All right. Good morning, everybody. Let's get started. Thank you for joining. My name is Nikhil Devnani. I'm Bernstein's U.S. Emerging Internet Analyst covering Uber. It's my pleasure today to be hosting Prashanth Mahendra-Rajah, CFO of Uber. Prashanth took the role over seven months ago. Prior to this, he was the CFO of ADI for over six years. Prashanth, welcome to the SDC. It's a pleasure to have you. Really looking forward to the conversation today. Joining us is Deepa Subramanian from IR as well. Just a reminder, you can submit questions for this session. Please do so via the QR code in your agenda or going to pigeonhole.at and using the passcode SDC 2024, and I'll try and work that into the dialogue as well.
Prashanth, I know you wanted to make a couple opening remarks, so I'll, I'll turn the stage over to you.
Great. Great. Yeah. Thank you. Thank you, Nikhil. It's very nice to be here. I see a few familiar faces from my prior role. Before I start talking about Uber, I did want to give one shout-out to Nikhil here. There's a piece of research that he did a couple of weeks ago around the overhang on the Uber stock. I think it was maybe an early May piece that if you haven't read, I encourage you to read it. I thought it was pretty good, and that's not often something I say about sell-side work. So with that, let's get into it. So Uber, once-in-a-generation company that has really transformed all of our lives.
We, as a company, I think, are also in the middle of a pretty powerful transformation. If you think back, our IPO was five years ago in May, so this is, w e're actually hitting our five-year anniversary for a company that is about 15 years old. Pre-pandemic, sort of pre-IPO, I should say, pre-IPO, we were a company that was really focused on how do we move people from point A to point B? How do we gain our category position? We had 90 million consumers using our platform and call it maybe four million earners. We entered the pandemic, and we saw a pretty substantial hit to our mobility business. It was actually down, I think, from peak to trough, like 70%.
But during that time, we saw a meaningful growth in our delivery business, which we invested in, but it also created an opportunity for the leadership team to really look at what was Uber and make some difficult choices. We exited a number of businesses, a number of joint ventures. We made some very tough staffing decisions in our employee headcount base, and have emerged from that a much stronger company. Today, about half of our business is mobility and half of our business is delivery. We have about 150 million folks using our product every month. We are supporting seven million earners around the world, and I think just this last quarter, we hit one million merchants whose products are available on Uber Eats platform.
Financially, also a pretty strong transformation. So the company, pre-IPO, was losing about $2 billion, or a little over $2 billion in cash that we were burning through. We are now at a $40 billion-$42 billion revenue run rate, with very strong growth, despite that large revenue base. We have adjusted EBITDA of $5 billion, and over the last 12 months, we generated $4 billion in free cash flow. So it has been a real transformation over that period to a company that is of scale, that is growth at scale, and then that is now really focused on how do we drive shareholder value, and I think through some of the Q&A, we'll get a chance to get into that. So.
Perfect.
Let's go.
Thank you, Prashanth, and we hope to change your perception of sell side, one note at a time. So, I guess as you come into the role here, you know, how do you think about your imprint, your focus as the CFO of Uber? What kind of direction do you want to bring to the company here forward?
Yeah. Thank you. So, as Nikhil mentioned, I think I'm on my seventh month, and maybe a few things I would highlight. First, when I think of my first meeting with Dara, when I had coffee with him in San Francisco Airport, he talked about Uber being a very mission-driven company. And I don't know if you guys have ever met a CEO who has not said that they work for a mission-driven company. But for Uber, what I found was this truly is something that is very different, and I feel very unique having spent a lot of time in different companies.
This is an organization where we have 30,000 employees who are really passionate about what they do every day and about their ability to kind of, with a sense of urgency, attack problems, focus on our consumers, focus on our earners, and focus on merchants, and creating the Uber magic, as we call it, for all of them. Where I see myself spending time is first, I'm transitioning from hardware to software, and it is strikingly different. The rate and pace of software is meaningfully faster than I think my colleagues in the hardware industry would be accustomed to. So for me, it's about learning the business first and learning the tech, learning the business models, learning our geography. We operate in over 70 countries.
