Lyft, Inc. (LYFT) Q3 2026 Earnings Call Transcript

Good morning, everyone. Good afternoon, and welcome to Lyft's third quarter 2026 earnings call. As a reminder, this conference call is being recorded. On the call today, we have our CEO, David Risher, and our CFO, Michael Browse. Our full prepared remarks are available on the IR website and Lyft blog, and we will use this time to answer your questions. We'll make forward-looking statements on today's call, including statements relating to our business strategy and performance, partnerships, future financial and operating results, trends in our marketplace, and guidance. These statements are subject to risks and uncertainties that could cause our actual results to differ materially from those projected or implied during this call. These factors and risks are described in our earnings materials and in our recent SEC filings. All of the forward-looking statements that we make on today's call are based on our beliefs as of today, and we disclaim any obligation to update any forward-looking statements except as required by law. Additionally, today we are going to discuss customers. For rideshare, there are generally two customers in every car. The driver is Lyft's customer, and the rider is the driver's customer. We care about both. Our discussion today will also include non-GAAP financial measures, which are not a substitute for GAAP results. Reconciliations of our historical GAAP to non-GAAP results can't be found in our earnings materials, which are available on our IR website. And with that, I'll pass the call to David.

Thank you, Frankie. Hey, good afternoon, everyone, and thanks for joining us. All right, listen up. I know you're multitasking, so cut it out. I want to start the call by reminding us how far we've come over the last couple of years. Back in 2023, people, yourselves included, had some questions. We'd completed only 700 million rides. Bookings had grown only by about 14% versus the prior year. We were losing share, and we burned about $248 million in cash. Ouch. Okay, so today, Lyft is a very different company, thanks to one simple idea. Customer obsession drives profitable growth. Our quarterly results tell the story. In Q3, bookings were up 17% year on year. We have accelerated rides up 10% year on year, with acceleration both in the U.S. and Canada. We had 31.6 million active riders, our eighth consecutive quarter of double-digit growth. Driver hours reached a new all-time high, and we had faster ETAs compared to last quarter than last year. And obviously, we had record adjusted EBITDA. And that strength has continued into Q4. Just this past week, we hit two new, actually several new all-time highs for daily and weekly rides in North America, powered by our strongest Halloween ever. For 2026, Lyft is on track to reach over 1 billion rides around the world. We bake that customer obsession into every new product we deliver. So let's take Lyft Go, which we announced earlier today. We built it to be the best membership program for the industry. Remember that old Lyft, excuse me, the Reese's peanut butter commercial, peanut butter cup commercial, two great tastes that go great together. That's Lyft Go, which includes DashPass membership. It gives you an industry-leading 8% back in credit to use on the best rideshare platform or on the best delivery platform. Look, if you have DashPass, you've already got Lyft Go. Just link your accounts, and if you don't, sign up for a free trial in the Lyft or DoorDash app, and let me know what you think. So this engine we have built keeps getting stronger, and it's fueling our transformation. Lyft is growing, and I want you to think about this, up, out, and forward, as we become a global, AB-ready mobility platform. So up means providing better premium modes, more business-to-business services, and luxury chauffeuring under our new Alcove brand, all of which will continue to strengthen our margins. Out, by leveraging our expertise, technology, and infrastructure, we're going to grow into our expanded TAM and strengthen our global chauffeur offers significantly. And forward, as we build the best hybrid network and become the best partner to commercialize AV, we are going to reset our industry and our place within it. So that's where we're headed, global AV-ready mobility platform. We are very confident in the drivers we have to grow this business, and we are proud of the progress we've made. Before I hand it off, I'd like to introduce our new CFO, Michael Brous. This may be his first earnings call as CFO, but he is not new to Lyft. He has spent about eight years in senior roles, including on my team here, and has been an incredible operator across a complex international business. I have found that's what makes for the best CFOs, those who understand both their financial world as well as operations. I'm super excited to partner with him as we execute on our next transformative phase of growth. Brous, over to you.

