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

Good morning, and on behalf of all of Team Uber thank you for joining us. Now before we begin, please note that we are going to be making some forward-looking statements today. Our actual results could differ materially for the reasons discussed in our filings with the SEC. We're also going to be presenting both GAAP and non-GAAP financial measures. So please make sure to pause and carefully review the information on the screen. After the presentation, we'll have a Q&A session, and we encourage you to submit questions throughout the presentation. With that, let's get started. Last week, we announced our Q4 results. It was a standout quarter to cap off a truly standout year. Today, we want to take a step back to give you a bigger picture perspective on the power of our platform, our competitive differentiation, the opportunities ahead and our financial outlook. Now at Uber, our work starts with our mission. We reimagine the way the world moves for the better. In service of this mission, we built the largest mobility and delivery platform in the world, one that has structural advantages that are responsible for a strong performance and are very, very hard to replicate. Our aspiration is to be the default choice for the movement of people and things and for flexible earnings globally. To get there, we'll continue to relentlessly innovate, building world-class products for an expanding number of use cases for consumers, for drivers, couriers, businesses and advertisers. I am proud of the incredible progress that we've made in the 5 years since our IPO. In Uber's earlier days, we were rapidly expanding all around the world while making massive investments to build our category position. Given those enormous losses, many people question whether Uber could ever make money. Fast forward to today, and that question has been asked and it's been answered. Uber is stronger than ever, delivering exceptional growth and profitability with $138 billion in gross bookings and $4 billion in adjusted EBITDA in 2023 alone. We're now operating at a massive scale while serving multiple multitrillion dollar markets across mobility, delivery and logistics. I'm proud of our financial results, but I'm even more proud of the team behind them. At Uber, one of our many company values is to see the forest and the trees, understanding both the big picture and every single little detail. That's this management team, pushing big innovations that spur growth while never letting up on the small improvements that can compound into enormous impact over time. And of course, there are tens of thousands of other Uber employees all around the world working hard every single day to improve our execution, the quality of our products and of course, the relationship that we have with all of our stakeholders. With our mission and communities in mind, we've been executing against our strategy. And the strategy is simple: to build best-in-class products and then to amplify them with the power of the platform. As we scaled, that power has become even more clear. Now our platform gives us a simple but significant advantage. We can acquire our customers at a lower cost and, at the same time, generate higher lifetime value than our competitors. It also means we can bring more products to the market more quickly and more efficiently than any other competitor. So let me give you a couple of examples of just how this works. Let's start with consumers. We want to bring in new consumers through our mobility and delivery apps and then convert them into multiproduct consumers, both within and across segments. That can mean getting a mobility only user to drive delivery or vice versa, or an Uber Moto, which is a 2-wheeler rider to upgrade to an UberX, or get an Uber Eats customer to try grocery delivery for the very first time. If you haven't, you really should. The more products and services we add to the platform, the more data we have and the more opportunities we have to make that particular pitch really compelling for the consumers at the right time with the right incentives. And with shared identity and payments across all of our apps, we can make it super simple, super easy to move from one app to the other or one service to the other. We've been leaning in here, and we're seeing real progress. More than 1/3 of Uber consumers now use multiple products. And the mathematical advantage for Uber lies in the fact that consumers who use multiple products on average spend 3.4x more than those who don't. And at Uber and, I would say, in life, the simple truth is that in the end, math wins and compounding only amplifies the win. Now this multi-product advantage also lets us acquire customers at a much lower cost than paid third-party channels alone. Last quarter, nearly 1/3 of Uber Eats customers came from the Rides app and more than 20% of first-time mobility trips came from Uber Eats. We're driving even more engagement by uniting our platform with a compelling membership program. We view Uber One as a competitive differentiator because it's something only Uber can offer, benefits across both delivery and mobility. Today, as a matter of fact, 45% of delivery gross bookings and 30% of combined mobility and delivery gross bookings come from our 19 million members now across 25 different countries. Members spend 3x more than nonmembers. And you'll continue to see us layer on new benefits and member-only exclusives that add value to the program over time. The power of our platform isn't just restricted to consumers, though. In fact, it's just as powerful with drivers and couriers who earn on our platform. It's our goal to keep innovating, creating new opportunities for them, making the improvements, both big and small, to our app, to our policies, to our processes that we know they most care about, and it's working. All around the world, drivers tell us that they prefer Uber over competitors. And those who choose to work across both mobility and delivery are more engaged and they stick around for longer. In addition to higher engagement, though, the platform gives us a much more cost-efficient way of finding drivers than through external channels. So for example, in the U.S. converting an existing courier into a driver is about half the cost of finding a new driver through third parties. This is a huge opportunity. In fact, today, 20% of first-time drivers in the U.S. have come from our courier pool. The power of the platform extends even further to businesses of all sizes who are turning to Uber to help accomplish some of their most important objectives, whether it's helping many of the world's largest companies get their employees from point A to point B, retailers offering their most valuable customers free rides to their stores, or health care providers needing a trusted partner for nonemergency medical transportation, Uber for Business and Uber Health are there. And with Uber Direct and Uber Connect, we're able to open up our network's capabilities to the world, whether you're a major retailer offering same-day delivery or you're a consumer sending a package across town to a friend. And of course, Uber's large premium and global user base is an important audience for advertisers. The power of our advertising platform stems from what Uber users tell us every time they use our apps, where they want to go and what they want to get. And as a result, we've got the unique ability to bring together both location-based and shopping data with closed-loop attribution across our mobility and delivery channels for both performance and brand campaigns. That's how in less than 4 years, we have reached $900 million in revenue run rate just as last quarter, now supporting 550,000 merchants all around the world. We continue to innovate and improve our tools for our advertisers. And when you combine the consumer signals with our world-class AI, we're just scratching the surface of what we believe will be a multibillion-dollar opportunity. Finally, all of the advantages I just talked about are deeply rooted in our tech stack. While it may not always be visible to the casual user or investor, this really is our secret sauce. Whether you're ordering a ride or a delivery much of the underlying tech and tech-enabled operations, identity, maps, payments, fraud detection, ordering, dispatching, pricing and more, they're all shared across Uber. In fact, around 75% of our engineering resources are focused on these shared elements. This advantage is also self-reinforcing as the lessons we learn in one business can be applied elsewhere and technical investments we make in one area accrue to the whole platform. One example of this self-reinforcing advantage is AI, where our massive data sets and our shared architecture allow us to build predictive models at a greater scale than any of our competitors. It's built into the fabric of our platform. From our marketplace tech, personalization engine, developer tools and new generative AI assistant on Eats that we're incredibly excited about. All of this tech is available out of the box for new product lines, whether we want to scale grocery or lower-cost mobility offerings like Hailables. We can move faster because the tech is essentially ready to go. You'll see us continue to move into adjacencies where we believe we've got a strong right to win, including advertising, travel, last mile delivery fulfillment, enterprise and others. We're thrilled to see how quickly some of these new products and services are growing, but we're even more energized by the fact that we're in such early innings with a ton of headroom and future growth ahead of us. Okay. I've gone through our mission, our strategy and how the power of our platform is a strong and compounding advantage. I've also described a solid technical and operational foundations that we've laid to continue driving profitable growth at scale. Prashanth is going to take you through the detailed financial building blocks, but I wanted to preview our 3-year financial framework. Over the next 3 years, we expect to deliver gross bookings CAGR of mid- to high teens and adjusted EBITDA CAGR from the high 30s to 40% with 90% or more annual free cash flow conversion. We see this as a business that can sustain industry-leading growth, particularly at such huge scale while continuing to drive substantial operating leverage to the bottom line. By now, I hope you see why we're so excited for what's ahead. At Uber, we have leading global positions in multiple multitrillion dollar categories. At the same time, we're making disciplined investments in the compelling, sustainable growth opportunities that we see ahead of us and the power of the platform will continue to deliver operational leverage, paired with compounding growth to deliver significant free cash flow generation at scale. There's never been a better time to build at Uber, and we're looking forward to continuing to deliver on our commitments. With that, let me turn it over to Mac to talk about mobility.