And then more operationally, I think it's a few things. First, this is an organization that has a tremendous number of ideas and opportunities that are all calling for capital, calling for spending. It could be headcount resources, it could be investment dollars to be used for product development or for market activities. And with that very sort of long list of regional entrepreneurs who are saying, "I have an idea, and here's why to what extent can I get funded?" We, as a leadership team, can do a better job of prioritizing where we do give our time and our money to, and when an idea that we're working on maybe is not living up to its initial potential, and that money can be redistributed or those resources can be redistributed elsewhere.
So that is, that's one area that I'm spending time with Dara and the ELT on introducing sort of profitable growth and what it means to be constantly thinking about those challenging trade-offs. The second, I would say, is with the scale that we have, the importance of driving our focus on our operating cost structure and driving out bits of sort of margin expansion through grinding through payments, customer service, insurance, our fixed cost structure, lots of different levers as you go down the P&L, that with the scale that we have and the growth that we have, those minor kind of improvements can continue to compound quarter after quarter, multiplied by the volume that we deal with, and can be quite accretive to profitability.
So third would be that I've got the luxury of being the sort of the first CFO of Uber who gets to deal with capital allocation. We've now moved to a stature where we're generating significant free cash flow, and how does that cash get deployed? So, for us, key priority for us will be to return that to shareholders through our share repurchase program. And we've talked about kind of that as being a framework to get us eventually to a stage where we are consistently reducing our share count every year. And then maybe last, Nikhil, I'd say is you'll probably see me more than you'll see my boss on a go-forward basis.
I think that over the last couple of years, Dara was out with investors a fair amount, and he's still gonna be accessible to you, but I think we'll probably have you come to see him versus having him on the road as much, because I think there's good use of his time addressing the long-term strategy, so I will be pinch-hitting for him.
Appreciate that overview. Could we maybe start with the profitable growth piece of it? You know, externally, it sounds like you've basically put up guardrails within the business. Historically, Uber wanted to be everywhere all at once.
Mm-hmm.
It sounds like a fair characterization, but correct me if I'm wrong. When you think about those guardrails, are they specific to the businesses, or do they extend across the different segments, such that you are making more discrete decisions in capital allocation between delivery, mobility, freight?
Yes. So one of the magics about our platform is that we are operating a global platform that has been built off of years of our not only our technology investment, but just the experiences and the learnings that come from operating in so many different countries and in so many different environments. And what that allows us to do is at the start of every quarter, we think about how much we can fund the market to improve liquidity. And where that money gets funded will be based on what our priorities for that quarter are, given sort of all the demands that are out there. So it starts out with, should we, h ow much goes to delivery and how much goes to mobility?
Then it goes to, within each of those divisions, what is the priority they're trying to accomplish? Is it a new product that has been launched that we want to encourage more adoption of? Is it a new geography that we have entered into, that we want to create more liquidity in the market? Is it for a competitive situation where we want to make sure that we are defending our category position, and so forth.
So what is incredible about the way the tech operates is business leaders, which then go to geography leaders, and then go to country or city heads are allocated what they are able to focus on or what they're able to fund, and then they work with the technology team to say: These are the metrics that I want to improve, A, B, and C. The tech team is able to run that through the algorithm, which then does the work to optimize for whatever key metrics that we're focusing on. It's a pretty incredible system when you think about it, because we operate a global marketplace, but we at the same time are implementing our decisions very locally.
And the way that that is enabled is because we have this global technology platform that can be tuned very specifically to what we're focused on. Now, to step back, Nikhil, to your question on how do we think about mobility versus delivery? One of the things I shared in the investor day we had in February was we would really like you as investors to shift your focus to EBITDA dollar growth. And the rationale for that is, and that's a shift from incremental margins. And the rationale for that is that as a management team, we want the flexibility to constantly be moving our incentive dollars and our investment, whether it be on a quarter-by-quarter or year-by-year basis, between our different product lines. The goal that we are focused on maximizing EBITDA dollars.
Having expectations or guidance that we're providing on a specific product line limits some of our flexibility. For example, I think we had talked recently about products we had launched with Uber Teens. And if we want to incent Uber Teens as an example, and maybe fund that from a different side of the business, those are degrees of freedom that we would like to keep.
We're believers in the delivery business, but one of the things I hear from investors often is, you know, why go into delivery? Why go into grocery delivery? Some of these are margin-dilutive efforts relative to your core mobility business that you feel very optimistic about from a growth perspective. So if I ask you, the other question is, why, you know, why not just allocate more into the rideshare business if that's your profit center? You know, what's the strategic rationale for being in these other verticals to begin with?
