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Item 7. Management’s Discussion and Analysis

2023-02-21 compared with 2022-02-24 · 184 added, 179 removed, 499 unchanged (42% of the section changed)

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following discussion and analysis of our financial condition and results of operations should be read in conjunction with the consolidated financial statements and related notes included in Part II, Item 8, “Financial Statements and Supplementary Data,” of this Annual Report on Form 10-K .

The following discussion and analysis of our financial condition and results of operations should be read in conjunction with our consolidated financial statements and the related notes included in Part II, Item 8, “Financial Statements and Supplementary Data,” of this Annual Report on Form 10-K .

We have elected to omit discussion on the earliest of the three years covered by the consolidated financial statements presented.

Refer to Item 7.

Management's Discussion and Analysis of Financial Condition and Results of Operations located in our Annual Report on Form 10-K for the year ended December 31, 2020, filed on March 1, 2021, for reference to discussion of the fiscal year ended December 31, 2019, the earliest of the three fiscal years presented.

Management's Discussion and Analysis of Financial Condition and Results of Operations located in our Annual Report on Form 10-K for the year ended December 31, 2021, filed on February 24, 2022, for reference to discussion of the fiscal year ended December 31, 2020, the earliest of the three fiscal years presented.

In addition to our historical consolidated financial information, the following discussion contains forward-looking statements that reflect our plans, estimates, and beliefs.

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We develop and operate proprietary technology applications supporting a variety of offerings on our platform.

We connect consumers with providers of ride services and merchants as well as delivery service providers for meal preparation, grocery and other delivery services.

We connect consumers with providers of ride services, merchants as well as delivery service providers for meal preparation, grocery and other delivery services.

Uber also connects consumers with public transportation networks.

We use this same network, technology, operational excellence, and product expertise to connect shippers with carriers in the freight industry.

We are also developing technologies that provide new solutions to solve everyday problems.

In March 2020, the World Health Organization declared the outbreak of coronavirus (“COVID-19”) a pandemic.

The COVID-19 pandemic has rapidly changed market and economic conditions globally, impacting Drivers, Merchants, consumers and business partners, as well as our business, results of operations, financial position, and cash flows.

Various governmental restrictions, including the declaration of a federal National Emergency, multiple cities’ and states’ declarations of states of emergency, school and business closings, quarantines, restrictions on travel, limitations on social or public gatherings, and other measures have, and may continue to have, an adverse impact on our business and operations, including, for example, by reducing the global demand for Mobility rides.

Furthermore, we are experiencing and expect to continue to experience Driver supply constraints, and such supply constraints have been and may continue to be impacted by concerns regarding the COVID-19 pandemic.

COVID-19 Response Initiatives

We continue to prioritize the health and safety of our consumers, Drivers and Merchants, our employees and the communities we serve and continue to believe we will play an important role in the economic recovery of cities around the globe.

We are focused on navigating the challenges presented by COVID-19 through preserving our liquidity and managing our cash flow by taking preemptive action to enhance our ability to meet our short-term liquidity needs.

The pandemic has reduced the demand for our Mobility offering globally, while accelerating the growth of our Delivery offerings.

We have responded to the COVID-19 pandemic by launching new, or expanding existing, services or features on an expedited basis, particularly those related to delivery of food and other goods.

To comply with social distancing guidelines of national, state and local governments, we have temporarily suspended our shared rides Mobility offering in most markets, and implemented “leave at door” delivery options for Delivery offerings.

Additionally, we have asked that all employees who are able to do so, to work remotely.

As vaccination rates increase in the United States, we are observing that consumer demand for Mobility is recovering faster than driver availability, and consumer demand for Delivery continues to exceed Courier availability.

During the first half of 2021, we announced that we are increasing investments in driver incentives to improve driver availability in the near-term.

While we continue to assess the impact from the COVID-19 outbreak, we are unable to accurately predict the full impact of COVID-19 on our business, results of operations, financial position, and cash flows due to numerous uncertainties, including the severity of the disease, the duration of the outbreak, any future waves or resurgences of the virus, variants of the virus, the administration, adoption and efficacy of vaccines in the United States and internationally, additional actions that may be taken by governmental authorities, the further impact on the business of Drivers, Merchants, consumers, and business partners, and other factors identified in Part I, Item 1A.

“Risk Factors” of this Annual Report on Form 10-K.

We use this same network, technology, operational excellence, and product expertise to connect Shippers with Carriers in the freight industry by providing Carriers with the ability to book a shipment, transportation management and other logistics services.

We are also developing technologies designed to provide new solutions to everyday problems.

Driver Classification Developments

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We are involved in numerous legal proceedings globally, including putative class and collective class action lawsuits, demands for arbitration, charges and claims before administrative agencies, and investigations or audits by labor, social security, and tax authorities that claim that Drivers should be treated as our employees (or as workers or quasi-employees where those statuses exist), rather than as independent contractors.

Of particular note are proceedings in California, where on May 5, 2020, the California Attorney General, in conjunction with the city attorneys for San Francisco, Los Angeles and San Diego, filed a complaint in San Francisco Superior Court (the “Court”) against Uber and Lyft, alleging that drivers are misclassified, and sought an injunction and monetary damages related to the alleged competitive advantage caused by the alleged misclassification of drivers.

Of particular note are proceedings in California, where on May 5, 2020, the California Attorney General, in conjunction with the city attorneys for San Francisco, Los Angeles and San Diego, filed a complaint in San Francisco Superior Court (the “Court”) against Uber and Lyft, Inc., alleging that drivers are misclassified, and sought an injunction and monetary damages related to the alleged competitive advantage caused by the alleged misclassification of drivers.

On August 10, 2020, the Court issued a preliminary injunction order prohibiting us from classifying Drivers as independent contractors and from violating various wage and hour laws.

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In January 2021, a petition was filed with the California Supreme Court by several drivers and a labor union alleging that Proposition 22 is unconstitutional, which was denied.

The same drivers and labor union have since filed a similar challenge in California Superior Court, and in August 2021, the court ruled that Proposition 22 is unconstitutional.

On September 21, 2021, the State of California filed an appeal of that decision with the California Court of Appeal, and the Protect App-Based Drivers and Services has also filed an appeal.

The same drivers and labor union have since filed a similar challenge in California Superior Court, and in August 2021, the Alameda County Superior Court ruled that Proposition 22 is unconstitutional.

On September 21, 2021, the State of California filed an appeal of that decision with the California Court of Appeal, and the Protect App-Based Drivers and Services organization, who intervened in the matter, has also filed an appeal.

Oral argument was heard and we await a decision.

To comply with Proposition 22, we have incurred and expect to incur additional expenses, including expenses associated with a guaranteed minimum earnings floor for Drivers, insurance for injury protection and subsidies for health care.

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Aslam and Mr.

Farrar, was brought in the UK Employment Tribunal against us asserting that they should be classified as “workers” (a separate category between independent

contractors and employees) in the UK rather than independent contractors.

The tribunal ruled on October 28, 2016 that the Drivers were workers whenever our app was switched on and they were ready and able to take trips, based on an assessment of the app in July 2016.

Farrar, was brought in the United Kingdom (“UK”) Employment Tribunal against us asserting that they should be classified as “workers” (a separate category between independent contractors and employees) in the UK rather than independent contractors.

The tribunal ruled on October 28, 2016 that the Drivers were workers whenever our App is switched on and they are ready and able to take trips, based on an assessment of the App in July 2016.

The Court of Appeal rejected our appeal in a majority decision on December 19, 2018.

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We have also completed a settlement process with drivers in the UK to proactively resolve historical claims relating to their classification under UK law.

Our portal for drivers to register for a settlement of historical holiday pay and national minimum wage liabilities closed on July 22, 2021 and we have extended offers to all drivers eligible for settlement who are not already represented by an attorney and have made payments to the drivers who accepted our offers.

