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Uber shares plunge 11% as slower bookings growth spooks investors

Uber shares plunge 11% as slower bookings growth spooks investors

Uber Technologies pointed to a further slowdown in its main app-based taxi business as the company forecast fourth-quarter gross bookings below Wall Street estimates, sending its shares down 11% through Thursday afternoon.

Booking growth, a key indicator of ridership for online taxi operators, slowed to its lowest level in more than a year in the third quarter and also fell short of analysts' forecasts.

Shares of rival Lyft, which is due to report quarterly results next week, fell 5.3%.


Uber car in New York, NY on May 16, 2024.
Booking growth, a key indicator of ridership for online taxi operators, slowed to its lowest level in more than a year in the third quarter. Christopher Sadowski

Uber's outlook underscored concerns about weakening demand in the ride-hailing industry in recent quarters as an uncertain economy and high inflation weigh on commuters.

“High interest rates have taken their toll on consumers, who have also struggled with higher prices across all areas of finance, and some are now looking to cut back on unnecessary spending,” said Susannah Streeter, head of money and markets at Hargreaves Lansdown.

“It is likely that there has been some shift towards cheaper modes of transport.”

The company, the dominant player in the North American ride-sharing market, sees suburban areas both in the U.S. and elsewhere as the next growth driver amid concerns about market saturation.

“It's a common misconception that almost everyone already uses Uber,” CEO Dara Khosrowshahi said in prepared remarks.

He said the company plans to capture suburban markets through better pricing strategies for longer routes and to focus on features that allow people to wait and reserve rides in those areas.


Uber logo.
Uber's outlook underscored concerns about weakening demand in the ride-hailing industry in recent quarters. REUTERS

Gross bookings for Uber's mobility business increased 26.4%, with user engagement reaching an all-time high. Total third-quarter revenue was $11.19 billion, beating the average analyst estimate of $10.98 billion.

Net income attributable to Uber was $2.61 billion in the third quarter, including a pretax gain of $1.7 billion related to the company's equity investments, while operating income was a record $1.06 billion reached.

Adjusted earnings before interest, taxes, depreciation and amortization – a closely watched profitability measure – came in at $1.69 billion, compared with analysts' average estimate of $1.64 billion.

The company forecast fourth-quarter adjusted EBITDA between $1.78 billion and $1.88 billion, while analysts had expected $1.84 billion.

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