Sure, sure. We are excited about the delivery business, and as I mentioned in my opening remarks, it's half of our gross bookings today. It is on a very strong growth trajectory for both top-line growth, but also for improving profitability. If you think about the top 10 markets as we define them for our delivery business, we have a category-leading position in five of them. And in general, every quarter or every so often, we talk about category gains across those markets, and we're generally gaining category position in all of those markets on a pretty regular basis.
The problem that we get to solve for customers is that last mile, and whether it is for delivering food, delivering groceries, or delivering retail, there's a product market fit that we clearly are able to address. And when you think about the opportunity in that space, it still represents a very exciting and large TAM for us. Beyond just food delivery and groceries, we're also now doing quite a bit in the retail space, and in areas that I think you may not be as sort of directly aware of that is being done by Uber.
You know, if you order your iPhone from the Apple Store for delivery, if you order Walmart to have it delivered from the Walmart website, it is our crew that is, it's our earners that are delivering that. If you order McDonald's from the app or from Uber Eats, it's likely, you know, it's in both cases, it's being delivered by Uber. So this allows us to drive densification of the network. It allows us to create more earnings opportunities to bring folks into the platform, and then, as they have more opportunities to earn with Uber, then the retention of those earners is also better for us. And then lastly, I would highlight that, j ust go through some of the numbers here, right?
Delivery grew 17% in the first quarter, and that's on, again, roughly half of our revenue. Of that growth, we saw almost just under 50% of that from new users coming on the platform. So, increase in monthly actives. And in profitability terms, it is, it's on its way. I think in the first quarter, we were at sort of 3% adjusted EBITDA. So it is continuing to improve and be a great source of cash for us to continue to return to shareholders.
One of the criticisms of this industry is that the service is fairly commoditized, so the drivers are the same, the merchants on these delivery apps can be the same. You had a head start. How do you turn that head start into a durable moat? And how do you prevent this just being a race to the bottom on pricing if you have a competitor with minimum viable scale that can, at any point in time, increase the competitive intensity of the sector?
Yeah. Yeah, I think that is now being answered by our global scale, right? That you can, you can see the market dynamics playing out for us. We are, we are the only global platform of, of our scale on mobility, delivery, grocery. We bring it all together. We have representation in 70+ countries, and the, the intensity that we have had in building out that tech platform, that global platform, is what gives us that durable growth.
It's extraordinarily hard for competitors now to sort of catch up with the investment we've made because we've now even been able to move to profitability, where we're able to keep funding more and more investment in that space and launching new products like we did in our GO-GET two weeks ago here in New York. That is creating, I think, a wider and wider moat. In the competitive space, you look sort of around the world, and majority of our competitors are struggling with profitability. It's barely profitable or at relatively low levels of profitability, and I think that you'll continue to see that gap widen.
Let's stay focused on mobility growth for a moment. You're calling for stable mid-20s constant currency growth in the second quarter.
Mm-hmm.
So a couple questions there. One, what is underpinning that, that view and that strength? And then two, it seems like in Q1, maybe you held back some investments. We saw a bit of a deceleration in Q2. Sounds like you're reinvesting a bit more, and the growth is coming, coming through on the back of that. Is this just now a constant balancing act between these two factors, and are you dialing the levers as you see fit?
Yeah. So what Nikhil referring to is for Q1, we generated an impressive 26% growth at constant currency. And we've talked about our growth algorithm is really trips times pricing, where trips is a compound of monthly active users times frequency. So in that 26%, constant currency growth, we had about 17% of the 26% come from increased monthly users. So very strong top-line growth, and of that top line growth, still seeing more users coming onto the platform. Early in the quarter, and maybe chalk it up as a bit of a newbie CFO. Early in the quarter, we saw a lot of noise in the first couple of weeks in our year-over-year data trends.
I was unclear whether that was macro-driven or not, given the rate of interest rate hikes that we've gone through and the inflationary environment. And because we didn't have enough clarity on how much of that was just choppy compares, which can happen on a week-to-week basis versus macro, we made a decision to hold back some investment, as a very rational portfolio manager would say, you don't want to invest into a downturn. No, no, no reason to fight the tape. And the result of that was we exceeded profitability for Q1 because we held back investments. But as the quarter progressed, things normalized, and we got quite comfortable that it is, you know, it's business as usual.
