Good day, my name is Jericka, and I will be your conference operator today. At this time, I would like to welcome everyone to the Uber Q2 2019 Earnings Conference Call. All lines have been placed on mute to prevent any background noise. After the speakers’ remarks, there will be a question-and-answer session. [Operator Instructions] It is now my pleasure to turn today’s program over to Mr. Kent Schofield. Sir, the floor is yours.

Thank you, operator. Thank you for joining us today, and welcome to Uber Technologies’ Q2 2019 earnings presentation. On the call today, we have Dara Khosrowshahi, CEO; Nelson Chai, CFO; and this is Kent Schofield, Head of Investor Relations. During today’s call, we will present both GAAP and non-GAAP financial measures. Additional disclosures regarding these non-GAAP measures, including a reconciliation of GAAP to non-GAAP measures, is included in the press release, supplemental slides and our filings with the SEC, each of which is posted to investor.uber.com. I will remind you that these numbers are unaudited and may be subject to change. Certain statements in this presentation and on this call may be deemed to be forward-looking statements. Such statements can be identified by terms such as believe, expect, intend and may. You should not place undue reliance on forward-looking statements. Actual results may differ materially from these forward-looking statements, and we do not undertake any obligation to update any forward-looking statements we make today. For more information about factors that may cause actual results to differ materially from forward-looking statements, please refer to the press release we issued today as well as risks and uncertainties including in the section under the caption Risk Factors and management’s discussion and analysis of financial condition and results of operations in our filed prospectus filed with the SEC in connection with our IPO on May 13, 2019, as well as our first quarter Form 10-Q that was filed on June 4, 2019. Following prepared remarks today, we will open the call to questions. With that, let me hand it over to Dara.

Thanks, Kent. We’re proud of the progress we made in Q2 2019 towards becoming the platform of choice for the movement of people and powering global commerce all around the world. During the quarter, we continued to produce strong growth in gross bookings across all of our platform offerings with overall growth of 37% year on year at constant currency producing a $63 billion annual run rate. Adjusted net revenue or ANR was $2.9 billion, up 12% year on year excluding a driver appreciation award non-cash made in connection with our IPO and on a constant currency basis and our accelerated nicely up 26% powered by strongly monthly active platform consumers, or MAPC growth of 30%. Our MAPC growth is continued into the second half of the year and we’re proud to announce that we’ve had 100 million MAPCs in the month of June. Note that we expect ANR growth to continue to accelerate beyond the 30% mark in constant currency during the back half of the year as we continue to grow MAPCs, increased multi-offering users, improved take rates sequentially and with the help of easier comps in the prior year periods. Our Q2 2019 adjusted EBITDA loss came in at $656 million, a big improvement versus Q1 and handily beating our own internal plan due to strong execution of our teams across the businesses. The competitive environment and our position of Ridesharing space continues to be stable to improve. We will take some of that improvement to continue to lead into our Eats business where we see plenty of competition and significant capital investments but incredible potential. While you often have to make trade-offs in life, we believe that we can continue to invest aggressively and grow while driving efficiencies from scale by building great tech to improve…

Thanks, Dara. During Q2, our GAAP revenue was $3.2 billion, up 14% year-over-year. Our GAAP cost of revenues, excluding D&A of $1.7 billion, increased from 55% from 48% of revenue in Q2 2018. GAAP EPS was a loss of $4.72 which was impacted by a $3.9 billion stock-based compensation charge due to restricted stock units as part of our IPO and compares to a loss of $2.01 in Q2 of 2018. For the remainder of the call, unless otherwise noted, I will discuss key operational metric as well as non-GAAP financial measures excluding pro forma adjustments such as our $299 million driver appreciation award and the $3.9 billion stock-based compensation charge both related to the IPO. First, our total company global trips of 1.7 billion, grew 35% year-over-year. Growth is driven principally by international growth in rides and Eats. MAPC grew 30% year-over-year to $99 million. We continue to see strong new MAPC additions to the platform via Uber Eats and NeMo. Total company gross bookings grew 31% to $15.8 billion and on a constant currency basis grew 37% year-over-year, continued solid growth in Ridesharing gross bookings growth across all our regions led by the U.S. and Latin America. Eats gross bookings growth is driven by strong year-over-year growth in U.S. and Canada and APAC, despite the significant amount of capital that is poured into the space. Adjusted net revenue or ANR excluding the driver appreciation award was $3.2 billion, which was up 26% on a constant currency basis. Core platform ANR excluding the driver appreciation award was $3 billion or up 22% on a constant currency basis. Core Ridesharing ANR was up 70% year-over-year and Eats ANR was up 56% year-over-year and they were up 20% and 60% year-over-year respectively on a constant currency basis. Our core platform ANR…

Thank you very much, Nelson. We’re pleased with our progress this quarter. We hope to deliver more for you and with that, let’s open up for questions.

