UBER filing — read by section

Item 7. Management’s Discussion and Analysis

ITEM 7. 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 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, 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. Our actual results could differ materially from those discussed in the forward-looking statements. You should review the sections titled “Special Note Regarding Forward-Looking Statements” for a discussion of forward-looking statements and in Part I, Item 1A, “Risk Factors”, for a discussion of factors that could cause actual results to differ materially from the results described in or implied by the forward-looking statements contained in the following discussion and analysis and elsewhere in this Annual Report on Form 10-K. 
 Overview 
 We are a technology platform that uses a massive network, leading technology, operational excellence, and product expertise to power movement from point A to point B. We develop and operate proprietary technology applications supporting a variety of offerings on our platform. 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 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 
 The classification of Drivers is currently being challenged in courts, by legislators and by government agencies in the United States and abroad. 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, 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. 
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 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. Following a stay of the injunction and our unsuccessful appeal of the injunction to a Court of Appeal, we were ordered to comply with the preliminary injunction. In November 2020, California voters approved Proposition 22, a state ballot initiative that provides a framework for drivers that use platforms like ours for independent work. Proposition 22 went into effect in December 2020. Although our stipulation to dissolve the California Attorney General’s preliminary injunction was granted in April 2021, that litigation remains pending, and we also may face liability relating to periods before the effective date of Proposition 22. 
 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 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. We do not expect these changes will have a material impact on our business, results of operations, financial position, or cash flows. 
 Also of note, on October 28, 2015, a claim by 25 Drivers, including Mr. Y. Aslam and Mr. J. 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. We appealed to the Supreme Court and a hearing at the Supreme Court took place in July 2020. 
 On February 19, 2021, the Supreme Court of the UK upheld the tribunal ruling. Subsequently, we initiated a historical claims settlement process for UK drivers. Damages may include back pay including holiday pay and minimum wage. Additional claimants have also filed and each claimant will be required to bring their own separate action to an employment tribunal to determine whether they met the “worker” classification and if so, how much each claimant will be awarded. 
 On March 16, 2021, we announced that more than 70,000 drivers in the UK will be treated as workers, earning at least the National Living Wage when driving with Uber. They will also be paid for holiday time and all those eligible will be automatically enrolled into a pension plan. 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. We have completed the enrollment of eligible drivers in the UK into a pension plan. 
 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. Additionally, we may not have adequate Driver supply as Drivers may opt out of our platform given the loss of flexibility under an employment model, and we may not be able to hire a majority of the Drivers currently using our platform. Any of these events could negatively impact our business, result of operations, financial position, and cash flows. 
 For a discussion of risk factors related to how misclassification challenges may impact our business, result of operations, financial position and operating condition and cash flows, see the risk factor titled “-Our business would be adversely affected if Drivers were classified as employees, workers or quasi-employees” included in Part I, Item 1A, “Risk Factors”, and 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. 
 In addition, if we are required to classify Drivers as employees, this may impact our current financial statement presentation including revenue, cost of revenue, incentives and promotions as further described in Note 1 – Description of Business and Summary of Significant Accounting Policies in the notes to the consolidated financial statements included in Part II, Item 8, “Financial Statements and Supplementary Data,” and the section titled “Critical Accounting Estimates” in Part II, Item 7, of this Annual Report on Form 10-K. 
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 Financial and Operational Highlights 
 Year Ended December 31, Constant Currency (1) 
 