Our guide for the second quarter for mobility is very consistent with what we guided for the first quarter. Again, business trends remain strong. But what that caused from a performance standpoint is you saw a bit higher profitability for mobility in Q1, which will, on a sequential basis, be down in Q2 because we are, we're not repeating that action of holding back on investment. We're not catching up. We just delivered that through as profitability and we're back to sort of running the business as normal.
If we look out beyond the quarter, you have a three-year framework.
Mm-hmm.
That implies mid- to high-teens gross bookings growth. What is the underpinning mobility growth within that algorithm? You have a core business that's been around for a while. You have new products that you've launched in various regions. How do those interplay?
Yep.
What do you expect from the rideshare business specifically?
Yeah, yeah. So maybe I'll restate the framework for everyone's benefit. The three-year model that we gave in February was: expect us to deliver gross bookings at a compound CAGR of mid- to high teens. Expect us to convert that to revenue at a relatively consistent revenue take rate as we have today. We're not looking for that to meaningfully move. Look for adjusted EBITDA to grow high 30%s-40%. Expect EBITDA to convert to cash flow in excess of 90%, and then look for us to return that cash flow because we intend to remain asset light to shareholders, and we also announced at the same time our inaugural share repurchase program with a target of about $7 billion over the next couple of years. So that's the framework.
Now, when you look at what gives us confidence to that gross bookings range, we expect growth, and if you go back to the model that I said, it is number of monthly users times the frequency they use the product, times price. We expect price to be relatively flattish over that period. So again, that gross bookings growth will not come from us turning the pricing dial. It will come from a balance of increase in users and those users using the product more frequently. For our core products, we expect core products to contribute sort of a low teens of that range, and then the upside would come from the investments we're making in new products. New products on the mobility side would include examples like hailables, which are taxi products.
It'll include Moto, it'll include our U4B business, as some examples. New products for the first quarter were growing 80%. So very strong growth on new products, which is what gives us confidence on that, that boost for us to be able to come in at the higher, at the high end of that range. And then on the food delivery side, examples of new products would be alcohol and grocery. So that's the construct of where the growth comes from. And then we do expect a balance, a better balance between how much of that comes from new users versus frequency.
Today, certainly for the first and second quarter, it's probably over-indexed towards new users in terms of user frequency, is driving more of the growth, and we expect that to balance to be more frequency-led as these quarters roll out.
Maybe a good segue from that is your more mature markets, like the U.S. or the U.K., it's hard to find people that don't know what Uber is.
Mm-hmm.
At this point in time. So where does the growth keep coming from?
Yeah.
In these more mature markets? How do you keep driving frequency up, given you've been around for a long time already now?
Yes. A learning for me, Nikhil, coming into this role is that you and I, and probably many of the folks in this room here, we are more the exception than the norm. We tend to be high Uber users. We tend to be very familiar with the product, but the penetration of the product is still relatively low. In the U.S., I think, and Deepa, correct me if I don't get the number right, I think in the U.S., we expect that about 30% of the 18 and older population have tried Uber, so still significant opportunity for us to increase penetration there. And we are targeting that through a few different means. One is, as we continue to expand out into more suburban areas, including in, you mentioned the U.K.
In the U.K., I think in the last quarter or two, we began activating more in some of the areas outside of the big metros of London and others, and similarly in the U.S., but also tapping into demographics with different use cases. So, the teens product, which I mentioned, is now available in all 50 states. While it is growing off a very small base, the growth is absolutely explosive. I mean, truly explosive in terms of how quickly that product is being adopted.
A few weeks ago, we introduced the Caregiver product, and that is something that if any of you are taking care of older parents or older family members. It is a way for you to arrange Uber or Uber Eats on their behalf, and have that service coordinated between the three of you so that you're in touch with the courier or the driver, as well as with whomever you're providing the service for.
Product innovation of ways to find more use cases, I think, will continue to drive the adoption and the growth, and I don't think we have any concerns that our mature markets, like the U.S. or U.K., are anywhere near sort of where their terminal growth velocity.
What are the aspirations on frequency?
So, I guess I'd come back to when we think about the growth algorithm and having frequency contributing to about half of our growth algorithm. It is driving frequency up through a couple different things. It is a membership product, which helps enable more across products. So, a key lever is that. We know on frequency, and the reason we're focused on frequency, I should state, is if you're a multi-product user on Uber, you tend to spend a little bit less than 3.5 more times what a single product user is.