Great. Thanks, Dara. Operator, we are now ready for questions.

[Operator Instructions] Your first question comes from the line of Justin Post with Bank of America Merrill Lynch.

Great. Thank you taking my question. I guess, Dara looking at the results, your bookings and riders close to in line, but large beat on the profitability. How are you thinking about balancing the ability to drive the top line bookings versus drive the bottom line? How do you balance that? And then when you think about some of the new competitors entering in London, could that make that decision different going forward and how do you feel about the London situation right now? Thank you.

Hey, Justin. Good question. Listen, I think you know that the balance between the top and the bottom line is more of an art rather than a science. So I if I told you that we had kind of the scientific formulae that we’re solving for here, we’d be lying to you. That said, if you look at our trip growth on a year-on-year trip growth was 37% Q3 of 2018, 37% Q4, 36% Q1, 35% Q2. So it’s just at these kinds of scale, it’s rare to find this kind of growth and we do think that as we look at our marketing spend, our incentive spend, how we can leverage the business going forward, we think that there’s the opportunity to scale our expenses or be more efficient with our incentive spend or be more efficient with our marketing spend really doubled down on less, smaller kind of projects and doubling down on the channels that are really working for us. So we actually think that if we do our jobs right, there are always tradeoffs to be made in life, but I think that we can make the tradeoffs where we can scale expenses and/or get far more efficient in our marketing and incentive spend while improving the bottom line of the company. And listen, we’re very confident that this company at maturity can be cash flow positive, and the team is focused on being able to drive big-time growth at the top line while getting more efficient on all parts of the business. I think as far as the London competition goes, listen, the London is a great market for us. We are trying our best to be excellent partners with TFL, the regulator there, and intend to continue to build our business in a constructive way. The new competition that we’re seeing in London are frankly competitors that we’re familiar with. We’ve been competing against those players in Paris for many, many years. Our position in Paris is very, very strong. It’s quite a constructive market for us. So with a category of Ridesharing, we are going to have multiple competitors in every country that we compete in. We’re going to have multiple competitors in large markets like Paris and London. But so far we’re not seeing anything in London that’s a surprise or unexpected that we’re not seeing in 20 other cities all around the world.

Great. Thanks.

Thanks, Justin.

Sure.

Operator, next question please.

Your next question comes from the line of Heath Terry with Goldman Sachs.

Great, thanks. Dara, on the last earnings call, you talked about earning – or about the market share in ride hailing sort of reaching a point of stability. I’m curious, as you look at the competitive markets and the rate of growth on some of your main competitors, particularly in markets like the U.S., what’s it take to get to that point of stability? Is it a just a matter of time, is a matter of more investment and sort of how do you – whether it’s bookings or revenues across the space, sort of how to think of what qualifies as stability.

Yes. I think it’s – listen we – when we look at the Ridesharing category, our top competitor in this category is car ownership and other ways of getting around. And when I look at how we are faring against car ownership, we’re faring very well. And we continue to invest in product, continuing to kind of improve the efficiency of our POOL product. You’ve seen us bring in transit choices, a whole other host of ways that people can get around their city, so that this younger generation that is coming of age on myself as zero need to own a car. That said, within our category of Ridesharing, we are going to have multiple competitors. We and Lyft are big-time competitors here and have been for some period of time. And for now, we are seeing generally category positions that are stable and we’re focused on improving profitability in this market as many – and many other markets around the world. And based on what we read, Lyft seems to be focused in a similar way, but as you know, competitive environments can change. But the big picture is we want to be there any way you want to get around your city and I think we’re well on a path to do so in a profitable way.

Great. Thanks, Dara.

You are welcome.

Thank you for the question. Operator, next question please.

Your next question comes from the line of Brian Nowak with Morgan Stanley.

Thanks for taking my question. I have two. The first one on the U.S. Eats. Curious to hear about sort of any impact at all from elasticity associated with that service fee. And how do you think about potentially rolling it out to other markets in the back half or into next year? And then India Eats, I remember last quarter you called it out as a one of the headwinds to overall ANR. Is there any update on India Eats in the quarter? And how do you think about strategic options to improve your ability to more profitably grow in that market? Thanks.