Thanks, David. Really excited to partner with you as well. Before I begin, I just want to thank Erin for her leadership and partnership for setting Lyft up so well for this next chapter. As David mentioned, I've been at Lyft for nearly eight years, the last three on the leadership team, helping shape the strategy David just described. You should expect continuity, not a reset. What I want to share today is how I think about running the business financially because it follows the same logic as the strategy itself. Execution in the core is the fuel. Operational rigor turns that fuel into capital, and discipline allocation puts that capital to work towards our future, up, out, and forward. First, the core is the fuel. The third quarter was another proof point. Gross bookings grew 17% year-over-year to $5.6 billion. Adjusted EBITDA grew 47% year-over-year to $204 million, with margin expanding to 3.6% of gross bookings, our most profitable quarter to date on a non-GAAP basis.

Good morning.

North American rides growth accelerated again with momentum in both the U.S. and Canada, and we delivered our fifth consecutive quarter of more than $1 billion in trailing 12-month free cash flow. Three years ago, that number was negative $248 million. That swing is what funds everything else, and protecting and compounding it is my first job. Second, the operational rigor and cost discipline that we demonstrate are what frees up capital to invest in our future. I'm an operator by background. At Lyft Urban Solutions, we ran an international, asset-heavy business, and the lesson was simple. The economics are won and lost on a handful of operating levers. Fleet availability, asset utilization, unit cost efficiency, and you manage those relentlessly. During my time as head of loss, teams scaled e-bikes and improved those operating drivers. It's led to double-digit rides growth, strong margins, and cash flow for the total business. We saw this kind of discipline in our results this quarter as well, with total company cost of revenue declining year over year as we continue to bend the insurance cost curve. Every dollar of efficiency we generate is a dollar we can reinvest or return to shareholders. As CFO, I'll hold every part of the business, including our newest ones, to the same standard of operational excellence. Third, we allocate capital deliberately toward the future. Our capital allocation framework is unchanged. Maintain ample liquidity and a strong balance sheet, prioritize investing in profitable growth, and return capital to shareholders. That framework has served us well, and I'll continue to apply it with the same discipline, now across a much broader range of opportunities than we've ever had before. You can already see this in practice. Up, we acquired TBR a year ago for its service standard, and now we're building on it with Alcove, rather than starting from scratch. Within our out strategy, Freenow made Lyft a global company. We set out to grow into our expanded TAM with Q3 active riders, rides, and gross bookings in Europe all increasing year over year. And forward, in Nashville, where we're building a best-in-class AV operation that pairs end-to-end fleet management with a hybrid marketplace. We've made tremendous progress to date, which is why we expect to significantly grow the fleet we service by year-end. The scale here really follows the proof. And on shareholder returns, we repurchased approximately $50 million in shares in Q3 and expect that to be about $500 million for the full year, consistent with what we've said all year. Put simply, this is a business that's generating more than a billion dollars of cash, a team that knows how to make that engine more efficient, and a disciplined process for deploying what it produces to deliver value for our customers and our shareholders. That's how we'll build Lyft up, out, and forward from a position of strength. With that, we'll take your questions.

We will now open the call for a question and answer session. As a reminder, if you would like to ask a question, please click on the raise hand button, which can be found on the black bar at the bottom of your screen. When it is your turn, you will receive a message on your screen from the host allowing you to talk, and then you will hear your name called. Please accept, unmute your audio, and ask your question. At this time, we ask that you limit to one question. We will wait one moment to allow the queue to form. Our first question comes from Eric Sheridan with Goldman Sachs. Your line is open. Please unmute and ask your question.

Thanks so much for taking the question and for all the details and the materials so far around earnings. I wanted to come back to LyftGo and maybe ask a two-part question. First, in terms of implementing something like this, how are you going to be measuring what success is of this kind of partnership? Is it about driving more frequency or elements of bringing new riders into the platform? Just help us understand a little bit about what you're going to be monitoring to make sure that this achieves its goals. And then the second question would be, is there any way to better understand some of the unit economics of the partnership between yourself and DoorDash? Thanks so much.

