Lyft, Inc.

VP at BNA

Investor Relations. Please go ahead. Thank you. Welcome to the LEAF earnings call for the first quarter 2025. On the call today, we have our CEO, David Risher, and our CFO, Aaron Brewer. Starting with this call and going forward, our full preparatory remarks will be available on the IR website before the call, and we will use this time to answer more of your questions. We'll make forward-looking statements on today's call relating to our business strategy and performance, partnerships, future financial and operating results, trends in our marketplace, and guidance. These statements are subject to risks and uncertainties that could cause our actual results to differ materially from those projected or implied during this call. These factors and risks are described in our earnings materials and our recent SEC filings. All of the forward-looking statements that we make on today's call are based on our beliefs as of today, and we disclaim any obligation to update any forward-looking statements, except as required by law. Additionally, today we are going to discuss customers. For a ride share, there are two customers in every car. The driver is LEAF's customer, and the rider is the driver's customer. We care about both. Our discussion today will also include non-gad financial measures, which are not a substitute for gap results. Reconciliation of our historical gap to non-gap results can be found in our earnings materials, which are available on our IR website. And with that, I'll pass the call to David.

Thank you, Aurelien. Well, hi everyone, and thank you as always for joining. Q1 2025 was our strongest Q1 ever. We're innovating for drivers and riders. We're expanding outside the US in a meaningful way, and our partnership strategy continues to fuel our momentum. Lyft had -on-year growth across regions, across modes, and across use cases, resulting in a record Q1 for active riders, rides, and driver hours. Looking at our financials, we delivered Q1 records in gross bookings, adjusted EBITDA, and free cashflow. A note on gross bookings, this was Lyft's 16th consecutive quarter of double digit -on-year growth, demonstrating the resilience and momentum of our customer-obsessed strategy. And we approached nearly $1 billion in cash generation over the last 12 months. That demonstrates our winning formula of growth with discipline. It's this financial strength that has enabled us to increase our share repurchase program to $750 million, while maintaining the ability to invest in our most promising growth initiatives. With our expansion into new demographics by Lyft Silver, and into Europe with our free now acquisition, we are positioning ourselves for sustained growth to build on our incredible momentum. I am so impressed and proud of the work our team has done over the last two years to build a strong foundation, fueled by customer obsession and operational excellence. I am very confident we are well positioned for 2025 and beyond. And now with that, let's get to your questions.

And so then we will now begin the question and answer session. As at this time, I would like to remind everyone to ask a question, please press star followed by the number one on your telephone keypad. If you would like to withdraw your question, please press star one again. One moment please for your first question. Your first question comes from the line of Brad Erickson of RBC Capital Markets, please go ahead.

Hey, thanks for taking my questions. First, just talk about the pricing environment, what are you seeing and maybe just the puts and takes between sort of things within your control versus things out of your control. And then second, just on insurance, I know it's a little early to talk about this, but maybe any update you can give on how you're thinking about that. Adding into the pricing formula through the year, thanks.

Hi Brad, it's Erin, why don't we start with pricing? I'll start there and turn it over to David and then we can come back and I'll chat about insurance. So let me just start with some facts around pricing. Obviously we talked about it last quarter about some dynamics in the market, generally resulting in lower prices in the US, which we started to see late in the fourth quarter. And as of our last earnings call, we're persistent at that time. So here we are today, average prices in Q1 were still lower than average prices in the fourth quarter, although they were up modestly year over year. David?

Yeah, I'll just say to remind everyone on the call that our pricing strategy remains the same. It's always to be competitive for sure and then to be reliable. And of course we've talked in the past about how we're trying to sort of get prime time out of the system, introduce features like price lock and so forth to sort of even further increase that reliability, but really no change. And as Erin has said, modest differences from what we've seen in the past, but we feel good about where things are.

And then Brad, back to your second question around insurance, we continue to move forward with our programs, everything that we work on across our risk team here at Lyft. We highlighted a whole bunch of that at Investor Day and have talked about it since, but it's just continuing that momentum. We have unique industry-leading capabilities. We are continuously innovating to make our platform safer through technology, products, partnerships. You know, we innovated things like the smooth cruiser score, which gives drivers feedback on how they're doing and how to provide better rides. We will continue that. We are recognized by our partners, our long-standing partners, you know, for all of those advancements. And so we feel really good about our program. You heard us talk about our renewal, our 10-1 renewal. As you know, we've got a six month cycle. No new updates there. You know, it's reflected in how you see our guide in the second quarter. So I don't have anything specific to call out there. We continue to make great progress. We've got a great team and we've got great long-term partnerships.

