Ride-hailing giant Uber forecast adjusted profit below Wall Street expectations on Wednesday, with headwinds like driver shortages, higher fuel costs, and the Iran war weighing upon ride-hailing growth in markets ranging from India and Brazil to Canada.
The company, in response to the operational headwinds, will be spending more to recruit and retain drivers, a cost that will be watched closely by investors and analysts 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 USD 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.
“We also saw an impact in Canada from tighter immigration flows, and the market is currently meaningfully undersupplied,” he noted further.
The ride-hailing giant’s mobility trends improved in October, a tailwind that will boost the company’s spending on driver acquisition, retention, and reactivation.
The company expects gross bookings of USD 63.25 billion to USD 65.25 billion, compared with analysts’ estimates of USD 64.42 billion.
It adjusted the core profit forecast from USD 3.13 billion to USD 3.23 billion, which is compared with estimates of USD 3.19 billion.
Uber’s Q3 revenue of USD 14.77 billion grew 10% and was the slowest since the first quarter of 2021, but it topped estimates of USD 14.69 billion.
Delivery bookings increased 22%, while the freight segment saw an uptick of 35%.
Uber now expects about 700 fully driverless vehicles on its platform by year-end and more than 2,000 by the end of 2027.
It also plans to focus capital on a smaller group of autonomous-vehicle partners.