Thank you, Angela. Thank you for joining us today and welcome to Uber's fourth quarter 2022 presentation. On the call today, we have Uber CEO, Dara Khosrowshahi and CFO, Nelson Chai. During today's call, we will present both GAAP and non-GAAP financial measures. Additional disclosures regarding these non-GAAP measures, including the 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. As a reminder, 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 words such as believe, expect, intend, and may, and 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 issued today as well as risks and uncertainties described in our most recent annual report on Form 10-K for the year ended December 31, 2021, and in other filings made with the SEC when public. We published our quarterly earnings press release, prepared remarks, and supplemental slides to our Investor Relations website earlier today. And we ask you to review those documents if you haven't already. We will open the call to questions following brief opening remarks from Dara. With that, let me hand it over to Dara.

Thanks, Balaji. Uber delivered our strongest quarter ever in Q4, with gross bookings up 26% year-on-year on a constant currency basis. Adjusted EBITDA of $665 million exceeded the high-end of our guidance for the sixth quarter in a row, and we delivered a strong incremental adjusted EBITDA margin of 12%. We reached several new milestones this quarter. We crossed 2 billion quarterly trips, and our Mobility consumer base exceeded 100 million for the first time in our history. At the same time, we're laser-focused on making Uber the best platform for earners, with over 5.4 million people earning on Uber around the world, another all-time high. Put simply, the Uber platform has never been stronger and we're making great progress building on our platform advantage through advertising and membership. Despite any macroeconomic uncertainty, I'm more confident than ever in our prospects. We're entering the year with great momentum. Mobility trip growth is accelerating and Delivery remains resilient. But we are far from complacent, and we'll continue to hold ourselves to high standards of growth and profitability to deliver yet another record year in 2023. With that, let's open it up to questions.

Angela, please queue up the questions.

Your first question comes from the line of Eric Sheridan with Goldman Sachs. Please go ahead.

Thanks so much. Maybe two questions, if I could. Dara, as you think forward to 2023 and you have aligned an array of products between Delivery and Mobility, how should we be thinking about Uber One as a subscription product? And elements of either leaning in behind growth and pushing adoption of the product to create a wider moat around the collection of assets you have versus maybe just letting virality build around the subscription product. How do we think about active versus passive approaches to driving the subscription element of the business? And then obviously, one of the more recurring themes during earnings season has been elements of continued efficiency and cost cutting within organizations. You guys have laid out an incremental margin strategy, but how should we be thinking about your broader views on efficiency inside the organization, especially with respect to some of the corporate costs inside the company's cost structure? Thanks so much.

Yeah, absolutely, Eric. So in terms of Uber One, we think Uber One is a terrific membership program. It's the only one. If you think about the Uber One benefits, we think about that as content. So Uber One has the best content in terms of Mobility subscriptions and movement subscriptions compared to any other similar subscription. We have over 12 million members now, with membership having nearly doubled for 2022, which is terrific. And our efforts here are quite active. I mean, we are pushing Uber One. You'll see it on our delivery services. You'll see it on our Mobility service. And we are actively continuing to innovate in terms of the benefits that we offer, and the results are pretty spectacular. Members spend monthly 4.1 times the amount that non-members do on a monthly basis. So it creates great stickiness. And member retention is 15% greater than non-member retention. In the initial months in which we acquire a member, that member is actually loss-making because the discounts that we offer are greater than the in-period value of that 4.1x. But over the lifetime of the member, the membership creates a significant moat and a growth opportunity for our business. You will see membership counts continue to increase. And you'll see the percentage of our bookings coming from membership continue to increase as well. Globally, about 25% of our gross bookings come from members. In the U.S., for example, 40% of our Delivery gross bookings come from members and it's a moat that we will continue to actively develop. Nelson, do you want to talk about cost?

