Uber (UBER) Q3 FY26 Earnings Call Transcript

Operator00:00

.Hello. and welcome to Uber's Q3 2026 earnings conference call. All lines have been placed on mute to prevent any background noise.

Operator00:14

After the speaker's remarks there will be a question and answer session and if you would like to ask a question during this time please press star one on your telephone keypad. I would now like to turn the conference over to Alex Wang head of investor relations.

Operator00:17

You may begin.

Alaxandar Wang00:17

Thank

Alaxandar Wang00:33

Thank you Sarah. Thank you for joining us today and welcome to Uber's third quarter 2026 earnings presentation. On the call today we have Uber's CEO Dara Khosrowshahi and CFO Balaji Krishnamurthy. During today's call we'll present both GAAP and non-GAAP financial measures.

Alaxandar Wang00:47

Additional disclosures regarding these non-GAAP measures including a 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.

Alaxandar Wang01:04

Certain statements in this presentation and on this call are forward looking statements. 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.

Alaxandar Wang01:17

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 uncertainty described in our most recent form 10-K and in other filings made with the SEC.

Alaxandar Wang01:17

SEC.

Alaxandar Wang01:33

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 up call to questions following brief opening remarks from Dara, with that let me hand it over to Dara.

Prepared remarks

Dara Khosrowshahi01:49

Thanks Alex. Q3 was another strong quarter of growth and expanding profitability for Uber with record audience and engagement across our platform. We reached 215 215 million monthly active platform consumers we were using Uber more frequently than ever.

Dara Khosrowshahi02:03

That helped us deliver our fifth consecutive quarter of 20 plus percent year over year gross bookings growth alongside 35% growth in non-GAAP EPS and record trailing 12 month free cash flow of 10.4 billion.

Dara Khosrowshahi02:15

Mobility continued to see healthy growth but came in below our expectations as a result of driver supply not keeping pace with strong consumer demand in several international markets.

Dara Khosrowshahi02:23

We're responding with targeted investments to improve driver availability and marketplace balance and we saw encouraging improvement in October.

Dara Khosrowshahi02:48

Our focus is on driving consistent growth while maintaining strong profitability of the business. Delivery had another excellent quarter with gross bookings up 23% year over year and organic growth accelerating. Our investments in selection, affordability, and reliability are making Uber Eats even more useful for everyday occasions from restaurant meals to weekly groceries and last minute essentials.

Dara Khosrowshahi02:56

And with approximately 55 million Uber One members we're deepening consumer relationships across both mobility and delivery.

Dara Khosrowshahi03:10

Those direct consumer relationships are central to our approach to AI. We're using AI to make everyday transactions simpler and discovering more personalized while selectively exploring new distribution channels that can bring incremental demand.

Dara Khosrowshahi03:25

In AVs our focus is shifting from partnerships and testing to driverless commercial service. We're excited for Zoox to launch on Uber in Las Vegas later this month with Motional moving up to fully driverless operations soon thereafter.

Dara Khosrowshahi03:39

We expect approximately 700 fully driverless vehicles on Uber by year end and more than 2000 by the end of 2027. Just as importantly we're focused on demonstrating utilization and economics that are needed to scale.

Dara Khosrowshahi03:51

As we enter Q4 our priorities are clear improve mobility supply build on deliveries momentum and deliver against our AV milestones all while continuing to grow profitably.