Thanks, Dara. I'm Andrew Macdonald, and I lead our mobility team. At our last Investor Day, I shared our vision for the mobility business, which is to make every journey better. Being part of every journey means not only winning every ride share trip, but also expanding our offerings beyond UberX. Being relevant for more people, for more use cases at more affordable prices and ultimately, chipping away at our toughest competitor, personal car ownership. This vision remains our North Star and our execution over the past 2 years has led to incredible outcomes. We are growing a $70 billion business at 30% year-on-year, remarkable growth at scale, while also optimizing our cost structure to generate $5 billion in EBITDA. We have a leading position in the vast majority of the over 70 countries we operate in, and we're the clear market leader in all of our top 10 biggest countries. These balanced results have come thanks to strong execution against the priorities we outlined for you 2 years ago. Coming out of the pandemic, we highlighted the importance of growing supply, and we delivered, adding over 2 million monthly active new drivers. We shared that we were working to unlock historically challenged markets like Spain and Germany. And today, those businesses are booming. We discussed expanding consumer use cases and growing low-cost products to drive engagement. We've since doubled the share of non-UberX trips and our 2- and 3-wheeler products are driving significant volume of both consumers and drivers. And finally, we're still laser-focused on cost discipline. So we can continue to grow our bottom line while lowering consumer prices and increasing driver earnings. We really are firing on all cylinders, and I'm tremendously proud of the team's execution. The question I often get is Mac, mobility is already a massive business. Can you continue this momentum? And the answer is that we're still in the very early stages of what's possible in mobility. We have a simple equation that illustrates how we drive growth in our business, add and retain more consumers, win more of their daily trips and strike the right balance on price to continue growing the category. And of course, all of this will be supported by healthy supply growth. Let's walk through each of these building blocks. We'll start with drivers because as has been the case since day 1 at Uber, our success starts with them. And the best way for us to grow our driver base is by making sure Uber is the world's best platform for flexible work. We do this primarily through our local teams on the ground who deeply understand the drivers and their needs and our tech teams who have shipped hundreds of improvements to improve the driver experience. Looking forward, it's clear that drivers already prefer Uber over our competitors. And in addition to our traditional peer-to-peer supply base, we're also innovating on new models of supply growth. 2 years ago, we spoke about our efforts to partner with taxis around the world. Taxi drivers now represent 5% of our overall driver base, and that number is growing rapidly. Fleets will also be an important part of our supply strategy going forward. These partnerships give us access to high-quality, highly engaged drivers, helping us step change our supply base. Fleets already make up almost 20% of our mobility supply hours with enterprise fleets contributing 2.5x more suppliers per vehicle versus independent operators. With drivers as the foundation, the next part of our growth equation is consumers. On this front, we've made meaningful gains on consumer penetration over the past 2 years. But despite being the largest ride share platform in all our major markets, we've still only scratched the surface. Even in our most saturated countries, our penetration is less than 20% of adults. We think the ceiling is much higher, but even just getting the U.S. to match our existing U.K. penetration rate, for example, represents a $13 billion incremental opportunity. Reserve gives us a strong tool to drive this growth. One common misconception is that the vast majority of Reserve trips are airport trips. But in fact, 40% of Reserve volume is not airport-related at all. And of these, the majority originate in the suburbs, meaning Reserve is unlocking users outside of our urban cores where our network is less dense. The suburbs have been a persistently challenging place for on-demand ride share to break into, so the traction we're seeing with Reserve is very promising. We also have an opportunity to increase penetration of our core use cases, like airports and business travel, where we already have significant scale, but tons of headroom remains. Reserve has incredible product market fit for airports. Already 1 in 5 U.S. airport drop-offs are Reserved. On the business travel front, we've laid the groundwork by winning around 70% of Fortune 500 companies. We now have huge opportunity to grow share of wallet from these customers, which we're doing through innovations like Business Comfort. Today, almost 1/4 of all business trips upsell to Comfort, a remarkable stat. The growth story in our core markets and use cases is exciting, but we're also innovating to bring new segments of consumers. New demographics like teens significantly increase the size of our market with the added benefit of building engagement habits and brand loyalty for consumers of the future. I think we've all heard anecdotes and seen the data showing that teens of today aren't rushing to get their driver's license like their parents did. We also have material opportunity to bring more older adults onto the platform through innovations like our Uber Health business and the ability to get an Uber via a simple phone call. Last, but certainly not least, we'll grow our consumer base by continuing to expand in massive global economies where Uber's mobility business is just getting started. These markets collectively spend close to $1 trillion on transportation each year. Five years ago, we could barely operate in these countries. 2 years ago, we had $1 billion in gross bookings. And today, they're at $3 billion. Our next building block is growing engagement, more trips per rider. Among our monthly active riders, we have a healthy share of power users, but roughly half of riders take only 1 to 2 trips per month. Moving these infrequent riders to the right on this chart represents a huge opportunity. If our once-a-month riders took just 1 more trip, that alone is $4 billion in growth. Growing engagement starts with expanding use cases. For much of Uber's history, we've only been relevant to most people on a small set of journeys. But people move a lot. In the U.S., people take an average of 1,500 trips a year to truly be a part of every journey, we built a more holistic set of products that make us relevant, not just when you're going to the airport or coming on from the bars, but when you're running errands, going to a doctor's appointment, commuting to work, traveling between cities, renting a car and more. We see this strategy working. Riders who use multiple products spend 3x as much as single product users. The other way to grow frequency and access new cohorts of consumers is through our suite of low-cost products. Traditional ride share remains too expensive for the vast majority of the world's population to use every day. We're innovating to find solutions that structurally lower costs. So consumers can afford daily usage at economics that also work for drivers and our business. One way to do this is form factor. 2- and 3-wheel vehicles are far cheaper than a 4-wheel car. For example, Moto fares are roughly 50% cheaper per mile versus UberX in markets like Brazil and India. Another way to lower cost is by sharing, more people in fewer cars. Higher vehicle utilization means lower consumer fares. That brings us to the last piece of our growth acquisition, average fare. Overall, UberX prices have grown slower than inflation, and we plan to keep prices as low as we can to grow the category. But zooming out, our overall average fare is an output of balanced growth across our product portfolio. Driving volume through lower fare options like Moto and XShare is balanced out by more premium offerings like Reserve and Business Travel. India offers a case study in how this plays out. Over the past 2 years, low-cost products have helped drive meaningful volume growth, but strong growth in premium products like intercity car rides has kept overall average fare progressing modestly. So these are our core building blocks: more consumers, more engagement and balanced fares, supported by a growing driver base. As we look to the future, autonomous vehicles will further accelerate this growth equation. In addition to safety and quality benefits, AVs will bring down the cost per mile, increasing the shared mobility TAM. A lot has happened in the autonomous landscape over the past 2 years. But one thing remains clear, autonomous vehicles will be a part of the mobility fabric of the future. Our strategy is to be the platform partner of choice for AV Tech. Rather than building AVs ourselves, we are bringing developers fleets onto our network. There are lots of ways we add value for AV players, but our unique ability to offer a turnkey adoption path for one-stop access to a global marketplace of mobility, delivery and freight makes us truly the best platform partner. We now have 10 successful partnerships live, and this strategy puts us at the center of the AV ecosystem, where we can shape the future of mobility, which we believe will be shared, electric, multimodal and autonomous. To summarize, the mobility business is humming and there's so much growth ahead. There are strong reasons to have conviction in this growth: geo-expansion, new user segments, low-cost products, a multiuse case product portfolio, the fact that we're the best platform for flexible work and the best platform partner for autonomous vehicles, and our proven ability to set our sights high and go execute. But if you remember one thing, it's this. Transportation is the connective tissue of our daily lives. It's a massive TAM. And while we've established a high-scale, high-growth business, we aren't satisfied with just being the global rideshare leader. We're charting a path that can truly make us part of every journey and both our business and our consumers will benefit. With that, I'll hand it over to Pierre to talk about delivery.

