Document

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, 2020

☐ 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.)

1455 Market Street, 4th Floor

San Francisco, California 94103

(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 April 30, 2020 was 1,733,987,312.

UBER TECHNOLOGIES, INC.

TABLE OF CONTENTS



		Pages
	Special Note Regarding Forward-Looking Statements	2

	PART I - FINANCIAL INFORMATION	4
Item 1.	Financial Statements (unaudited)	4
	Condensed Consolidated Balance Sheets as of December 31, 2019 and March 31, 2020	4
	Condensed Consolidated Statements of Operations for the Three Months Ended March 31, 2019 and 2020	5
	Condensed Consolidated Statements of Comprehensive Loss for the Three Months Ended March 31, 2019 and 2020	6
	Condensed Consolidated Statements of Mezzanine Equity and Equity (Deficit) for the Three Months Ended March 31, 2019 and 2020	7
	Condensed Consolidated Statements of Cash Flows for the Three Months Ended March 31, 2019 and 2020	9
	Notes to Condensed Consolidated Financial Statements	11
Item 2.	Management's Discussion and Analysis of Financial Condition and Results of Operations	42
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	59
Item 4.	Controls and Procedures	60

	PART II - OTHER INFORMATION	61
Item 1.	Legal Proceedings	61
Item 1A.	Risk Factors	61
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	98
Item 3.	Defaults Upon Senior Securities	98
Item 4.	Mine Safety Disclosures	98
Item 5.	Other Information	98
Item 6.	Exhibits	98
	Signatures	100

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 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, Adjusted Net 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 six countries we have identified as near-term priorities;


•	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;


•	our ability to meet the requirements of our existing debt and draw on our line of credit;


•	our ability to prevent disturbance to our information technology systems;


•	our ability to successfully defend litigation brought against us;


•	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 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.

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, 2019			As of March 31, 2020
Assets
Cash and cash equivalents	$	10,873		$	8,165
Short-term investments	440			831
Restricted cash and cash equivalents	99			193
Accounts receivable, net of allowance of $34 and $54, respectively	1,214			683
Prepaid expenses and other current assets	1,299			1,242
Total current assets	13,925			11,114
Restricted cash and cash equivalents	1,095			1,171
Collateral held by insurer	1,199			1,107
Investments (including, amortized cost of debt securities of $2,279 and $2,281; credit allowance of $— and $173, respectively)	10,527			8,687
Equity method investments	1,364			1,299
Property and equipment, net	1,731			1,851
Operating lease right-of-use assets	1,594			1,589
Intangible assets, net	71			560
Goodwill	167			2,566
Other assets	88			146
Total assets	$	31,761		$	30,090
Liabilities, mezzanine equity and equity
Accounts payable	$	272		$	215
Short-term insurance reserves	1,121			1,073
Operating lease liabilities, current	196			205
Accrued and other current liabilities	4,050			5,138
Total current liabilities	5,639			6,631
Long-term insurance reserves	2,297			2,421
Long-term debt, net of current portion	5,707			5,703
Operating lease liabilities, non-current	1,523			1,519
Other long-term liabilities	1,412			1,498
Total liabilities	16,578			17,772
Commitments and contingencies (Note 13)
Mezzanine equity
Redeemable non-controlling interests	311			290
Equity
Common stock, $0.00001 par value, 5,000,000 shares authorized for both periods, 1,716,681 and 1,729,850 shares issued and outstanding, respectively	—			—
Additional paid-in capital	30,739			31,035
Accumulated other comprehensive loss	(187		)	(395		)
Accumulated deficit	(16,362		)	(19,298		)
Total Uber Technologies, Inc. stockholders' equity	14,190			11,342
Non-redeemable non-controlling interests	682			686
Total equity	14,872			12,028
Total liabilities, mezzanine equity and equity	$	31,761		$	30,090

The accompanying notes are an integral part of these condensed consolidated financial statements.