Dara Khosrowshahi04:52

Um before I hand it off to the operator I did also want to offer a special thanks to Jill Hazelbaker our president and chief corporate affairs officer after 10 years here at Uber she's moving on to open AI it's a big win for them it's a loss for us to lose some someone like Jill she's been such a big part of our culture our company but fortunately she has built a great team who get to step up to more senior positions many of them working with me directly so I want to personally thank Jill for her 10 years here she's helped me in innumerable ways both professionally and personally as well she's been a great advisor it's a big win for OpenAI and I'm really glad that the team that she built is ready to step up to bigger positions which they fully deserve at the company so big thank you to Jill and with that I will turn it over to the operator for questions

Questions and answers

Operator05:02

Great thank you your first question comes from the line of Eric Sheridan with Goldman Sachs your line is open

Eric Sheridan05:26

Thanks so much for taking the question I want to come back to the parts of the letter and prepared remarks around AV fleet financing can you go a little bit deeper in terms of how we should be thinking about the balance sheet and incremental free cash flows that you want to put behind these efforts and how should we be thinking about rates of return or aligning the economics with the commercial opportunity thanks so much

Balaji Krishnamurthy06:56

Thanks Eric I can take this um so I think you know we aren't ready to say a lot on the structures that we are working on just yet but what I would point you to is the billion dollar financing arrangement that we had set up with Santander earlier in the year that was focused on our traditional fleet partners that is a template for what we could be doing with our AV fleets as we go through the next few months we are actively working on these kinds of setups and specifically you should expect that we will have announcements to make both on infrastructure financing but also on vehicle financing as we go forward so our long run expectation is that this should be financed by third party capital not by Uber's balance sheet and you know in the near term as you've seen with the announcement that we had in the release that we will have about 700 driverless vehicles on our network this year 2000 by the end of next year the you know capital deployment against those is fairly limited but as we start scaling out into the 10,000 plus territory in 2028 and beyond we want to bring in third party capital against that and we feel good about the ROI that the third parties can get there

Dara Khosrowshahi08:40

And Eric just a little bit more for me which is we do think that fleet financing for these cars is going to be somewhat unusual in that if you look at like fleet financing for rental car fleets etc they're all based on residual value of vehicles and I think the residual value of AV vehicles isn't established yet and so as a result in the early days we're going to take these vehicles on our balance sheet um we have a very strong balance sheet are capable of doing so uh and I think a lot of the fleet financing is going to be based on revenue kind of revenue potential of these fleets and what we're able to demonstrate is that cars on our network get very very high utilization and actually higher utilization on cars that aren't on our network you know we show a 30% kind of utilization premium on our network and we're able to do so very flexibly so you know if there's a fleet that for some reason fails in terms of their operations we can take that AV vehicle and you know put it under separate ownership and it will still earn on the Uber network so to speak so we think that the financing on the Uber network can have a real advantage in terms of cost of capital versus alternatives and it is kind of a business model that we're working with to establish with partners the reaction has been actually you know they're quite interested they want to diversify away from data centers so to speak so we're quite optimistic on it but we do have to establish kind of the business model the utilization advantages demonstrate that to the banks and then go from there

Dara Khosrowshahi08:42

Next question please.

Operator08:49

Your next question comes from Nikhil Devnani with Bernstein. Your line is open.

Nikhil Devnani09:27

Hey there. Thank you for taking the question. I wanted to follow up on the international supply dynamic you called out. Um just want to make sure did something sort of change through the quarter I think last time we had talked about Brazil but it seems like there's a few more markets that are now reflecting this so if you could just elaborate on what you saw through the quarter that would be helpful and then also as we look forward how should we be thinking about the supply side investments required because some of the variables called out like immigration feel a little bit more persistent so it would be helpful to understand just the degree and persistence of these investments as you try and reaccelerate the business thank you

Dara Khosrowshahi09:48

Yeah yeah thank you Nikhil so I think what I would say is a lot of this is a continuation of the dynamics that we have seen through the year and if you zoom out and look at the macro environment with the escalation in the war in the Middle East fuel costs impacts have been felt globally.