Thanks, Mac, and hello. I'm Pierre-Dimitri Gore-Coty, and I lead our global delivery business. I've been at Uber for more than 10 years. It's been an incredible journey to watch Uber grow into what it's become today and a privilege to lead the delivery team since 2020. Since then, we have fundamentally transformed what delivery looks like at Uber. We've grown into a massive global and profitable business, and Uber Eats is now so much more than just food delivery. Whether it's your favorite restaurant, a last-minute gift, the phone charger you always seem to misplace or even your family's weekly grocery order, we are proud that you can get almost anything delivered on Uber Eats. Two years ago, we laid out some pretty ambitious goals at a time when there were reasonable dabs about the growth trajectory and financial sustainability of the delivery sector. I am pleased to report that our teams did what they do best, they delivered. First, let me touch on our growth. Our top line has been not only resilient but remarkably is accelerating. We've gone from 12% year-on-year growth in Q1 to exiting the year at 17% GB growth in Q4. We've also dramatically expanded profitability. We're continuing to reach record margins and have grown adjusted EBITDA dollars by a cumulative $2 billion since Q4 2021. And we've done all this while building on our category leadership in many of the largest, fastest-growing delivery markets globally. We are #1 in 7 of our top 10 GB markets and gained category position in all 10 of our top 10 markets in 2023. From an operational perspective, the results are just as impressive. We've been able to grow our audience while deepening engagement with our consumers. Our base of merchants and earners also continues to grow. We now have over 1 million monthly merchants, and we've also made real tangible progress against our strategic bets such as membership, direct and ads. One of the things I am most proud of has been our profitability ramp-up. Long gone are the days of exuberant promos. We've been able to dramatically reduce Uber-funded promotions and instead invest in the things that drive long-term value for our customers. Through technology improvements like machine learning and automation, we've more fully optimized the marketplace, driving down the cost of fulfillment while keeping courier earnings relatively stable and reliability high. Lastly, we've remained disciplined in optimizing our cost structure. We know cost leadership is key to winning in our space, and we are playing to win. We're entering a new chapter in the delivery business, growth at scale. And the way we do it is roughly the same that what you heard from Mac, consumer growth, coupled with engagement growth drives gross bookings growth. There is a long runway for us to drive progress against both. When we think about growing consumers, one of our strongest opportunities is actually with consumers that are already on the platform. Our path to doubling or tripling our monthly consumers lies with converting consumers who are already engaged with us, but on a less frequent basis. Today, only about 35% of our annual consumers use us monthly, and we think there's room to grow that share. There's also plenty of headroom to acquire new consumers. When you look across our top 10 countries, our annual consumers represent only about 15% of our TAM. Another key opportunity for us is bringing more merchants to the marketplace. We think of new merchants like a streaming platform thinks about new content. It fundamentally broadens the appeal of our marketplace, attracting new consumers while driving more engagement with existing ones. We're making great progress, but we're still quite early across our top markets with roughly 20% of available restaurants and grocery stores on our platform. We're building tech to drive down on-boarding time, improve self-sign-up and self-service and tools to make our commercial teams more effective and more productive. We're also super bullish about membership. Remember, Uber One is still less than 3 years old, yet we've managed to increase our delivery membership penetration to 45% of our gross bookings, and we are seeing really promising results across conversion, engagement and retention. We had conviction that membership will be an extremely effective tool for driving long-term engagement, and we are seeing that decision pay off. On the right-hand side, you can see that across our top 10 markets, the higher the membership penetration, the more often consumers use Uber. This tells us 2 things: our membership strategy is working, and we have lots of runway ahead with only 2 of these markets above 50% coverage. Another key driver that the team's rightly obsessed over is the consumer experience. We've made great strides across design, affordability and reliability. We have built rich functionality across discovery, search, item replacements, and basket building that are all great for food delivery, but even more essential for grocery and retail. We have also ramped up cross-selling, bundling drinks, ice cream, wine, flowers from other shops with a food order, all made possible by our best-in-class marketplace tech. To drive affordability for our consumers, we've also built out extensive tech to make it easy for our merchant partners to invest in their own offers and drive growth on our platform. Lastly, our world-class tech and ops teams are making delivery more reliable every day. This is hard work where you make progress in fractions of a percent, but every basis point at our scale means we are fulfilling millions more orders to consumers. We also believe that strategically investing in new use cases beyond food delivery is critical to structurally expanding spend and engagement. Grocery and restaurant delivery may seem similar, but we learned early on that they are fundamentally different. We've also seen that once you really nail the experience for grocery, the other retail categories are even easier, smaller catalogs, simpler pick and pack, and usually nonperishable items. Over the past 2, 3 years, we've transformed our product into an elegant, unified experience that we are proud of. As you can see, the results have been telling with sharp increases in consumer metrics, including retention. Today, our grocery and retail business, combined with Direct, which I'll discuss shortly, is running at $7 billion in annualized gross bookings, yet only 14% of our delivery monthly consumers place grocery and retail orders each month. It sits on top of a best-in-class global ops platform, leading marketplace tech, and has access to a massive base of Uber consumers. The early data shows that we're on the right path. A user who orders from both our food delivery and grocery and retail businesses is 3x more engaged than a food delivery only user. These users go on to try more categories and different occasions, which further drives frequency and retention. Our grocery and retail product is even starting to bring in net new consumers to delivery with 5% of new delivery consumers placing their first order on grocery and retail. With Uber Direct, our white label delivery product, we're using the power of ad tech and marketplace to help businesses deliver with the magic of Uber. We've invested in making Direct just as reliable and efficient as our core service. Direct is growing strongly with trips up 3.5x over the past 2 years. Direct is not only a fantastic growth driver with a big TAM, it is synergistic with our marketplace. It creates more and different earnings opportunities for earners, increasing liquidity for our marketplace while supporting the large base of merchants who have or looking to establish third-party delivery channels. We've added tens of thousands of storefronts and partnered with some of the most recognizable and beloved brands globally, like McDonald's, Walmart, Alberto and Apple, just to name a few, and we are expanding into e-commerce more broadly. Despite this impressive growth, Direct is still by far our most nascent bet, and we're excited to bring its true potential to life. Another new capability we've been able to build out and where we've made truly remarkable progress is our ads business. We've built a sophisticated set of tools, like sponsored listings, ads in search, merchant offers, dedicated CPG ads and more, but it was still early. Today, total spend across ads and merchant offers only amount to 5% of gross bookings. We have room to grow. Our product offers advertisers excellent value, access to a high-value audience across mobility and delivery with excellent return on advertising spend. In turn, this gives us confidence we can grow this business for a long time, which is great for Uber because it gives us more dollars to invest in building a better service for consumers, merchants and couriers. In closing, we're very happy with our strong progress. We've been able to grow our top line and even accelerate that growth while substantially expanding our profitability. But we're far from complacent. There's still massive room for growth in all categories, both in terms of merchants and consumers as well as share of wallet. As the largest platform in the world to go anywhere and get anything, we believe we have a structural advantage in terms of efficiency. We've made the right investments over the past 3 years, and we are in a great position to compound top and bottom line for many years to come. We wake up every day, excited about delivering a better day, and we appreciate your support. With that, I'll turn it over to Jill.