Hey, Eric, it's David. We'll do our first tag team on this one. So thanks for your question. First of all, I got to say, we are super excited about Lyftgo. You know, as a reminder to those of you who maybe are newer, we've been partnered with DoorDash for just over two years now, about two years and three days. And the partnership has been remarkable. It's been one of our most productive partnerships, both in terms of new customer acquisition and in particular driving frequency. But it had its limits. And so we've, you know, kind of put our heads together over the last, you know, six or at least months and tried to come up with a construct that we think is even stronger, this 8% cash back that you can spend on either with DoorDash included. And again, just to say it, if you have a DashPass, you've already got LiftGo. You just have to link your accounts. Okay. So all that's great. So the question you're asking is, how are we going to measure success? And in a sense, it's very simple. We're going to look at new customer acquisition, of course, and we're going to look at frequency. But the nice thing is we're going to do it in a framework that we've spent years and years developing. So as you know, I mean, we deploy rider incentives all day long, and we're also going to talk a little bit more about this. But we look at this as potentially what we hope will be a more efficient way over time to attract and retain customers than we even have today. And we've been developing those tools. The bar is high, right? We've been developing those tools quarter after quarter, year after year. But that's really what it's all about. I'll say one more tiny thing. Maybe break it down just a tiny bit more. First thing you got to do is you got a link, right? You got to kind of sign up for the program. I hope I'm not speaking at a school here. We've literally seen hundreds of thousands of people already. So that's a good leading indicator that the program has product market fit. And then we're going to look at usage. We're going to look at the economics of it. And hopefully it's going to drive our business in exactly the way we went on to. And of course, for DoorDash, we hope it'll help them retain their customers and increase the value of DashPass.

Just building on what David mentioned, any of the near-term economic impact is reflected in our Q4 guide. But more broadly, we just view this as another tool in our toolbox to drive durable long-term growth in the business. We spent the last couple of years building out an incredible kit. And brighter incentives, as David mentioned, has been a really, really efficient way in order for us to drive growth. And as we've really fine-tuned and perfected that, this is kind of the next evolution. We feel like we're ready to really hit the gas on the pedal here and drive it going forward. So, yeah, just one of many things that we're going to do to drive durable growth into the future.

Our next question comes from Brad Erickson with RBC Capital Markets. You may now unmute your audio and ask your question.

Hey, guys. So had a couple on the cost side of the equation on, you know, S&M being up a fair bit. So two questions there. One, just where is that spend going maybe between North American business versus some of the other kind of newer initiatives or geos that you're in? And then second, you know, are these kind of new levels of rider incentives we're seeing generally consistent with kind of reaching the margin targets as we think about a little longer term? Or is this something that can maybe more show some moderation over time? Thanks.

Yep, great question. So first, maybe just zooming out for a second, we really try to manage this business, optimizing for long-term bookings growth and adjusted EBITDA margin, and all the investments that we make here are in support of those two goals. Incentives, as we just previously talked about, are one of the many levers we pull in support of those two metrics, and we're pulling this lever really right now because it's never been more efficient. We've been able to do this. You see this in the financials in Q3. We've been able to generate significant leverage and cost of revenue as we're really focused on bending the insurance cost curve here. And this has sort of given us a lot of capacity to invest, again, in a lever that's been super efficient. So right now, we're really happy with the results. And as we just previously discussed around LIFTGO, this is going to be a new piece for us going forward as well as we think about the overall equation. In terms of the margin targets, you know, again, we're focused on making investments in support of long-term booking growth, bookings growth and adjusted EBITDA margin expansion. So we view this, we've been able to do this effectively this quarter, and we expect to do that going forward as well.

Bruce and Brad, actually, I want to add on to something here, because I think it's maybe kind of a foundational point. You know, incentives work best. There are two ways to think about incentives. Well, okay. So incentives have to be efficient, right? We know that. But they also work best when your marketplace is strong, right? So if you have very fast ETAs, if you have very slow ETAs, let's take the counterfactual. If you take very slow ETAs or very high prices or sort of inconsistent service or all sorts of things, then you're sort of, you're band-aiding over a problem. But if you've got those things nailed, and we have those things nailed, I mean, we were picking people up faster than we've ever picked them up before. There are markets where we're picking people up four or five, even six minutes faster than our big competitors. It's pretty extraordinary payback for quarter after quarter of customer obsession. So that's, to Ross's point, when you then see yourself having an opportunity on insurance to sort of redeploy some of that incentives, you say, now's the moment, particularly if the incentives are very efficient.

Our next question comes from John Blackledge with TD Cohen. You may now unmute your audio and ask your question.

Great, thanks. Just wanted to ask about the rides. If you can talk about the 3Q rides growth and the key drivers of the North America acceleration, and maybe how we should think about rides growth trending in 4Q and any color on 2027 rides volume. Thank you.

