Uber Technologies, Inc Q4 FY2020 Earnings Call

Thank you, David. Thank you for joining us today, and welcome to Uber Technologies' Fourth Quarter and Full-Year 2020 Earnings Presentation. On the call today, we have Uber's CEO, Dara Khosrowshahi; and CFO, Nelson Chai. This is Balaji Krishnamurthy from the Investor Relations team. During today's call, we will present both GAAP and non-GAAP financial measures. Additional disclosures regarding these non-GAAP measures, including a reconciliation of GAAP to non-GAAP measures, are included in the press release, supplemental slides and our filings with the SEC, each of which is posted to investor.uber.com. I will remind you that these numbers are unaudited and may be subject to change. Certain statements in this presentation and on this call are forward-looking statements. Such statements can be identified by terms such as believe, expect, intend and may. You should not place undue reliance on forward-looking statements. Actual results may differ materially from these forward-looking statements, and we do not undertake any obligation to update any forward-looking statements we make today, except as required by law. For more information about factors that may cause actual results to differ materially from forward-looking statements, please refer to the press release we issued today as well as the risks and uncertainties described in our most recent quarterly report on Form 10-Q for the quarter ended September 30, 2020, and in other filings made with the SEC when available. Following prepared remarks today, we will open the call to questions. For the remainder of this discussion, all growth rates reflect year-over-year growth and are on a constant currency basis, unless otherwise noted. With that, let me hand it over to Dara.

Thank you, Balaji, and thanks for everyone joining us today. Since our last earnings call, the world has made considerable progress in the fight against COVID. While there's still a lot of work to do, we're cautiously optimistic that this progress will continue and accelerate over the next quarters. However, longer recovery takes Uber's business remains well positioned. Despite renewed lockdowns in Q4, we ended the year with total company gross bookings nearly flat year-on-year in December with gross bookings turning positive in January. Disciplined execution and increased scale in our delivery business allowed us to improve adjusted EBITDA by $161 million year-on-year in Q4. This quarter marks the completion of a series of portfolio actions that began in Q2, with the goal of focusing the company on its two massive core opportunities of Mobility and Delivery. We executed 17 transactions in 2020, including acquisitions that increase our run rate gross bookings by over $6 billion and divestitures of non-core operations that, combined with other cost optimization actions, reduced our annualized EBITDA losses by over $1 billion.

Thanks, Dara. We continue to execute well against the tough operating environment for our Mobility business, investing for growth and delivery while improving total company adjusted EBITDA for both year-on-year and quarter-on-quarter. During the quarter, we completed significant portfolio realignment actions, including our divestiture of ATG and acquisition of Postmates. I will now discuss key operational metrics as well as non-GAAP financial measures. All comparisons are year-over-year and on a constant currency basis, unless otherwise noted. Total company gross bookings were down 4%, but up 16% quarter-over-quarter. Revenue was $3.2 billion, down 15%, but up 13% quarter-over-quarter. Our revenue take rate was 18.5% of gross bookings, down 221 basis points year-over-year and down 62 basis points quarter-over-quarter as our business mix continues to shift towards delivery. Non-GAAP cost of revenue, excluding D&A, increased to 45% from 43% of revenues but down 177 on an absolute dollar basis, driven by lower volumes in our Mobility business. Turning now to non-GAAP operating expenses, which exclude pro forma adjustments such as stock-based compensation and restructuring charges. Operations and support was down $123 million year-on-year, reflecting continued leverage from headcount reduction actions taken in the second quarter. Sales and marketing decreased $209 million as a result of lower marketing and promotion spend in our Mobility business. R&D was down $126 million, primarily driven by a decrease in headcount-related spend. G&A was down $80 million year-on-year and quarter-on-quarter. Our spend decreased $10 million and improved as a percentage of revenue by 2 percentage points in continued top line recovery. Our Q4 2020 total company adjusted EBITDA loss was $454 million, improving $161 million year-over-year and $171 million quarter-over-quarter. Now I'll provide additional detail on our segments. Starting with Mobility. Mobility gross bookings were $6.8 billion, improved 15% quarter-over-quarter, but was down 47% year-on-year and a revenue of $1.5 billion, improved 8% quarter-over-quarter but was down 51% year-on-year. Revenue take rate of 21.7% declined 90 basis points year-over-year with a 40 basis point impact from a one-time driver litigation settlement in Q4 and with lower take rate geographies such as LatAm recovering faster than expected. Despite a significant headwind to our top line performance, Mobility adjusted EBITDA was $293 million or 20% of Mobility revenue, improving $48 million quarter-over-quarter.