Compensation hearings will take place for claimants who have not settled their historic claims, where the tribunal will assess our position on the correct approach to working time, expenses, and holiday pay.

On June 23, 2021, we received a compliance notice from the UK pension regulator to facilitate our auto-enrollment implementation.

The pension regulator has confirmed that Uber will be required to pay historic company contributions, but that we are not required to pay the driver component of historic pension contributions unless we fail to comply in which case the amount equivalent to those contributions would be payable as a penalty.

We have completed the enrollment of eligible drivers in the UK into a pension plan.

We are currently in mediation with the drivers who are represented by one of three law firms who represent large cohorts of drivers.

Compensation hearings will take place in 2022 for claimants who have not settled their historic claims, where the tribunal will assess our position on the correct approach to working time.

In September 2021, a Netherlands court ruled that Mobility drivers are employees within the meaning of the taxi collective bargaining agreement.

If, as a result of legislation or judicial decisions, we are required to classify Drivers as employees, workers or quasi-employees where those statuses exist, we would incur significant additional expenses for compensating Drivers, including expenses associated with the application of wage and hour laws (including minimum wage, overtime, and meal and rest period requirements), employee benefits, social security contributions, taxes (direct and indirect), and potential penalties.

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$ (774) $ 1,713 **

Net cash provided by (used in) operating activities (5)

$ (445) $ 642 **

Free cash flow (1), (5)

$ (743) $ 390 **

(1) See the section titled “Reconciliations of Non-GAAP Financial Measures” for more information and reconciliations to the most directly comparable GAAP financial measure.

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(4) Net loss attributable to Uber Technologies, Inc.

includes stock-based compensation expense of $827 million and $1.2 billion during the years ended December 31, 2020 and 2021, respectively.

included stock-based compensation expense of $1.2 billion and $1.8 billion during the years ended December 31, 2021 and 2022, respectively.

(5) Net cash used in operating activities and free cash flow during the year ended December 31, 2021 reflected a $1.0 billion cash inflow related to a legacy auto insurance transfer.

For additional information on the legacy auto insurance transfer, refer to Note 1 – Description of Business and Summary of Significant Accounting Policies to our consolidated financial statements included in Part II, Item 8, “Financial Statements and Supplementary Data,” of this Annual Report on Form 10-K as well as the section titled “Liquidity and Capital Resources” for more information.

Net cash provided by operating activities and free cash flow during the year ended December 31, 2022 reflected an approximately $733 million (GBP 613 million) cash outflow related to the resolution of all outstanding HMRC VAT claims that were paid during the fourth quarter of 2022.

For additional information on this matter, refer to Note 14 – Commitments and Contingencies to our consolidated financial statements included in Part II, Item 8, “Financial Statements and Supplementary Data,” of this Annual Report on Form 10-K as well as the section titled “Liquidity and Capital Resources”.

** Percentage not meaningful.

Highlights for 2022

In the fourth quarter of 2022, our MAPCs were 131 million, growing 7 million, or 6%, quarter-over-quarter, and growing 11% compared to the same period in 2021.

Overall Gross Bookings increased by $25.0 billion in 2022, up 28%, or 33% on a constant currency basis, compared to 2021.

Delivery Gross Bookings grew 66% from 2020, on a constant currency basis, due to an increase in food delivery orders and higher basket sizes as a result of stay-at-home order demand related to COVID-19, as well as continued expansion across U.S.

and international markets.

Additionally, we saw an increase in Delivery revenue resulting from an increase in certain Courier payments and incentives that are recorded in cost of revenue, where we are primarily responsible for delivery services and pay Couriers for services provided.

Mobility Gross Bookings grew 36%, on a constant currency basis, from 2020, due to increases in Trip volumes as the business recovers from the impacts of COVID-19.

Revenue was $17.5 billion, or up 57% year-over-year, reflecting the overall growth in our Delivery business and an increase in Freight revenue attributable to the acquisition of Transplace in the fourth quarter of 2021 as well as growth in the number of shippers and carriers on the network combined with an increase in volumes with our top shippers.

Mobility Gross Bookings grew 48% year-over-year, on a constant currency basis, primarily due to increases in Trip volumes as the business recovers from the impacts of the coronavirus pandemic (“COVID-19”).

Delivery Gross Bookings grew 14% year-over-year, on a constant currency basis, primarily driven by growth in the US & Canada.

Freight Gross Bookings grew 226% year-over-year, on a constant currency basis, primarily attributable to the acquisition of Tupelo Parent, Inc.

(“Transplace”) in the fourth quarter of 2021.

Revenue was $31.9 billion, or up 83% year-over-year.

Revenue growth outpaced Gross Bookings growth primarily due to a $4.8 billion increase in our Freight business primarily due to the acquisition of Transplace during the fourth quarter of 2021, the net favorable impact to Mobility revenue of $3.9 billion as a result of business model changes in the UK and accruals made for the resolution of historical claims in the UK relating to the classification of drivers, and an $892 million increase in Delivery revenue resulting from an increase in certain Courier payments and incentives that are recorded in cost of revenue, exclusive of depreciation and amortization, for certain markets where we are primarily responsible for Delivery services and pay Couriers for services provided.

Net loss attributable to Uber Technologies, Inc.

was $496 million, a 93% improvement year-over-year, driven by a $1.6 billion pre-tax gain on the sale of our ATG Business to Aurora, a $1.6 billion pre-tax net benefit relating to Uber’s equity investments, as well as reductions in our fixed cost structure and increased variable cost efficiencies.

was $9.1 billion, which includes the unfavorable impact of a pre-tax unrealized loss on debt and equity securities, net, of $7.0 billion primarily related to changes in the fair value of our marketable equity securities, including:

a $3.0 billion net unrealized loss on our Aurora investments, a $2.1 billion net unrealized loss on our Grab investment, a $1.0 billion net unrealized loss on our Didi investment, a $747 million change of fair value on our Zomato investment, as well as a

$142 million net unrealized loss on other investments.

Net loss attributable to Uber Technologies, Inc.

also included $1.8 billion of stock-based compensation expense.

Adjusted EBITDA loss was $774 million, improving $1.8 billion from 2020 with Mobility Adjusted EBITDA profit of $1.6 billion.

Additionally, Delivery Adjusted EBITDA loss of $348 million, improved $525 million and Delivery Adjusted EBITDA margin as a percentage of Delivery Gross Bookings improved to (0.7)% from (2.9)%, compared to 2020.

We ended the year with $4.3 billion in cash and cash equivalents.

Other Developments for 2021

Remaining Interests in Cornershop

In August 2021, we completed the acquisition of the remaining 45% ownership interest in Cornershop Cayman (“Cornershop”), or 47%, on a fully-diluted basis, in an all-stock transaction.

On October 12, 2021, we completed the acquisition of 100% ownership interest in The Drizly Group, Inc.

(“Drizly”), an on-demand alcohol marketplace in North America, allowing us to expand alcohol offerings in our Delivery business.

On November 12, 2021, we completed the acquisition of 100% ownership interest in Tupelo Parent, Inc.

(“Transplace”), a leading transportation management and third-party logistics provider in North America.

The acquisition of Transplace is expected to allow us to expand our Uber Freight business through Transplace’s expertise in transportation management.

For additional information on acquisitions, see Note 18 – Business Combinations included in Part II, Item 8, “Financial Statements and Supplementary Data,” of this Annual Report on Form 10-K.

ATG Business to Aurora

On January 19, 2021, we completed the previously announced sale of Apparate USA LLC (“Apparate” or the “ATG Business”), a subsidiary focused on the development and commercialization of autonomous vehicle technology, to Aurora Innovation, Inc.