Yeah. Hey, John. Great to meet you. Thanks for the question. So, yeah, just to reiterate what we've talked about here, record-rise growth in the third quarter, we grew 10% year-over-year, $273.5 million, and we saw strength across the board. In North America, first, accelerating rides growth for the second straight quarter, with growth accelerating in both the U.S. and Canada in Q3. It would be a major failure if I didn't talk about our bike-sharing business here. Having run it for the last couple of years, we had a record-breaking quarter as we continue to expand our e-bike footprint and operate them with excellence. And last, in Europe, FreeNow, we grew on an organic basis, bookings, active riders, and rides for the period, and we delivered in line with our expectations in a seasonally impacted quarter. So geographically, strength across the board. When you really start to unpack the success in the third quarter, you know, many drivers, not just one thing that's contributing. As David just talked about, our marketplace has never been healthier. Record driver hours, supplied faster ETAs, which contributed to all-time high active riders. We're continuing to deepen our penetration in our partnership portfolio while driving frequency in that rider base, led to record partnership rides for the quarter. And, you know, our customer-obsessed products that we continue to deliver and improve, like Lyft Team, Lyft Silver, etc., are delivering in line with expectations. So this is not just a one-part story here for the quarter. Lots of things, I think, really clicking for us right now, and that's what's really driving these record results for the company.

Our next question comes from Nikhil Devnani with Bernstein. Your line is open. Please unmute and ask your question.

Hi there. Thanks for taking the question. Appreciate the call out on San Francisco growth. I think the other AV market everyone's focused on right now is Austin and Texas more broadly, given Tesla's expansion into the region. Anything you can share on the impact or are you seeing continued signs of incrementality here? Just early signals would be really helpful. And then, David, as you think about your general strategy on commercializing AVs, is the playbook still to go deep with select partners, or do you see a room to start expanding the portfolio of AV companies you're working with? Thank you.

Um, yeah. Hey, Nicole, it's David. Yeah, let's, um, maybe I'll... Well, Preston, I'll kind of tag team on this a little bit as well.

Want to go first, Mr. Preston? You think you can start.

I'm good. Okay, cool. Awesome. Okay, so the first question was about market share, and then you were asked specifically about Austin. The second one may be more generally about the partnership strategy. Cool. Okay, so you probably won't say too much about any particular market. You know, of course, as you know, as you just said, Austin's getting some press, but still, we're talking about fairly small numbers in the grand scheme of things. So no material impact there. I think the bigger thing, and maybe this is, of course, what you're getting at, is what we continue to see is that in the markets, the ODDs, where we see AVs across the board, Lyft is actually growing. It is actually growing, and that's really important because it kind of underscores this thesis we've had that AVs are going to be incremental to your exact point. And again, I know I've said this before, but it's kind of easy to understand why, you know, there are product people like once they get in them, they sort of find after initial hesitation, people find them, you know, they feel safe, they feel very private, and so on and so forth. And so they sort of open people's minds to what rideshare can do. But then sort of unsurprisingly, sometimes because the fleets tend to be fairly small and spread out, you know, the ETA is a little bit slow. And so they switch back to a Lyft or, you know, maybe someone else's car. So anyway, we're seeing continuing to see that. And Austin is, There's no exception to that. About the partnership strategy, yeah, no, I would say we're very consistent on this. We're looking for a small number of partners to go deep on. You know, Baidu and Waymo are the two that we're the most focused on right now. You know, there will be others for sure. If you don't mind, maybe I'll spend a minute just talking about the nature of that. The Waymo partnership in particular in Nashville, I'm sure, you know, if you hadn't asked it, someone else would, so I'll just kind of jump into it for a second and talk about the depth of it. It has two parts. It's got a sort of fleet management side, and then it has a marketplace supply sharing side. I think what's so interesting about it is when you put these together, you get a whole which is greater than some of the parts. And I think you can think about it this way. Imagine a car out on the road. And all of a sudden, it needs to come in for service. It could be a minor service, you know, batteries running low, it could need a sensor cleaning, whatever it is. Okay, that's just another ride. That's just another ride. And so if you have a healthy marketplace, and you have a marketplace machinery that works well 24-7, seven days a week at huge scale, you just send effectively a ride request to that, and you bring the car in at exactly the time when your tech is ready, you know, when your system is ready, when your charging capability is the best, maybe when electricity is the cheapest. I'm not saying we do this, you know, all day, every day yet, but this is what we're building to. Now, the early indications in Nashville are super, super good. So on the fleet management side, we're operating this 80,000 square foot facility, which we opened about a month ago. It's going super well. We've got very, very good feedback from a partner. We're learning a ton, of course, still very early days, but off to a very, very good start there. And what a good start means is we need to keep the availability of those cars high. That's what that means because on the other side, you have to be able to match demand and a car sitting around not ready to go or a car not getting demand is not making any money. And maybe the last thing very quickly I'll say there is we're increasing the fleet size in Nashville fairly significantly just through between now and the end of the year. So you put all those together and you can probably understand two things. Number one, things are going well. That's good. But number two, that's a deep partnership. You don't do that with 20 different partners because that's a lot of integration back and forth on many, many different dimensions. Our Baidu partnership is, you know, the particulars are a little different in London. I can get into that if we're interested, but maybe that gives you a sense of why our strategy is to go deep with folks. Last thing I'll say. We're a partnership-driven company. Over 30% of our rides are tagged to partners. Obviously, we just reopened this DoorDash partnership and deepened that. I think that also gives you a sense that, and that's one we've built on for a couple of years, it gives you a sense that when we find a partner we like, we tend to go pretty deep in them. Preston, anything you want to add? Nothing to add. Our next question.

