Uber CEO Dara Khosrowshahi: 22% trip growth, $9.8B free cash flow, and autonomous vehicles are additive not replacement

and support, giving employees instant resolution for access requests and password resets. And without further ado, I believe we have Dar Koshari from Uber in the Reream waiting room. So, let's bring him into TV Ultra. Dar, good to meet you. How are you doing?

Nice to meet you. I'm doing great. Thank you. We just had earnings and they were uh really strong, although the market is going crazy as we speak. So, who knows?

Well, let's let's start there. break it down for anybody that that uh wasn't paying attention to your guys's fantastic quarter.

Yeah. What happened and maybe why did you uh have this particular quarter?

So, um the quarter ended a great year for us. Uh in the quarter we announced uh trip growth of 22%. Um we're now at a run rate of 15 billion trips. Well, there you go. Uh 15 billion trips

uh for for the year. That's 40 million per day. So the business is really scaling. Gross bookings growth actually accelerated. You know, usually as companies get bigger, they slow down. We're actually accelerating.

Uh profits is defined by Ebida. We're up 35% on a year-on-year basis. And then we threw off almost $10 billion of free cash flow, 9.8 billion.

Uh up 40% yearon-year. So the business is really scaling. And at the same time, you know, you've got the mobility business that's growing at really healthy rates, 19% and then Uber Eats

that really we built like entirely organically now is uh over a hundred billion run rate uh solidly profitable and that grew 26% in the last quarter. Really accelerating nicely since the beginning of the year. So the business actually looks really really great. And then obviously we've got the onset of autonomous and autonomous vehicles and we kind of in our investor presentation we had to lot a lot to say about autonomous which we can definitely get into if you guys want to.

Yeah. Be before we get into that like what what are the key drivers outside of obviously the business is you know uh maturing. You've been in the driver's seat for long enough now to really start having clearly a tremendous impact but like what's really what what what's driving you know this acceleration?

Yeah. Yeah. So I tell you one in terms of uh the business is our business is really supply le. So the more cars we get on the road, the more restaurants we have on the platform, our product gets better. There's uh the the conversion of the product. You know, when you open up your app, your ETA uh is lower, you have more restaurants available.

So the basically we are supplyled business and we continue to add supply onto the platform. We've got almost 10 million drivers and couriers on the platform, well over a million merchants, and first it starts with supply and our selection and supply just keeps getting better and better and better. I I'd say that's number one. The second is we're the only platform out there that has both rides and eats and it's global as well.

And that allows us to more deeply embed with our customers. About 30% of our eats uh first trips come from riders, so to speak, and we can promote crossromote from the rides platform to the Eats platform. If you open up your Uber uh Uber app now, you see Eats being offered. You'll see grocery being offered. If you're looking to go to a restaurant uh for dinner, we'll also offer that restaurant for delivery as a reminder that it's available for delivery as well. So, this crossplatform kind of promo that we can do, it's just no one else is doing it. um it's taken us years to perfect it because any pixel that is promoting let's say Uber Eats on the Uber app, it can get in the way of your experience on Uber. So you have to be very careful to have an optimal experience for your base business while at the same time nudging you over to the other product, you know.

Yeah. Was there a period where it just felt like you were running two very distinct businesses and now it feels like they're actually coming together and it's working?

Totally. and and and you know my philosophy is that when you're building businesses that are younger, you want kind of full stack teams. So for example, what our technology team, we had a dedicated technology team for eats. As that business got more mature and larger, we combined our tech teams, we combined our product team so that you could build one core infrastructure, one matching stack, for example, bring the customer data together and kind of create more commonality between the businesses. Now, for example, uh the my I promoted our head of global mobility, Andrew McDonald. He's been here for 12 years. He's now president and COO. So, he's running one P&L. And essentially, we can trade off between benefits on one business for the other business to not to kind of grow the whole. And there's no one else who again has the breadth and depth of offerings that we have. And then on top of that, we've got the Uber 1 membership program. Mhm.