Great. I hope you can hear me, okay? I'm actually in an Uber, I got back. A couple of questions. I guess, first...

Justin, you can ask questions from an Uber anytime.

It seems that some of your markets have started to see profitability in delivery. What factors are contributing to this? Is it due to increased scale or operational efficiencies? Are any of these markets reaching your long-term targets? Additionally, how are the trends in the U.S. market? How do your delivery and rideshare services compare in terms of market share against your public competitors?

Yes, sure. I think it's basically on delivery, the general business is scaling as we bring more restaurants onto the platform, as we bring more eaters onto the platform, more couriers onto the platform. Essentially, we get to drive network density. As the network gets more dense, essentially a courier has less distance to cover for the average delivery, and our algorithms are getting smarter in terms of routing, in terms of wait time with restaurants and optimizing every last percentage in order to drive cost per transaction efficiency, which then helps our net revenue. And also really helps carrier earnings because they are being productive a higher percentage of the time that they are on the network. That, in addition to just the business scaling up, right, if you're tripling revenue, I can tell you that we're certainly not tripling headcount or tripling overheads. So you just have revenue synergy, which is pretty beneficial. And we continue also to benefit from increases in average order size. And as average order size increases, the cost of the delivery stays the same. And again, that accrues to margin as well. So I would say there's not a single element responsible for the improvement in margins, but many elements coming together. And frankly, it's the team and the technology focused on continuing to drive hyper-efficiency in every part of the business. I think the last part I would say is that as your customer base becomes a higher percentage of your overall customer base, you've seen us increase our membership base from 1 million to 5 million, as you get a higher percentage of members, as you get a higher percentage of customers who have been with you for a period of time, your marketing costs should come down as a percentage of bookings or revenue. We're not there yet. We're leaning in. But I think that as I look forward two, three, four years on the Delivery business, there's more efficiency. But right now, we're finding a lot of new customers. And on the marketing side, generally, we are leaning in and also getting the additional benefit of new leaders through our Mobility business. As far as the trends versus other players in the U.S., I'd say that no surprise, it's obviously Lyft, who's our largest competitor, released their numbers yesterday. I would say that there are no surprises as it relates to their numbers. They're a strong operator. And I would say that generally, we see our trends roughly comparable to their trends. Although from the insurance side, we've been pretty consistent in executing well there. So we kind of don't have these surprises, so to speak. As it relates to the Delivery business, we are in the U.S., growing at very significant rates, triple-digit rates. We see January trends in the U.S. actually improving over already strong trends that we saw in Q4. We can't exactly tell how we're doing versus all of our competition in the U.S. But we think that we're more than holding our own. And frankly, there's more to do there with a real focus being on improving our restaurant selection, which I think holds significant upside for us.

Great. Thanks, Dara.

You’re welcome. Next question?

Thanks for taking my question. I have two. First one, Dara, with all the cost reductions and the adjustments you made to the business throughout 2020, and now with the Rides business kind of continuing to evolve, how do you think about sort of the long-term rides profitability now? Do you sort of remove those costs and the mix of the business continues evolving? And the second question on Uber Pass, can you share with us about frequency or user behavior of Uber Pass members versus non-members? And then you mentioned being more aggressive to drive adoption. What types of strategies have you not yet really deployed to drive that growth of Uber Pass?

Yes. I'll start with Uber Pass, then I'll have Nelson talk about the long-term P&L. As far as Uber Pass goes, we are very early in the development of Pass. I mean, we started getting into Pass in the middle of last year. We built that Eats Pass essentially on the influx that the mainline Uber Pass team had built, and as a result, you see pretty significant acceleration. I think the last time we talked to you, we had 1 million paid members and we got 5 million total members with that number expected to go up very significantly in 2021. While I don't want to give away competitive information, the frequency of Pass members is significantly higher than the frequency of non-Pass members. So going out and acquiring Pass members is, while it may be unprofitable in period. If you look at the frequency increases and apply them to some reasonable lifetime value estimates, this becomes a very, very strong profit pool for us that either we can pull to the bottom line or we can use to reinvest in other appropriate markets. With that, Nelson, do you want to talk on margins?