 (In millions, except percentages) 2021 2022 2021 to 2022 % Change 2021 to 2022 % Change 
 Monthly Active Platform Consumers (“MAPCs”) (2), (3) 
 118 131 11 % 
 Trips (2) 
 6,368 7,642 20 % 
 Gross Bookings (2) 
 $ 90,415 $ 115,395 28 % 33 % 
 Revenue $ 17,455 $ 31,877 83 % 90 % 
 Net loss attributable to Uber Technologies, Inc. (4) 
 $ (496) $ (9,141) ** 
 Mobility Adjusted EBITDA $ 1,596 $ 3,299 107 % 
 Delivery Adjusted EBITDA $ (348) $ 551 ** 
 Adjusted EBITDA (1), (2) 
 $ (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. 
 (2) See the section titled “Certain Key Metrics and Non-GAAP Financial Measures” below for more information. 
 (3) MAPCs presented for annual periods are MAPCs for the fourth quarter of the year. 
 (4) Net loss attributable to Uber Technologies, Inc. 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. 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 $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 
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 $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 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 
 COVID-19 
 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. 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. 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 
 Revenue 
 We generate substantially all of our revenue from fees paid by Drivers and Merchants for use of our platform. We have concluded that we are an agent in these arrangements as we arrange for other parties to provide the service to the end-user. Under this model, revenue is net of Driver and Merchant earnings and Driver incentives. We act as an agent in these transactions by connecting consumers to Drivers and Merchants to facilitate a Trip, meal or grocery delivery service. 
 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 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. As Trips increase or decrease, we expect related changes for insurance costs, credit card processing fees, hosting and co-located data center expenses, maps license fees, and other cost of revenue, exclusive of depreciation and amortization. 
 Operations and Support 
 Operations and support expenses primarily consist of compensation expenses, including stock-based compensation, for employees that support operations in cities, including the general managers, Driver operations, platform user support representatives and community managers. Also included is the cost of customer support, Driver background checks and the allocation of certain corporate costs. 
 As our business recovers from the impacts of COVID-19 and Trip volume increases, we would expect operations and support expenses to increase on an absolute dollar basis for the foreseeable future, but decrease as a percentage of revenue as we become more efficient in supporting platform users. 
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 Sales and Marketing 
 Sales and marketing expenses primarily consist of compensation costs, including stock-based compensation to sales and marketing employees, advertising costs, product marketing costs and discounts, loyalty programs, promotions, refunds, and credits provided to end-users who are not customers, and the allocation of certain corporate costs. We expense advertising and other promotional expenditures as incurred. 
 As our business recovers from the impacts of COVID-19, we would anticipate sales and marketing expenses to increase on an absolute dollar basis for the foreseeable future but vary from period to period as a percentage of revenue due to timing of marketing campaigns. 
 Research and Development 
 Research and development expenses primarily consist of compensation costs, including stock-based compensation, for employees in engineering, design and product development. Expenses includes ATG and Other Technology Programs development expenses prior to the divestiture of our ATG business in January 2021, as well as expenses associated with ongoing improvements to, and maintenance of, existing products and services, and allocation of certain corporate costs. 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 in 2021. 
 General and Administrative 
 General and administrative expenses primarily consist of compensation costs, including stock-based compensation, for executive management and administrative employees, including finance and accounting, human resources, policy and communications, legal, and certain impairment charges, as well as allocation of certain corporate costs, occupancy, and general corporate insurance costs. General and administrative expenses also include certain legal settlements. 
 As our business recovers from the impacts of COVID-19 and Trip volume increases, we expect that general and administrative expenses will increase on an absolute dollar basis for the foreseeable future, but decrease as a percentage of revenue as we achieve improved fixed cost leverage and efficiencies in our internal support functions. 
 Depreciation and Amortization 
 Depreciation and amortization expenses primarily consist of depreciation on buildings, site improvements, computer and network equipment, software, leasehold improvements, furniture and fixtures, and amortization of intangible assets. Depreciation includes expenses associated with buildings, site improvements, computer and network equipment, leased vehicles, and furniture, fixtures, as well as leasehold improvements. Amortization includes expenses associated with our capitalized internal-use software and acquired intangible assets. 
 Interest Expense 
 Interest expense consists primarily of interest expense associated with our outstanding debt, including accretion of debt discount. For additional detail related to our debt obligations, see “Note 8 – Long-Term Debt and Revolving Credit Arrangements” to our consolidated financial statements included in Part II, Item 8, “Financial Statements and Supplementary Data,” of this Annual Report on Form 10-K. 
 Other Income (Expense), Net 
 Other income (expense), net primarily includes the following items: 
 • Interest income, which consists primarily of interest earned on our cash and cash equivalents and restricted cash and cash equivalents. 
 • Foreign currency exchange gains (losses), net, which consist primarily of remeasurement of transactions and monetary assets and liabilities denominated in currencies other than the functional currency at the end of the period. 
 • Gain on business divestitures, net. 
 • 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 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. 
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 • 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. 
 Provision for (Benefit from) Income Taxes 
 We are subject to income taxes in the United States and foreign jurisdictions in which we do business. These foreign jurisdictions have different statutory tax rates than those in the United States. Additionally, certain of our foreign earnings may also be taxable in the United States. Accordingly, our effective tax rate will vary depending on the relative proportion of foreign to domestic income, changes in the valuation allowance on our U.S. and Netherlands' deferred tax assets, and changes in tax laws. 
 Equity Method Investments 
 Equity method investments primarily includes the results of our share of income or loss from our Yandex.Taxi joint venture. 
 
 Results of Operations 
 The following table summarizes our consolidated statements of operations for each of the periods presented (in millions): 
 Year Ended December 31, 
 2021 2022 
 
 Revenue $ 17,455 $ 31,877 
 Costs and expenses 
 Cost of revenue, exclusive of depreciation and amortization shown separately below 9,351 19,659 
 Operations and support 1,877 2,413 
 Sales and marketing 4,789 4,756 
 Research and development 2,054 2,798 
 General and administrative 2,316 3,136 
 Depreciation and amortization 902 947 
 Total costs and expenses 21,289 33,709 
 Loss from operations (3,834) (1,832) 
 Interest expense (483) (565) 
 Other income (expense), net 3,292 (7,029) 
 Loss before income taxes and income (loss) from equity method investments (1,025) (9,426) 
 Provision for (benefit from) income taxes (492) (181) 
 Income (loss) from equity method investments (37) 107 
 Net loss including non-controlling interests (570) (9,138) 
 Less: net income (loss) attributable to non-controlling interests, net of tax (74) 3 
 Net loss attributable to Uber Technologies, Inc. $ (496) $ (9,141) 