Thanks, Pierre, and hello, everyone. I'm Jill Hazelbaker, and I lead Uber's Communications, Public Policy and Marketing teams. When we last met, I talked about Uber's approach to working with cities. And my belief that by partnering with local governments on issues that we both care about, we could make a lot of progress together, and I'm pleased to report that we have done just that. Today, Uber's impact on the world is massive, and we're just getting started. We have more than 6.8 million monthly active earners in over 70 countries and 10,000 cities around the globe. Since 2016, those earners have made over $270 billion working with Uber, that number is north of $60 billion in 2023 alone. At a time of economic uncertainty, access to this type of flexible work has never been more important. Inside of Uber, we talk a lot about the fact that drivers and couriers have choices, and we're competing for their time every time they go online. That's why we've invested in our technology in ways big and small to make earning on Uber easier, safer and fair than ever before. We've made earning on Uber easier by introducing new features like upfront fares and destinations, hugely popular with drivers so they know exactly where they're going and how much they'll earn before they accept the trip. We've made earning on Uber safer by introducing features like record my ride, where drivers can record what's happening inside the vehicle using their own phone setup. No additional equipment is necessary. And we've made earning on Uber fair by introducing a new step in our deactivations process where drivers can request a review and introduce new information, like an audio or video recording, a first of its kind for the gig economy. All over the world, our policy teams are fighting hard for a better future for earners, a future that marries the flexibility and independence we know they love with the benefits and protection they deserve. And we're making a ton of progress, progress for earners and also in terms of providing predictability and stability that allows our business to grow. In New York, we reached a landmark agreement with the New York Attorney General, instituting a minimum earnings guarantee while also preserving the ability for earners to dual app if they choose. In Brazil, we're working closely with the government on a path to certainty for the more than 1 million earners in that country, and I expect that we'll make fast progress in the first half of this year. By the end of this month, in Australia, we'll have passed federal legislation preserving independence for earners while also introducing new benefits and protections. Of course, this is just a snapshot of the work that's happening around the globe. And none of it would be possible, but for the fact that lawmakers, presidents, and prime ministers are listening to the fact that drivers and couriers want to remain independent. We also believe that we can bring the benefits of Uber's technology and scale to other aspects of the transportation sector like Taxi. Today, we have more than 235,000 taxi drivers on Uber's platform in more than 33 countries around the world. Now I've been at Uber for almost 10 years, and it's true that Uber's relationship with taxi hasn't always been on the friendliest terms, but that relationship is changing. We've welcomed iconic taxis in Hong Kong, Tokyo and New York onto the platform. And what we're finding is that taxi drivers who accept Uber trips are busier and earning more than those who don't. Take San Francisco as an example. Taxi drivers in San Francisco who are accepting UberX trips are earning on average 27% more than those who don't. That's almost $1,800 a month extra into their pockets. And we have grand ambitions to bring every taxi in the world onto the Uber platform, which is why I'm so excited to welcome the iconic London Black Cab by the end of 2024. Turning next to electrification, which continues to be a crucial issue for Uber. Today, we operate the world's largest 0 emissions ridesharing platform. We have more than 126,000 monthly active EV drivers, and those drivers have taken more than 287 million trips over the last 3 years. In fact, Uber drivers are the earliest adopters of EV, going electric at 7x the rate of the average motorists. And they're delivering up to 4x the emissions benefits given the number of miles they're traveling on the road. Now investing in sustainability isn't just the right thing to do, it's good business for Uber. No group prioritizes the environment quite like Gen Z, who we know uses the sustainability of products and services when they're making purchasing decisions. And by 2030, Gen Z will make up to 1/3 of Uber's user base. In closing, it's our belief that by working collaboratively with cities, with earners and with taxi, we can solve some of the toughest challenges facing our world, all the while creating a competitive advantage for Uber. Thank you very much for your time. And with that, I'll pass it over to Prashanth.