Thanks.

I think we'll take the next question.

Your next line comes from the line of Kangal Elsey of Wells Fargo. Please go ahead.

Hi, thank you for the question. Really appreciate it. I'm curious, just a couple of things. One is, you know, the other guys, I think as you refer to them, has talked a lot about affordability initiatives in the US. I'm just curious, just as you think about the go-forward and the many innovations you've rolled out on the product side, how you're thinking about just the go-forward there and your positioning in the market and kind of from a pricing standpoint, what the pricing outlook is for the remainder of the year. And then the second, if I may please, you made an announcement to enter Europe. Could you just talk to us a little bit more and you're expanding in Canada. Could you just talk a little bit about your broader international ambitions? Should we think of this as the extent of it for the next select period of time or could we see more? Thank you.

Sure, yeah, good questions both. So on pricing, I don't have much more to say than what Aaron said, but maybe zooming out just a little bit. I mean, look, in a marketplace like this, let me actually step way, way back. You always wanna be able to provide the best price you possibly can. I mean, let's be clear, that's always important. But I feel good about where our pricing is and I don't see it being a major sort of area of focus or competition and really all I mean by that is, like as you mentioned, innovation is kind of our big thing, right? And at a certain level, there's only so much you can do with pricing. The market sets a clearing price millions of times a day and we sort of follow the market's lead on that as they say we're competitive and reliable. So once you sort of have that and you kind of take that a little bit off the table, then it becomes much more interesting to think about things like the silver or price lock or the earnings guarantee for drivers or whatever you can do to really drive preference for your platform. I think it's really because we've been so focused on that customer obsession and the operational excellence required to continue to execute on that, that we've seen our growth be powered sort of independent of pricing sort of bouncing around a little bit. So maybe not much more to say about that. On international, you're right to point out that we've seen great, great growth in Canada, roughly doubled year on year and now up I think another 50%. In fact, I think literally just today, we opened up the funnel for driver onboarding in Quebec, the province of Quebec, which just gave us authorization to expand there later this year. So super excited about that. And then, looking at that, which obviously gave us a certain amount of confidence that our kind of customer obsessed formula can work outside the United States, we acquired Freenow. And I can talk more about that if you're interested, but I don't think I'm gonna be able to say much beyond beyond that just now. Obviously that deal hasn't even closed. It won't until the second half of the year. So a bit premature to think about further international expansion. I will say more likely than not, the near term focus will be kind of infill in the nine countries where Freenow is operating rather than thinking about further expansion. But that's not a never say never. It's simply the focus right now is on making sure the Freenow acquisition exceeds its already great potential.

Next question comes from the line of Eric Sheridan of Goldman Sachs. Please go ahead.

Thank you so much for taking the question. Maybe I'll just ask one. You obviously made the announcement with May Mobility and we're seeing a lot of different announcements in the broader AV landscape. Would love to continue to sort of click down on how your views are evolving in terms of going to market with partners and what do you think that might do in terms of the supply and demand dynamic in these cities where you bring that type of supply into your ecosystem. Thanks so much.