 
 
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 The following table sets forth the components of our consolidated statements of operations for each of the periods presented as a percentage of revenue (1) : 
 Year Ended December 31, 
 2021 2022 
 
 Revenue 100 % 100 % 
 Costs and expenses 
 Cost of revenue, exclusive of depreciation and amortization shown separately below 54 % 62 % 
 Operations and support 11 % 8 % 
 Sales and marketing 27 % 15 % 
 Research and development 12 % 9 % 
 General and administrative 13 % 10 % 
 Depreciation and amortization 5 % 3 % 
 Total costs and expenses 122 % 106 % 
 Loss from operations (22) % (6) % 
 Interest expense (3) % (2) % 
 Other income (expense), net 19 % (22) % 
 Loss before income taxes and income (loss) from equity method investments (6) % (30) % 
 Provision for (benefit from) income taxes (3) % (1) % 
 Income (loss) from equity method investments — % — % 
 Net loss including non-controlling interests (3) % (29) % 
 Less: net income (loss) attributable to non-controlling interests, net of tax — % — % 
 Net loss attributable to Uber Technologies, Inc. (3) % (29) % 

 (1) Totals of percentage of revenues may not foot due to rounding. 
 Comparison of the Years Ended December 31, 2021 and 2022 
 Revenue 
 Year Ended December 31, 2021 to 2022 % Change 
 (In millions, except percentages) 2021 2022 
 
 Revenue $ 17,455 $ 31,877 83 % 

 2022 Compared to 2021 
 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 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 
 Year Ended December 31, 2021 to 2022 % Change 
 (In millions, except percentages) 2021 2022 
 
 Cost of revenue, exclusive of depreciation and amortization $ 9,351 $ 19,659 110 % 
 Percentage of revenue 54 % 62 % 

 2022 Compared to 2021 
 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 
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 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 
 Year Ended December 31, 2021 to 2022 % Change 
 (In millions, except percentages) 2021 2022 
 
 Operations and support $ 1,877 $ 2,413 29 % 
 Percentage of revenue 11 % 8 % 

 2022 Compared to 2021 
 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 
 Year Ended December 31, 2021 to 2022 % Change 
 (In millions, except percentages) 2021 2022 
 
 Sales and marketing $ 4,789 $ 4,756 (1) % 
 Percentage of revenue 27 % 15 % 

 2022 Compared to 2021 
 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 
 Year Ended December 31, 2021 to 2022 % Change 
 (In millions, except percentages) 2021 2022 
 
 Research and development $ 2,054 $ 2,798 36 % 
 Percentage of revenue 12 % 9 % 

 2022 Compared to 2021 
 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 
 Year Ended December 31, 2021 to 2022 % Change 
 (In millions, except percentages) 2021 2022 
 
 General and administrative $ 2,316 $ 3,136 35 % 
 Percentage of revenue 13 % 10 % 

 2022 Compared to 2021 
 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 
 Year Ended December 31, 2021 to 2022 % Change 
 (In millions, except percentages) 2021 2022 
 
 Depreciation and amortization $ 902 $ 947 5 % 
 Percentage of revenue 5 % 3 % 

 2022 Compared to 2021 
 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 
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 depreciation primarily due to fixed assets that fully depreciated in 2021. 
 Interest Expense 
 Year Ended December 31, 2021 to 2022 % Change 
 (In millions, except percentages) 2021 2022 
 
 Interest expense $ (483) $ (565) 17 % 
 Percentage of revenue (3) % (2) % 

 2022 Compared to 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, 2021 to 2022
% Change 
 (In millions, except percentages) 2021 2022 
 
 Interest income $ 37 $ 139 276 % 
 Foreign currency exchange gains (losses), net (67) (147) (119) % 
 Gain on business divestitures, net 1,684 14 (99) % 
 Gain from sale of investments 413 — (100) % 
 Unrealized gain (loss) on debt and equity securities, net 1,142 (7,045) ** 
 Impairment of equity method investment — (182) (100) % 
 Revaluation of MLU B.V. call option — 191 100 % 
 Other, net 83 1 (99) % 
 Other income (expense), net $ 3,292 $ (7,029) ** 
 Percentage of revenue 19 % (22) % 

 ** Percentage not meaningful. 
 2022 Compared to 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 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 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 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. 
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 Provision for (Benefit from) Income Taxes 
 Year Ended December 31, 2021 to 2022 % Change 
 (In millions, except percentages) 2021 2022 
 
 Provision for (benefit from) income taxes $ (492) $ (181) 63 % 
 Effective tax rate 48.0 % 1.9 % 

 2022 Compared to 2021 
 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. 
 Income (Loss) from Equity Method Investments 
 Year Ended December 31, 2021 to 2022 % Change 
 (In millions, except percentages) 2021 2022 
 