We got 46 million members. Close to 50% of our gross bookings come from members.

Uh and that membership provides a real lock in. Members spend three times more than non-members. Customers who shop on both eats and rides spend three times than the ones who don't. And so it's that combination of the whole platform coming together that lets us grow fast. It lets us accelerate. It lets us gain category position versus the others while at the same time having a lot of profitability.

What's the biggest uh lesson from Expedia that you've been able to apply to Uber?

Yeah, it's a great question. I I would say um and it was a mistake at at Expedia was not recognizing that the business is supplyled. Uh so with Expedia, we were very much focused on the customer and bringing in more audience so to speak and then following with supply.

Uh and I think one of the regrets and you you have to kind of learn your lessons as a CEO. It's like we're humans too. We make mistakes too. We learn as well is that Booking.com was really focused on more supply in Europe for example. And because they had more supply, they were able to build a more compelling platform in Europe than Expedia was. And so I took some of those learnings and then of course, you know, some tips from the OG Uber folk including Travis as well, that this is a real supply business. And so it was to some extent learning from my past mistakes and then making sure I don't make those mistakes again in the new job, so to speak.

Yeah. Uh I remember when uh Uber came to LA, the push for supply on the platform was so aggressive that I was getting directly targeted. Hey, do you want to drive for Uber? I was employed at the time. I wasn't signing up, but I haven't seen those ads. Is that a function of better targeting or do you just have a more natural driver acquisition flywheel? Like what's working on the supply side in increasing the supply of drivers these days? I think supply is uh definitely cyclical. So in the early days obviously it was kind of a new thing. No one knew what gig work was. So Travis and team had to introduce it to drivers. Had to pull them off of you know driving for carry limousines or some of the traditional players onto the Uber platform.

It was very ads everywhere.

Yeah. Totally. And then we had to kind of grow

uh the the overall marketplace as well because there are way more Ubers on the road now than taxis. uh etc.

Um but we have had kind of supply shocks in the past. So for example with CO one of the great things about CO as it related to Uber was terrible event obviously was that we were able to move our drivers who are driving for Uber to make money on Uber Eats.

But then after CO we thought when the world would open up everyone would get back to driving cuz why the heck not. It turned out that a lot of our drivers rightly so they were worried about their health. They didn't want to catch CO. I remember I was talking to a driver and I'll never forget this line. I'm like, "Well, why don't you go back to driving people because you can make more money that way." And uh she said, "Well, big a Big Mac isn't going to give me CO, you know, it's it's so safety was a big issue." So, we had to reinvest in supply,

okay?

Uh very aggressively postco. We did so faster than our competitors, which which helped us. Now we have a pretty finely tuned machine

in that the retention of drivers is really high.

On average um drivers are driving more supply hours. They're spending more time on our platform because they can drive, they can deliver, they can shop, they can even do

um uh they can judge AI algorithms. Now we have a group called Uber AI solutions where they can you know look at algorithmic answers and decide which is better etc. There's much more to do on the platform. So the position that we have in supply is pretty strong, but believe me, we're investing. I guess we figured out that you guys are more consumer uh customers than drivers and um good for algorithms for that.

Good work on the marketing side. Uh everyone's been able to make the bare case for traditional enterprise software over the last year as models have gotten better. There's been some chatter about uh kind of risk to marketplaces with agents. I'm not necessarily bought into some of those theories yet. You know, you're operating this, you know, massive network of drivers and and supply and it's just a lot more difficult to sort of No, no, no model is going to oneshot that uh anytime soon.

I I'm expecting to go to my terminal and it will call people randomly in my neighborhood and ask them if they want to give me a ride. That's the future I want to live in. Uh anyway, so so uh we're we're not really quite seeing that yet, but how are you thinking about kind of risks and opportunities with uh with a more agentic kind of internet and consumer product?

