Supplemental Financial Statement Information

12 Months Ended

Dec. 31, 2022

Additional Financial Information Disclosure [Abstract]

Supplemental Financial Statement Information

Cash Equivalents and Short-Term Investments

The following tables summarize the cost or amortized cost, gross unrealized gain, gross unrealized loss and fair value of the Company’s cash equivalents and short-term investments as of the dates indicated (in thousands):


	December 31, 2022
	Cost or Amortized Cost		Unrealized				Estimated Fair Value
			Gains		Losses
Unrestricted Balances(1)
Money market funds	$	3,276	$	—	$	—	$	3,276
Money market deposit accounts	126,994		—		—		126,994
Term deposits	5,000		—		—		5,000
Certificates of deposit	502,374		295		(510)		502,159
Commercial paper	964,410		403		(1,663)		963,150
Corporate bonds	61,605		—		(104)		61,501
U.S. government securities	7,059		1		—		7,060
Total unrestricted cash equivalents and short-term investments	1,670,718		699		(2,277)		1,669,140
Restricted Balances(2)
Money market funds	93,362		—		—		93,362
Term deposits	3,539		—		—		3,539
Certificates of deposit	355,241		174		(437)		354,978
Commercial paper	596,213		243		(865)		595,591
Corporate bonds	14,933		—		(17)		14,916
U.S. government securities	74,699		2		(167)		74,534
Total restricted cash equivalents and investments	1,137,987		419		(1,486)		1,136,920
Total unrestricted and restricted cash equivalents and investments	$	2,808,705	$	1,118	$	(3,763)	$	2,806,060

_______________

(1)Excludes $126.5 million of cash and $1.1 million of marketable equity securities, which are included within the $1.8 billion of cash and cash equivalents and short-term investments on the consolidated balance sheets.

(2)Excludes $1.3 million of restricted cash, which is included within the $1.1 billion of restricted cash and cash equivalents and restricted short-term investments on the consolidated balance sheets.


	December 31, 2021
	Cost or Amortized Cost		Unrealized				Estimated Fair Value
			Gains		Losses
Unrestricted Balances(1)
Money market funds	$	22,250	$	—	$	—	$	22,250
Money market deposit accounts	330,252		—		—		330,252
Term deposits	385,000		—		—		385,000
Certificates of deposit	505,562		25		(149)		505,438
Commercial paper	806,446		132		(190)		806,388
Corporate bonds	99,779		4		(78)		99,705
Total unrestricted cash equivalents and short-term investments	2,149,289		161		(417)		2,149,033
Restricted Balances(2)
Money market funds	20,161		—		—		20,161
Term deposits	5,046		—		—		5,046
Certificates of deposit	421,243		35		(134)		421,144
Commercial paper	523,616		43		(169)		523,490
Corporate bonds	63,506		—		(48)		63,458
U.S. government securities	31,745		—		(28)		31,717
Total restricted cash equivalents and investments	1,065,317		78		(379)		1,065,016
Total unrestricted and restricted cash equivalents and investments	$	3,214,606	$	239	$	(796)	$	3,214,049

_______________

(1)Excludes $104.8 million of cash, which is included within the $2.3 billion of cash and cash equivalents and short-term investments on the consolidated balance sheets.

(2)Excludes $53.7 million of restricted cash, which is included within the $1.1 billion of restricted cash and cash equivalents and restricted short-term investments on the consolidated balance sheets.

The Company’s short-term investments consist of available-for-sale debt securities and term deposits. The term deposits are at cost, which approximates fair value.

The weighted-average remaining maturity of the Company’s investment portfolio was less than one year as of the periods presented. No individual security incurred continuous unrealized losses for greater than 12 months.

The Company purchases investment grade marketable debt securities which are rated by nationally recognized statistical credit rating organizations in accordance with its investment policy. This policy is designed to minimize the Company's exposure to credit losses. As of December 31, 2022, the credit-quality of the Company’s marketable available-for-sale debt securities had remained stable. The unrealized losses recognized on marketable available-for-sale debt securities as of December 31, 2022 was primarily related to the continued market volatility associated with market expectations of an aggressive pace of interest rate increases by the Federal Reserve. The contractual terms of these investments do not permit the issuer to settle the securities at a price less than the amortized cost basis of the investments and it is not expected that the investments would be settled at a price less than their amortized cost basis. The Company does not intend to sell the investments and it is not more likely than not that the Company will be required to sell the investments before recovery of their amortized cost basis. The Company is not aware of any specific event or circumstance that would require the Company to change its quarterly assessment of credit losses for any marketable available-for-sale debt security as of December 31, 2022. These estimates may change, as new events occur and additional information is obtained, and will be recognized on the consolidated financial statements as soon as they become known. No credit losses were recognized as of December 31, 2022 for the Company’s marketable and non-marketable debt securities.