Excuse me. Our next question comes from Michael Morton with Moffitt Nathanson. Your line is open. Please unmute and ask your question.

Good evening. Thank you for the question. I wanted to follow up on the discussion a little bit earlier about rides growth. I think in the letter you talk about specifically an acceleration in U.S. rides in the fourth quarter, and Michael had specifically called out bikes being a big contributor in the third quarter. So just if you could decompose the acceleration for us, because David, as you like to say, that growth rate is outperforming the other guys. So kind of just like what the levers are moving that. And then if I could sneak in another quick one, just you get a lot of insurance savings this year, and you've been able to get margin expansion while you invest more in incentives. And in the letter, you talk about insurance renewal kind of growing moderately. So how do you think about marrying that now in 27, where you might not have that significant insurance savings? Thank you.

Thanks for the question, Michael. Nice to see you again. So maybe I'll start with insurance first. We just went through our 10-1 renewal. I'm incredibly pleased with the outcome that the team was able to deliver. It's probably a year-long process. I think I saw the team getting ready for the 2027 renewal at this point. But this is one of many pieces of a multi-year strategy that we're focused on to bend this major cost curve. So yeah, the renewal itself, very modest growth impact quarter on quarter. We expect it to be well below the industry average. But there are other major things that are helping us get leverage here. So policy reform, we've talked about a lot previously with California. But there are product initiatives and innovation where we're trying to drive better safety outcomes on the platform that leads to better insurance cost outcomes as well. So while the renewal this year was favorable, while we've been able to see favorable development in policy reform, this is not just going to be a one-time thing, and we have teams of people focused on continuing to bend this curve, and we expect continued leverage here into the future. Your first question on So just to reiterate this, so North America, we saw accelerated growth in the second straight quarter. We actually expect the third straight acceleration in Q4, and we did see accelerated growth across U.S. and Canada. Canada rides more than doubled in the quarter. Incredible strength there as we continue to further penetrate the country. Toronto now is one of our largest markets in the portfolio, actually. So we're really happy with the success that we're seeing there. And then the U.S. also has strength across the board in our top markets. We saw improvements quarter on quarter. Low-scale markets, which has been a very deliberate strategy of ours to really grow those markets. Double-digit growth again for another quarter. And then in places like California, with insurance reform, we've talked about changing consumer behavior over time. And in the third quarter, we actually saw, from a consumer perspective, higher rates growth than the average. You know, when I look across the portfolio, we kind of see strength everywhere. I'm really happy with the investments that we're making and the innovation that we're making on the product side, our partnership portfolio, and it's all kind of coming to fruition in what we've seen for the quarter, which, you know, again, was a record in terms of rides.

Hey, Michael, nice note. We read your note on Lyftco. Well done.