Yes, Brian, we haven't updated our long-term margins. However, we believe we will continue to make progress toward them. As you know, despite the COVID restrictions, we achieved 20% in Mobility in the fourth quarter. Last year, in the first quarter, we were around 30%, and we are fairly confident in our ability to reach those levels again. The incremental margins we are currently seeing are in the mid-40s compared to Q3. Much of this success is related to our ability to leverage and improve efficiencies against our fixed cost base. We are optimistic that as COVID recovery progresses and people begin to move again, we will see strong profitability in our Mobility business.

The other factor to add there is, Nelson and I are constantly managing the business based on a portfolio of profits and opportunities. And while we talk about the delivery business and rightly so, based on the growth of that business right now, as it relates to Mobility, when we look at the Germanys of the world, Japan, Argentina, new markets to get into, as we look at the opportunity to power taxi technology and hailables in general, when we think about the opportunity of shared rides when things open up, and then we look at our transit team, there are many, many growth opportunities in the Mobility segment. So I do think that we will take some of the incremental margins that we see in Mobility and reinvest in growth opportunities because we expect our Mobility business to grow at very attractive rates for years and years and years. And I think we're one of the few companies around that can afford to invest in those areas.

Brian, one last point is that you've heard us discuss our outlook for recovery. Previously, we estimated being 10% or 20% down on the path to breakeven. Now, we have more flexibility due to the actions we've taken. We feel much more optimistic about this. However, as Dara mentioned, we plan to reinvest some of that profitability. This doesn’t alter our overall full-year projection for achieving total company profitability, but it does provide us with greater flexibility. Dara and I have outlined all the actions we undertook last year, and we are confident about our position moving forward.

Maybe a few on the concept of what you've already seen in some of the markets with Mobility that have started to improve. Curious, just maybe following up on the last answer and some of the comments you made in the prepared remarks. Just what form is that taking in either stoking demand, growing or retaining the user base on the customer side as opposed to investing more heavily on the supply side and investing a deepening on the supply side in the markets that have recovered and/or have started the process of recovery? And how should we be thinking about that being applied more globally and what we should be watching for in terms of the form those investments might take?

Sure, Eric. I think that the team that we have on the Mobility side has dealt with the significant changes in volumes in Mobility at a pretty incredible rate, right? Like in Q2, we were able to drive segment EBITDA profitability. So as the markets come back, one is that we're seeing both social use cases come back. So social use cases have been a bunch of the markets that have come back are over 100% year-on-year, and workday community uses have come back. The only use case that hasn't come back is the airport. And the teams are very closely watching the balance between supply; drivers, who are coming onto the platform; and demand, which are our riders who are also coming back onto the platform. What's really exciting is that the coronavirus and everything that's happened has actually changed the nature of some of our riders using the Mobility use case. So if you look at, for example, Brazil, we are at 90-plus percent recovery in Brazil, yet 30% of our riders, who happen to be very, very high-value riders, haven't even come back. So our business is already 90% back and then 30% of high-value riders, who happen to be very high-value, they haven't even started to ride again. So we're seeing pretty attractive signs. The team has been able to balance the marketplace pretty effectively. I do think that I'm worried about one thing going into the second half of the year is, are we going to have enough drivers to meet the demand that we're going to have in the Mobility segment. But I think this team has proven itself over and over again. And as the Mobility business comes back, we will look to continue to fund some of the new use cases, hailables, transit, et cetera. But frankly, we've been doing that anyway because those kinds of long-term bets are bets that we should be pushing during good or bad times. Does that answer your question, Eric?

It does.

A couple of questions on Delivery. We've heard some grumblings about increased competition in each business in the U.K., Japan and Australia. So has your outlook changed at all for those three big countries? Are they still on track for breakeven? And is that $40 million of incremental investment, is that for each? Or is that for these adjacencies like Cornershop and Postmates, et cetera? And then the second one is Drizly, from what we understand, this is an ad marketplace, you kind of breakeven on the transaction and then the EBITDA is coming from the advertising side. So I guess, how does that fit in? And then are there any practices that they're doing that could be applied to Cornershop, Eats or the rest of Uber?