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,
	2019			2020
Revenue	$	3,099		$	3,543
Costs and expenses
Cost of revenue, exclusive of depreciation and amortization shown separately below	1,681			1,786
Operations and support	434			503
Sales and marketing	1,040			885
Research and development	409			645
General and administrative	423			859
Depreciation and amortization	146			128
Total costs and expenses	4,133			4,806
Loss from operations	(1,034		)	(1,263		)
Interest expense	(217		)	(118		)
Other income (expense), net	260			(1,795		)
Loss before income taxes and loss from equity method investment	(991		)	(3,176		)
Provision for (benefit from) income taxes	19			(242		)
Loss from equity method investments, net of tax	(6		)	(12		)
Net loss including non-controlling interests	(1,016		)	(2,946		)
Less: net loss attributable to non-controlling interests, net of tax	(4		)	(10		)
Net loss attributable to Uber Technologies, Inc.	$	(1,012	)	$	(2,936	)
Net loss per share attributable to Uber Technologies, Inc. common stockholders:
Basic	$	(2.23	)	$	(1.70	)
Diluted	$	(2.26	)	$	(1.70	)
Weighted-average shares used to compute net loss per share attributable to common stockholders:
Basic	453,543			1,724,367
Diluted	453,619			1,724,367

The accompanying notes are an integral part of these condensed consolidated financial statements.

UBER TECHNOLOGIES, INC.

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS

(In millions)

(Unaudited)



	Three Months Ended March 31,
	2019			2020
Net loss including non-controlling interests	$	(1,016	)	$	(2,946	)
Other comprehensive loss, net of tax:
Change in foreign currency translation adjustment	(54		)	(148		)
Change in unrealized loss on investments in available-for-sale securities	(4		)	(60		)
Other comprehensive loss, net of tax	(58		)	(208		)
Comprehensive loss including non-controlling interests	(1,074		)	(3,154		)
Less: comprehensive loss attributable to non-controlling interests	(4		)	(10		)
Comprehensive loss attributable to Uber Technologies, Inc.	$	(1,070	)	$	(3,144	)

The accompanying notes are an integral part of these condensed consolidated financial statements.

UBER TECHNOLOGIES, INC.

CONDENSED CONSOLIDATED STATEMENTS OF MEZZANINE EQUITY AND EQUITY (DEFICIT)

(In millions, except share amounts which are reflected in thousands)

(Unaudited)



	Redeemable Non-Controlling Interests			Redeemable Convertible Preferred Stock			Common Stock				Additional Paid-In Capital		Accumulated Other Comprehensive Loss			Accumulated Deficit			Total Deficit
	Redeemable Non-Controlling Interests			Shares	Amount		Shares		Amount		Additional Paid-In Capital		Accumulated Other Comprehensive Loss			Accumulated Deficit			Total Deficit
Balance as of December 31, 2018	$	—		903,607	$	14,177	457,189		$	—	$	668	$	(188	)	$	(7,865	)	$	(7,385	)
Cumulative effect of adoption of new accounting standard	—			—	—		—		—		—		—			9			9
Exercise of warrants	—			923	45		—		—		—		—			—			—
Lapsing of repurchase option related to Series E redeemable convertible preferred stock issued to a non-employee service provider	—			—	2		—		—		—		—			—			—
Repurchase of outstanding shares	—			—	—		(1	)	—		—		—			—			—
Exercise of stock options	—			—	—		677		—		4		—			—			4
Repurchase of unvested early-exercised stock options	—			—	—		(32	)	—		—		—			—			—
Stock-based compensation	—			—	—		—		—		10		—			—			10
Unrealized loss on investments in available-for-sale securities, net of tax	—			—	—		—		—		—		(4		)	—			(4		)
Foreign currency translation adjustment	—			—	—		—		—		—		(54		)	—			(54		)
Net loss	(4		)	—	—		—		—		—		—			(1,012		)	(1,012		)
Balance as of March 31, 2019	$	(4	)	904,530	$	14,224	457,833		$	—	$	682	$	(246	)	$	(8,868	)	$	(8,432	)

The accompanying notes are an integral part of these condensed consolidated financial statements.

UBER TECHNOLOGIES, INC.