Dara Khosrowshahi11:58

Where it shows up most materially for us is in emerging markets where there is a level of price sensitivity on both the consumer and the driver side and what we talked about last quarter in Brazil was specifically focused on motor supply from drive delivery competition in the market but through the last quarter we have seen the elevated fuel price impact in markets like Brazil and India in particular quite meaningfully impacting the supply situation similarly you know the immigration dynamics have been in place through the year but as we go through the back half of the year and we see elevated demand from the holiday season that you have coming through right now which again the demand picture is pretty strong we see an elevated impact on the supply on the marketplace when the supply is short so that's kind of what we're calling out in Canada as well um now this is a good problem where you know we are at the scale that we are at operating at and we still are running into supply constraints rather than demand constraints and we know exactly how to address those kinds of challenges with the history that we have demonstrated we're making targeted supply investments so this is focused on driver acquisition retention and engagement and as we go through that kind of investment we are already encouraged with the early signs of supply improvement we saw in October and supply hours growth globally accelerated in October including notable improvements in Brazil and India so I think you know with all of that you see our outlook which is steady at the 18 to 22% growth range which is steady from the last couple of quarters so we feel good about where we are and the growth runway in front of us is extremely long over the last five years we have doubled our eligible population penetration in our top 10 markets but it's still at only 10% right so we feel really good about where we can go from here.

Dara Khosrowshahi12:49

I think just the additional factor that that we are dealing with is that we obviously had the year-over-year pressure on supply but then we also have seasonal pressure on supply as well which is September October November December are kind of peak season for us both in mobility and delivery and in some markets like Brazil mobility and delivery depend on two wheel supply which for us is for example one of the examples of supply that that we need to add so those kind of intermingle so it's a seasonal issue and it's a year on year issue that that are hitting together but we've got a good handle on it we're very optimistic about the trends as we see them in October and going into Q4 and again this is not the first time we have dealt with this kind of situation

Dara Khosrowshahi12:51

Next question please

Operator12:57

Your next question comes from Brian Nowak with Morgan Stanley your line is open

Brian Nowak13:19

Great thanks for taking my questions maybe one on grocery just talk to us a little bit philosophically about the investments you need to make in grocery and retail the sort of further accelerate and compete that compete in that business in the US and how do you think about the need to have a larger 1P presence so you know your own dark stores or your own sort of fulfillment operation

Dara Khosrowshahi16:42

Yeah, absolutely Brian. So we're very excited about the progress of our grocery and retail business we're you know run rate now at 15 billion dollar run rate growing 40% on a year on year basis you know we think this is like a 10 trillion dollar TAM so it's an enormous market for us and what we see from consumers is over and over is you know they want more stuff faster they want everything faster you know I think when Amazon brought overnight shipping it was magic and now you know next hour shipping is magic and pretty soon people are going to expect everything in 15 minutes and we play right into that area you know the areas of investment for us are really about selection they're about affordability and they're about kind of consumer experience you know on the selection side we're very excited to expand to Costco nationwide we also have added a number of international players Target Decathlon Priceline in Australia Tesco in the UK Rui in Germany as well so we continue to invest in selection and as we add selection we have more consumers coming online as well and also conversion rates improve we continue to invest in affordability whether it's fresh off Tuesdays or for example members not having any fees above 60 60 bucks that our members are loving as well and then we continue to invest in product innovation as well to make sure that you know our pick pack is as accurate as it can be shopper we're investing in shopper quality so we are paying high quality shoppers more and we're also introducing technology for example where our shoppers will take a photo of an empty shelf to verify that you know the item that you're looking for isn't there it also helps our consumers too because when they see the empty shelf they don't get upset it's not the shopper's fault it's just what they want it wasn't there and so it's it helps establish trust between both sides of the marketplace so for us it's just all about execution you know as it relates to dark stores um our number one priority has been to work with our partners and to help them grow their businesses uh now we're very excited as it relates to delivery hero they have built a substantial quick commerce and dark store business and the benefit of dark stores is that you have a much better handle on inventory usually your pick and pack success percentages your found rates are much higher so quality goes up as a result of the vertical integration and you know this is a part of the delivery hero hopeful potential acquisition that we're very excited about that team has been building their quick commerce business for you know well over you know seven eight years it is it hit break even it is growing at very attractive rates and we're very excited to add that as part of our portfolio once we close on delivery hero