Sure. As you may remember, our pivotal moment took place in 2020 when our Mobility division accounted for more than 85% of our gross bookings. By April 2020, that business had declined by 80%. At that time, we took decisive action, cutting over $1 billion in costs from our operations, shutting down several businesses, and regrettably reducing our workforce by over 20%. Since then, we've prioritized efficiency. We aimed for EBITDA profitability in 2021, which we successfully achieved. Last year, we set a goal to become free cash flow positive, and again, we met that objective. This year, we're focused on reaching GAAP operating profit later on, and we anticipate accomplishing that as well. We've succeeded in this goal because we've concentrated on managing costs effectively. Our headcount will stay mostly flat this year. In the last few years, our headcount has increased by about 10%, excluding the Freight business. Our gross bookings have grown from $62 billion in 2019 to $115 billion last year, illustrating our growth and efficiency. We have primarily hired in tax and selectively added sales staff in the Delivery sector, which has proven beneficial. Our aim is to drive the incremental margins we discussed at last year's Investor Day, and we've exceeded our profitability targets. The year has started off strong, which is why we raised our guidance for the first quarter. We will keep utilizing our cost base to drive the incremental margins that you are witnessing.

Great. Thank you.

Next question?

Your next question comes from the line of Brian Nowak with Morgan Stanley.

Thanks for taking my questions. I have two. The first one on frequency and engagement on the platform. You've made really good progress. Now you're, I think, 5.4 trips per month versus about 5 last year, but still below, I think, the peak levels that Dara used to talk about in 2019. I guess the question on frequency is, where have you made the most progress getting that frequency per rider up? And how do you think about the key drivers throughout '23 to sort of get that back to 2019 levels and beyond? The second one is on the incremental margins. The Delivery incremental margins continue to deliver above your Analyst Day targets. Anything we should think about that's sort of one-time in nature or different competitive dynamics as to why the incremental margin in Delivery shouldn't stay at these elevated levels as we go throughout 2023? Thanks.

So I'll handle the second part of that. So if you think about the incremental margins on the Delivery business, yeah, we've been very pleased with the throughput. It's been about over 20% if you think about last year. It's really been driven by three areas, right, maybe four. But we focused on efficiency in the marketplace. We have benefited from the fact that a lot of the players are trying to follow our path to profitability, especially the private companies as external money has become harder to come by. That benefit has certainly been there, and we believe it will continue. Our own technology gains are really improving the efficiency of our cost per transaction. Recall, we talked about it a fair amount in our third-quarter call where we saw a little bit of a step function improvement there. We expect that to continue; that's on batching and related efficiencies, and we've seen the benefits of that. Frankly, we've augmented the margins on new business. Our Ads business continues to outperform the targets that we laid out. The combination of those three factors is really driving the incremental margins that you mentioned. We don't necessarily see those changing much. The pace of improvement will certainly slow down.

In terms of the frequency of trips, there are really four factors that I would point to. First of all, we just talked about our membership program. As we increase the number of members in our member base and coverage of members who tend to buy more frequently, just mathematically, you're going to drive frequency up. Second for us is the power of the platform. We are constantly cross-promoting between Mobility and Delivery, essentially sending free or cheaper traffic from one platform to the other in a personalized targeted way as well. You should expect more opportunities for us to upsell and cross-sell in an intelligent way driven by AI and machine learning. The third is the breadth of the product that we offer. For example, with Mobility, with Reserve and low-cost offerings, Reserve has been a huge shift for us. We estimate that 50% of Reserve trips are actually incremental; they wouldn't have happened otherwise. The other 50% are upsell, so to speak, more profitable than on-demand trips. Grocery is another example of new products that we are adding with higher selection, driving higher frequency as well. Last, but certainly not least, is the reopening. The shift of spend from products to services is benefiting us. There’s a tailwind in terms of people getting out, shopping more, dining out, etc., and that is helping our business as well. It's really membership, platform, new products, and then the macro environment that's helping frequency. We expect to see that frequency of 5.4% continue to increase over time. There's no reason I see why we shouldn't hit or exceed our all-time highs over time.