As a result, our controlling interest and the non-controlling interests in the ATG Business were settled, and ownership of the ATG Business transferred to Aurora.

For additional information, see Note 19 – Divestitures included in Part II, Item 8, “Financial Statements and Supplementary Data,” of this Annual Report on Form 10-K.

Adjusted EBITDA was $1.7 billion, growing $2.5 billion compared to 2021.

Mobility Adjusted EBITDA profit was $3.3 billion, up $1.7 billion compared to 2021.

Delivery Adjusted EBITDA profit was $551 million, up $899 million from Delivery Adjusted EBITDA loss of $348 million in 2021.

We ended the year with $4.3 billion in unrestricted cash, cash equivalents and short-term investments.

Other Developments

and Uber Russia/CIS Operations

On August 30, 2021, we entered into an agreement (the “Framework Agreement”) with Yandex N.V.

(“Yandex”) to restructure our joint ventures, MLU B.V.

and Yandex Self Driving Group B.V.

Pursuant to the Framework Agreement, we completed the sale of our entire equity interest in SDG and 4.5% of our equity interest in MLU B.V.

to Yandex during the third quarter of 2021.

During the fourth quarter of 2021 and pursuant to the Framework Agreement, MLU B.V.

completed the spin-off of its delivery businesses:

Yandex.Eats, Yandex.Lavka and Yandex.Delivery (collectively, “Demerged Businesses”).

Immediately following the demerger, Yandex acquired all of our equity interest in the Demerged Businesses.

For additional information, see Note 4 - Equity Method Investments included in Part II, Item 8, “Financial Statements and Supplementary Data,” of this Annual Report on Form 10-K.

Legacy Auto Insurance Transfer

On September 27, 2021, Aleka Insurance, Inc., our wholly-owned captive insurance subsidiary, entered into a Loss Portfolio Transfer Reinsurance Agreement (the “LPTA”) with James River Group companies (“James River”) , effective July 1, 2021.

Pursuant to the LPTA, our captive insurance subsidiary reinsured certain automobile liability insurance risks relating to activity on our platform between 2013 and 2019 in exchange for payment by James River to our captive insurance subsidiary of a premium.

For additional information, see Note 1 – Description of Business and Summary of Significant Accounting Policies included in Part II, Item 8, “Financial Statements and Supplementary Data,” of this Annual Report on Form 10-K.

COVID-19 rapidly changed market and economic conditions globally, impacting Drivers, Merchants, consumers and business partners, as well as our business, results of operations, financial position, and cash flows.

For example, we temporarily suspended our shared rides offering globally, and continue to offer “leave at door” delivery options for Delivery offerings.

We also responded to COVID-19 by launching new, or expanding existing, services or features on an expedited basis, particularly those related to delivery of food and other goods.

Furthermore, we have experienced, and may continue to experience, Driver supply constraints.

For a discussion of the potential impacts of COVID-19 on our business, results of operations, financial position, and cash flows refer to Part I, Item 1A, “Risk Factors” in this Annual Report on Form 10-K.

Components of Results of Operations

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We act as an agent in these transactions by connecting consumers to Drivers and Merchants to facilitate a Trip, meal or grocery delivery service.

For additional discussion related to our revenue, see the section titled “Management’s Discussion and Analysis of Financial Condition and Results of Operations - Critical Accounting Estimates - Revenue Recognition,” “Note 1 – Description of Business and Summary of Significant Accounting Policies,” and “Note 2 – Revenue” to our consolidated financial statements included in Part II, Item 8, “Financial Statements and Supplementary Data,” of this Annual Report on Form 10-K.

In 2022, we modified our arrangements in certain markets and, as a result, concluded we are responsible for the provision of Mobility services to end-users in those markets.

We have determined that in these transactions, end-users are our customers and our sole performance obligation in the transaction is to provide transportation services to the end-user.

We recognize revenue when a trip is complete.

In these markets where we are responsible for Mobility services, we present revenue from end-users on a gross basis, as we control the service provided by Drivers to end-users, while payments to Drivers in exchange for Mobility services are recognized in cost of revenue, exclusive of depreciation and amortization.

For additional discussion related to our revenue, see the section titled “Management’s Discussion and Analysis of Financial Condition and Results of Operations - Critical Accounting Estimates - Revenue Recognition,” “Note 1 – Description of Business and Summary of Significant Accounting Policies - Revenue Recognition,” and “Note 2 – Revenue” to our consolidated financial statements included in Part II, Item 8, “Financial Statements and Supplementary Data,” of this Annual Report on Form 10-K.

Cost of Revenue, Exclusive of Depreciation and Amortization

Cost of revenue, exclusive of depreciation and amortization, primarily consists of certain insurance costs related to our Mobility and Delivery offerings, credit card processing fees, bank fees, data center and networking expenses, mobile device and service costs, costs incurred for certain Delivery transactions where we are primarily responsible for delivery services and pay Couriers for services provided, costs incurred with carriers for Uber Freight transportation services, amounts related to fare chargebacks and other credit card losses.

Cost of revenue, exclusive of depreciation and amortization, primarily consists of certain insurance costs related to our Mobility and Delivery offerings, credit card processing fees, bank fees, data center and networking expenses, mobile device and service costs, costs incurred with Carriers for Uber Freight transportation services, amounts related to fare chargebacks and other credit card losses as well as costs incurred for certain Mobility and Delivery transactions where we are primarily responsible for Mobility or Delivery services and pay Drivers and Couriers for services.

We expect that cost of revenue, exclusive of depreciation and amortization, will fluctuate on an absolute dollar basis for the foreseeable future in line with Trip volume changes on the platform.

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We expense substantially all research and development expenses as incurred.

We expect research and development expenses to increase and vary from period to period as a percentage of revenue as we continue to invest in research and development activities relating to ongoing improvements to and maintenance of our platform offerings and other research and development programs, offset by a decrease in investments in our ATG and Other Technology Programs subsequent to the sale of our ATG Business.

General and Administrative

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Amortization includes expenses associated with our capitalized internal-use software and acquired intangible assets.

As our business recovers from the impacts of COVID-19, we would anticipate depreciation and amortization expenses to increase as we continue to build out our network infrastructure and building locations.

Interest Expense

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• Gain from sale of investments, which consists primarily of gain from the sale of our entire equity interest in the Yandex Self Driving Group B.V.

(“SDG”), and the derecognition of our entire equity interest in the Demerged Businesses.

(“SDG”), and the derecognition of our entire equity interest in the Demerged Businesses in 2021.

For additional information, see “Note 4 - Equity Method Investments” to our consolidated financial statements included in Part II, Item 8, “Financial Statements and Supplementary Data,” of this Annual Report on Form 10-K.

• Unrealized gain (loss) on debt and equity securities, net, which consists primarily of gains (losses) from fair value adjustments relating to our marketable and non-marketable securities.

• Impairment of debt and equity securities, primarily related to an impairment charge recognized on our Didi investment.

• Impairment of equity method investment.

• Revaluation of MLU B.V.

call option, which represents changes in fair value recorded on the call option granted to Yandex (“MLU B.V.

Call Option”).

• Other, net.

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Other income (expense), net 3,292 (7,029)

Loss before income taxes and loss from equity method investments (6,946) (1,025)

Loss before income taxes and income (loss) from equity method investments (1,025) (9,426)

Provision for (benefit from) income taxes (492) (181)

Loss from equity method investments (34) (37)

Income (loss) from equity method investments (37) 107

Net loss including non-controlling interests (570) (9,138)

net loss attributable to non-controlling interests, net of tax (20) (74)

net income (loss) attributable to non-controlling interests, net of tax (74) 3

Net loss attributable to Uber Technologies, Inc.