Yeah, sure. I'll take this one, Eric. Good to hear from you. So yeah, let's start exactly where you started with May Mobility. So we're super excited about that partnership. It's scheduled and on track to launch this summer in Atlanta, which is wonderful. And I think it's gonna be very interesting and very instructive for us, of course, because it'll help us get feedback on what happens in markets when we do this. And then next up, of course, is the partnerships that we've announced in Texas coming next year. And that'll also involve a financing partner, Maru Beni, which sort of maybe allows me to talk a little bit about the whole value chain for just a second and then get back specifically to your question. I feel, maybe I'll just start by saying, again, AVs are an absolutely extraordinary opportunity for us, absolutely extraordinary opportunity. And it's because it brings a whole new supply, as you're mentioning, and frankly broadens the portfolio, right? You now have use cases that maybe people weren't excited about before on rideshare that now they get very excited about whatever those might look like. And it's a good product and it's a safe product and so on and so forth. So super, super excited about how it can expand the market and open us up to new opportunities. There's a whole set of activities that has to happen all the way from the equipment manufacturers have to be on board, the OEMs have to be on board, financing has to be lined up. Again, I'll mention Maru Beni, our partner, who's in the business of fleet financing and fleet ownership. That ownership piece, quite important. Someone's gotta own these things and hopefully it's someone with a good capital structure and so on and so on. So that's where they come in. Then there's the whole fleet management piece, which we've talked about several times. And again, since we're on the topic, I would encourage anyone who hasn't read about this post we published a couple of weeks ago on FlexDriver subsidiary that does fleet management. I'd highly recommend you read it because it gives you a strong sense of why fleet management matters so much. I mean, anyone can have a couple of cars, maybe even 50 cars and sort of keep them utilized. But then you start talking about thousands of cars and you're talking about a lot of maintenance, a lot of repair, a lot of uptime monitoring, a lot of cost control and so on and so forth. And that's what FlexDrive provides us. We do that to the tune of 10 to 20,000 cars every year on a platform already. And we're super excited about welcoming AVs to that. And then of course you have the marketplace piece that's supply demand management, ETA estimation, and so on and so forth. And then pricing and all the outbound marketing to generate demand. Okay, so that's the whole value chain. Again, we've written about this. I recommend you read that paper as well, just for education. Then back to the center of your question. Our general view is the more supply, the better. We think it'll come from a lot of different partners. May is an early one, Mobileye, of course, is another tech provider. They're the ones that are providing the tech in Texas for us. They're companies that frankly, we've never even heard of yet. They'll be providing this technology over the coming years. And then you have the current market leaders as well. And our strategy through all of this is the same, which is we want to be the absolute best way for an AV supplier of any type to monetize those assets on the platform, and that's what we're setting up for. And we feel very confident in our position.

Your next question comes from the line of Ben Black of Deutsche Bank. Please go ahead.

Hi, thanks. This is Jeff. I'm for Ben. Thanks for taking our questions. This is a follow-up to that on AVs. We're kind of looking beyond getting the supply on the platform. What do you think the impact will be to pricing and frequency membership as AV scale longer term? And also it would be great to hear your thoughts on the Waymo Toyota partnership for personally owned vehicles. It would be great to get your perspective if this could impact list and I guess the transportation market more broadly. Thank you.

Yeah, great questions both. And sorry, the second one I'm very clear on, the first one again, say that one more time, Jeff. It just kind of beyond the pricing and

frequency.

Yeah, yeah, yeah. Pricing and frequency membership. Of course, yeah, of course. So, I mean, we can give you our views, but I will tell you that probably the dominant thing to take away on that is a little too early to tell. And the reason I say that is because if you look at the markets where AVs are operational right now, you see a San Francisco, you see a Phoenix, you see an LA, you see an Austin as an example. And the dynamics in these are these are slightly different. In some markets, AVs are actually priced as a premium product. In some markets, they're priced at a little bit of a discount. In most markets, the service levels are actually not as good as traditional rideshare, about which you can understand why that might be that the ODDs are somewhat limited. And even when there's dense supply, those companies don't necessarily, or it's really that company, doesn't necessarily have the same sophistication with supply demand balancing and so forth. So it's very hard to know over the long term what's gonna happen. Obviously the bet that generally people are making is that over time, this will increase supply overall and decrease costs to operating a network like this. And that seems like a reasonable assumption for obvious reasons, but that could be quite a long ways away. It really could, for example, insurance, people think a lot about insurance, gosh, AVs are safe, that's true. But on the other hand, they're very expensive to repair. That's also true. They still do get an accident because other people cause those accidents sometimes. The utilization rates are very unknown. The profitability of these on a unit basis per car basis will have a lot to do with whether they're utilized 14 hours a day or 18 hours a day. So, and then sorry, back to insurance, I neglected to mention the insurance companies tend to be quite conservative when it comes to pricing insurance, particularly early on, they say they like to have five to seven years of data, which means, and sort of I'd say their incentive is maybe even to overprice at the beginning so they don't get caught upside down. So I might not be a very satisfying answer, but I think that's kind of the truth. At long term, I would expect again that it'll be very sort of expansionary and maybe bring prices down, but I don't bet on that in the super short term. I think more interesting in the short term is just how differentiated they are from the existing offering and therefore market expanding. On the issue of individual ownership and the particular Waymo Toyota thing, I won't probably mention or talk about too much, but I think what it does is it validates that there are gonna be a couple of phases of AV adoption. The first of course is very pilot and trial and that's obviously where we are now. Over time, there will be owners of fleets, right? And today those owners typically are the people who are designing or building the tech, Waymo being up a figures of the day, they design the tech, they buy the cars from Jaguar and then they own them themselves. But over time, you wouldn't expect that necessarily. You would expect new companies like Marabeni and others and even companies like Lyft at a small scale to actually wanna own the assets and manage the assets and so forth. But then I think in the medium and long term, you get to a very different and next level where individuals or maybe very small fleet owners of small groups of cars own cars. And we're already planning for that. And so we're gonna be able to do that very, very directly. So this is why I think our Mobileye partnership is so important. Again, Mobileye, they're the driver assistance technology that's in 800 different car models right now. So they have very good relationships with OEMs, but it's level two, kind of lane assist and so forth. But they have a very clear strategy and a very clear roadmap. And again, we're dependent on that roadmap as we realize in Texas with them to get to level four and level five. The idea there is that that technology won't just be in bespoke cars, one or two OEMs or even one or two platforms within one or two OEMs, but rather ultimately universally available. And as I've said before, I think there'll come a time, call it the next 10 years, probably not much sooner than that, but 10 years where buying a car without AV will be like buying a car without a radio. Actually, I think a better analogy is buying a stick shift car. I think that's a better analogy. You could buy a stick shift today. I happen to have one, they're awesome. And they're super fun to drive, but they're definitely the thing that you drive because you like to, not because you, it may not be your best commuter option every single day. So I think it'll be kind of like that. There will be manual cars just as there are today, but increasingly AV will be everywhere. And in that world, this idea of lift ready, every car being lift ready so that when you buy it, you can put it on the lift platform and have it generate revenue, have it sort of self monetize, you might say, becomes very appealing. So that's the world we're already building to. We know it's a long way away, but we also, we have a very long-term view on AV. So I think you have to, again, for all the sort of short-term buzz there is and that flurry of press releases and so forth, that's one thing, but I think sort of, you have to have your eyes on the long-term on this.

