In their first quarter as a public company, Uber reported earnings slightly ahead of expectations, with a $1.01B net loss on $3.10B in revenue. Our takeaways:

2019 will likely be an unpredictable year for Uber shares, given the company remains in investment mode. Beyond one year, the story becomes more attractive due to Uber’s ability to leverage its base of 93M monthly users and multiple services to cross-sell consumers and earn more revenue per user.

The company suggested they are entering a more rational competitive environment with Lyft in the U.S. This is based on Uber guiding for a reduction in sales and marketing expenses in the June quarter and several comments on the call. Uber expects competition to be based more on product and brand rather than who can spend the most on driver and rider incentives.

Uber will begin to more heavily cross-sell their ridesharing and Uber Eats products. On the call, it was revealed that half of Uber Eats customers are not Uber riders. If Uber can leverage an existing brand relationship with these users, they can transform eaters into riders and vice versa, ultimately earning more utilization, revenue per user, and brand reach.

Uber’s business will be re-engineered over the next decade to capitalize on the trends of autonomy and transportation-as-a-service. We believe investors view this shift as the third most important consideration (behind competitive landscape, and Eats/Freight). While it is currently a distant third, it remains foundational to the future of the company. The question is not if they will capitalize on autonomy, but what will be the cost to get there. This adds a layer of uncertainty to spending over the next several years.

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