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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
____________________________________________ 
FORM 10-Q
____________________________________________ 
(Mark One)

QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended March 31, 2022
OR
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from_____ to _____            
Commission File Number: 001-38902
____________________________________________ 
UBER TECHNOLOGIES, INC.
(Exact name of registrant as specified in its charter)
Not Applicable
(Former name, former address and former fiscal year, if changed since last report)
____________________________________________________________________________ 
Delaware 45-2647441
(State or other jurisdiction of incorporation or organization) (I.R.S. Employer Identification No.)
1515 3rd Street
San Francisco, California 94158
(Address of principal executive offices, including zip code)
(415) 612-8582
(Registrant’s telephone number, including area code)
____________________________________________________________________________
Securities registered pursuant to Section 12(b) of the Act:
Title of each class Trading Symbol(s) Name of each exchange on which registered
Common Stock, par value $0.00001 per share UBER New York Stock Exchange
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    Yes   No
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).    Yes       No
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
Large accelerated filer
Accelerated filer
Non-accelerated filer
Smaller reporting company
Emerging growth company
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes  No 
The number of shares of the registrant's common stock outstanding as of May 2, 2022 was 1,963,660,253.



UBER TECHNOLOGIES, INC.
TABLE OF CONTENTS
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SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS
This Quarterly Report on Form 10-Q contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. All statements other than statements of historical facts contained in this Quarterly Report on Form 10-Q, including statements regarding our future results of operations or financial condition, business strategy and plans, and objectives of management for future operations, are forward-looking statements. In some cases, you can identify forward-looking statements because they contain words such as “anticipate,” “believe,” “contemplate,” “continue,” “could,” “estimate,” “expect,” “hope,” “intend,” “may,” “might,” “objective,” “ongoing,” “plan,” “potential,” “predict,” “project,” “should,” “target,” “will,” or “would” or the negative of these words or other similar terms or expressions. These forward-looking statements include, but are not limited to, statements concerning the following:
the impacts of COVID-19 or other future pandemics on our business, results of operations, financial position and cash flows;
our ability to successfully defend litigation and government proceedings brought against us, including with respect to our relationship with drivers and couriers, and the potential impact on our business operations and financial performance if we are not successful;
our ability to successfully compete in highly competitive markets;
our ability to effectively manage our growth and maintain and improve our corporate culture;
our expectations regarding financial performance, including but not limited to revenue, potential profitability and the timing thereof, ability to generate positive Adjusted EBITDA, expenses, and other results of operations;
our expectations regarding future operating performance, including but not limited to our expectations regarding future Monthly Active Platform Consumers (“MAPCs”), Trips, Gross Bookings, and Take Rate;
our expectations regarding our competitors’ use of incentives and promotions, our competitors’ ability to raise capital, and the effects of such incentives and promotions on our growth and results of operations;
our anticipated investments in new products and offerings, and the effect of these investments on our results of operations;
our anticipated capital expenditures and our estimates regarding our capital requirements;
our ability to close and integrate acquisitions into our operations;
anticipated technology trends and developments and our ability to address those trends and developments with our products and offerings;
the size of our addressable markets, market share, category positions, and market trends, including our ability to grow our business in the countries we have identified as expansion markets;
the safety, affordability, and convenience of our platform and our offerings;
our ability to identify, recruit, and retain skilled personnel, including key members of senior management;
our expected growth in the number of platform users, and our ability to promote our brand and attract and retain platform users;
our ability to maintain, protect, and enhance our intellectual property rights;
our ability to introduce new products and offerings and enhance existing products and offerings;
our ability to successfully enter into new geographies, expand our presence in countries in which we are limited by regulatory restrictions, and manage our international expansion;
our ability to successfully renew licenses to operate our business in certain jurisdictions;
the availability of capital to grow our business;
volatility in the business or stock price of our minority-owned affiliates;
our ability to meet the requirements of our existing debt and draw on our line of credit;
our ability to prevent disturbances to our information technology systems;
our ability to comply with existing, modified, or new laws and regulations applying to our business; and
our ability to implement, maintain, and improve our internal control over financial reporting.
Actual events or results may differ from those expressed in forward-looking statements. As such, you should not rely on forward-looking statements as predictions of future events. We have based the forward-looking statements contained in this Quarterly Report on Form 10-Q primarily on our current expectations and projections about future events and trends that we believe may affect our
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business, financial condition, operating results, prospects, strategy, and financial needs. The outcome of the events described in these forward-looking statements is subject to risks, uncertainties, assumptions, and other factors described in the section titled “Risk Factors” and elsewhere in this Quarterly Report on Form 10-Q. Moreover, we operate in a highly competitive and rapidly changing environment. New risks and uncertainties emerge from time to time, and it is not possible for us to predict all risks and uncertainties that could have an impact on the forward-looking statements contained in this Quarterly Report on Form 10-Q. The results, events and circumstances reflected in the forward-looking statements may not be achieved or occur, and actual results, events or circumstances could differ materially from those described in the forward-looking statements.
In addition, statements that “we believe” and similar statements reflect our beliefs and opinions on the relevant subject. These statements are based on information available to us as of the date of this Quarterly Report on Form 10-Q. While we believe that such information provides a reasonable basis for these statements, such information may be limited or incomplete. Our statements should not be read to indicate that we have conducted an exhaustive inquiry into, or review of, all relevant information. These statements are inherently uncertain, and investors are cautioned not to unduly rely on these statements.
The forward-looking statements made in this Quarterly Report on Form 10-Q speak only as of the date on which the statements are made. We undertake no obligation to update any forward-looking statements made in this Quarterly Report on Form 10-Q to reflect events or circumstances after the date of this Quarterly Report on Form 10-Q or to reflect new information, actual results, revised expectations, or the occurrence of unanticipated events, except as required by law. We may not actually achieve the plans, intentions or expectations disclosed in our forward-looking statements, and you should not place undue reliance on our forward-looking statements.
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PART I - FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
UBER TECHNOLOGIES, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(In millions, except share amounts which are reflected in thousands, and per share amounts)
(Unaudited)
As of December 31, 2021 As of March 31, 2022
Assets
Cash and cash equivalents $ 4,295  $ 4,184 
Restricted cash and cash equivalents 631  543 
Accounts receivable, net of allowance of $51 and $64, respectively
2,439  2,476 
Prepaid expenses and other current assets 1,454  1,462 
Total current assets 8,819  8,665 
Restricted cash and cash equivalents 2,879  2,865 
Investments 11,806  6,247 
Equity method investments 800  624 
Property and equipment, net 1,853  1,853 
Operating lease right-of-use assets 1,388  1,439 
Intangible assets, net 2,412  2,269 
Goodwill 8,420  8,435 
Other assets 397  415 
Total assets $ 38,774  $ 32,812 
Liabilities, redeemable non-controlling interests and equity
Accounts payable $ 860  $ 862 
Short-term insurance reserves 1,442  1,415 
Operating lease liabilities, current 185  209 
Accrued and other current liabilities 6,537  6,166 
Total current liabilities 9,024  8,652 
Long-term insurance reserves 2,546  2,709 
Long-term debt, net of current portion 9,276  9,273 
Operating lease liabilities, non-current 1,644  1,681 
Other long-term liabilities 935  679 
Total liabilities 23,425  22,994 
Commitments and contingencies (Note 12)
Redeemable non-controlling interests 204  205 
Equity
Common stock, $0.00001 par value, 5,000,000 shares authorized for both periods, 1,949,316 and 1,959,794 shares issued and outstanding, respectively
—  — 
Additional paid-in capital 38,608  38,977 
Accumulated other comprehensive loss (524) (505)
Accumulated deficit (23,626) (29,556)
Total Uber Technologies, Inc. stockholders' equity 14,458  8,916 
Non-redeemable non-controlling interests 687  697 
Total equity 15,145  9,613 
Total liabilities, redeemable non-controlling interests and equity $ 38,774  $ 32,812 
The accompanying notes are an integral part of these condensed consolidated financial statements.
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UBER TECHNOLOGIES, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(In millions, except share amounts which are reflected in thousands, and per share amounts)
(Unaudited)
Three Months Ended March 31,
2021 2022
Revenue $ 2,903  $ 6,854 
Costs and expenses
Cost of revenue, exclusive of depreciation and amortization shown separately below 1,710  4,026 
Operations and support 423  574 
Sales and marketing 1,103  1,263 
Research and development 515  587 
General and administrative 464  632 
Depreciation and amortization 212  254 
Total costs and expenses 4,427  7,336 
Loss from operations (1,524) (482)
Interest expense (115) (129)
Other income (expense), net 1,710  (5,557)
Income (loss) before income taxes and income (loss) from equity method investments 71  (6,168)
Provision for (benefit from) income taxes 185  (232)
Income (loss) from equity method investments (8) 18 
Net loss including non-controlling interests (122) (5,918)
Less: net income (loss) attributable to non-controlling interests, net of tax (14) 12 
Net loss attributable to Uber Technologies, Inc. $ (108) $ (5,930)
Net loss per share attributable to Uber Technologies, Inc. common stockholders:
Basic $ (0.06) $ (3.03)
Diluted $ (0.06) $ (3.04)
Weighted-average shares used to compute net loss per share attributable to common stockholders:
Basic 1,858,525  1,953,989 
Diluted 1,858,525  1,957,731 
The accompanying notes are an integral part of these condensed consolidated financial statements.
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UBER TECHNOLOGIES, INC.
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)
(In millions)
(Unaudited)
Three Months Ended March 31,
2021 2022
Net loss including non-controlling interests $ (122) $ (5,918)
Other comprehensive income, net of tax:
Change in foreign currency translation adjustment 33  19 
Change in unrealized gain on investments in available-for-sale securities 1,156  — 
Other comprehensive income, net of tax 1,189  19 
Comprehensive income (loss) including non-controlling interests 1,067  (5,899)
Less: comprehensive income (loss) attributable to non-controlling interests (14) 12 
Comprehensive income (loss) attributable to Uber Technologies, Inc. $ 1,081  $ (5,911)
The accompanying notes are an integral part of these condensed consolidated financial statements.
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UBER TECHNOLOGIES, INC.