Great. Thank you both.

You're welcome. Next question?

Your next question comes from Ross Sandler with Barclays.

Hey, guys. Just a question about the upfront fare and upfront destination technology that you shipped. So you noted in the letter that you saw about a 4% increase in conversion. I guess just some context around that. How does this innovation compare to others that you've shipped in the past in terms of the magnitude of overall impact? Looking forward over the next couple of years, do you see other technology updates that could be as impactful as what you've done with upfront? Thanks a lot.

Ross, it's very difficult to predict impact. But I will tell you that the upfront destinations and upfront fares has been one of our largest releases ever. It takes a huge amount of work in the background in terms of training models, testing it out in various markets to ensure we got it right. It was the number one requested feature by driver partners. They want to know what the upfront fare is going to be. They want to know what the destination is going to be. It's an important part of the information that drivers process to decide whether or not to accept a particular trip. It has been a home run for us in terms of the number of trips we can drive through the marketplace or improve throughput in the marketplace and reduce cancellations because drivers know upfront whether to accept or not. This is a feature that we are now expanding globally. We launched it in the UK outside of London and, for example, we see a much higher percentage of fulfillment rates than we did previously. We're carefully rolling it out in London, and we will continue to do so market by market. It’s difficult to predict what our engineers will come up with next, but we're very, very happy with this feature. I would never underestimate the power of our engineers at Uber, so hopefully, we will have another hit like upfront fares coming up.

Next question, please?

Your next question comes from the line of Mark Mahaney with Evercore.

Thanks. Two questions, please. You talk about the impact of these newer Mobility products. Which of those, in particular, would you single out as having the most impact? And then just talk about the timing of rolling out upfront fares and destinations globally. Thank you.

Yeah, absolutely. I'd say the biggest one for us has been Reserve. If you look overall at the portfolio of new products that we've introduced, those new products accounted for about $6 billion of gross bookings for the quarter, which is about 20% of our growth. That portfolio is growing at about 100% year-on-year, so it will continue to be a larger and larger portion of our overall bookings. Reserve contributes over $2 billion; it is a terrific product, especially as travel opens up. Typically, if you think about traveling to and from the hotel and then coming back, there are about four trips that are available to us, and we capture 1 to 1.5 of those trips. There's still a significant runway for us to continue to grow Reserve. I'm also very, very interested in our low-cost product, UberX Share, the opportunity for two or three passengers to ride together. It's more efficient for the marketplace and better for the environment. Our dream is to have all of our trips shared in an electric vehicle; this would be a significant benefit in terms of congestion and environmental impact. Last but not least are hailables, such as two-wheelers and three-wheelers, especially taxis. There are over 20 million hailable vehicles in the world and about 4.5 million taxis. It's a huge base of drivers and vehicles that we think Uber should power, as we are the leading source of on-demand movement globally. Ultimately, we want to wire up every vehicle, whether it's a car, delivery vehicle, truck, van, or bus, available to move people or things around the world, and taxis and hailables play a big part in this.

Next question, please?

Your next question comes from the line of Justin Post with Bank of America.

Yeah, thanks for taking my question. Maybe one for Dara and one for Nelson. On the outlook for '24, I think there's been some headwinds from FX and some other things. Any updates on that, and maybe some of the puts and takes as you think about that, that you provided last year? And then, Nelson, a couple of the cost issues maybe in the quarter. The New York minimum driver fee changes and insurance costs, could you cover those and how you're thinking about the potential impact in '23? Thanks.