CONDENSED CONSOLIDATED STATEMENTS OF MEZZANINE EQUITY AND EQUITY (DEFICIT)

(In millions, except share amounts which are reflected in thousands)

(Unaudited)



	Redeemable Non-Controlling Interests			Common Stock				Additional Paid-In Capital			Accumulated Other Comprehensive Loss			Accumulated Deficit			Non-Redeemable Non-Controlling Interests			Total Equity (Deficit)
	Redeemable Non-Controlling Interests			Shares		Amount		Additional Paid-In Capital			Accumulated Other Comprehensive Loss			Accumulated Deficit			Non-Redeemable Non-Controlling Interests			Total Equity (Deficit)
Balance as of December 31, 2019	$	311		1,716,681		$	—	$	30,739		$	(187	)	$	(16,362	)	$	682		$	14,872
Exercise of stock options	—			4,359		—		14			—			—			—			14
Stock-based compensation	—			—		—		285			—			—			—			285
Issuance of common stock for settlement of RSUs	—			8,917		—		—			—			—			—			—
Shares withheld related to net share settlement	—			(107	)	—		(3		)	—			—			—			(3		)
Unrealized loss on investments in available-for-sale securities, net of tax	—			—		—		—			(60		)	—			—			(60		)
Foreign currency translation adjustment	—			—		—		—			(148		)	—			—			(148		)
Distributions to non-controlling interests	(3		)	—		—		—			—			—			(4		)	(4		)
Net loss	(18		)	—		—		—			—			(2,936		)	8			(2,928		)
Balance as of March 31, 2020	$	290		1,729,850		$	—	$	31,035		$	(395	)	$	(19,298	)	$	686		$	12,028

The accompanying notes are an integral part of these condensed consolidated financial statements.

UBER TECHNOLOGIES, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(In millions)

(Unaudited)



	Three Months Ended March 31,
	2019			2020
Cash flows from operating activities
Net loss including non-controlling interests	$	(1,016	)	$	(2,946	)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization	146			128
Bad debt expense	47			22
Stock-based compensation	11			277
Gain on business divestiture	—			(154		)
Deferred income tax	4			(273		)
Revaluation of derivative liabilities	(175		)	—
Accretion of discount on long-term debt	53			20
Loss from equity method investment	6			12
Unrealized (gain) loss on debt and equity securities, net	(16		)	114
Impairment of debt and equity securities	—			1,863
Impairments of goodwill, long-lived assets and other assets	—			193
Unrealized foreign currency transactions	(4		)	7
Other	2			(10		)
Change in assets and liabilities, net of impact of business acquisition and disposals:
Accounts receivable	(210		)	444
Prepaid expenses and other assets	(116		)	29
Collateral held by insurer	—			92
Operating lease right-of-use assets	41			57
Accounts payable	—			(46		)
Accrued insurance reserves	161			77
Accrued expenses and other liabilities	370			(320		)
Operating lease liabilities	(26		)	(49		)
Net cash used in operating activities	(722		)	(463		)
Cash flows from investing activities
Proceeds from sale and disposal of property and equipment	40			1
Purchases of property and equipment	(129		)	(198		)
Purchases of marketable securities	—			(493		)
Proceeds from maturities and sales of marketable securities	—			100
Proceeds from business disposals, net of cash divested	293			—
Acquisition of business, net of cash acquired	—			(1,346		)
Return of capital from equity method investee	—			91
Purchase of non-marketable equity securities	—			(10		)
Other investing activities	—			(1		)
Net cash provided by (used in) investing activities	204			(1,856		)
Cash flows from financing activities
Principal payments on finance leases	(41		)	(60		)
Other financing activities	(5		)	(3		)
Net cash used in financing activities	(46		)	(63		)



Effect of exchange rate changes on cash and cash equivalents, and restricted cash and cash equivalents	3			(156		)
Net decrease in cash and cash equivalents, and restricted cash and cash equivalents	(561		)	(2,538		)
Cash and cash equivalents, and restricted cash and cash equivalents
Beginning of period	8,209			12,067
Reclassification from assets held for sale during the period	34			—
End of period, excluding cash classified within assets held for sale	$	7,682		$	9,529

Reconciliation of cash and cash equivalents, and restricted cash and cash equivalents to the condensed consolidated balance sheets
Cash and cash equivalents	$	5,745		$	8,165
Restricted cash and cash equivalents-current	136			193
Restricted cash and cash equivalents-non-current	1,801			1,171
Total cash and cash equivalents, and restricted cash and cash equivalents	$	7,682		$	9,529

Supplemental disclosures of cash flow information
Cash paid for:
Interest, net of amount capitalized	$	42		$	91
Income taxes, net of refunds	34			36
Non-cash investing and financing activities:
Ownership interest in Zomato received in exchange for the divestiture of Uber Eats India operations	—			171
Issuance of initial unsecured convertible notes in connection with Careem acquisition	—			880
Holdback amount of unsecured convertible notes in connection with Careem acquisition	—			754

The accompanying notes are an integral part of these condensed consolidated financial statements.