Good morning, and let me add my warm welcome to Uber's investor update. I'm going to recap what you've heard so far. First, Dara discussed how the growing power of our platform is delivering phenomenal results. Next, you heard from Mac and Pierre, who highlighted the strength of their 2 businesses and the building blocks to expanding profitability and consistent growth. Then Jill reminded us that we maximize long-term value by being good partners to our communities. So let me now tie it all together into Uber's financial performance and discuss how we intend to run the company over the next few years. Specifically, I'll share our conviction that the power of our platform and the investments we've made over the last 15 years are going to continue to evolve this company into a durable core holding and a long-term compounder. And now that we've reached positive cash flow generation, I'll also share our capital allocation framework. So let's get started. When I joined Uber 3 months ago, I saw an incredible opportunity to help drive the next chapter of this category-defining business and join a world-class management team. Uber is a once in a generation company that has used the power of technology along with the passion of its 30,000 employees to create a service that is used by 150 million consumers and nearly 7 million drivers and couriers. It's a company that is uniquely positioned at the intersection of the physical and digital worlds. And it's a company that has delivered profitable growth at scale and generated significant shareholder value. Let me walk you through our plan to continue enhancing shareholder value as we execute against our massive opportunities. Taking a step back to when Uber went public nearly 5 years ago. We closed 2018 with around $50 billion in gross bookings, but the business was generating billions in losses. However, in the middle of a global pandemic and an unprecedented operating environment, the team turned crisis into opportunity, delving down on Uber's core business, overhauling the company's cost structure and building back stronger than ever. Last week, we reported full year 2023 results in which we delivered both growth and profitability with nearly $140 billion of gross bookings and $4 billion of adjusted EBITDA. Over the last 2 years, we've continued to grow our top line more than 20% annually while expanding profitability and improving the quality of those profits. This is a leadership team that keeps our commitment. We became EBITDA positive in 2021 and free cash flow positive in '22, and we are now GAAP profitable in 2023. And with scale, we have created operating leverage across the P&L from variable cost lines such as payments and customer support to fixed cost efficiencies like tech staffing in best cost countries. These achievements are super compelling, but I'm even more excited for what comes next. Looking ahead, we want to provide a framework to help you with how we think about running this enterprise over the next 3 years. We see a path to deliver gross bookings CAGR of mid- to high teens over the next 3 years. Using the power of the platform and the benefits of scale, we are committed to growing profits faster than the top line, targeting adjusted EBITDA growth at more than 2x gross bookings growth. We know that free cash flow is an important measure of profitability, so we want to provide some guidance on how to model this. We expect free cash flow as a percentage of adjusted EBITDA to be over 90% annually, and that includes changes to insurance reserves. Put simply, our financial objective is to drive profitable growth at scale. We seek to deliver market-leading top line growth alongside even faster bottom line growth. As you heard from Dara earlier, it all starts with the power of our platform. With lower customer acquisition costs and higher lifetime value, we have the unique advantage of using innovation to extend our core business and capture more use cases. Importantly, our platform delivers an outcome that's bigger than the sum of its parts, enabling us to earn an attractive return on capital. As Mac and Pierre shared, a useful framework is that gross bookings is a function of how many consumers use our products, how often they use our products and how much they spend. Over the coming quarters, as we share more about the performance of the business, we will try to put our results in this context. Our growth algorithm will primarily be driven by user and frequency growth as we expect pricing to be relatively flat. It's important to note that pricing is an output for us given mix effects and input costs. Mix effects include the growth of our lower-cost products like Moto and shared rides, balanced by continuing adoption of premium products like Uber Reserve and Uber for Business. Input costs can include inflation pressure from items like insurance, labor, food or fuel. Moving to user growth. I want to remind you of the incredibly large addressable markets in which we operate. We have fueled user growth and exited 2023 with MAPCs growing 15% year-over-year to 150 million consumers. Yet for perspective, we estimate that less than 5% of the population aged 18-plus in the countries we operate are mobility and delivery monthly users. We operate in over 70 countries today. And while the majority of our gross bookings come from our top 10 geos, we still see penetration opportunities in those markets. The remaining 60-plus geos are earlier in their adoption and will provide additional growth for years to come. We also have new use cases that we're expanding into, whether it's scheduling a ride to the airport, ordering groceries or sending a package across town. Finally, we still have significant opportunities to increase the frequency of engagement across our platform. Today, consumers use our services just shy of 6x per month, which has grown nearly 10% compared to last year. And importantly, while we do have some power users of our service, including many of you on this call, about half of our monthly consumers only use our service once or twice per month. This is a tremendous opportunity for us to use the Uber magic and serve consumer demand at the right moments. We're building tech to improve this through best-in-class products and experiences that will drive multiproduct usage. Recall that Dara highlighted roughly 1/3 of our MAPCs are multiproduct users. Said another way, there were 50 million consumers who use 2 or more products every month. I'll spend the next section discussing the drivers of our improving profitability. In 2022, reacting to what he called a seismic shift in the market, Dara challenged the company to focus on cost discipline and meet our profitability commitments even faster. Our teams delivered on this call to action, and as a result, we hit 2 important milestones in '23: GAAP operating income profitability and our inclusion in the S&P 500. While our tech and platform are global, we operate locally. Let me spend a moment providing more details on our geographic profitability expansion over the last 2 years. As you can see, of our top 10 mobility and top 10 delivery countries, all but 3 are profitable today, and all but 3 have improved margins over the last 2 years. Our profitability expansion has not been restricted to a few countries. We continue to drive healthy growth and best-in-class operating cost structures. So you're seeing progress across the board. We are confident that our portfolio of products and geographies can continue showing profit expansion, which I'll discuss next. We exited 2023 with an adjusted EBITDA margin of 3.4% of gross bookings, up 120 basis points. We're driving significant efficiencies in both variable and fixed cost across our P&L, including support, payment and overhead costs like R&D and G&A. This business is a game of inches. It's all about grinding out basis points of improvement compounded by our scale. Looking ahead, we see additional margin expansion coming from customer support through generative AI tools and from payments through new tech functionalities. In combination with continued improvement in our fixed costs and the benefits of scale, we believe we can drive EBITDA CAGR in the high 30s to 40% range over the next 3 years. Turning to our cash flow generation. We are at an inflection point. If we look at the 3-year period ending 2020, we burned a cumulative $10 billion of free cash flow. In the most recent period ending 2023, we generated positive $3 billion. Given our asset-light model, we expect free cash flow as a percentage of adjusted EBITDA over the next 3 years to be 90-plus percent annually as EBITDA to cash flow conversion continues to improve, translating to a 3-year free cash flow CAGR of 40-plus percent. Now let me take a moment to talk you through how to think about modeling from adjusted EBITDA to free cash flow. With respect to our tax rate, you are likely to see a meaningful deviation between our GAAP tax rate and cash rate for the next few years. A decent proxy is a cash tax rate in the high single digits to low teens as we can now take advantage of the accumulated losses that have been built by the investments made in the creation of this business. Given the movement of cash between our payments to earners and collections from consumers, we usually have daily fluctuations. But in general, as the business continues to grow, working capital will be a modest draw on cash. On CapEx, given our marketplace business model, we are very asset light, and the plan is to remain so. Now let me tackle insurance reserves. As a reminder, in many markets, we arrange automotive liability insurance on behalf of drivers, which in turn is built into our pricing. For insurance liabilities we retain, our cash flow from operations includes the inflow of reserves for trips taken today less the outflow for resolution of historical claims. Thus, as our business grows, this timing difference can also scale, creating a float that is reflected in free cash flow. And just like an insurer, we also earn income on this float. And lastly, now that we've laid out what drives our cash flow, let me spend a few minutes on how we intend to deploy capital to drive long-term shareholder value. The first call of capital is to invest in our core business and capital-efficient opportunities to further generate durable free cash flow growth. We will also maintain appropriate level of liquidity in part to support our expanding marketplace. We target strong investment-grade ratings by our debt ratios. And as part of our focus on value creation for shareholders, we may continue to selectively evaluate M&A opportunities. But let's be clear, it's a high bar and would need to bring meaningful strategic value and be financially accretive. As we generate excess cash, returning capital to shareholders will be a key focus. And as you saw, we announced our first buyback authorization of $7 billion. We will be thoughtful as it relates to the pace of our buybacks, and we will consider it in the context of our other capital allocation priorities. We'll start with actions that partially offset stock-based compensation and work our way towards a consistent reduction in share count. Before going into the Q&A, let me share our thesis on why we will continue to be a leader in driving TSR. We have built a significant competitive advantage that is a combination of phenomenal technology and a ground game that can't be duplicated. We are a $140 billion gross bookings enterprise that has a path to high teens top line growth with over 2x that in profit growth. Our asset-light model enables significant cash flow generation and our shareholder focus underscores our commitment to return this capital to you by repurchases or only the highest ROI investments. So to wrap up, this brings us to a new chapter in Uber's history, and we are so excited about the future. At this time, we'll take a short break and then I'll invite Dara to join me on stage to open it up to questions. [Break]