 Income (loss) from equity method investments $ (37) $ 107 ** 
 Percentage of revenue — % — % 

 ** Percentage not meaningful. 
 2022 Compared to 2021 
 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 
 We operate our business as three operating and reportable segments: Mobility, Delivery, and Freight. For additional information about our segments, see Note 13 – Segment Information and Geographic Information 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. 
 Revenue 
 Year Ended December 31, 2021 to 2022 % Change 
 (In millions, except percentages) 2021 2022 
 
 Mobility $ 6,953 $ 14,029 102 % 
 Delivery 8,362 10,901 30 % 
 Freight 2,132 6,947 226 % 
 All Other (1) 
 8 — (100) % 
 Total revenue $ 17,455 $ 31,877 83 % 

 (1) Includes historical results of ATG and Other Technology Programs and New Mobility. Refer to Note 13 – Segment Information and Geographic Information and Note 18 – Divestitures for further information. 
 Segment Adjusted EBITDA 
 Segment Adjusted EBITDA is defined as revenue less the following expenses: cost of revenue, exclusive of depreciation and amortization, operations and support, sales and marketing, and general and administrative and research and development expenses associated with our segments. Segment adjusted EBITDA also excludes non-cash items, certain transactions that are not indicative of ongoing segment operating performance and/or items that management does not believe are reflective of our ongoing core operations. For additional information, see Note 13 – Segment Information and Geographic Information to our consolidated financial statements included in Part II, Item 8, “Financial Statements and Supplementary Data,” of this Annual Report on Form 10-K. 
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 Year Ended December 31, 2021 to 2022 % Change 
 (In millions, except percentages) 2021 2022 
 
 Mobility $ 1,596 $ 3,299 107 % 
 Delivery (348) 551 ** 
 Freight (130) — 100 % 
 All Other (1) 
 (11) — 100 % 
 Corporate G&A and Platform R&D (2), (3) 
 (1,881) (2,137) (14) % 
 Adjusted EBITDA (4) 
 $ (774) $ 1,713 ** 

 (1 ) Includes historical results of ATG and Other Technology Programs and New Mobility. Refer to Note 13 – Segment Information and Geographic Information and Note 18 – Divestitures for further information regarding the sale of our ATG Business. 
 (2 ) Excluding stock-based compensation expense. 
 (3) Includes costs that are not directly attributable to our reportable segments. Corporate G&A also includes certain shared costs such as finance, accounting, tax, human resources, information technology and legal costs. Platform R&D also includes mapping and payment technologies and support and development of the internal technology infrastructure. Our allocation methodology is periodically evaluated and may change. 
 (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, 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 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, 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, 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 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 
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 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. 
 All Other 
 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 
 Adjusted EBITDA and revenue growth rates in constant currency are non-GAAP financial measures. For more information about how we use these non-GAAP financial measures in our business, the limitations of these measures, and reconciliations of these measures to the most directly comparable GAAP financial measures, see the section titled “Reconciliations of Non-GAAP Financial Measures.” 
 Monthly Active Platform Consumers. MAPCs is the number of unique consumers who completed a Mobility or New Mobility ride or received a Delivery order on our platform at least once in a given month, averaged over each month in the quarter. While a unique consumer can use multiple product offerings on our platform in a given month, that unique consumer is counted as only one MAPC. We use MAPCs to assess the adoption of our platform and frequency of transactions, which are key factors in our penetration of the countries in which we operate. 
 
 Trips. We define Trips as the number of completed consumer Mobility or New Mobility rides and Delivery orders in a given period. 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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 Gross Bookings. We define Gross Bookings as the total dollar value, including any applicable taxes, tolls, and fees, of: Mobility rides; Delivery orders (in each case without any adjustment for consumer discounts and refunds); Driver and Merchant earnings; Driver incentives and Freight revenue. Gross Bookings do not include tips earned by Drivers. Gross Bookings are an indication of the scale of our current platform, which ultimately impacts revenue. 
 
 (In millions) Q1 2021 Q2 2021 Q3 2021 Q4 2021 Q1 2022 Q2 2022 Q3 2022 Q4 2022 
 
 Mobility $ 6,773 $ 8,640 $ 9,883 $ 11,340 $ 10,723 $ 13,364 $ 13,684 $ 14,894 
 Delivery 12,461 12,912 12,828 13,444 13,903 13,876 13,684 14,315 
 Freight 302 348 402 1,082 1,823 1,838 1,751 1,540 
 

 Take Rate is defined as revenue as a percentage of Gross Bookings. 
 Adjusted EBITDA. See the section titled “Reconciliations of Non-GAAP Financial Measures” for our definition and a reconciliation of net loss attributable to Uber Technologies, Inc. to Adjusted EBITDA. 
 Year Ended December 31, 
 (In millions, except percentages) 2021 2022 2021 to 2022 % Change 
 