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” or “the Company”) 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 (“Rides Driver(s)”) for ridesharing services, and connects consumers (“Eater(s)”) with restaurants (“Restaurant(s)”) and food delivery service providers (“Delivery People”) for meal preparation and delivery services. Riders and Eaters are collectively referred to as “end-user(s)” or “consumer(s).” Rides Drivers and Delivery People are collectively referred to as “Driver(s)”. Uber also connects consumers with public transportation networks, e-bikes, e-scooters and other personal mobility options. 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 autonomous driving vehicle solutions to consumers, networks of vertical take-off and landing vehicles and new solutions to solve everyday problems.

The Company’s 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, 2019 included herein was derived from the audited consolidated financial statements as of that date but does not include all of the information and notes required by GAAP for complete financial statements. 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, 2019, included in the Company’s Annual Report on Form 10-K.

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 the Company’s significant accounting policies described in the Annual Report on Form 10-K for the year ended December 31, 2019 filed with the SEC on March 2, 2020 that have had a material impact on the Company’s condensed consolidated financial statements and related notes, except for an update reflecting the new accounting standard related to the measurement of credit losses on available-for-sale debt securities.

The evolving nature of the novel strain of coronavirus COVID-19 (“COVID-19”) pandemic and the extent of its impact across industries and geographies, including the duration and spread of the outbreak, are uncertain and cannot be predicted. Therefore, the results of operations for the three months ended March 31, 2020 may not be indicative of the results to be expected for subsequent quarters and the full fiscal year.

Basis of Consolidation

The condensed consolidated financial statements of the Company include the accounts of the Company and entities consolidated under the variable interest and voting models. All intercompany balances and transactions have been eliminated. Refer to Note 14 – Variable Interest Entities (“VIEs”) for further information.

Use of Estimates

The preparation of the Company’s 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, the Company evaluates its estimates, including, but not limited to: the incremental borrowing rate (“IBR”) applied in lease accounting; fair values of investments and other financial instruments (including the measurement of credit or impairment losses); useful lives of amortizable long-lived assets and intangible 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. The Company 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, the Company’s 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 the Company's and its investees' operations and financial performance means that these estimates may change in future periods, as new events occur and additional information is obtained.

Certain Significant Risks and Uncertainties - COVID-19

In March 2020, the World Health Organization declared the outbreak of the novel coronavirus disease (“COVID–19”) a pandemic. COVID–19 has rapidly impacted market and economic conditions globally. In an attempt to limit the spread of the virus, various governmental restrictions have been implemented, including business activities and travel restrictions, and “shelter–at–home” orders, that started to have, and may continue to have, an adverse impact on the Company’s business and operations by reducing, in particular, the demand for Rides and New Mobility offerings globally. In light of the evolving nature of COVID–19 and the uncertainty it has produced around the world, it is not possible to predict the COVID–19 pandemic’s cumulative and ultimate impact on the Company’s future business operations, results of operations, financial position, liquidity, and cash flows. The extent of the impact of the pandemic on the Company’s business and financial results will depend largely on future developments, including the duration of the spread of the outbreak both globally and within the U.S., the impact on capital, foreign currencies exchange and financial markets, and governmental or regulatory orders that impact the Company’s business, all of which are highly uncertain and cannot be predicted.

Revenue Recognition

Rides

During the first quarter of 2020, the Company began charging end-users a fee for services in certain markets. In these transactions, the Company enters into a Master Services Agreements (“MSA”) with the end-user to use the platform for a fee. The combination of the MSA and the individual transaction request establishes enforceable rights and obligations for each transaction. The Company has determined that in these transactions, the end-user is the Company’s customer, in addition to the previously disclosed customers, and revenue from these contracts is also recognized under Accounting Standards Codification (“ASC”) 606. In these transactions, in addition to a performance obligation to Drivers, the Company also has one performance obligation to end-users, which is to connect end-users to Drivers in the marketplace. The Company recognizes revenue when a trip is complete.

The Company will continue to present revenue on a net basis for Rides transactions, as the Company does not control the transportation service provided by Drivers to end-users. In the first quarter of 2020, the Company recognized total revenue of $137 million associated with these fees charged to end-users.