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Other income (expense), net 19 % (22) %

Loss before income taxes and loss from equity method investments (62) % (6) %

Loss before income taxes and income (loss) from equity method investments (6) % (30) %

Provision for (benefit from) income taxes (3) % (1) %

Loss from equity method investments — % — %

Income (loss) from equity method investments — % — %

Net loss including non-controlling interests (3) % (29) %

net loss attributable to non-controlling interests, net of tax — % — %

net income (loss) attributable to non-controlling interests, net of tax — % — %

Net loss attributable to Uber Technologies, Inc.

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Revenue increased $14.4 billion, or 83%, primarily attributable to an increase in Gross Bookings of 28%, or 33% on a constant currency basis.

The increase in Gross Bookings was primarily driven by an increase in Delivery Gross Bookings of 71%, or 66% on a constant currency basis, due to an increase in food delivery orders and higher basket sizes as a result of stay-at-home order demand related to COVID-19, as well as continued expansion across U.S.

and international markets.

The increase was also driven by Mobility Gross Bookings growth of 38%, or 36% on a constant currency basis, due to increases in Trip volumes as the business recovers from the impacts of COVID-19.

The increase in Gross Bookings was primarily driven by increases in Mobility Trip volumes as the business recovers from the impacts of COVID-19 and a $4.8 billion increase in Freight Gross Bookings resulting primarily from the acquisition of Transplace in the fourth quarter of 2021.

Additionally, we saw a $3.9 billion net increase in Mobility revenue as a result of business model changes in the UK and accruals made for the resolution of historical claims in the UK relating to the classification of drivers.

We also saw an $892 million increase in Delivery revenue resulting from an increase in certain Courier payments and incentives that are recorded in cost of revenue, exclusive of depreciation and amortization, for certain markets where we are primarily responsible for Delivery services and pay Couriers for services provided.

Cost of Revenue, Exclusive of Depreciation and Amortization

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2022 Compared to 2021

Cost of revenue, exclusive of depreciation and amortization, increased $4.2 billion, or 81%, mainly due to a $2.1 billion increase in Courier payments and incentives in certain markets, a $660 million increase in insurance expense primarily due to an increase in miles driven in our Delivery business, and a $873 million increase in Freight carrier payments.

Cost of revenue, exclusive of depreciation and amortization, increased $10.3 billion, or 110%, mainly due to a $3.3 billion increase in Freight Carrier payments resulting from the acquisition of Transplace in the fourth quarter of 2021, a $2.7 billion increase in Mobility Driver payments and incentives that are recorded in cost of revenue, exclusive of depreciation and amortization, as a result of business model changes in the UK, a $1.4 billion increase in insurance expense primarily due to an increase in miles driven in our

Mobility business, and a $1.4 billion increase in Courier payments and incentives that are recorded in cost of revenue for certain markets where we are primarily responsible for Delivery services and pay Couriers for services provided.

Operations and Support

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2022 Compared to 2021

Operations and support expenses increased $58 million, or 3%, primarily attributable to a $71 million increase in external contractor expenses and a $67 million increase in stock-based compensation expense, partially offset by an $82 million decrease in employee headcount costs.

Operations and support expenses increased $536 million, or 29%, primarily attributable to a $336 million increase in employee headcount costs, a $114 million increase in external contractor expenses, and a $15 million increase in stock-based compensation.

Sales and Marketing

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2022 Compared to 2021

Sales and marketing expenses increased $1.2 billion, or 34%, primarily attributable to a $681 million increase in consumer advertising expenses as well as an increase in consumer discounts, rider facing loyalty expense, promotions, credits and refunds of $384 million to $2.4 billion compared to $2.0 billion in the same period in 2020.

Sales and marketing expenses decreased $33 million, or 1%, primarily attributable to a $227 million decrease in consumer discounts, rider facing loyalty expense, promotions, credits and refunds to $2.2 billion compared to $2.4 billion in 2021, partially offset by a $152 million increase in employee headcount costs, a $25 million increase in indirect advertising and marketing, and an $19 million increase in stock-based compensation.

Research and Development

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2022 Compared to 2021

Research and development expenses decreased $151 million, or 7%, primarily attributable to a $211 million decrease in employee related costs and a $85 million decrease in restructuring and related charges, partially offset by a $137 million increase in stock-based compensation.

Research and development expenses increased $744 million, or 36%, primarily attributable to a $446 million increase in stock-based compensation and a $360 million increase in employee headcount costs.

General and Administrative

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2022 Compared to 2021

General and administrative expenses decreased $350 million, or 13%, primarily attributable to a $202 million decrease in employee headcount costs and a $193 million decrease in impairment charges related to our New Mobility reporting unit recorded during the first quarter of 2020 primarily related to COVID-19 impacts on certain markets, partially offset by a $102 million increase in stock-based compensation expense.

General and administrative expenses increased $820 million, or 35%, primarily attributable to a $661 million increase in legal, tax, and regulatory reserve changes and settlements and a $145 million increase to stock-based compensation.

Depreciation and Amortization

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2022 Compared to 2021

Depreciation and amortization expenses increased $327 million, or 57%, primarily attributable to additional amortization

expenses related to acquired intangible assets, primarily held by Postmates, Transplace, Drizly, and Cornershop, and an increase in building, site improvements, and leased server depreciation, partially offset by a decrease in amortization expense related to Careem fully amortized intangible assets.

Depreciation and amortization expenses increased $45 million, or 5%, primarily attributable to $93 million in additional amortization expenses primarily related to Transplace and Drizly intangible assets, partially offset by a $48 million decrease in

depreciation primarily due to fixed assets that fully depreciated in 2021.

Interest Expense

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2022 Compared to 2021

Interest expense increased by $25 million, or 5%, primarily due to additional interest expense resulting from the issuance of our $1.5 billion 2029 Senior Notes in August 2021.

Interest expense increased by $82 million, or 17%, primarily attributable to a $43 million increase in interest expense resulting from the issuance of our $1.5 billion 2029 Senior Notes in August 2021 and $41 million increase in interest expense on our term loans due to higher LIBOR rate.

Other Income (Expense), Net

Year Ended December 31, 2020 to 2021 % Change

Year Ended December 31, 2021 to 2022

(In millions, except percentages) 2021 2022

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Unrealized gain (loss) on debt and equity securities, net 1,142 (7,045) **

Impairment of debt and equity securities (1,690) — **

Impairment of equity method investment — (182) (100) %

Revaluation of MLU B.V.

call option — 191 100 %

Other, net 83 1 (99) %

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2022 Compared to 2021

Interest income decreased by $18 million or 33% primarily due to declining balances and yields in our money market fund investments, bank deposits, and available-for-sale securities.

Foreign currency exchange gains (losses), net decreased by $61 million due to both realized and unrealized gains (losses) on our treasury funding and accrued legal contingencies.

Gain on business divestitures, net increased by $1.5 billion due to primarily due to a $1.6 billion gain on the sale of our ATG Business to Aurora recognized in the first quarter of 2021.

Interest income increased by $102 million or 276% primarily attributable to Federal interest rate increases and increasing investment allocation fixed income instruments.

Gain on business divestitures, net decreased by $1.7 billion due to primarily due to a $1.6 billion gain on the sale of our ATG Business to Aurora recognized in the first quarter of 2021.

For additional information, see Note 18 – Divestitures included in Part II, Item 8, “Financial Statements and Supplementary Data,” of this Annual Report on Form 10-K.

Gain from sale of investments increased by $413 million primarily due to the sale to Yandex of our (i) 4.5% equity interest in MLU B.V., (ii) our entire equity interest in Yandex Self Driving Group B.V.

Gain from sale of investments decreased by $413 million primarily due to the sale to Yandex of our (i) 4.5% equity interest in MLU B.V., (ii) our entire equity interest in Yandex Self Driving Group B.V.

and (iii) all of our equity interest in the Demerged Businesses.