Good morning, and thank you for joining the Q&A portion of Uber's investor update. I'm Alex Wang, Director of Investor Relations. I'm pleased to be joined by CEO, Dara Khosrowshahi; and CFO, Prashanth Mahendra-Rajah. In terms of format, we've already begun collecting questions from the analyst community, and I'll be moderating Q&A. With that, let's dive into the first set of questions about our platform. So our first question is from Justin Post from BofA. How does Uber One member profitability compared to nonmembers? And as more bookings convert to Uber one, what does that mean for margins?

Yes. So thank you, Justin, for your question. We have actually been quite encouraged in terms of member profitability for Uber One. The most important factor as we think about membership and it's growing very nicely. We now have 19 million members across 25 countries. It generates about 30% of our gross bookings and delivery. It's more than that. It's 45%. In the U.S., it's over 50%. So the penetration is great. But as it relates to profitability, goal #1 on membership is to drive frequency. Members spend about 3.4x that of nonmembers, that does come with a cost, which is the discount that we give to members. So in terms of margin, obviously, Uber One members carry a lower margin than non-Uber One members. But because of the higher frequency that is driven by members actually on a dollar basis now, if you look at members versus nonmembers, members are more profitable in terms of, let's say, variable margin dollars per person or per member versus a nonmember now, that profitability is offset by free membership trials. So we think of free membership trials as essentially a marketing mechanism to get more members to join, and we can essentially tune free trials in a very, very specific way. So if we're trying to drive membership and we're trying to drive, say, gross bookings growth and frequency growth and retention, we can be much more aggressive on free trials, and then to the extent that we want to drive more profitability, we can tune down free trials and essentially tune for retention of memberships, for example, moving more members from monthly to annual memberships and other tools that we have to drive either member retention or member spend. One example is the Quest. The Quest is a special offer for a member to, for example, complete 3 trips and you get x amount off, or member exclusives that give members kind of additional discounts that aren't available to nonmembers or accelerators that essentially we use often to encourage members to try out a new product. So for example, you may get 2x cash back on an Uber Reserve if we haven't seen you take Uber Reserve. So we now have a very strong tool set that can either drive top line when we want to through free trials and other factors, or we can drive margin by driving dollar usage, retention, et cetera. But I'd say so far so good in terms of the membership engine. I think the teams are working really well together, and it definitely shows up in the results that we've seen more recently.

Great. Our next question is from Ron Josey from Citi. When we think about the delivery growth of mid-teens CAGR, can you talk to us about the building blocks between food and grocery and specifically around grocery, talk to us about the plans to ramp up this use case.

Yes. So we're very happy with the growth of our grocery efforts. Grocery is now about $7 billion annual run rate, growing 40-plus percent. This even includes an offset of our decrementing corner shop in Latin America, which actually hurt volumes in Latin America, but grocery continues to grow really, really quickly. And really, as we think about grocery, it's about introducing a higher percentage of our audience to groceries. So this last quarter, about 14% of delivery monthly active platform consumers bought thing from our grocery offerings. The most common upsell that we use is actually, when you're ordering food, let's say you order some pizza from Domino's, we may offer you dessert or we may offer you wine from a different store. It may be from an ice cream shop that's around the corner or maybe from a liquor store that's around the corner as well. That introduces customers to, wow, I can get much more from Uber Eats. If you watch Super Bowl, as many did, hopefully, you saw our commercial layer. Don't forget, you can buy more than just food on Uber Eats as well, and that gets kind of the flywheel going in terms of grocery penetration. So when we think overall in terms of our delivery business, you've got the base business growing in the teens and actually accelerating, which we're really happy about. The majority of the growth is coming from transaction growth. That base is fueled by more merchants, more consumers that are coming from our mobility business, membership penetration actually getting deeper. And then on top of that, you've got grocery as well that I just talked about. So it creates a good combination of top line, and we're pretty confident in terms of profitability. But Prashanth, you want to talk about that?

Yes. So I think we provided some similar comments in the Q4 earnings call, but let me recap it again. We've got a clear path to profitability with expectations of getting to positive EBITDA over time, and a couple of things are driving that. So let's go through that again. First, we have the power of the platform, and the key to that is it allows for us to really reduce our customer acquisition cost and gives us cost efficiencies as an example, about 14% of delivery users are using the grocery and retail, and that's up from 8% a year ago. So that's a huge advantage for us in terms of being able to bring consumers over. Second, Dara just made reference to it. We've got this growing ads revenue, and as we continue to build out that user base, and I think we're at about 150 million monthly users now, that becomes an attractive platform for advertisers to target our audience and can give us continued opportunity to grow that ads business as we build out the product selection and our support model, the amount of consumer promotions that we have to provide can also come down, and that's going to be accretive to the P&L. And then lastly, again, with the tech that we have, we have the ability to batch efficiently, and that helps to lower the higher sort of cost per trip and the courier pick pack costs that is related to this model. Thank you for the question.

Great. We'll move to our next question on advertising, and this one is from Andrew Boone at JMP Securities. What's the potential ceiling for ad spend as you think about it as a percentage of gross bookings?