Eats

During the first quarter of 2020, the Company began charging a direct fee to end-users for delivery services in certain markets. In these transactions, the Company enters into an MSA with the end-user to use the platform for delivery services for a fee and separately subcontracts with Delivery People to provide delivery services to end-users. The combination of the end-user MSA and the individual end-user transaction request establishes enforceable rights and obligations for each transaction. The Company’s contract with end-users creates one performance obligation, which is to provide delivery services to end-users in these markets. The Company has determined that in these transactions, Restaurants and end-users are the Company’s customers and revenue from these contracts shall be recognized separately for each under ASC 606. The Company recognizes delivery service revenue associated with the Company's performance obligation over the contract term, which represents its performance over the period of time the delivery is occurring. The Company’s previously disclosed revenue recognition policy for contracts with Restaurants remain unchanged.

The Company will present revenue on a gross basis for the delivery of meals, as the Company controls the delivery service in these transactions and is primarily responsible for delivery. Consistent with previous disclosures, the Company will continue to present revenue on a net basis for the sale of meals. In the first quarter of 2020, the Company recognized total revenue of $9 million and cost of revenue, exclusive of depreciation and amortization of $54 million for these delivery transactions.

End-user Discounts and Promotions

Any promotions utilized by an end-user in these Rides and Eats transactions where the end-user is a customer are accounted for as consideration payable to a customer, and recorded as a reduction of revenue, if the Company does not receive a distinct good or service or cannot reasonably estimate the fair value of the good or service received.

Accounts Receivable and Allowance for Doubtful Accounts

Accounts receivable represents uncollected fare payments from end-users for completed transactions where (i) the payment method is credit card and includes (a) end-user fare amounts not yet settled with payment service providers, and (b) end-user fare amounts settled by payment service providers but not yet remitted to the Company, or (ii) completed shipments where the Company invoices Freight Customers ("Shippers") and payment has not been received. The timing of settlement of amounts due from these parties varies by region and by product. The portion of the fare receivable to be remitted to Drivers and Restaurants is included in

accrued and other current liabilities. Refer to Note 8 – Supplemental Financial Statement Information for amounts payable to Drivers and Restaurants.

Although the Company pre-authorizes forms of payment to mitigate its exposure, the Company bears the cost of any accounts receivable losses. The Company records an allowance for doubtful accounts for credit losses for fare and invoiced amounts that may never settle or be collected, as well as for credit card chargebacks including fraudulent credit card transactions. The Company considers the allowance for doubtful accounts for fare amounts to be direct and incremental costs to revenue earned and, therefore, the costs are included as cost of revenue in the consolidated statements of operations. The Company estimates the allowance based on historical experience, estimated future payments and geographical trends, which are reviewed periodically and as needed, and amounts are written off when determined to be uncollectable.

Allowance for Credit Losses on Available-for-sale Debt Securities

The Company accounts for credit losses on available-for-sale debt securities in accordance with ASC 326, Financial Instruments - Credit Losses (“ASC 326”). The Company adopted ASC 326 on January 1, 2020, on a modified retrospective basis. Under ASC 326, at each reporting period, the Company evaluates its available-for-sale debt securities at the individual security level to determine whether there is a decline in the fair value below its amortized cost basis (an impairment). In circumstances where the Company intends to sell, or is more likely than not required to sell, the security before it recovers its amortized cost basis, the difference between fair value and amortized cost is recognized as a loss in the consolidated statement of operations, with a corresponding write-down of the security’s amortized cost. In circumstances where neither condition exists, the Company then evaluates whether a decline is due to credit-related factors. The factors considered in determining whether a credit loss exists can include the extent to which fair value is less than the amortized cost basis, changes in the credit quality of the underlying loan obligors, credit ratings actions, as well as other factors. To determine the portion of a decline in fair value that is credit-related, the Company compares the present value of the expected cash flows of the security discounted at the security’s effective interest rate to the amortized cost basis of the security. A credit-related impairment is limited to the difference between fair value and amortized cost, and recognized as an allowance for credit loss on the consolidated balance sheet with a corresponding adjustment to net income. Any remaining decline in fair value that is non-credit related is recognized in other comprehensive income, net of tax. Improvements in expected cash flows due to improvements in credit are recognized through reversal of the credit loss and corresponding reduction in the allowance for credit loss.