Got it. I'll let Nelson talk about the investment. But as far as the competitive environment goes, listen, the only environment we've known in Delivery is competitive. We were relatively late to the game. There were a bunch of market players who had already been, in some cases, incumbents. And I think based on the results that you're seeing, we are able to make progress, grow the business, grow faster than the category and improve margins. And I think that speaks to the power of the platform. It speaks to the fact that we have access to many, many common components as it relates to our tech platform, our identity platform, risk, insurance, etc. And it speaks to the power of the Uber brand and of teams who are local and understand the market deeply. So I wouldn't characterize the competitive environment as getting any better or worse. I would characterize it as continuing to be intense, but it's been that way since we started. Nelson, do you want to talk through the investment?

Sure. So in terms of the investment, I think we said there was going to be probably an incremental $40 million to $50 million in the first quarter, and that is for Postmates groceries as well as other adjacencies. In terms of your question on, specifically around food delivery, again, you've heard us talk in the past, we have a capital allocation model. We go through it every month. We continue to lean and invest and grow. You are right. We are in very competitive marketplaces, as Dara mentioned, but we believe we're winning in places like the U.K. and Japan, where we're seeing high triple-digit type of growth what we saw in the quarter, and we are continuing to improve the economics. And then obviously, there are some marketplaces like Australia, as you called out and others that we've called out in the past in terms of not just being very, very strong from a top line perspective, but also very good from a margin perspective as well.

And we can agree like that, but the number of markets that are profitable, that then we can use to either reinvest or we can use to increase our overall profit profile. Just the quantum number of markets is increasing and the dollars that those markets are contributing to the P&L are also improving. So those are good trends. But again, it's within the context of a very competitive marketplace. And with these kinds of category growth, I certainly wouldn't count on it getting any better.

And then the only thing I would add is that I think you heard in my prepared remarks, we will deliver against the $200 million of synergies in Postmates when we announced the transaction. And so as those synergies come in, again, it will be less in terms of the drag as it is in the first quarter. But again, as Dara mentioned, there are some areas that we will continue to invest for growth.

A couple, if I may. The first, just wanted to follow-up on Eric's question. One of the things that you mentioned are in some of those international markets, like Australia, where 30% of those super users haven't returned. Can you share a little bit of color on...

Sorry, that was Brazil, to be specific.

Sorry, Brazil. Yes. Can you share color on who is kind of driving that demand? Is it just other kind of returning users? Or any kind of cross-sell that you're seeing from the delivery side as the customer acquisition channel? And then second question, just I think you called it the super app. And as we just kind of look ahead, any updates on the road map there and the timing on how you think about integrating the different pieces into that super app?

Sure. Regarding the user base, it has become clear that Uber, as a transportation platform, is bouncing back more quickly than other transportation options in many of our markets. This is a result of the safety investments we’ve made, the technology we use to ensure drivers are properly equipped, and the confidence riders have in our platforms. We are witnessing our service rebound faster than taxis in many instances, and our volumes are recovering faster than public transit as well. This increased recovery is driven by consumer trust and the investments we are making. We are seeing growth in new customer acquisition, although this customer segment tends to be more price-sensitive. Overall, our trips are increasing at a faster rate than our bookings in many markets. There is a specific group of consumers who work remotely and haven’t yet returned, and we believe their return will provide a significant boost as they will switch from other transportation methods and our loyal customers will return too. We view this situation positively. Interestingly, we've also observed non-urban riders joining our platform for new purposes. While we've seen our core markets and outer boroughs recover, suburbs have also returned, likely because people trust us as a transportation option where they can access ample information, reflecting the success of our investments. What was the second question again?

Just around the super app and the timeline and roadmap.

I don’t want to disclose our roadmap, as that’s competitive. However, there are two key factors related to it. First, we’re expanding our categories, which will lead to a more comprehensive super app. Second, we are leveraging machine learning technology to ensure that the options presented to riders and eaters are highly personalized and the best possible. We have more data than anyone else in the industry, and we utilize it not just within Mobility and Delivery but across both areas. We believe that enhancing choice and personalization is very powerful. The 10% increase in new eaters I mentioned for Q4 was achieved with the super app being available for the first quarter on Android, so we expect that number to grow. Our focus has primarily been on Mobility and Delivery, but we see significant potential in integrating Delivery with Mobility or expanding into delivery of alcohol and groceries, which are all areas we are concentrating on.