The following table summarizes the Company’s available-for-sale debt securities in an unrealized loss position for which no allowance for credit losses was recorded, aggregated by major security type (in thousands):


	December 31, 2022
	Estimated Fair Value		Unrealized Losses
Certificates of deposit	$	188,209	$	(947)
Corporate bonds	76,417		(121)
Commercial paper	718,771		(2,528)
U.S. government securities	62,801		(167)
Total available-for-sale debt securities in an unrealized loss position	$	1,046,198	$	(3,763)

Property and Equipment, net

Property and equipment, net consisted of the following as of the dates indicated (in thousands):


	December 31,
	2022		2021
Bike fleet	$	179,330	$	138,216
Leasehold improvements	91,334		100,252
Owned vehicles	143,391		150,443
Finance lease right-of-use assets	32,887		26,802
Computer equipment and software	36,271		19,103
Furniture and fixtures	5,602		5,110
Construction in progress	48,523		25,270
	537,338		465,196
Less: Accumulated depreciation	(223,936)		(167,001)
Property and equipment, net	$	313,402	$	298,195

Depreciation and amortization expense related to property and equipment was $127.8 million, $115.3 million, and $121.0 million for the years ended December 31, 2022, 2021 and 2020, respectively.

Accrued and Other Current Liabilities

Accrued and other current liabilities consisted of the following as of the dates indicated (in thousands):


	December 31,
	2022		2021
Insurance-related accruals	$	566,831	$	336,340
Legal accruals	458,209		349,518
Ride-related accruals	181,138		196,716
Long-term debt, current	36,287		56,264
Insurance claims payable and related fees	53,280		33,696
Deferred gain related to the Reinsurance Transaction (1)	2,357		52,785
Other	263,507		239,107
Accrued and other current liabilities	$	1,561,609	$	1,264,426

_______________

(1)Refer to Note 2 “Summary of Significant Accounting Policies” above and the rest of this Note 6 “Supplemental Financial Information - Insurance Reserves” below for more information on this deferred gain.

Insurance Reserves

The following table provides a rollforward of the insurance reserve for the periods presented (in thousands):


	Year Ended December 31,
	2022		2021		2020
Balance at beginning of period	$	1,068,628	$	987,064	$	1,378,462
Additions1	1,146,482		772,321		569,180
Deductions2	(797,760)		(690,757)		(960,578)
Balance at end of period	$	1,417,350	$	1,068,628	$	987,064

_______________

(1)Additions to insurance reserves include $895.0 million, $527.1 million and $569.2 million for the years ended December 31, 2022, 2021 and 2020, respectively, for changes in estimates resulting from new developments in prior period claims. Additions also include adjustments related to the Commutation Transaction of $247.4 million for the year ended December 31, 2022. See below for more details of the "Commutation of the Reinsurance Agreement". Additions include $4.0 million and $245.2 million of reinsurance recoverable for the years ended December 31, 2022 and 2021, respectively. There was no such recoverable for the year ended December 31, 2020.

(2)Deductions include losses paid of $552.6 million, $439.4 million and $552.7 million for the years ended December 31, 2022, 2021 and 2020, respectively, in addition to a transfer of certain legacy auto insurance liabilities of $407.9 million for the year ended December 31, 2020. Deductions include reinsurance recoverable at the beginning of the period of $245.2 million and $251.3 million for the years ended December 31, 2022 and 2021, respectively. There was no such recoverable at the beginning of the period for the year ended December 31, 2020.

Transfer of Certain Legacy Auto Liability Insurance

On March 31, 2020, the Company’s wholly-owned subsidiary, PVIC, entered into a Novation Agreement with Clarendon, and certain underwriting companies of Zurich. Pursuant to the terms of the Novation, on the effective date March 31, 2020, the obligations of PVIC as reinsurer to Zurich for the Legacy Auto Liability, were assigned to, assumed by, and novated to Clarendon, for cash consideration of $465.0 million. As a result of the Novation, the Company’s obligations related to the Legacy Auto Liability were fully extinguished and novated to Clarendon on March 31, 2020.

The Company paid the $465.0 million cash consideration to Clarendon on April 3, 2020. The Company derecognized $407.9 million of insurance reserves liabilities and recognized a loss of $64.7 million for the net cost of the Novation on the consolidated statements of operations for the year ended December 31, 2021, with $62.5 million in cost of revenue and $2.2 million in general and administrative expenses. In conjunction with the Novation, Clarendon and PVIC executed a Retrocession Agreement, pursuant to which PVIC will reinsure Clarendon’s losses related to the Legacy Auto Liability in excess of an aggregate limit of $816.0 million.