Recently Adopted Accounting Pronouncements

In June 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2016-13, “Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments” to require the measurement of all expected credit losses for financial assets held at the reporting date based on historical experience, current conditions, reasonable and supportable forecasts. The standard also amends the accounting for credit losses on available-for-sale debt securities and purchased financial assets with credit deterioration. ASC 326 was subsequently amended by ASU 2019-04, “Codification Improvements to Topic 326, Financial Instruments - Credit Losses, Topic 815, Derivatives and Hedging, and Topic 825, Financial Instruments.” The Company adopted the standard and related amendments effective January 1, 2020 on a modified retrospective basis. The adoption of the new standard did not have a material impact on the Company’s condensed consolidated financial statements.

In August 2018, the FASB issued ASU 2018-13, “Fair Value Measurement (Topic 820): Disclosure Framework - Changes to the Disclosure Requirements for Fair Value Measurement,” which modifies the disclosure requirements in ASC 820, “Fair Value Measurement” (“ASC 820”). The Company adopted the new standard effective January 1, 2020 on a prospective basis. The adoption of the new standard did not have a material impact on the Company’s condensed consolidated financial statements.

In August 2018, the FASB issued ASU 2018-15, “Intangibles-Goodwill and Other-Internal-Use Software (Subtopic 350-40): Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract,” which aligns the requirements for capitalizing implementation costs incurred in a cloud computing arrangement that is a service contract with the requirements for capitalizing implementation costs incurred to develop or obtain internal-use-software. The Company adopted the new standard effective January 1, 2020 on a prospective basis. The adoption of the new standard did not have a material impact on the Company’s condensed consolidated financial statements.

In October 2018, the FASB issued ASU 2018-17, “Consolidation (Topic 810): Targeted Improvements to Related Party Guidance for Variable Interest Entities,” which amends the guidance for determining whether a decision-making fee is a variable interest and requires organizations to consider indirect interests held through related parties under common control on a proportional basis rather than as the equivalent of a direct interest in its entirety. The Company adopted the new standard effective January 1, 2020 on a retrospective basis. The adoption of the new standard did not have a material impact on the Company’s condensed consolidated financial statements.

In December 2019, the FASB issued ASU 2019-12, “Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes,” which removes certain exceptions for performing intraperiod allocation, recognizing deferred taxes for investments, and calculating income taxes in interim periods. The guidance reduces complexity in certain areas, including franchise taxes that are partially based on income and accounting for tax law changes in interim periods. The Company early adopted the new standard effective January 1,

2020 on a prospective basis. The adoption of the new standard did not have a material impact on the Company’s condensed consolidated financial statements.

Recently Issued Accounting Pronouncements Not Yet Adopted

In March 2020, the FASB issued ASU 2020-04, “Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting,” which provides optional expedients and exceptions to contract modifications and hedging relationships that reference LIBOR or another reference rate expected to be discontinued. The standard is effective upon issuance through December 31, 2022 and may be applied at the beginning of the interim period that includes March 12, 2020 or any date thereafter. The Company is currently evaluating the impact of this accounting standard update on its consolidated financial statements.

Note 2 – Revenue

The following tables present the Company’s revenues disaggregated by offering and geographical region. Revenue by geographical region is based on where the trip or shipment was completed or meal delivered. This level of disaggregation takes into consideration how the nature, amount, timing, and uncertainty of revenue and cash flows are affected by economic factors. Revenue is presented in the following tables for the three months ended March 31, 2019 and 2020 (in millions):



	Three Months Ended March 31,
	2019		2020
Rides revenue	$	2,376	$	2,450
Vehicle Solutions revenue ⁽¹⁾	10		1
Other revenue	32		19
Total Rides revenue	2,418		2,470
Eats revenue	536		819
Freight revenue	127		199
Other Bets revenue ⁽¹⁾	18		30
ATG and Other Technology Programs collaboration revenue ⁽²⁾	—		25
Total revenue	$	3,099	$	3,543

⁽¹⁾The Company accounts for Vehicle Solutions and New Mobility revenue as an operating lease as defined under ASC 842.

⁽²⁾ Refer to Note 15 – Non-Controlling Interests for further information on collaboration revenue.



	Three Months Ended March 31,
	2019		2020
United States and Canada	$	1,895	$	2,142
Latin America ("LATAM")	450		497
Europe, Middle East and Africa ("EMEA")	487		552
Asia Pacific ("APAC") ⁽¹⁾	267		352
Total revenue	$	3,099	$	3,543

⁽¹⁾ Primarily includes Australia.