Dara, you may have touched on it briefly on Drizly and the acquisition, but just wondering if you can help us understand more just the rationale kind of from a build-versus-buy perspective and then also a little bit more around the unit economics of the business.

Yes. For us, the decision between building or buying came down to our experience with the Drizly team, which left us very impressed. While at a glance it might seem like delivery is a straightforward service across various categories like food, groceries, or alcohol, each of these areas is quite unique. This uniqueness makes it challenging for a generalized platform to delve deeply into specifics, such as how to effectively search for products. For instance, users of the Uber Eats app typically search for restaurants first, whereas Drizly users prioritize searching for products. If someone is looking for an IPA, they start with the product search, and then the Drizly team can identify which merchants can fulfill that request considering factors like speed and price, before narrowing down to the merchant. This illustrates how two seemingly similar products actually differ significantly in practice. With alcohol delivery, there’s also the added complexity of varying regulations from state to state, which adds to the challenges given our highly regulated environment. We are impressed by how the Drizly team built their business quickly and profitably while adhering to those regulations. By combining their excellent merchant base with our large audience, we believe we can create a strong partnership. Other tech companies have successfully executed similar strategies, and we are optimistic about accelerating Drizly's growth while allowing their team to continue performing at a high standard.

Any...

Go ahead, sorry.

I was just going to follow-up and ask any more color just on how you think about unit economics and take rate in the business?

Yes, this is Nelson. As you would expect, the take rates and basket sizes are larger compared to traditional rides or food delivery. As Dara mentioned, it operates differently since it primarily involves a two-party business model. They connect local merchants, and if you haven't tried the product, you should; they do an excellent job. They are also competitive and often provide the courier service themselves, though they may use third-party couriers as well. The economics are quite favorable, and as Dara noted earlier, they are currently profitable. They are small, but we believe they have significant growth potential, although navigating the various state-by-state liquor regulations presents challenges. They have done an impressive job setting things up, and we are very positive about the unit economics and the strong basket prices.

We also think the media opportunity there is pretty interesting as it is in the Delivery space generally.

I have two questions, if I can. Just first, can you just talk a little bit more about your strategy for passing along the Prop 22 costs? Are you passing the entire amount along to customers or keeping it in California? What are you seeing kind of competitors do and customers react? And then the second one, can you talk about Uber Direct? How big of a priority is that for this year? And besides maybe grocery, what are some of the focus areas in terms of your partnerships? And anything you can share on kind of unit economics for that would be helpful.

Okay. So I'll cover Prop 22. So first of all, we believe Prop 22 was the right outcome for drivers and riders and Uber. And the price increases are manageable when compared to the 100-plus increases associated with traditional employment that we would have seen lead us to exit most markets in California. And not just us, but our other competitors as well. So for Mobility, we've increased prices to account for most of the new costs, although we've absorbed a small amount ourselves. And for Delivery, the cost impacts are larger than Mobility. And while the price increases have accounted for the majority of the cost to the customer, we have seen slightly bigger impact in Mobility. So I guess the shorter answer is we have seen some cost. We do think it's right. We've passed a fair amount on to consumers, but we've also absorbed some ourselves.

On Uber Direct, the direct business represents about 18% of Postmates' operations in the fourth quarter, which is a much smaller portion of Uber's overall business. Our emphasis on the enterprise market has primarily been related to U4B and now Eats for Business, where we have experienced remarkable growth. For instance, Bank of America is utilizing Eats for Business. This presents a significant opportunity for Uber. We initially concentrated on consumer-to-consumer package delivery through Uber Connect, which has been quite intriguing. However, we intend to follow the lead of the Postmates team for the enterprise segment, as they have developed those capabilities and established merchant relationships with companies like Apple, Walmart, and others. Given our wider scale and geographic reach, we believe we can expand that business effectively. The unit economics we have observed with Postmates are promising. We anticipate that this will contribute positively to our business and that the margins will generally be comparable on a bottom-line basis, although the net revenue margins won't match those of a marketplace business. From a bottom-line contribution margin perspective, we expect the unit economics to be roughly similar. Overall, it is an exciting and promising business, and we look forward to the Postmates team continuing to build on their efforts.