 Adjusted EBITDA $ (774) $ 1,713 ** 

 ** Percentage not meaningful. 
 2022 Compared to 2021 
 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, 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 
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 companies. 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 
 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. Accordingly, we believe that Adjusted EBITDA provides 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. In addition, it provides a useful measure for period-to-period comparisons of our business, as it removes the effect of certain non-cash expenses and certain variable charges. To help our board, management and investors assess the impact of COVID-19 on our results of operations, we are excluding the impacts of 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 from Adjusted EBITDA. Our board and management find the exclusion of the impact of these COVID-19 response initiatives from Adjusted EBITDA to be useful because it allows us and our investors to assess the impact of these response initiatives on our results of operations. 
 COVID-19 Response Initiatives 
 To support those whose earning opportunities have been depressed as a result of COVID-19, as well as communities hit hard by the pandemic, we have announced and implemented several initiatives, including, in particular, 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. The payments for financial assistance to Drivers personally impacted by COVID-19 and Driver reimbursement for their cost of purchasing personal protective equipment are recorded as a reduction to revenue. The cost of personal protective equipment distributed to Drivers, the costs related to free rides and food deliveries to healthcare workers, seniors, and others in need as well as charitable donations are recorded as an expense in our costs and expenses. 
 Limitations of Non-GAAP Financial Measures and Adjusted EBITDA Reconciliation 
 Adjusted EBITDA has limitations as a financial measure, should be considered as supplemental in nature, and is not meant as a substitute for the related financial information prepared in accordance with GAAP. These limitations include the following: 
 • 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 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; 
 • Adjusted EBITDA does not reflect period to period changes in taxes, income tax expense or the cash necessary to pay income taxes; 
 • Adjusted EBITDA does not reflect the components of other income (expense), net, which primarily includes: interest income; foreign currency exchange gains (losses), net; gain (loss) on business divestitures, net; and unrealized gain (loss) on debt and equity securities, net; and impairment of debt and equity securities; and 
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 • Adjusted EBITDA excludes certain legal, tax, and regulatory reserve changes and settlements that may reduce cash available to us. 
 The following table presents a reconciliation of net loss attributable to Uber Technologies, Inc., the most directly comparable GAAP financial measure, to Adjusted EBITDA for each of the periods indicated: 
 Year Ended December 31, 
 (In millions) 2021 2022 
 
 Adjusted EBITDA reconciliation: 
 Net loss attributable to Uber Technologies, Inc. $ (496) $ (9,141) 
 Add (deduct): 
 Net income (loss) attributable to non-controlling interests, net of tax (74) 3 
 Provision for (benefit from) income taxes (492) (181) 
 (Income) loss from equity method investments 37 (107) 
 Interest expense 483 565 
 Other (income) expense, net (3,292) 7,029 
 Depreciation and amortization 902 947 
 Stock-based compensation expense 1,168 1,793 
 Legal, tax, and regulatory reserve changes and settlements 526 732 
 Goodwill and asset impairments/loss on sale of assets 157 25 
 Acquisition, financing and divestitures related expenses 102 46 
 Accelerated lease costs related to cease-use of ROU assets 5 6 
 COVID-19 response initiatives 54 1 
 Loss on lease arrangement, net — 7 
 Restructuring and related charges, net — 2 
 Legacy auto insurance transfer (1) 
 103 — 
 Mass arbitration fees, net 43 (14) 
 Adjusted EBITDA $ (774) $ 1,713 

 (1 ) For further information, refer to Note 1 – Description of Business and Summary of Significant Accounting Policies 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. 
 Constant Currency 
 We compare the percent change in our current period results from the corresponding prior period using constant currency disclosure. We present constant currency growth rate information to provide a framework for assessing how our underlying revenue performed excluding the effect of foreign currency rate fluctuations. 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. dollar. 
 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. 
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 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. 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.” 
 
 Liquidity and Capital Resources 
 Year Ended December 31, 
 (In millions) 2021 2022 
 
 Net cash provided by (used in) operating activities $ (445) $ 642 
 Net cash used in investing activities (1,201) (1,637) 
 Net cash provided by financing activities 1,780 15 