Yeah,

I I think that if you have unique fragmented supply and the global scope that we have,

then you are safer than let's say others who might not have unique supply or they don't have the fragmentation of supply that we do. like we've got over 9 million uh couriers and drivers on our platform. That's very difficult for anyone whether human or agent to replicate as well.

So we are working with agentic platforms. We've got a great relationship for example with open AI

and so you will be able to call an Uber using chat GPT. One of the things that we want to do is we want to get our brand in front of you as well. So once you call it, for example, it's an Uber map, so you can track your car, do all that good stuff. So I think like companies like ours who do have, you know, we're in over 70 countries, we set everything up. The membership program is very, very deep and embedded. We have a fragmented supply base that's going to be very difficult for anyone to recreate. I think we can rest easier. And for me, I want to make sure that my brand gets out to the customer. And at the same time, I'm building those experiences within the Uber app. So, a driver can interact with the app using voice. They can they have an agent who can help them out if they don't know why they're not making more money. Um, we've got agents for ordering. We've got agents for ordering your rides, etc. So, I think as long as the experience on app doesn't trade trail the experience off app, I think off actually can ultimately for players like us expand the the marketplace. And that's definitely something that we're looking at.

How are you thinking about the next iteration of Apple Intelligence rolling out? We were talking to Mark German and he was saying that we've been able to call Ubers from Siri for I think he said a decade or something like that. It's been there. Uh obviously I'm sure you have the numbers and there's probably a lot of people in nominal terms that are using that functionality, but it feels like it hasn't broken through, but it feels like it's about to with the next iteration of Siri and Apple intelligence. is that that's lower friction. That feels good for you. At the same time, if I don't open the app, maybe I don't go and do other things and I lose a little bit of connection. What how are you seeing that trade-off?

You know, my my view is um don't think too hard and build great consumer products. And so if someone wants to if someone wants to get us through Apple intelligence chat GBT or they want to come to the app um I don't care you know as long as as long as we're we're we're getting used and we're getting used often. Now

yes there are considerations we have a $2 billion advertising business

if that is subsumed underneath an Apple intelligence

um that could hurt our advertising business. But for me, like if if the north star is build out consumer experiences that are absolutely first rate and then we have this the multi-product category and the membership underneath, I think the economics can kind of take them uh take care of themselves over the long term. And if we make a great app, you know, like people will keep coming to that app. And and I remember when um uh Google Maps was at some point amalgamating Lyft and Uber content, people were worried about that. You talked about Apple intelligence. Our app is pretty damn good. And my job is to make sure that it remains, you know, leading and keeps attracting audience because ultimately that is the most engaged audience that you can have that direct audience. Yeah, that makes a lot of sense.

Yeah, I mean with food with the benefit with with with the Uber Eats business is like I don't really want plain text experience ordering food in chat and then yes, you know, Chad can generate images and stuff like that, but

it's several jumps and eventually you're like, well, I can just pop over to the app. Uh we got to talk about autonomy. Uh I'm sure uh I'm sure you spent a bunch of the earnings call on that note, but what what were the highlights? What should people be paying attention to? I think the the biggest highlight um and and we have a big section in our supplemental materials that I that I encourage folks to look at is that what we're seeing with autonomy is that it's a net positive in terms of demand into the ecosystem. So there's one view of looking at it, hey, autonomous is just going to replace humans and you know robot cars don't get tired, they don't get distracted, they can work 20 hours a day, they do need to get recharged and clean, etc. So they will replace the workforce so to speak that I think a lot of people are talking about in other markets as well. What we're seeing in markets in which we have launched autonomous is that actually those markets are growing faster. There's a new audience segment that comes in our new customer acquisition. You know overall now we have 200 million consumers coming to our front door every single month. Uh growing 18% growing pretty quickly. But in the markets in which we have AV, our audience growth is actually accelerated and we're gaining new customers because it's a really freaking cool product. So one is that we've always had the hypothesis, hey, mobility is a trillion dollar marketplace, but autonomous can add more to that market. It can be trillion dollar plus or another trillion dollars. And the early signal is that yeah, it is actually additive. it's not um replacement only. The second I I would say big finding if you want to call that for us is we've always had the hypothesis that autonomous on our platform is going to take advantage of the platform to be much more h uh much more utilized than offplatform. You know like to some extent a car is a box with wheels.