Next question comes from the line of Michael Morton of Moffat Nesenson. Please go ahead.

Hey, good evening. Thank you for the question. To the extent you can talk about it, I know it's just announced, but I wanted to hear your thoughts on the ability to invest behind Free Now, and then maybe how you're thinking about the business mix between taxis and rideshare for Free Now going forward versus where that mix shift stands today. And then just quickly, David, as pricing increases subside, I'd love to hear about any changes you're seeing in consumer behavior that might lead them to spend more per month, just because there's less sticker shock, right? If you open, you look at your morning commute, you go, wow, that's too much, but then you start opening it, it's not going up as much, and they actually end up using it more than they would have in their prior budget. So if you're maybe seeing more shopping engagement at this point, maybe they haven't transitioned into actual conversion yet, but anything there would be very helpful. Thank you.

Super perceptive questions, Michael. So why did I do this? Maybe I'll talk just super briefly about kind of how we see Free Now and sort of that mixed question you talked about. Maybe I can pass it to Erin to talk about investing behind it to the extent we can say anything, which the answer won't be much. She's smiling at me right now, which is fair. And then I'll come back to talk about that communication and what we're seeing there. So briefly with Free Now, maybe a thing to remember is that it's, so it is a taxi-first marketplace. And actually I want to talk about this for a second because I think people's intuition can be a little bit sort of over-weighted by maybe what you see in the New York City when you think taxis, for example. So in Europe, just to be super clear, the taxi tends to be a sort of a premium product in most parts of Europe. And you might think of the London Black Tab. You might think of taking a Mercedes from the airport in Frankfurt. The drivers oftentimes are long-term drivers. Some of you might know, I lived in Barcelona for many years. Many of the taxi drivers I had had been doing it for years and years. And so it's a very sort of stable, a very important part of the landscape there. And an enormous part of the ride-hailing industry in Europe, ride-hailing, not a broadly, including taxis and personal vehicles and everything else on the street, raise your hand, all the things, it's roughly, I think a 40 billion euro market, but roughly half of that is still offline. And it's quite traditional. It's people pick up the phone and calling a taxi and literally it's a second secret personal experience here. This is exactly what I did when I lived in Europe, as much as I like the tech, there's their habits that are sort of hard to break. But part of that, and the reason for that sort of stasis is there just hasn't been a lot of innovation on the sort of taxi side, in particular, in part because there's so many different individual fleet operators that don't really have the scale or the capital to expand what they're doing. So Free Now brings that. And it's why they've been so successful. It's why they really are the dominant player in that space. And we continue to believe that that's gonna be the interesting point, because it's sort of a higher, when you ask people, maybe ask a friend in Paris at some point, how they feel about rideshare versus taxis. And often they'll talk about how rideshare feels a little bit like a sort of a less than experience, versus taxis feels like a more than experience. And we really wanna lean into that. Now, country by country, things differ. There's some countries where personal vehicle kind of rideshare as we think of it in the United States is not legal. There's somewhere, anyway, so country by country, and Free Now is in nine countries, each country has slightly different dynamics, but I wouldn't expect the overall approach really to change very much. They've got a very good model. And we can bring a lot to that model, a lot. There's a lot we know about the way pricing works and market dynamics and so forth, because of our scale and our history we've got. And vice versa, they'll bring a lot of fleet management expertise to us, because of course, every one of these taxi operations typically needs another fleet manager to work with. The last thing I'll say there, as I kind of alluded to earlier, is I think to the extent that there's work to do and investments and stuff, and I'm not gonna speak much about this, but there may be some infill opportunities within the markets we're already working in. I think maybe I can turn it over to Erin at this