Balaji Krishnamurthy17:51

And and just one additional comment on the dark store question this is for us a fit for purpose sort of solution right we will not we don't want to get into this business everywhere but there are markets where it makes sense as Dara mentioned delivery hero has done a really good job with their dark store footprint in the Middle East uh we are also uh you know in a position where we would be able to uh look at that business in Turkey both with our existing presence in the market but also with the Getir transaction that we have done and that business again is running near profitability and then we have organically experimented with this in Taiwan as well so ultimately it needs to be a business that that can be run well has to meet the market conditions and has to have a good return on assets when you go into that sort of a field so we'll be selective in where we engage with this otherwise we will work with our grocery partners who are experts at doing that that in their own space

Dara Khosrowshahi17:53

Next question please.

Operator18:00

Your next question comes from Ron Josey Josey of Citi. Your line is open.

Ron Josey18:17

Great thanks for taking the question I want to ask a little bit more about the fully driverless you know rollouts and 700 this year to 2000 next year and just help us understand a little bit on the geography pace of rollout I think you said 50 50 in the US international and how you're thinking about that thank you

Dara Khosrowshahi18:31

Yeah, absolutely. So we're very excited. I mean, we got launches. Obviously, we're in market with Waymo already in the US. We're in market with WeRide and Baidu with no drivers in a number of international markets. markets.

Dara Khosrowshahi19:13

We expect to launch Zoox and Motional, as we mentioned, in Vegas this year. And then next year, we expect to add Nuro, in California and then in Houston as well in Texas at least early on in 2027 these are fully driverless commercial rides and Avride the middle of the year in Texas as well and internationally we expect to add Pony and Momenta to our no vehicle operator kind of inventory You know, in late 27, I do think we are going to be doing kind of testing rides, vehicle operator testing rides with NVIDIA, with Rivian, hopefully with Wabi as well.

Dara Khosrowshahi19:58

And also wave outside of the US so you know there's going to the partner strategy and the panoply of all these partners are really going to start adding up and we're quite confident of getting to the 2000 vehicles in 2027 but the real goal is to get to tens of thousand vehicles tens of thousands of vehicles in 28 and beyond and really scaling the ecosystem and you know we are in market in these markets we have relationships with the cities we have operations in those markets we don't have to build demand the demand is already there so we think we can launch very quickly at very high utilizations for our partners which makes us even more optimistic about the opportunity here

Dara Khosrowshahi20:00

Next question please.

Operator20:02

Sure.

Operator20:10

Your next question comes from Shweta Kajaria with Wolf Research. Your line is open.

Unidentified speaker20:15

Hello?

Operator20:19

Perhaps your line is on mute.

Unidentified speaker20:21

Can you hear me?

Operator20:22

Yes.

Unidentified speaker21:31

Sorry about that. Thank you for taking my question. question. Um let me try two please. The first is on AV unit economics. So in the illustrative example that you gave 30% 30% increase in paid trips with a you know 23% decrease in fixed costs and even if partners were to pay the transaction fee or take rate to Uber that would still be additive to them so my question is how durable is that 30% increase in paid trips that you would add how durable is that advantage as you think long term in AV and then the second question I have is on just your capital allocation strategy you talked about that in your letter there's no change there in terms of your priorities and you don't expect M&A further M&A until the year end or after but I guess how are you what was the rationale for Easy Cater how are you thinking about capital allocation in general when you think about mobility and delivery as well as AV going forward thanks a lot

Balaji Krishnamurthy22:48

Sure. Thanks, Shweta. I'll take the first one. Dara's going to jump in on the second one. Um so on the uh utilization lift I would start by saying we believe it's a very durable advantage for Uber um and maybe just for context when we're talking about the 30% lift here we are comparing Uber's deployments on a hybrid basis in the US with mature 1P deployments right and these mature 1P deployments have the advantage of mix that in that they include San Francisco which is a uniquely favorable market for AV deployments today um as that deployment scale broadens out we expect that 1P deployments will likely have utilization that will be worse than what they're seeing in San Francisco and in fact what you're seeing on the ground today is exactly that both for Waymo and Tesla their trips per vehicle per day in the new markets that they have launched this year is in the low teens versus high 20s that we are seeing on our network in these hybrid markets and effectively you're looking at 100% plus utilization for us in those markets.