I have two questions. Nelson, can you explain the decline in the Mobility take rate from quarter to quarter? Also, can you provide some insight on how we should approach this in the first quarter? Dara, as we work through our total addressable market models, how are you viewing the growth of grocery compared to convenience and alcohol, and how do you see the differences between the U.S. and international markets? It seems like the business is currently experiencing varying unit economics by geography.

The primary reason for the change in the Mobility take rate is the mix of markets. As mentioned earlier, Brazil has nearly returned to 80% to 90% of its pre-crisis levels, recovering much quicker than the U.S. and certain parts of Western Europe. Therefore, the change is mainly related to this mix shift. In my prepared remarks, I noted that we expect the take rates to remain relatively stable in the first quarter, although there may be some fluctuations due to this mix shift. As we see further recovery in markets like the U.S. and parts of Western Europe, we anticipate a positive impact from these changes in the mix.

Cornershop has been part of our business for some time now, and the team has built this operation effectively with a relatively small amount of capital. They have established an efficient cost structure and a service that fosters significant loyalty among their customers. The grocery opportunity is substantial, especially considering that grocery delivery adoption is lagging behind food delivery. We believe there is a considerable opportunity in groceries, and the market is still up for grabs. The Cornershop team already has a strong presence in Latin America, which is a priority for us, but we also see high potential in Europe and the U.S. Our approach in the U.S. will be more focused on signing large merchants and expanding in areas that align with them. In Europe, we will take advantage of opportunities; for example, we have started very strong in France through the mainline Uber service. We are working on grocery initiatives across all fronts, and our global reach is unique. We expect to scale the business significantly beyond the current run rate of $1.5 billion. The unit economics have already been validated by the Cornershop team, so our focus will be on leveraging those strong unit economics, scaling up, and investing in merchant relationships over time.

Two questions, please. One is actually just a follow-up to that question, Dara. Maybe focusing on grocery and convenience store opportunity. So the competitive landscape seems to be prudent, and it's probably even more intensive than Delivery. Can you just speak to the competitive advantages that you see Uber having relative to your key competitors? And kind of what are the key issues that still need to be ironed out before you kind of basically, maybe accelerate the investments there beyond what Nelson just said earlier, about Q1? And then on Prop 22, it's now been challenging core by some drivers in the labor union. Does that worry you? And where are you in your discussions with policymakers in other states, I guess, especially given the new administration?

Sure. I think on grocery, I'll keep it simple. We have over 90 million monthly active platform consumers right now on the platform. And we have proven with our Mobility business being able to drive consumers to our delivery app, basically for free, the ability to move consumers and audience across this platform because they trust Uber, they trust our brand. We have all their information, and they trust us with their payment information and they trust us with their location. So we've already done it. I think we can do the same with grocery because we essentially already proven out the unit economics. We don't need to make the unit economics work; they already work. We have a global audience, and that's, we think, a substantial strategic advantage versus our competition. It's really the merchant relationships that we have to work on. In many markets, we are in great shape, and in some markets, we have to develop those relationships. On the Prop 22, we've got Tony West, our Chief Legal Officer on the line, I think. Tony, are you on? Can you comment on?

So taking that last question first, those conversations are ongoing, and we were very clear after Prop 22 that we thought it was a good model, a good base from which to have conversations about how you have an independent contractor plus model, one that allows for benefits in addition to the flexibility and independence that we know earners prefer. So those conversations are ongoing in various venues around the country. And with regard to the lawsuit, you may have seen that the California Supreme Court actually denied the lawsuit, said it was not properly brought at the Supreme Court level. We expect that this lawsuit will probably show up again in some other form in a lower court. But on the merits, it's not one that particularly concerns us.

Two questions. First, on Mobility, could you just discuss views on the business recovery over the next two years, maybe parsing out commuting versus business/airport travel? And then on Delivery, how do you view the long-term profit profile for the new verticals relative to each long-term profit profile?