Well, maybe I'll try to answer both of them. In terms of FX, we do give you constant currency numbers. FX has gotten better right now. We don't necessarily put that into our '24 as we're thinking about it. We laid out guidelines last year, as you recall, and we think we've over-delivered against it, particularly on the bottom line, incremental margins, and profitability. Our focus is to ensure we continue that path. We are focused on delivering GAAP operating profit at some point this year, and we think that we will continue to do well versus the targets we laid out. Regarding some of the costs, we must continue to mitigate those. Specifically on New York, a lot of it just has to do with transparency and making sure that the rule set is correct. The new 6% will get absorbed into the marketplace. As for insurance, that is one line item where we frankly haven't made progress on in terms of reducing the cost per trip. Much of it relates to what's happening more broadly within the insurance industry as that market tightens. The insurance companies themselves are facing challenges operationally as to how the actuarial work is conducted. The cost to repair a vehicle has changed significantly, as evidenced by the rearview mirror that used to cost $70 is now $700 with new technologies involved. Our earners are part of this ecosystem. We take our charges as they come; however, insurance remains a cost item that has not been optimized yet, and Dara invests time with me and our teams on how to work through that. Overall, we've done a pretty good job managing costs across our P&L, and we will continue to focus on that.

I realized that I neglected to answer Mark's second question in terms of the rollout of upfront fares and destinations. This is a very complex product that we're rolling out, and we have to ensure our models are correctly trained. We are currently rolling it out in the UK and will continue across major markets as appropriate. I would expect that upfront fare and destination will be deployed globally by the end of the year in markets where it's appropriate. Depending on regulatory issues, we may not manage it in various countries, but you should expect a full rollout by year-end.

Next question, please?

Your next question comes from the line of Doug Anmuth with JPMorgan.

Thanks for taking the questions. I just wanted to circle back on the Delivery margins. Can you help us, Nelson, perhaps split out some of the improvement across network efficiencies, advertising, and marketing incentive optimization?

Look, we're focused on delivering the incremental margins we laid out. We've certainly delivered above what we've discussed long-term, and we expect to continue to deliver against the 7% total company target while identifying efficiencies across the board. What I can tell you is that some were very deliberate actions we took to ensure the marketplaces run more efficiently regarding incentives. Some relates to the technology we deployed in the first half of last year, yielding benefits in our cost per trip. As we've discussed, Ads is an easy example where we expect to see continual growth. We'll continue to run efficient marketplaces, balancing growth with margin and profitability carefully. I don't want to get too prescriptive in terms of what we're doing on specific margins.

Regarding Ads, we've crossed $500 million in annual run rate, driven by an 80% year-on-year increase in active advertisers. However, only 25% of our Delivery merchants are currently active in our auctions, providing substantial upside potential for our advertising business. We've committed to reaching $1 billion in revenue by 2024 and are making great progress toward that target. Expect to see more upside opportunities in both our Delivery and Mobility businesses. On Mobility, we've seen really encouraging signals related to Journey Ads in our app, with over 3% put-through rates and CPMs at $45, impressive figures. We have a new class of advertising we're excited about involving car tops and tablets, which aims to increase drivers’ monthly earnings. Our advertising networks will run these products, ultimately benefiting the entire marketplace.

Thank you both.

You bet. Next question?

Your next question comes from the line of Deepak Mathivanan with Wolfe Research.

Great. Thanks for taking the question. So first, on the weekly active user penetration, it seems like in some markets like the UK, you're already above kind of the pre-COVID levels, but it's still below in large markets like the U.S. Is there any broad reason for this lag on the user side? How should we think about this? And then for Nelson, as we go into the kind of annual comp cycle, I’m obligated to ask the SBC question; how should we think about the target compensation levels in 2023? Any high-level color you can share on your thoughts there would be helpful.

I'll start on the user trends, and then Nelson can discuss SBC. The reason for the U.S. trailing is really the West Coast. Look at the U.S. as a tale of two coasts. Miami, New York, Atlanta, Austin, Houston, and all contribute significantly; most of the U.S. is at pre-COVID levels. Our neighbors to the north, Canada, are above 2019 levels as well. However, the San Franciscos, Seattles, Portlands, and Los Angeles have been trailing, falling behind. Thus, I wouldn't generalize the U.S. The non-West Coast looks great. Daily metrics in U.S. Mobility value approaches pre-COVID levels. All the trends are moving in the right direction, with West Coast trailing behind other areas globally.