For additional information, see Note 4 - Equity Method Investments included in Part II, Item 8, “Financial Statements and Supplementary Data,” of this Annual Report on Form 10-K.

Unrealized gain (loss) on debt and equity securities, net increased by $1.3 billion primarily due to a $1.6 billion net unrealized gain on our Grab investment, a $1.6 billion unrealized gain on our Aurora Investments and a $991 million unrealized gain on our Zomato investment, partially offset by a $3.0 billion unrealized loss on our Didi investment.

Unrealized gain (loss) on debt and equity securities, net decreased by $8.2 billion primarily due to a $3.0 billion net unrealized loss on our Aurora investment, a $2.1 billion net unrealized loss on our Grab Investment, a $1.0 billion net unrealized loss on our Didi investment, a $747 million change of fair value on our Zomato investment, as well as a $142 million net unrealized loss on other investments.

For additional information, see Note 3 – Investments and Fair Value Measurement included in Part II, Item 8, “Financial Statements and Supplementary Data,” of this Annual Report on Form 10-K.

Impairment of debt and equity securities decreased by $1.7 billion due to nonoccurence of an impairment charge of $1.7 billion, primarily related to our investment in Didi recognized during the first quarter of 2020.

Impairment of equity method investment represents a $182 million impairment loss recorded on our MLU B.V.

equity method investment.

For additional information, see Note 4 - Equity Method Investments included in Part II, Item 8, “Financial Statements and Supplementary Data,” of this Annual Report on Form 10-K.

Revaluation of MLU B.V.

call option represents a $191 million net gain for the change in fair value of the call option granted to Yandex (“MLU B.V.

Call Option”).

For additional information, see Note 4 - Equity Method Investments included in Part II, Item 8, “Financial Statements and Supplementary Data,” of this Annual Report on Form 10-K.

Provision for (Benefit from) Income Taxes

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2022 Compared to 2021

Provision for (benefit from) income taxes increased by $300 million primarily due to the deferred China and U.S.

tax impact related to our investment in Didi and the deferred U.S.

Provision for (benefit from) income taxes decreased by $311 million primarily due to the deferred China and U.S.

tax impact related to our investment in Didi, the deferred U.S.

tax impact related to the acquisitions recognized in 2021, offset by the deferred U.S.

tax impact related to our investments in Aurora, Grab, and Zomato.

Loss from Equity Method Investments

Income (Loss) from Equity Method Investments

Year Ended December 31, 2021 to 2022 % Change

(In millions, except percentages) 2021 2022

Loss from equity method investments $ (34) $ (37) 9 %

Income (loss) from equity method investments $ (37) $ 107 **

Percentage of revenue — % — %

** Percentage not meaningful.

2022 Compared to 2021

Loss from equity method investments increased by an immaterial amount.

Supplemental Disclosure Related to Restructuring and Related Charges

During the second quarter of 2020, we initiated and completed certain restructuring activities in order to reduce our overall cost structure in response to the economic challenges and uncertainty resulting from the COVID-19 pandemic and its impact on our business.

We also exited the JUMP business and incurred costs related to site closures, asset impairments and write-offs.

As a result, during the year ended December 31, 2020, we recognized $362 million in total restructuring and related charges in the consolidated statement of operations.

Total restructuring and related charges included $248 million of cash settled charges, primarily for severance and other termination benefits.

The remaining costs related to these restructuring activities are expected to be immaterial.

These activities were designed to generate an aggregate cost savings of at least $1.0 billion annually when compared to our original fourth quarter 2020 planned cost structure, with the largest component of savings resulting from reductions in workforce.

We do not believe these cost-saving measures will impair our ability to conduct any of our key business functions.

As of December 31, 2021, we achieved these aggregate cost savings when compared to our original fourth quarter 2020 planned cost structure.

Refer to Note 20 – Restructuring and Related Charges in the notes to the consolidated financial statements included in Part II, Item 8, “Financial Statements and Supplementary Data,” of this Annual Report on Form 10-K.

Income (loss) from equity method investments increased by $144 million due to an increase in our portion of the net income from our Yandex.Taxi joint venture.

Segment Results of Operations

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All Other (1)

(461) (11) 98 %

Corporate G&A and Platform R&D (2), (3)

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(4) See the section titled “Reconciliations of Non-GAAP Financial Measures” for more information and reconciliations to the most directly comparable GAAP financial measure.

** Percentage not meaningful.

Mobility Segment

For the year ended December 31, 2021 compared to the same period in 2020, Mobility revenue increased $864 million, or 14% and Mobility adjusted EBITDA profit increased $427 million, or 37%.

For the year ended December 31, 2022 compared to the same period in 2021, Mobility revenue increased $7.1 billion, or 102% and Mobility adjusted EBITDA profit increased $1.7 billion, or 107%.

Mobility revenue increased primarily attributable to an increase in Mobility Gross Bookings due to increases in Trip volumes as the business recovers from the impacts of COVID-19.

Mobility Take Rate was 19.0%, down from 22.9% compared to the same period in 2020, primarily due to an increase in Mobility Driver incentives, as Mobility Driver additions have been outpaced by higher demand recovery in the U.S.

and other markets.

Mobility adjusted EBITDA profit increased primarily attributable to an increase in Mobility revenue, partially offset by variable costs attributable to the overall growth of the business.

Mobility revenue also had a net increase of $3.9 billion from business model changes in the UK and accruals made for the resolution of historical claims in the UK relating to the classification of drivers.

Mobility adjusted EBITDA profit increased primarily attributable to an increase in Mobility revenue, partially offset by a $1.4 billion increase in insurance expense as a result of an increase in miles driven and a $298 million increase in credit card processing costs.

Delivery Segment

For the year ended December 31, 2021 compared to the same period in 2020, Delivery revenue increased $4.5 billion, or 114% and Delivery adjusted EBITDA loss improved $525 million, or 60%.

Delivery revenue increased primarily attributable to an increase in Delivery Gross Bookings of 66%, on a constant currency basis, driven by an increase in food delivery orders and higher basket sizes as a result of stay-at-home demand related to COVID-19, combined with continued expansion across U.S.

and international markets.

Take Rate improved to 16.2% from 12.9% compared to the same period in 2020 driven by a decrease in incentive spend combined with an overall improvement in basket sizes.

Additionally, we saw an increase in Delivery revenue and Take Rate resulting from an increase in certain Courier payments and incentives that are recorded in cost of revenue, where we are primarily responsible for delivery services and pay Couriers for services provided.

Delivery adjusted EBITDA loss improved, primarily attributable to an increase in Delivery revenue, partially offset by a $2.6 billion increase in cost of revenue as well as a $710 million increase in consumer promotions, brand marketing, and employee headcount costs.

For the year ended December 31, 2022 compared to the same period in 2021, Delivery revenue increased $2.5 billion, or 30% and Delivery adjusted EBITDA grew $899 million, or 258%.

Delivery revenue increased primarily attributable to an increase in Delivery Gross Bookings of 14%, on a constant currency basis, driven by an increase in food delivery orders and higher basket sizes.

Delivery Take Rate improved to 19.5% from 16.2% compared to the same period in 2021 driven by an overall improvement in basket sizes and increase in orders.

Additionally, we saw an $892 million increase in Delivery revenue and Take Rate resulting from an increase in certain Courier payments and incentives that are recorded in cost of revenue, exclusive of depreciation and amortization, for certain markets where we are primarily responsible for Delivery services and pay Couriers for services provided.

Delivery Adjusted EBITDA improvement is primarily attributable to an increase in Delivery revenue, partially offset by (i) a $1.6 billion increase in cost of revenue, exclusive of depreciation and amortization, driven by a $1.4 billion increase in Courier payments and incentives that are recorded in cost of revenue for certain markets where we are primarily responsible for Delivery services and pay Couriers for services provided, and (ii) a $231 million increase in employee headcount costs.

