Uber One Hits 30 Million Subscribers, Drives Delivery Revenues 22% Higher

Uber’s membership program continues to drive cross-selling activities across the company’s platform, a nod to the movement toward its app as a digital front door to a host of everyday activities.

But investors sent the shares 4% lower at the start of trading on Wednesday (May 7), as deceleration of ride-hailing — Mobility is still Uber’s largest segment — implied in forward-looking guidance came against what CEO Dara Khosrowshahi termed in his prepared remarks a “dizzying backdrop of headlines on trade and economic policy.” Shares had been up more than 40% year to date coming into Wednesday’s results. At this writing the shares had recovered somewhat and were down 1%.

The company’s earnings materials indicated that the company’s overall consumer base grew 14% in the first quarter to 170 million monthly active consumers. Gross bookings were 18% higher than a year ago, down from past growth that had been at 20% or more in previous quarters. Looking ahead, the company sees 16% to 20% growth in overall bookings.

Khosrowshahi had noted the overall market potential for the platform, as the current customer roster is only 5% of the adult population, and half of consumers are using the app roughly 2x per month.

Growth in Driver Earnings

Growth in the number of drivers on the platform came in at 20% to 8.5 million, and they garnered 18% growth in driver earnings to $18.6 billion. Merchant payouts were $12.9 billion up 21%.

The Delivery segment grew as Uber has expanded beyond restaurants to grocery and retail, and trip growth here was 15%, with gross bookings in the segment 18% higher. A third of Uber Eats customers come from the app, and the membership program drives 60% of gross bookings, the CEO said.

The Membership Tailwind

“Membership drives multiple long-term benefits to Uber: they spend more and they are more likely to try new services that we introduce. It’s our highest long-term ROI lever by far,” Khosrowshahi said in his remarks.

The membership growth in Uber One, the CEO said, comes as “we are very focused on affordability as it relates to delivery as well … membership essentially is our lowering of prices, with no delivery fee, for example, for members, and for the most loyal, customers that that we’ve got.  Members tend to have high retention. They spend three times more than, than nonmembers as well. And our membership program now, with 30 million members is delivering billions of discounts” along with merchant-funded offers.

The advertising segment has seen 60% growth, crossing a $1.5 billion annualized run rate.

Elsewhere, the company has logged an annualized run-rate of 1.5 million Mobility and Delivery AV trips on Uber’s network.

During the conference call with analysts, Khosrowshahi stated that with the AV business, and the Waymo self-driving service in Austin, “we’re seeing very high utilization of the vehicles in terms of trips per vehicle per day.”

With a nod to the Mobility segment, CFO Prashanth Mahendra-Rajah said that “for three quarters now, we’ve had about 19% year over year trip growth. So that’s very strong trip growth. And as we look at what we’ve incorporated into the guide, we’re thinking that it should be around the same and that, we’re fortunate it’s still very heavily led by audience growth … we are seeing a slightly higher mix of international trips, and that’s a bit due to that lower inbound US travel.”

Turning to consumer behavior, Khosrowshahi said that “in in terms of macro … we’re watching it pretty closely. We don’t see any signals that that I describe as significant. Audience growth is very consistent with last quarter up 14%.  Frequency is consistent as well. We are looking to modulate price increases, and you saw that in our results as well … [delivery] basket sizes continue to increase.

“So I think that would be a leading indicator to the extent that there was macro uncertainty. We’re not seeing trade downs in terms of the kinds of restaurants that our eaters are eating at … the categories that we operate in — restaurants, transportation, grocery, tend to be categories that are quite consistent even during periods of macro uncertainty,” he said.