Um the autonomous car is super expensive. So, you want to keep it running and you want to keep it earning money for as long as possible. And we're finding that the utilization of those cars on our platform is 30 plus% higher than cars that are not that kind of are building their own platforms. That utilization bonus is hugely important as it relates to the value of our platform. And so, we're seeing that come through too. So, one is it's additive, which is great. And the platform is doing what it's designed to do which is bring more business to a driver where that driver happens to be human or happens to be a robot.

Yeah. So you're saying so the unit economics of uh AV provider can actually be better if they're if they're adding it to the Uber platform.

Yeah. I mean that that's how we have to earn our take rate, right? It's it's uh if we're not driving higher utilization, we won't earn our take rate. And right now the utilization premium that we're seeing um suggests that our take rate is you could argue too low but we have a very strong case to be made for the take rate of the platform.

Is there any role for Uber in the rest of the self-driving car stack from cleaning to service to storage. There's a lot of these things that could be handled and they're currently handled by the sort of OEMs and the big autonomy companies. other

you could imagine in the future uh it being much more distributed but does it go full uh individual uh maintenance and whatnot.

Yeah. Yeah. Totally. So if you think about the the AV stack,

yeah,

there's the distribution, you know, that could be Uber, it could be Whimo, could be Tesla, right?

Then there's a driver and the driver we're partnering up uh with a driver. Then there's an operator and the operator has depots, is cleaning the cars, recharging the cars. We have a network of uh fleet partners now on a global basis

because about 15% of our supply is provided by fleets today. and you know they rent out cars to drivers. Yeah.

We're taking those fleet operators and we're saying hey we want you now to operate AVs. So that those fleet operators in partnership with us we have investments in a bunch of them. They are the ones who operate the fleet and they can do it in a really lowcost manner. They're doing it with hundreds of thousands of cars and so AV is different but not that different. So you got the operator then you have someone who owns the car. That could be us. It could be Whimo, but ultimately I think it's going to be third parties like private equity players and all this stuff who are going to want to own these big assets just like they kind of do rental car fleets

and then you will have um uh kind of debt uh out there. So there will be the financialization of the marketplace as well. But we are definitely playing in the demand side. We're partnering on the driving side and then we can and are providing through our fleet partners all of the operations in a city including depots, cleaning, etc.

What kind of conversations have you had or what should people expect from other OEMs outside of Tesla on the autonomy side? It's it's an interesting dynamic now where Teslas are getting the FSD is getting really really good. Uh it's a meaningful differentiator if you're a consumer and you uh you either want to, you know, drive less on your way to work or one day be able to add your car to a platform uh like Uber. Uh what what's come kind of coming down the pipeline in terms of just overall competitiveness from other OEMs. So what's interesting is that um when I was having discussions regarding autonomous with OEMs, it was more they were more interested in L2, which is

where FSD is now, than they were L4. You know, the the prospect of every single car being sold uh with a $5,000 priced piece of software that has a cost of goods of zero. It's like OEM's eyes, you know, went like this. They were super super interested.

Yeah.