Yes, Andrew, I think when we think about the ceiling for ad spend, it's much more dependent on the customer experience. That's the most important factor. What we don't want to do is have ad load or ads feature stores that are less relevant to a particular customer that hurts the underlying customer experience. So it really is dependent on the customer experience. We run a certain percentage of our audience with no ads on a long-term cohort basis, and then we compare that audit behavior to audiences who are receiving ads, and we make sure that the experience there isn't significantly different, and that is going to define the ceiling in terms of our ads penetration because you don't want to build an ad business that penalizes the customer experience, and I think so far, our teams have done a really good job of continuing to increase ad penetration in a metered careful manner, always thinking about the customer first. That said, I have kind of historically talked about ad penetration as a percentage of delivery, getting to about 2% as a target for us. I think that target stands, and I think we can get to that target. We're a little bit above 1% now, and if you think about increasing that percentage, it's a couple of factors. One is increasing the number of monetizable impressions per user session. Again, we have to be careful about the ad load. But for example, we may have new ad formats, new placements, increased monetization of search, for example, if you filter for Japanese restaurants, having advertisements there as well or paid placements there as well. Second for us is increasing the adoption and budget of advertisers. The average return on ad sales on advertising is about 8x. So it makes a lot of sense for more restaurants or more grocers to use our ads product. This is about sales, and it's about upselling a particular restaurant that might be spending $200 a week to get them to go to $300 a week as well. And as you get more advertisers in with the reliance that we have, our CPCs should increase as well as auction becomes kind of a richer auction. So that's kind of the base ads business, and that's the majority of the ads business. Now the percentage or penetration of ads for enterprises generally are lower than SMBs. Enterprises require more tools, for example, incrementality. They may want to target only new customers. They may want to target breakfast, for example. We are building out that additional tool set for enterprises, and we're making really great progress across the Enterprise segment. For us, grocery is another new category. Prashanth and I just talked about it. If you look at Instacart's latest results, I think their advertising business as a percentage of GB was approaching 3%. That's a lot of sponsored listing activities, CPG advertisers. They're spending online. They're spending offline, and it's about building again that rich tool set for those advertisers. We're investing in that area, and we're relatively confident as well. So if you put it all together and then on top of that, you have Journey ads for our mobility audience that is a very, very strong demographic. They're going out. They're spending money. You get a very strong ad plan, which brings me back to the fact that we do think we can get to 2% as grocery gets to be a larger and larger percentage of our business, could we see it go above 2%? We could, but that's going to be mattered -- that's going to be metered by the customer experience. And right now, it's too soon for me to say, yes, we can get there or above 2% at this point. We're going to be very, very careful about making sure the customer experience doesn't suffer while we grow our ads business.

Great. Our next question is from Bernie McTernan from Needham related to frequency and multiproduct usage. But what's been the largest drivers of frequency gains over the past couple of years moving from annual to monthly users, monthly to weekly users, how should we think about sort of the most likely drivers of frequency gains over the next few years?

Yes, it's a great question, and frequency is incredibly important for us because not only does it drive the base business, but it's something also drives audience, right? About 1/3 of our audience monthly -- sorry, 1/3 of our annual users come to us on a monthly basis. So when you drive frequency, not only are you growing the business, but you might move 1/3 of those annuals to 35% to 40% to 50%. So for example, in Brazil, 50% of our annuals come back on a monthly basis. That increases our monthly active platform consumers. So we take frequency really seriously. I'd say there are a couple of factors in frequency. The most important factor is the quality of the service itself, right? So if you look at our Rides business, our supply has increased, ETAs have come down, surge levels have come down, cancellation levels have come down, and as the service becomes more dependable, more predictable, more reliable, frequency increases. Same thing for delivery. We see delivery frequency increasing as delivery times either come down or more consistent. You saw Pierre talk about the number of missed deliveries being down 25% on a year-on-year basis. Again, it's all about getting the basics right, reliability, having more merchants available so you see more of the great stuff that you want. That's always going to be core. It is about the core business. Then on top of that, we have 2, I'd say, of our special sauce. One is multiproduct, and the second is membership. With multiproduct, we have a product team that is focused on driving essentially AI-driven offers to put in front of consumers. In the morning, it might be coffee. In the evening, it might be dinner. If we see you reserve an on-demand trip to an airport, we may say, Prashanth, next time, reserve your trip. All of this is going to be driven by AI. And here, we have more consumers. We have more occasions. We have more products. We have more on goal than anyone else. And you've seen the results in terms of multiproduct, about 1/3 of our consumers buy multiple products or use multiple products on our service. They spend 3.4x more. That's increased from 25%. So it's been a pretty significant increase as a result of really, really good technical work by the teams. Then on top of that, we have membership that we talked about as well, 19 million members now in 25 countries. Members spend more. We retain them more effectively as well. So when you put all the top of each other, better core service, and you can never ever forget that multiple multiproduct use, and then on top of that membership and then a breadth of product, reserve, low-cost, grocery, et cetera, it all adds up into higher frequency and higher frequency actually is a pretty significant driver of higher audience.

Great. Our next question from Mark Mahaney from Evercore. When you think AVs will contribute a material, call it, 10% of your total mobility volume in your key markets? Any reason to think it will be in the next 10 years?

Wow. Mark, always with the easy question. So Mark, when you talk about materially, if you define it at 10%. Just to size this, if you think about mobility delivery, we're at 2.6 billion transaction run rate. So our run rate is 10 billion plus in transactions. If you say 10 years forward, triple the businesses, it's fun with numbers. So it will be 30 billion trips or 3 billion trips. Okay? So I would say who the heck knows Mark? We don't know. And the transition to AV has been difficult, more difficult than anyone imagined, both in terms of the technology itself and the social aspects of technology, the challenges in terms of safety, the challenges in terms of governments regulating this technology. Our view with AV is following, which is, one, we are the best partner in the world for anyone to partner with. This technology is expensive. It has been slower to develop. We've got mobility use cases. We've got delivery use cases. We've got logistics use cases with Uber Freight as well. And as a result, we got over 10 partnerships with different partners. And whenever this incredibly promising technology happens and starts to hit the real world in a material way, we believe we are going to be ready. We're going to be best positioned. We bring incredible scale for these players. We bring a global audience so that they can get their technology in front of anyone else. We can mix AV trips with non-AV trips to provide the kind of reliability that customers demand, both in mobility, both in delivery and especially in freight. We've got operational expertise to run these large on-demand managed marketplaces. And safety is a priority for us. So if there's any company that knows how to run a large ride sharing, logistics operation safely on a global basis because the definitions of safety differ by country by country by country, it's Uber. So we want to be the AV provider's the best partner out there. Is it going to be material in 10 years or not? My honest answer is I don't know. But if it is, we are going to be there and we'll be the best partner for the AV landscape out there.

Great. We're going to switch our next set of questions from the platform that we just discussed to our financial framework. The next question is from Ben Black from DB. In the context of your gross bookings guidance, how should we think about the building blocks? And how should we think about the growth rate between core UberX and food delivery versus the other businesses?

Great. Thank you. Thanks, Ben, for the question. I'm going to step back here and restate sort of the framework that I did during the slides on how you should think about gross bookings. It is a function of our monthly users, their engagement with the platform and how much they spend. So we gave you a long-term 3-year CAGR guidance out there of mid- to high teens. So that mid- to high teens is going to come from those 3 elements. And if you were to ask us today kind of what does that mix look like? Best view today is sort of it's balanced between frequency and growth with pricing expected to be more flattish, and I talked a bit about why that's the case. So let's kind of double-click on the frequency and the engagement. Dara did quite a bit now on multiproduct. So I'm not going to repeat that except to say that we do have high conviction that given that only 50% of our monthly users use Uber once or twice a month, there is plenty of runway ahead to drive that frequency up. It is coming from the breadth of product offerings, including the -- here in the U.S., the opportunity to do Reserve and Share, internationally we have the Moto product. So more product offerings, bringing more people, giving them more options on how often they engage with the product. Membership, Dara has also referred to membership, is great for us on the delivery side, and it helps kind of drive that multiproduct usage that we just spent some time walking through. In terms of driving the number of users, the stat that I mentioned in the video, and I'll say it here, is that in the countries that we operate in, only about 5% of the population 18 and older are active monthly users. So we see plenty of room to drive that up, and where is that growth going to come from? We continue to open up into new countries and push in countries where there's opportunities to run like Germany and Spain, as an example. We're tackling new demographics like the teen product that's been launched and is getting great traction, and expanding use cases like for the grocery product, trying to expand that for folks to use as their weekly grocery service. So lots of opportunity for us to keep driving users up, add to the frequency that we went up and then sort of offset with pricing being flattish, we feel good sort of in that mid- to high teens growth.