Regarding stock-based compensation: We are looking at all parts of our cost structure, including employee compensation. There’s significant noise, especially on the West Coast around stock-based compensation. We expect our employment levels to remain stable this year. Focusing on performance management across our businesses is crucial, evidenced by actions taken in our Freight business in January. You won't see any demonstrable change in stock-based compensation, as it takes time to build that out. However, we will manage our headcount very judiciously. Since we're focusing on GAAP operating profit, it is part of our overall calculation. With the progress made on EBITDA and free cash flow, you can envision the attention this line will receive as we move forward.

That's very helpful. Thank you both.

Your next question comes from the line of Lloyd Walmsley with UBS.

Thanks. Two, if I can. First, just on Uber One. You talked about a strong pickup in spend, and clearly, there's a nice LTV that covers CAC pretty quickly. But once you're through that kind of start-up cost, what would contributions look like for Uber One members versus a non-member? How much of a trade-off exists in margin versus profit dollars in that plan? Secondly, do you think the driver supply benefits at all from slower economic growth? If we see some of that or eventually experience that, how do you think about pricing and take rate on the Mobility side if you get better supply?

Look, Lloyd, I don't want to disclose too much about Uber One since that information is proprietary. However, if we get an Uber One member who sticks around for a year, that member will generally be unprofitable. It’s really in the second year where that member becomes profitable, which reflects trade-offs between frequency, average order value, and margin. We're actively developing that trade-off and increasing Uber One penetration. Another side benefit of Uber One is that a growing portion of our merchant base in our Delivery business is willing to pay for advantageous exposure to our most valuable members through Uber One. As for driver supply, it remains very healthy, with drivers up 35% year-on-year, and new driver counts up 34% year-on-year. Many drivers cite inflation as a factor they consider; about 70% of new drivers joining our platform aim to earn more money in an increasingly inflationary world. Hence, the economic environment could be a tailwind. In markets where we’ve seen economic downturns in the past, such as Mexico and Brazil, we have found weaker economic conditions help boost our driver supply, contributing positively to trip volumes. Additionally, we have been focused on improving the driver experience, allowing for quicker earnings opportunities and upselling drivers to receive earnings of $35 per utilized hour. These levels are very high, with driver earnings increasing by 37% on a year-on-year basis in constant currency. Overall, the combination results in a healthier marketplace with lower surge levels—in January, for instance, surge levels in the U.S. were under 20%—and improved ETAs down to approximately 4.5 minutes. So overall, the marketplace is becoming healthier, while drivers earn well at the same time, which aligns with our goals.

Okay, thank you.

You're welcome. Next question?

Your last question comes from the line of Ron Josey with Citi.

Great, thanks for taking the question. Dara on Delivery, we're constantly discussing or fielding questions on the demand side here, just given macro challenges. From what we're hearing on growth in January for Delivery and the expectations for acceleration in February and March, you mentioned habitual in the letter. How much of this growth here in Delivery is due to category adoption, better convenience, etc., versus Uber-specific factors, as you mentioned, where competition isn’t as strong?

Overall, the Delivery category has shown resilience post-pandemic, certainly more so than many other categories that benefited during the pandemic. That said, we are growing faster than the category globally. In Europe, for instance, we see many competitors pull back from levels of unhealthily high spending in the past. While this may have made sense for top-line growth, it made little sense concerning the bottom line. Our Delivery business benefits from our platform's power aided by our Rides business, significantly reducing our cost of acquiring new eaters compared to spending on Google, Facebook, and Instagram. Our membership structure encourages higher frequency, spend, and retention, which effectively adds to recovery. Additionally, our optimization efforts on product costs and the advertising business that is beginning to scale are proving beneficial. Together, all these factors are enabling us to outpace the category, which remains more resilient than others. We anticipate this trend will continue going forward.