So getting folks into the system, where they're using rides and delivery and ideally grocery, into the membership program, so that those membership benefits carry across all three, helps keep the sort of that flywheel at an individual level running because you're using all of our products, and you're using them more frequently. And by doing so, then you're, you know, you're getting the benefits of membership, but we're also getting the benefits of the share gain versus alternatives that are available to you.
Dara has talked about the importance of being supply-led, and there are very strong tailwinds right now from a driver supply perspective.
Mm-hmm.
Your competitors are also seeing this. But when you step back and look at the product changes that you've made around pay, around transparency, do you feel that you've managed to structurally improve the retention rate or the engagement rate around this driver base? Because to support mid- to high-teens growth, you do need.
Yes.
The drivers to be available for that.
Yeah. So we are very much a supply-led business, meaning that our ability to continue to grow is a function of our ability to continue to bring earners onto the platform. And the flexibility that we offer them in working when they want for however long they want is a very important attribute to the earners. One of the big changes that Dara made when he came in, and he began driving himself and also working as a courier, is he got to experience what it's like to be an earner on Uber, and that led to a pretty strong focus on how do we improve the experience and improve the desirability of working for Uber?
It led to a long, long list of product improvements, including the establishment of a dedicated team, a cross-functional team, whose sole purpose is to always be looking at what is in the best interest of our earners, and how do we ensure that their voices are heard throughout the company as we think about product designs or market decisions? That has included some of the things that Nikhil has talked about. It included things like giving them great transparency on their earnings. It included creating financial products for them to be able to be, we would normally pay our drivers every Tuesday.
They have the opportunity, through some of the financial products that we have, to get those earnings on a more frequent basis, if they so wish. We are regularly doing satisfaction surveys, small groups, all kinds of interactions with them to understand what's important to them so that we can continue to improve the product. One that I don't think it's been launched yet, but Deepa can correct me, but one that was important for them was if you think about the last time you've been in an Uber, it is not uncommon for a driver to have an LCD screen as a part of their vehicle, but then they're using their phone to run the Uber app.
We are now integrating the Uber app into Apple CarPlay and into Google's Android product, I forget what it's called. But that allows, from a safety standpoint, they're now looking at a bigger screen, and it's just one less device for them to deal with. But little things like that, that we hear from our drivers, that, again, we have the scale now to invest in that tech and blow that across the globe, which I think is again, another advantage versus our competitors. But that focus on drivers is what brings them to the platform, and we measure retention rate. I don't know what we're public on retention rate, so Deepa, if there's a public number out there that we can share.
Our retention has been up 30+ basis points on a year-on-year basis.
Okay, so 30 up, up 30 basis points on a year-on-year basis for retention. And that is one of the, one of the important metrics for us to know that, that if you come onto the platform and you like it, then you're going to stay with us.
Everybody's talking about autonomous now. It's picked up steam quite a bit. So how do you position yourself for that world? Is this an existential threat to your model, and how do you ensure that it isn't?
Great. Good. First, thank you, Nikhil, for at least waiting to question seven before bringing that up. So, autonomous. A lot to say on this topic. So let's start with our, our sort of, a t the highest level, we are excited about autonomous. We view it as a real unlock for increasing our TAM, and that comes from a couple, a couple items. The first is exactly what Nikhil asked in the prior question, which is, in a supply-led business, we need supply, and, AVs are going to be a critical element of that supply as we go forward. It's a great way for us to bring more supply onto the platform.
And second, you can envision a time when the cost of the AV, because of mass production, has reached a more reasonable amount, that you're able to lower the cost of delivering our product to our customers. And if we can bring the price of our product down, we know the elasticity of demand will unlock more users onto the platform. So, from an overall TAM expansion, I would say that we are looking forward to AV. From a strategic angle, what is our approach here? We have very high conviction that as these expensive assets are introduced, what is going to be important for the owner of these assets is to drive utilization.
If you're going to monetize these assets, you need to have passengers in the vehicles as much as possible. The easiest way for you to do that is by putting them on the largest global network, which would be the Uber platform. We have a number of partnerships. I think we have over 10 different partnerships, both mobility and delivery in the AV space. Through those partnerships, we've already started a tremendous learning curve about what are the unique scenarios, situations, edge cases, et cetera, customer support challenges that come with servicing AV as an alternative to for rideshare.
