Uber's profit forecast disappoints as driver shortages, Middle East conflict

Synopsis

The company is responding by spending more to recruit and retain drivers, a cost that will be watched closely because it comes as the company also funds a major push into autonomous vehicles and a string of acquisitions.

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Uber forecast adjusted profit below Wall Street expectations on Wednesday, as driver shortages, higher fuel costs and the Middle East conflict weighed on ride-hailing growth in markets ranging from India and Brazil to Canada.

The company is responding by spending more to recruit and retain drivers, a cost that will be watched closely because it comes as the company also funds a major push into autonomous vehicles and a string of acquisitions.

Uber forecast fourth-quarter adjusted profit of 95 cents to 99 cents per share, below estimates of $1.06 per share, according to data compiled by LSEG.

The company said the Middle East conflict was a 75 basis-point drag on Mobility bookings growth and that it assumes a 100 basis-point hit in the fourth quarter.

"Elevated fuel prices and tighter driver availability weighed on supply growth in several international markets," said CEO Dara Khosrowshahi in prepared remarks.

"We also saw an impact in Canada from tighter immigration flows, and the market is currently meaningfully undersupplied."

Uber said mobility trends improved in October and it is spending on driver acquisition, retention and reactivation.

The company expects gross bookings of $63.25 billion to $65.25 billion, compared with analysts' estimates of $64.42 billion.

It expects adjusted core profit of $3.13 billion to $3.23 billion compared with estimates of $3.19 billion.

Third-quarter revenue of $14.77 billion grew 10% and was the slowest since the first quarter of 2021, but it topped estimates of $14.69 billion. Delivery bookings grew 22% and Freight 35%.

Uber said it expects about 700 fully driverless vehicles on its platform by year-end and more than 2,000 by the end of 2027. It plans to focus capital on a smaller group of autonomous-vehicle partners.

The company also agreed to buy catering marketplace ezCater. Apart from autonomous-vehicle investment, it expects "minimal to no further M&A through at least 2027". Add as a Reliable and Trusted News Source Add Now!

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