Just do want to add one factor, which is the other side of any kind of a marketplace is supply. We are very much supply led. And if you think about our supply position in terms of drivers, for example, this last quarter, we increased the number of drivers on the platform by 30%, retention of drivers was up by 10% on a year-on-year basis. So we feel very good about our supply position. And then we're reaching into new sets of supply, taxi, for example, is about 20% of first-time drivers. Fleets account for about 18% of total vehicles there on a worldwide basis. So the supply position that we have is strong, and we're reaching into new sources of supply. And if you look at our merchant penetration on the delivery side in the U.S., for example, it's less than 20% of total target merchants out there, less than 10% in France as well. So on the demand side, I think we're in great shape, and on the supply side, I think we've got great momentum and lots of supply to essentially wire up all over the world.

Prashanth, do you want to touch on Ben's second part of the question around the core UberX and food delivery business?

Yes, yes. So maybe in our multiyear framework for guide, the way that I would -- I'd encourage you to think about mobility and delivery is, we feel good that kind of the core product growth for mobility and delivery can continue to grow sort of in that at least mid-teens. So we've got plenty of runway there, kind of mid-teens on both of that with the boost sort of coming from the investments that we are making in the growth bets and the new verticals. So we feel strong there. I would say that, that means if you look -- if you kind of think historically how have we done, delivery was sort of coming in, in the mid-teens, so continued sort of in that rate. But for mobility, which has historically been sort of, I think in the last year, was probably a 30-plus rate, a little bit of deceleration there. But overall, we feel good that together, the core of that can kind of continue at a mid-teens level and provide us the support we need to use the bets that we're making in some of the more exploratory areas to push us to the higher end of that guide.

And then just one other thing that I would add is that the bets are great businesses in and of themselves, but consumers who use our bets often then transition into our base products as well. So Moto users often will then graduate to UberX users. Pierre talked about grocery users now being a new customer acquisition tools. So the bets fuel growth, but that's actually fuel the base business as well.

Great. Our next question is from Youssef Squali of from Truist. Can you give us examples of specific structural advantages that are translating into better unit economics for you versus competitors?

Sure. Yes. Thank you, Youssef. So there's a term in the Uber lexicon called Operating Cost Structure or OCS, that I'm getting familiar with. And basically, this is the collection of capturing all costs between revenue and EBITDA. And there is a team within Uber that's goal is really to grind out incremental cost efficiencies out of that OCS, and I hope they are watching the call because I do want to give a shout out to them for the tremendous work that they've done today, continue helping driving that margin expansion by focusing on those costs. When you think of what's in that cost bucket, it sort of breaks into variable and fixed. So let me maybe just share some examples of what gives us conviction that we're going to be able to continue to drive efficiency in that cost structure. So one example, and I made reference to this in the video, is on the payment side. We have massive volume, $150 billion with our exit rate in Q4, and that allows us to use our best-in-class technology to optimize the routing to help reduce our cost to the best possible position. And it also allows us to find ways to incentivize customers to use different payment options such as direct banking to help again reduce those payment costs. Another example would be on customer service, and there's a great team there that is constantly working on how do we reduce what we are spending on refunds and appeasements, how do we continue to find efficiencies and improve the quality to get those costs down? And certainly for a company that does as much volume as we do, fraud is a meaningful item that we need to pay attention to. We have a sophisticated fraud team, and they have the benefit of a massive data set that comes through that allows them to really be very thoughtful and creative in how to use technology to minimize our fraud expenses. On the fixed cost side, it's a little more straightforward. It is just having that great discipline of controlling your fixed cost, which largely are going to be a function of headcount. We have been tremendously rigorous in controlling headcount over the last couple of years. We don't see that changing meaningfully. I will say that with the kind of growth numbers that we have given you sort of in that mid- to high teens, it is likely that as we grow into that, we'll probably need to support that growth with some headcount increase, but I'm confident it's going to be fractional compared to the growth that we've been projecting out there. So we should be able to generate significant leverage off that. And then lastly, I will call out stock-based compensation, which I know in my last month, several of you have called out as an item that you want us to pay attention to. And I think we're comfortable saying here that over the next 3 years, sort of $2 billion plus or minus feels like the number that we're ready to kind of say, that's how you should think about stock-based comp over the next couple of years.

Great. We'll move to the next set of questions around capital allocation. And first question from Eric Sheridan from Goldman Sachs. Can you frame the company's key priorities for opportunistic reinvestment across business lines and products? How should we think about the return or yield from these investments in forming your short to medium growth? .

Thank you. Thank you, Eric. So I suppose an aberration that I'll share in my first few months here is this is an opportunity-rich company. There is -- between the brilliance in the tech and in the regional organizations, there is no shortage of ideas that are coming up as, hey, what about this, what about that? I've gotten several Slack messages in my few months on, hey, Prashanth, should we consider this? So with that influx of ideas, the discipline that the team uses is when an idea is funded, there is a very rigorous process to regularly bring that back for review to say what were the KPIs that were lined up against that? And how are you doing against that? And do we continue or do we shift those resources to work on something else? The reason this is important for an organization like Uber is we are constantly looking for what is going to be the next product or geography or investment that's going to provide that sort of $5 billion GB role a few years out. We're clear on kind of where things are going to come from over the next 3 years. We've given you the confidence in that to say mid-teens, mid- to high teens GB growth, but we need to be investing to provide that longer-term growth, put that in the framework of the EBITDA ranges we've given you that is helpful to you, but it's also discipline for us. It allows us to say that we're committing to more than 2x GB growth in EBITDA, and that discipline on focusing on making sure that we are constantly growing profitability allows us to force the prioritization of what are the bets and what are the long-term items that we're going to be funding to drive that future growth while still delivering profitable GBs in the near term.

Great. Our last question comes from Doug Anmuth from JPMorgan. Can you help us understand the framework for arriving at the $7 billion buyback? And how should we think about timing?

Yes. Great. Great. Thank you, Doug. So look, we're going to be very thoughtful as it relates to the pace of our buybacks, and we're going to consider it in the context of all of our capital allocation priorities. I'd say this is our inaugural program, and it's important for us to have flexibility and timing as opportunities arise. You can expect us to execute this over a multiyear period, and that it is very consistent. We want to consistently be in the market. We're going to start with actions that partially offset stock-based comp, and then we're going to work our way up towards a consistent reduction of share count. We've got an asset-light model that enables significant cash flow generation, and this is the leadership team that is very focused on shareholder value. So we're going to ensure that the capital that we're generating is returned to you either via repurchases or only the highest ROI investments.

Great. Well, thank you for joining us today. We appreciate you taking the time, and we look forward to connecting with you soon.