Uber Technologies, Inc.

Ladies and gentlemen, thank you for standing by, and welcome to the Uber Technologies Q3 2020 earnings conference call. At this time, all participants are in listen-only mode. After the speaker's presentation, there will be a question-and-answer session. To ask a question during the session, you will need to press star 1 on your telephone. Please be advised that today's conference is being recorded, and if you require any further assistance, please press star 0. I would now like to hand the conference over to your speaker today, Ms. Emily Reuter, Investor Relations, please go ahead.

Emily Reuter Thank you, operator. Thank you for joining us today, and welcome to Uber Technologies' third quarter 2020 earnings presentation. On the call today, we have Dara Khatashahi and Nelson Che. We also have Apology Christian Murphy, and this is Emily Reuter from the Investor Relations team. During today's call, we will present both GAAP and non-GAAP financial measures. Additional disclosures regarding these non-GAAP measures, including the reconciliation of GAAP and non-GAAP measures, are included in the press release, supplemental slides, and our filings with the SEC, each of which is posted to investor.uber.com. I will remind you that these numbers are unaudited and may be subject to change. Certain statements in this presentation and on this call may be deemed to be forward-looking statements. Such statements can be identified by terms such as believe, expect, intend, and may. You should not place undue reliance on forward-looking statements. Actual results may differ materially from these forward-looking statements and we do not undertake any obligation to update any forward-looking statements we make today. For more information about factors that may cause actual results to differ materially from forward-looking statements, please refer to the press release we issued today, as well as risks and uncertainties included in the section under the caption Risk Factors and Management Discussion and Analysis of Financial Conditions and Results of Operations in our annual report on Form 10-K, filed with the SEC on March 2, 2020, and in any subsequent Form 10-Qs and Form 8-Ks filed with the SEC. Following prepared remarks today, we will open the call to questions. For the remainder of this discussion, all growth rates reflect year-over-year growth and on a constant currency basis, unless otherwise noted. With that, let me hand it over to Dara.