point. Yeah, so what I'd say, look in Free Now, we found a partner to, we see opportunities to immediately fuel growth, unlock potential for partners, level up the experience for drivers and riders, so we're excited about it. It obviously doubles our addressable market overall. So the strategic purpose of this acquisition is fully aligned with the strategy that we outlined at Investor Day. Very specifically, we said we would, as part of our capital strategy, responsible investment and attractive growth and margin expansion opportunities was important to us. This fits that bill. The first step, however, is to close the deal. So we expect that to happen sometime in the second half of the year, and then we'll start some foundational integration, and we'll continue to evaluate opportunities for growth over time, so that's what I would add there. Maybe I'll start with the second part of the question, which is around affordability, and what I would say, Michael, is affordability is not something that's new to Lyft. If you look at our overall product portfolio, this is something that we've emphasized in terms of a mode for every mood, so to speak, for a period of time, and so you think about things like wait and save, obviously, which has been a great feature overall for the company, and that's certainly not a monolith if you think about the ridership, right? Wait and save riders use the mode about a third of the time. They tend to take about 2X the rides. So again, affordability is not new, and I think that the breadth of our portfolio and even the growth that we highlighted in some of our prepared remarks at the higher end of our portfolio is a strength, and that's where you're seeing more than 16% rides growth in the quarter, really proud of that. David mentioned some of the stats in his opening remarks, so I don't know, David, do you wanna add anything to the affordability question?

I'll add, and maybe end exactly where Michael was also going. I think what's so interesting about this idea of affordability, and you actually, you touched on this, Michael, is people think of it, I think, sort of in a maybe small way as, oh, well, lower prices. Well, sure, I mean, obviously, again, you want a great cost position. You'll remember we took $330 million out of our cost position a couple of years ago to be able to afford to give great prices and great earnings to drivers and so forth, but at a certain point, that becomes a little bit kind of just baseline, and then you have to start to innovate on top of that, and I do think Price Lock is such a good example, and I'll tell you why. So commute is now our largest use case. It was our largest use case, and remember, 10 years ago, commute was 0% of 0% of 0% rides here. I mean, it didn't exist, right? Now, it's a third of our rides roughly, so we're talking about an enormous part of people's daily lives, and then you think, well, why isn't everybody doing it? Remember, 150 billion rides a year, of which some gigantic number of commute rides and a fraction of a fraction of a fraction are still on rideshare, and so much of it is all the irritating things that rideshare sort of introduced over the years or didn't quite get right, like surge pricing being the single biggest one. So annoying, right? You're doing the same thing every day. Why should you pay something different every day? No one wants that. That's irritating. On the other hand, gosh, is it great to sit in the backseat and be able to text or start your work or make a phone call or whatever, say goodbye to your spouse after you left because you didn't get a chance to say goodbye. Well, whatever it is you want to do. So it's a great service, but you got to take away some of the party stuff. PriceLock does that, and I can tell you that we're the PriceLock membership. We introduced it a couple quarters ago. It's now up 21% compared to Q4, and very interestingly, the retention rate is super high. It's greater than 70%. I think we've said 70 in the past. It's up to about 75% right now, which means that once people sign on, they do it again, and that's a form of affordability, right? It's a sort of a normalization. It's kind of like, okay, the price is not gonna bounce around. I kind of understand what it is. Maybe it's a little higher than I want it to be. I don't know, whatever, but at least I can understand what it is every day, and I begin to understand the value. And little by little by little by little becomes part of more and more people's lives. So that's very much the way we think about these things, and we like when we see a product like this have such a product market fit, because it shows that we've discovered something pretty important.