So, those learnings are now helping us continue to improve the product and build out the tech that's necessary for us to be the platform of choice. We have conversations ongoing with a number of partners in the U.S. as well as outside the U.S. that I think are going to eventually manifest into supply. And I think the other one that folks often misunderstand is no one in the world understands demand patterns for transportation needs better than we do. We know when their peaks are, when the valleys are. We can tell you not just by time of day, but by location, where folks are going to be asking for rides, where are people trying to get to.
So all of that, all of that knowledge allows us to maximize utilization, but it also allows us to operate the ideal hybrid network. An all-AV network has the challenge of, do you build for the peak, in which case you have really substantial underutilization when, when you're doing non-peak hours, or do you build for some moderate level, in which case you have very high customer satisfaction challenges because during peak loads, people are- there's not enough vehicles to serve them. So it's a challenge that we are uniquely equipped to solve by being able to mix an AV with a hybrid or a hybrid solution, which is a mix of AV and drivers.
Switching gears a bit to profitability.
Mm-hmm.
Your three-year targets, our math suggests your margin structure needs to go from 3.5% of gross bookings, give or take, to about 5% or so.
Mm-hmm.
By 2026. It's not a trivial amount of margin expansion. You've already done a lot. You used to be cash burning, you're not cash burning anymore. When you look at your cost structure across fixed and variable elements, where do you see the most opportunity to improve that margin structure?
Yes. So, as a reminder, our long-term goal is our long-term target is a 7% EBITDA to gross bookings ratio. And if you take the midpoint of the three-year guidance range we gave you, you kind of get to the high 50s range. The way that we will continue to see opportunity on those costs is it's all through the P&L. So it is continuing to focus on a payment cost and driving down the cost of transactions on payment. We have significant technology on routing that we're able to use to improve the cost of transactions, significant investments that we are making in tech to improve our fraud or reduce our fraud expenses.
In the customer operations, which is a mix of chatbots, which are more ML driven, as well as live support. We see that AI is gonna drive opportunities for us, for our live agents to be more efficient, and for us to get scale on that line with continued growth in the volume. On insurance, it's an area that we've been putting a lot of attention into. Insurance, I would say now, has reached a level of stable, and investments we're continuing to make on tech to reduce accidents, the negotiations and the collaborations we do with our insurance partners, because we have a captive, gives us some leverage to continue to find ways to optimize that.
And then more recently, we've really increased our investments in going, being more on the front foot in a regulatory way to help improve some of the laws that are around that make us maybe a larger target than we should be for tort law. And then with the fixed cost structure, Dara's been pretty constrained over the last couple of years, limiting headcount growth. And as we look out over the next few years, we have conviction that if we do begin to add more heads, it will be at a small fraction of what the top line growth will be.
So, continue to get meaningful leverage on that, as well as continuing to drive more best cost sourcing of where the talent should be hired.
How about profitability on a GAAP basis? Beyond all the adjustments, beyond the stock comp, how important is that to you?
Yes. So the it is hard to be a company of our size and scale, and not see that there's there's gonna have to be a path for us to talk about reporting our numbers on a GAAP basis. We are GAAP profitable now, so to to question, we are GAAP profitable, but it really is more about talking about our numbers for generalists who who are more accustomed to having a way to compare companies across across their portfolio, having a consistent set of numbers. So I think that's in the, that is in the very near future. One of the challenges that that I think Uber brings is we are very comfortable holding equity stakes in in other companies for strategic reasons, and those equity stakes do create some volatility.
So that's probably an area where investors are gonna have to continue to look through, because I think our willingness to do that actually is a strength for us, but it does create some non-cash swings in the P&L.
Can we spend a moment on the profit implications of some of the growth bets? So within mobility, within delivery.
Mm-hmm.
You have some faster-growing product types, as you talked about. How does the profitability of that portfolio evolve over time, and how big of a drag is it today in your current margin structure?
Sure. So let's take mobility for a minute. So the growth bets in mobility as a portfolio is profitable, and that and there are multiple bets within that portfolio. Some are very profitable, that we're delighted with where they are. Others are closer to breakeven, and there are others that are still clearly in their investment phase. So there is a mix in there, and the Our view is pretty straightforward, is that if we don't see a path for a bet to become profitable, then we will no longer keep that as a bet. So it stays in the portfolio under regular review, with kind of the scrutiny of: Is this something we want to keep investing in?