CONDENSED CONSOLIDATED STATEMENTS OF REDEEMABLE NON-CONTROLLING INTERESTS AND EQUITY
(In millions, except share amounts which are reflected in thousands)
(Unaudited)
Redeemable Non-Controlling Interests Common Stock Additional Paid-In Capital Accumulated Other Comprehensive Income (Loss) Accumulated Deficit Non-Redeemable Non-Controlling Interests Total Equity
Shares Amount
Balance as of December 31, 2020 $ 787  1,849,794  $ —  $ 35,931  $ (535) $ (23,130) $ 701  $ 12,967 
Reclassification of the equity component of 2025 Convertible Notes to liability upon adoption of ASU 2020-06 —  —  —  (243) —  —  —  (243)
Exercise of stock options —  3,518  —  35  —  —  —  35 
Stock-based compensation —  —  —  287  —  —  —  287 
Issuance of common stock for settlement of Careem Convertible Notes —  2,872  —  158  —  —  —  158 
Issuance of common stock as consideration for acquisition —  505  —  28  —  —  —  28 
Issuance of common stock for settlement of RSUs —  10,924  —  —  —  —  —  — 
Shares withheld related to net share settlement —  (244) —  (14) —  —  —  (14)
Recognition of non-controlling interest upon acquisition 56  —  —  —  —  —  —  — 
Derecognition of non-controlling interests upon divestiture (356) —  —  —  —  —  (701) (701)
Unrealized gain on investments in available-for-sale securities, net of tax —  —  —  —  1,156  —  —  1,156 
Foreign currency translation adjustment —  —  —  —  33  —  —  33 
Net loss (14) —  —  —  —  (108) —  (108)
Balance as of March 31, 2021 $ 473  1,867,369  $ —  $ 36,182  $ 654  $ (23,238) $ —  $ 13,598 
The accompanying notes are an integral part of these condensed consolidated financial statements.
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UBER TECHNOLOGIES, INC.
CONDENSED CONSOLIDATED STATEMENTS OF REDEEMABLE NON-CONTROLLING INTERESTS AND EQUITY
(In millions, except share amounts which are reflected in thousands)
(Unaudited)
Redeemable Non-Controlling Interests Common Stock Additional Paid-In Capital Accumulated Other Comprehensive Income (Loss) Accumulated Deficit Non-Redeemable Non-Controlling Interests Total Equity
Shares Amount
Balance as of December 31, 2021 $ 204  1,949,316  $ —  $ 38,608  $ (524) $ (23,626) $ 687  $ 15,145 
 Exercise of stock options —  1,093  —  —  —  — 
 Stock-based compensation —  —  —  369  —  —  —  369 
 Issuance of common stock for settlement of RSUs —  9,569  —  —  —  —  —  — 
 Shares withheld related to net share settlement —  (316) —  (11) —  —  —  (11)
 Issuance of common stock for settlement of contingent consideration liability —  132  —  —  —  — 
 Foreign currency translation adjustment —  —  —  —  19  —  —  19 
 Net income (loss) —  —  —  —  (5,930) 10  (5,920)
Balance as of March 31, 2022 $ 205  1,959,794  $ —  $ 38,977  $ (505) $ (29,556) $ 697  $ 9,613 
The accompanying notes are an integral part of these condensed consolidated financial statements.
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UBER TECHNOLOGIES, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In millions)
(Unaudited)
Three Months Ended March 31,
2021 2022
Cash flows from operating activities
Net loss including non-controlling interests $ (122) $ (5,918)
Adjustments to reconcile net loss to net cash provided by (used in) operating activities:
Depreciation and amortization 212  254 
Bad debt expense 23  18 
Stock-based compensation 281  359 
Gain on business divestiture (1,684) — 
Deferred income taxes 120  (281)
Loss (income) from equity method investments, net (18)
Unrealized (gain) loss on debt and equity securities, net (63) 5,570 
Impairments of goodwill, long-lived assets and other assets 16  13 
Impairment of equity method investment —  182 
Revaluation of MLU B.V. call option —  (181)
Unrealized foreign currency transactions 13  (15)
Other 65 
Change in assets and liabilities, net of impact of business acquisitions and disposals:
Accounts receivable (35) (26)
Prepaid expenses and other assets (67) (20)
Collateral held by insurer 108  — 
Operating lease right-of-use assets 38  42 
Accounts payable (3)
Accrued insurance reserves (27) 134 
Accrued expenses and other liabilities 556  (72)
Operating lease liabilities (50) (39)
Net cash provided by (used in) operating activities (611) 15 
Cash flows from investing activities
Purchases of property and equipment (71) (62)
Purchases of marketable securities (336) — 
Purchases of non-marketable equity securities (803) (13)
Purchase of notes receivable (216) — 
Proceeds from maturities and sales of marketable securities 696  — 
Proceeds from sale of non-marketable equity securities 500  — 
Acquisition of businesses, net of cash acquired (28) (59)
Other investing activities (1)
Net cash used in investing activities (250) (135)
Cash flows from financing activities
Principal repayment on Careem Notes (194) — 
Principal payments on finance leases (47) (62)
Other financing activities 15  (51)
Net cash used in financing activities (226) (113)
Effect of exchange rate changes on cash and cash equivalents, and restricted cash and cash equivalents (46) 20 
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Net decrease in cash and cash equivalents, and restricted cash and cash equivalents (1,133) (213)
Cash and cash equivalents, and restricted cash and cash equivalents
Beginning of period 7,391  7,805 
Reclassification from assets held for sale during the period 349  — 
End of period $ 6,607  $ 7,592 
Reconciliation of cash and cash equivalents, and restricted cash and cash equivalents to the condensed consolidated balance sheets
Cash and cash equivalents $ 4,836  $ 4,184 
Restricted cash and cash equivalents-current 247  543 
Restricted cash and cash equivalents-non-current 1,524  2,865 
Total cash and cash equivalents, and restricted cash and cash equivalents $ 6,607  $ 7,592 
Supplemental disclosures of cash flow information
Cash paid for:
Interest, net of amount capitalized $ 84  $ 135 
Income taxes, net of refunds 22  41 
Non-cash investing and financing activities:
Finance lease obligations 21  46 
Right-of-use assets obtained in exchange for lease obligations 45  132 
Ownership interest received in exchange for divestiture 1,018  — 
Conversion of convertible notes to common stock 158  — 
The accompanying notes are an integral part of these condensed consolidated financial statements.
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UBER TECHNOLOGIES, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
Note 1 – Description of Business and Summary of Significant Accounting Policies
Description of Business
Uber Technologies, Inc. (“Uber,” “we,” “our,” or “us”) was incorporated in Delaware in July 2010, and is headquartered in San Francisco, California. Uber is a technology platform that uses a massive network, leading technology, operational excellence and product expertise to power movement from point A to point B. Uber develops and operates proprietary technology applications supporting a variety of offerings on its platform (“platform(s)” or “Platform(s)”). Uber connects consumers (“Rider(s)”) with independent providers of ride services (“Mobility Driver(s)”) for ridesharing services, and connects Riders and other consumers (“Eaters”) with restaurants, grocers and other stores (collectively, “Merchants”) with delivery service providers (“Couriers”) for meal preparation, grocery and other delivery services. Riders and Eaters are collectively referred to as “end-user(s)” or “consumer(s).” Mobility Drivers and Couriers are collectively referred to as “Driver(s).” Uber also connects consumers with public transportation networks. Uber uses this same network, technology, operational excellence and product expertise to connect shippers with carriers in the freight industry. Uber is also developing technologies that will provide new solutions to everyday problems.
Our technology is used around the world, principally in the United States (“U.S.”) and Canada, Latin America, Europe, the Middle East, Africa, and Asia (excluding China and Southeast Asia).
Basis of Presentation
The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with generally accepted accounting principles in the United States (“GAAP”) and applicable rules and regulations of the Securities and Exchange Commission (“SEC”) regarding interim financial reporting. The condensed consolidated balance sheet as of December 31, 2021 included herein was derived from the audited consolidated financial statements as of that date. Certain information and note disclosures normally included in the financial statements prepared in accordance with GAAP have been condensed or omitted pursuant to such rules and regulations. As such, the information included in this Quarterly Report on Form 10-Q should be read in conjunction with the audited consolidated financial statements and the related notes thereto as of and for the year ended December 31, 2021, included in our Annual Report on Form 10-K. The results for the interim periods are not necessarily indicative of results for the full year.
In the opinion of management, these financial statements include all adjustments, which are of a normal recurring nature, necessary for a fair statement of the financial position, results of operations, comprehensive loss, cash flows and the change in equity for the periods presented.
There have been no changes to our significant accounting policies described in the Annual Report on Form 10-K for the year ended December 31, 2021 filed with the SEC on February 24, 2022 that have had a material impact on our condensed consolidated financial statements and related notes.
Basis of Consolidation
Our condensed consolidated financial statements include the accounts of Uber Technologies, Inc. and entities consolidated under the variable interest and voting models. All intercompany balances and transactions have been eliminated. Refer to Note 13 – Variable Interest Entities for further information.
Use of Estimates
The preparation of our unaudited condensed consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions, which affect the reported amounts in the financial statements and accompanying notes. Estimates are based on historical experience, where applicable, and other assumptions which management believes are reasonable under the circumstances. On an ongoing basis, management evaluates estimates, including, but not limited to: fair values of investments and other financial instruments (including the measurement of credit or impairment losses); useful lives of amortizable long-lived assets; fair value of acquired intangible assets and related impairment assessments; impairment of goodwill; stock-based compensation; income taxes and non-income tax reserves; certain deferred tax assets and tax liabilities; insurance reserves; and other contingent liabilities. These estimates are inherently subject to judgment and actual results could differ from those estimates. We considered the impacts of the COVID-19 pandemic on the assumptions and inputs (including market data) supporting certain of these estimates, assumptions and judgments, in particular, our impairment assessment related to the determination of the fair values of certain investments and equity method investments as well as goodwill and the recoverability of long-lived assets. The level of uncertainties and volatility in the global financial markets and economies resulting from the pandemic as well as the uncertainties related to the impact of the pandemic on us and our investees' operations and financial performance means that these estimates may change in future periods, as new events occur and additional information is obtained.
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Certain Significant Risks and Uncertainties - COVID-19
Various governments continue to implement, lift, and in some regions reinstate restrictions, including business activities and travel restrictions. These restrictions have had an adverse impact on our business and operations by reducing, in particular, the global demand for Mobility offerings, while accelerating the growth of our Delivery offerings. COVID-19 has produced uncertainty around the world and it is not possible to predict the COVID-19 pandemic’s cumulative and ultimate impact on our future business operations, results of operations, financial position, liquidity, and cash flows. The extent of the impact of the pandemic on our business and financial results will depend largely on future developments, including the duration of the spread of the outbreak and any resurgences of the outbreak or variants of the virus, both globally and within the United States, the administration, adoption and efficacy of vaccines in the United States and internationally, the impact on capital, foreign currencies exchange and financial markets, governmental or regulatory orders that impact our business and whether the impacts may result in permanent changes to our end-users’ behavior, all of which are highly uncertain and cannot be predicted.