Thank you. The next question comes from the line of Nikhil Divnani, Bernstein. Please go ahead.

Hi, thank you for taking my questions. I had two, please. First, on the taxi initiative you're rolling out in the US, do you think this can accelerate your growth in 25 and 26? Just trying to get a sense for the scale of it, and is there a long process to bring more taxis online in more markets, or do you think this is something where you can move fairly quickly with new cities beyond St. Louis? And then my second question is around AV partnerships. Do the deals that Uber is striking today actually accelerate your ability to onboard partners, because there's a playbook for these AV providers to rinse and repeat, so to speak? Or do you feel like you need to be the first one in the door because fleets are still really small and experimental, so there aren't enough cars to go around just yet? Thank you.

Yeah, hey, Nikhil, two good questions. Let me touch on both. I think, well, and I'm sorry, I know I'm thinking about your last question so much that I've already forgotten your first and second time we've done today. Say the first one more time.

Just on the taxi initiative in the US and the rollout of more cities.

Yeah, yeah, of course, sorry about that. The two-part question is always tricky. So on that, look, as you said, so just to sort of level set with everyone, yeah, we started in St. Louis, and it's great. I know you asked specifically about, is it gonna accelerate your growth? I'm not gonna comment on that particularly, but what I will say is when we look at our strategic initiatives over the course of the year, and we set these at the end of last, expanding our sort of access to fleets was quite important. And it's important for a couple of reasons. Effectively, diversity of supply really matters. It matters at sort of one end with taxes. We're doing it also when it comes to what we call the high margin modes, particularly the black cars, which also tend to be fleet cars. They have good economics. Typically, they insure in a different way from normal insurance with us. So that's all good. I'm not gonna, we've only talked about St. Louis so far, so I won't speculate beyond that, but I will say it is an important part of what we're doing in the US. And again, when you hear the free now acquisition, you understand that that, obviously their expertise is gonna come in handy for us. On the AV side, it absolutely is not the case that you have to be first. It just isn't. And the reason I say that is because even if fleets are limited, which is sort of maybe the premise behind the question. Well, I guess you sort of put it both ways, right? You said either there's the playbook or there's a limitation. I would say, first of all, every AV provider has a very strong incentive to have multiple partners. I mean, it's just clear. No one wants to be beholden, right? So that's why you don't see anything that looks really exclusive because that would just be sort of self-defeating. There'll be supply constraints from time to time, of course. And so maybe one person will get a little ahead of the other for a certain period of time in a certain city. But I think that's very temporary. I think much more interesting, if I'm an AV supplier of equipment or what have you, is who is the partner who can better monetize? And frankly, that I can sort of work with better. Who brings more to the table? Maybe it could be any number of things. I won't characterize it too much. But obviously we're very excited about the unique asset we have. We have the only sort of integrated fleet management solution to rideshare that's out there. So that's obviously a huge advantage we have. So I think that that's probably more important at this point simply because, but I think really at the end, just to be super honest, I think most suppliers have an incentive to bring on at least two partners, right? So that they can differentiate, excuse me, so that they can sort of diversify and also not be beholden to anyone.

Thanks, David.

Sure. Your next question comes from the line of Stephen Ju, QBF. Please go ahead.

Okay, thank you so much. So David, I think when you offered lift media targets back at the investor day, I think there was some amount of skepticism in the market as to whether you can actually hit those goals over the next few years. So, but there was a very interesting angle, I thought, where to offer retailers and merchants traffic based on the user's destination, especially if they're headed to your store, right? So that sets you up to potentially onboard performance ad budgets. So can you talk about how this is progressing and how the outreach efforts to these performance advertisers and undoubtedly also to the awareness and brand up or funnel advertisers, how that's been progressing? Thanks.