Yes, I think on the U.S. and elasticity as it relates to the service fee, we’re constantly testing and learning. What we found is, as you can see from the take rate improvement, this is two quarters in a row where you’re seeing very, very substantial take rate improvement on the Eats side. The team is executing well. They’re focused. There is due to be some elasticity, but what I can tell you is that the improvements that we are seeing in our take rate from a revenue standpoint and from a profitability standpoint are significantly in excess of any business that we might be losing on the top line. And of course this is within the context of the top line of our Eats business growing bookings at 90 plus percent on a year on year basis. So, we think that at this scale, and at these kinds of top lines, the kind of trade-off decisions that we’re making are the right trade-off decisions and frankly they’re not too difficult to make. We will look at taking some of these learnings in different markets. Every single market is its own – has its own character, has it done competitive environment. So at this point, we can’t point to a specific plan or rollout plan. There are certain markets where we’ll introduce the fees and there are certain markets where we won’t and we’ll be pretty disciplined and data driven in our approach to every single market. In terms of India, it’s a big market on the rideshare side in India. We’re very happy with the results there both in terms of category position, the top line and especially the bottom line. And we’re taking some of the lessons and extending them into the Eats category. Right now the market is very, very competitive. There are a few very strong competitors there. Generally, I will tell you that we want to be the number one or number two in every single market. Right now in India, we are the number three, and so the team knows there’s a big lift ahead of them. But we’re in the game and I think India – what’s great about India is we have a local team there. We’ve got a great engineering team there. We’re kind of a local company in India. We proven our ability to win in rides, and my expectation is the same on Eats side.

Great. Thanks gentlemen.

Thank you for the question.

Sure.

Operator, next question please.

Your next question comes from line of Ross Sandler with Barclays.

Hey guys. Just one clarification and then a question around that. So if we back out the 287 million shares for the riders or for the drivers in Q2, your rides net revenue or adjusted net revenue was $2.6 billion and take rate 21.3. So just want to clarify that that’s actually accurate and the right way to handle that 287 and then if so, that take rates up 150 or so sequentially and you mentioned that is going to go up in the back half. So what’s driving up the ride take rate that the U.S., is it Brazil getting less of that, any color on what’s happening with rides take rate both in Q2 and back half of this year. Thank you.

Hey, Ross. I think, you have gone the numbers right. Nelson, correct me if I’m wrong.

That is right.

I think, listen, on the take rate, we don’t want to get into particulars as far as market by market, but I think the characterization, which is the competitive environment in most of the markets in which we’re competing with are stable or improving or our competitive tactics are improving. I think that’s a generalization that is true in most of the markets out there in the rides category. And that is translating into take rates that are an improvement quarter on quarter. And if things remain the same, we think those trends are healthy and we’ll take them.

Thank you Ross for the question. Operator, next question please.

Your next question comes from the line of Lloyd Walmsley with Deutsche Bank.

Thanks. Two if I can. First, Dara you mentioned some interesting innovations coming in the second half. Is there anything you can share with us on kind of where those might fall or any specific there would be great? And then just secondly, SoftBank’s in the process of raising a second Vision Fund. They continue to put money into competitors. So just wondering what kind of dialogue you might have with them to try to bring about more of a healthy market in the space. Anything you could share would be great.

Yes, Lloyd. I would – the marketing team would kill me if I steal their thunder as far as innovation goes on the POOL side. But on the shared ride category, listen, one of the keys was share rides is you have to create matching efficiency. And we were the pioneer in shared rides to begin with. We were the pioneer in shared rides, the product in shared rides where you walk and wait in order to create greater matching efficiencies, and you should expect more of that pioneering and innovative spirit in share rides going forward. We’re already experimenting in high capacity vehicles, for example, Uber Bus, Uber Van, to kind of {***Part – 0-28***} {***Spart-028***} matching efficiencies, and you should expect more of that pioneering and innovative spirit in shared rides going forward. We're already experimenting in high capacity vehicles, for example, Uber Bus, Uber Van to kind of take sharing two to three people in the back seat to 10 people in a van, which we think benefits riders, it benefits cities, it benefits the environment. And there's a whole lot of technical kind of innovation and investment that has to go into matching. It's a category that, because of our volumes and basically every single market that we compete with on the rides side where we're the largest player, shared rides tend to be a category where our network effects are amplified. So we want to invest technically behind those network effects. And I think you'll see kind of more matching tests coming up in the back half of the year that we think will hopefully take us to kind of the next growth phase of shared rides. I think as far as SoftBank and the vision fund 2.0 we're as awed and inspired as everyone else as far as SoftBank's ability to raise capital and put that capital to work. And I said at the first time which is I'm really happy that SoftBank is a partner of ours. I may be even slightly happier now that SoftBank is a partner of ours because a partner that's global, that has so much capital, as someone that you want to have with you, and SoftBank has been a great partner. I think they'll continue to be a partner going forward. We are a sensitive us to industry dynamics, so when we talk to SoftBank, we talk about things that are relevant to us and we leave the investment up to them. Thanks as always for the question.