Thank you, Dara.

Thanks, next question?

Your next question comes from the line of John Colantuoni with Jefferies.

Hi, thanks for taking my questions. So Mobility continues to deliver impressive bookings growth. Could you help give us a sense of how shared gains are playing into that versus broader recovery in category usage post-pandemic? Assuming some share shifts are seen, are you starting to notice evidence that the investments you've made in driver supply technology and Uber One are allowing you to leverage your network effect and create a potential lasting competitive advantage that could drive ongoing share shifts in certain markets? And lastly, a question about freight, bookings, and EBITDA were a bit below expectations, could you discuss how that compared to your expectations in the fourth quarter and some of the factors that may have influenced that discrepancy?

The first thing I’d state, John, is that I have yet to see a permanent competitive advantage in my lifetime. We don’t expect one either. Our advantages concerning Mobility are derived from increasing category position—particularly in the U.S., UK, Australia, etc. We are seeing our competition in France expend excessive capital without seeming proper logic, resulting in our ability to regain ground. Spending money isn’t a strategy; it might have seemed relevant when the only metric was how much capital you could generate. While competitors are entrenched in that spend more revenue strategy, we prioritize efficiency, technology like upfront fares and destinations, and maximally leverage our platform and membership to establish our category position. We are now experiencing a beneficial feedback loop: More driver supply increases demand for trips, which in turn generates more data enabling targeted rider-driver matches on-demand and reserved orders. While we shouldn’t take success for granted, the trends over the last 18 months have been positive.

Regarding freight, yes, we’re observing the same trends you are. No one is more disappointed in the fourth quarter of freight numbers than us. The business is resilient overall. Since acquiring Transplace in December 2021, we spent much of last year integrating the business. Uber Freight has effectively leveraged our brand and technology to drive growth, primarily among national brands. We need to implement a more focused approach towards small and mid-sized shippers, making ongoing adjustments to our organization. We expect traction in this area but acknowledge that a cyclical trend within the broader industry is likely to impact our growth moving forward.

Operator, we will take our last question now. Thank you.

Your last question comes from the line of Nikhil Devnani with Bernstein.

Hi, thanks for taking my questions. Just a couple, please. It looks like the leverage on promotional spending has been quite good. I think it's the third quarter in a row of sales and marketing dollars stepping down. How much more efficient can that line get? As a follow-on to that, when you think about your ambitions regarding gross bookings growth, do you expect to ramp promotional spending down the road, or do you feel comfortable about growing the business while getting leverage against that item?

I’ll start on the first one, and Dara can tackle the second half. We aim to deliver and balance our growth and efficiency; we’ve laid out a target last year and will achieve or exceed it. There may be instances where we strategically invest more into specific markets, and reasons exist for doing so. However, I wouldn’t say we aim for super efficiency in a quarter, but still have growth avenues available. Right now, we focus on maximizing growth, where revenues equate to the bottom line efficiently.

In terms of ramping S&M to drive top-line, the way I’d describe our activities is just as Nelson explained. We want to leverage all our cost lines—the cost of sales and marketing costs, and operational costs, maintaining lean operations tends to yield better strategic investments. This opens avenues for growing selectively based on market demands, which includes investments in advertising and technology. Our ad strategy, such as the Super Bowl ad for Uber One, proves the kind of focused strategies we can employ. Overall, by driving efficiency, we can strategically invest in key geographies or products. If we keep the drive towards efficiency in every part of our business, this opens avenues for us to organically invest and achieve lasting results that align with investor expectations.

Appreciate the color. Thanks.

All right. I think that's it. Thank you, everyone, for joining us. Huge thank you to the Uber team for delivering another great quarter and deep appreciation to our earners, without whom none of this would be possible. 2022 was a really, really good year for the company, and we're looking for 2023 to be even better. Thank you, everyone.

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