Sure, yeah, great question and a good memory. So let's start big picture first and then we'll kind of dive in. So at the time, yeah, I remember the skepticism that was not lost by me. We're on track, as we said before, to reach a hundred million dollar run right at the end of the year and very much on track and feel quite good about that. And I will also say, by the way, quite good about the leader who's getting us there, Susie, I've mentioned her in the past, she really helped build YouTube's ad platform and then way later. So anyway, I'm actually bragging on people, I'll brag on the whole team there. It's an extraordinary team and we're actually adding new folks. In fact, we just got a new person on yesterday. So super excited about how we're building that out. The results we've seen so far have been really strong. As I say, we're on track for a hundred million, but I think part of it is because particularly, come back to your point in a second, but particularly when we look at some of the big brand partnerships we have, we continue to see, and again, this is third party data, but we continue to see third party measurement platforms telling us that we have, this is their numbers, not ours, seven times the impact relative to the norm on brand perception and we still have about 10 times the standard click-through rate. So super good there. We're also expanding our formats. So Aaron mentioned Wait and Save a little while ago as a nice product from a consumer so that they can choose to wait a little longer and save some money. It's also nice for us because it gives us a little bit more time to engage with writers and we now have a new ad unit, which is sort of a vertical takeover, a video unit that takes over while you're waiting. So you've got time on your hands while you're waiting and saving, might as well use it checking out a movie trailer or a kind of a brand activation or whatever. So seeing, very excited about it, still early days, of course, in a lot of ways, but I feel very, very good about the platform we're building and the opportunity there is. When it comes to what we internally called sponsored rides, yeah, we're still super excited about that. It's very much in experimentation mode. I think I don't actually have, I just don't know whether we can mention the partners live now. I'm not sure that we can, but we have a couple of partners that we're working with to try that out and encouraging results. But there's certain things that you try at small scale and then you just don't know yet, but I still have a lot of conviction around it. I know that any, look, any store, any retailer, any restaurant, anyone who depends on that marginal person to walk in the door, to make the week or make the night, they become very interested when they start talking to partners who can literally deliver effectively foot traffic to their door. So anyway, good memory, nothing to share on it right now, but definitely an area where we've still got real conviction based on what we oversee. Thank

you. Your next question comes from the line of ANMA, JP Morgan, please go ahead.

Thanks for taking questions. I have two, just as you continue to see strength in rides with the 200 basis points of acceleration, but pricing was down 3% year over year. Can you just talk about what's driving the lower gross bookings per ride, particularly as you continue to grow luxury modes and are we seeing more discounts and promotions or just industry wide pricing dynamics tied to insurance easing? And then maybe on to Q and just thinking about Delta, is there any shift or change from kind of how you were thinking about the 100 basis point impact to rides and 200 basis point impact from gross bookings?

Thanks. Thanks, Doug. This is Erin, I'll take the question starting with gross bookings overall. So I'd start with framing that we remain very focused on penetrating that 161 billion private vehicle TAM that we've talked about that we highlighted at our investor day. We continue to grow in our top markets, but one of the, and commute, David mentioned earlier, commute is particularly strong, which we're really proud of. And then one of the biggest opportunities for us is to really penetrate and grow in what have been historically underrepresented markets. So you've heard us talk about Canada now for a while and our progress there, right? We grew that market 100% in 2024, we grew rides 55% in Q1, we're about to launch in Quebec and a few cities. So we'll continue our growth path there. In that market overall, gross bookings per ride is lower than the average in the US. And then another area that we highlighted in our prepared remarks is under penetrated markets in the US. So we, this is not new, we've been kind of taking our formula for operational excellence and customer obsession more broadly in the US. And we've seen fantastic results out of that. We highlighted, for example, in a prepared remarks, we talked about growth in Indianapolis, but it's cities like Indianapolis, Charlotte, where we grew in both cases, more than 30% year over year in Q1. And so, that's fantastic because we are continuing that really strong growth in active riders and frequency and in ride share really is a great option across now multiple markets in addition to the growth of our top markets. But there is a mix impact and that's the way you should think about that as you, as you see some of that gross bookings per ride dynamic overall. And then your second question, as it relates to Delta, so maybe just starting with the fact that the Delta partnership ended on April 7th, so still pretty early days. And I think the right way to think about this is, whether you're entering or exiting a partnership like this, it tends to have an impact over time. So in this case, that curve is gonna depend on the offer that they're getting also frankly, our efforts around retention and competitiveness and we have amazing service levels, et cetera. So price and benefits are really just one part of the process, the decision-making process on behalf of the rider. The other thing is that our partnership, our past partnership with Delta, offered more benefits than the one that there's today with the other guys. So there's a couple of different decision criteria, I think that any rider is gonna go through. So still relatively early days, we do still believe that over time, this will have an impact of about 1% to our rides, about 2 percentage points to our gross bookings. So that's how I would highlight those.