Alright thanks.

Let’s go to the next question please

Your next question comes from the line of Ron Josey with JMP Securities.

Great thanks for taking the question. I wanted to ask a little bit more. I think, Dara, you talked about increased consumer promotions this quarter – sorry more effective to deployment of incentive this quarter. Just want to understand a little bit more particularly as you talked about that promotion has been down and some sequential improvement. So just any information around promotion and incentives should be helpful. Thank you.

Yes, we don't want to get into too many details because you're entering into competitive categories. But there are two factors going on. One is there has always spend that is kind of an inefficient side of incrementality, kind of the next dollar that you put to work, the incremental return tends to be worse. And we've got our engineers and marketing folks always looking for the least efficient incremental spend and then testing and learning their way into more efficient types of spend going forward. So you've got kind of engineers and marketers rinsing and repeating there. And I do think that we are coming with types of incentives that are designed not just to drive volume for the next week, but they're designed to drive volume for the next month or two months and increasingly investing more in programs like our loyalty program both Uber Pro on our drivers side but then Uber Rewards which are designed to essentially invest money for loyalty that carries over for not months, but hopefully years. So it's a continuing process. At the same time we are seeing the competitive environment in general, be more constructive and listen that always helps as well. The combination of better science, better marketing, and a more constructive environment, we think makes for a decent to hopefully better than decent second half for us.

Thank you, Dara.

You're welcome.

Thanks Ron for the question. Operator next question please.

Your next question comes from line of John Blackledge with Cowen.

Great. Two questions. First just curious about the pricing environment in the U.S. also the ability to raise prices and/or potential for raising prices as we ramp through the year on the Ridesharing side. And then just second on the marketing team change, just any early thoughts on how it may impact brand spend or customer acquisition spend. Thank you.

Hey John as far as the pricing power and pricing in general in the U.S. we're constantly testing and learning in terms of pricing. I do think that we have pricing power as a category as to what's the best way to exercise that pricing power one way or the other, I think, it remains to be seen and we don't want to talk too much about kind of what our intentions are going forward. But I think as a service we have pricing power. And I think it will, in a year or two, our ability to grow this business for many, many years to come. As far as marketing and what we're doing, listen, part of the design around the restructuring of the marketing team was really looking at where we came from. Really the marketing team grew organically. And based on kind of the history of how Uber grew up, Uber was very decentralized from a local base of businesses essentially, business leaders and city leaders who were their own CEOs. And over a period of time as businesses grow, as they become more consistent, it makes sense to centralize some of the capabilities and the decentralization that served as very, very well early on in our development as a company to some extent hurt us as we think about how we tune our marketing teams for the next five years. A significant amount marketing as you can imagine happens, for example, online on big online global systems, Google, Facebook, Twitter, Snapchat, et cetera, these are all essentially technical global platforms. And to have a bunch of local teams, all of whom are starting from square one engaging with these technical global platforms in their own ways and reinventing the wheel, did make sense. So the reorganization is about improving effectiveness and it's about thinking about where we're going to be for the next five years for the company versus where we come from. And I think, listen, my expectation is that our marketing spend, I can't speak for the second half of the year, but our marketing spend for the next few years is actually going to both increase and be more effective as a result of the changes that we're making in the marketing organization.

Great John, thanks for the question. Operator next question please.

Your next question comes from the line of Mark Mahaney with RBC Capital Markets.

Mark, are you on the line? You might be on mute.

Operator, why don't we go ahead and come back to Mark? Can we go to the next question please?

Yes. Your next question comes from the line of Brad Erickson with Needham & Company.