Your next question will come from Chad Larkin with Oppenheimer. Your line is open. Please go ahead.

Hey, thanks. Maybe could you just, you know, as we kind of wrap up the year here and start looking at 2027, can we, you know, talk about the growth drivers for gross bookings? And, you know, I know you kind of hit on rides a little bit already, but, you know, between, you know, North America. You know, the acceleration you're seeing now, how that continues into 27, you know, between investments and premiums, barst markets, partners, you know, insurance pass-through savings, you know, anything else you can add to that. Thanks.

Yeah, thanks for the question, Chad. So look, foundation, incredibly strong right now. Again, we sort of saw that in the third quarter with all the records that we hit kind of across the board. Q4 guide, we feel really good about in terms of where gross bookings is going and your margin expansion from an adjusted EBITDA perspective. And then I think we're really well positioned with some of our focus areas and our up out and forward strategy. So premium, in the premium segment you called out, TBR, which has been sort of a foundational piece of our premium offering, combining that with a best-in-class technology solution, forming Alcove, really excited about what we think that's going to be able to deliver in 27. You know, LIFGO is going to be a real cornerstone for growth as well in 2027. Again, David mentioned this earlier, the results so far today alone have just been absolutely incredible. I'm international, which, you know, in our out strategy, we're still really in the early innings of right now. It's been a year since the free now acquisition. Again, Q3 organic growth on bookings, active riders and rides. The teams have been integrated. So we're able to actually deliver some of these outcomes more, much more efficiently. From a technology perspective, now we have a roaming feature now where if you are a US Lyft customer and you land in Europe, you can hail a ride through the Lyft app. But, you know, we're sort of mid-innings here from an integration perspective, so we see a lot more opportunity as we bring these teams and these technology stacks a lot closer together. And then, you know, AVs, obviously, you know, David talked about the Waymo partnership earlier. Incredible proof points really early on. We're really focused on the details right now because the scale is so small, but I think it speaks volumes that Waymo is expanding the service area before the end of the year. We're bringing significantly more fleet to the market, and we're finally going to be able to get to the airport as well pretty soon there. So a lot of really good proof points here at the end of 2026 that get us really excited about 27 and our ability to continue on this journey.

Our next question comes from Shweta Kajuria with Wolf Research. Your line is open. Please unmute and ask your question.

Okay, thank you for taking my questions. The first one is, could you please talk to how the competitive landscape has evolved as you've seen some sort of share shifts through the quarter? How do you see that evolve between now and year-end? And I ask because there is a... A lot of chatter around, perhaps, you know, you guys being a bit more aggressive in the market, potentially gaining share. And there's this question around durability on that. So if you could please talk to that, that'd be great. And then the second question I have is around fuel prices. Did you, are you seeing any impact from elevated fuel prices at all, or did you see that in Q3? Thanks a lot.

Yeah, hey, Shweta, David, I'll take a stab at both of those. I think, well, maybe I'll start this way. I think it's, consumer behavior actually takes a while to shift. And so I think, of course, you can see sometimes short-term things happen. You know, a competitor might do something and get super aggressive one way or the other. But I'd say in general, a lot of the strength comes from a real resilience we've built into this platform and into the strength of the team and the strength of technology. And so when you see, you know, acceleration and maybe some share shift and so forth, it's not, you know, it's tempting to sort of look at things that happen in quarter, but I think it's probably more explanatory to look at things that have been happening over years. And again, our customer obsession, I think, is really paying off. I'll give you maybe one example that I think tells the story. If you look at our driver hours right now, they are at all-time highs, all-time highs. And that's not something that you sort of get to do overnight. It's something that takes years and years to develop. It's a relationship. It's the fee cap we've put in place that limits the fee that Lyft takes from a driver's bookings over the course of a week. It's the loyalty program that we have. To maybe touch on your fuel point for a second, we established a really strong fuel rebate program, which I think if you combine with the other program this year saved us about $20 million, something like this, gave drivers about $20 million, largely co-funded, by the way, by a My partners. So those are things that you do, you know, month after month, day after day, you know, and so forth and that pay off over time. So I think this is really more. I think the shift you're seeing, and I do think there's a shift, we see it as well, I think as a result of long-term effort. Give you maybe one last data point. Halloween is typically the biggest day of the year. We prepared for it obsessively. We set records in terms of number of ride requests per minute, number of rides per day, number of rides the whole prior week. By the way, we sort of had two Halloweens, Friday night and Saturday night, just because of the way the calendar worked, and we were prepared for both, and we didn't have one second of downtime. And we had all-time high driver hours, and no problem with driver supply. So you look at all those together, that's not a decision that got made in a week or That's a decision that got made over many years, and I think that's kind of it. On the fuel side, you know, the story is the same. We didn't actually see a huge issue, unlike, you know, maybe prior fuel shocks where there's really been an issue. It didn't really get in driver's way. We did put in place this driver, our kind of fuel relief program, and then extended it, and that was much appreciated, but we haven't seen a huge impact.