Recently Adopted Accounting Pronouncements
In November 2021, the FASB issued ASU 2021-10, “Government Assistance (Topic 832): Disclosures by Business Entities about Government Assistance,” which requires disclosures about transactions with a government that are accounted for by applying a grant or contribution accounting model by analogy. The standard is effective for public companies for fiscal years beginning after December 15, 2021. Early adoption is permitted. We adopted the ASU prospectively on January 1, 2022. The additional required annual disclosures are not expected to have a material impact on our consolidated financial statements.
Recently Issued Accounting Pronouncements Not Yet Adopted
In October 2021, the FASB issued ASU 2021-08, “Business Combinations (Topic 805): Accounting for Contract Assets and Contract Liabilities from Contracts with Customers,” which requires entities to apply Topic 606 to recognize and measure contract assets and contract liabilities in a business combination as if the acquiring entity had originated the contracts. The standard is effective for public companies for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2022. Early adoption is permitted. We are currently evaluating the impact of this accounting standard update on our consolidated financial statements.
Note 2 – Revenue
The following tables present our revenues disaggregated by offering and geographical region. Revenue by geographical region is based on where the transaction occurred. This level of disaggregation takes into consideration how the nature, amount, timing, and uncertainty of revenue and cash flows are affected by economic factors (in millions):
Three Months Ended March 31,
2021 2022
Mobility revenue (1)
$ 853  $ 2,518 
Delivery revenue (1)
1,741  2,512 
Freight revenue 301  1,824 
All Other revenue — 
Total revenue $ 2,903  $ 6,854 
(1) We offer subscription memberships to end-users including Uber One, Uber Pass, Rides Pass, and Eats Pass (“Subscription”). We recognize Subscription fees ratably over the life of the pass. We allocate Subscription fees earned to Mobility and Delivery revenue on a proportional basis, based on usage for each offering during the respective period.
Three Months Ended March 31,
2021 2022
United States and Canada ("US&CAN") $ 1,849  $ 4,562 
Latin America ("LatAm") 302  432 
Europe, Middle East and Africa ("EMEA") 225  1,127 
Asia Pacific ("APAC") 527  733 
Total revenue $ 2,903  $ 6,854 
Revenue
Mobility Revenue
We derive revenue primarily from fees paid by Mobility Drivers for the use of our platform(s) and related services to facilitate and complete mobility services and, in certain markets, revenue from fees paid by end-users for connection services obtained via the platform. Mobility revenue also includes immaterial revenue streams such as our financial partnerships products.
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During the first quarter of 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.
Delivery Revenue
We derive revenue for Delivery from Merchants’ and Couriers’ use of the Delivery platform and related service to facilitate and complete Delivery transactions.
Additionally, in certain markets where we are responsible for delivery services, delivery fees charged to end-users are also included in revenue, while payments to Couriers in exchange for delivery services are recognized in cost of revenue. In these markets, we recognized revenue from end-users of $88 million and $241 million for the three months ended March 31, 2021 and 2022, respectively. We also recognized cost of revenue for these delivery transactions, exclusive of depreciation and amortization of $339 million and $740 million for the three months ended March 31, 2021 and 2022, respectively.
Delivery also includes advertising revenue from sponsored listing fees paid by merchants and brands in exchange for advertising services.
Freight Revenue
Freight revenue consists of revenue from freight transportation services provided to shippers. During the fourth quarter of 2021, we completed the acquisition of Tupelo Parent, Inc. (“Transplace”), and as a result, our Freight revenue now also includes revenue from transportation management.
All Other Revenue
Prior to 2022, All Other revenue primarily includes collaboration revenue related to our Advanced Technologies Group (“ATG”) business and revenue from our New Mobility offerings and products.
Contract Balances and Remaining Performance Obligation
Contract liabilities represent consideration collected prior to satisfying our performance obligations. As of March 31, 2022, we had $155 million of contract liabilities included in accrued and other current liabilities as well as other long-term liabilities on the condensed consolidated balance sheet. Revenue recognized from these contracts during the three months ended March 31, 2021 and 2022 was not material.
Our remaining performance obligation for contracts with an original expected length of greater than one year is expected to be recognized as follows (in millions):
Less Than or
Equal To 12 Months
Greater Than
12 Months
Total
As of March 31, 2022
$ 25  $ 121  $ 146 
Note 3 – Investments and Fair Value Measurement
Investments
Our investments on the condensed consolidated balance sheets consisted of the following (in millions):
As of
December 31, 2021 March 31, 2022
Non-marketable equity securities (1)
$ 315  $ 306 
Marketable equity securities:
Didi 2,838  1,410 
Grab 3,821  1,876 
Aurora 3,388  1,682 
Other 1,312  843 
Note receivable from a related party (1)
132  130 
Investments $ 11,806  $ 6,247 
(1) These balances include certain investments recorded at fair value with changes in fair value recorded in earnings due to the election of the fair value option of accounting for financial instruments.
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Assets and Liabilities Measured at Fair Value on a Recurring Basis
The following table presents our financial assets and liabilities measured at fair value on a recurring basis based on the three-tier fair value hierarchy (in millions):
As of December 31, 2021 As of March 31, 2022
Level 1 Level 2 Level 3 Total Level 1 Level 2 Level 3 Total
Financial Assets
Non-marketable equity securities $ —  $ —  $ 32  $ 32  $ —  $ —  $ 21  $ 21 
Marketable equity securities 11,359  —  —  11,359  5,811  —  —  5,811 
Note receivable from a related party —  —  132  132  —  —  130  130 
Total financial assets $ 11,359  $ —  $ 164  $ 11,523  $ 5,811  $ —  $ 151  $ 5,962 
Financial Liabilities
MLU B.V. Call Option (1)
$ —  $ —  $ 193  $ 193  $ —  $ —  $ 12  $ 12 
Total financial liabilities $ —  $ —  $ 193  $ 193  $ —  $ —  $ 12  $ 12 
(1) For further information, see Note 4 – Equity Method Investments.
During the three months ended March 31, 2022, we did not make any transfers between the levels of the fair value hierarchy.
We measure certain investments at fair value. Level 1 instrument valuations are based on quoted market prices of the identical underlying security. Level 2 instrument valuations are obtained from readily available pricing sources for comparable instruments, identical instruments in less active markets, or models using market observable inputs. Level 3 instrument valuations are valued based on unobservable inputs and other estimation techniques due to the absence of quoted market prices, inherent lack of liquidity and the long-term nature of such financial instruments.
As of December 31, 2021 and March 31, 2022, our Level 3 non-marketable equity securities and note receivable from a related party primarily consist of common stock investments, preferred stock investments and convertible secured notes that may be converted into common or preferred stock in privately held companies without readily determinable fair values.
Depending on the investee’s financing activity in a reporting period, management’s estimate of fair value may be primarily derived from the investee’s financing transactions, such as the issuance of preferred stock to new investors. The price in these transactions generally provides the best indication of the enterprise value of the investee. Additionally, based on the timing, volume, and other characteristics of the transaction, we may supplement this information by using other valuation techniques, including the guideline public company approach. The guideline public company approach relies on publicly available market data of comparable companies and uses comparative valuation multiples of the investee’s revenue (actual and forecasted), and therefore, unobservable input used in this valuation technique primarily consists of short-term revenue projections.
Once the fair value of the investee is estimated, an option-pricing model (“OPM”), a common stock equivalent (“CSE”) method or a hybrid approach is employed to allocate value to various classes of securities of the investee, including the class owned by us. The model involves making assumptions around the investees’ expected time to liquidity and volatility.
An increase or decrease in any of the unobservable inputs in isolation, such as the security price in a significant financing transaction of the investee, could result in a material increase or decrease in our estimate of fair value. Other unobservable inputs, including short-term revenue projections, time to liquidity, and volatility are less sensitive to the valuation in the respective reporting periods, as a result of the primary weighting on the investee’s financing transactions. In the future, depending on the weight of evidence and valuation approaches used, these or other inputs may have a more significant impact on our estimate of fair value.
We determine realized gains or losses on the sale of equity on a specific identification method.
Financial Assets and Liabilities Measured at Fair Value Using Level 3 Inputs
The following table presents a reconciliation of our financial assets and liabilities measured and recorded at fair value on a recurring basis as of March 31, 2022, using significant unobservable inputs (Level 3) (in millions):
Non-marketable Equity Securities Note Receivables MLU B.V. Call Option
Balance as of December 31, 2021 $ 32  $ 132  $ 193 
Change in fair value
Included in earnings (11) (2) (181)
Balance as of March 31, 2022 $ 21  $ 130  $ 12 
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Assets Measured at Fair Value on a Non-Recurring Basis
Non-Financial Assets
Our non-financial assets, such as goodwill, intangible assets and property and equipment are adjusted to fair value when an impairment charge is recognized. Such fair value measurements are based predominantly on Level 3 inputs.
Non-Marketable Equity Securities
Our non-marketable equity securities are investments in privately held companies without readily determinable fair values. The carrying value of our non-marketable equity securities are adjusted based on price changes from observable transactions of identical or similar securities of the same issuer (referred to as the measurement alternative) or for impairment. Any changes in carrying value are recorded within other income (expense), net in the condensed consolidated statement of operations. Non-marketable equity securities are classified within Level 3 in the fair value hierarchy because we estimate the fair value of these securities based on valuation methods, including the CSE and OPM methods, using the transaction price of similar securities issued by the investee adjusted for contractual rights and obligations of the securities we hold.
We did not record any material unrealized or realized gains or losses for our non-marketable equity securities measured at fair value on a non-recurring basis during the three months ended March 31, 2021 and 2022.
The following table summarizes the total carrying value of our non-marketable equity securities measured at fair value on a non-recurring basis held, including cumulative unrealized upward and downward adjustments made to the initial cost basis of the securities (in millions):
As of
December 31, 2021 March 31, 2022
Initial cost basis $ 279  $ 281 
Upward adjustments
Downward adjustments (including impairment) —  — 
Total carrying value at the end of the period $ 283  $ 285 
Note 4 – Equity Method Investments
The carrying value of our equity method investments were as follows (in millions):
As of
December 31, 2021 March 31, 2022
MLU B.V. $ 751  $ 574 
Mission Bay 3 & 4 38  37 
Other 11  13 
Total equity method investments $ 800  $ 624 
MLU B.V. Investment
We reviewed for impairment whenever factors indicate that the carrying value of the equity method investment may not be recoverable. During the three months ended March 31, 2022, we determined that our investment in MLU B.V. was other-than-temporarily impaired, and recorded an impairment charge of $182 million in other income (expense), net in the condensed consolidated statement of operations. The impairment was primarily due to consensus projections of a protracted recession of the Russian economy as a result of Russia's invasion of Ukraine. To determine the fair value of our investment in MLU B.V., we utilized a market approach referencing revenue multiples from publicly traded peer companies.