Reinsurance of Certain Legacy Auto Liability Insurance

On April 22, 2021, the Company’s wholly-owned subsidiary, Pacific Valley Insurance Company, Inc. (“PVIC”), entered into a Quota Share Reinsurance Agreement (the “Reinsurance Agreement”) with DARAG Bermuda LTD (“DARAG”), under which DARAG reinsured a legacy portfolio of auto insurance policies, based on reserves in place as of March 31, 2021, for $183.2 million of coverage above the liabilities recorded as of that date. Under the terms of the Reinsurance Agreement, PVIC ceded to DARAG approximately $251.3 million of certain legacy insurance liabilities for policies underwritten during the period of October 1, 2018 to October 1, 2020, with an aggregate limit of $434.5 million, for a premium of $271.5 million (“the Reinsurance Transaction”). The Reinsurance Agreement was on a funds withheld basis, meaning that funds are withheld by PVIC from the insurance premium owed to DARAG in order to pay future reinsurance claims on DARAG’s behalf. Upon consummation of the Reinsurance Transaction, a reinsurance recoverable of $251.3 million was established, and since a contractual right of offset exists, the reinsurance recoverable was netted against the funds withheld liability balance of $271.5 million for a $20.2 million net funds withheld liability balance included in accrued and other current liabilities on the consolidated balance sheet. In addition to the initial funds withheld balance of $271.5 million, additional coverage of certain legacy insurance liabilities was collateralized by a trust account established by DARAG for the benefit of PVIC, which was $75.0 million upon consummation. At the inception of the Reinsurance Agreement, a loss of approximately $20.4 million for the total cost of the Reinsurance Transaction was recognized on the consolidated statement of operations for the year ended December 31, 2021, with $20.2 million in cost of revenue and $0.2 million in general and administrative expenses. The Reinsurance Transaction does not discharge PVIC of its obligations to the policyholder. Management evaluated reinsurance counterparty credit risk and does not consider it to be material.

Commutation of the Reinsurance Agreement

On June 21, 2022, PVIC and DARAG entered into a Commutation Agreement, which effectively commuted and settled the previous Reinsurance Agreement. Under the terms of the Commutation Agreement, DARAG released $89.3 million of assets held in trust to PVIC and the remaining balance of the funds withheld liability of $90.3 million from the Reinsurance Transaction for a total consideration of $178.6 million.

In addition, the Commutation Agreement caused a DARAG affiliate, DNA Insurance Company (“DNA”), to simultaneously enter into an Adverse Development Cover Reinsurance Agreement (“ADC”) with PVIC (the Commutation Agreement and the ADC

will collectively be referred to as the “Commutation Transaction”). Under the terms of the ADC, DNA agreed to reinsure up to $20 million of the legacy insurance liabilities contemplated in the Reinsurance Agreement for a premium of $1.0 million, which will be retained by PVIC on a funds withheld basis. DNA also has the option to commute this agreement for $5.0 million prior to November 1, 2023, which may be offset by any premiums retained as funds withheld.

As a result of the Commutation Transaction, the Company noted the following impacts on its financial statements:

•The Company recognized a $36.8 million gain in cost of revenue in the three months ended June 30, 2022, including amortization of a portion of the previously recognized deferred gain.

•The Company reduced its reinsurance recoverable by $247.4 million. As of December 31, 2022, the balance of reinsurance recoverables was $4.0 million, reflecting the ultimate amount it anticipates receiving from DNA as a result of this transaction. The reinsurance recoverable from DNA, net of the funds withheld liability, is included in prepaid expenses and other current assets on the consolidated balance sheets.

•The Company reduced the funds withheld liability balance by $90.3 million. As of December 31, 2022 the balance of the funds withheld liability was $1.0 million, reflecting the premium retained by PVIC for the Adverse Development Cover.

•The Company amortized deferred gains related to losses ceded under the Reinsurance Agreement by $105.7 million. As of December 31, 2022, the Company had $2.4 million of deferred gains related to losses ceded under the Reinsurance Agreement remaining following the Commutation Transaction, which are included within accrued and other current liabilities on the consolidated balance sheets.

On February 8, 2023, PVIC and DNA entered into a Commutation and Mutual Release Agreement, whereby DNA agreed to exercise its option to fully settle and commute the ADC. DNA commuted the ADC for $5.0 million consisting of a $4.0 million payment made to PVIC and the release of $1.0 million premium which was retained by PVIC as a funds withheld. As a result, PVIC recognized a gain of $3.4 million, comprised of $2.4 million amortization of the remaining deferred gain and $1.0 million related to the release of the funds withheld. PVIC also reduced its reinsurance recoverable by $4.0 million related to the payment received. The Company recorded these amounts during the first quarter of 2023.

Other Income (Expense), Net

The following table sets forth the primary components of other income (expense), net as reported on the consolidated statements of operations (in thousands):


	Year Ended December 31,
	2022		2021		2020
Interest income	$	47,142	$	9,074	$	43,654
Gain (loss) on sale of securities, net	(287)		687		(868)
Foreign currency exchange gains (losses), net	(4,387)		788		1,818
Sublease income	11,591		6,624		—
Gain from transaction with Woven Planet	—		119,284		—
Impairment charges(1)	(135,714)		—		—
Other, net	(18,333)		(524)		(935)
Other income (expense), net	$	(99,988)	$	135,933	$	43,669

_______________

(1)In the third quarter of 2022, the Company impaired the entire amount of a non-marketable equity investment in addition to other assets with the investee. This impairment was triggered due to the announced winding down of the equity investee. Refer to Note 7 “Fair Value Measurements” for additional details.