Balaji Krishnamurthy24:06

Um I think the other part of this is we are also going to likely have advantages on additional pieces of the unit economics pile uh first the vehicle costs over time are going to come down um and that will be true for many players uh but in general what we are trying to ensure here is that as we work with OEMs we want to ensure that we have line of sight to advantaged pricing that we can deliver because we have scale second piece that we will have advantage on also is on shared charging maintenance and fleet infrastructure since that can be shared across multiple AV partners and I I would think about this as the hyperscalers getting advantage versus on-prem data centers that were serving one one corporate so I think those two pieces in addition to the utilization will support long-term economics our goal is for AV trips to deliver margins comparable to human driven trips over time and as we get beyond that kind of point we can share savings with consumers and truly expand TAM beyond what we're already seeing on the ground.

Dara Khosrowshahi27:33

Great. And in terms of you know capital allocation etc our priorities haven't changed obviously our number one priority is to drive organic growth investment in the AV ecosystem we talked about a 10 billion dollar commitment based on certain deliverables both in investment and partners and or AV fleets etc that that's another priority and then there's M&A and buybacks as well and we have plenty of capital for both we are going to shift to I would say more of the top two and we're going to pull back on M&A chiefly because we're really focused on integration of the deals that we've already announced um the generally they're performing great but we want to make sure we get the right cost of capital as it relates to M&A and if you look at kind of our M&A philosophy historically and going forward it's really in a couple categories you know one you'll see deals that expand our geographies right it they allow us to offer our services in more countries Delivery Hero is an example of that that, Trendyol is an example of that and not only do we get into new geographies that are growing very very fast but it allows us to offer the platform advantage the power of the platform which is mobility and delivery cross promoting each other membership programs cross promoting each other in more countries so we're in many many of the delivery hero markets where many many of the delivery hero markets and it's just the extension of our platform geographically the second area we look at are what are capabilities that we can build that are specialized and we think really profitable we talked about our premium business growing and we've talked for example it's grown 35% year on year and our U4B business grow almost 50% year on year so premium is a theme for us and corporate business is a theme for us is is something that we want to kind of double down on and those for example are the acquisitions of Blacklane and Easy Cater that you asked about you know Blacklane gives us more specialty very high quality inventory and Easy Cater have specialized capabilities you know they only work with merchant partners who focus on catering a lot of times the delivery partner has to come into the office set things up it's a different level of service and there's a huge advantage in being able to offer both Blacklane and Easy Cater to our U4B audience which I think now we've got like half of Fortune 500 companies now as well so those are established businesses different capabilities and we can introduce our U4B audience and really embed with them even more and then third is kind of new products that can grow with our audience so Spot Hero is an example of that um we want our product to be uh more relevant for example to commuters commute is one of our largest categories and to be able to offer commuters you know an Uber to work um a pass to avoid surge and parking if they want it when they want to drive is a great for example for us building out our inventory of services to the commuter who is a top customer for us.

Dara Khosrowshahi28:02

So those are the themes that we're going after we're really excited to the about the acquisitions that we have on our books we're so we're very excited about Easy Cater and generally at standalones they are operating at higher levels than our deal cases and now we just want to make sure that the integration is right the teams are treated well and everything goes well which is why next year I think the focus is going to be more on organic autonomous and then of course buying back stock opportunistically.

Dara Khosrowshahi28:21

I just from a process sure from a process standpoint for any deal that you see us do we are always evaluating the build versus buy case and we're looking at the accretion math relative to what it would look like if we just bought back our own stock.