Great, thank you,

Erin. Yep.

Your next question comes from the line of Stephen Fox of Fox Advisors, please go ahead.

Hi, good afternoon. Just one question, just following up on that last one. If we think more deeply about the Q2 guidance in terms of ride growth and monetizing per ride basis, like what would be the sort of how you would directionally talk about it? Is there any consideration for any consumer spending risks? And then where would be some of the things you've highlighted on this call about growth on different platforms? What would be the major drivers? Would it still be commute leading the way or something else? Thanks.

Yeah, sure. So again, starting at a high level, we provide range overall for our guide. Our intention is for that range to bracket, of course for a number of different scenarios overall. We expect commute to continue to be strong. We think this mix of the results of our efforts in some of these under penetrated markets, we continue to see great momentum there. So we think that will have an impact in the second quarter as well as growth in our top markets. So some of those similar dynamics that I just talked about for Q1, I would expect to consider for Q2. And maybe I'll start with the consumer sentiment side, David, if you want to add anything. I think the headline here is we're just not seeing anything in our data. As you know, we don't have a lot of leading indicators, but we are not seeing in our data signs of weakening. We see continued growth across modes, across different use cases overall. So David, you wanna add anything to that?

You just said it's so interesting. We can all probably talk openly about this. We all read the same headlines, but at the same time, when we look at the data, we had our strongest ride week, I think the last week of March ever. And then even as recent as this past week, when we look at Cinco de Mayo, which is another area where people tend to take ride share, super, super strong. So again, everyone understands the uncertainty in the future. And of course, we have a business that's sort of resilient to that. We can talk about that separately if you're interested, but in terms of sentiment so far, things look strong.

Yeah, thank you. If you did wanna follow up, I'd love to understand just the key headlines on how resilient the business could be in the downturn. Thanks.

Sure. I mean, I think, let's talk about the sector first before lift. I do think this sector has a certain amount of resilience built into it. If you look at demand, well, let's start with the basics. Is there demand there? There's definitely demand there. And we see it week on week. It's again, we've made this point in different ways now. This is part of people's daily lives. And we've talked about commute a lot. You might talk about a much different part of the sort of spectrum healthcare. I think our healthcare rides, it's called non-emergency medical transportation, have grown something like 30% year on year. This is literally people going to doctors and medical appointments and stuff, often paid for by somebody else. But the point being that, rides should become very foundational for a lot of people. So demand is there. Then when you sort of look at the supply side, well, actually, hold on, let's talk more about demand. You could imagine a world where, let's say tariffs increase the price of cars. You can imagine a world where, if that's the case, that people become even more interested in rideshare because it's a lot more approachable to think of a 10 or $15 ride than it is a $30,000 car that just got more expensive. So that's kind of interesting. And I'll point to sort of broad data that says in general, and of course, every economic downturn, if there is such a thing, is a little different, but in general, services tend to be more reliable than durable goods. Durable goods flux a little, but services tend to be somewhat more reliable. So within that context, obviously, rideshare falls. And then when you look on the supply side, again, this is not any new data, but remember, we have 1.4 million people who drive on the platform and they like it. We'll come back to that in a second, but that's also quite an important part of a lot of people's lives. And remember, again, at almost a macroeconomic level, it's actually quite stabilizing for the US economy because what it sort of means is that if a person loses their job, which can happen, of course, in economic downturn times, you know, 48 hours later, literally 48 hours later, they could be driving and earning again. So, you know, just big picture again, it feels like a very, very stable place. You never say never, you don't know exactly what the future holds, but certainly we believe that we're very well positioned gonna come what may.

Further questions at this time. With that, I will now turn the call to David Risher, Chief Executive Officer for Closing and Marks. Please go ahead.

Yeah, thank you everyone. Thank you, Aurelian, thank you, Aaron, thank you everyone on the team who's worked so hard to do. All of the work we've done to put together a great quarter. So really appreciate everyone on the call, as always, in your support and lift. We've never been in a stronger position as we continue to deliver on our mission to serve and connect. Thank you all very much and we will see you next time.

Ladies and gentlemen, this concludes today's conference call. We thank you for participating and ask that you please disconnect your lines.