 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. 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. 
 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 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. 
 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. 
 Financing Activities 
 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 
 As of December 31, 2022, $2.4 billion of our $4.2 billion in cash and cash equivalents was held by our foreign subsidiaries. Cash held outside the United States may be repatriated, subject to certain limitations, and would be available to be used to fund our domestic operations. Repatriation of funds may result in immaterial tax liabilities. We believe that our existing cash balance in the 
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 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. 
 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. 
 Commitments 
 Leases 
 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 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 
 We believe that the following accounting policies involve a high degree of judgment and complexity and are critical to understanding and evaluating our consolidated financial condition and results of our operations. An accounting policy is considered to be critical if it requires judgment on a significant accounting estimate to be made based on assumptions about matters that are uncertain at the time the estimate is made, and if different estimates that reasonably could have been used, or changes in the accounting estimates that are reasonably likely to occur periodically, could materially impact the reported amounts of assets, liabilities, revenue and expenses, and related disclosures in our audited consolidated financial statements. We have based our estimates on historical experience and on various other assumptions that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Although we believe that the estimates we use are reasonable, due to the inherent uncertainty involved in making those estimates, actual results reported in future periods could differ from those estimates. 
 We believe that the following critical accounting policies reflect the more significant judgments, estimates and assumptions used in the preparation of our consolidated financial statements. For additional information, see the disclosure included in Note 1 – Description of Business and Summary of Significant Accounting Policies 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. 
 Revenue Recognition 
 We derive our revenue principally from service fees paid by Drivers and Merchants for the use of our platform in connection with our Mobility products and Delivery offering provided by Drivers and Merchants to end-users. 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. In certain markets, we also generate revenue from end-users and charge a direct fee for use of the platform and in exchange for 
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 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). We have concluded that we are the agent in most markets as we arrange for Drivers and Merchants to provide the service to the end user in Mobility and Delivery transactions. The assessment of whether we are considered the principal or the agent in a transaction could impact the accounting for certain payments and incentives provided to Drivers and end-users and change the timing and amount of revenue recognized. 
 In certain markets, consumers have the option to pay Drivers cash for trips, and we generally collect our service fee from Drivers for these trips by offsetting against any other amounts due to Drivers, including Driver incentives. We have concluded collectability of such amounts is not probable until collected. As such, uncollected service fees for cash trips are not recognized as revenue in our consolidated financial statements until collected. 
 Driver Incentives 
 We offer various incentive programs to Drivers. Judgment is required to determine the appropriate classification of these incentives. Incentives provided to customers are recorded as a reduction of revenue if we do not receive a distinct service in exchange or cannot reasonably estimate the fair value of the service received. Incentives offered in exchange for specific services, such as referral services are recorded as sales and marketing expenses. 
 End-User Discounts and Promotions 
 We offer discounts and promotions to end-users (that are not customers) to encourage use of our platform. Judgment is required to determine the appropriate classification of these incentives. End-user discounts and promotions are recorded to sales and marketing expenses with the exception of market-wide promotions which are recorded as a reduction of revenue. 
 Business Combinations 
 We allocate the fair value of purchase consideration to the tangible assets acquired, liabilities assumed, and intangible assets acquired based on their estimated fair values. The excess of the fair value of purchase consideration over the fair values of these identifiable assets and liabilities is recorded as goodwill. Such valuations require management to make significant estimates and assumptions, especially with respect to intangible assets. Significant estimates in valuing certain intangible assets include, but are not limited to, future expected cash flows from acquired advertiser, fleet, merchant, and end-user contracts, acquired technology, and trade names, based on expected future growth rates and margins, attrition rates, future changes in technology and royalty for similar brand licenses, useful lives, and discount rates. 
 Management's estimates of fair value are based upon assumptions believed to be reasonable, but which are inherently uncertain and unpredictable and, as a result, actual results may differ from estimates. Allocation of purchase consideration to identifiable assets and liabilities affects our amortization expense, as acquired finite-lived intangible assets are amortized over the useful life, whereas any indefinite lived intangible assets, including goodwill, are not amortized. During the measurement period, which may be up to one year from the acquisition date, we may record adjustments to the assets acquired and liabilities assumed, with the corresponding offset to goodwill. Upon the conclusion of the measurement period, any subsequent adjustments are recorded to earnings. 
 Investments—Non-Marketable Equity and Debt Securities 
 We hold investments in privately held companies in the form of equity securities and debt securities without readily determinable fair values and in which we do not have a controlling interest or significant influence. Investments in equity securities without readily determinable fair values are initially recorded at cost and are subsequently adjusted to fair value for impairments and price changes from observable transactions in the same or a similar security from the same issuer. Investments in material available-for-sale debt securities are recorded initially at fair value and subsequently remeasured to fair value at each reporting date with the changes in fair value recognized in other comprehensive income (loss), net of tax. We may elect the fair value option for financial instruments and account for investments in debt and equity securities at fair value with changes reported in net income (loss) from continuing operations. 
