An Uber logo in a car in Los Angeles, Calif., on Aug. 20, 2020.MIKE BLAKE/Reuters
Uber Technologies Inc. UBER-N posted a surprise quarterly loss and forecast gross bookings below Wall Street expectations, sending its shares down 9 per cent and putting the ride-share and food delivery company on course to shed more than US$10-billion in market value.
Uber’s disappointing forecast was in sharp contrast to an upbeat guidance late on Tuesday from smaller rival Lyft Inc., which lifted its shares up 8 per cent.
Lyft posted strong quarterly results, leaning on an industry-wide pickup in demand, while Uber’s results signalled growth slowing from 2023 in which it posted first annual profit by dominating the U.S. ride-share market and delivery business.
Uber also missed Wall Street’s expectations for first-quarter gross bookings, a key metric that indicates the total dollar value of transactions on the platform.
Chief financial officer Prashanth Mahendra-Rajah pointed to softer ride-share demand in Latin America and the impact from certain holidays shifting into the first quarter.
Uber operates in about 70 countries and offers services including meal deliveries and freight booking. It had a 72-per-cent share of the U.S. ride-hailing market in the March quarter, up from 68 per cent two years ago, according to YipitData.
Lyft LYFT-Q, a much smaller company, offers ride-hailing services only in the United States and parts of Canada.
Uber reported a net loss of US$654-million, driven by legal charges and provisions and those related to fair valuation of certain company investments. Analysts were expecting a net profit of US$503.1-million.
“We were already expecting a deceleration in average spending in several markets due to slower-than-expected economic activity in the US in Q1 and persistent consumer pressures. However, this is way above the base case,” said Thomas Monteiro, senior analyst at Investing.com.
Lyft is trying to take market share from Uber in the North America market, especially since it hired David Risher as chief executive officer last April.
Besides aggressively cutting costs, Mr. Risher has managed to add users to Lyft with shorter wait times and competitive fares.
Uber said it expects second-quarter gross bookings, or the total dollar value earned from its services, in the range of US$38.75-billion to US$40.25-billion, below estimates of US$40.04-billion.
In the quarter ended March 31, gross bookings came in at US$37.65-billion, closely missing expectations of US$37.92-billion.
Revenue rose 15 per cent to US$10.13-billion, narrowly beating the estimate of US$10.11-billion. On an adjusted basis, Uber lost 32 US cents per share, compared with expectations of 23-US-cent profit.