Hi, thanks. I think there's a fair amount of work being done at the city and local government level around the world to understand, I guess, the effect of mobility platforms you are having on broader transportation in those cities. So relative to the some of those works that are ongoing and the conversations you are you all are having in those cities and local governments, how should we think about any impact either positive or negative with regards to supply TNCs are controlled in more cities here going forward.

Listen, I think that it's – every conversation that we are having with every city is different, so it's difficult to give you a global answer. In general, what I can tell you that the great news is we're actually have been dialogue and constructive dialogue with many of the cities and many of the transportation authorities in these cities. So if you look at London, for example, we have a clean air plan and a plan to actually fund electrifying our fleet which is obviously great for the environment, I think it’s great for London, it’s great for consumers, and it's great for us. And that is a result of terrific dialogue with the city. We are now in dialogue with multiple transit operators and we have a transit product that's live, that is actually feeding demand into public transit, which we think is again a good thing for us, it's a good thing for the city and a certainly a great thing for public transit as well. We are now having active dialogue in terms of sharing our data. Obviously we don't share any personal data for riders, but sharing aggregated traffic data that will allow cities to design more effectively for the next five years in a smarter, better way. So I think the dialogue that we're having, this dialogue will turn into what we think are constructive results. There are some cities with whom the dialogue unfortunately, we think is not constructive. New York is one of them. But I think that the majority of these conversations are positive. And we want to be a partner. And the best partner for cities going forward as it relates to their transportation solution for the next 10 years.

Great Brad, thank you for the question.

Welcome.

Next question please.

Yes, your next question comes from the line of Mark Mahaney with RBC Capital Markets.

Okay, thanks. Sorry about that. Hey, could we just talk about – Dara, could you talk a little bit about the two regulatory fronts, New York City, what's happened to demand the profitability of the Uber Platform in New York City over the last couple of months as these series of changes have been introduced? And then just comment on the likelihood or the outcome materiality with these – the California, the pending legislation in California about changing people from contract to full time employees and what kind of impact that could have? You could address both of those please. Thanks, Dara.

Yes, sure Mark. So listen, I think that a lot of the changes that have been introduced or potentially introduced in New York City we just don't agree with. The city's essentially introducing another medallion system. And if you've read any of the articles in the New York Times, you know that that system is right for abuse by people in power and it's happened in the past and the city could be setting itself up. Again if you look at our business in New York, it's pretty healthy and it continues to grow. The problem is that we are growing fastest in areas of the city where you've got consumers who can afford significantly higher prices and the price increases that we have had to go forward in the city while areas like East New York, or Wakefield, Bronx or Central Harlem are not growing because our consumers there can't afford the increases in prices. And as a result, we're making kind of mobility unavailable to them. So I think anyone who thinks that the changes – who tells you that the changes in New York City are good is malarkey frankly. And even [indiscernible] appointed TNC commissioners, they acted over the gesture of city council, and drivers, and editorial boards, and community groups and even the former TNC Chair and transit experts. So we think frankly we don't get it. But we are doing our best in New York City. I think one of the issues that we hold here as it relates to Uber and our system is that Uber has always been an open labor system. We've always been available to anybody who wants to find labor on our system, make money on our system, any which way they can. And the new rules could potentially…

Thank you, Mark for the question.

Thank you, Dara.

Operator, next question please.

Your next question comes from the line of Michael Graham with Canaccord.

Thank you. I just wanted to ask on public transit again, you mentioned launching in London and Boston. Any update on rider engagement with that part of the platform either in those cities or in some of the places you've been a little bit longer. And is this a city relations thing primarily and a rider convenience thing? Or is there a business opportunity there as well in a direct way? Thanks.

Yes Michael it’s very early. But what we are seeing, which is super encouraging is that transit options and frankly more options, more transportation options in our app increase engagement with Uber app. So it's more transit, more bikes and scooters even in certain cases Uber Bus, et cetera, all of these additions, for example, taxi is a very, very fast growing category for us in certain parts of the world as well. As we add in more transportation options, we become a factor in a larger percentage of the population's transportation decisions. We have a great products and technical teams that can build these solutions in an artful, simple way that over a period of time learn about you and can personalize the choices for you. So the transit option is just one way in which we are increasing our relevance to a greater number of consumers on a global basis. And we are seeing it in higher engagement in the app specifically with London and some of the other areas where we've grown transit. And listen, we think it’s good for consumers, we think it's good for us and we think it's good for mass transit and the city as well. So, this one is a win-win, win, but it's pretty early and we think there's going to be a lot of kind of testing and learning going forward as we build these products.