MLU B.V. Basis Difference
Included in the carrying value of MLU B.V. is the basis difference, net of amortization, between the original cost of the investment and our proportionate share of the net assets of MLU B.V. The carrying value of the equity method investment is primarily adjusted for our share in the income or losses of MLU B.V. on a one-quarter lag basis and amortization of basis differences. Equity method goodwill and intangible assets, net of accumulated amortization are also adjusted for currency translation adjustments representing fluctuations between the functional currency of the investee, the Ruble and the U.S. Dollar. The Ruble depreciated against the U.S. dollar by approximately 15% between December 31, 2021 and March 31, 2022. The movement in exchange rates will be reflected in the carrying value of the investment with a corresponding adjustment to other comprehensive income (loss) in our condensed consolidated financial statements at June 30, 2022, as we record our share of MLU B.V.’s earnings and reflect our share of MLU B.V.'s net assets on a one-quarter lag basis.
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The table below provides the composition of the basis difference (in millions):
As of March 31, 2022
Equity method goodwill $ 320 
Intangible assets, net of accumulated amortization 48 
Deferred tax liabilities (13)
Cumulative currency translation adjustments (70)
Basis difference $ 285 
We amortize the basis difference related to the intangible assets over the estimated useful lives of the assets that gave rise to the difference using the straight-line method. The weighted-average life of the intangible assets is approximately 3.1 years as of March 31, 2022. Equity method goodwill is not amortized.
MLU B.V. Call Option
On August 30, 2021, we granted Yandex an option (“MLU B.V. Call Option”) to acquire our remaining equity interest in MLU B.V. during a two-year period as part of the agreement with Yandex to restructure our joint ventures in 2021. The MLU B.V. Call Option is recorded as a liability in accrued and other current liabilities on our condensed consolidated balance sheets and measured at fair value on a recurring basis with changes in fair value recorded in other income (expense), net in the condensed consolidated statements of operations. The exercise price of the MLU B.V. Call Option is approximately $1.8 billion, subject to certain adjustments based on the timing of the option exercise.
As of December 31, 2021, the fair value of the MLU B.V. Call Option is $193 million. To determine the fair value of the MLU B.V. Call Option as of December 31, 2021, we used a lattice model which simulated multiple scenarios of the exercise behaviors and the corresponding strike prices over the term of the call option. Key inputs to the lattice model were: the underlying business value; option term of 1.7 years; volatility of 50%; risk-free interest rates; and strike price (Level 3).
As of March 31, 2022, the fair value of the MLU B.V. Call Option is $12 million, including the recognition of a $181 million gain for the fair value change during the three months ended March 31, 2022. To determine the fair value of the MLU B.V. Call Option as of March 31, 2022, we used a lattice model which simulated multiple scenarios of the exercise behaviors and the corresponding strike prices over the term of the call option. Key inputs to the lattice model were: the underlying business value, which decreased significantly due to the conflict between Russia and Ukraine; option term of 1.4 years; volatility of 65%; risk-free interest rates; and strike price (Level 3).
Note 5 – Goodwill and Intangible Assets
Goodwill
The following table presents the changes in the carrying value of goodwill by reportable segment for the three months ended March 31, 2022 (in millions):
Mobility Delivery Freight Total Goodwill
Balance as of December 31, 2021 $ 2,581  $ 4,401  $ 1,438  $ 8,420 
Acquisitions 64  —  —  64 
Measurement period adjustment —  — 
Foreign currency translation adjustment (56) —  (54)
Balance as of March 31, 2022 $ 2,589  $ 4,403  $ 1,443  $ 8,435 
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Intangible Assets
The components of intangible assets, net as of December 31, 2021 and March 31, 2022 were as follows (in millions, except years):
Gross Carrying Value Accumulated Amortization Net Carrying Value Weighted Average Remaining Useful Life - Years
December 31, 2021
Consumer, Merchant and other relationships $ 1,868  $ (294) $ 1,574  9
Developed technology 922  (269) 653  5
Trade names and trademarks 222  (47) 175  6
Patents 15  (7) 7
Other (3) 0
Intangible assets $ 3,032  $ (620) $ 2,412 
Gross Carrying Value Accumulated Amortization Net Carrying Value Weighted Average Remaining Useful Life - Years
March 31, 2022
Consumer, Merchant and other relationships $ 1,856  $ (362) $ 1,494  9
Developed technology 924  (325) 599  5
Trade names and trademarks 222  (55) 167  6
Patents 15  (8) 6
Other (3) 0
Intangible assets $ 3,022  $ (753) $ 2,269 
Amortization expense for intangible assets subject to amortization was $92 million and $144 million for the three months ended March 31, 2021 and 2022, respectively.
The estimated aggregate future amortization expense for intangible assets subject to amortization as of March 31, 2022 is summarized below (in millions):
Estimated Future Amortization Expense
Year Ending December 31,
Remainder of 2022 $ 381 
2023 363 
2024 306 
2025 266 
2026 203 
Thereafter 748 
Total $ 2,267 
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Note 6 – Long-Term Debt and Revolving Credit Arrangements
Components of debt, including the associated effective interest rates and maturities were as follows (in millions, except for percentages):
As of
December 31, 2021 March 31, 2022 Effective Interest Rates Maturities
2025 Refinanced Term Loan $ 1,448  $ 1,444  3.8  % April 4, 2025
2027 Refinanced Term Loan 1,090  1,087  3.8  % February 25, 2027
2025 Senior Note 1,000  1,000  7.7  % May 15, 2025
2026 Senior Note 1,500  1,500  8.1  % November 1, 2026
2027 Senior Note 1,200  1,200  7.7  % September 15, 2027
2028 Senior Note 500  500  7.0  % January 15, 2028
2029 Senior Note 1,500  1,500  4.7  % August 15, 2029
2025 Convertible Notes 1,150  1,150  0.2  % December 15, 2025
Total debt 9,388  9,381 
Less: unamortized discount and issuance costs (85) (81)
Less: current portion of long-term debt (27) (27)
Total long-term debt $ 9,276  $ 9,273 
2016 and 2018 Senior Secured Term Loans Refinancing
On February 25, 2021, we entered into a refinancing transaction under which we borrowed $2.6 billion pursuant to an amendment to the 2016 Senior Secured Term Loan agreement, the proceeds of which were used to repay in full all previously outstanding loans under the 2016 Senior Secured Term Loan agreement and the 2018 Senior Secured Term Loan agreement. The $2.6 billion is comprised of (i) a $1.1 billion tranche with a maturity date of February 25, 2027, replacing the 2016 Senior Secured Term Loan as a Refinancing Term Loan (the “2027 Refinanced Term Loan”), and (ii) a $1.5 billion tranche with a maturity date of April 4, 2025, replacing the 2018 Senior Secured Term Loan as an Incremental Term Loan (the “2025 Refinanced Term Loan”). The refinancing transaction qualified as a debt modification that did not result in an extinguishment.
The 2025 Refinanced Term Loan and the 2027 Refinanced Term Loan are guaranteed by certain of our material domestic restricted subsidiaries. The 2025 Refinanced Term Loan and the 2027 Refinanced Term Loan agreements contain customary covenants restricting our and certain of our subsidiaries’ ability to incur debt, incur liens and undergo certain fundamental changes. We were in compliance with all covenants as of March 31, 2022. The loan is secured by certain of our intellectual property and equity of certain material foreign subsidiaries.
The fair values of our 2025 Refinanced Term Loan and 2027 Refinanced Term Loan were $1.4 billion and $1.1 billion, respectively, as of March 31, 2022 and were determined based on quoted prices in markets that are not active, which is considered a Level 2 valuation input.
2025 Convertible Notes
In December 2020, we issued $1.15 billion aggregate principal amount of 0% convertible senior notes due in 2025 (the “2025 Convertible Notes”), including the exercise in full by the initial purchasers of the 2025 Convertible Notes of their option to purchase up to an additional $150 million principal amount of the 2025 Convertible Notes. The 2025 Convertible Notes were issued in a private placement to qualified institutional buyers pursuant to Rule144A under the Securities Act. The 2025 Convertible Notes will mature on December 15, 2025, unless earlier converted, redeemed or repurchased.
Holders of the 2025 Convertible Notes may convert their notes at their option at any time prior to the close of business on the business day immediately preceding September 15, 2025 only under the following circumstances: (i) during any calendar quarter commencing after the calendar quarter ending on March 31, 2021 (and only during such calendar quarter), if the last reported sale price of our common stock for at least 20 trading days (whether or not consecutive) during a period of 30 consecutive trading days ending on, and including, the last trading day of the immediately preceding calendar quarter is greater than or equal to 130% of the conversion price on each applicable trading day; (ii) during the five business day period after any ten consecutive trading day period (the “measurement period”) in which the trading price (as defined below) per $1,000 principal amount of notes for each trading day of the measurement period was less than 98% of the product of the last reported sale price of our common stock and the conversion rate on each such trading day; (iii) if we call such notes for redemption, at any time prior to the close of business on the scheduled trading day immediately preceding the applicable redemption date; or (iv) upon the occurrence of specified corporate events. On or after September 15, 2025 until the close of business on the second scheduled trading day immediately preceding the maturity date, holders may convert all or any portion of their notes at any time, regardless of the foregoing circumstances.
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As of March 31, 2022, none of the conditions permitting the holders of the 2025 Convertible Notes to convert their notes early had been met. Therefore, the 2025 Convertible Notes are classified as long-term.
The initial conversion rate is 12.3701 shares of common stock per $1,000 principal amount of notes, equivalent to an initial conversion price of approximately $80.84 per share of common stock. The conversion rate will be subject to adjustment in some events but will not be adjusted for any accrued and unpaid special interest.
Upon conversion of the 2025 Convertible Notes, we will pay or deliver, as the case may be, cash, shares of our common stock or a combination of cash and shares of our common stock, at our election. We may not redeem the notes prior to December 20, 2023. We may redeem for cash all or any portion of the notes, at our option, on or after December 20, 2023 if the last reported sale price of our common stock has been at least 130% of the conversion price then in effect for at least 20 trading days (whether or not consecutive) during any 30 consecutive trading day period (including the last trading day of such period) ending on, and including, the trading day immediately preceding the date on which we provide notice of redemption at a redemption price equal to 100% of the principal amount of the notes to be redeemed, plus accrued and unpaid special interest, if any, to, but excluding, the redemption date.
The indenture governing the 2025 Convertible Notes does not contain any financial or operating covenants or restrictions on the payments of dividends, the incurrence of indebtedness or the issuance or repurchase of securities by us or any of our subsidiaries.