 Investments in privately held equity and debt securities are valued using significant unobservable inputs or data in inactive markets. This valuation requires judgment due to the absence of market prices and inherent lack of liquidity and are classified as Level 3 in the fair value hierarchy. In determining the estimated fair value of our investments in privately held companies, we utilize the most recent data available including observed transactions such as equity financing transactions of the investees and sales of the existing shares of the investees’ securities. In addition, the determination of whether an observed transaction is similar to the equity and debt securities held by us requires significant management judgment based on the rights and preferences of the securities. 
 We assess our investment portfolio of privately held equity and debt securities quarterly for impairment. 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 
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 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. In circumstances where we intend to sell, or are more likely than not required to sell the security before it recovers its amortized cost basis, the difference between the fair value and amortized cost is recognized as a loss in the consolidated financial statement of operations, with a corresponding write-down of the security’s amortized cost. In circumstances where neither condition exists, we then evaluate whether a decline is due to credit-related factors. The factors considered in determining whether a credit loss exists can include the extent to which fair value is less than the amortized cost basis, changes in the credit quality of the underlying loan obligors, credit ratings actions, as well as other factors. To determine the portion of a decline in fair value that is credit-related, we compare the present value of the expected cash flows of the security discounted at the security’s effective interest rate to the amortized cost basis of the security. A credit-related impairment is limited to the difference between fair value and amortized cost, and recognized as an allowance for credit loss on the consolidated balance sheet with a corresponding adjustment to net income (loss). Any remaining decline in fair value that is non-credit related is recognized in other comprehensive income (loss), net of tax. Improvements in expected cash flows due to improvements in credit are recognized through reversal of the credit loss and corresponding reduction in the allowance for credit loss. 
 Equity Method Investments 
 We account for investments in the common stock or in-substance common stock of entities that provide us with the ability to exercise significant influence, but not a controlling financial interest, using the equity method. Investments accounted for under the equity method are initially recorded at cost. Subsequently, we recognize through the consolidated statements of operations, and as an adjustment to the investment balance, our proportionate share of the investee entities’ net income or loss, and the amortization of basis differences. In accounting for these investments, we record our share of the entities’ net income or loss one quarter in arrears. Equity method investments for which the fair value option is elected are measured at fair value on a recurring basis with changes in fair value reflected in earnings. 
 We review our equity method investments for impairment whenever events or changes in business circumstances indicate that the carrying value of the investment may not be fully recoverable. Qualitative and quantitative factors considered as indicators of a potential impairment include financial results and operating trends of the investees, implied values in transactions of the investee’s securities, severity and length of decline in value, and our intention for holding the investment, among other factors. 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 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. 
 Goodwill Impairment Assessment 
 We review goodwill for impairment annually (in the fourth quarter) and whenever events or changes in circumstances indicate that goodwill might be impaired. We make certain judgments and assumptions to determine our reporting units and in allocating shared assets and liabilities to determine the carrying values for each of our reporting units. Determination of reporting units is based on a judgmental evaluation of the level at which our segment managers review financial results, evaluate performance, and allocate resources. 
 Judgment in the assessment of qualitative factors of impairment include, among other factors: financial performance; legal, regulatory, contractual, political, business, and other factors; entity specific factors; industry and market considerations, macroeconomic conditions, and other relevant events and factors affecting the reporting unit. To the extent we determine that it is more likely than not that the fair value of the reporting unit is less than its carrying value, a quantitative test is then performed. 
 Performing a quantitative goodwill impairment test includes the determination of the fair value of a reporting unit and involves significant estimates and assumptions. These estimates and assumptions include, among others, revenue growth rates and operating margins used to calculate projected future cash flows, risk-adjusted discount rates, future economic and market conditions, and the determination of appropriate market comparables. 
 Loss Contingencies 
 We are involved in legal proceedings, claims, and regulatory, indirect tax examinations, or government inquiries and investigations that may arise in the ordinary course of business. Certain of these matters include speculative claims for substantial or indeterminate amounts of damages. We record a liability when we believe that it is both probable that a loss has been incurred and the amount can be reasonably estimated. If we determine that a loss is reasonably possible and the loss or range of loss can be reasonably estimated, we disclose the possible loss in the accompanying notes to the consolidated financial statements. 
 We review the developments in our contingencies that could affect the amount of the provisions that have been previously recorded, and the matters and related reasonably possible losses disclosed. We make adjustments to our provisions and changes to our disclosures accordingly to reflect the impact of negotiations, settlements, rulings, advice of legal counsel, and updated information. Significant judgment is required to determine both the probability and the estimated amount of loss. These estimates have been based 
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 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. 
 Income Taxes 
 We are subject to income taxes in the United States and foreign jurisdictions. We account for income taxes using the asset and liability method. The establishment of deferred tax assets from intra-entity transfers of intangible assets requires management to make significant estimates and assumptions to determine the fair value of such intangible assets. Significant estimates in valuing intangible assets may include, but are not necessarily limited to, internal revenue and expense forecasts, the estimated life of the intangible assets, comparable transaction values, and/or discount rates. The discount rates used to discount expected future cash flows to present value are derived from a weighted-average cost of capital analysis and are adjusted to reflect the inherent risks related to the cash flow. Although we believe the assumptions and estimates we have made are reasonable and appropriate, they are based, in part, on historical experience, internal and external comparable data and are inherently uncertain. Unanticipated events and circumstances may occur that could affect either the accuracy or validity of such assumptions, estimates or actual results. 