Dara Khosrowshahi28:35

In this specific case since you are specifically about Easy Cater the build versus buy math could not be more obvious. We are talking about acquiring a business that is profitable right now.

Dara Khosrowshahi28:53

We have more synergies coming and relative to building this business we expect that you would see a few hundred million dollars of profit swing in the build case versus buy. So I think you know we feel very good about the deal logic and we now are focused on executing against it.

Dara Khosrowshahi28:56

Next question please.

Operator29:04

Your next question comes from Michael Morton with MoffettNathanson. Your line is open.

Michael Morton29:25

Good morning. Uh thank you for the question I wanted to maybe talk about the potential combination of DoorDash and Instacart Uber has talked a lot about the cross platform success you've experienced from your eats to your mobility business so I was wondering if you could talk about the potential opportunity and or risk that you see created by this combination thank you.

Dara Khosrowshahi31:13

Yeah absolutely so I I don't think honestly Michael it's going to affect us too much um our grocery and retail business is growing you know it's a 15 billion dollar run rate growing 40% our focus really is to continue to improve the product and the product still has a lot of improvement ahead of it in terms of selection in terms of quality in terms of on time rate in terms of fill rates etc you know when we talk to our merchant partners they want choice they want to develop direct channels they want plenty of partners including us and DoorDash and Instacart to work with so this potential deal takes one of those partners off the table and we've already had kind of reach outs from our partners you know both who are very worried about the potential transaction and asking us what do you think and then two wanting to actually work with us more wanting to build their business with us so that they are not overly dependent on a single platform if DoorDash and Instacart happens which will be a very very large percentage of the online markets but from our standpoint the promise of this market is the 10 trillion dollar market you know this would create a competitor that has a big share of certainly the online portion of that market but we think for us we're going to continue to invest and you know these acquisitions create a lot of distractions and at this point the reach outs we've gone from merchants are merchants who want to embed with us more deeply and want to build their business with us so that they have alternatives and you know it's going to be up to the government to decide whether clear alternatives or two alternatives is better

Dara Khosrowshahi31:15

Next question please

Operator31:22

Your next question comes from Ken Garelski with Wells Fargo your line is open

Unidentified speaker32:16

Thank you uh two if I may please first could you talk about domestic or US mobility trends maybe what you saw in 3Q and into 4Q you talked about improving mobility growth but I I want to see if we can touch a little bit upon what you're seeing in the US versus some of the international markets you've talked about and in particular I think there's a market focus on continued on California but maybe even in some markets in Texas where there's been heavier AV penetration and the second question is you talked about organic delivery acceleration could you talk about the drivers you know between kind of restaurant restaurants and grocery are you seeing core restaurant acceleration as part of that overall organic acceleration thank you very much

Dara Khosrowshahi32:32

Yeah, thanks, Ken. On the US for mobility, we are seeing relatively resilient growth in the US versus the international trends we talked about earlier in the call.

Balaji Krishnamurthy34:20

You know, growth moderated a bit in Q3 but not as much as in the international markets. You know, elevated gas prices are an issue globally and there is some level of supply pressure that we're seeing in the US as well but we are responding with the targeted investment supply investments that we talked about earlier I think beyond the supply question what we are seeing in the US that continues to be true is the insurance tailwinds continue to build you know we talked about the meaningful acceleration in California trip growth they continue to outperform relative to the rest of the country two our barbell strategy on the product side continues to be really really healthy in the US US barbell products grew at 3x the rate of the overall business in Q3 and it's driven by strong innovation in our growth best portfolio including wait and save comfort reserve black but then also expanding to new demographics with teens and women preferences that are targeting just new cohorts of consumers and creating more options for our consumer base and then finally from a sparse market standpoint you know we just see so much runway in the US less than 10% of eligible consumers in sparse markets have used Uber in the last 12 months that number in dense markets is 50% of consumers so you know we continue to make improvements on supply and reliability in these markets and that that should have long term impacts that are very favorable Dara you want to take the second one?