Prior to the adoption of ASU 2020-06, the proceeds from the issuance of the 2025 Convertible Notes were allocated between the conversion feature recorded as equity and the liability for the notes themselves. The difference of $243 million between the principal amount of the 2025 Convertible Notes and the liability component (the “debt discount”) was amortized to interest expense using the effective interest method over the term of the 2025 Convertible Notes. The equity component of the 2025 Convertible Notes was included in additional paid-in capital in the consolidated balance sheet as of December 31, 2020 and was not remeasured as it continued to meet the conditions for equity classification. To determine the fair value of the liability component of the 2025 Convertible Notes as of the pricing date, we used the binomial model with inputs of time to maturity, conversion ratio, our stock price, risk free rate and volatility.
Effective January 1, 2021, we early adopted ASU 2020-06 using the modified retrospective approach. The adoption of this standard resulted in a decrease to additional paid-in capital of $243 million and an increase to our 2025 Convertible Notes by the same amount. At adoption, there was no adjustment recorded to the opening accumulated deficit. As a result of the adoption, starting on January 1, 2021, interest expense is reduced as a result of accounting for the 2025 Convertible Notes as a single liability measured at its amortized cost.
The fair value of our 2025 Convertible Notes was $1.0 billion as of March 31, 2022 and was determined based on quoted prices in markets that are not active, which is considered a Level 2 valuation input.
Senior Notes
The 2025, 2026, 2027, 2028 and 2029 Senior Notes (collectively “Senior Notes”) are guaranteed by certain of our material domestic restricted subsidiaries. The indentures governing the Senior Notes contain customary covenants restricting our and certain of our subsidiaries’ ability to incur debt and incur liens, as well as certain financial covenants specified in the indentures. We were in compliance with all covenants as of March 31, 2022.
The following table presents the fair values of our Senior Notes as of March 31, 2022, and were determined based on quoted prices in markets that are not active, which is considered a Level 2 valuation input (in millions):
As of March 31, 2022
2025 Senior Note $ 1,044 
2026 Senior Note 1,595 
2027 Senior Note 1,281 
2028 Senior Note 516 
2029 Senior Note 1,410 
Total $ 5,846 
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The following table presents the amount of interest expense recognized relating to the contractual interest coupon and amortization of the debt discount and issuance costs with respect to our long-term debt, for the three months ended March 31, 2021 and 2022 (in millions):
Three Months Ended March 31,
2021 2022
Contractual interest coupon $ 111  $ 133 
Amortization of debt discount and issuance costs
Total interest expense from long-term debt $ 118  $ 137 
Revolving Credit Arrangements
We have a revolving credit agreement initially entered in 2015 with certain lenders, which provides for $2.3 billion in credit maturing on June 13, 2023 (“Revolving Credit Facility”). On April 4, 2022, we entered into an amendment to our Revolving Credit Facility to, among other things, (i) provide for approximately $2.2 billion of revolving credit commitments, (ii) extend the maturity date for the commitments and loans from June 13, 2023 to April 4, 2027, (iii) reduce the minimum liquidity covenant from $1.5 billion to $1.0 billion, (iv) replace the London Interbank Offered Rate (“LIBOR”) based interest rate with a Secured Overnight Financing Rate (“SOFR”) based interest rate, and (v) make certain other changes to the negative covenants under the amended revolving credit agreement. The Revolving Credit Facility may be guaranteed by certain of our material domestic restricted subsidiaries based on certain conditions. The credit agreement contains customary covenants restricting our and certain of our subsidiaries’ ability to incur debt, incur liens, and undergo certain fundamental changes, as well as maintain a certain level of liquidity specified in the contractual agreement. The credit agreement also contains customary events of default. The Revolving Credit Facility also contains restrictions on the payment of dividends. As of March 31, 2022, there was no balance outstanding on the Revolving Credit Facility.
Letters of Credit
As of December 31, 2021 and March 31, 2022, we had letters of credit outstanding of $749 million and $741 million, respectively, of which the letters of credit that reduced the available credit under the Revolving Credit Facility were $247 million and $239 million, respectively.
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Note 7 – Supplemental Financial Statement Information
Prepaid Expenses and Other Current Assets
Prepaid expenses and other current assets were as follows (in millions):
As of
December 31, 2021 March 31, 2022
Prepaid expenses $ 459  $ 355 
Other receivables 553  615 
Other 442  492 
Prepaid expenses and other current assets $ 1,454  $ 1,462 
Accrued and Other Current Liabilities
Accrued and other current liabilities were as follows (in millions):
As of
December 31, 2021 March 31, 2022
Accrued legal, regulatory and non-income taxes $ 2,187  $ 2,066 
Accrued Drivers and Merchants liability 1,187  1,222 
Income and other tax liabilities 376  393 
Commitment to issue unsecured convertible notes in connection with Careem acquisition 238  234 
Other 2,549  2,251 
Accrued and other current liabilities $ 6,537  $ 6,166 
Other Long-Term Liabilities
Other long-term liabilities were as follows (in millions):
As of
December 31, 2021 March 31, 2022
Deferred tax liabilities $ 365  $ 91 
Other 570  588 
Other long-term liabilities $ 935  $ 679 
Accumulated Other Comprehensive Income (Loss)
The changes in composition of accumulated other comprehensive income (loss), net of tax, were as follows (in millions):
Foreign Currency Translation Adjustments Unrealized Gains (Losses) on Available-for-Sale Securities, Net of Tax Total
Balance as of December 31, 2020 $ (581) $ 46  $ (535)
Other comprehensive income (loss) before reclassifications (1)
33  1,156  1,189 
Amounts reclassified from accumulated other comprehensive income (loss) —  —  — 
Other comprehensive income (loss) 33  1,156  1,189 
Balance as of March 31, 2021 $ (548) $ 1,202  $ 654 
(1) During the three months ended March 31, 2021, unrealized gains on available-for-sale securities, net of tax relates to pre-tax unrealized gains of $1.3 billion for the change in fair value of our investment in Grab. To determine the fair value of our investment in Grab as of March 31, 2021, we utilized a hybrid approach, incorporating a CSE method along with an OPM. The CSE method assumes an if-converted scenario (for example an initial public offering (“IPO”) or a special purpose acquisition company transaction), where the OPM approach allocates equity value to individual securities within the investees’ capital structure based on contractual rights and preferences.
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Foreign Currency Translation Adjustments Unrealized Gains (Losses) on Available-for-Sale Securities, Net of Tax Total
Balance as of December 31, 2021 $ (524) $ —  $ (524)
Other comprehensive income (loss) before reclassifications 19  —  19 
Amounts reclassified from accumulated other comprehensive income (loss) —  —  — 
Other comprehensive income (loss) 19  —  19 
Balance as of March 31, 2022 $ (505) $ —  $ (505)
Other Income (Expense), Net
The components of other income (expense), net were as follows (in millions):
Three Months Ended March 31,
2021 2022
Interest income $ $ 11 
Foreign currency exchange gains (losses), net (25) 10 
Gain on business divestiture (1)
1,684  — 
Unrealized gain (loss) on debt and equity securities, net (2)
63  (5,570)
Impairment of equity method investment (3)
—  (182)
Revaluation of MLU B.V. call option (4)
—  181 
Other, net (17) (7)
Other income (expense), net $ 1,710  $ (5,557)
(1) During the three months ended March 31, 2021, gain on business divestiture primarily represents a $1.6 billion gain on the sale of Apparate USA LLC (“Apparate” or the “ATG Business”) to Aurora Innovation, Inc. (“Aurora”) in January 2021. Refer to Note 15 – Divestiture for further information.
(2) During the three months ended March 31, 2022, unrealized loss on debt and equity securities, net primarily represents changes in the fair value of our marketable equity securities, including: a $1.9 billion unrealized loss on our Grab investment; a $1.7 billion unrealized loss on our Aurora investments; a $1.4 billion unrealized loss on our Didi investment; and a $462 million unrealized loss on our Zomato investment.
(3) During the three months ended March 31, 2022, impairment of equity method investment, represents a $182 million impairment loss recorded on our MLU B.V. equity method investment. Refer to Note 4 – Equity Method Investments for further information.
(4) During the three months ended March 31, 2022, revaluation of MLU B.V. call option represents a $181 million gain for the change in fair value of the call option granted to Yandex (“MLU B.V. Call Option”). Refer to Note 4 – Equity Method Investments for further information.
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Note 8 – Stockholders' Equity
Equity Compensation Plans
We maintain four equity compensation plans that provide for the issuance of shares of our common stock to our officers and other employees, directors, and consultants: the 2010 Stock Plan (the “2010 Plan”), the 2013 Equity Incentive Plan (the “2013 Plan”), the 2019 Equity Incentive Plan (the “2019 Plan”), and the 2019 Employee Stock Purchase Plan (the “ESPP”), which have all been approved by stockholders. Following our IPO in 2019, we have only issued awards under the 2019 Plan and the ESPP, and no additional awards will be granted under the 2010 and 2013 Plans. These plans provide for the issuance of incentive stock options (“ISOs”), nonqualified stock options (“NSOs”), stock appreciation rights (“SARs”), restricted stock awards, restricted stock units (“RSUs”), performance-based awards, and other awards (that are based in whole or in part by reference to our common stock).
Stock Option and SAR Activity
A summary of stock option and SAR activity for the three months ended March 31, 2022 is as follows (in millions, except share amounts which are reflected in thousands, per share amounts, and years):
SARs Outstanding Number of SARs Options Outstanding Number of Shares Weighted-Average Exercise Price Per Share Weighted-Average Remaining Contractual Life (in years) Aggregate Intrinsic Value
As of December 31, 2021 157  24,253  $ 11.84  4.35 $ 735 
Granted 421  $ 33.89 
Exercised (3) (999) $ 5.20 
Canceled and forfeited —  (88) $ 14.17 
As of March 31, 2022 158  23,587  $ 12.51  4.10 $ 558 
Vested and expected to vest as of March 31, 2022 141  17,045  $ 8.31  3.36 $ 473 
Exercisable as of March 31, 2022 141  17,045  $ 8.31  3.36 $ 473 
RSU Activity
The following table summarizes the activity related to our RSUs for the three months ended March 31, 2022 (in thousands, except per share amounts):
Number of Shares Weighted-Average
 Grant-Date Fair
 Value per Share
Unvested and outstanding as of December 31, 2021 71,461  $ 41.91 
Granted 59,266  $ 33.65 
Vested (9,699) $ 39.24 
Canceled and forfeited (4,073) $ 39.87 
Unvested and outstanding as of March 31, 2022 116,955  $ 37.99 
Stock-Based Compensation Expense
Stock-based compensation expense is allocated based on the cost center to which the award holder belongs. The following table summarizes total stock-based compensation expense by function (in millions):
Three Months Ended March 31,
2021 2022
Operations and support $ 28  $ 33 
Sales and marketing 22  22 
Research and development 133  196 
General and administrative 98  108 
Total $ 281  $ 359 
As of March 31, 2022, there was $4.5 billion of unamortized compensation costs related to all unvested awards. The unamortized compensation costs are expected to be recognized over a weighted-average period of approximately 2.91 years.
