Uber’s fourth-quarter earnings miss overshadows bookings growth

UBER Technologies reported weaker-than-expected fourth-quarter earnings and operating income, overshadowing steady bookings growth.

Adjusted earnings before interest, taxes, depreciation and amortisation were US$1.84 billion, just shy of the US$1.85 billion that Wall Street was projecting, Uber said in a statement on Wednesday (Feb 5). Income from operations for the fourth-quarter was US$770 million, well below the average estimate of US$1.2 billion. “Discrete legal and regulatory related matters” offset income gains from a “strong operating performance,” chief executive officer Dara Khosrowshahi said in a prepared statement.

Gross bookings, which includes ride hails, delivery orders and driver and merchant earnings but not tips, grew 18 per cent to US$44.2 billion in the last three months of 2024. For the current quarter, it forecast bookings of US$42 billion to US$43.5 billion. Bloomberg’s data included one analyst estimate for gross bookings for the fourth and first quarters.

In prepared remarks, chief financial officer Prashanth Mahendra-Rajah cited continued currency headwinds, as well as impact from the recent Los Angeles fires and “extreme weather in January.”

Shares of Uber fell 3 per cent during premarket trading after the results were announced.

Uber’s US flagship rideshare business, which accounts for more than half of its profitability, has lately been weighed down by rising insurance prices. Executives have blamed these expenses for slowing demand ride demand, saying it’s had to pass higher costs on to consumers in certain markets such as New Jersey, Southern California and parts of Florida.

Khosrowshahi has since publicly vowed to push for insurance and tort reform to address the issue. The company has gone on the offensive in New York, filing a racketeering lawsuit against a group of law firms, doctors and clinics it claims staged fake car accidents to take advantage of insurance policies.

In his prepared statement, Khosrowshahi said the company has made “significant progress in slowing insurance price increases through a combination of tech innovation and strong policy work.” Yet the company will continue to pass on those rising costs to consumers and expects UberX prices in the US to be “up marginally” in 2025.

Diversifying revenue

Meanwhile, Uber has been pushing into new growth areas across its global mobility and delivery businesses. It has launched more affordable options such as shuttle rides in New York and pooled rides at airports.

The company is also working on a US$2.99-a-month pass feature to let commuters secure prices for frequent rides ahead of time, Bloomberg reported last month. This subscription offering would represent a potential new revenue source if Uber decides to move forward with the plan. Additionally, the firm has begun selling data labelling services to other businesses by leaning on its gig-worker platform, Bloomberg reported last year.

Uber continues to partner with other brands to boost user growth. Last month, it announced an exclusive, multiyear deal with Delta Air Lines, ending rival Lyft’s prior deal with the air carrier that allowed riders to earn miles on ground trips. Separately, the Uber Eats unit recently struck a partnership with Home Depot, allowing customers to arrange deliveries for things beyond just restaurant orders.

Autonomous vehicles have also been an increasing area of focus for Uber, which inked more than a dozen manufacturer partnerships and has invested in multiple self-driving technology companies. Earlier on Wednesday, the rideshare giant announced it has opened a waitlist for customers in Austin to indicate interest in Waymo rides ahead of an expected launch in March. The company will also be the sole app offering Waymo rides in Atlanta this summer. The tie-up is part of a longer-term vision to become the go-to platform for automakers to monetise their self-driving vehicles.

“Even as we see AV technology advancing, we expect AV commercialisation will take significantly longer,” Khosrowshahi said in the prepared statement, citing the need for an operator to balance a consistent safety record, on-the-ground logistics and managing a high-utilisation marketplace. “Given the scale of the Uber platform, and human drivers’ ability to dynamically fulfil demand spikes-and take a break during demand troughs-partnering with Uber allows AV players to move much faster than they could on their own.” BLOOMBERG