Dara Khosrowshahi36:30

Yeah and we're quite pleased in terms of US delivery which accelerated nicely it's the second quarter in a row that organic growth and delivery and US delivery accelerated and really it's for a number of factors one is mathematically our grocery and retail business and direct business which are growing faster than our OSD business are becoming a higher percentage of the portfolio so to speak so you just have kind of a bigger faster growing part of the business getting even larger our core restaurant business is also accelerating and that is because of really merchant selection the number of merchants that we added in the US was up nicely about 12% on a year-on-year basis so as we add more selection you know everything helps conversion improves we get new customers on the platform as well membership is definitely a tailwind for us so members are now 70% of delivery gross bookings so membership is deepening in engagement with our consumers as well and then of course sparse markets you know as Balaji said sparse markets is a play that we're running globally but it's absolutely a play that we're running in the US as well for delivery that helps and then last but not least is is really deals we are focused on kind of merchant funded promotions in addition to the membership discounts that we give to our consumers if you look at our ad business and merchant funded promotions they grew to over 10 billion on a year on year basis and you know these are dollars that we're giving to our consumers in and the return for merchants is you know new consumers and kind of higher penetration in the marketplace so all of it is working at this point if there's one issue it's it rhymes with mobility in that we continue to invest in delivery in couriers to make sure that you know kind of our courier growth keeps up with the consumer demand that we're seeing on the food side that is right now the biggest challenge that we got but the team we think is more than up for it

Dara Khosrowshahi36:32

Next question please

Operator36:39

Your next question comes from Mark Mahaney with Evercore your line is open

Mark Mahaney37:05

Yeah I just want to ask one question on the profitability of the mobility segment these 8% margins you had this last quarter with the supply initiatives that you're you know introducing in international markets does that can you maintain the profitability performance that you've had or is it do we have a detour is it structural or is it a temporary detour or is there any detour just in those profit margins thank you

Balaji Krishnamurthy38:30

Yeah, Mark, I think I would just take you back to our philosophy as always which is that we want to drive margin expansion for the total company on a year-on-year on year basis and ideally we want to do the same for the segments as well but on a quarterly basis there is some variability in the business both from you know just the investments we typically make in supply in holiday season etc so I don't I wouldn't call out any kind of meaningful changes in the margin trajectory for the business and You know we would have some color on just the Q4 supply investments for mobility that would have an impact on take rate but not necessarily from a margin standpoint anything meaningful uh look i think the final point i'd make here is on profitability we are uh if you look at our outlook we delivered a quarter of mid 30% EPS growth the Q4 outlook that we just provided at the midpoint is a 37% year on year growth on our non-GAAP EPS. So if anything you're seeing the profit ramp expand and that puts us in a pretty good spot for 2027.

Dara Khosrowshahi40:17

And Mark just a little bit more so so you understand the picture in terms of supply and demand you know we have base pricing for both kind of our consumer pricing and then base pricing for driver courier pay etc then we have incentives and there are kind of call it rider side incentives driver side incentives eater side incentives you know and then kind of courier incentives as well these are more flexible dollars that we target times you know like Halloween make sure drivers show up etc or we'll target places if we think that there's a ball game going on we'll put incentives for drivers to show up to the ball game at the right time but the cool thing is that we just rebalance incentives between riders and drivers for example in this case and so whereas last year more of the incentives went to riders to reduce price now this year we're taking down rider incentives and we're using those dollars to fund driver incentives now that does mean sometimes higher prices for riders which is something that we watch out for we will do do trade-offs against profitability but that's something that we handle but there is a flexible incentive pool that we allocate to supply or demand based on the balance of the marketplace and that's part of kind of the art that we've got and then there's a lot of science algorithmic science that goes into hey if you have a dollar what is the maximum predicted return for that dollar and should I give invest that dollar in a driver in Brazil or should I invest that dollar in a rider in India for example.