Our next question comes from Ken Gowrowski with Wells Fargo. Your line is open. Please unmute and ask your question.

Thank you. Appreciate it. Can you hear me okay? Yep. Okay, great. Could you talk a little bit about supply and maybe the balance between driver and rider incentives and how you're seeing that evolve? One of your peers talked about more supply incentives necessary in 4Q, and then maybe that might continue into 27. But could you just give us a sense of how you're balancing today between driver and rider incentives? And then maybe the second one is, I'd love to get a little bit more thoughts from you on London. It's setting up to be a kind of a showdown market with multiple AV providers. You're going to have one of those, you'll be one of those providers. Just talk to us a little bit about over what period of time we should see kind of the full competitive set and what you're looking for. Thank you.

Okay. Hey, Ken, I'm going to take the first question, and David will take the second one. So, in terms of the balance between riders and driver incentives, David has sort of talked about a lot around our focus on drivers. And I think this is one of his priorities when he came in and took over as CEO. So we focused on creating durable programs for them, like fee cap and driver rewards, etc. And as a result of that, you know, on the supply side, things are incredibly healthy. Third quarter, we had all time high driver hours that led to improvements in ETAs year over year and quarter on quarter. So the marketplace was super healthy in a way in order for us to meet the incredible demand that we saw in the quarter. So from an incentive perspective on the driver's side, because of the durability of these programs, we're actually getting pretty significant leverage on our incentive investments. You'll kind of see this historically and through this quarter where the pride economics look quite good. So we're really happy with those results. So a lot of our investment has been on the rider side. This has been a theme. Those investments have been incredibly efficient, and we've been able to invest at that scale in support of durable, top-line growth and margin expansion.

Yeah. Hey, Ken. So we'll switch over to AVs in London for a second. So you're absolutely right. It is becoming sort of a, you know, kind of an intense market with a lot of activity for AVs. And I think maybe let's first talk about why and then what we see happening, what the future looks like. So the why is kind of simple. I mean, aside from, obviously, it's one of the world's great cities and, you know, has a very sort of intense transportation, you know, kind of infrastructure between cabs and so on and so forth. But also, it is relatively more open than the rest of Europe to technology that doesn't just come from the Western world. So for that reason, you know, of course, you're seeing Waymo there, you know, from the United States, but you're also seeing Baidu, who's our partner, as well as, you know, European AVU providers like Wave and then other Chinese providers even as well. So, you know, it's made itself, let's say, available and open. And you can understand why. I think I've mentioned this before, but I mean, Geely actually produces the London cap. So they, you know, some time ago realized that Chinese tech was probably, you know, had a place there. Okay, so what do we think? So we're working with Baidu. For those of you who don't know, they're sort of the alphabet of China. The car is called the RT6, and it is right now in, you know, sort of safety driver mode, right? So, in fact, I think we did a ride-along a couple of weeks ago with the press in London to sort of show the product off. It's a great product. It's sort of a custom-built. It's their sixth-generation kind of custom-built, you know, kind of robotaxi. And it's great. And so it's going through kind of safety and validation and so on and so forth this year. Next year, you'll see it hopefully enter into commercial service with us. That's sort of the goal. I will say one other thing, which is part of the role we play there, and this is a little bit of an aside, but you asked about different things to look at. So of course, you know, we're matching supply and demand, and we're also going to be doing fleet management there. They also have, let's say, relatively fewer capabilities than, for example, Waymo. And so we take on some more of the technical capabilities and so forth. But another sort of interesting role that we have to play there is a regulatory one. You know, it's very important to regulators that they be working with, you know, credible partners. You know, this is expensive technology, it's potentially dangerous technology and so forth and so on. And so, and by the way, their privacy concerns for all the obvious reasons. So we actually take on quite a significant role there. I bring this up only because I think it's important to understand, you know, this is real work and this is very early days in the AV space and different partners are going to have different requirements. Our goal is to be the absolute best partner around. And so we sort of try to, you know, morph ourselves a little bit to be that type, the partner that the partner needs us to be in different geographies.

