Uber Technologies pointed to further slowdown in its core app-based taxi business as it forecast fourth-quarter gross bookings below Wall Street estimates, sending its shares down 11% by Thursday afternoon.
Booking growth, a key measure of ridership for online taxi operators, fell to the lowest level in more than a year in the third quarter and fell short of analysts’ forecasts.
Shares of rival Lyft, which is set to report quarterly results next week, fell 5.3%.
Uber’s outlook underscores concerns about weak demand in the ride-hailing industry in recent quarters as the uncertain economy and high inflation weigh on riders.
“Higher interest rates have taken their toll on consumers, who have also faced higher costs in their finances and some are now looking to cut unnecessary spending,” said Susanna Streeter, head of currency and markets at Hargreaves Lansdown. ,
“There is likely to be a slight shift toward cheaper modes of transportation.”
The company, the dominant player in the North American ride-sharing market, sees suburban areas as the next growth driver in the US and elsewhere 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 long distances and a focus on features that allow people to wait and reserve rides in these areas.
Gross bookings for Uber’s mobility business increased by 26.4%, with user engagement reaching an all-time high. Third-quarter revenue totaled $11.19 billion, beating analysts’ average estimate of $10.98 billion.
Uber’s net income in the third quarter was $2.61 billion, including a pre-tax gain of $1.7 billion related to the company’s equity investment, while operating profit was a record $1.06 billion.
Adjusted earnings before interest, taxes, depreciation and amortization — a closely watched profitability metric — came in at $1.69 billion, while analysts’ average estimate was $1.64 billion.
The company estimates fourth-quarter adjusted EBITDA to be between $1.78 billion and $1.88 billion, compared to analysts’ estimates of $1.84 billion.
