Uber Technologies, Inc. (NYSE:UBER) Q4 2023 Earnings Call Transcript

And then of course the membership program continues to be a larger and larger portion of our business. Now, about 45% of Delivery gross bookings are coming from membership, and that just mathematically drives frequency. And if you look at Delivery, audience is up, frequency is up, basket size is up as well. So the growth comes, it’s very broad growth and more of the growth this year is coming from transactional growth versus pricing growth relative to last year. Last year was more pricing growth than transaction growth. Now it’s the other way around. And that really is broad. In Mobility, I would say, standouts were Latin-America and APAC. Again, we had very strong broad growth around the world. But we’ve seen very strong growth, particularly in Asia-Pacific, the Japanese market is super strong, Korea is starting to come up.

Australia remains very strong. Taiwan, et cetera. So all of these markets are strong. I think it’s augmented by taxis. India for us is super strong and we are gaining category position versus our big competitor there. And we think we’re the larger player. Making a lot of progress with two-wheelers. And then Latin America, it’s really two-wheelers model. It’s a lower-cost product, that is the hero. It’s a newer product, trip growth there is incredibly healthy. So Latin-American trip growth was absolutely standout this year.

Eric Sheridan: Thank you.

Alax Wang: Next question. You bet.

Operator: Your next question comes from the line of Brian Nowak from Morgan Stanley. Please go ahead.

Brian Nowak: Thanks, good morning guys. I have two, one for Dara, one for Prashanth, Dara I mean you’ve talked a lot over the 2023 period about sort of increasing frequency and increasing engagement on the overall platform. Can you just talk to us about sort of operationally and from an investment perspective, what are sort of the key areas, you need to invest and to continue to turn more miles into wows and wows and [indiscernible] et cetera, how do you do that operationally? And then the second one, Prashanth, you’ve had a little time on top of the hood and now sort of under the hood, just sort of talk to us about, maybe one or two of the things that you think are most surprising and under-appreciated internally versus externally now you’ve sort of gotten to know the company a little better.

Dara Khosrowshahi: Yes, absolutely. I like your phraseology there. Listen, I think in terms of frequency, I know there’s a bunch of sexy stuff that people talk about, but the most important factor in terms of frequency is being a service that is reliable and predictable every single day for every single occasion. So for Mobility, it’s making sure that ETAs are at constructive levels, making sure that surge typically has less than, let’s say 20% of sessions, and both of those are moving in the right direction and especially in Q1, they are moving in the right direction. And then for Delivery, Jeff, taking out any errors in terms of you’re missing a drink et cetera, making sure that if we make a delivery promise of 25 minutes, we deliver in 25 minutes.

So I think those are the basics. Now, the advantage or one of the advantages that we have is the platform, which is, as we see our users engage with more than one product, those users tend to come back more often and tend to stick around for longer. So we have now a team that is essentially using AI algorithms, and there are a number of promotions that we — that we have lined-up. So if you are going to work, if we know that you’re committing to work for breakfast, we may have a promotion for you to up a coffee at Starbucks. If you’re coming home from work and we know it’s around 6:30, and that’s when you order dinner, we may say why don’t you order a pizza, it’ll be home for your family, by the time you get there. All of these occasions, there are different occasions that we can target the right person with the right offer at the right price.

All of that now is algorithmically driven. And it’s pretty powerful because it’s gone from, I’d say like programing, a third of the time, let’s throw this promotion and a third of the time let’s do another promotion. As it turns algorithmic, as it becomes much more targeted and personalized, the part of the platform increases. And that generally just mathematically moves frequency the right direction. The last point that I would make is, again, membership too is just a tailwind for us for frequency. We got 19 million members, up significantly on a year-on-year basis. Members buy more, they stay longer and just mathematically members will account for higher percentage of gross bookings, which means a higher percentage of customers are going to stick around for longer, and transact more frequently.

Prashanth, you want to take the second question?

Prashanth Mahendra-Rajah: Yes. Good morning, Brian. And thank you for giving me a softball to start with. So if I think about kind of my observations over the last three months now, under the hood using your expression, I would say what I found most surprising is the — just the level of excitement and energy within the organization in the focus they have on building products for user, for earners and for partners. It’s a very mission-driven company. I know that’s an expression you often hear, a lot of tech companies use. But I’m really experiencing it within the four walls of Uber. I’ll say the other learning that has been very, very encouraging for someone coming in is just the internal conviction and planned around driving profitable growth. And there is a — there is tremendous runway that this organization has over the next couple of years to continue focusing not just on growth, but also making sure that, that growth comes with significant profit leverage.

Operator: Your next question comes from the line of Ross Sandler from Barclays. Please go ahead.