Our next question comes from Yusuf Squally with Truist. Your line is open. Please unmute and ask your question.

Great. Thank you so much.

Maybe just as a follow-up to that question, David, as you think about expanding the AV rollout with partners, can you maybe talk about the investment associated with that, particularly maybe around CapEx, around some of these facilities that you may need to open in London or, you know, any way to kind of quantify that? And then just staying with London, with Europe for a sec, did you guys see any impact from The European arrests going on in October and any impact from the war. Thanks.

On the second, let me start with the second and maybe hand to Brous the first. On the second, unless, Brous, you want me to tee up the first at all?

No, you can start with the second.

I'll start with the second, yeah. No, nothing significant. Appreciate your asking. It's something we have our eyes on. Yeah, it's very interesting. There are all sorts of different things that impact our business that are maybe a little bit unexpected. As you say, international unrest is one. Weather obviously has a big impact as well. But anyway, no, nothing significant. Thank you for asking on that. And then, yeah, let's talk about the capital needs for AVs.

Yeah, so right now we're funding all of the AV capital needs off the balance sheet today, relatively immaterial in the context of our broader free cash flow profile. You know, we are, for the fifth consecutive quarter, delivering over a billion dollars of trailing 12-month free cash flow. So for right now, we feel comfortable, given the scale of what we're doing right now, to fund it off the balance sheet. And over time, as that scale grows, we do expect third-party capital to come in and support the overall build-out. But for right now, given what we're doing, all of it we can absorb within the current cash flow profile of the business.

Our last question comes from John Colantone with Jefferies. Your line is open. Please unmute and ask your question.

Hey, guys. Thanks for taking the question here. This is Vincent Cardos on John. So with bikes and scooters performing really well in the U.S. and then the ongoing mix shift to higher value rides and then insurance relief in California driving lower prices on a big chunk of rideshare rides there, can you just sort of walk us through how we should be thinking about bookings per ride in the U.S. just in terms of the various puts and takes that are sort of coming together there? Thanks.

Uh, yeah, um, so to your, um, to your point, thanks, thanks for the question. Um, so to your point, um, a lot, a lot of puts and takes kind of happening under the scenes, um, from, you know, bikes and seasonally bikes and scooters will scale down in the fourth quarter, um, which should be a tailwind from a gross booking for ride perspective. Um, we have our, our premium modes as we scale those out will be, uh, will be a tailwind, uh, as well. Um, so, um. I don't think we're going to be able to give any specific guidance on this going forward, but lots of things happening behind the scenes that are going to support this going forward.

Let me, Bryce, I'll add a little bit more. And Vincent, I'm not going to answer your question any more precisely, but just to sort of give you a little bit more dynamics even. If you look in Europe, bookings per ride tend to be a little bit larger, right? Because the taxi marketplace, let's say, and I'm going to use these numbers very illustrative, let's say a $20 ride in the U.S. might be a $25 or $30 ride, so maybe a 25-year-old ride in Europe. Canada tends to be a little bit less expensive. Low-scale markets tend to be a little less expensive. So, maybe helping you, if not with the outputs of the model, or if not with the exact numbers of the model, you can kind of see those are some of the different components, and then use your best judgment and best guesses on kind of how those are going to go.

This concludes the question and answer session. We will now turn the call over to David Risher for final remarks.

Thank you so much. Thank you, everyone. Really appreciate your interest in your questions. They're super perceptive, as always, and appreciate your time, of course. I think you've heard both Browse and me say, we've got a very, very strong core business right now that's performing extremely well, and that gives us the fuel to power ourselves up and forward. So that's what we're going to do. We're going to become the world's best AV-ready mobility platform. That's the goal. Excited for another strong quarter, both Q3 and Q4, and we will see you next time. Thank you, y'all.

Thank you. You may now disconnect.