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The tax benefits recognized in the condensed consolidated statement of operations for stock-based compensation arrangements were not material during the three months ended March 31, 2021 and 2022, respectively.
Note 9 – Income Taxes
We compute our quarterly income tax expense/(benefit) by using a forecasted annual effective tax rate and adjust for any discrete items arising during the quarter. We recorded an income tax expense/(benefit) of $185 million and $(232) million for the three months ended March 31, 2021 and 2022, respectively. During the three months ended March 31, 2021, the income tax expense was primarily driven by current tax on foreign earnings, the deferred U.S. tax impact related to our investment in Aurora upon the sale of our ATG Business, offset by a partial benefit from U.S. losses. During the three months ended March 31, 2022, the income tax benefit was primarily driven by the deferred U.S. tax impact related to our investments in Grab, Aurora, Didi and Zomato, and to a lesser extent, the benefit of U.S. losses, offset by current tax on our foreign earnings. The primary differences between the effective tax rate and the federal statutory tax rate are due to the deferred U.S. taxes related to our investments in Grab, Aurora, Didi and Zomato, the valuation allowance on our U.S. and Netherlands' deferred tax assets, and foreign tax rate differences.
During the three months ended March 31, 2022, the amount of gross unrecognized tax benefits increased by an immaterial amount, and this amount would not impact the effective tax rate due to the valuation allowance against certain deferred tax assets.
We are subject to taxation in the U.S. and various state and foreign jurisdictions. We are also under routine examination by federal, various states, and foreign tax authorities. We believe that adequate amounts have been reserved in these jurisdictions. To the extent we have tax attribute carryforwards, the tax years in which the attribute was generated may still be adjusted upon examination by the federal, state, or foreign tax authorities to the extent utilized in a future period. For our major tax jurisdictions, the tax years 2004 through 2022 remain open; the major tax jurisdictions are the U.S., Brazil, Netherlands, the United Kingdom (“UK”), and Australia.
Although the timing of the resolution and/or closure of audits is highly uncertain, we do not expect any material changes to our unrecognized tax benefits within the next 12 months. Given the number of years remaining subject to examination and the number of matters being examined, we are unable to estimate the full range of possible adjustments to the balance of gross unrecognized tax benefits.
In the event we experience an ownership change within the meaning of Section 382 of the Internal Revenue Code (“IRC”), our ability to utilize net operating losses, tax credits, and other tax attributes may be limited. The most recent analysis of our historical ownership changes was completed through March 31, 2022. Based on the analysis, we do not anticipate a current limitation on the tax attributes.
Note 10 – Net Income (Loss) Per Share
Basic net loss per share is computed by dividing net loss by the weighted-average number of common shares outstanding for the periods presented. Diluted net loss per share is computed by giving effect to all potential weighted average dilutive common stock. The dilutive effect of outstanding awards and convertible securities is reflected in diluted net loss per share by application of the treasury stock method or if-converted method, as applicable.
We take into account the effect on consolidated net loss per share of dilutive securities of entities in which we hold equity interests that are accounted for using the equity method.
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The following table sets forth the computation of basic and diluted net loss per share attributable to common stockholders (in millions, except share amounts which are reflected in thousands, and per share amounts):
Three Months Ended March 31,
2021 2022
Basic net loss per share:
Numerator
Net loss including non-controlling interests $ (122) $ (5,918)
Net income (loss) attributable to non-controlling interests, net of tax (14) 12 
          Net loss attributable to common stockholders $ (108) $ (5,930)
Denominator
Basic weighted-average common stock outstanding 1,858,525  1,953,989 
Basic net loss per share attributable to common stockholders (1)
$ (0.06) $ (3.03)
Diluted net loss per share:
Numerator
     Net loss attributable to common stockholders $ (108) $ (5,930)
Net loss attributable to Freight Holding convertible common shares non-controlling interest, net of tax —  (13)
     Diluted net loss attributable to common stockholders $ (108) $ (5,943)
Denominator
     Number of shares used in basic net loss per share computation 1,858,525  1,953,989 
     Weighted-average effect of potentially dilutive securities:
Assumed redemption of Freight Holding convertible common shares, non-controlling interest —  3,742 
     Diluted weighted-average common stock outstanding 1,858,525  1,957,731 
Diluted net loss per share attributable to common stockholders (1)
$ (0.06) $ (3.04)
(1) Per share amounts are calculated using unrounded numbers and therefore may not recalculate.
The following potentially dilutive outstanding securities were excluded from the computation of diluted net loss per share because their effect would have been anti-dilutive for the periods presented, or issuance of such shares is contingent upon the satisfaction of certain conditions which were not satisfied by the end of the period (in thousands):
As of March 31,
2021 2022
Freight Holdings contingently redeemable preferred stock 13,586  12,377 
Convertible notes 22,013  18,503 
RSUs 82,146  116,955 
Stock options 26,073  23,587 
Common stock subject to repurchase 28  3,767 
Shares committed under ESPP 2,084  3,361 
Warrants to purchase common stock 126  73 
Total 146,056  178,623 
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Note 11 – Segment Information and Geographic Information
We determine our operating segments based on how the chief operating decision maker (“CODM”) manages the business, allocates resources, makes operating decisions and evaluates operating performance.
As of the first quarter of 2022, our three operating and reportable segments are as follows:
Segment
Description
Mobility Mobility products connect consumers with Drivers who provide rides in a variety of vehicles, such as cars, auto rickshaws, motorbikes, minibuses, or taxis. Mobility also includes activity related to our Financial Partnerships and Transit offerings.
Delivery
Delivery offerings allow consumers to search for and discover local restaurants, order a meal, and either pick-up at the restaurant or have the meal delivered. In certain markets, Delivery also includes offerings for grocery, alcohol and convenience store delivery as well as select other goods.
Freight
Freight connects carriers with shippers on our platform, and gives carriers upfront, transparent pricing and the ability to book a shipment. Freight also includes transportation management and other logistics services offerings.
For information about how our reportable segments derive revenue, refer to Note 2 – Revenue. Our segment operating performance measure is segment adjusted EBITDA. The CODM does not evaluate operating segments using asset information and, accordingly, we do not report asset information by segment. Segment adjusted EBITDA is defined as revenue less the following expenses: cost of revenue, 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 or items that management does not believe are reflective of our ongoing core operations (as shown in the table below). The following table provides information about our segments and a reconciliation of the total segment adjusted EBITDA to loss from operations (in millions):
Three Months Ended March 31,
2021 2022
Segment adjusted EBITDA:
Mobility $ 298  $ 618 
Delivery (200) 30 
Freight (29)
All Other (11) — 
Total segment adjusted EBITDA 58  650 
Reconciling items:
Corporate G&A and Platform R&D (1), (2)
(417) (482)
Depreciation and amortization (212) (254)
Stock-based compensation expense (281) (359)
Legal, tax, and regulatory reserve changes and settlements (551) — 
Goodwill and asset impairments/loss on sale of assets (57) (13)
Acquisition, financing and divestitures related expenses (36) (14)
Accelerated lease costs related to cease-use of ROU assets (2) — 
COVID-19 response initiatives (26) (1)
Loss on lease arrangements, net —  (7)
Restructuring and related charges —  (2)
Loss from operations $ (1,524) $ (482)
(1) Excluding stock-based compensation expense.
(2) 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.
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Geographic Information
Revenue by geography is based on where the trip or shipment was completed or meal delivered. The following table sets forth revenue by geographic area (in millions):
Three Months Ended March 31,
2021 2022
United States $ 1,683  $ 4,197 
All other countries 1,220  2,657 
Total revenue $ 2,903  $ 6,854 
Revenue grouped by offerings and geographical region is included in Note 2 – Revenue.
Note 12 – Commitments and Contingencies
Contingencies
From time to time, we are a party to various claims, non-income tax audits and litigation in the normal course of business. As of December 31, 2021 and March 31, 2022, we had recorded aggregate liabilities of $2.2 billion and $2.1 billion, respectively, of which $1.3 billion and $1.3 billion relate to non-income tax matters, respectively, in accrued and other current liabilities on the condensed consolidated balance sheets for all of our legal, regulatory and non-income tax matters that were probable and reasonably estimable.
We are currently party to various legal and regulatory matters that have arisen in the normal course of business and include, among others, alleged independent contractor misclassification claims, Fair Credit Reporting Act (“FCRA”) claims, alleged background check violations, pricing and advertising claims, unfair competition claims, intellectual property claims, employment discrimination and other employment-related claims, Telephone Consumer Protection Act (“TCPA”) claims, Americans with Disabilities Act (“ADA”) claims, data and privacy claims, securities claims, antitrust claims, challenges to regulations, and other matters. We have existing litigation, including class actions, Private Attorney General Act lawsuits, arbitration claims, and governmental administrative and audit proceedings, asserting claims by or on behalf of Drivers that Drivers are misclassified as independent contractors. In connection with the enactment of California State Assembly Bill 5 (“AB5”), we have received and expect to continue to receive - in California and in other jurisdictions - an increased number of misclassification claims. With respect to our outstanding legal and regulatory matters, based on our current knowledge, we believe that the ultimate amount or range of reasonably possible loss will not, either individually or in the aggregate, have a material adverse effect on our business, financial position, results of operations, or cash flows. The outcome of such legal matters is inherently unpredictable and subject to significant uncertainties. 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 could be materially adversely affected.
Driver Classification
California Attorney General Lawsuit
In January 2020, AB5 went into effect. AB5 codifies a test to determine whether a worker is an employee under California law. The test is referred to as the “ABC” test, and was originally handed down by the California Supreme Court in Dynamex Operations v. Superior Court in 2018. Under the ABC test, workers performing services for a hiring entity are considered employees unless the hiring entity can demonstrate three things: the worker (A) is free from the hiring entity’s control, (B) performs work that is outside the usual course of the hiring entity’s business, and (C) customarily engages in the independent trade, work or type of business performed for the hiring entity.
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 against Uber and Lyft, Inc. (“Lyft”). The complaint alleges drivers are misclassified, and seeks 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. The injunction was stayed pending appeal. On October 22, 2020, the Court of Appeal affirmed the lower court’s ruling, and we filed a petition for review of the decision with the California Supreme Court. The petition was based upon the passage of Proposition 22 by California voters in November 2020, and requested that the Court of Appeal opinion be vacated because AB5’s application to Uber was superseded by Proposition 22.