Great, thank you.

Thanks Michael. Operator, next question please.

You next question comes from the line of Benjamin Black with Evercore ISI.

Hey thanks for the question. I was wondering if you could give us an update on the six focus countries. Where are you seeing meaningful traction? Where the incremental work to be done? What does the competitive environment look like in some of these countries? Thank you.

Yes sure. We can certainly give you a quick tour around the countries. Listen, Argentina is a very strong market for us. Buenos Aires continues to be one of our biggest and fastest growing markets in the world. And we think that there is a constructive regulatory momentum in the country and we hope to build on that momentum. Germany is another great market for us. We are building our business in Germany in the right way as it relates to rideshare. What's interesting is that we launched our Jump bikes in Berlin and they've been spectacular. They’ve been a huge hit in the city. I think that bike ridership in Europe is more prevalent. And we're certainly seeing it with our product as well. And what you see with us in Germany is an expansion into more cities, both on the ride side and on the bike side as well. And listen we're actually getting into Germany with freight as well. So Germany we think is going to be a pretty interesting market for us. Japan and Korea, are a couple of other markets. These are taxi-heavy markets. We think that regulatory the regulatory environment in both markets continuing to improve, although we have a long way to go to build the ride, big rides business. I will tell you that our Eats business in Japan is doing incredibly well. And in Japan, I think, we will be in Eat first and then ride second business, which is terrific. It goes to some of the flexibility that we have in our model as far as introducing the Uber brand into the market, and then expanding the definition of what Uber means to consumers in that market. Spain has had good parts and bad parts. Barcelona, the regulations in Barcelona and a couple of the eastern regions were not great. But honestly, the rest of the Spain is doing incredibly well. We're growing well there in the right category and we're starting to invest in Eats as well. And so that's going well. So I think most of the story around these markets are strong. Italy is an area where we haven't really developed a big business there. But I'll take where we are and I take five of the six countries. These are some pretty big countries. They're all going to take a lot of work, but they're all showing promise in different ways.

Great.

Benjamin, thank you for the question.

Thank you.

Operator, next question please.

Your next question comes from the line of Justin Patterson with Raymond James.

Great, thank you very much. Maybe a big picture one. Dara you've been involved with a variety of Internet businesses over the course of your career. Could you talk about how scaling Uber differs from traditionally online businesses? And how should we think time line of those financial benefits? And then as a quick follow-up, can you provide an update around how you're thinking about opportunities around payments? Thanks.

Sure. I'll take the first and Nelson, maybe you can talk on the payment side. Listen, I think that, there are ways in which Uber is a unique beast and in ways in which it is like any other business. I think that there's a meme around which is can Uber ever be profitable? I certainly heard that that meme along with others. And I'll tell you, we have a business in the rides area that has a 20 plus percent take rate, which is a very, very strong take rate and a business at scale the way we are a global business at scale that has network effect with a 20 plus percent take rate, I believe has the potential. And if we execute, should turn out to be a spectacular business long-term. And I think that the same goes for Eats and we're making bets in a lot of other categories that carry with that incredible potential. So it's hard to compare Uber to other businesses because it's a unique entity. It's one of those rare brands in the world. I think what's very interesting about Uber is that we're a digital and physical business, and so the connectivity between the digital and the physical world and local regulatory bodies and at the presence that we need in every single city, and the difference in kind of local customs, all of those are amplified as it relates to this business, that makes it all the more interesting and to some extent also makes for pretty interesting barriers for entry once you build the business. So I think that myself and my team are well-prepared. But I think we're very, very early in this incredible journey. But Nelson, do you want to talk about payments?

The only thing I'd add to that is if you listen to the script at the end of the script when I talk about our rides contribution in the second quarter and so we had a very strong second quarter on the rise contribution. And again if you deducted that from what we call our corporate overhead, which is all the unallocated corporate overhead and texts according to the entire company excluding what we invest in ATG, the loss would have been $100 million. So it should give you a little bit of sense of the path to profitability on the rides business. And then obviously we'll have plenty of dialogs and some of the investments were making whether it be in Eats or Freight or in NeMo or around autonomous. But it should give you guys a sense of kind of the path we're moving and we talk about healthy growth in the market environment. Your second question on payments, we continue to make good progress. I would say the team has done a very, very good in terms of reducing some of the payment card fees. A lot of it is working with our partners and we've been able to reduce some of the things. And it literally has been better than we would have expected both on a quarter-on-quarter and a year-on-year basis. As we move towards the next phase of the payments, we are going to be testing, broadening out some of the capabilities particularly in Latin America. And again we think this will have beneficial impact particularly in terms of driver retention. As we offer more tools to allow them to kind of operate every day and also try to take cash out of some markets like Brazil where we think that also provides some safety benefit.