Revenue from Contracts with Customers

Rides Revenue

The Company derives revenue primarily from fees paid by Rides Drivers for the use of the Company’s platform(s) and related service to facilitate and complete ridesharing services and, in certain markets, revenue from fees paid by End-Users for connection services obtained via the platform.

Other Revenue

Other revenue consists primarily of revenue from the Company’s Uber for Business (“U4B”), financial partnerships products and other immaterial revenue streams.

Eats Revenue

The Company derives revenue for Eats from Restaurants’ and Delivery People’s use of the Eats platform and related service to facilitate and complete Eats transactions. Additionally, in certain markets where the Company is responsible for delivery services, delivery fees charged to end-users are also included in revenue, while payments to Delivery People in exchange for delivery services are recognized in cost of revenue.

Freight Revenue

Freight revenue consists primarily of revenue from freight transportation services provided to shippers.

Other Bets Revenue

Other Bets revenue consists primarily of revenue from New Mobility products, including dockless e-bikes, Platform Incubator group offerings, which are responsible for innovating new services and use cases on the Company’s platform to drive long-term growth and cross-platform customer engagement, and other immaterial revenue streams.

Contract Balances

The Company’s contract assets for performance obligations satisfied prior to payment or contract liabilities for consideration collected prior to satisfying the performance obligations are not material as of December 31, 2019 and March 31, 2020.

Remaining Performance Obligations

As a result of a single contract entered into with a customer during 2018, the Company had $74 million of consideration allocated to an unfulfilled performance obligation as of March 31, 2020. Revenue recognized during the three months ended March 31, 2019 and 2020 related to the contract was not material.

The Company’s remaining performance obligation 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, 2020	$	52	$	22	$	74

Note 3 – Investments and Fair Value Measurement

Investments

The Company’s investments on the condensed consolidated balance sheets consisted of the following as of December 31, 2019 and March 31, 2020 (in millions):



	As of
	December 31, 2019		March 31, 2020
Classified as short-term investments:
Marketable debt securities ⁽¹⁾:
Commercial paper	148		248
U.S. government and agency securities	93		186
Corporate bonds	199		397
Short-term investments	$	440	$	831

Classified as investments:
Non-marketable equity securities
Didi ⁽²⁾	$	7,953	$	6,299
Other ⁽³⁾	204		272
Non-marketable debt securities
Grab ⁽⁴⁾	2,336		2,109
Other ⁽³⁾	34		7
Investments	$	10,527	$	8,687

⁽¹⁾Excluding marketable debt securities classified as cash equivalents and restricted cash equivalents.

⁽²⁾On August 1, 2016, the Company completed the sale of the Company’s interest in Uber China to Didi and received approximately 52 million shares of Didi’s Series B-1 preferred stock as consideration valued at approximately $6.0 billion at time of transaction.

⁽³⁾These balances include certain investments in securities 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.

⁽⁴⁾Recorded at fair value with changes in fair value recorded in other comprehensive income (loss), net of tax, unless subject to credit loss.

Assets and Liabilities Measured at Fair Value on a Recurring Basis

The following table presents the Company’s 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, 2019								As of March 31, 2020
	Level 1		Level 2		Level 3		Total		Level 1		Level 2		Level 3		Total
Financial Assets
Money market funds	$	5,104	$	—	$	—	$	5,104	$	4,778	$	—	$	—	$	4,778
Commercial paper	—		233		—		233		—		355		—		355
U.S. government and agency securities	—		153		—		153		—		269		—		269
Corporate bonds	—		199		—		199		—		403		—		403
Non-marketable debt securities	—		—		2,370		2,370		—		—		2,116		2,116
Non-marketable equity securities	—		—		98		98		—		—		21		21
Total financial assets	$	5,104	$	585	$	2,468	$	8,157	$	4,778	$	1,027	$	2,137	$	7,942

During the three months ended March 31, 2020, the Company did not make any transfers between the levels of the fair value hierarchy.

The following table summarizes the amortized cost and fair value of the Company’s debt securities with a stated contractual maturity or redemption date as of March 31, 2020 (in millions):



	As of March 31, 2020
	Amortized Cost		Fair Value
Within one year	$	797