Proposition 22 was a state ballot initiative that provides a framework for drivers that use platforms like ours to qualify as independent workers. As a result of the passage of Proposition 22, Drivers are able to maintain their status as independent contractors under California law, and we and our competitors are required to comply with the provisions of Proposition 22. Proposition 22 went into effect on December 16, 2020.
The California Supreme Court declined the petition for review on February 10, 2021. The lawsuit was returned to the trial court following the appellate proceedings on February 22, 2021. On April 12, 2021, the California Attorney General, Uber and Lyft filed a
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stipulation to dissolve the preliminary injunction with the trial court. On April 16, 2021, the trial court signed an order granting the stipulation. Although the preliminary injunction has been dissolved, the lawsuit remains ongoing relating to claims by the California Attorney General for periods prior to enactment of Proposition 22. We have petitioned to stay this matter pending coordination with other California employment related matters, which was granted and a coordination judge was assigned. Since the assignment of the coordination judge, the case remains stayed as to discovery. We intend to continue to vigorously defend ourselves. Our chances of success on the merits are still uncertain and any reasonably possible loss or range of loss cannot be estimated.
In addition, 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.
Massachusetts Attorney General Lawsuit
On July 9, 2020, the Massachusetts Attorney General filed a complaint in Suffolk County Superior Court against Uber and Lyft. The complaint alleges Drivers are employees, and are entitled to protections under the wage and labor laws. The complaint was served on July 20, 2020 and Uber filed a motion to dismiss the complaint on September 24, 2020, which was denied on March 25, 2021. A summary judgment motion was filed in September 2021, and we filed a motion in which we argue that the motion is premature. The court granted our motion to defer the summary judgment motion on January 12, 2022. Our chances of success on the merits are still uncertain and any reasonably possible loss or range of loss cannot be estimated.
Swiss Social Security Reclassification
Several Swiss administrative bodies have issued decisions in which they classify Drivers as employees of Uber Switzerland, Rasier Operations B.V. or of Uber B.V. for social security or regulatory purposes. We are challenging each of them before the Social Security and Administrative Tribunals. In April 2021, a ruling was made that Uber Switzerland could not be held liable for social security contributions. The litigations with regards to Uber B.V. and Raiser Operations B.V. are still pending for years 2014 to 2019. In January 2022, the Social Security Tribunal of Zurich reclassified drivers who have used the App in 2014 as dependent workers of Uber BV and Rasier Operations BV from a social security standpoint, but this ruling has been appealed before the Federal Tribunal and has no impact on our current operations. A ruling on the merits by the Federal Tribunal is expected in 2023. The ultimate resolution of the matters appealed before the Federal Tribunal is uncertain and the amount accrued for those matters is recorded within accrued and other current liabilities on the condensed consolidated balance sheet as of March 31, 2022.
Aslam, Farrar, Hoy and Mithu v. Uber B.V., Uber Britannia Ltd. and Uber London Ltd.
On October 28, 2015, a claim by 25 Drivers, including Mr. Y. Aslam and Mr. J. 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 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 that the Drivers using the App in 2016 were workers for UK employment law purposes. Damages include back pay including holiday pay and minimum wage, which will be assessed and quantified at a future hearing in July 2022.
On March 16, 2021, we announced that more than 70,000 Mobility 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 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, 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. While the ultimate resolution of these matters is uncertain, we have recorded an accrual for these matters within accrued and other current liabilities on the condensed consolidated balance sheet as of March 31, 2022.
Other Driver Classification Matters
Additionally, we have received other lawsuits and governmental inquiries in other jurisdictions, and anticipate future claims, lawsuits, arbitration proceedings, administrative actions, and government investigations and audits challenging our classification of Drivers as independent contractors and not employees. We believe that our current and historical approach to classification is
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supported by the law and intend to continue to defend ourselves vigorously in these matters. However, the results of litigation and arbitration are inherently unpredictable and legal proceedings related to these claims, individually or in the aggregate, could have a material impact on our business, financial condition, results of operations and cash flows. Regardless of the outcome, litigation and arbitration of these matters can have an adverse impact on us because of defense and settlement costs individually and in the aggregate, diversion of management resources and other factors.
State Unemployment Taxes
In 2018, the New Jersey Department of Labor (“NJDOL”) opened an audit reviewing whether Drivers were independent contractors or employees for purposes of determining whether unemployment insurance regulations apply from 2014 through 2018. The NJDOL made an assessment on November 12, 2019, against both Rasier and Uber. Both assessments were calculated through November 15, 2019, but only calculated the alleged contributions, penalties, and interests owed from 2014 through 2018. The NJDOL has provided several assessments from February through October 2021. We have submitted payment for the principal revised amount of the assessment and are engaged in ongoing discussions with the NJDOL about the assessments. While the ultimate resolution of this matter is uncertain, we recorded for this matter within accrued and other current liabilities on the condensed consolidated balance sheet as of March 31, 2022.
Google v. Levandowski & Ron; Google v. Levandowski
On October 28, 2016, Google filed arbitration demands against each of Anthony Levandowski and Lior Ron, former employees of Google, alleging breach of their respective employment agreements with Google, fraud and other state law violations (due to soliciting Google employees and starting a new venture to compete with Google’s business in contravention of their respective employment agreements). Google sought damages, injunctive relief, and restitution. On March 26, 2019, following a hearing, the arbitration panel issued an interim award, finding against each of Google’s former employees and awarding $127 million against Anthony Levandowski and $1 million for which both Anthony Levandowski and Lior Ron are jointly and severally liable. In July 2019, Google submitted its request for interest, attorneys fees, and costs related to these claims. The Panel’s Final Award was issued on December 6, 2019. On February 7, 2020, Ron and Google entered into a settlement agreement and mutual release to satisfy the corrected final award in the amount of approximately $10 million. Uber paid Google on behalf of Ron pursuant to an indemnification obligation. A dispute continues to exist with regard to Uber’s alleged indemnification obligation to Levandowski. Whether Uber is ultimately responsible for indemnification of Levandowski depends on the exceptions and conditions set forth in the indemnification agreement. In March 2020, Levandowski pleaded guilty to criminal trade secret charges and filed for bankruptcy. Former President Trump pardoned Levandowski from the trade secret conviction. Uber filed a proof of claim in the bankruptcy court, and Levandowski additionally asserted a claim against Uber alleging that Uber failed to perform its obligations under an agreement with Otto Trucking, LLC. For these claims, Uber and Levandowski reached a confidential settlement, which was formally approved by the court on May 2, 2022. The approval of the settlement and confirmation of Levandowski’s bankruptcy plan is subject to appeal by May 16, 2022, by certain creditors and the taxing authorities. While the ultimate resolution of this matter is uncertain given the possibility of appeals, we recorded for this matter within accrued and other current liabilities on the condensed consolidated balance sheet as of March 31, 2022.
Non-Income Tax Matters
We recorded an estimated liability for contingencies related to non-income tax matters and are under audit by various domestic and foreign tax authorities with regard to such matters. The subject matter of these contingent liabilities and non-income tax audits primarily arises from our transactions with Drivers, as well as the tax treatment of certain employee benefits and related employment taxes. In jurisdictions with disputes connected to transactions with Drivers, disputes involve the applicability of transactional taxes (such as sales, value added and similar taxes) to services provided, as well as the applicability of withholding tax on payments made to such Drivers.
We are involved in a proceeding in the UK about our historic operating model in the UK involving HMRC, the tax regulator in the UK, which is seeking to classify us as a transportation provider. Being classified as a transportation provider would result in a VAT (20%) on Gross Bookings or on the service fee that we charge Drivers prior to March 14, 2022. HMRC is considering a number of factors including our contractual Driver, Rider and intercompany arrangements, and HMRC is also expected to consider the UK Supreme Court’s February 19, 2021 ruling on Drivers’ worker classification, in determining whether we should be classified as a provider of transportation services. HMRC may update its assessment, which we would then review and discuss with HMRC. If we do not reach a satisfactory resolution after exhausting HMRC’s review and appeals process, we would still be able to argue our case anew in the UK Tax Court, which may require the up-front payment to the Tax Court (“pay-to-play”) of any final HMRC assessment to be held in escrow. We continue to believe that we have meritorious defense in these proceedings. As of March 14, 2022, we modified our operating model in the UK, such that as of that date Uber UK is a merchant of transportation and is required to remit VAT on Gross Bookings, which we are remitting under the Value Added (Tour Operators) Order 1987. As part of our ongoing discussions with HMRC we anticipate that they will review our VAT remittance as a merchant of transportation.
Our estimated liability is inherently subjective due to the complexity and uncertainty of these matters and the judicial processes in certain jurisdictions, therefore, the final outcome could be materially different from the estimated liability recorded.
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Other Legal and Regulatory Matters
We have been subject to various government inquiries and investigations surrounding the legality of certain of our business practices, compliance with antitrust, Foreign Corrupt Practices Act and other global regulatory requirements, labor laws, securities laws, data protection and privacy laws, consumer protection laws, environmental laws, and the infringement of certain intellectual property rights. We have investigated many of these matters and we are implementing a number of recommendations to our managerial, operational and compliance practices, as well as strengthening our overall governance structure. In many cases, we are unable to predict the outcomes and implications of these inquiries and investigations on our business which could be time consuming, costly to investigate and require significant management attention. Furthermore, the outcome of these inquiries and investigations could negatively impact our business, reputation, financial condition and operating results, including possible fines and penalties and requiring changes to operational activities and procedures.
Indemnifications
In the ordinary course of business, we often include standard indemnification provisions in our arrangements with third parties. Pursuant to these provisions, we may be obligated to indemnify such parties for losses or claims suffered or incurred in connection with their activities or non-compliance with certain representations and warranties made by us. In addition, we have entered into indemnification agreements with our officers, directors, and certain current and former employees, and our certificate of incorporation and bylaws contain certain indemnification obligations. It is not possible to determine the maximum potential loss under these indemnification provisions / obligations because of the unique facts and circumstances involved in each particular situation.
Note 13 – Variable Interest Entities
Variable interest entities (“VIEs”) are legal entities that lack sufficient equity to finance their activities without future subordinated financial support.
Consolidated VIEs
We consolidate VIEs in which we hold a variable interest and are the primary beneficiary. We are the primary beneficiary because we have the power to direct the activities that most significantly impact the economic performance of these VIEs. As a result, we consolidate the assets and liabilities of these VIEs.
Total assets included on the condensed consolidated balance sheets for our consolidated VIEs as of December 31, 2021 and March 31, 2022 were $3.9 billion and $4.2 billion, respectively. Total liabilities included on the condensed consolidated balance sheets for these VIEs as of December 31, 2021 and March 31, 2022 were $1.0 billion and $1.2 billion, respectively.
