Uber had to suffer a setback: Despite a record quarter, the forecast for the current quarter was weaker than expected. The ride-hailing company's stock then lost up to seven percent.
The company expects gross bookings of between 42 and 43.5 billion US dollars for the first quarter. Analysts had expected 43.5 billion dollars according to Visible Alpha. Uber emphasized that the value would have been about one billion dollars higher if exchange rates had not developed unfavorably. The US dollar reached a 26-month high against a currency basket in January.
Other factors are also affecting the business: Chief Financial Officer Prashanth Mahendra-Rajah cited wildfires in Los Angeles and snowstorms in several U.S. cities. Additionally, a provision of $462 million for an unspecified legal settlement weighed on the balance sheet.
Uber exceeded expectations in the fourth quarter with gross bookings of $44.2 billion. Operating profit rose 18 percent to $770 million, but fell short of analysts' estimates of $1.2 billion. Nevertheless, the company was able to report an operating profit of $2.8 billion for the full year 2024 – following the first profitable year in 2023.
CEO Dara Khosrowshahi remained optimistic. He emphasized that Uber is on the right track to unlock the "trillion-dollar potential" of autonomous vehicles. Just recently, the company announced a collaboration with Waymo, Alphabet's robotaxi subsidiary, to offer driverless rides in Austin, Texas - at the same prices as regular Uber rides.
However, competition is intensifying: Tesla plans to begin testing its own self-driving "Cybercabs" in Austin starting in June. Uber will initially invest in autonomous vehicles itself but will eventually rely on a hybrid model with partners and smaller providers, Khosrowshahi explained.
Investors remain skeptical. After Uber announced a seven billion dollar share buyback program in 2023, the stock still lost two percent in 2024. Analysts at Bank of America consider concerns about the impact of autonomous vehicles on Uber's core business to be exaggerated.
Khosrowshahi also dampened expectations for a rapid replacement of human drivers: "In the next ten years, we will have hybrid networks of humans and machines," he said at the World Economic Forum in Davos. "After that, it might look different.
