Uber falls short amid economic concerns and cheaper transporthttps://www.thetimes.com/business-money ... -9fmpxbd23Ride bookings and delivery orders at Uber Technologies fell shy of expectations in the first quarter, stoking fears of slowing demand against a gloomy economic outlook.
The San-Francisco-based company said gross bookings rose 18 per cent to $42.8 billion in the three months to the end of March, falling slightly short of analyst forecasts.
Uber’s overall revenue for the first quarter rose 17 per cent to $11.5 billion, which was also below Wall Street estimates, while adjusted profit grew 35 per cent to $1.9 billion.
Revenue from its ride-hailing business, which was affected by the Los Angeles wildfires and heavy snow in parts of the United States, rose 15 per cent while delivery revenue rose 18 per cent.
Prashanth Mahendra-Rajah, the company’s chief financial officer, said the strengthening of the US dollar against Brazilian, Mexican and Argentine currencies had resulted “in an outsized headwind” for the company.
Uber has struggled to match the high growth from the post-pandemic quarters and is also contending with lower ride prices with some customers seeking cheaper transport options.
Dara Khosrowshahi, the company’s chief executive, said it aims to keep “prices as low as possible” adding that the autonomous vehicles segment “is the single greatest opportunity ahead for Uber”.
In February, Uber launched “price lock pass”, a $2.99 monthly subscription offering consistent fares on designated routes, to attract budget-conscious commuters, competing with a similar feature that its rival Lyft started offering last year.
Shares in Uber fell $2.41, or 2.8 per cent, to $83.42 in New York as the first quarter results overshadowed a strong outlook for the current quarter. Its stock has risen roughly 42 per cent this year, making it among the top ten gainers in the US’s benchmark S&P 500 index.
The company expects bookings to be between $45.75 billion and $47.25 billion for the present quarter. This compares with Wall Street expectations of $45.8 billion. Uber anticipates it will deliver adjusted profits between $2.02 billion and $2.12 billion in the quarter.
It has also forecast a 1.5 per cent currency-related drag on gross bookings growth in the quarter owing to a stronger US dollar reducing the value of earnings from international markets.
Uber, founded in 2009 by Travis Kalanick and Garrett Camp, owns one of the world’s most popular taxi-hailing apps and also has interests in restaurant delivery, bike-sharing services and self-driving cars. Kalanick departed in 2017 after sexual harassment and privacy scandals at the business. The company has faced the threat of bans in cities including London and repeated legal challenges over its employment responsibilities towards its drivers.
Uber, which could benefit from autonomous vehicle technology, has struck a number of partnerships over the past year. In March it started offering driverless rides with Waymo, Alphabet’s self-driving car unit in Austin, Texas.
Khosrowshahi added that there “is still a lot of runway for growth” in its mobility division, matching customers with drivers, saying its key focus is to advance transportation in the suburbs and more sparse markets.
“Historically, rideshare has struggled in these areas because fewer drivers naturally means less reliability. Technology like ours can help to bridge that gap.”
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