Great, thank you.

Thank you for the questions Justin. Operator next question please.

Your next question comes from the line of Jason Helfstein with Oppenheimer.

Thanks, two questions. Anything you can share to help us understand the early impact of the loyalty program and its impact on repeat usage or retention? And then just around Eats, do you expect to deploy batching other dynamics to improve Eats delivery efficiency in the near term, or is that something more longer term given the complexity to do that? Thanks.

Yes Jason as far as our loyalty programs go, we are definitely observing what I would call interesting behavior with our consumers. We're really looking for increased retention, increased spend. So we're seeing both. I think that identifying cause – causal versus correlative behavior is harder and takes time. But you can expect with the expansion of our loyalty programs in the U.S. and into other markets, you should assume that we're expanding it because we like what we see. As far as each batching goes, we're batching our orders now. And we're using kind of the efficiency in the marketplace. And I think that you should expect to see more bathing going forward as we create increase matching the same way that we build POOL over the past couple of years.

Okay, t Jason. Operator, next question please.

Your next question comes from the line of Masha Kahn with HSBC.

Hi, thanks for the opportunity. Wanted to ask you about some user reports about you going to grocery delivery, if you could comment on that. And the other one from the Eats perspective, what makes it very interesting country or unit perspective which country you like better than the others? Can you maybe characterize some of the aspects of what makes Eats a good business in a certain markets? Thank you.

Yes Masha, as far as grocery, I don't want to comment too much other than we have said in the past that we are going to look at additional categories that can take advantage of fulfillment network essentially that we are building and can take advantage of the fulfillment network essentially that we are building and can give our couriers and drivers high utilization and higher work especially during non-peak times, as it relates to driving. So grocery could be one of those categories hypothetically. And once we have something announced we'll definitely tell you about it, but it's something that we could take a look at. Nelson you want to talk.

Sure. And it tends to be more city by city than just strict country. And a lot of it just has to do with how fast we're in there and then our competitive position. So what I would say is that you heard us talk about a 10.2% take rate, if you will, for Eats in the second quarter. If you look at the top five cities around the world where we are, but those take rates range between 8% and 16%. And so you'll see – we do have some markets and somebody asked earlier about India where you have a very, very low or negative take rate. But again, we think it can be an attractive business in a lot of those different parts of the market. And so in most of the markets we're in and we have some where we are very pretty strong category position, those tend to be the ones where you'll see that those kinds of high take rates in contribution.

Okay, thank you.

Masha thank you for the question. Operator, we'll go ahead and take our last question.

Your last question comes from the line of David Dillon with SMBC.

Hi, thank you for the question. Just following-up on that ATG, you have nice expansion there on the take rate despite more competitive pricing environment you're talking about and new competitors coming to market. And just kind of triangulating that with what you said about Japan and nice growth there. And would you expect that take rate to have – to be sustainable here or possibly continue expand in the back half of 2019?

Yes. It's Nelson. We hope so, right? So I can report in a service fee in the U.S. at the end of the first quarter and so think there will be a bit of a tailwind as we continue in the back half of the year. Obviously we're going to watch India. So if you think about the fact that our take rate is 10.2%, ex-India probably would have been another 100 basis points or so. The one thing that we do watch and there is seasonality in the fourth quarter particularly has to do with drivers and careers. And so we will have to watch that in terms of what impacted it. But we do think over time that we'll be able to continue to improve in terms of our take rates.

Thank you for fitting me. Appreciate it.

Thanks David.

So with that, thank you, everyone, for joining us. I wanted to give a special thank you to all of our Uber employees all around the world. This is their first full quarter as a public company. We're entering a different phase now, Uber. From an execution basis, I think, that everyone is putting their best foot forward, and I think it certainly you showed this quarter with revenue accelerating and bottom line getting better. And I think the team will be not satisfied with anything but these kinds of results going forward. So thank again for joining us and we'll talk to you next quarter.

This concludes today's conference call. You may now disconnect.