Thanks, Emily, and thanks, everyone, for joining us today. It's hard to believe that it's been eight months since I first spoke with you about the coronavirus pandemic. Without question, its impact on the world has been one of the most significant events of our lifetimes, and we've moved quickly as a company to respond. We've taken steps to prepare our mobility business for any recovery scenario and to seize a vastly expanded opportunity ahead for a delivery business, all while improving the overall health of the company by taking out more than $1 billion in fixed costs, strengthening our balance sheet, and more rigorously allocating capital with a focus on our core segments. Despite the volatile environment, we steadily recovered gross bookings throughout the last two quarters, with September run rate gross bookings reaching nearly $65 billion, down just 6% compared to last year. And despite the 50% decline in mobility gross bookings, we ended Q3 with total company adjusted EBITDA only 7% lower than last year, and we expect to improve adjusted EBITDA year-on-year in Q4. Whether consumers want to safely go someplace somewhere in their city or get something delivered to their door in 30 minutes, Uber is becoming their go-to app. In September alone, over 80 million people generated more than 425 million trips or deliveries across our platform. What I'm even more proud of, though, is that we connected 3.2 million drivers and delivery people to earnings opportunities and over 560,000 restaurants and small businesses to their customers during an unprecedented economic crisis. I'll now dive into each of our core segments, starting with mobility. Unsurprisingly, the mobility recovery continues to be directly correlated with the level of lockdown restrictions in any given city. When cities start to move, so too does Uber. Mobility growth bookings continue to improve throughout the third quarter, nearly doubling from Q2 levels and down 50% year-on-year. We saw mobility GBs improve 10% month-on-month versus September to down 44% year-on-year. That's October mobility growth bookings. LATAM and APAC led the recovery, offset by slower gains in the U.S. and Canada and a modest contraction in EMEA driven by the new lockdown orders. The U.S. has been an overall drag on our global recovery. As a point of comparison, mobility GBs outside of the U.S. were down 34% in October versus down 55% in the U.S. But we have some bright spots, even in the U.S. Since bringing the case count under control over the past few months, New York City has improved significantly, with bookings recovered to 63% of year-ago levels in October. We're seeing Uber recovery faster than taxi and public transit in the city, indicating a deep level of consumer trust we believe stems from our safety technology investments and the reliability of our service. New York City rider engagement is up double digits year on year, but it's particularly up during non-peak hours, suggesting the emergence of new use cases. As of last week, while New York weekday commute and weekend gross bookings have recovered to roughly 85% of prior year levels, weekday gross bookings outside of commute hours have recovered to nearly 100% of prior year levels. Elsewhere, Brazil, our largest market on trips, recovered to 87% of prior year levels in October. We're seeing workday, commute, weekend use cases nearly fully recovered year on year with airports, of course, lagging. All early evidence we see makes it increasingly clear that it's a question of when, not if, our mobility business will recover. These trends give us the confidence that mobility will fully recover as public health situation improves and as people return to Uber to get to work, go shopping, or reunite with their friends or family. Finally, It's important to note that we're continuing to invest in product innovation to drive growth. For existence, our taxi business grew nearly 20% year-on-year in Q3, and auto rickshaws and motorbikes are recovering faster than the rest of our mobility segment. We're leaning in and seeing strong momentum with Uber for Business. Nearly 40% of our top 50 enterprise accounts are new since March, driven by increased demand for new products, including specialized commute offerings and guest products such as vouchers. Now, switching over to our delivery business, which is benefiting from a massive structural shift in consumer behavior. As I've noted before, consumers are quickly becoming accustomed to the magic of having anything delivered to their door in half an hour, much like the magic of having a car show up in a few minutes. It's my belief that the tailwinds behind this category are so strong that we can continue to deliver exceptional growth while also improving profitability. In Q3, delivery gross bookings accelerated to 135% annual growth rate and reached a $35 billion GB run rate. Adjusted net revenue nearly tripled year-on-year, expanding take rate to 13.3% and improving adjusted EBITDA margin as a percentage of A&R by more than 10 points quarter-on-quarter. This growth is coming not only from an influx of new users, but also from higher engagement from existing users. With delivery MAPSE growth over 70% and trip growth over 110%, excluding markets that we exited, eater, restaurant, delivery, driver retention all increased year-on-year and quarter-on-quarter. And we continue to add new eaters at an elevated level. We did all of this with consistent improvement in the unit economics of this business in each quarter of this year. On the competitive front, we improved our category position in most major markets around the world, including growing GBs at triple digits year-on-year, and several large markets, including the U.S., Canada, U.K., France, Spain, Japan, Taiwan, amongst others. In the U.K., we continued to expand our national footprint outwards from our leading position in London, delivering gross bookings growth of nearly 200%. On a trip basis, we're now only about 30% smaller than the reported numbers from Justice Takeaway. This compares to 60% smaller a year ago. While the U.S. remains one of our most competitive markets globally, we made real progress in the quarter, with GBs up roughly 123% year-on-year. We improved our position in 11 of the top 15 markets, including New York City, Chicago, Washington, D.C., Boston, and Atlanta. Bookings in New York City grew more than 150%, sustaining our momentum from Q2, even as the city led the U.S. in reopening. We've also made meaningful progress in corporate ordering with our Uber for Business platform, adding new enterprise customers like Bank of America, Unilever, and Citadel. We also leaned into a number of growth opportunities during the quarter. We closed our corner shop transaction in all markets excluding Mexico and scaled our grocery business to over 30 markets, exceeding $1 billion in annual run rate. We expanded Uber Eats Pass to four additional countries, surpassing a combined 1 million paid members across Uber Pass and Eats Pass. We're particularly encouraged by the improved use of the trends we see with our Eats Pass members and will continue to roll out our other markets in Q4. Our ads offering is now live in the U.S. with over 30,000 restaurants running ad campaigns, many with significantly positive ROI. Even with the substantial growth investments, we continue to make progress towards profitability. In Q3, we had over 10 delivery countries adjusted EBITDA breakeven or better. While we recognize we still have enormous opportunity for growth and investment in the segment, we're confident that we can lean in and turn delivery EBITDA profitable sometime next year. Lastly, a quick word on Proposition 22, which we're happy to say passed with a healthy margin in California. This important question has now been settled in the most populous state in the country. California voters listen to what the vast majority of drivers want. new benefits and protections with the same flexibility. Going forward, drivers and delivery people in California will be guaranteed a minimum earning standard, health care contributions, accident insurance, increased safety protections, and more. We feel strongly that this is the right approach. We should be adding benefits to gig work to make it better, not getting rid of it altogether in favor of an employment-only system. That's why going forward, you'll see us more loudly advocate for new laws like Prop 22, which we believe strike the balance between preserving the flexibility that drivers value so much while adding protections that all gig workers deserve. Our proposal for a new pragmatic approach is supported by 82% of drivers and 76% of voters, and it's a priority for us to work with governments across the U.S. and the world to make this a reality. To sum up, while the last eight months have been tough for me, for our team, and for the millions of people and businesses who rely on our technology, I'm more optimistic than ever about Uber's future. The tough actions we took, the resilience we've demonstrated give me confidence that we'll emerge from the pandemic on an even stronger foundation, more nimble, more innovative, and more relevant to people's lives than ever before. Now over to Nelson for more details on the numbers.