Sure. I'll address Mobility, and then Nelson can discuss the profit profile. Regarding the recovery of Mobility this year, the timing will largely depend on how cities reopen. While we can't predict specific quarters, we can identify trends. We've seen that in major markets like Brazil and Australia, the business rebounds as these regions open up and will begin to grow again. This sector has a history of long-term growth and represents a more effective means of transportation. It's promising to see new customers joining our platform during these challenging times. When we combine this with our loyal customer base returning to work and social activities, I believe we will experience strong growth. I am confident that in 2022 and 2023, our Mobility segment will see significant double-digit growth. I also believe we will gain market share from other transportation options because we have shown the safety, effectiveness, user-friendliness, reliability, and affordability of our platform. I am very optimistic about Mobility trends. Additionally, I am excited about our investments in various transport modes and supporting transit agencies as they recover by enhancing taxis with our routing, hail technology, pricing systems, and more. These factors will provide additional benefits. Altogether, this creates a comprehensive platform for transportation in cities with unique scale and global reach. I anticipate that internal business travel will take longer to bounce back, possibly a couple of years, as companies have reduced it in favor of virtual meetings. However, we expect external travel, particularly for salespeople visiting clients, to recover quickly. Salespeople making in-person connections tend to perform better than those relying on virtual communication. While internal business travel may see a slower recovery, we believe that external travel and leisure travel will rebound rapidly and significantly over the next few years. We remain optimistic about the overall trends despite not being able to predict short-term timing. Looking ahead a couple of years, we see promising trends and a favorable investment, profit, and cost outlook as the business recovers.

Sure. So in terms of new verticals in Delivery, it's actually too early to comment and be too specific. But hopefully, we've proven to be pretty disciplined in terms of how we view investment. And we've been talking about it with our investors and all of you folks over the past quarters in terms of how we go through our research allocation. You've seen and you saw during the course of 2020, the number of different actions you've taken including not just acquiring, but also moving away from things that we didn't think made sense from a long-term profit perspective. We are going to continue to test and try a lot of different things. You probably heard Dara talk before about the fact that we really want to own the next hour. And so in doing so, we are trying to figure out over the course of the next few years as we move to COVID recovery, what are those things that we have the right to play, and you will see us lean in. And as you know, we've announced that we're doing some pharmacy-type things in places like New York. You've already talked a little bit about Drizly on the call. You've heard us talk a little bit about Cornershop and grocery. So we think there are a number of different verticals that you're going to see us continue to build on. And it's all about building and bringing in more people into the community. And so you hear about how many people you can act with users we have, and so we will continue to build on it. We will be disciplined in terms of the economics. And you heard on Drizly, one of the things we really like was just the basket sizes. And you've heard us talk in the past about the way you drive margin as you get scale, you have economies, you get good basket sizes, and you can generate margins. So we'll continue to do that.

I believe that our customer acquisition costs will be structurally lower than those of our competitors, all else being equal. In these early markets, customer acquisition costs are significant relative to the overall economics. I'm thrilled about our membership program, which currently has 5 million members, as it becomes increasingly powerful. We will be the only membership program offering discounts on food, rides, free grocery delivery, and free alcohol delivery. Our approach will create the most effective local membership model, resulting in a structural advantage in customer acquisition costs and hopefully enhancing customer retention and lifetime value. Additionally, we have established a payments ecosystem and an identity ecosystem, with teams in all 180 cities. This should lead to more efficient overhead and operational costs compared to other players. With better capital management, improved lifetime value, and a more attractive margin profile, we are poised for success just like we have been in Mobility and food, and we will achieve similar outcomes in Delivery.

All right. I think, Balaji, that was the last question, if I'm correct. Is that right?

All right. Great. I did want to say a special thank you to the Uber teams. 2020, I think, has been a super difficult year for the world. It's been a really difficult year for us as a team, but I'm just incredibly proud of how the team stood up. We asked ourselves a question like how can we help our community first, how can we help our drivers first, our couriers first? And the team really, really stepped up this year. We've got a huge amount of work ahead of us, but you really stepped up. So thank you for that. As far as our investors go, we will talk to you next quarter, and thank you for your interest and thank you for your investment.

Ladies and gentlemen, this concludes today's conference call. Thank you for participating. You may now disconnect.