Dara Khosrowshahi40:32

And the algorithms are making these choices and these structurally can make these choices based on you know training on billions of trips and you know they can allocate these investments in a way that humans just can't.

Mark Mahaney40:33

Thank you, Dara. Thank you, both.

Dara Khosrowshahi40:35

We'll take our last question, please.

Operator40:43

Your last question will come from Doug Anmuth with JPMorgan your line is open

Doug Anmuth41:02

Thanks so much for the question. Um Dara I was hoping to get your latest thoughts on AI agents can you just talk about some of the goals and differentiation that you can provide by building agentic directly into the Uber platform and then also how you're thinking about the opportunities on third party platforms like Muse and others thanks

Dara Khosrowshahi44:03

Yeah definitely so Doug I think our focus is is making sure that we invest for the best possible experience to become direct you know it's price your delivery time reliability selection obviously we have membership benefits and members now account for more than 50% of our bookings it just builds the best experience when you come direct and we're really focused on making sure that the direct app experience is already frictionless right so like the mean ride time booking is less than a minute it's actually 50 seconds that's how much time people spend on our app and 75% of our rides are single tap based on personalizing you know your destination based on the data that that that we have on you know our mean if you look at the median time for an eater to reorder their favorite food it's only 90 seconds so we make sure that kind of coming to Uber doesn't require a bunch of toil you can get in you can get out and because of the data that we have you know where you're going when you're going there etc we think we're going to have a ton of people come direct to our site and listen I used to work in the travel business where we're dependent on the Googles of the world I don't want to go back there um so really kind of the best in class marketplace technology that we're building operational execution I I think is going to have more and more people coming direct to us and we are building our own AI experiences you know for example we have a cart assistant which we're very excited about and early signal shows that baskets that you build with a cart assistant are roughly twice the average of the average basket as well and we're working on kind of each assistant driver assistant etc to make sure that AI kind of we have the best AI assistance that can get you in and out of our services very very quickly um that said we will have discussions with kind of third party AI agents we think that it's another opportunity to reach our platform uh we think it'll be a net positive in terms of demand into the ecosystem and you can guess based on kind of our services there are a lot of every single AI assistant company is talking to us and we're really now negotiating the terms of trade and the good news here is in most markets you have two mobility big mobility providers two big delivery providers you know I think I counted now there are eight different assistants and I think there'll be more than 10 assistants so I think you know the content players in our space in the physical space where kind of you know the fulfillment the demands on you know the services that we build are very large I think the demands on our services are going to be very very high so something we're really excited about now it's pretty small Balaji I think you were telling me AI what a transaction volumes at this point

Dara Khosrowshahi44:03

Yeah

Dara Khosrowshahi44:42

So I think just to put numbers to it, um, we had our one of our largest weeks last week because uh it was Halloween, so we did uh just around 320 million uh trips on Uber and Uber Eats um the volumes coming from AI agents uh for Uber Eats were around 500 um 500 orders uh total and for our rides business, it was a grand total of four trips that we uh fulfilled from agents. So it's very very early and very limited traction that we're seeing so far.

Dara Khosrowshahi45:07

Yeah, listen, we hope that there will be more traction. Like we do do think that we want to make services that are available to consumers in a delightful easy way we think our direct services are going to be the most delightful and easy but we will work with these third parties which is very very early uh and we want to make sure we're not dependent on any one player and I think we're very well positioned to uh in this environment going forward.

Dara Khosrowshahi45:30

Uh alright well I think that's it thank you everyone for joining thank you Uber team for everything that you've done to deliver a great quarter um we're excited to close out the year hopefully with a really really strong quarter and a big thank you to our investors and our owners who um who put their dollars uh and faith in us as a company uh more to come thank you

Closing

Operator45:36

This concludes today's conference call thank you for joining you may now disconnect