If so, kind of what's next, you know, how long do we let that run before we have this conversation again? And if we're unable to, then we'll pivot out of that, and it goes back to my opening comments, that when we come out of a bet, then it allows us to fund another great idea. So, all of these are sort of in the spirit of how are we gonna continue to provide gross bookings momentum, just, not just for the next three years, but really for the next 10 years. And there are some that, you know, that are a little bit longer, you know, that are pretty exciting.
I know one that, that, that Dara is particularly excited about is high-capacity vehicles, which is this, this idea of us, you know, sort of think of it as, as, as an Uber Bus. We have launched in India, a, I guess it was a week or two ago, as part of GO-GET. And if you can crack the code on that, it is a tremendous TAM. If you think about how inefficient and underutilized today's bus systems are, and our ability to provide a very attractive price point to a large number of users, it's a, it's a huge TAM, but it's, it's some pretty complicated tech that we have to figure out on how to, how to make that work.
To be clear, even with these constraints, you still want to keep the R&D engine alive in Uber? Experimentation is still a big part of that.
That is very much who we are. I mean, it's a, w e're an innovation company, and with the expectation for us to kind of continue to be spending on product innovation. But all of that is in the framework we gave you. All of that is in the guidance, and that's how we're gonna drive growth. But I think the real pivot over the last couple, the last, you know, couple of years has been that that growth needs to be profitable growth.
In your opening comments, you talked about being a CFO that now has to deal with excess cash and excess capital. How do you think about deploying that capital between, o bviously, we've seen you do some M&A recently. You've promised some capital return. What does that prioritization look like?
Sure. Yes. It is a high-class problem to have, so I'm thankful that we are now sort of pivoting into this period where we're gonna have significant capital generation over the next couple of years. We've talked about really the commitment to shareholders in returning that capital through share repurchase. So I think of our share repurchase program in sort of three steps, three phases. Starting this year, it's about making a dent into our stock-based comp expense. Then we will move that into offsetting stock-based comp, and then we will get to a stage where we are regularly more than offsetting stock-based comp and taking share count down on a consistent basis.
But the model is to get to sort of that recurring engine of every year, we are taking stock-based comp down by repurchasing shares based, of course, taking outstanding stock down by repurchasing outstanding shares with our available cash. Other uses of cash really will be, we wanna continue to maintain good liquidity. As you can imagine, with $150 billion of gross bookings, we have a lot of money that we are collecting from you as consumers and then distributing back to earners around the globe. So we need good liquidity to be able to manage those ins and outs. And we are committed to improve our credit rating to investment grade.
I hate to put a prediction on Moody's and S&P, but I'll take a risk here and say that certainly by next summer, we would expect to be there.
How about the M&A appetite? Was Foodpanda just too good a deal to pass up? Is there a change in philosophy or thinking around that?
Yeah. So, what Nikhil's referring to is that we purchased or we entered into an agreement with Delivery Hero to buy their business in Taiwan, the Foodpanda brand. And we did that through a construct of part cash, $950 million for the business. And at the same time, we also made an investment in Foodpanda for an additional, s orry, in Delivery Hero, for an additional $300 million. So the way that I would think about that is, it was a great deal for both companies. That on Delivery Hero's side, you know, they would say they got a good return for the size of that business.
We get the benefit of cost synergies because of our global platform and because of our presence already in Taiwan. So when you add in the benefit of the synergies that we're creating, it becomes a very good deal for us. And we think Delivery Hero was underappreciated, so this was an opportunity for us to also take a stake in that company, and I'm sure that we will do well financially at some point with that investment.
Prashanth, in the closing couple minutes here, what message do you want to leave investors with? What should they come to expect from you? And, where's the focus now going forward?
Yeah. I think that our goal is for you to think about this as an investment where we are focused on top-line growth. We take that top-line growth with our size, our scale, and our intensity to drive leverage on profitability, so we can grow profits meaningfully faster than the top line. We remain asset light, which allows us to convert that profitability to cash flow. We take that cash flow, we use that to reduce the outstanding share count, and then we start over again and repeat. And then we keep that cycle going, and that, we believe, is a company that you would be very content to invest in.
Great. With that, we will leave it there. Prashanth, thank you so much.
Thank you.