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Uber's first-quarter results were well below expectations, weighed down by costs from the ride-hailing company's decade-long battle with global regulators.
The San Francisco-based company reported operating income of $172 million for the first three months of the year, compared to analysts' expectations of more than $600 million.
Uber The company on Wednesday attributed the shortfall to „separate changes and settlements in statutory and regulatory reserves,“ but said the company was „resolving some legacy issues.“
The legal costs include Uber agreeing to pay $178 million to settle a class action lawsuit brought by taxi drivers in Australia. However, the quarter was still a good number compared to his $262 million operating loss reported in his first three months of 2023.
Shares fell 6.3% in pre-market trading.
Uber and its rivals face increasing regulatory headwinds globally, particularly over pay for drivers and couriers.
A challenge filed in the UK this month raises the following questions for Uber: multi-million pound lawsuit From over 10,000 black taxi drivers in London.
The company previously reported that 2023 was its first full year of operating profit, which Uber hailed as a „turning point“ in its turbulent history.
The milestone comes after the company spent billions of dollars battling ride-hailing rivals and suffered several years of huge losses.
After investors demanded proof that the space could be sustainably profitable, Uber sought to increase profit margins and lower costs.
Revenue for the most recent quarter rose 15% to $10.1 billion, in line with analyst expectations. However, Uber reported a net loss of $654 million for the three months ended March 31, well below analysts' expectations for net income of about $500 million.
The company said the loss was due to a total of $721 million in write-downs of Uber's stakes in other groups, including self-driving car company Aurora and Chinese ride-hailing company Didi Chuxing.
Earnings before interest, taxes, depreciation and amortization increased 82% year over year to $1.4 billion, beating analysts' expectations of $1.3 billion.
„Our results this quarter once again demonstrated our ability to deliver consistent, profitable growth at scale,“ said CEO Dara Khosrowshahi.
Adjusted EBITDA for the quarter is expected to be between $1.45 billion and $1.53 billion, in line with analyst expectations.
Uber's total bookings for rides, deliveries and freight also fell slightly below analysts' expectations of $37.7 billion. The company attributes this to slowdown in demand in Latin America compared to the same period last year.
However, Uber said demand remains „robust“ across its delivery and mobility businesses. In March, India became the third country in the world after the US and Brazil to have more than 1 million Uber drivers.
Uber said further growth will come from expanding its services, including in the grocery delivery space, where the company is looking to grow.
Uber this week announced a partnership with Instacart that will allow the grocery delivery group's U.S. users to order from restaurants listed on Uber Eats. The ride-hailing company hopes the move will help it compete with rival DoorDash in suburban stores across the country.
JPMorgan analysts said that while Instacart's grocery capabilities are not offered by Uber, „this first step is an opportunity for the two companies to potentially work more closely together in the future.“ I believe it will open doors.“
on wednesday, Khosroshahi „Make no mistake, we remain committed to executing our grocery and retail strategy. . . . You can expect more news on the grocery market in the coming weeks.“
Uber also said it was confident it could „aggregate“ demand for self-driving cars, which are already available in some regions.
During the first quarter, the company began share buybacks in line with its original policy. $7 billion stock repurchase programChief Financial Officer Prashant Mahendra Raja said this would „partially offset“ the company's employee stock compensation obligations.