's -- we obviously were very successful in the California ballot, and we're confident in terms of Massachusetts. It's -- so clearly, IC+ is what the vast majority of our earners want, and I think voters see it.

Drivers are on multiple apps, right? Yes.

Well, more and more now, they're on the Uber app, but they get multiple earnings opportunities, which is really cool.

Excellent. Do we have a -- see if there's any questions out there? All right.

You've exhausted the crowd.

I guess I've gone through all of them. Why don't we go into the last thing, is taxi unit economics.

Yes.

It seems like that could really be interesting on supply. So how do you think about that and then how the economics compare to the current model?

Yes. So I think taxi is a great opportunity for us. These are professional drivers who -- and in a post-pandemic world, I think they want strong technology partners and they want demand. Taxi economics vary market by market. But the way that -- if I were to generalize for investors, we believe that our U.S. economics in taxi are going to be broadly similar to UberX economics. And so from a margin standpoint, from an opportunity standpoint, think of it as more UberXs out there, although it's great to have partnerships with taxi. For perspective in New York when we announced the taxi partnerships, we think that will add about 5% to our supply in New York, which is a great improvement in terms of our New York supply. Outside of the U.S., taxi margins tend to be lower as we use taxi to penetrate into marketplaces, Japan, South Korea, et cetera. And over a period of time, we believe that we can increase taxi margins to get to margins that are broadly similar with our other rideshare business. But we're leaning into taxi as a real growth driver. And because of our portfolio, we can invest in those kinds of growth drivers while achieving the long-term margin targets that we put forward.

Great. I think we'll end there. I really appreciate your time today, and it's great to have an update.

Awesome. Thank you.

Thanks for being here.