As it turns out, I think that L2 is proving to be less interesting than people thought because you still kind of have to watch a road, etc. You can't really turn off. I think the great great customer product is just I can relax. I can do whatever I want and I can get my time back the way that you get your time back in an Uber. Sit in the back seat, do whatever you want, make a call, etc. So the conversations with OEMs actually are getting a lot more constructive for us because they see L3 and L4 and we want L4 obviously as the big prize now and that was not true 3 years ago. So we're having actually really great conversations with OEMs. We have a deal for example with Lucid who builds awesome EVs uh and one of our other partners Neuro and Lucid coming together uh and there are many other discussions that we're having with OEM partners and then of course now Nvidia is in the game right they were building the reference compute architecture um now they're bringing in the sensor stack and now they are building uh self-driving as well the model as well so Nvidia will provide a full stack software software and hardware solution to any OEM provider and as you can imagine Nvidia brings a lot of heft um a lot of knowhow and then a lot of credibility to the ecosystem as well. So uh the direction of travel

you're sitting there as like a supply driven business just being like let's go I want every every car outfitted with this when when it's when it's ready. Uh and you can imagine a world where you know the Uber wait time is 20 seconds every time. It's just like

I mean the dream is

the dream is 10 years from now every single new car sold is L4 capable because that is obviously very strong prospect for a supply what I started with and hopefully you'll get that 22nd ETA or you'll be pissed off if uh you have to wait for more than a minute.

Yeah. If you step back from maybe the specifics of of Uber and just think about how autonomy might change the American landscape, like how are do you do you agree with the thesis of like the suburbs will become more popular, people will be commuting longer? Like what what knock-on effects do you think are potentially underrated or under discussed of of moving in a more autonomous direction?

Yeah, it's a great question. I I'd say generally in the US suburbs are growing faster than cities. So this is a trend that started with co it continues and our growth in the suburbs and less dense areas is about twice our growth rate in the cities.

Um so it's been a really attractive growth driver for us.

I do think that it's going to create a lot of space in cities. You know I think 30% of space in cities is for parking. A huge amount of it goes unutilized. Some of that will be taken up by depots, etc. But I do think that it is going to increase the the breadth of where people get to live. Um, and I think it's going to make transportation available for many, many more people as the cost, it's going to take a while and it's probably going to take two or three generation of cars, but the hardware cost for these sensors, for the computers absolutely coming down. uh and this will result in lowerc cost mobility being available to many more people in the world whether they live in the city or they live outside of the city and I think it's going to have a great impact on society having more transportation available uh more affordably to a higher percentage of the population yes it's good for a business

but it will undoubtedly be great for society

last question what advice do you give to someone who wants to be a public company CEO.

Uh, one is, um, I would tell you like don't hunt for it. Um, pick I I I'd say that the advice that that I give folks is people get way too hung up on what their title is or how much they're going to get paid, etc.

I have always, you know, what's worked for me is I have been very, very specific about who I want to work for. Uh and when you pick the right people to work for one, you learn a lot from them. But the one thing that I've seen in every environment, like environments are unpredictable, but people usually stay successful. Like you look at Elon, right? Like he succeeded in so many different areas. And that's true for really exceptional people.

So exceptional people stay exceptional regardless of the environment. You know, if you pick a company or you pick a position, that can change that that can go the wrong way. If you pick the right person, you've picked the right person. Not only do you get to learn from them, but they usually move up in the world.

Yeah.

And so as they get promoted, as they build a bigger company, you kind of get to free ride off of them. So you get double the benefit, which is you learn from someone who's awesome

and you get to move kind of in their wake until you're ready to strike out on your own. I'd say that's number one. And then the the second thing I'd say is like you know advice for young young people in terms of learning just learn how to work hard like it's again your skill sets may change your profession may change people are like discussing is coding the right thing or or you know learning the liberal arts. The most important skill in life is the skill of working freaking hard. Uh and if you work for the right person and you learn how to work hard you're going to do just fine.

I love that. I love both those answers.

That's a fantastic answer. Thank you so much for

so great to finally have you on the show. Congrats to the whole team on a fantastic quarter and uh we'll hope to have you back on very soon.

We'll talk to you soon.

By the way, I don't know if our IT people have been watching you guys, but we have ramp coming on to Uber. So, there's something happening with your commercials that that are working. My IT people are watching way too much PVP.

That's amazing. That's great. Well, uh congratulations and we'll talk to you soon. Thanks so much.

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