Freight Holding
As of March 31, 2022, we own the majority of the issued and outstanding capital stock of Freight Holding and report a non-controlling interest as further described in Note 14 – Non-Controlling Interests.
Careem Qatar
The assets and operations in Careem Qatar had not been transferred to us as of March 31, 2022. Transfer of the assets and operations of Careem Qatar will be subject to a delayed closing pending timing of regulatory approval. We have rights to all residual interests in the Careem Qatar entity which is considered a variable interest. We are exposed to losses and residual returns of the Careem Qatar entity through the right to all of the proceeds from either the divestiture or the eventual legal transfer, upon regulatory approval, of the Careem Qatar entity.
Unconsolidated VIEs
We do not consolidate VIEs in which we hold a variable interest but are not the primary beneficiary because we lack the power to direct the activities that most significantly impact the entities’ economic performance. Our carrying amount of assets recognized on the condensed consolidated balance sheets related to unconsolidated VIEs was $598 million and $605 million as of December 31, 2021 and March 31, 2022, respectively, and represents our maximum exposure to loss associated with the unconsolidated VIEs.
Lime
Neutron Holdings, Inc. (“Lime”) is incorporated in Delaware for the purpose of owning and operating a fleet of dockless e-bikes and e-scooters for short-term access use by consumers for personal transportation. On May 7, 2020, we entered into a series of transactions and agreements with Lime to divest our JUMP business and acquired ownership in Lime comprised of Lime Common Stock, Lime 1-C Preferred Stock, Lime 1-C Preferred Stock Warrants, and the Lime Convertible Note (collectively, the “2020 Lime Investments”). We are exposed to Lime’s economic risks and rewards through our ownership of the 2020 Lime Investments, which represent variable interests.
Moove
Garment Investments S.L. dba Moove (“Moove”) is a vehicle fleet operator in Spain. On February 12, 2021, we entered into and completed a series of agreements with Moove including (i) an equity investment, through preferred shares, in which we acquired a
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30% minority interest in Moove from its current shareholders at closing and up to approximately $185 million contingent on future performance of Moove and certain other conditions through the eighth anniversary of the agreement, (ii) a term loan of $213 million to Moove, due February 2026, and (iii) a commercial partnership agreement. After this series of agreements, Moove is considered a related party. We are exposed to Moove’s economic risks and rewards through our equity investment, the term loan and commercial partnership agreement, which represent variable interests.
Note 14 – Non-Controlling Interests
Freight Holding
As of December 31, 2021 and March 31, 2022, we owned 78% of the issued and outstanding capital stock of our subsidiary Freight Holding, or 75% on a fully-diluted basis if all common shares reserved for issuance under our Freight Holding employee incentive plan were issued and outstanding. The minority stockholders of Freight Holding include: (i) holders of Freight Holding’s Series A and A-1 Preferred Stock; (ii) holders of common equity awards issued under the employee equity incentive plans; and (iii) employees who hold fully vested shares.
Note 15 – Divestiture
Divestiture of ATG Business to Aurora
On January 19, 2021, we completed the previously announced sale of our ATG Business, a subsidiary focused on the development and commercialization of autonomous vehicle technology, to Aurora. 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.
As consideration for the sale, Aurora issued Series U-1 preferred shares to the third-party investors of the ATG Business to settle their ATG Series A Stated Liquidation Preference of $1.1 billion, which had previously been recorded as redeemable and non-redeemable non-controlling interests on our condensed consolidated balance sheet prior to this transaction. We received the residual consideration from the sale as the only common unit holder of the ATG Business in the form of Aurora common shares valued at $1.3 billion, representing 22% of fully-diluted (25% undiluted) ownership interest of Aurora. Concurrently, we invested $400 million in Aurora in exchange for Aurora Series U-2 convertible preferred shares, representing 4% of fully-diluted (5% undiluted) ownership interest of Aurora.
We do not consolidate Aurora under either the VIE or the voting interest model.
We entered into a commercial agreement with Aurora pursuant to which the parties will collaborate with best efforts to launch and commercialize self-driving vehicles on our ridesharing network. We also allowed unvested RSUs for Uber stock held by employees of the ATG Business that transferred to Aurora to continue to vest over the next 12 months contingent upon the employee remaining at Aurora. As a result, we initially recognized liabilities of $315 million as consideration for these future obligations to Aurora.
The sale of the ATG Business did not represent a strategic shift that would have had a major effect on our operations and financial results, and therefore does not qualify for reporting as a discontinued operation. Our ATG Business was included in the ATG and Other Technology Programs segment prior to this transaction. Beginning in the first quarter of 2021, results of ATG and Other Technology Programs are included within All Other. The resulting gain on disposal was recorded in other income (expense), net in the condensed consolidated statement of operations.
The following table presents the gain on sale of the ATG Business (in millions):
Three Months Ended
March 31, 2021
Fair value of common shares received $ 1,277 
Derecognition of ATG Business' non-controlling interests 1,057 
Liability recognized for future obligations (315)
Net consideration received for sale of the ATG Business 2,019 
Carrying value of net assets transferred (375)
Gain on the sale of the ATG Business $ 1,644 
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ITEM 2. 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 condensed consolidated financial statements and the related notes and other financial information included elsewhere in this Quarterly Report on Form 10-Q and our audited consolidated financial statements included in our 2021 Annual Report on Form 10-K. In addition to 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 Part II, 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 Quarterly Report on Form 10-Q.
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. We are also developing technologies that 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.
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.
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 Mobility 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
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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 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, 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 II, Item 1A, “Risk Factors”, and Note 12 – Commitments and Contingencies in the notes to the condensed consolidated financial statements included in Part I, Item 1, of this Quarterly Report on Form 10-Q.
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 our significant and critical accounting policies in the section titled “Critical Accounting Policies and Estimates” and Note 1 in the section titled “Notes to the Consolidated Financial Statements” included in our Annual Report on Form 10-K for the year ended December 31, 2021.
Financial and Operational Highlights
Three Months Ended March 31,
(In millions, except percentages) 2021 2022 % Change
% Change
(Constant Currency (1))
Monthly Active Platform Consumers (“MAPCs”) (2)
98  115  17  %
Trips (2)
1,447  1,713  18  %
Gross Bookings (2)
$ 19,536  $ 26,449  35  % 39  %
Revenue $ 2,903  $ 6,854  136  % 141  %
Net loss attributable to Uber Technologies, Inc. (3)
$ (108) $ (5,930) **
Mobility Adjusted EBITDA $ 298  $ 618  107  %
Delivery Adjusted EBITDA $ (200) $ 30  **
Adjusted EBITDA (1), (2)
$ (359) $ 168  **
Net cash provided by (used in) operating activities $ (611) $ 15  **
Free cash flow (1)
$ (682) $ (47) 93  %
(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” for more information.
(3) Net loss attributable to Uber Technologies, Inc. included stock-based compensation expense of $281 million and $359 million in the first quarter of 2021 and 2022, respectively.
** Percentage not meaningful.
Highlights for the First Quarter 2022
In the first quarter of 2022, our MAPCs were 115 million, declining 3 million, or 3%, quarter-over-quarter, but growing 17% compared to the same period in 2021. The quarter-over-quarter decline in MAPCs was related to a slower start to the first quarter of 2022 due to impacts from the Omicron variant of COVID-19, followed by consumer activity increases through the remainder of the first quarter of 2022 with the number of unique consumers who completed a Mobility ride or received a Delivery order on our platform increasing from 111 million in January 2022 to 121 million in March 2022.
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Overall Gross Bookings increased to $26.4 billion in the first quarter of 2022, or 39% on a constant currency basis, compared to the same period in 2021. Mobility Gross Bookings grew 62% year-over-year, on a constant currency basis, primarily due to increases in Trip volumes as the business recovers from the impacts of COVID-19. Delivery Gross Bookings grew 15% year-over-year, on a constant currency basis, outpacing Delivery Trip growth, as we saw a 3% increase in basket sizes globally driven by stay-at-home order demand related to COVID-19.
Revenue was $6.9 billion, up 136% year-over-year, with a Take Rate of 25.9%. Revenue growth outpaced Gross Bookings growth primarily due to a $1.5 billion increase in our Freight business due to the acquisition of Tupelo Parent, Inc. (“Transplace”) during the fourth quarter of 2021, the favorable impact to revenue of $200 million due to a change in the accounting model for our UK Mobility business, as well as a favorable comparative impact to the same period in 2021 where, during the first quarter of 2021, revenue was reduced by a $600 million accrual made for the resolution of historical claims in the UK relating to the classification of drivers.
Net loss attributable to Uber Technologies, Inc. was $5.9 billion, which includes the unfavorable impact of a pre-tax unrealized loss on debt and equity securities, net of $5.6 billion primarily related to changes in the fair value of our marketable equity securities, including: a $1.9 billion unrealized loss on our Grab investment; a $1.7 billion unrealized loss on our Aurora investments; a $1.4 billion unrealized loss on our Didi investment; and a $462 million unrealized loss on our Zomato investment. Net loss attributable to Uber Technologies, Inc. also includes $359 million of stock-based compensation expense.
Adjusted EBITDA was $168 million, up $527 million compared to the same period in 2021. Mobility Adjusted EBITDA profit improved by 107%, year-over-year, to $618 million. Delivery Adjusted EBITDA profit was $30 million, up $230 million from an Adjusted EBITDA loss of $200 million in the same period in 2021.
We ended the quarter with $4.2 billion in unrestricted cash and cash equivalents.
Other Developments
COVID-19
In March 2020, the World Health Organization declared the outbreak of the coronavirus disease (“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. 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. 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 Mobility offering, in most markets, and implemented “leave at door” delivery options for Delivery offerings. 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.
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 II, Item 1A, “Risk Factors” in this Quarterly Report on Form 10-Q.
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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.
During the first quarter of 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 audited consolidated financial statements included in our Annual Report Form 10-K for the year ended December 31, 2021 and Note 2 – Revenue in this Quarterly Report on Form 10-Q.
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.
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 include 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.
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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.
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
Interest expense consists primarily of interest expense associated with our outstanding debt, including accretion of debt discount.
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 divestiture.
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 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.
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Results of Operations
The following table summarizes our condensed consolidated statements of operations for each of the periods presented (in millions):
Three Months Ended March 31,
2021 2022
Revenue $ 2,903  $ 6,854 
Costs and expenses
Cost of revenue, exclusive of depreciation and amortization shown separately below 1,710  4,026 
Operations and support 423  574 
Sales and marketing 1,103  1,263 
Research and development 515  587 
General and administrative 464