Mobility group Uber just released results for the second quarter of 2026. The business is performing well, with this quarter boasting 22% growth in gross bookings. Not only is that ahead of guidance, but it marks the fourth consecutive quarter of growth above 20%.
Aside from lifting the lid on how Uber is performing, the earnings transcript gives insights that are important for Prosus investors. I’m invested in both Uber and Prosus, so I pay attention to what’s going on here.
Before digging into that, it’s important to explain why Uber is one of my highest-conviction offshore holdings (3% of my portfolio). For context, most of my positions are 1% or less.
Uber’s business model relies on having one impressive underlying platform that has global functionality across payments, maps and rider safety. When I travelled to Egypt, my Uber app worked seamlessly. It’s easy to forget just how difficult this is to build across developed and emerging markets.
The benefit of this shared architecture is strong contribution margins on incremental users. Put simply, the cost of a new user in Rides or Eats is low relative to the value of that customer. This is great for the long-term economic value of the platform.
Key to my thesis is that there’s plenty of growth runway available to the company, with a barbell strategy that shows innovation at both ends of the product spectrum. Demand has been strong for premium offerings (Uber Black) and products that offer better fares in exchange for longer wait times (literally called Wait & Save).
Uber also enjoys strong appeal outside busy areas. In the US, the business is so diversified that only 25% of profits come from the top 20 cities!
In terms of cross-platform activity, Uber works hard to convert users of Rides to Eats. Only 20% of consumers are using both. These are different consumer needs, so there’s a practical ceiling to cross-selling rates. But even modest gains matter as a way to decrease the cost of acquiring a new customer in Eats.
To further support the economics, AI technology is making the business more efficient. Code output has nearly doubled per engineer, with a near-100% adoption rate of code-based AI tools. This has allowed them to decrease the rate of headcount growth or even cut headcount by 10%-20% in some areas.
Keep an eye on autonomous vehicles as well, a market that Uber sees as being similar to AI in terms of a proliferation of service providers and a consumer adoption curve that they expect to spike. Uber’s focus is on bringing the “commercialisation layer” to this industry, with an expected presence in 28 different cities by 2028. There will no doubt be regulatory headaches along the way, as well as new funding models that need to be solved, but this is an opportunity that shouldn’t be ignored.
Now, let’s deal with why Prosus investors need to keep track of Uber’s movements.
The first reason is the Delivery Hero acquisition in Europe. Prosus created this monster by choosing Just Eat Takeaway.com (JET) as its regional fighter, opening the door for Uber to take Delivery Hero with the blessing of regulators. This dramatically expands Uber’s reach and allows it to bring its technology and Uber One subscription experience to that audience, making it a formidable foe in Europe. As I’ve said several times before, Prosus CEO Fabricio Bloisi’s tenure will be judged by the success (or otherwise) of the JET deal.
The second reason is the comments made by Uber about the environment in Latin America. Prosus has already sounded the alarm about competition in the region, with Uber citing DiDi and Meituan as the source of the pain. With a relatively limited supply of two-wheelers, ride and food delivery platforms are fighting for the attention of drivers who can easily switch between platforms.
And what do low switching costs and supply shortages mean? That’s right, the drivers become more expensive to secure. Now add in the cost of marketing to compete against other platforms and you can quickly see the risks to margins.
At least Uber participates across Rides and Eats, so it has a natural hedge in place. There’s no such luck for Prosus’s iFood business, which is in the crosshairs of the Chinese market entrants.
As you can see, market dynamics can change very quickly. This is why I prefer a highly diversified portfolio vs concentrated positions, because we live in a world where disruption is everywhere. I think both Uber and Prosus have solid long-term stories. But if I were absolutely forced to pick just one, it would be Uber.