 We account for uncertainty in tax positions by recognizing a tax benefit from uncertain tax positions when it is more-likely-than-not that the position will be sustained upon examination. Evaluating our uncertain tax positions and determining our provision for income taxes are inherently uncertain and require making judgments, assumptions, and estimates. While we believe we have adequately reserved for our uncertain tax positions, no assurance can be given that the final tax outcome of these matters will not be different. We adjust these reserves in light of changing facts and circumstances, such as the closing of a tax audit. To the extent that the final tax outcome of these matters is different than the amounts recorded, such differences may impact the provision for income taxes and the effective tax rate in the period in which such determination is made. 
 The provision for income taxes includes the impact of reserve provisions and changes to reserves as well as the related net interest and penalties. In addition, we are subject to the continuous examination of our income tax returns by the IRS and other tax authorities which may assert assessments against us. We regularly assess the likelihood of adverse outcomes resulting from these examinations and assessments to determine the adequacy of our provision for income taxes. 
 Insurance Reserves 
 We use a combination of third-party insurance and self-insurance mechanisms, including a wholly-owned captive insurance subsidiary, to provide for the potential liabilities for certain risks, including auto liability, uninsured and underinsured motorist, auto physical damage, general liability, and workers’ compensation. The insurance reserves is an estimate of our potential liability for unpaid losses and loss adjustment expenses, which represents the estimate of the ultimate unpaid obligation for risks retained by us and includes an amount for case reserves related to reported claims and an amount for losses incurred but not reported as of the balance sheet date. The estimate of the ultimate unpaid obligation utilizes generally accepted actuarial methods applied to historical claim and loss experience. In addition, we use assumptions based on actuarial judgment related to claim and loss development patterns and expected loss costs, which consider frequency trends, severity trends, and relevant industry data. These reserves are continually reviewed and adjusted as experience develops and new information becomes known. Adjustments, if any, relating to accidents that occurred in prior years are reflected in the current year results of operations. 
 All estimates of ultimate losses and allocated loss adjustment expenses, and of resulting reserves, are subject to inherent variability caused by the nature of the insurance claim settlement process. Such variability is increased for us due to limited historical experience and the nature of the coverage provided. Actual results depend upon the outcome of future contingent events and can be affected by many factors, such as claim settlement processes and changes in the economic, legal, and social environments. As a result, the net amounts that will ultimately be paid to settle the liability, and when these amounts will be paid, may vary in the near term from the estimated amounts. 
 While management believes that the insurance reserve amount is adequate, the ultimate liability may be in excess of, or less than, the amount provided. 
 Stock-Based Compensation 
 We have granted stock-based awards consisting primarily of stock options, restricted common stock, RSUs, warrants, and SARs to employees, members of our board of directors and non-employees. The substantial majority of our stock-based awards have been made to employees. The majority of our outstanding RSUs, as well as certain options, SARs, and shares of restricted common stock, contain a service-based vesting condition. A small portion of the awards contains service-based vesting condition as well as performance-based vesting condition and/or market-based vesting condition. 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 
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 certain financial and operation metrics. The market-based vesting condition is satisfied upon reaching predetermined targets of fully diluted equity values. 
 We account for stock-based employee compensation under the fair value recognition and measurement provisions, in accordance with applicable accounting standards, which requires compensation expense for the grant-date fair value of stock-based awards to be recognized over the requisite service period. We account for forfeitures when they occur. 
 We have elected to use the Black-Scholes option-pricing model to determine the fair value of stock options, warrants, and SARs on the grant date. The Black-Scholes option-pricing model requires certain subjective inputs and assumptions, including the fair value of our common stock, the expected term, risk-free interest rates, expected stock price volatility, and expected dividend yield of our common stock. 
 These assumptions used in the Black-Scholes option-pricing model, other than the fair value of our common stock, are estimated as follows: 
 • Expected term . We estimate the expected term based on the simplified method for employees and on the contractual term for non-employees. 
 • Risk-free interest rate . The risk-free interest rate is based on the U.S. Treasury yield curve in effect at the time of grant. 
 • Expected volatility . We estimate the volatility of our common stock on the date of grant based on the weighted-average historical stock price volatility of our own common shares within the same length of period as the expected term. Where, in some cases, our common share trading history is shorter than the expected term, we consider comparable publicly-traded companies in our industry group. 
 • Expected dividend yield . Expected dividend yield is zero percent, as we have not paid and do not anticipate paying dividends on our common stock. 
 We continue to use judgment in evaluating the expected volatility and expected term utilized in our stock-based compensation expense calculation on a prospective basis. As we continue to accumulate additional data related to our common stock, we may refine our estimates of expected volatility and expected term, which could materially impact our future stock-based compensation expense. 
 
 Recent Accounting Pronouncements 
 See Note 1 – Description of Business and Summary of Significant Accounting Policies, to the consolidated financial statements included in Part II, Item 8, “Financial Statements and Supplementary Data,” of this Annual Report on Form 10-K.
Text extracted from the filing as submitted to EDGAR. Formatting, tables and exhibits are simplified for reading; the original document is authoritative for anything you rely on.
Uber Technologies, Inc 10-K

Item 7. Management’s Discussion and Analysis