Freight Segment

For the year ended December 31, 2021 compared to the same period in 2020, Freight revenue increased $1.1 billion, or 111% and Freight adjusted EBITDA loss improved $97 million, or 43%.

For the year ended December 31, 2022 compared to the same period in 2021, Freight revenue increased $4.8 billion, or 226% and Freight adjusted EBITDA grew $130 million, or 100%.

Freight revenue increased primarily attributable to the acquisition of Transplace in the fourth quarter of 2021.

Additionally, the increase in Freight revenue is also driven by the growth in the number of shippers and carriers on the network combined with an increase in volumes with our top Shippers.

Freight adjusted EBITDA loss improved, primarily attributable to a $135 million improvement in gross profit as a result of increased load margins, partially offset by an increase in employee headcount costs.

For the year ended December 31, 2021 compared to the same period in 2020, All Other revenue decreased $127 million, or 94% and All Other adjusted EBITDA loss improved $450 million, or 98%.

All Other revenue and All Other adjusted EBITDA loss improved primarily due to the favorable impact of the sale of our ATG Business in the first quarter of 2021 and the JUMP Divestiture in the second quarter of 2020.

Freight adjusted EBITDA improvement is attributable to a $4.8 billion improvement in Freight revenue, partially offset by (i) $4.3 billion of certain Shipper payments recorded in cost of revenue, exclusive of depreciation and amortization, mainly due to a $3.3

billion increase in Freight Carrier payments resulting from the acquisition of Transplace in the fourth quarter of 2021, and (ii) a $329 million increase in employee headcount costs.

For the year ended December 31, 2022 compared to the same period in 2021, All Other revenue decreased $8 million, or 100% and All Other adjusted EBITDA grew $11 million, or 100%.

All Other revenue decreased and All Other adjusted EBITDA grew primarily due to the favorable impact of the sale of our ATG Business in the first quarter of 2021.

Certain Key Metrics and Non-GAAP Financial Measures

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We define Trips as the number of completed consumer Mobility or New Mobility rides and Delivery orders in a given period.

For example, an UberPOOL ride with three paying consumers represents three unique Trips, whereas an UberX ride with three passengers represents one Trip.

For example, an UberX Share ride with three paying consumers represents three unique Trips, whereas an UberX ride with three passengers represents one Trip.

We believe that Trips are a useful metric to measure the scale and usage of our platform.

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We define Gross Bookings as the total dollar value, including any applicable taxes, tolls, and fees, of:

Mobility and New Mobility rides;

Mobility rides;

Delivery orders (in each case without any adjustment for consumer discounts and refunds);

Driver and Merchant earnings;

Driver incentives;

and Freight revenue.

Driver incentives and Freight revenue.

Gross Bookings do not include tips earned by Drivers.

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Freight 302 348 402 1,082 1,823 1,838 1,751 1,540

All Other 21 5 — — — — — —

Take Rate is defined as revenue as a percentage of Gross Bookings.

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Adjusted EBITDA $ (774) $ 1,713 **

** Percentage not meaningful.

2022 Compared to 2021

Adjusted EBITDA loss improved $1.8 billion, or 69%, primarily attributable to a $525 million improvement in Delivery Adjusted EBITDA loss, a $427 million increase in Mobility Adjusted EBITDA, a $255 million decrease in Corporate G&A and Platform R&D costs as well as the favorable impact of $450 million in our other business offerings driven by the sale of our ATG Business in the first quarter of 2021 and the JUMP Divestiture that occurred in the second quarter of 2020.

Adjusted EBITDA improved $2.5 billion, to $1.7 billion, primarily attributable to a $1.7 billion increase in Mobility Adjusted EBITDA, a $899 million improvement in Delivery Adjusted EBITDA, as well as a $130 million increase in Freight Adjusted EBITDA, partially offset by a $256 million increase in Corporate G&A and Platform R&D costs.

Reconciliations of Non-GAAP Financial Measures

We collect and analyze operating and financial data to evaluate the health of our business and assess our performance.

In addition to revenue, net income (loss), income (loss) from operations, and other results under GAAP, we use Adjusted EBITDA and revenue growth rates in constant currency, which are described below, to evaluate our business.

We have included these non-GAAP financial measures because they are key measures used by our management to evaluate our operating performance.

In addition to revenue, net income (loss), income (loss) from operations, and other results under GAAP, we use Adjusted EBITDA, revenue growth rates in constant currency and free cash flow, which are described below, to evaluate our business.

We use these non-GAAP financial measures for financial and operational decision-making and as a means to evaluate period-to-period comparisons.

We believe that these non-GAAP financial measures provide meaningful supplemental information regarding our performance by excluding certain items that may not be indicative of our recurring core business operating results.

We believe that both management and investors benefit from referring to these non-GAAP financial measures in assessing our performance and when planning, forecasting, and analyzing future periods.

These non-GAAP financial measures also facilitate management’s internal comparisons to our historical performance.

We believe these non-GAAP financial measures are useful to investors both because (1) they allow for greater transparency with respect to key metrics used by management in its financial and operational decision-making and (2) they are used by our institutional investors and the analyst community to help them analyze the health of our business.

Accordingly, we believe that these non-GAAP financial measures provide useful information to investors and others in understanding and evaluating our operating results in the same manner as our management team and board of directors.

Our calculation of these non-GAAP financial measures may differ from similarly-titled non-GAAP measures, if any, reported by our peer companies.

Our calculation of these non-GAAP financial measures may differ from similarly-titled non-GAAP measures, if any, reported by our peer

These non-GAAP financial measures should not be considered in isolation from, or as substitutes for, financial information prepared in accordance with GAAP.

Adjusted EBITDA

impairments/loss on sale of assets, (xi) acquisition, financing and divestitures related expenses, (xii) restructuring and related charges and (xiii) other items not indicative of our ongoing operating performance, including COVID-19 response initiatives related payments for financial assistance to Drivers personally impacted by COVID-19, the cost of personal protective equipment distributed to Drivers, Driver reimbursement for their cost of purchasing personal protective equipment, the costs related to free rides and food deliveries to healthcare workers, seniors, and others in need as well as charitable donations.

We define Adjusted EBITDA as net income (loss), excluding (i) income (loss) from discontinued operations, net of income taxes, (ii) net income (loss) attributable to non-controlling interests, net of tax, (iii) provision for (benefit from) income taxes, (iv) income (loss) from equity method investments, (v) interest expense, (vi) other income (expense), net, (vii) depreciation and amortization, (viii) stock-based compensation expense, (ix) certain legal, tax, and regulatory reserve changes and settlements, (x) goodwill and asset impairments/loss on sale of assets, (xi) acquisition, financing and divestitures related expenses, (xii) restructuring and related charges and (xiii) other items not indicative of our ongoing operating performance, including COVID-19 response initiatives related payments for financial assistance to Drivers personally impacted by COVID-19, the cost of personal protective equipment distributed to Drivers, Driver reimbursement for their cost of purchasing personal protective equipment, the costs related to free rides and food deliveries to healthcare workers, seniors, and others in need as well as charitable donations.

We have included Adjusted EBITDA in this Annual Report on Form 10-K because it is a key measure used by our management team to evaluate our operating performance, generate future operating plans, and make strategic decisions, including those relating to operating expenses.

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• Adjusted EBITDA excludes certain recurring, non-cash charges, such as depreciation of property and equipment and amortization of intangible assets, and although these are non-cash charges, the assets being depreciated and amortized may have to be replaced in the future, and Adjusted EBITDA does not reflect all cash capital expenditure requirements for such replacements or for new capital expenditure requirements;

• Adjusted EBITDA excludes certain restructuring and related charges, part of which may be settled in cash;

• Adjusted EBITDA excludes stock-based compensation expense, which has been, and will continue to be for the foreseeable future, a significant recurring expense in our business and an important part of our compensation strategy;

• Adjusted EBITDA excludes certain restructuring and related charges, part of which may be settled in cash;

• Adjusted EBITDA excludes other items not indicative of our ongoing operating performance, including COVID-19 response initiatives related payments for financial assistance to Drivers personally impacted by COVID-19, the cost of personal protective equipment distributed to Drivers, Driver reimbursement for their cost of purchasing personal protective equipment, the costs related to free rides and food deliveries to healthcare workers, seniors, and others in need as well as charitable donations;

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Add (deduct):

Net loss attributable to non-controlling interests, net of tax (20) (74)

Net income (loss) attributable to non-controlling interests, net of tax (74) 3

Provision for (benefit from) income taxes (492) (181)

Loss from equity method investments 34 37

(Income) loss from equity method investments 37 (107)

Interest expense 483 565

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COVID-19 response initiatives 54 1

Gain on lease arrangement, net (5) —

Loss on lease arrangement, net — 7

Restructuring and related charges, net — 2

Legacy auto insurance transfer (1)

Mass arbitration fees — 43

Mass arbitration fees, net 43 (14)

Adjusted EBITDA $ (774) $ 1,713

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We calculate constant currency by translating our current period financial results using the corresponding prior period’s monthly exchange rates for our transacted currencies other than the U.S.

Free Cash Flow

We define free cash flow as net cash flows from operating activities less capital expenditures.

The following table presents a reconciliation of free cash flow to the most directly comparable GAAP financial measure for each of the periods indicated:

Year Ended December 31,

(In millions) 2021 2022

Free cash flow reconciliation:

Net cash provided by (used in) operating activities (1)

$ (445) $ 642

Purchases of property and equipment (298) (252)

Free cash flow (1)

$ (743) $ 390

(1) Net cash used in operating activities and free cash flow during the year ended December 31, 2021 reflected a $1.0 billion cash inflow related to a legacy auto insurance transfer.

For additional information on the legacy auto insurance transfer, refer to the section titled “Liquidity and Capital Resources” for more information.

Net cash provided by operating activities and free cash flow during the year ended December 31, 2022 reflected a cash outflow of approximately $733 million (GBP 613 million) related to the resolution of outstanding HMRC VAT claims that were paid during the fourth quarter of 2022.

Liquidity and Capital Resources

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(In millions) 2021 2022

Net cash used in operating activities $ (2,745) $ (445)

Net cash provided by (used in) operating activities $ (445) $ 642

Net cash used in investing activities (1,201) (1,637)

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Operating Activities

Net cash provided by operating activities was $642 million for the year ended December 31, 2022, primarily consisting of $9.1 billion of net loss, adjusted for certain non-cash items, which primarily included $7.0 billion in unrealized losses from equity securities, $1.8 billion of stock-based compensation expense, and $947 million depreciation and amortization expense as well as a $335 million decrease in cash consumed by working capital.

The decrease in cash consumed by working capital was primarily driven by an increase in our insurance reserves and accrued expenses and other current liabilities, partially offset by higher accounts receivable.

Net cash provided by operating activities reflects a cash outflow of approximately $733 million (GBP 613 million) related to the resolution of outstanding HMRC VAT claims that were paid during the fourth quarter of 2022.

Net cash used in operating activities was $445 million for the year ended December 31, 2021, primarily consisting of $570 million of net loss, adjusted for certain non-cash items, which primarily included $1.7 billion in gain on business divestitures, $1.2 billion of stock-based compensation expense, $1.1 billion of unrealized gain on debt and equity securities, $413 million of gain from sale of investments, depreciation and amortization expense of $902 million, as well as a $477 million decrease in cash consumed by working capital.

The decrease in cash consumed by working capital and other operating activities was primarily driven by an increase in accrued expenses and other liabilities, an increase in our insurance reserves, partially offset by higher accounts receivable and prepaid expenses and lower operating lease liabilities.

Net cash used in operating activities also reflects a $1.0 billion cash inflow related to a legacy auto insurance transfer.

Net cash used in operating activities also reflects a $1.0 billion cash inflow related to legacy auto insurance transfer.

For additional information on the legacy auto insurance transfer, see Note 1 – Description of Business and Summary of Significant Accounting Policies included in Part II, Item 8, “Financial Statements and Supplementary Data,” of this Annual Report on Form 10-K.

Net cash used in operating activities was $2.7 billion for the year ended December 31, 2020 , primarily consisting of $6.8 billion of net loss, adjusted for certain non-cash items, which primarily included $1.7 billion in impairment of non-marketable equity securities, $827 million of stock-based compensation expense, depreciation and amortization expense of $575 million, $404 million in impairment of goodwill, long-lived assets and other assets, as well as a $393 million decrease in cash consumed by working capital.

The decrease in cash consumed by working capital and other operating activities was primarily driven by a decrease in our operating lease right-of-use assets, prepaid expenses and other assets and increase in accrued expenses and other liabilities, partially offset by lower accounts payable and operating lease liabilities.

Investing Activities

Net cash used in investing activities was $1.6 billion for the year ended December 31, 2022, primarily consisting of $1.7 billion in purchases of marketable securities, $252 million in purchases of property and equipment, and $59 million in acquisition of business, net of cash acquired, partially offset by proceeds from maturities and sales of marketable securities of $376 million.

Net cash used in investing activities was $1.2 billion for the year ended December 31, 2021, primarily consisting of $2.3 billion in acquisition of businesses, net of cash acquired, $1.1 billion in purchases of marketable securities, $982 million in purchases of non-marketable equity securities, $297 million in purchases of notes receivable, and $298 million in purchases of property and equipment, partially offset by proceeds from maturities and sales of marketable securities of $2.3 billion, proceeds from the sale of equity method investments of $1.0 billion and proceeds from sale of non-marketable equity securities of $500 million.

Net cash used in investing activities was $2.9 billion for the year ended December 31, 2020, primarily consisting of $2.1 billion in purchases of marketable securities, $1.5 billion in acquisition of businesses, net of cash acquired and $616 million in purchases of property and equipment, partially offset by proceeds from maturities and sales of marketable securities of $1.4 billion.

Financing Activities

Net cash provided by financing activities was $1.8 billion for the year ended December 31, 2021, primarily consisting of $1.5 billion of proceeds from issuance of notes, net of issuance cost, $675 million of proceeds from the issuance and sale of subsidiary preferred stock units, partially offset by $307 million of principal repayment on the non-interest bearing unsecured convertible notes related to the acquisition of Careem (“Careem Notes”) and $226 million principal payments on finance leases.

Net cash provided by financing activities was $1.4 billion for the year ended December 31, 2020, primarily consisting of $2.6 billion of proceeds from issuance of notes, net of issuance costs and $247 million of proceeds from issuance of subsidiary preferred stock units, partially offset by $891 million of principal repayment on Careem Notes and $527 million of principal repayment on term loan and notes.

Net cash provided by financing activities was $15 million for the year ended December 31, 2022, primarily consisting of proceeds from sale of subsidiary stock units of $255 million, and proceeds from the issuance of common stock under the Employee Stock Purchase Plan of $92 million, partially offset by $184 million of principal payments on finance leases, and $80 million of principal repayment on the non-interest bearing unsecured convertible notes related to the acquisition of Careem (“Careem Notes”).

Net cash provided by financing activities was $1.8 billion for the year ended December 31, 2021, primarily consisting of $1.5 billion of proceeds from issuance of notes, net of issuance costs, $675 million of proceeds from issuance of subsidiary preferred stock units, partially offset by $307 million of principal repayment on Careem Notes and $226 million principal payments on finance leases.

Other Information

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Repatriation of funds may result in immaterial tax liabilities.

We believe that our existing cash balance in the United States is sufficient to fund our working capital needs in the United States.

We believe that our existing cash balance in the

United States is sufficient to fund our working capital needs in the United States.

We are in compliance with our debt and line of credit covenants as of December 31, 2022, including by meeting our reporting obligations.

We also believe that our sources of funding and our available line of credit will be sufficient to satisfy our currently anticipated cash requirements including capital expenditures, working capital requirements, collateral requirements, potential acquisitions, potential prepayments of contested indirect tax assessments (“pay-to-play”), and other liquidity requirements through at least the next 12 months.

We intend to continue to evaluate and may, in certain circumstances, take preemptive action to preserve liquidity during the COVID-19 pandemic.

As the circumstances around the COVID-19 pandemic remain uncertain, we continue to actively monitor the pandemic's impact to us worldwide including our financial position, liquidity, results of operations and cash flows.

We intend to continue to evaluate and may, in certain circumstances, take preemptive action to preserve liquidity.

Non-Income Tax Matters

On October 31, 2022, we resolved all outstanding HMRC (the tax regulator in the UK) VAT claims related to periods prior to our model change on March 14, 2022.

There was not a material impact to our statement of operations as we had adequate reserves recorded related to this resolution.

During the fourth quarter of 2022, we made a payment of approximately $733 million (GBP 613 million) for this resolution.

For additional information, see Note 14 – Commitments and Contingencies in the section titled “Notes to Consolidated Financial Statements” included in Part II, Item 8 of this Annual Report on Form 10-K.

Our operating lease portfolio primarily consists of corporate offices.

For additional information, see Note 6 - Leases in the notes to the consolidated financial statements included in Part II, Item 8, “Financial Statements and Supplementary Data,” of this Annual Report on Form 10-K.

Long-Term Debt

We have long-term debt with varying maturities dates through 2029.

For additional information, see Note 8 – Long-Term Debt and Revolving Credit Arrangements in the notes to the consolidated financial statements included in Part II, Item 8, “Financial Statements and Supplementary Data,” of this Annual Report on Form 10-K.

Purchase Commitments

We have non-cancelable commitments for network and cloud services, background checks, and other items in the ordinary course of business.

These amounts are determined based on the non-cancelable quantities or termination amounts to which we are contractually obligated.

As of December 31, 2021, we had $394 million in non-cancelable commitments, with varying expiration terms through December 15, 2026.

We have non-cancelable commitments which primarily relate to network and cloud services and other items in the ordinary course of business.

These amounts are determined based on the non-cancelable quantities to which we are contractually obligated.

In November 2022, we entered into commercial technology agreements with vendors for cloud computing services (“2022 Cloud Computing Service Agreements”).

We are committed to spend an aggregate of at least $2.9 billion through November 2029, of which $160 million is short-term.

We may pay more than the minimum purchase commitment to our cloud-computing web services providers based on usage.

As of December 31, 2022, the amounts utilized for these agreements are immaterial.

As of December 31, 2022, we had $3.2 billion in non-cancelable commitments, this includes the $2.9 billion in 2022 Cloud Computing Service Agreements discussed above.

The non-cancellable commitments have varying expiration terms through November 2029.

Critical Accounting Estimates

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Our sole performance obligation in the transaction is to connect Drivers and Merchants with end-users to facilitate the completion of a successful ridesharing trip or delivery.

Because end-users access our platform for free, except in certain markets, and we have no performance obligation to end-users, end-users are not our customers.

In certain markets, we also generate revenue from end-users and charge a direct fee for use of the platform and in exchange for

Mobility and Delivery services.

With exception of these markets, end-users are not our customers because end-users access our platform for free and we have no performance obligation to end-users.

Judgment is required in evaluating the presentation of revenue on a gross versus net basis based on whether we control the service provided to the end-user and are the principal in the transaction (gross), or we arrange for other parties to provide the service to the end-user and are the agent in the transaction (net).

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Upon the conclusion of the measurement period, any subsequent adjustments are recorded to earnings.

Embedded Derivatives

During 2015, we had issued convertible notes that contain embedded features subject to derivative accounting.

These embedded features are composed of conversion options that have the economic characteristics of a contingent early redemption feature settled in shares of our stock rather than cash, because the total number of shares of our common stock delivered to settle these embedded features will have a fixed value.

These conversion options are bifurcated from the underlying instrument and accounted for and valued separately from the host instrument.

Embedded derivatives are recognized as derivative liabilities on our consolidated balance sheet.

We measure these instruments at their estimated fair value and recognize changes in their estimated fair value in other income (expense), net in our consolidated statement of operations and comprehensive loss during the period of change.

We value these embedded derivatives as the difference between the estimated value of these convertible notes with and without the Qualified Initial Public Offering (“QIPO”) conversion option (“QIPO Conversion Option”).

The fair value of these convertible

notes with and without the QIPO Conversion Option is estimated utilizing a discounted cash flow model to discount the expected payoffs at various potential QIPO dates to the valuation date.

The key inputs to the valuation model include the probability of a QIPO occurring at various points in time and the discount yield, which was derived by imputing the fair value as equal to the face value on the issuance date of these convertible notes.

The discount rate is updated during each period to reflect the yield of a comparable instrument issued as of the valuation date.

Upon closing of the IPO in May 2019, holders of these convertible notes elected to convert all outstanding notes into shares of common stock.

For additional information, refer to Note 11 - Stockholders' Equity included in Part II, Item 8, “Financial Statements and Supplementary Data,” of this Annual Report on Form 10-K.

Investments—Non-Marketable Equity and Debt Securities

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The impairment analysis for investments in equity securities includes a qualitative analysis of factors including the investee’s financial performance, industry and market conditions, and other relevant factors.

If an equity investment is considered to be impaired we will establish a new carrying value for the investment and recognize an impairment loss through our consolidated statement of operations.

If an equity investment is considered to be impaired we will establish a new carrying

value for the investment and recognize an impairment loss through our consolidated statement of operations.

Investments in debt securities are evaluated for impairment quarterly based on whether its fair value has declined below its amortized cost.

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If an impairment is determined to be other-than-temporary, the fair value of the impaired investment would have to be determined and an impairment charge recorded for the difference between the fair value and the carrying value of the investment.

The fair value determination, particularly for investments in privately held companies, requires significant judgment to determine appropriate estimates and

The fair value determination, particularly for investments in privately held companies, requires significant judgment to determine appropriate estimates and assumptions.

Changes in these estimates and assumptions could affect the calculation of the fair value of the investments and the determination of the impairment charges.

19 unchanged sentences

Significant judgment is required to determine both the probability and the estimated amount of loss.

These estimates have been based on our assessment of the facts and circumstances at each balance sheet date and are subject to change based on new information and future events.

The outcomes of litigation, indirect tax examinations and investigations are inherently uncertain.

These estimates have been based

on our assessment of the facts and circumstances at each balance sheet date and are subject to change based on new information and future events.

The outcomes of litigation, regulatory, indirect tax examinations and investigations are inherently uncertain.

Therefore, if one or more of these matters were resolved against us for amounts in excess of management’s expectations, our results of operations, financial condition, or cash flows, including in a particular reporting period in which any such outcome becomes probable and estimable, could be materially adversely affected.

32 unchanged sentences

The service-based vesting condition for the majority of these awards is satisfied over four years.

The performance-based vesting condition is satisfied upon meeting predetermined targets of certain financial and operation metrics.

The performance-based vesting condition is satisfied upon meeting predetermined targets of

certain financial and operation metrics.

The market-based vesting condition is satisfied upon reaching predetermined targets of fully diluted equity values.

19 unchanged sentences

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 7. Management’s Discussion and Analysis